/raid1/www/Hosts/bankrupt/TCR_Public/050209.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, February 9, 2005, Vol. 9, No. 33
Headlines
ABSOLUTE SOFTWARE: Dec. 31 Balance Sheet Upside-Down by C$1.089M
ADELPHIA COMMS: Files Amended Reorg. Plan & Disclosure Statement
ADELPHIA COMMS: Classification of Claims Under Amended Reorg. Plan
AGRICORE UNITED: Will Webcast Annual Shareholders' Meeting Today
ALLIED HOLDINGS: AMEX Okays Plan to Regain Compliance by May 2006
AMERICAN BUSINESS: Appoints Milton Riseman President & CEO
AMERICAN LAWYER: Moody's Junks $78 Mil. Senior Secured Term Loan
AMERICAN SAFETY: Moody's Junks $87.5 Million Senior Secured Loan
AMERIKING: Trustee Wants Janssen Keenan as Litigation Counsel
ANC RENTAL: Files Corporate Dissolution Papers as Required by Plan
ASSET BACKED: Fitch Puts BB+ Rating on $13.678M Class M-11 Certs.
ATA AIRLINES: Accepting Bids for Chicago Express Business & Assets
ATA AIRLINES: Viacom Wants Debtors to Decide on Five Contracts
ATHERTON FRANCHISE: Fitch Junks Five Securitization Classes
ATLANTIC BROADBAND: Moody's Junks $150M Senior Subordinated Notes
BEAR CREEK: Moody's Puts B3 Rating on $245MM Senior Unsec. Notes
BEAR STEARNS: Fitch Affirms Low-B Ratings on Classes L & M Certs.
BRIGHTPOINT INC: S&P Revises Outlook on B+ Rating to Positive
BRITISH AVIATION INSURANCE: Section 304 Petition Case Summary
BRITISH AVIATION: Scheme Approval Hearing Set on March 15
BULLHEAD LLC: Voluntary Chapter 11 Case Summary
CATHOLIC CHURCH: U.S. Trustee Alters Spokane Committee Membership
CATHOLIC CHURCH: Hamilton Rabinovitz Hired by Tuscon Claim Reps.
CHC INDUSTRIES: Disclosure Statement Hearing Set for March 14
CHC INDUSTRIES: Taps Gardner Wilkes to Investigate & Pursue Claims
COMMUNITY HEALTH: Selling Mississippi Hospital to Delta Regional
COUNSEL CORPORATION: Terminates Stock Registration with SEC
COVENTRY HEALTH: Moody's Holds Ba1 Senior Unsecured Debt Rating
CSFB MORTGAGE: S&P's Rating on Class II-M-2 Issues Tumbles to D
CYPRESS COMMS: Sept. 30 Balance Sheet Upside-Down by $2 Million
CYPRESS COMMS: Asks Stockholders to Vote on Amended Merger Pact
DANKA BUSINESS: S&P Pares Corporate Credit Rating to B from B+
DONNKENNY INC: Wants to Hire Fried Frank as Bankruptcy Counsel
DONNKENNY INC: Look for Bankruptcy Schedules by March 7
DOUBLECLICK INC: Earns $10.6 Million of Net Income in 4th Quarter
DYKESWILL LTD: Court Appoints Ben. B. Floyd as Chapter 11 Trustee
ENRON CORP: Wants Court to Disallow Washington's $245-Mil. Claims
ENTERPRISE PRODUCTS: Files Prospectus for 10MM Common Share Offer
EXIDE TECHNOLOGIES: Sandell Has Ideas About Maximizing Value
EXIDE TECH: Will Release Fiscal 2005 Financial Results on Monday
FEDERAL-MOGUL: Equity Committee Taps Deloitte's Actuarial Services
FEDERAL-MOGUL: Navigant's Fees for PD Committee Work Top $156K Cap
FOSTER WHEELER: Subsidiary Wins $18 Million Pact with SNC-Lavalin
FRANKLIN CAPITAL: Board Wants Stockholders to Okay Name Change
GLOBAL CROSSING: AGX Trustee Wants to Adopt Cross-Border Protocol
HELIOS SERIES: Moody's Junks $24 Mil. Class C Floating Rate Notes
HEXCEL CORPORATION: S&P Puts B+ Rating on $350 Million Bank Loan
HOLLINGER INC: Ernst & Young's Inspection Costs C$4.25 Million
HOLLY ENERGY: S&P Puts B+ Rating on $150 Mil. Sr. Unsecured Notes
HORNBECK OFFSHORE: Launches $225 Mil. 6.125% Sr. Debt Tender Offer
HUFFY CORP: Lasky & Rifkind Files Class Action Securities Lawsuit
HUMAN GENOME: Posts $66.7 Million Net Loss in Fourth Quarter
IMPERIAL HOME: Trustee Taps Ballard Spahr as Litigation Counsel
INNOPHOS INC: S&P Junks $120 Million Senior Floating-Rate Notes
INTRAWEST CORP: Appoints M. Morfitt & A. Wasilov to Board
IPSCO INC: Will Webcast 2004 Fourth Quarter Results on Monday
ISLE OF CAPRI: Hosting Third Quarter Conference Call on Monday
ISTAR ASSET: Moody's Junks $15,982,000 Class S Mortgage Bonds
J.A. JONES: Insulation & Asbestos Creditors Demand Payroll Records
JAZZ PHOTO: U.S. Trustee Asks Court to Appoint Examiner
MADISON RIVER: Moody's Rates Planned Senior Sec. Facilities at B1
MEYER'S BAKERIES: Wants to Hire Wright Lindsey as Counsel
MEYER'S BAKERIES: Wants Until July 26 to Decide on Leases
MIRANT CORP: Disclosure Statement Hearing Scheduled for April 20
MIRANT CORP: Confirmation Hearing Scheduled for June 8
NATIONAL ENERGY: Disclosure Statement Hearing Set for March 3
NEWS CORP: Extends Common Stock Exchange Offer Until Feb. 22
NORTHWESTERN CORP: Seeks Advanced Approval for Power Supply Deals
NORTHEASTERN GEAR: Case Summary & 20 Largest Unsecured Creditors
NRG ENERGY: NRG McClain Wants to Distribute $1.3M in Sale Proceeds
O'SULLIVAN INDUSTRIES: S&P Junks Corp. Rating to CCC+ from B-
OMNICARE INC: Launches Offer for 4.00% Trust Preferred Securities
PARAMOUNT RESOURCES: Completes Exchange Offer for Senior Notes
PARMALAT GROUP: Securities Fraud Actions Consolidated by JPMDL
PARMALAT GROUP: Joint Status Report on Italian Proceedings Filed
PC LANDING: Has Until Mar. 31 to File Chapter 11 Plan
PEGASUS SATELLITE: Wants Administrative Claim Bar Date Established
PILLOWTEX CORP: Court Approves Beacon Blankets Settlement Pact
POPE & TALBOT: Postpones Release of 2004 Fourth Quarter Results
REYNOLDS AMERICAN: Dist. Court Ruling Cues Moody's to Hold Ratings
RIGGS NATIONAL: S&P Removes B- Ratings from CreditWatch
SOLUTIA INC: Court Approve DuPont Settlement Agreement
SYLVAN GOLF CENTERS: Case Summary & 20 Largest Unsecured Creditors
TECO AFFILIATES: Disclosure Statement Hearing Set for Friday
TECO AFFILIATES: U.S. Trustee Unable To Appoint a Committee
TOWER AUTOMOTIVE: Law Firm Investigates Possible ERISA Violations
U.S. PLASTIC: Names Bruce Disbrow President & CEO
UAL CORP: Wants to Modify Stay to Effect Frankel Claim Set-Off
UAL CORP: Court Approves Amended AMB Codina Transfer Agreement
UNISPHERE WASTE: BondHolders File Suit for $1-Mil. Unpaid Fees
UNOVA INC: Posts $71.2 Million Net Loss in Fourth Quarter
VARTEC TELECOM: Selling DeSoto Property to Regional Mgt. for $455K
WORLDSPAN L.P.: Gets Required Consent of 9-5/8% Senior Noteholders
YUKOS OIL: Says It Should File a Chapter 11 Plan this Week
YUKOS OIL: Look for Schedules of Assets & Liabilities Today
* John Rogovin Joins Wilmer Cutler as Partner in Washington Firm
* Upcoming Meetings, Conferences and Seminars
*********
ABSOLUTE SOFTWARE: Dec. 31 Balance Sheet Upside-Down by C$1.089M
----------------------------------------------------------------
Absolute Software (TSX-VEN: ABT) disclosed its financial results
for the three and six-month periods ended December 31, 2004. All
dollar amounts are in Canadian dollars unless otherwise specified.
Financial highlights for the six months ended December 31, 2004:
-- year-to-date sales contracts of $5.5 million
(US$4.3 million) are up 43% from $3.9 million
(US$2.9 million) last year.
-- cash provided by operations of $805,000 versus cash used in
operations of $1.8 million to Q2'04.
-- six-month revenue of $4 million is up 5% from $3.8 million
last year.
-- net loss of $1.47 million or $0.09 per share to Q2'05
decreased 3% from a net loss of $1.52 million or $0.10 per
share to Q2'04.
"Our focus remains on driving the industry standard for Computer
Theft Recovery and Secure Asset Tracking solutions and on
increasing the attach rates of our products in our target
markets," said John Livingston, Chairman and CEO of Absolute.
"Our improved year-to-date performance primarily reflects our
growth in the education market where we now have implementations
with six of the top twelve school districts in the U.S. Going
forward we will build widespread acceptance of our products in the
education, consumer and enterprise markets by continuing to invest
in our technology, integrating our products into computer
manufacturers' sales and marketing initiatives and significantly
enhancing our functionality by becoming "built-in" the computer
firmware with those manufacturers."
Second quarter sales contracts were $2.3 million, a 61% increase
from the same period in the prior year. Year-to-date, sales
contracts also rose sharply to $5.5 million, a 43% increase over
the same period in the prior year. This increase was sufficient
to generate cash positive operations of $243,000 in the second
quarter, for a total of $805,000 of cash provided by operations
for the year-to-date. This is a significant improvement from the
prior year performance, which reported cash used in operations of
$1.1 million in the second quarter last year, and $1.8 million
used for the six months to December 31, 2003.
Management focuses on sales contracts as Absolute's lead
operational indicator. Sales contracts are not a defined term
under generally accepted accounting principles. Sales contracts
represent prepaid non-refundable subscriptions for Absolute's
Computer Theft Recovery and Secure Asset Tracking solutions.
Subscription terms range from 1 to 4 years and the underlying
revenue is recognized in the income statement on a straight line
basis over the contract term. As a majority of the contract
expenses are also paid at the beginning of the contract term,
sales contracts provide a proxy for profitability. They also
determine cash flow and the future revenue stream.
Revenue for the three-month period ended December 31, 2004, was
$2.2 million, an increase of 10% from revenue of $2 million in the
second quarter of fiscal 2004. For the six-month period to
December 31, 2004, revenue was $4 million, a 5% increase from
revenue of $3.8 million in the same period of the prior year. The
increase in revenue is primarily due to increases in current
period sales contracts.
Net loss for the second quarter was $467,000 or $0.03 per share, a
42% decrease from a net loss of $812,000 or $0.05 per share in the
same period of the prior year. Net loss for the year-to-date
period was $1.47 million, down 3% from $1.52 million in the prior
year period. The decreased loss reflects the rise in revenue and
decrease in operating expenses, offset by an increase in foreign
exchange losses.
Corporate Developments
Built-in Strategy
A key strategy for Absolute to increase attach rates for its
products and drive the industry standard in Computer Theft
Recovery and Secure Asset Tracking is to become "built-in" the
BIOS -- firmware -- with the major computer manufacturers -- OEMs.
Achieving built-in status is significant to Absolute as it:
-- enhances the persistence of the Computrace software, through
moving it from a software application closer to a chip
solution;
-- increases the value proposition for Absolute's services
through improving the usability and effectiveness of the
solutions, which management expects to translate to
increased demand;
-- opens additional distribution channels and OEM support for
marketing Absolute's solutions;
-- creates barriers to entry for competitors; and
-- establishes Computrace software as the industry standard for
Computer Theft Recovery and Secure Asset Tracking.
On February 1, 2005, Absolute announced that IBM is now embedding
support for the Company's Computrace(R) solutions into the BIOS of
their new ThinkPad computers. Highlights of the agreement with
IBM include:
-- Computrace will begin shipping on every IBM T-Series
ThinkPad starting in February 2005;
-- IBM and Absolute will develop sales and marketing programs
to create awareness and demand amongst IBM customers; and
-- revenue is generated as customers opt-in for the service.
The relationship is expected to begin generating increased sales
contracts toward the end of fiscal 2005 as IBM rolls out its new
ThinkPad lines.
Distribution Strategies
Absolute's core distribution strategy is to leverage relationships
with the world's leading computer OEMs and value added resellers.
Management believes that creating integrated marketing and sales
programs with these OEM partners is key to achieving wide-spread
adoption of Absolute's solutions. As an example of recent
progress, on February 1, 2005, Dell announced launch of its
managed deployment services, which now includes Absolute's
guaranteed computer theft recovery solutions as part of their
security platform. Absolute expects this advancement to generate
additional sales through awareness and demand created by being
included as part of Dell's standard sales programs.
Absolute(R) Software (TSX VEN: ABT) is the leader in Computer
Theft Recovery and Secure Asset Tracking(TM) with more than
350,000 subscriptions under management. The company's uniquely
patented Computrace(R) technology is optimized for remote and
mobile users. Absolute Software provides organizations with
simple and cost effective solutions to help track their computing
assets, deter computer loss, and reduce incurred liability costs.
Absolute Software has a history of delivering first-to-market
technology innovations along with a recovery guarantee making it
one of the most reliable asset tracking and recovery solutions in
the market today. The company also has key partnerships with
global leaders, including, Dell, IBM, HP, Toshiba, Gateway,
Phoenix Technologies, and Apple.
As of December 31, 2004, Absolute Software's balance sheet
reflected a CDN$1,089,867 stockholders' deficit compared to
CDN$321,140 of positive equity at June 30, 2004.
ADELPHIA COMMS: Files Amended Reorg. Plan & Disclosure Statement
----------------------------------------------------------------
Adelphia Communications Corporation (OTC: ADELQ) filed an amended
plan of reorganization with the U.S. Bankruptcy Court for the
Southern District of New York, together with the related amended
disclosure statement on February 4, 2005.
Among other things, the amended plan formally facilitates the sale
process by allowing for the distribution of sale consideration to
Adelphia's creditors upon a sale of all or a portion of Adelphia's
assets. At the same time, the plan preserves Adelphia's ability
to emerge from Chapter 11 bankruptcy as an independent entity.
The amended plan also adds provisions designed to facilitate
potential compromises of outstanding inter-creditor disputes and
governmental settlement demands in the context of a potential
global settlement.
"Our goal of maximizing value for all constituents remains our
number one priority, and to that end, we remain focused on the
dual track of selling the Company or emerging from bankruptcy as
an independent company," said Bill Schleyer, chairman and CEO of
Adelphia. "[T]he filing reflects our continued progress towards
this goal and evidences our efforts to balance input from our many
constituents."
As previously announced, Adelphia is conducting a sale process for
the Company as a whole or in seven strategic clusters. The
Company is in the process of reviewing bids received in its sale
process and anticipates, following negotiations with the bidders,
announcing the results of the sale process sometime before the end
of the first quarter.
* * *
Adelphia Communications Corporation Chairman and CEO, William T.
Scheleyer, relates that under the Amended Plan, the Debtors will
have the option of:
1) reorganizing their existing businesses and assets, and
satisfying prepetition obligations under the Plan through
distributions of cash, equity securities and new debt
obligations of reorganized entities without consummating
any sale transaction;
2) implementing one or more sale transactions together
relating to substantially all of the ACOM Debtors' assets,
in connection with which a Plan Administrator -- acting
through and on behalf of a distribution company consisting
of one of the Debtors -- would satisfy prepetition
obligations of the Debtors principally through distribution
of the currency received in connection with the sale
transaction; or
3) implementing one or more sale transactions relating to less
than all of the ACOM Debtors' assets, and reorganizing the
remaining Debtors and their assets in entities that would
emerge and continue to operate after the Effective Date.
In connection with this transaction, the Debtors would
satisfy prepetition obligations in part through
distribution of currency received in connection with the
sale transactions and in part through distributions of
cash, equity securities and new debt obligations of the
reorganized entities.
Except as and to the extent the ACOM Debtors implement a sale
transaction that consists of a sale of substantially all of their
assets, the Amended Plan provides that reorganized ACOM's capital
structure will be comprised of:
* the Exit Facility, consisting of:
-- a working capital revolving credit facility; and
-- either (a) term loan facilities and high yield notes
or a bridge credit facility, (b) new Rollover Notes,
or (c) some combination of Rollover Notes, term loans,
notes under a New Financing Facility and cash received
in a sale transaction;
* New Joint Venture Preferred Securities; and
* New Equity
A full-text copy of the Amended Plan is available for free at:
http://www.adelphia.com/about/02-41729-Adelphia-Ch_11_Plan_of_Reorg.pdf
A full-text copy of the Amended Disclosure Statement is available
for free:
http://www.adelphia.com/about/First_Amended_Disclosure_Statement_(as_filed).
PDF
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.
79; Bankruptcy Creditors' Service, Inc., 215/945-7000)
ADELPHIA COMMS: Classification of Claims Under Amended Reorg. Plan
------------------------------------------------------------------
Adelphia Communications Corporation's Amended Plan of
Reorganization groups claims and interests into 15 classes.
Sub-classes are added and the treatment of certain classes are
revised:
Class Description Treatment
----- ----------- ---------
n/a Administrative Expense Paid in full, in cash.
Claims
Estimated Recovery: 100%
n/a Fee Claims Paid in full, in cash.
Estimated Recovery: 100%
n/a Priority Tax Claims Paid in full, in cash.
Estimated Recovery: 100%
Unimpaired; not entitled to
vote
n/a DIP Lender Claims Paid in full, in cash.
Estimated Recovery: 100%
Unimpaired; not entitled to
vote
1 Other Priority Claims Paid in full, in cash.
Estimated Recovery: 100%
Unimpaired; not entitled to
vote
2 Secured Tax Claims Paid in full, in cash.
Estimated Recovery: 100%
Unimpaired; not entitled to
vote
3 Other Secured Claims At the option of the
reorganized Debtors or the
Distribution Company:
* reinstated and rendered
unimpaired in accordance
with Section 1124(2) of
the Bankruptcy Code;
* fully and completely
satisfied by delivery of
the collateral securing
the allowed other secured
claim, together with any
interest required to be
paid under Section 506(b);
* fully and completely
satisfied by other
treatment in respect of the
claim as will cause it not
to be impaired; or
* as reorganized ACOM or the
Plan Administrator elects,
as applicable:
-- full payment in cash;
-- distribution of proceeds
of the sale of
collateral securing the
claim;
-- unless the Debtors
consummate a
substantially all assets
sale, delivery of a note
with periodic cash
payments with a value
equal to the allowed
amount of claims; or
-- other distribution as
necessary to satisfy
Bankruptcy Code
requirements.
Estimated Recovery: 100%
Unimpaired; not entitled to
vote
FRONTIER VISION DEBTOR GROUP:
4(a) Bank Claims Without prejudice to any
rights or remedies of the
Impaired Debtors, the Creditors'
Entitled to Vote Committee or the Contingent
Value Vehicle in connection
Estimated total with the Bank Actions, which
claims: $617,312,500 such rights and remedies will
be preserved and retained in
full, receipt on the
Effective Date of its Pro
Rata Share of the
FrontierVision Bank Claim
Distribution, consisting of
either:
* cash;
* Rollover Notes; or
* a combination of cash and
Rollover Notes equal to
the allowed amount of
claims.
Estimated Recovery: 100%
4(b) Notes Claims Payment through distribution
of its pro rata share of plan
Impaired consideration allocated to
Entitled to vote Class 4(b) from the
FrontierVision Notes/Trade
Estimated total Distribution Reserve.
claims: $543,776,927
4(c)(i) Trade Claims Payment through distribution
of its pro rata share of plan
Impaired consideration allocated to
Entitled to vote Class 4(c)(i) from the
FrontierVision Notes/Trade
Distribution Reserve.
4(c)(ii) Other Unsecured Except to the extent the
Claims claim is an insured claim,
payment through distribution
Impaired of its pro rata share of plan
Entitled to vote consideration from the
FrontierVision Other
Unsecured Distribution
Reserve.
4(d) Existing Securities Payment through distribution
Law Claims of its pro rata share of
either:
Impaired * Plan consideration from the
Entitled to vote FrontierVision Existing
Securities Law Claim
Reserve; or
* if the Debtors consummate
the Government Settlement,
the portion of the
Settlement Consideration,
if any, allocated to
FrontierVision Existing
Securities Law Claims.
PARNASSOS DEBTOR GROUP:
5(a) Bank Claims Without prejudice to any
rights or remedies of the
Impaired Debtors, the Creditors
Entitled to vote Committee or the Contingent
Value Vehicle in connection
Estimated total with the Bank Actions, which
Claims: $623,000,000 rights and remedies will be
preserved and retained in
full, receipt on the
Effective Date of its pro
rata share of the Parnassos
Bank Claim Distribution
consisting of either:
* cash;
* Rollover Notes; or
* a combination of cash and
Rollover Notes equal to
the allowed amount of
claims.
5(b)(i) Trade Claims Payment through distribution
of its pro rata share of plan
Impaired consideration from the
Entitled to vote Parnassos Trade Distribution
Reserve.
5(b)(ii) Other Unsecured Except to the extent the
Claims claim is an Insured Claim,
payment through distribution
Impaired of its pro rata share of plan
Entitled to vote consideration from the
Parnassos Other Unsecured
Distribution Reserve.
5(c) JV Equity Interests If the Debtors consummate a
sale transaction relating to
Impaired the Debtors' Parnassos JV
Entitled to vote Equity Interests, then:
* all Parnassos JV Equity
Interests held by entities
other than a Debtor remain
outstanding and unaffected
and will not receive any
distribution;
* the Parnassos Joint Venture
organizational documents
will be amended as provided
in the Plan; and
* the sale proceeds will be
allocated to the applicable
Debtor Group Reserve in
accordance with the Plan.
If the Debtors do not
consummate a sale transaction
relating to the Debtors'
Parnassos JV Equity
Interests, then the existing
joint venture will be merged
into the New Joint Venture
Preferred Securities Issuer,
and existing Parnassos JV
Equity Interests will be
exchanged for equivalent
value of the New Joint
Venture Preferred Securities.
CENTURY-TCI DEBTOR GROUP
6(a) Bank Claims Without prejudice to any
rights or remedies of the
Impaired Debtors, the Creditors
Entitled to vote Committee or the Contingent
Value Vehicle in connection
Estimated total with the Bank Actions, which
claims: $1,000,000,000 rights and remedies will be
preserved and retained in
full, receipt on the
Effective Date of its pro
rata share of Century-TCI
Bank Claim Distribution
consisting of either:
* cash;
* Rollover Notes; or
* a combination of cash and
Rollover Notes equal to
the allowed amount of
claims.
Estimated Recovery: 100%
6(b)(i) Trade Claims Payment through distribution
of its pro rata share of
Impaired plan consideration from the
Entitled to vote Century-TCI Trade
Distribution Reserve.
6(b)(ii) Other Unsecured Except to the extent the
Claims claim is an Insured Claim,
payment through distribution
Impaired of its pro rata share of plan
Entitled to vote consideration from the
Century-TCI Unsecured
Distribution Reserve.
6(c) JV Equity Interests If the Debtors consummate a
sale transaction relating to
Impaired the Debtors' Century-TCI JV
Entitled to vote Equity Interests, then:
* all Century-TCI JV Equity
Interests held by entities
other than a Debtor remain
outstanding and unaffected
and will not receive any
distribution;
* the Century-TCI Joint
Venture organizational
documents will be amended
as provided in the Plan;
and
* the sale proceeds will be
allocated to the applicable
Debtor Group Reserve in
accordance with the Plan.
If the Debtors do not
consummate a sale transaction
relating to the Debtors'
Century-TCI JV Equity
Interests, the existing joint
venture will be merged into
the New Joint Venture
Preferred Securities Issuer,
and existing Century-TCI JV
Equity Interests will be
exchanged for equivalent
value of the New Joint
Venture Preferred Securities
with equivalent value.
CENTURY DEBTOR GROUP
7(a) Bank Claims Without prejudice to any
rights or remedies of the
Impaired Debtors, the Creditors
Entitled to vote Committee or the Contingent
Value Vehicle in connection
Estimated total with the Bank Actions, which
claims: $2,400,000,000 rights and remedies will be
preserved and retained in
full, receipt on the
Effective Date of its pro
rata share of Century Bank
Claim Purchase Price,
consisting of either:
* cash;
* Rollover Notes; or
* a combination of cash and
Rollover Notes equal to
the allowed amount of
claims.
Estimated Recovery: 100%
7(b) FPL Notes Claim As and to the extent the
claim is allowed, payment
Impaired through distribution of its
Entitled to vote pro rata share of plan
consideration allocated to
Class 7(b) from the Century
Note/Trade Distribution
Reserve.
7(c)(i) Trade Claims Payment through distribution
of its pro rata share of
Impaired plan consideration allocated
Entitled to vote to Class 7(c)(i) from the
Century Note/Trade
Distribution Reserve.
7(c)(ii) Other Unsecured Except to the extent the
Claims claim is an Insured Claim,
payment through distribution
Impaired of its pro rata share of plan
Entitled to vote consideration from the
Century Other Unsecured
Distribution Reserve.
7(d) Century/Tele-Media If the Debtors consummate a
JV Equity Interests sale transaction relating to
the Debtors' Century/Tele-
Impaired Media JV Interests only,
Entitled to vote then:
* all Century/Tele-Media JV
Equity Interests held by
entities other than a
Debtor will remain
outstanding and unaffected
and will not be entitled to
distribution;
* the Century/Tele-Media
Joint Venture
organizational documents
will be amended as
provided in the Plan; and
* the sale proceeds will be
allocated to the applicable
Debtor Group Reserve in
accordance with the Plan.
If the Debtors consummate a
sale transaction relating to
Century/Tele-Media JV Equity
Interests held by the Debtors
and by persons other than the
Debtors, then:
* sale proceeds applied first
to claims against
Century/Tele-Media Joint
Venture in accordance with
the Plan, and to the extent
proceeds remain after
payment in full of all
claims, the proceeds will
be allocated among the
holders of Century/Tele-
Media JV Equity Interests
in accordance with their
relative rights under the
Century/Tele-Media Joint
Venture organizational
documents and agreements;
and
* the Century/Tele-Media
organizational documents
and agreements will be
amended as provided in the
Plan.
If the Debtors do not
consummate a sale transaction
relating to the Debtors'
Century/Tele-Media JV Equity
Interests, the existing joint
venture will be merged into
the New Joint Venture
Preferred Securities Issuer,
and existing Century/Tele-
Media JV Equity Interests
will be exchanged for the New
Joint Venture Preferred
Securities with equivalent
value.
ARAHOVA DEBTOR GROUP
8(a) Notes Claims Payment through distribution
of its pro rata share of plan
Impaired consideration allocated to
Entitled to vote Class 8(a) from the Arahova
Notes/Trade Distribution
Reserve.
8(b)(i) Trade Claims Payment through distribution
of its pro rata share of plan
Impaired consideration allocated to
Entitled to vote Class 8(b)(i) from the
Arahova Notes/Trade
Distribution Reserve.
8(b)(ii) Other Unsecured Except to the extent the
Claims claim is an Insured Claim,
payment through distribution
Impaired of its pro rata share of plan
Entitled to vote consideration from the
Arahova Other Unsecured
Distribution Reserve.
8(c) Existing Securities Payment through distribution
Law Claims of its pro rata share of
either:
Impaired
Entitled to vote * Plan consideration from the
Arahova Existing Securities
Law Claim Reserve; or
* if the Debtors consummate
the Government Settlement,
the portion of the
Settlement Consideration,
if any, allocated to
Arahova Existing Securities
Law Claims.
SILO 7A DEBTOR GROUP
9(a) Trade Claims Payment through distribution
of its pro rata share of plan
Impaired consideration from the Silo
Entitled to vote 7A Trade Distribution
Reserve.
9(b) Other Unsecured Except to the extent the
Claims claim is an Insured Claim,
payment through distribution
Impaired of its pro rata share of plan
Entitled to vote consideration from the Silo
7A Unsecured Distribution
Reserve.
UCA SUBSIDIARY DEBTOR GROUP
10(a) Trade Claims Payment through distribution
of its pro rata share of plan
Impaired consideration from the UCA
Entitled to vote Subsidiary Trade Distribution
Reserve.
10(b) Other Unsecured Except to the extent the
Claims claim is an insured claim,
payment through distribution
Impaired of its pro rata share of plan
Entitled to vote consideration from the UCA
Subsidiary Other Unsecured
Distribution Reserve.
OLYMPUS DEBTOR GROUP
11(a) Bank Claims Without prejudice to any
rights or remedies of the
Impaired Debtors, the Creditors
Entitled to vote Committee or the Contingent
Value Vehicle in connection
Estimated total with the Bank Actions, which
claims: $1,265,000,000 rights and remedies will be
preserved and retained in
full, receipt on the
Effective Date of its pro
rata share of the Olympus
Bank Claim Purchase Price,
consisting of either:
* cash;
* Rollover Notes; or
* a combination of cash and
Rollover Notes equal to
the allowed amount of
claims.
Estimated Recovery: 100%
11(b)(i) Trade Claims Payment through distribution
of its pro rata share of
Impaired plan consideration from the
Entitled to vote Olympus Trade Distribution
Reserve.
11(b)(ii) Other Unsecured Except to the extent the
Claims claim is an Insured Claim,
payment through distribution
Impaired of its pro rata share of plan
Entitled to vote consideration from the
Olympus Other Unsecured
Distribution Reserve.
UCA DEBTOR GROUP
12(a) Bank Claims Without prejudice to any
rights or remedies of the
Impaired Debtors, the Creditors
Entitled to vote Committee or the Contingent
Value Vehicle in connection
Estimated total with the Bank Actions, which
claims: $831,375,000 rights and remedies will be
preserved and retained in
full, receipt on the
Effective Date of its pro
rata share of the UCA Bank
Claim Purchase Price,
consisting of either:
* cash;
* Rollover Notes; or
* a combination of cash and
Rollover Notes equal to
the allowed amount of
claims.
Estimated Recovery: 100%
12(b) Notes Claims Payment through distribution
of its pro rata share of plan
Impaired consideration allocated to
Entitled to vote Class 12(b) from the UCA
Notes/Trade Distribution
Reserve.
12(c)(i) Trade Claims Payment through distribution
of its pro rata share of plan
Impaired consideration allocated to
Entitled to vote Class 12(c)(i) from the
UCA Notes/Trade Distribution
Reserve.
12(c)(ii) Other Unsecured Except to the extent the
Claims claim is an insured claim,
payment through distribution
Impaired of its pro rata share of plan
Entitled to vote consideration from the UCA
Other Unsecured Distribution
Reserve.
12(d) Existing Securities Payment through distribution
Law Claims of its pro rata share of
either:
Impaired
Entitled to vote * Plan consideration from the
UCA Existing Securities Law
Claims Reserve; or
* if the Debtors consummate
the Government Settlement,
the portion of the
Settlement Consideration, if
any, allocated to UCA
Existing Securities Law
Claims.
12(e) UCA/Tele-Media If the Debtors consummate a
JV Equity Interests sale transaction relating to
the Debtors' UCA/Tele-
Media JV Interests only,
then:
* all UCA/Tele-Media JV
Equity Interests held by
entities other than a
Debtor will remain
outstanding and unaffected
and will not be entitled to
distribution;
* the UCA/Tele-Media Joint
Venture organizational
documents will be amended
as provided in the Plan;
and
* the sale proceeds will be
allocated to the applicable
Debtor Group Reserve in
accordance with the Plan.
If the Debtors consummate a
sale transaction relating to
the UCA/Tele-Media JV Equity
Interests held by the Debtors
and by persons other than the
Debtors, then:
* sale proceeds applied first
to claims against UCA/Tele-
Media Joint Venture in
accordance with the Plan,
and to the extent proceeds
remain after payment in
full of all claims, the
proceeds will be allocated
among the holders of
UCA/Tele-Media JV Equity
Interests in accordance
with their relative rights
under the UCA/Tele-Media
Joint Venture
organizational documents
and agreements; and
* the UCA/Tele-Media
organizational documents
and agreements will be
amended as provided in the
Plan.
If the Debtors do not
consummate a sale transaction
relating to the Debtors'
UCA/Tele-Media JV Equity
Interests, the existing joint
venture will be merged into
the New Joint Venture
Preferred Securities Issuer,
and existing UCA/Tele-
Media JV Equity Interests
will be exchanged for the New
Joint Venture Preferred
Securities with equivalent
value.
HOLDING COMPANY DEBTOR GROUP
13(a)(i) ACOM Trade Claims Payment through distribution
of:
Impaired
Entitled to vote * pro rata share of plan
consideration allocated to
class 13(a)(1) from the
Holding Company Notes/Trade
Distribution Reserve; plus
* [____] Contingent Value
Vehicle Series A-2
Interests.
13(a)(ii) ACOM Other Unsecured Except to the extent the
Claims claim is an Insured Claim,
payment through distribution
Impaired of:
Entitled to vote
* pro rata share of plan
consideration allocated to
the ACOM Other Unsecured
Distribution Reserve; plus
* [____] Contingent Value
Vehicle Series A-2
Interests.
13(b) ACOM Senior Notes Payment by distribution of:
Claims
* plan consideration
Impaired allocable to Class 13(b)
Entitled to vote and Class 13(c) from the
Holding Company
Notes/Trade Distribution
Reserve; plus
* [____] Contingent Value
Vehicle Series A-1
Interests.
13(c) ACOM Subordinated Payment trough distribution
Notes Claims of:
Impaired * any plan consideration
Entitled to vote allocated to the ACOM
Senior Notes Claims and
Subordinated Notes Claims
remaining after the ACOM
Senior Notes Claims have
received distributions of
plan consideration with a
deemed value equal to the
allowed amount of the
claims; plus
* a pro rata share of [___]
Contingent Value Vehicle
Series B Interests.
13(d) ACOM Notes Existing Payment through distribution
Securities Law Claims of its pro rata share of
either:
Impaired * [____] Contingent Value
Entitled to vote Vehicle Series C
Interests; or
* if the Debtors consummate
the Government Settlement,
the portion of the
Settlement Consideration,
if any, allocated to the
Class of Claims.
13(e) ACOM Series B Payment by distribution
Preferred Stock of its pro rata share of
Interests [___] Contingent Value
Vehicle Series D Interests.
Impaired
Entitled to vote
13(f) ACOM Series B Payment through distribution
Preferred Stock of its pro rata share of
Existing Securities either:
Law Claims
* [____] Contingent Value
Impaired Vehicle Series E
Entitled to vote Interests; or
* if the Debtors consummate
the Government Settlement,
the portion of the
Settlement Consideration,
if any, allocated to the
class of Claims.
13(g) ACOM Series D Payment by distribution
Preferred Stock of its pro rata share of
Interests [___] Contingent Value
Vehicle Series F Interests.
Impaired
Entitled to vote
13(h) ACOM Series D Payment through distribution
Preferred Stock of its pro rata share of
Existing Securities either:
Law Claims
* [____] Contingent Value
Impaired Vehicle Series G
Entitled to vote Interests; or
* if the Debtors consummate
the Government Settlement,
the portion of the
Settlement Consideration,
if any, allocated to the
class of Claims.
13(i) ACOM Series E and F Payment by distribution
Preferred Stock of its pro rata share of
Interests [___] Contingent Value
Vehicle Series H Interests.
Impaired
Entitled to vote
13(j) ACOM Series E and F Payment through distribution
Preferred Stock of its pro rata share of
Existing Securities either:
Law Claims
* [____] Contingent Value
Impaired Vehicle Series I
Entitled to vote Interests; or
* if the Debtors consummate
the Government Settlement,
the portion of the
Settlement Consideration,
if any, allocated to the
class of Claims.
13(k) ACOM Common Stock Payment through distribution
Existing Securities of its pro rata share of
Law Claims either:
Impaired * [____] Contingent Value
Entitled to vote Vehicle Series J
Interests; or
* if the Debtors consummate
the Government Settlement,
the portion of the
Settlement Consideration,
if any, allocated to the
class of claims.
13(l) ACOM Common Stock In full and complete
Interests satisfaction of the Equity
Interests, distribution of a
Impaired pro rata share of either:
Entitled to vote
* [____] Contingent Value
Vehicle Series K
Interests; or
* if the Debtors consummate
the Government Settlement,
the portion of the
Settlement Consideration,
if any, allocable to the
class of claims.
CONVENIENCE CLAIMS
14(a) Subsidiary Convenience Payment in cash in an amount
Claims equal to the lesser of
[___]% times the allowed
Impaired amount of the claim or
Entitled to vote $[___].
14(b) ACOM Convenience Payment in cash in an amount
Claims equal to the lesser of
[___]% times the allowed
Impaired amount of the claim or
Entitled to vote $[___].
OTHER CLAIMS
15 Intercompany Claims In consideration of the Plan
benefits, allowed in the
Compromised amounts specified in the
Not entitled to vote Plan, and subordinated to all
claims in their respective
Debtor Groups of persons who
are not Debtors, but senior
to any Equity Interests in
those Debtor Groups.
n/a ACOM Other Equity Disallowed, no distribution.
Interests Not entitled to vote
n/a Rigas Claims and Disallowed, no distribution
Equity Interests Not entitled to vote
The ACOM Debtors have yet to update their hypothetical
reorganization value. Thus, the ACOM Debtors are unable to
provide estimates of recoveries for any classes of claims or
equity interests other than Classes 1, 2, 3, and the subsidiary
Bank Claims. The Debtors expect that the recovery to holders of
claims against, and equity interests in, the Debtors may differ
from the estimates contained in the Disclosure Statement dated
February 2004. The difference of the estimates is the result of,
among others:
-- the completion of the audit of the ACOM Debtors' financial
statements for the years ended December 31, 2001, 2002, and
2003, the associated reconstruction of their books and
records, and the resulting material changes from previously
published financial information;
-- compromises or proposed compromises of outstanding issues
between the Debtors' stakeholders and between the Debtors
and third parties;
-- judicial resolution of outstanding issues; and
-- the ultimate results of the currently pending sale process
of the ACOM Debtors' assets.
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.
79; Bankruptcy Creditors' Service, Inc., 215/945-7000)
AGRICORE UNITED: Will Webcast Annual Shareholders' Meeting Today
----------------------------------------------------------------
Agricore United will host a live webcast from Regina,
Saskatchewan of its Annual and Special Shareholders' Meeting
starting at 9:00 a.m. CST today, February 9, 2005.
Media and other interested parties are invited to log on the
Agricore United website http://www.agricoreunited.com/to view the
webcast at 9:00 a.m. CST. The Annual and Special Shareholders'
Meeting is scheduled from 9:00 a.m. to 11:45 a.m. CST and will
include presentations by Board Chair Wayne Drul and Chief
Executive Officer Brian Hayward.
The webcast will also be digitally recorded and will be available
for re-broadcast through a link on the Agricore United website.
Agricore United is one of Canada's leading agri-businesses. The
prairie-based company is diversified into sales of crop inputs and
services, grain merchandising, livestock production services and
financial markets. Agricore United's shares are publicly traded
on the Toronto Stock Exchange under the symbol "AU.LV".
* * *
As reported in the Troubled Company Reporter on March 31, 2003,
Standard & Poor's Ratings Services lowered the long-term corporate
credit and senior secured debt ratings on Agricore United to 'BB'
from 'BB+', based on weak financial results. At the same time,
Standard & Poor's assigned a 'B+' rating to Agricore United's
C$100 million subordinated convertible debt issue. The outlook is
negative.
ALLIED HOLDINGS: AMEX Okays Plan to Regain Compliance by May 2006
-----------------------------------------------------------------
DECATUR, Ga., Feb. 7 /PRNewswire-FirstCall/
Allied Holdings, Inc. (Amex: AHI) reported that on Jan. 31, 2005,
the American Stock Exchange notified Allied that it accepted
Allied's plan to regain compliance with the shareholders' equity
standard provided in Section 1003(a) of the Amex Company Guide.
The Amex has determined, in accordance with Section 1009 of the
Amex Company Guide, that Allied's plan makes a reasonable
demonstration of Allied's ability to regain compliance with the
continued listing standards by May 26, 2006.
Allied's listing is being continued in accordance with an
extension as a result of the staff's acceptance of the plan. The
continued listing is subject to Allied gaining compliance with the
continued listing standards by May 26, 2006 and Allied providing
the Amex staff with updates in conjunction with the initiatives of
the plan no later than at the end of each calendar quarter. The
Amex staff will review Allied periodically for compliance with the
plan and if the Company does not show progress consistent with the
plan, the Amex staff may immediately commence delisting
proceedings. At May 26, 2006, Allied must be in compliance with
all of the continued listing standards and the failure to regain
compliance by such date will likely result in the Amex staff
initiating delisting proceedings.
About the Company
Allied Holdings, Inc. is the parent company of several
subsidiaries engaged in providing distribution and transportation
services of new and used vehicles to the automotive industry. The
services of Allied's subsidiaries span the finished vehicle
continuum, and include car-hauling, intramodal transport,
inspection, accessorization and dealer prep. Allied, through its
subsidiaries, is the leading company in North America specializing
in the delivery of new and used vehicles.
* * *
Allied Holdings' 8-5/8% senior notes due 2007 are currently rated
at 'CCC+' by Standard & Poor's and Caa1 by Moody's Ratings
Services.
AMERICAN BUSINESS: Appoints Milton Riseman President & CEO
----------------------------------------------------------
American Business Financial Services, Inc., promoted Milton
Riseman to President and Chief Operating Officer. He had been
Chairman of the Consumer Mortgage Group of the Company, a position
he has held since June 1999.
According to ABFS Chairman and Chief Executive Officer, Anthony J.
Santilli, "We believe that Milt Riseman's day-to-day management of
the Company's lending and other operations will help guide us
through our restructuring. Milt has distinguished himself not
only during his nearly six years at ABFS, but throughout his
entire career in the industry."
As Chairman of ABFS' Consumer Mortgage Group, Mr. Riseman was
responsible for the sales, marketing and day-to-day operation of
Upland Mortgage. His duties included leading Upland's retail
operation in its Philadelphia, Pennsylvania headquarters, as well
as supervisory responsibility for the Company's Bank Alliance
Services Program. Mr. Riseman was President of Advanta Mortgage
from February 1994 until October 1998. He joined Advanta in 1992
as Senior Vice President, Administration. From 1986 until 1992,
Mr. Riseman was President of Citicorp Acceptance Corp. He joined
Citicorp in 1965, serving in various capacities, including serving
as President of Citicorp Acceptance Corp. from 1986 to 1992.
Headquartered in Philadelphia, Pennsylvania, American Business
Financial Services, Inc., together with its subsidiaries, is a
financial services organization operating mainly in the eastern
and central portions of the United States and California. The
Company originates, sells and services home mortgage loans through
its principal direct and indirect subsidiaries. The Company,
along with four of its subsidiaries, filed for chapter 11
protection on Jan. 21, 2005 (Bankr. D. Del. Case No. 05-10203).
Bonnie Glantz Fatell, Esq., at Blank Rome LLP represents the
Debtors in their restructuring efforts. When the Company filed
for protection from its creditors, it listed $1,083,396,000 in
total assets and $1,071,537,000 in total debts.
AMERICAN LAWYER: Moody's Junks $78 Mil. Senior Secured Term Loan
----------------------------------------------------------------
Moody's Investors Service has assigned a B3 rating to American
Lawyer Media, Inc.'s proposed senior secured first lien credit
facility. Full details of the rating action are as follows:
The ratings assigned are:
-- American Lawyer Media, Inc.
* $70 million first lien senior secured revolving credit
facility, due 2010 -- B3
* $193 million first lien senior secured term loan facility,
due 2010 -- B3
* $78 million second lien senior secured term loan facility,
2011 -- Caa1
* Issuer rating -- Caa2
The rating upgraded is:
* Senior Implied rating -- B3 from Caa3 (reassigned to American
Lawyer Media, Inc. from American Lawyer Media Holdings, Inc.)
The ratings withdrawn are:
-- American Lawyer Media, Inc.
* $175 million 9.75% senior notes, due 2007 -- Caa3
-- American Lawyer Media Holdings, Inc.
* $63 million 12.25% senior discount notes, due 2008 -- C
* Issuer rating -- C
The rating outlook is changed to stable from negative.
The senior implied rating upgrade reflects the recent improvement
in American Lawyer's sales and cash flow generation, a rebound in
the legal B2B advertising environment, success in growing its
trade show and Internet businesses and the company's ability to
tap bank and public debt funding to complete a long-expected
recapitalization.
American Lawyer's ratings incorporate the dependence of its
business on the US legal services market, its vulnerability to
legal advertising spending, a persistently high leverage profile,
lingering soft spending in segments of American Lawyer's customer
base and management's continuing acquisitive behavior.
The stable outlook indicates Moody's expectation of continuing
organic top line growth, margin improvement and a greater income
contribution from trade shows, information services and Internet
business activities.
In January 2005, American Lawyer announced a complete
recapitalization, including new first and second lien bank
facilities, new unrated holding company notes and the issuance of
$25 million in unrated holding company preferred stock. In
addition American Lawyer commenced a formal process to tender for
its existing $175 million senior unsecured notes.
Pro-forma for the proposed recapitalization, Moody's expects that
American Lawyer's total debt will increase, however, leverage will
remain constant at around 8.5 times pro-forma debt to unadjusted
EBITDA through the holdco notes at the end of September 2004.
While the recapitalization does little to improve unadjusted
leverage, it will save American Lawyer approximately $10 million
in annual cash interest expense and improve the company's maturity
profile so that its earliest significant debt maturity is pushed
out to 2010 from 2007.
Moody's expects that American Lawyer will enjoy adequate
liquidity, primarily from its $70 million senior secured revolving
credit facility, which is expected to receive only modest usage
for tuck-in acquisitions.
The proposed first lien is rated at parity with the senior implied
rating in consideration of the preponderance of first lien debt in
American Lawyer's capital structure. The second lien term loan is
notched down from the senior implied rating in recognition of its
effective subordination behind $263 million in first lien priority
commitments. Moody's notes that the $25 million in holdco
preferred does not represent an infusion of cash equity, rather,
it is the consideration issued to the seller in respect of a
pending acquisition.
Ratings are supported by the Company's strong recurring revenue
streams and its high customer subscription renewal rates.
However, ratings remain constrained by the company's high leverage
(consolidated pro-forma unadjusted leverage of 8.5 times).
Ratings lift could be considered following an improvement in
leverage below 7 times consolidated debt to EBITDA.
Conversely, ratings pressure could result from an inability to
establish traction in business initiatives outside of its legal
publication offerings, the completion of leverage-worsening
acquisitions, or the payment of special dividends.
Headquartered in New York City, New York, American Lawyer Media is
a leading integrated media company, focused on the legal industry.
The Company, which is wholly owned by U.S. Equity Partners, L. P.
recorded 2003 sales of $136 million
AMERICAN SAFETY: Moody's Junks $87.5 Million Senior Secured Loan
----------------------------------------------------------------
Moody's Investors Service affirmed the B2 senior implied rating of
American Safety Razor Company, but revised the Company's rating
outlook to stable from positive following the company's announced
plans to launch new senior secured debt facilities to fund a
$92 million dividend and refinance existing debt.
The proposed $225 million first-lien facilities were assigned a B2
rating, and the $87.5 million second-lien term loan was rated
Caa1. Ratings on American Safety's existing credit facilities
were also affirmed, but will be withdrawn upon closing of the
proposed transaction.
Moody's noted that the increased leverage at a time of heightened
spending behind new product launches and capacity expansion
programs will weaken credit metrics and limit prospective debt
reduction, thereby delaying upward rating pressure. Nonetheless,
the stable outlook and ratings affirmation recognize the Company's
strong niche position in the attractive wet shaving category, its
significant growth and operating efficiency achievements in recent
periods, and the credible operating strategies being implemented
by an experienced management team through internally-generated
cash flows.
The new ratings assigned are:
* $25 million first-lien senior secured revolving credit
facility, assigned at B2;
* $200 million first-lien senior secured term loan B, assigned
at B2;
* $87.5 million second-lien senior secured term loan, assigned
Caa1;
Existing ratings impacted are:
* Senior implied, affirmed at B2;
* $25 million first-lien senior secured revolving credit
facility, affirmed at B2;
* $160 million first-lien senior secured term loan B, affirmed
at B2;
* $40 million second-lien senior secured term loan, affirmed at
B3;
* Senior unsecured issuer rating, downgraded to Caa2 from Caa1.
The affirmation of the senior implied and first-lien ratings with
a stable outlook reflects the expectation that American Safety
will maintain or increase its operating gains in recent periods,
as the Company continues to benefit from the trade-up and
innovation strategies of its wet shaving competitors which are
resulting in similar opportunities and increased demand for the
company's value alternatives.
In addition, Moody's recognizes American Safety's disciplined
spending programs and capital efficiency efforts through the
successful migration to a LEAN culture, which has supported profit
expansion and free cash flow generation. Further support to the
ratings stems from ASR's long-standing relationships with strong,
growing retailers, and the increasing importance of high-profit
private label products to their performance (American Safety holds
a leading 95% share of this sub-segment of the category).
Notwithstanding these strengths, the outlook revision from
positive to stable reflects a deceleration of the time-frame over
which Moody's is likely to consider a ratings upgrade, given the
significant leverage increase (from 3.5x EBITDA to 5.0x) and the
depletion of capital at a time of major new product and capital
spending initiatives.
The higher interest expense associated with heightened debt
levels, in combination with capital spending programs, is expected
to substantially prohibit free cash flow available to reduce debt
over the coming 18 months. American Safety's diminished credit
statistics as a result of the transaction weaken the Company's
position in the B2 senior implied rating category, especially
given the event risk that American Safety faces that necessitates
above-average measures for a given rating category.
Event risk arises from the Company's largely non-branded
participation in the highly brand-sensitive and competitive wet
shaving industry, with well-resourced competitors (Gillette/P&G,
Schick & BIC are 85-95% of the market) and consolidating
retailers. Additionally, American Safety needs to quickly adapt
its products to meet technology changes introduced by industry
leaders without violating highly-protected patents. Additional
risks include its high concentration in a single product category
(wet shaving around 74% of sales), under-funded pension and
medical benefit plans, and a partially-unionized workforce.
Given our expectations for stable operating performance but modest
free cash flow generation, Moody's does not anticipate rating
changes over the coming year. Negative rating actions could be
possible if the company is unable to sustain profit improvements
and hold prospective credit measures, especially if leverage
exceeds 6.0x, free cash flow turns negative, or borrowing access
is impeded.
Potential drivers under this scenario could include debt-financed
acquisitions, additional shareholder initiatives, or renewed
competitive threats. In this last regard, Moody's does not expect
Gillette to alter its trade-up and innovation strategies in wet
shaving following its pending purchase by P&G, but the overall
scale increase by P&G could increase its bargaining power with
retailers and/or shift shelf-space and the competitive positioning
of other branded companies.
On the other hand, continued discipline with regard to cost
efficiency and the successful launch of new products could result
in debt reduction beyond current expectations and, thereby, drive
positive rating momentum, particularly if the company sustains
debt levels below 4.0x EBITDA and generates mid-to-high single
digit free cash flow as a percentage of debt.
For the fiscal year ended December 2004, American Safety grew
sales and EBITDA by 17% and 32%, respectively, as the company
maintained cost controls while achieving domestic market share
gains and strong international growth, partially driven by
favorable currency exchange rates. The Company's profit expansion
and strong working capital management supported moderate free cash
flow generation (despite increased capital spending) and rapid
leverage declines to 3.5x EBITDA from 4.3x at its March 2004
refinancing. Moody's notes that adjustments for capitalized rents
and under-funded pension plans increase leverage by around one
turn.
The B2 ratings on American Safety's senior secured revolving
credit and first lien term loan facilities reflect their priority
in the capital structure as supported by domestic subsidiary and
parent company guarantees and by first lien collateral pledges
comprising substantially all of the domestic assets of the
borrower and guarantors (including capital stock) and 65% of the
capital stock of foreign subsidiaries.
Despite these benefits, the ratings on the facilities are at the
level of the senior implied rating due to limited tangible asset
coverage and the significant portion of the debt structure
comprised by this first lien debt class.
The second lien term loan facility will benefit from the same
guarantees as the first lien debt and will be secured by perfected
second priority liens on the assets backing the first lien debt.
However, the Caa1 rating on this facility reflects effective
subordination to a material amount of first lien debt, as well as
the fact that in a distressed scenario tangible asset coverage is
unlikely to provide meaningful principal recovery for this debt
class, and a large multiple of potentially diminished sales or
EBITDA levels would be required to fully repay the debt.
Importantly, Moody's believes that the increase in higher priority
first-lien and pari passu second-lien debt relative to the
existing capital structure, meaningfully weakens the standing of
the second-lien debt class, and thereby warrants the rating at
one-notch below the existing second-lien facility.
The final credit agreement governing all senior secured credit
facilities is anticipated to contain customary limitations, a 75%
excess cash flow sweep (subject to financial performance
measures), and financial covenants governing maximum leverage,
minimum interest and fixed charge coverages, and maximum capital
expenditures.
Modest amortization requirements (1% of first-lien term loan),
relatively stable sales and profit generation, and expectations
for near-full availability under the $25 million revolving credit
facility at close support American Safety's liquidity profile.
However, Moody's notes that accelerated capital spending programs
in 2005 will likely require modest revolver borrowings and could
constrain covenant cushions beyond customary 15-20% levels.
Headquartered in Cedar Knolls, New Jersey, American Safety Razor
Company is a major US designer, manufacturer and marketer of brand
name and private-label consumer products. Its principal products
include wet shaving blades and razors and industrial/medical
blades. Revenues were approximately $277 million for the fiscal
year ended December 31, 2004.
AMERIKING: Trustee Wants Janssen Keenan as Litigation Counsel
-------------------------------------------------------------
George L. Miller, the chapter 7 Trustee of Ameriking, Inc., and
its debtor-affiliates, asks the U.S. Bankruptcy Court for the
District of Delaware for authority to employ Janssen Keenan &
Ciardi, PC, to prosecute avoidance actions, nunc pro tunc to
Nov. 1, 2004. Avoidance actions include the estate's claims on
account of fraudulent conveyances of the debtor's property and the
recapture of preferential prepetition payments to creditors.
The principal attorneys and paralegals presently designated to
represent the Trustee are:
* Albert A. Ciardi, III, Esq.
* Rosalie L. Spelman, Esq.
* Matthew C. Gaughan, Esq.
* Amy Vendetti -- paralegal
These professionals will be paid 25% of the proceeds from the
prosecution, settlement or resolution of the avoidance actions.
To the best of the Trustee's knowledge, Janssen Keenan is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
Headquartered in Westchester, Illinois, AmeriKing, Inc., operates
approximately 329 franchised restaurants through its subsidiaries.
The Company filed for chapter 11 protection on December 4, 2002
(Bankr. Del. Case No. 02-13515). On June 9, 2004, these cases
were converted to chapter 7 and George Miller was appointed
chapter 7 Trustee. Christopher A. Ward, Esq., and Neil B.
Glassman, Esq., at The Bayard Firm represent the Debtors in their
restructuring efforts. When the Company filed protection from its
creditors, it listed $223,399,000 in assets and $291,795,000 in
debts.
ANC RENTAL: Files Corporate Dissolution Papers as Required by Plan
------------------------------------------------------------------
On Feb. 1, 2005, ANC Rental Corporation filed documents with the
Secretary of State of Delaware, authorizing the dissolution of the
Company. This action was taken in conjunction with the Company's
efforts to effectuate its Joint Plan of Liquidation, which was
confirmed by the U.S. Bankruptcy Court in Delaware on April 15,
2004. The Plan provides that "upon entry of the Confirmation
Order, notwithstanding the Effective Date, the Debtors and the
Liquidating Trust, as the case may be, shall have the authority to
dissolve the Debtors' corporations."
ANC President John W. Chapman discloses in a regulatory with the
Securities and Exchange Commission that the Company has not yet
met all the criteria for achieving the Effective Date but is
working toward achieving that result. The Plan states that "on
the Effective Date, all ANC Common Stock Interests will be
extinguished and no distributions will be made in respect of such
ANC Common Stock Interests."
In December 2004, ANC's board of directors signed a resolution to
dissolve the Company:
UNANIMOUS WRITTEN CONSENT
OF THE BOARD OF DIRECTORS OF
ANC RENTAL CORPORATION
December 31, 2004
WHEREAS, the Amended Joint Chapter 11 Liquidating Plan
of ANC Rental Corporation and certain of its subsidiaries,
as debtors and debtors-in-possession, (collectively, the
"Debtors"), and its Statutory Creditors' Committee (the
"Plan"), and the Order Confirming the Plan, entered on the
court's docket on April 16, 2004 (the "Confirmation Order"),
provide that, from and after the Confirmation Date (as
defined in the Plan), Denis O'Connor, as Liquidating Trustee
of the Liquidating Trust (as such terms are defined in the
Plan), shall be deemed to have all corporate governance
power over the Debtors in connection with all post-
confirmation activities, including the authority to take
actions to dissolve or merge the Debtor corporations; and,
WHEREAS, the Board has determined that it is advisable
and in the best interests of the Debtors, including ANC
Rental Corporation, to immediately assign, transfer, convey
and set over to ANC Liquidating Trust, all assets of ANC
Rental Corporation; and
WHEREAS, the Board has determined that it is advisable
and in the best interests of the Debtors, including ANC
Rental Corporation, itself, to be voluntarily dissolved
effective February 1, 2005; and
NOW, THEREFORE, BE IT RESOLVED, that the Board approves
the assignment of assets and dissolution of the Debtors, and
be it
FURTHER RESOLVED, that in furtherance of the
dissolution of the Debtors, the Board approves and
authorizes Denis O'Connor in his capacity as Liquidating
Trustee for ANC Liquidating Trust to take all necessary
steps to dissolve the Debtors effective February 1, 2005.
IN WITNESS WHEREOF, the undersigned has executed this
written consent as of the date written above.
/s/ John W. Chapman
---------------------
John W. Chapman
President
STATE OF DELAWARE
CERTIFICATE OF DISSOLUTION
The corporation organized and existing under General
Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY AS FOLLOWS:
The dissolution of ANC Rental Corporation has been duly
authorized by the Board of Directors in accordance with
Section 275 of the General Corporation Law of the State of
Delaware.
The dissolution was authorized on December 31, 2004
with an effective date of the dissolution to be February 1,
2005.
The following is a list of the names and addresses of
the directors of the said corporation:
Name Address
---- -------
John W. Chapman 200 S. Andrews Avenue, Fort
Lauderdale, FL 33301
The following is a list of the names and addresses of
the officers of the said corporation:
Name Address
---- -------
John W. Chapman 200 S. Andrews Avenue, Fort
Lauderdale, FL 33301
By: /s/ John W. Chapman
--------------------------
Authorized Officer
Name: John W. Chapman
Title: President and Director
Headquartered in Fort Lauderdale, Florida, ANC Rental Corporation,
is the world's third-largest publicly traded car rental company.
The Company filed for chapter 11 protection on November 13, 2001
(Bankr. Del. Case No. 01-11200). On April 15, 2004, Judge Walrath
confirmed the Debtors' 3rd amended Chapter 11 Liquidation Plan, in
accordance with Section 1129(a) and (b) of the Bankruptcy Code.
Upon confirmation, Blank Rome, LLP, and Fried, Frank, Harris,
Shriver & Jacobson, LLP, withdrew as the Debtors' counsel. Gazes
& Associates, LLP, and Stevens & Lee, PC, serve as substitute
counsel to represent the debtors' post-confirmation interests.
When the Company filed for protection from their creditors, they
listed $6,497,541,000 in assets and $5,953,612,000 in liabilities.
(ANC Rental Bankruptcy News, Issue No. 64; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
ASSET BACKED: Fitch Puts BB+ Rating on $13.678M Class M-11 Certs.
-----------------------------------------------------------------
Asset Backed Securities Corporation -- ABSC -- home equity loan
trust 2005-HE1 is rated by Fitch:
-- $902,742,000 classes A-1 through A-6 mortgage pass-through
certificates 'AAA';
-- $46,163,000 class M-1 certificates 'AA+';
-- $35,335,000 class M-2 certificates 'AA';
-- $21,657,000 class M-3 certificates 'AA-';
-- $19,377,000 class M-4 certificates 'A+';
-- $18,237,000 class M-5 certificates 'A';
-- $17,667,000 class M-6 certificates 'A-';
-- $14,248,000 class M-7 certificates 'BBB+';
-- $12,538,000 class M-8 certificates 'BBB';
-- $11,968,000 class M-9 certificates 'BBB-';
-- $9,119,000 class M-10 certificates 'BBB-';
-- $13,678,000 class M-11 certificates 'BB+'.
The 'AAA' rating on the senior certificates reflects the 20.80%
total credit enhancement provided by:
* the 4.05% class M-1,
* the 3.10% class M-2,
* the 1.90% class M-3,
* the 1.70% class M-4,
* the 1.60% class M-5,
* the 1.55% class M-6,
* the 1.25% class M-7,
* the 1.10% class M-8,
* the 1.05% class M-9,
* the 0.80% class M-10,
* the 1.20% class M-11, and
* the 1.50% initial overcollateralization -- OC.
All certificates have the benefit of monthly excess cash flow to
absorb losses. In addition, the ratings reflect the integrity of
the transaction's legal structure, as well as the primary
servicing capabilities of Saxon Mortgage Services, Inc.
U.S. Bank National Association will act as trustee. All of the
mortgage loans were purchased by an affiliate of the depositor
from NC Capital Corporation, which in turn acquired them from New
Century Mortgage Corporation and WMC Mortgage Corporation.
As of the cut-off date, Feb. 1, 2005, the mortgage loans have an
aggregate balance of $1,139,826,396. The weighted average
mortgage rate is approximately 7.005%, and the weighted average
remaining term to maturity is 347 months. The average cut-off
date principal balance of the mortgage loans is approximately
$187,904. The weighted average original loan-to-value ratio is
79.83%, and the weighted average Fair, Isaac & Co. score is 632.
The properties are primarily located in:
* California (48.60%),
* New York (6.50%), and
* Florida (4.68%).
ATA AIRLINES: Accepting Bids for Chicago Express Business & Assets
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ATA Airlines, Inc. (ATAHQ) intends to sell Chicago Express'
business, including its Department of Transportation and Federal
Aviation Administration certificates, as part of ATA's continuing
reorganization effort. The sale decision resulted from a recent
determination to change ATA's route network.
Chicago Express is a regional feeder carrier operating as ATA
Connection and connecting small- and medium-sized cities with
either Chicago-Midway or Indianapolis. Chicago Express has a
non-unionized workforce employing 400 people in Chicago and
another 200 people in various cities including Evansville, Flint,
Fort Wayne, Grand Rapids, Indianapolis, Milwaukee and South Bend.
"We are entertaining offers for the business and all assets
utilized in the Chicago Express operation," said Sean Frick, ATA's
Vice President and Chief Restructuring Officer.
"Among the more valuable parts of this regional airline are the
operating certificates which, after providing appropriate
information to DOT and the FAA, would enable a buyer to begin air
service more quickly than if a buyer was starting from scratch. A
stand alone application for a new certificate could take up to two
years before approval by the federal government. We believe there
is substantial value for a buyer to begin air transportation
service with this existing operation," said Frick.
The assets include: the FAA Part 121 Operating Certificate, a
uniform fleet of 16 SAAB 340B aircraft, engine and airframe parts,
ground equipment, a state-of-the-art maintenance facility, tooling
and training materials. ATA owns two of the SAAB aircraft and
leases the other 14. The sale may allow for the transfer of those
leases.
Compass Advisors has been engaged by ATA to handle the sale of
Chicago Express. Interested parties should contact Harvey L.
Tepner at (212) 702-8511 or Bruce A. Kaufman at (212) 702-8662.
Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA
Holdings Corp. -- http://www.ata.com/-- is the nation's 10th
largest passenger carrier (based on revenue passenger miles) and
one of the nation's largest low-fare carriers. ATA has one of the
youngest, most fuel-efficient fleets among the major carriers,
featuring the new Boeing 737-800 and 757-300 aircraft. The
airline operates significant scheduled service from
Chicago-Midway, Hawaii, Indianapolis, New York and San Francisco
to over 40 business and vacation destinations. Stock of parent
company, ATA Holdings Corp., is traded on the Nasdaq Stock
Exchange. The Company and its debtor-affiliates filed for chapter
11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case No.
04-19866, 04-19868 through 04-19874). Terry E. Hall, Esq., at
Baker & Daniels, represents the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they listed $745,159,000 in total assets and
$940,521,000 in total debts.
ATA AIRLINES: Viacom Wants Debtors to Decide on Five Contracts
--------------------------------------------------------------
Viacom Outdoor, Inc., asks the United States Bankruptcy Court for
the Southern District of Indiana to:
(a) compel ATA Airlines and its debtor-affiliates to assume or
reject five executory contracts it entered into with ATA
Holdings Corp.; and
(b) direct the Debtors to pay an administrative expense for
all the postpetition amounts it incurred.
Viacom Outdoor provided advertising services to ATA Holdings
pursuant to five unexpired Bulletin Agreements with ATA Holdings:
Unit No. End Date
------- --------
8585C January 31, 2005
1211 February 27, 2005
1411 February 28, 2005
9075C March 15, 2005
8232C April 14, 2005
Leanne Garbers McAnulty, Esq., at Lloyd & McDaniel, PLC, in
Louisville, Kentucky, tells Judge Lorch that Viacom Outdoor
continues to provide advertising services to ATA Holdings, has
fully complied with all provisions of the Agreements, and has met
all of its obligations under the Agreements. However, ATA
Holdings has failed to pay Viacom Outdoor in full for the value of
the postpetition advertising services.
After deducting all payments and credits, Viacom Outdoor asserts
that ATA Holdings owes it $78,286 for the postpetition advertising
services provided through January 2005. Additional amounts will
accrue as Viacom Outdoor continues to provide valuable advertising
services to ATA Holdings, Ms. McAnulty says.
ATA Holdings has enjoyed and is continuing to enjoy all of the
postpetition benefits under the Executory Contracts. Thus, ATA
Holdings should be compelled to make a determination whether it
will assume or reject the Executory Contracts, Ms. McAnulty
maintains.
Viacom asserts that if the Debtors assume the Contracts, the
Debtors should cure or provide adequate assurance that they will
make postpetition payments under the Contracts. If the Debtors
reject the Contracts, the Court should lift the automatic stay to
allow Viacom Outdoor to recover its property.
Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA
Holdings Corp. -- http://www.ata.com/-- is the nation's 10th
largest passenger carrier (based on revenue passenger miles) and
one of the nation's largest low-fare carriers. ATA has one of the
youngest, most fuel-efficient fleets among the major carriers,
featuring the new Boeing 737-800 and 757-300 aircraft. The
airline operates significant scheduled service from
Chicago-Midway, Hawaii, Indianapolis, New York and San Francisco
to over 40 business and vacation destinations. Stock of parent
company, ATA Holdings Corp., is traded on the Nasdaq Stock
Exchange. The Company and its debtor-affiliates filed for chapter
11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case No. 04-
19866, 04-19868 through 04-19874). Terry E. Hall, Esq., at Baker &
Daniels, represents the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, they
listed $745,159,000 in total assets and $940,521,000 in total
debts. (ATA Airlines Bankruptcy News, Issue No. 13; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
ATHERTON FRANCHISE: Fitch Junks Five Securitization Classes
-----------------------------------------------------------
Fitch has taken these rating actions on the issues for Atherton
Franchise Loan Funding LLC listed below:
Atherton Franchise Loan Funding LLC, series 1997-A
-- Class B downgraded to 'CCC' from 'BB+';
-- Class C downgraded to 'CC' from 'B';
-- Class A-1 affirmed at 'AAA';
-- Class A-2 affirmed at 'AAA'.
* Both affirmations are on the strength of an MBIA insurance
policy.
Atherton Franchise Loan Funding LLC, series 1998-A
-- Class C downgraded to 'BBB' from 'A';
-- Class D downgraded to 'BB' from 'BBB';
-- Class E downgraded to 'B' from 'BB';
-- Class F downgraded to 'CC' from 'B';
-- Class A-X affirmed at 'AAA';
-- Class A-2 affirmed at 'AAA';
-- Class B affirmed at 'AA'.
Atherton Franchise Loan Funding LLC, series 1999-A
-- Class A-X downgraded to 'A' from 'AA-'
-- Class A-2 downgraded to 'A' from 'AA-'
-- Class B downgraded to 'BBB' from 'A-',
-- Class C downgraded to 'CCC' from 'BB',
-- Class D downgraded to 'CC' from 'CCC',
-- Classes E and F are affirmed at 'D'.
The negative rating actions reflect additional reductions in
Fitch's expected credit enhancement that will be available to
support each class in all three transactions. Fitch's analysis
incorporated stressed recovery rates on currently defaulted
collateral.
ATLANTIC BROADBAND: Moody's Junks $150M Senior Subordinated Notes
-----------------------------------------------------------------
Moody's Investors Service affirmed Atlantic Broadband Finance,
LLC's (Atlantic Broadband) senior secured bank credit facility and
senior subordinated notes ratings at B2 and Caa1, respectively.
The senior implied rating remains B2 and the outlook remains
stable.
A summary of ratings are:
-- Atlantic Broadband Finance, LLC (Atlantic Broadband)
* $90 Million Senior Secured Revolver due 2010 -- B2
(affirmed)
* $30 Million Senior Secured Term Loan A due 2011 -- B2
(affirmed)
* $275 Million Senior Secured Term Loan B due 2011 -- B2
(affirmed)
* $150 Million Senior Subordinated Notes due 2014 -- Caa1
(affirmed)
* Senior Implied Rating -- B2 (affirmed)
* Senior Unsecured Issuer Rating -- B3 (affirmed)
* Rating Outlook -- Stable
The B2 senior implied rating continues to reflect high financial
leverage of approximately 7 times total debt to EBITDA, low
interest coverage, and concerns about execution risk, though the
latter concern has moderated somewhat based on management's
performance to date.
Competition, however, has arguably intensified, with high direct
broadcast satellite penetration particularly in Atlantic
Broadband's Maryland/Delaware systems, and potential for it to
increase throughout the footprint, as well as heightened
competition from the regional Bell operating companies. Good
intrinsic value, growing cash flows generated by predominantly
upgraded cable systems, and a fairly meaningful layer of junior
ranking capital continue to support the rating, nonetheless.
The stable outlook reflects Moody's expectation that leverage will
approach 6 times at the end of 2005 and fall below that level
during 2006. If Atlantic Broadband realizes projected
deleveraging on a sustained basis and continues to achieve or
outperform its plan, the outlook could be revised to positive
during the second half of 2005, with a potential upgrade in 2006
as leverage dips and remains below 6 times.
Moody's believes, however, that execution of the targeted plan for
reduction in leverage may prove somewhat challenging for
management to achieve due to the intensifying competitive
environment, which may necessitate additional operational and
capital expenses that are not currently incorporated in the
forecasted operating plan.
Specifically, Moody's believes that more aggressive DirecTV
promotions in the western Pennsylvania market - particularly since
DirecTV began offering local broadcasting in that market in late
2004 and has shown recent signs that still relatively new
management seems willing to sacrifice some margin to ramp-up
subscriber growth - could require Atlantic Broadband to respond
more aggressively or risk losing subscribers.
Notably, the ratings do not explicitly incorporate the possibility
of additional asset purchases, notwithstanding Moody's belief that
certain cable systems currently held by Adelphia Communications
would be of interest to the Company. Should any potential future
transaction transpire, either directly or through the sale and
subsequent disposition of certain assets by a third party, Moody's
analysis would likely focus on the mix of financing, increased
execution risk and integration challenges, along with the
perceived benefits of greater scale.
Moody's will monitor the company's progress toward continued
penetration of high speed data, retention of video subscribers,
and the planned telephony rollout, and should Atlantic Broadband
achieve greater than anticipated cash flow growth and apply it to
debt repayment, Moody's would consider upward ratings migration.
Conversely, operational stumbles including a greater than expected
loss of subscribers and/or limited success in expanding data
service penetration could warrant a shift to a negative outlook.
Leverage remains fairly high but in line with Moody's expectations
at approximately 7.1 times debt-to-annualized third quarter
EBITDA, or 8.6 times including preferred stock, while cash
interest coverage is just over 2 times. Moody's views the
preferred stock as containing many debt-like characteristics,
including its cash redemption provision and fixed maturity, but
interest coverage arguably benefits from the absence of a
requisite cash coupon for this instrument.
Leverage and coverage continue to remain relatively weak for a
credit of this scale, but Moody's anticipates the company will
continue to generate cash flow sufficient to service its debt and
meet all capital requirements. Still, positive free cash flow
will likely continue to remain fairly modest, estimated at
approximately $10 million for the full year 2005. Atlantic
Broadband's predominantly upgraded systems have somewhat limited
capital expenditure requirements to date, contributing to the
company's ability to generate modest free cash flow from inception
a little more than one year ago.
Management demonstrated progress in establishing a new corporate
culture and regional and local management teams, as well as
re-branding and simplifying promotional packages to drive high
speed data growth and retain video customers.
Margin compression due to higher programming rate increases as a
smaller, standalone operator and increased marketing spend related
to launching the Atlantic Broadband brand occurred approximately
as expected, with EBITDA margins currently in the 38% range.
Favorable demographics in the Maryland/Delaware and Miami Beach
markets present good growth potential, and successful execution in
these systems could yield diversification benefits for Atlantic
Broadband that would help to offset the existing concentration of
subscribers in Western Pennsylvania, a more mature market.
Atlantic Broadband Finance, LLC, is a multiple system operator
serving approximately 250 thousand cable subscribers located in
western Pennsylvania, Maryland, Delaware and Miami Beach. The
company maintains its headquarters in Quincy, Massachusetts.
BEAR CREEK: Moody's Puts B3 Rating on $245MM Senior Unsec. Notes
----------------------------------------------------------------
Moody's Investors Service assigned Bear Creek Corporation's
$245 million senior unsecured notes at B3 and affirmed Bear
Creek's senior implied rating of B2 and senior unsecured issuer
rating of Caa1. The proceeds of the note offering will partially
fund a recapitalization of the Company.
The ratings benefit from the Company's strong premium brand names,
barriers to entry and vertically integrated structure of the
company's operations. These strengths are tempered by the
company's leveraged balance sheet, aggressive financial policy and
extreme seasonality. The rating outlook is stable.
Moody's ratings actions were:
i) Senior implied - affirmed at B2;
ii) Senior unsecured issuer rating - affirmed at Caa1;
iii) $245 million senior unsecured notes - B3 assigned;
iv) $155 million second lien term loan - B2 withdrawn;
v) $150 milllion senior secured revolving credit facility - B1
withdrawn.
Moody's does not rate the new $125 million secured revolving
credit facility. Bear Creek is using the proceeds of the $245
million notes to redeem its $155 million second lien term loan, to
pay a dividend of $82.6 million to its equity sponsors and to
redeem the $13.9 million in notes currently at the holding company
level.
Bear Creek's ratings are limited by the Company's high lease-
adjusted leverage relative to earnings, its low interest coverage
(EBIT/Interest), its modest top line revenue growth, and its
moderate operating margins. Ratings also consider the Company's
extremely high seasonality with approximately 50% of net sales
occurring in the month of December due to the gift-giving nature
of many of the Company's products.
Ratings also consider its peach and pear orchards and the single
site of operation for its rose production, which make the company
vulnerable to weather and other factors that could influence
production. Ratings also reflect the Company's exposure to
macroeconomic factors, particularly the level of discretionary
consumer spending and the increasing competition in the market due
to the proliferation of gourmet food catalogues. Furthermore, the
company's Jackson & Perkins and specialty retail segments have had
mixed success.
The maintenance of Bear Creek's ratings reflects the Company's
leading position in the production and marketing of branded
premium fresh fruit and gourmet foods under the Harry and David
name and premium rose plants and horticultural products under the
Jackson & Perkins brand name. Harry and David and Jackson &
Perkins have strong brand awareness with a demographically
attractive customer base.
Bear Creek has expanded from direct marketing (catalog, internet)
into outlet stores, specialty stores and wholesaling in order to
expand and diversify its customer base, increase year round
self-purchase consumption, and leverage production capacity. The
improved performance of the Harry & David retail stores has also
contributed to maintaining the current ratings level.
Bear Creek's operations are vertically integrated with Bear Creek
growing, manufacturing, packaging or designing products that
account for over 75% of sales. The Company's vertical integration
allows for superior quality control, manufacturing flexibility,
and lower costs. Barriers to entry are high as a result of the
company's brand names, high number of patents on its roses,
ownership of large tracts of land ideally suited for the
production of comice variety pears and roses, and the long time
that it takes for orchards to mature.
Bear Creek is experienced in managing a highly seasonal business
with perishable inventory and a large temporary workforce. Bear
Creek has an asset rich balance sheet and has spent generously
over the last 5 years on capital expenditures, resulting in
state-of-the-art infrastructure.
The stable rating outlook assumes that leverage and coverage
ratios will improve. Downward pressure on the Company's ratings
could occur if an economic downturn occurs that impacts
discretionary spending, margins decline and credit ratios do not
strengthen.
The Company's extreme seasonality, high leverage and aggressive
financial policy limits ratings upside unless internal cash flow
generation resulting from strong business performance leads to
much improved leverage and fixed charge coverage metrics and the
company's owners sustain credit measurements at that level rather
than use funds for acquisitions.
Bear Creek is expected to have pro forma funded debt of
$245 million at closing, consisting of no outstandings under the
revolver and $245 million of senior unsecured notes. Based on
Moody's projections for March 2005, total debt/ EBITDA would be
approximately 4.6x at closing, excluding peak seasonal borrowings
of approximately $80 million, which occurs in November.
Including peak seasonal borrowings and rental expense as debt,
debt/EBITDAR would be approximately 6.8x. Pro forma EBITDA
coverage of interest for fiscal 2005 is estimated at 2.6x and pro
forma EBIT coverage of interest is estimated at 1.4x. Moody's
expects the company will generate positive free cash flow (cash
from operations less capital expenditures) and will use the
proceeds to reduce debt and improve credit metrics.
Liquidity provided by Bear Creek's $125 million revolving credit
facility appears adequate for the company's projected growth and
to meet peak borrowing needs. Borrowings under the revolver are
highly seasonal in nature, with no borrowings for much of the year
with borrowings in the $80 million range expected at peak in
fiscal year ended March 2006.
Bear Creek's business is highly seasonal; it is cash flow negative
in the first, second and fourth fiscal quarters and strongly cash
flow positive in the third fiscal quarter. Borrowings peak in
October and November. Cash on the balance sheet peaks in
December, after the holiday selling season, with all seasonal
revolving credit facility borrowings repaid. The Company appears
to have good covenant cushions for its senior secured revolving
credit facility and senior unsecured notes. Lack of required debt
amortization on the senior unsecured notes is helpful to
liquidity.
The B3 rating on the senior unsecured notes is one notch below the
senior implied as these notes do not benefit from the collateral
that the revolving credit facility has secured. The senior
unsecured notes do benefit from the guarantees from the operating
subsidiaries and the holding company.
The notes are typically the bulk of outstanding debt for the
company for most of the year. The senior unsecured issuer rating
is rated two notches below the senior implied rating because the
issuer is a holding company without any significant tangible
assets at the holding company level and does not benefit from
operating subsidiary guarantees.
Bear Creek Crop., located in Medford, Oregon, produces and markets
branded premium fresh fruit and gourmet foods under the Harry and
David brand and premium rose plant and horticultural products
under the Jackson & Perkins brand through the company's catalogs,
over the internet, through retail stores, and via the wholesale
channel. For the last twelve months ended December 25, 2004, the
Company generated net sales of $553.1 million and pro forma
adjusted EBITDA of $56.9 million.
BEAR STEARNS: Fitch Affirms Low-B Ratings on Classes L & M Certs.
-----------------------------------------------------------------
Fitch Ratings affirms Bear Stearns Commercial Mortgage Securities
Inc.'s commercial mortgage pass-through certificates, series
2000-WF2:
-- $100.9 million class A-1 'AAA';
-- $529.4 million class A-2 'AAA';
-- Interest only class X 'AAA';
-- $28.3 million class B 'AA';
-- $26.2 million class C 'A';
-- $8.4 million class D 'A-';
-- $26.1 million class E 'BBB';
-- $7.3 million class F 'BBB-';
-- $4.2 million class L 'B';
-- $2.1 million class M 'B-'.
Fitch does not rate classes G, H, I, J, K and N.
The rating affirmations reflect the stable performance and
scheduled amortization of the transaction. As of January 2005
distribution date, the pool has paid down 8.67%, to $765.8 million
from $838.5 million at issuance. The certificates are
collateralized by 146 loans. The transaction's highest geographic
concentration is in California (36%), with equal dispersion across
northern and southern California. The pool experienced a $2.8
million loss in the fourth quarter of 2004 as a result of two loan
liquidations.
Fitch reviewed the two credit assessed loans in the pool, the MHC
loan (11%) and the FM Global loan (4%). Both loans maintain their
investment grade credit assessments.
The transaction contains two specially serviced loans (1.21%)
which are 90+ days delinquent. Losses are expected to be absorbed
by the non-rated N class.
BRIGHTPOINT INC: S&P Revises Outlook on B+ Rating to Positive
-------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit rating on Indianapolis, Indiana-based Brightpoint Inc., and
revised its outlook on the company to positive from stable.
"The outlook revision reflects the company's consistent operating
performance over the past two years, and a good financial profile
for the rating," said Standard & Poor's credit analyst Martha
Toll-Reed.
Brightpoint does not have any outstanding rated debt.
The rating on Brightpoint Inc. reflects:
-- modest but stable profitability,
-- narrow product base, and
-- significant supplier concentration.
These factors partly are offset by Brightpoint's good market
position and modestly leveraged balance sheet.
Brightpoint is a leading distributor and provider of value-added
logistics services in the fragmented and highly competitive
wireless communications products distribution market. Double-
digit growth in worldwide wireless product shipments is expected
to continue, based on increased market penetration, particularly
in developing countries, and a significant base of replacement
product sales. Brightpoint's revenue growth is expected to be
more moderate, based on the company's strategic emphasis on
logistics services, which have a smaller revenue impact but higher
profitability than distribution services.
The company reported revenues of $1.9 billion and net income of
$16.3 million for the fiscal year ended Dec. 31, 2004, up 6% and
39%, respectively, from the prior year. While consolidated EBITDA
margins (adjusted for capitalized operating leases) have been
consistent over the past two years at about 2.5%, growth and
operating performance by geographic segment have been
significantly more volatile. Assuming consistent profitability,
free operating cash flow levels largely will be driven by
growth-related funding requirements and working capital
management. Capital expenditures ($8.3 million in fiscal 2004) are
expected to remain modest.
BRITISH AVIATION INSURANCE: Section 304 Petition Case Summary
-------------------------------------------------------------
Petitioner: Board of Directors
The British Aviation Insurance Company Limited
Fitzwilliam House
10 Saint Mary Axe
London, EC3A EQ
Debtor: The British Aviation Insurance Company Limited
Fitzwilliam House
10 Saint Mary Axe
London, EC3A EQ
Case No.: 05-10720
Type of Business: The Debtor wrote mainly aviation direct
business or facultative reinsurance and was
recognized as a leading underwriter in the
aviation risks in which it participated. On
Jan. 1, 2002, the Debtor ceased to underwrite
any insurance business and went into run-off.
Section 304 Petition Date: February 7, 2005
Court: Southern District of New York (Manhattan)
Petitioner's Counsel: Howard Seife, Esq.
Francisco Vazquez, Esq.
Chadbourne & Parke LLP
30 Rockefeller Plaza
New York, New York 10112
Tel: (212)408-5361
Fax: (212) 541-5369
Audited Financial Condition as of December 31, 2003:
Total Assets: GBP254,616,000
Total Debts: GBP151,938,000
BRITISH AVIATION: Scheme Approval Hearing Set on March 15
---------------------------------------------------------
The Board of Directors of The British Aviation Insurance Company
Limited filed a petition under Section 304 of the U.S. Bankruptcy
Code in the U.S. Bankruptcy Court for the Southern District of New
York. The Company wants to prevent any U.S. creditor from seizing
Company assets located in the U.S. The Company also seeks an
order from the Court to give full force and effect to its proposed
Scheme of Arrangement in the U.S.
About the Company
British Aviation Insurance began writing certain business through
its Canadian Branch in 1942. The Company wrote mainly aviation
direct business or facultative reinsurance and was recognized as a
leading underwriter in the aviation risks in which it
participated. The Company is licensed in 44 of the United States
to write surplus line coverage.
From Feb. 24, 1930, to Dec. 31, 2001, the Company underwrote
insurance and reinsurance. On Jan. 1, 2002, the Company
(including the Canadian Branch) stopped underwriting any insurance
business and went into run-off mode.
When insurance companies enter run-off, they have to determine,
settle and pay all liquidated claims of their insureds as they
arise. Typically, a run-off of an insurance company may take 20
or more years to complete. To shorten the Company's run-off
period and reduce administrative costs, the Company has proposed a
scheme of arrangement, which is scheduled for vote by its
creditors on March 15, 2005.
The Scheme of Arrangement
The Scheme applies to all insurance and reinsurance business
written by or on behalf of the Company in the period of
Feb. 24, 1930, to Dec. 31, 1990, and by the Canadian Branch from
1942 to Dec. 31, 1991. The Company will pay the Scheme creditors
the amount of its established liability.
By its terms, the application of the Scheme is limited to Claims
arising under Scheme Business. The Scheme will not apply to other
insurance or reinsurance business not falling within the
definition of Scheme Business, trade claims or non-insurance
related liabilities of the Company.
Global Aerospace Underwriting Managers Limited of Fitzwilliam
House, in its capacity as scheme manager will implement the Scheme
in accordance with its terms. Dan Yoram Schwarzmann and Claire
Louise Whitcomb, as scheme advisers, will provide advice and
assistance to the Company and the Scheme Manager upon written
request in order to facilitate the implementation of the Scheme.
Bar Date
Creditors must file written proofs of claim on or before
July 25, 2005, at 5:30 p.m. London time. Claim forms must be
delivered to:
The Scheme Manager
Global Aerospace Underwriting Managers Limited of
Fitzwilliam House
10 Saint Mary Axe
London, EC3A 8EQ
Headquartered in London, The British Aviation Insurance Company
Limited -- http://www.baicsolventscheme.co.uk/-- filed a Section
304 petition on February 7, 2005 (Bank. S.D.N.Y. Case No. 05-
10720). Howard Seife, Esq., and Francisco Vazquez, Esq., at
Chadbourne & Parke LLP represent the Debtor in this proceeding.
The Petition discloses assets of GBP254,616,000 and liabilities
totaling GBP151,938,000
BULLHEAD LLC: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Lead Debtor: Bullhead, LLC
500 Wilson Pike Circle, Suite 100
Brentwood, Tennessee 37027
Bankruptcy Case No.: 05-01441
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Nashville Business Venture 05-01442
Southking Business Venture 05-01443
Smith Foods, II, Limited Partnership 05-01444
E. R. Smith Real Estate, LLC 05-01445
Type of Business: The Debtors operate 22 burger king restaurant
franchises in the middle Tennessee area.
Chapter 11 Petition Date: February 4, 2005
Court: Middle District of Tennessee (Nashville)
Judge: Keith M. Lundin
Debtors' Counsel: Barbara Dale Holmes, Esq.
Craig Vernon Gabbert, Jr., Esq.
Tracy M. Lujan, Esq.
Harwell Howard Hyne Gabbert & Manner, PC
315 Deaderick Street, Suite 1800
Nashville, TN 37238
Tel: 615-256-0500
Fax: 615-251-1058
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
The Debtors did not file a list of their 20-largest creditors.
CATHOLIC CHURCH: U.S. Trustee Alters Spokane Committee Membership
-----------------------------------------------------------------
Sixty-two clergy sex abuse victims who have filed lawsuits against
the Diocese of Spokane complained that the members of the Official
Committee of Tort Claimants initially appointed by the U.S.
Trustee do not adequately represent the interests of tort
claimants. The consortium complains that the Committee members
appointed by the U.S. Trustee:
-- are controlled by persons loyal to the church;
-- are opposed to those that have filed state court claims;
and
-- hold minimal or nonexistent claims.
Dillon E. Jackson, Esq., at Foster, Pepper, & Shefelman, PLLC, in
Seattle, Washington, points out that of the current Tort
Committee members, only Richard Frizzell and Michael Shea are
victims of alleged clergy sexual abuse, who have filed lawsuits
against the Diocese.
Mr. Jackson notes that the principal creditor constituents in
Spokane's Chapter 11 case are the tort claimants who have filed
actions against the Diocese.
Church Loyalists
Mr. Jackson contends that three members of the Committee --
Brynne Malone, Steve Denny, and Marjory Garza -- have publicly
stated they have no interest in bringing monetary claims against
Spokane, and in fact, have not commenced legal action against the
Diocese.
Mr. Denny and Ms. Garza do not have claims at all:
* Mr. Denny, in a formation meeting with the other Committee
members, publicly stated that he was not interested in
pursuing a claim against the Diocese. He alleged that a
Franciscan priest, not a diocesan priest, abused him. Mr.
Denny stated that he simply wanted a symbolic one-dollar
from the Diocese.
* Ms. Garza's claims were against an order of nuns of the
Catholic Church. Ms. Garza's claims against that order was
settled in 1999. In addition to the settlement itself
barring her claims, the discovery rule on the statute of
limitations in Washington would bar her from bringing
additional claims for abuse against Spokane.
Ms. Garza, Mr. Malone, and Mr. Denny have also made statements
expressing their hostility to the tort claimants who had actually
filed suits and sought monetary compensation.
"It is obvious from their own statements that these committee
members will not property represent the vast majority in number
and in amount of the claimants in the tort claimant category,"
Mr. Jackson says.
The 62 clergy sex abuse victims contend that the U.S. Trustee, in
her appointment decisions, and in her refusal to correct those
decisions as further facts have been revealed, has abused her
discretion.
Mr. Jackson also alleges that Marcia Galucci, a counselor at
Lutheran Family Services, which is the organization selected by
the Diocese for counseling of abuse victims, determined those
victims who had not filed lawsuits against the Church and who had
a continuing loyalty to the Diocese accompanied by an enmity
against those who had filed suits. Ms. Galucci then encouraged
these individuals to apply for membership in the Tort Committee.
Ms. Galucci's intensive efforts explains why creditors who have no
or minimal claims against the Debtor, sought membership in the
Tort Committee, Mr. Jackson says.
Phantom Claims
Spokane alleges that there may be 70 additional abuse claimants,
which constitutes a reason for placing church loyalists in control
of the Tort Committee. Spokane assumes that these 70 future
claims will not file suit, but will only seek counseling. With 70
future claims that have not filed suit and 60 plus claims that
have filed suit, Spokane's stated rationale is that the majority
of the victims of abuse are persons who will not seek redress
through the courts and, therefore, persons who merely want
counseling should control the Committee of Tort Claimants.
Mr. Jackson tells Judge Williams that there is no need for
Committee representation for persons who have not asserted claims
against the Diocese because in those cases the Court will
typically appoint an "unknown claimants representative." That
representative is given the task of protecting the interests of
unknown claimants. The 70 persons who "may have been abused," and
thus may have claims, will be adequately represented by that
person.
Church Loyalists Must Be Removed
Mr. Jackson maintains that no resolution of the case can occur
through a committee that does not enjoy the confidence and support
of the majority of the Tort Claimants.
The 62 clergy sex abuse victims, therefore, ask Judge Williams to
remove Ms. Garza, Mr. Malone, and Mr. Denny from the Tort
Committee because these persons cannot serve as fiduciaries on
behalf of the interests of tort claimants and at least two of them
do not hold claims.
Alternatively, the 62 clergy sex abuse victims ask Judge Williams
to:
(a) direct the U.S. Trustee to appoint additional
representatives from their group as Tort Claimants'
Committee members, so that the majority of the Committee
represents the majority of Tort Claims; or
(b) order the formation of two Tort Claimants' Committees, one
representing monetary claimants and one representing
victims who primarily seek counseling or related services
from the Diocese; or
(c) appoint an additional committee of claimants who as of the
Petition Date had filed state court claims against Spokane
for sexual abuse.
* * *
On February 2, 2005, the U.S. Trustee removed Michael Shea and
Richard Frizzell from the Official Committee of Tort Claimants.
The Tort Committee is now composed of:
* Steve Denny,
* Marjorie Garza, and
* Brynne Malone
The U.S. Trustee appointed a separate Official Committee of
Tort Litigants, which is composed of creditors who filed
prepetition tort-based lawsuits against Spokane. The members
of the Tort Litigants Committee are:
* Richard Frizzell,
* Mark Mains,
* William McVay,
* Brad Norton, and
* Michael Shea
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. 16; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
CATHOLIC CHURCH: Hamilton Rabinovitz Hired by Tuscon Claim Reps.
----------------------------------------------------------------
The Unknown Claims Representative, A. Bates Butler III, and the
Guardian ad litem, Charles Arnold, in the Diocese of Tucson's
Chapter 11 case seek Judge Marlar's permission to retain
Hamilton, Rabinovitz, & Alschuler, Inc., as consultants.
Hamilton provides analytical services focused on the estimation of
claims and the development of claims procedures with regard to
payments and assets of a claims resolution trust.
Messrs. Butler and Arnold believe that Hamilton is well qualified
to serve as their consultants because the firm's members have
assisted and advised numerous chapter 11 debtors and creditors in
the estimation of the value and number of claims in other "mass-
tort" reorganizations.
As consultants, Hamilton will:
(a) estimate the number and value of future unknown claims;
(b) develop claims procedures to be used in the development of
financial models of payments and assets of a settlement
trust;
(c) render expert testimony as required by Messrs. Butler and
Arnold; and
(d) provide other advisory services as may be requested by
Messrs. Butler and Arnold, from time to time.
Hamilton will be compensated for its services on an hourly basis,
in accordance with the firm's normal billing rates:
Position Hourly Rate
-------- -----------
Senior Partners $500
Junior Partners $450
Principals $400
Directors $350
Managers $300
Senior Analysts $250
Analysts $175
Research Associates $150
Hamilton will also be reimbursed for its reasonable out-of-pocket
expenses incurred in connection with its retention.
Francine F. Rabinovitz, a member of the firm, assures Judge
Marlar that Hamilton is "disinterested" as that term is defined in
Section 101(14) of the Bankruptcy Code as modified by Section
1107, and does not hold any interest adverse to Tucson's case.
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. (Catholic Church Bankruptcy News, Issue No. 16;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
CHC INDUSTRIES: Disclosure Statement Hearing Set for March 14
-------------------------------------------------------------
The Honorable Paul M. Glenn of the U.S. Bankruptcy Court for the
Middle District of Florida will convene a hearing at 1:30 p.m., on
March 14, 2005, to consider the adequacy of the Amended Disclosure
Statement explaining the Amended Plan of Reorganization filed by
CHC Industries, Inc., fka Cleaners Hanger Company.
The Debtor filed its Amended Disclosure Statement and Amended Plan
on Jan. 25, 2005.
The Plan provides for the liquidation of company's Assets,
including the pursuit of any Causes of Action, to pay holders of
Allowed Claims and Allowed Equity Interests pursuant to the terms
of the Plan. The Debtor has already liquidated certain Assets and
may continue to liquidate other Assets prior to confirmation of
the Plan and the proceeds from those liquidations will constitute
the property of the Reorganized Debtor on the Effective Date
subject to the distribution process under the Plan.
Existing Equity Interests in the Debtor will not be entitled to
any distributions until Holders of all Allowed Claims, including
Allowed Unsecured Claims, have been paid in full.
The Plan provides for:
a) the payment in full of Allowed Administrative Claims,
Allowed Priority Tax Claims, Allowed Priority Claims, and
Allowed Tax Lien Claims from available funds on the
Distribution Date;
b) the Holders of the Allowed SunTrust Secured Claims have
already been paid in full during the reorganization process
and those claims will not retain or receive any
distributions under the Plan; and
c) the establishment of procedures for the Reorganized Debtor
to make distributions on account of Allowed Administrative
Convenience Claims, Allowed Unsecured Claims and Allowed
Equity Interests over a specific period of time.
Full-text copies of the Amended Disclosure Statement and Amended
Plan are available for a fee at:
http://www.researcharchives.com/download?id=040812020022
Headquartered in Palm Harbor, Florida and formerly known as
Cleaners Hanger Company, CHC Industries, Inc., manufactures and
distributes steel wire coat hangers. The Company filed for
chapter 11 protection on October 6, 2003 (Bankr. M.D. Fla. Case
No. 03-20775). Scott A. Stichter, Esq., at Stichter, Riedel,
Blain & Prosser, PA, represent the Debtor in its restructuring
efforts. When the Company filed for protection from its
creditors, it listed $25,000,000 in total assets and $20,000,000
in total debts.
CHC INDUSTRIES: Taps Gardner Wilkes to Investigate & Pursue Claims
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida gave
CHC Industries, Inc., permission to employ Gardner Wilkes Shaheen
as its special litigation counsel.
Gardner Wilkes will:
a) investigate and pursue claims and causes of actions related
to the sale of the Debtor's corporate headquarters located
in Palm Harbor, Florida, including examination of the
parties involved in the sale of the Palm Harbor building;
b) assist the Debtor in preparing for mediation involving
Ispat, including reviewing of claims against Ispat and
defenses to claims being asserted by Ispat; and
c) assist the Debtor in analyzing claims which it may have
against any third parties and assist the Debtor in preparing
to defenses to claims which may be available to the Debtor.
Richard Wilkes, a Member at Gardner Wilkes, reports the Firm's
professionals bill:
Designation Hourly Rate
----------- -----------
Partners $200 - $350
Associates $150 - $190
Paralegals $105
Gardner Wilkes assures the Court that it does not represent any
interests adverse to the Debtor or its estate.
Headquartered in Palm Harbor, Florida and formerly known as
Cleaners Hanger Company, CHC Industries, Inc., manufactures and
distributes steel wire coat hangers. The Company filed for
chapter 11 protection on October 6, 2003 (Bankr. M.D. Fla. Case
No. 03-20775). Scott A. Stichter, Esq., at Stichter, Riedel,
Blain & Prosser, PA, represent the Debtor in its restructuring
efforts. When the Company filed for protection from its
creditors, it listed $25,000,000 in total assets and $20,000,000
in total debts.
COMMUNITY HEALTH: Selling Mississippi Hospital to Delta Regional
----------------------------------------------------------------
Community Health Systems, Inc., (NYSE:CYH) reported the execution
of a definitive agreement to sell The King's Daughters Hospital, a
137-bed hospital in Greenville, Mississippi, to Delta Regional
Medical Center, an acute care hospital with 268 beds, also located
in Greenville. The divestiture is subject to regulatory approvals
and is expected to close as soon as practicable after the
approvals are obtained.
About the Company
Located in the Nashville, Tennessee, suburb of Brentwood,
Community Health Systems is a leading operator of general acute
care hospitals in non-urban communities throughout the country.
Through its subsidiaries, the Company currently owns, leases or
operates 70 hospitals in 22 states. Its hospitals offer a broad
range of inpatient and outpatient medical and surgical services.
Shares in Community Health Systems, Inc. are traded on the New
York Stock Exchange under the symbol "CYH."
* * *
As reported in the Troubled Company Reporter on Dec. 8, 2004,
Moody's Investors Service assigned a B3 rating to Community Health
Systems' new $250 million senior subordinated notes due 2012,
issued at the parent holding company by Community Health Systems,
Inc. The debt issue will be used to pay down the $240 million
balance on its revolving credit facility that the company drew
down following a repurchase and retirement of approximately half
of the 23.1 million shares sold by affiliates of Forstmann Little
& Co. on September 21, 2004. Forstmann Little, which had been
Community Health's principal stockholders since 1996, sold all of
its beneficial ownership in the company at that time.
Ratings assigned:
-- Community Health Systems, Inc. (Parent Holding Co)
* $250 million Senior Subordinated Notes due 2012 -- rated
B3
Ratings Affirmed:
-- CHS/Community Health Systems, Inc. (Intermediate Holding Co)
* $1.2 Billion Senior Secured Term Loan B due 2011 -- rated
Ba3
* $425 Million Senior Secured Revolver due 2009 -- rated
Ba3
-- Community Health Systems, Inc. (Parent Holding Co)
* $287.5 Million 4.25% Convertible Subordinated Notes due
2008, rated B3
* Senior Implied Rating -- Ba3
* Senior Unsecured Issuer Rating -- B2
* Outlook -- stable
COUNSEL CORPORATION: Terminates Stock Registration with SEC
-----------------------------------------------------------
Counsel Corporation (TSX:CXS) (OTCBB:CXSN) has filed a Form 15
with the Securities and Exchange Commission. The Form 15 was
filed with the SEC in order to terminate the Company's common
stock registration under the Securities and Exchange Act of 1934.
Because the OTC Bulletin Board requires quoted companies to be
reporting companies under the 1934 Act, as a result of the
Company's termination of registration, Counsel Corporation common
stock will no longer be quoted on the OTC Bulletin Board. The
obligations of Counsel Corporation to file periodic reports with
the SEC, including reports on Forms 20-F and 6-K, will cease upon
filing of the Form 15.
Allan Silber, Chairman and Chief Executive Officer of the Company,
said "Counsel Corporation is taking this action in order to reduce
operating expenses. The ever increasing costs and administrative
burdens of being a reporting company in the United States outweigh
the benefits of the Company's common stock continuing to be quoted
on the OTC Bulletin Board. This is especially true given that the
Corporation's common stock will continue to be traded on its
primary exchange, The Toronto Stock Exchange. Therefore, the
board of directors concluded that continued registration with the
SEC was no longer cost effective." Mr. Silber emphasized, "This
action will in no way change the way Counsel Corporation conducts
its business, and Counsel Corporation will continue to provide
information to stockholders through its reporting requirements
with the Ontario Securities Commission and the Toronto Stock
Exchange. This information will be made available through the
SEDAR system at http://www.sedar.com/
Counsel Corporation (TSX:CXS) (OTCBB:CXSN) --
http://www.counselcorp.com/-- is a diversified company focused on
acquiring and building businesses using its financial and
operational expertise in two specific sectors: communications and
real estate. Counsel's communications platform is focused on
building upon its existing communications investment, Acceris
Communications, Inc. (OTCBB:ACRS), through organic growth and by
acquiring substantial additional customer revenues. Counsel's
real estate platform has a focused strategy of investing in and
developing income producing commercial properties, primarily
retail shopping centres.
At Sept. 30, 2004, Counsel Corporation's balance sheet showed a
$29,385,000 stockholders' deficit compared to a $14,150,000 equity
deficit at Dec. 31, 2003.
COVENTRY HEALTH: Moody's Holds Ba1 Senior Unsecured Debt Rating
---------------------------------------------------------------
Moody's Investors Service has assigned a Baa1 insurance financial
strength rating with negative outlook to HealthAssurance
Pennsylvania, Inc., HealthAmerica Pennsylvania, Inc., and Group
Health Plan, Inc.
Moody's stated that each company has demonstrated strong earnings,
premium growth and reserve adequacy. Each company is a
significant operating subsidiary of Coventry Health Care Inc.,
accounting for at least 10% of Coventry's premium and fee revenue.
HealthAssurance Pennsylvania, Inc., offers non-HMO products,
including Medicaid, in Pennsylvania. Moody's stated that the
assignment of the Baa1 rating to HealthAssurance Pennsylvania,
Inc. reflects the Company's strong membership and premium growth,
good reserve adequacy, and improving medical loss ratio over the
last two years. The Company has reported steadily increasing
earnings over this period with after-tax margins of approximately
3% on a statutory basis.
HealthAmerica Pennsylvania, Inc., markets HMO products in
Pennsylvania including Medicare Advantage. In assigning the Baa1
IFSR to this Company, Moody's noted the Company's stable earnings
record over the last several years, conservative reserve margins,
and good premium growth. While overall membership in this
subsidiary has been declining, Moody's noted that Medicare
membership has been growing.
Group Health Plan, Inc., operates in St. Louis and markets HMO,
POS and Medicare products. According to Moody's, the Baa1
insurance financial strength rating assigned to Group Health Plan,
Inc. is based on its strong financial profile including solid
earnings margins, strong membership and premium growth, a risk
based capital (RBC) level in excess of 200% at company action
level (CAL), and substantial dividends to the parent company over
the last two years.
The rating agency also commented that while each of the companies
operates in a defined geographic area, subjecting each company to
a higher degree of risk from state specific regulation or economic
downturns, the rating of each of the operating companies' benefits
from the capital strength, diversity, and financial flexibility of
the consolidated Coventry organization.
Coventry's Ba1senior unsecured debt rating reflects the Company's
position in the U.S. health services marketplace, covering over
2.4 million members with diverse product offerings, including
Medicare, Medicaid and both risk and non-risk products to
employers including federal, state, and local governments.
Over the past several years, the Company has focused on a strategy
of acquiring small underperforming health care companies and
making them profitable. Recent improvements in operating margins
have stemmed from disciplined pricing, expense savings, and
improved medical management oversight.
Moody's maintains a negative outlook on Coventry Health's Ba1
senior unsecured debt ratings as well as the insurance financial
strength ratings of the three operating companies. This is based
on the increased financial leverage as well as operational and
integration issues Coventry faces with the planned acquisition of
First Health Group.
The rating agency noted that the scope of the integration of First
Health is considerably different and more complicated than those
Coventry has tackled in past years, as the company will be faced
with integrating a national business strategy with 15 separate
health plans as well as developing expertise in the distinct First
Health businesses. In addition, the recent management changes at
Coventry create some concerns as senior management acclimates to
their new positions while the First Health acquisition is
completed.
Moody's stated that over time, if the Company meets its expected
financial and operational goals for both Coventry and First
Health, and reduces its financial leverage (debt to capital ratio)
to below 25%, the outlook or ratings of the combined company may
improve. However, the ratings could be negatively affected should
Coventry consider other large debt-financed acquisitions in the
near-term, increase its financial leverage, or face unforeseen
negative developments in the integration or financing of the First
Health transaction.
The ratings assigned with a negative outlook are:
-- HealthAssurance Pennsylvania, Inc.:
* Insurance Financial Strength Rating at Baa1;
-- HealthAmerica Pennsylvania, Inc.:
* Insurance Financial Strength Rating at Baa1;
-- Group Health Plan, Inc.:
* Insurance Financial Strength Rating at Baa1.
The existing ratings with negative outlooks remaining unchanged:
-- Coventry Health Care, Inc.:
* senior implied debt rating at Ba1;
* senior unsecured debt rating at Ba1;
* senior unsecured credit facility at Ba1;
* long-term issuer rating at Ba1.
Coventry Health Care, Inc., headquartered in Bethesda, Maryland
reported total membership of 2.4 million as of September 30, 2004.
The Company reported net income of $245 million on revenues of
approximately $4 billion for the nine months ending September 30,
2004.
HealthAssurance Pennsylvania, Inc., which is domiciled in
Pennsylvania, reported premiums of approximately $601 million for
the period ending September 30, 2004, and statutory surplus of
$59 million as of September 30, 2004.
HealthAmerica Pennsylvania, Inc., also domiciled in Pennsylvania,
reported premiums of approximately $557 million for the period
ending September 30, 2004, and statutory surplus of $77 million as
of September 30, 2004.
Group Health Plan, Inc., domiciled in Missouri, reported premiums
of approximately $476 million for the period ending Sept. 30,
2004, and statutory surplus of $75 million as of Sept. 30, 2004.
An insurance financial strength rating is Moody's opinion of a
company's financial ability to repay punctually its senior
policyholder claims and obligations.
CSFB MORTGAGE: S&P's Rating on Class II-M-2 Issues Tumbles to D
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on
class II-M-2 from Credit Suisse First Boston Mortgage Securities
Corporation's series 2002-19 loan group 2 to 'D' from 'CCC'.
At the same time, ratings are affirmed on the remaining classes
from the same series and loan group.
The lowered rating reflects that the fact that the class suffered
a principal loss of $20,683 during the distribution period ending
Oct. 26, 2004. An additional loss was applied to the class for
the period ending Nov. 27, 2004. Based on the current
performance, it is not likely that the principal losses will be
recoverable. In addition, interest payments are being
determined based on the new, lower balance.
On the performance side, realized losses for loan group 2 total
$1,302,982.59 as of the last payment date, with 40% of the losses
occurring in the most recent six months. Moreover, total and
severe delinquencies during the same period have averaged 26.13%,
and 13.91%, respectively. Overcollateralization (o/c) for the
loan group has been reduced to $40,069.19, well below its original
target of $1,126,208.36.
The affirmations reflect sufficient levels of credit support to
maintain the current ratings, despite the high level of
delinquencies. Standard & Poor's will continue to monitor the
performance of the transaction to ensure the assigned rating
accurately reflects the risks associated with this security.
Credit support for class II-M-2 is provided by excess interest and
o/c. In addition, all other classes receive further support from
subordination.
Current credit enhancement for the classes is as follows:
-- Class II-A-4: 96.38%
-- Class II-A-5: 25.45%
-- Class II-M-1: 8.50%
The collateral consists of fixed- and adjustable-rate prime and
Alt A mortgage loans secured by one- to four-family residential
properties.
Rating Lowered
Credit Suisse First Boston
Mortgage Securities Corporation
Mortgage pass-through certificates
Series 2002-19 Group 2
Rating
------
Class To From
----- -- ----
II-M-2 D CCC
Ratings Affirmed
Credit Suisse First Boston
Mortgage Securities Corporation
Mortgage pass-through certificates
Series 2002-19 Group 2
Class Rating
----- ------
II-A-4, II-A-5 AAA
II-PP AAA
II-M-1 AA
CYPRESS COMMS: Sept. 30 Balance Sheet Upside-Down by $2 Million
---------------------------------------------------------------
Cypress Communications Holding Co., Inc. (Pink Sheets: CYHI.PK),
formerly known as U.S. RealTel, Inc., filed its Form 10-Q with the
Securities and Exchange Commission, reporting its consolidated
operating and financial results for its third quarter ended
Sept. 30, 2004. The announcement of the third quarter results and
the filing of the Form 10-Q had been delayed as Cypress evaluated
the financial impact of payments made to telecommunications
service providers for taxes and surcharges for which it might be
exempt. Cypress notified the Securities and Exchange Commission
on Nov. 12, 2004 of the delay with the filing of a Form 12b-25.
Cypress also has been informed by NASDAQ that as a result of the
Form 10-Q's not having been filed on a timely basis, Cypress's
common stock will not be quoted on the Over the Counter Bulletin
Board beginning Feb. 3, 2005. Cypress is re-applying to have its
common stock quoted now that its Form 10-Q has been filed.
Financial Highlights
The Company reported revenues for the third quarter ended
September 30, 2004 of $19.4 million, a decrease of 4% from second
quarter 2004 revenues of $20.3 million, primarily due to seasonal
factors associated with the business. Third quarter 2004 revenue
also showed an 8% decrease from third quarter 2003 revenue of
$21.0 million, primarily due to anticipated reductions in the
customer base acquired in the acquisition of WorldCom's Intermedia
Advanced Building Networks unit in 2002. Customer base reductions
resulted from contract expirations and the decline in occupancy
rates in buildings serviced by Cypress Communications. Revenues
for the nine months ended September 30, 2004 were $59.6 million, a
decrease of 8% from $64.8 million for the nine months ended
September 30, 2003, for same reasons noted above.
The Company reported net income of $303,000 or $0.05 per share for
the third quarter of 2004 as compared to a net loss of
$1.8 million or ($0.31) per share for the third quarter of 2003 on
5,874,000 weighted average shares of common stock outstanding for
each period respectively. The improvement in the reported net
income is related primarily to the improved gross margins from EZ
Office bundled services, lower operating expenses and the
competitive local exchange carrier -- CLEC -- migration. Net
income for the nine months ended September 30, 2004 was $335,000
or $0.06 per share as compared to a net loss of $3.0 million or
($0.52) per share for the nine months ended September 30, 2003 on
5,874,000 weighted average shares of common stock outstanding for
each period respectively.
The Company reported third quarter 2004 EBITDA (net income (loss)
excluding net interest, income taxes, depreciation and
amortization) of $2.3 million, versus third quarter 2003 EBITDA of
$46,000. When comparing EBITDA for the third quarter of 2004 to
the third quarter of 2003, the increase in EBITDA can be primarily
attributed to network cost savings and gross margins realized as a
result of the substantial completion of network migration efforts
as a CLEC to wholesale interconnection arrangements with the
regional bell operating companies and incumbent local telephone
companies, along with reductions in other operating expenses.
EBITDA for the nine months ended September 30, 2004, was
$6.1 million, a 190% increase over the $2.1 million of EBITDA
reported for the nine months ended September 30, 2003. (2003
EBITDA includes a one-time extinguishment of certain accrued
liabilities of $967,000 and $2.0 million for the three and nine
months ended September 30, 2003 respectively attributable to the
Company's success in renegotiating a settlement of prior period
disputes with one of its major suppliers.)
EBITDA is presented because it is a widely accepted performance
indicator, although it should be noted that it is not a measure of
liquidity or of financial performance under generally accepted
accounting principles. The EBITDA numbers presented may not be
comparable to similarly titled measures reported by other
companies. EBITDA, while providing useful information, should not
be considered in isolation or as an alternative to net income or
cash flows as determined under GAAP.
As of September 30, 2004, cash, cash equivalents and short-term
investments totaled $1.8 million, as compared to $2.2 million at
June 30, 2004.
During the quarter ended September 30, 2004, Cypress management
determined that Cypress had made payments to telecommunication
service providers for federal, state and local taxes and
surcharges on telecommunications services for which Cypress might
be exempt. The evaluation of the amounts paid required that
Cypress delay the filing of its Form 10-Q for the quarter ended
September 30, 2004, and Cypress notified the Securities and
Exchange Commission of such delay on November 12, 2004 with the
filing of a Form 12b-25.
Cypress has quantified the amount of taxes it believes were
erroneously billed and paid. Cypress is attempting to recover
these taxes and surcharges directly from the telecommunications
service providers involved. Although management believes that the
amount of taxes and surcharges which Cypress is entitled to
recover is in the range of $1 million to $2.5 million, there is no
assurance that any amounts will be recovered or when any amounts
will be recovered, if ever. The recovery of these taxes and
surcharges will be recorded in the financial statements when the
taxes and surcharges are actually recovered.
About Cypress Communications
Cypress Communications (Pink Sheets: CYHI.PK) is the preferred
communication solution provider in more than 1,300 commercial
office buildings in 25 major metropolitan U.S. markets. Each day,
Cypress uses its fiber optic and copper broadband infrastructure
to connect more than 100,000 employees for over 8,000 small- and
medium-sized businesses in commercial office buildings. As a
single-source provider of communication solutions, Cypress
supplies advanced digital and IP phone service, unlimited local
and long distance calling, business-class Internet connectivity,
firewalls, security and VPN solutions, audio/web conferencing and
business television solutions. The Cypress EZ Office(SM) product
suite provides a premium bundled solution with one number to call
for support, one simple bill and the highest level of service
available. Cypress Communications Holding Company, Inc. is
headquartered in Atlanta, Georgia. The company's web address is
http://www.cypresscom.net/
At Sept. 30, 2004, Cypress Communications' balance sheet showed a
$2,022,000 stockholders' deficit, compared to a $2,433,000 deficit
at Dec. 31, 2003.
CYPRESS COMMS: Asks Stockholders to Vote on Amended Merger Pact
---------------------------------------------------------------
Cypress Communications Holding Co., Inc. (Pink Sheets: CYHI.PK),
formerly known as U.S. RealTel, Inc., disclosed an amendment to
the Agreement and Plan of Merger entered into on Nov. 5, 2004,
between Cypress, TechInvest Holding Company, Inc., an affiliate of
Crescent Capital Investments, Inc., and TechInvest Acquisition,
Inc., a wholly-owned subsidiary of TechInvest Holding. Cypress
has scheduled a special stockholders meeting for March 15, 2005,
to consider the Merger Agreement.
Amendment to the Merger Agreement
On Nov. 5, 2004, Cypress, TechInvest Holding Company, Inc., an
affiliate of Crescent Capital, and Purchaser, entered into the
Merger Agreement pursuant to which Parent will acquire Cypress.
The total value of the transaction, at the time of the execution
of the Merger Agreement, was $39.350 million. The Merger
Agreement contains provisions for final merger consideration
adjustments, upwards or downwards, based on the achievement of
certain conditions pertaining to changes in certain current assets
and liabilities between the execution of the Merger Agreement and
closing of the transaction.
On Feb. 3, 2005, in recognition of the potential increase in
working capital relating to the telecommunications tax recovery,
Cypress and Parent agreed to amend the Merger Agreement to
increase the merger consideration by $935,000, making the total
value of the transaction $40.285 million. The parties also agreed
in the Amendment, among other things, that accounts receivable
attributable to the telecommunications tax recovery will be capped
in light of the increase in the merger consideration for purposes
of calculating the final merger consideration adjustment.
The Merger Agreement provides that the merger consideration will
first be used to repay outstanding indebtedness. The remaining
consideration, after transaction expenses, will be distributed to
stockholders, with an estimated price per share of $1.71, subject
to final merger consideration adjustments. (The $1.71 per share
cash consideration is estimated by Cypress as of Dec. 31, 2004,
and is subject to adjustment upwards or downwards pursuant to the
merger agreement.)
The closing of the transaction is subject to certain terms and
conditions customary for transactions of this type, including
receipt of stockholder and regulatory approvals and other
conditions.
In connection with the Merger Agreement and the transactions
contemplated by it, Cypress has scheduled a special meeting of its
stockholders for March 15, 2005.
About Cypress Communications
Cypress Communications (Pink Sheets: CYHI.PK) is the preferred
communication solution provider in more than 1,300 commercial
office buildings in 25 major metropolitan U.S. markets. Each day,
Cypress uses its fiber optic and copper broadband infrastructure
to connect more than 100,000 employees for over 8,000 small- and
medium-sized businesses in commercial office buildings. As a
single-source provider of communication solutions, Cypress
supplies advanced digital and IP phone service, unlimited local
and long distance calling, business-class Internet connectivity,
firewalls, security and VPN solutions, audio/web conferencing and
business television solutions. The Cypress EZ Office(SM) product
suite provides a premium bundled solution with one number to call
for support, one simple bill and the highest level of service
available. Cypress Communications Holding Company, Inc. is
headquartered in Atlanta, Georgia. The company's web address is
http://www.cypresscom.net/
At Sept. 30, 2004, Cypress Communications' balance sheet showed a
$2,022,000 stockholders' deficit, compared to a $2,433,000 deficit
at Dec. 31, 2003.
DANKA BUSINESS: S&P Pares Corporate Credit Rating to B from B+
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
and senior unsecured debt ratings on Danka Business Systems PLC to
'B' from 'B+'. The outlook is negative. Total debt outstanding
is $244 million.
"The downgrade reflects deteriorating profitability and cash-flow
trends in the December 2004 quarter, and weak debt protection
metrics," said Standard & Poor's credit analyst Martha Toll-Reed.
The ratings on St. Petersburg, Florida-based Danka reflect:
-- annual revenue declines,
-- weak profitability,
-- a leveraged financial profile, and
-- a second-tier position in the highly competitive office
equipment market.
These factors partly are offset by the company's base of recurring
service revenues and adequate near-term liquidity.
Danka is an independent supplier of office imaging equipment and
related services and supplies. Annual revenue levels have fallen
over the past four years, driven by an ongoing customer-base
transition from analog to digital copiers, declines in Danka's
installed equipment base, and a strategic emphasis on more
profitable multivendor equipment service revenue generation.
Despite ongoing cost-reduction actions, EBITDA levels also have
continued to decline on an annual basis. In the quarter ended
Dec. 31, 2004, EBITDA -- operating lease adjusted -- was
$9.6 million, down from $29 million in the year-earlier period.
Danka recently announced that it expects to take a charge to
earnings of about $20 million to $35 million over the next several
quarters, with targeted annual cost reductions in excess of
$60 million. The current rating incorporates the expectation that
restructuring actions will lead to EBITDA improvement over the
next several quarters. Total debt to EBITDA, in excess of 6x,
remains weak for the rating.
DONNKENNY INC: Wants to Hire Fried Frank as Bankruptcy Counsel
--------------------------------------------------------------
Donnkenny, Inc., and its debtor-affiliates ask the U.S. Bankruptcy
Court for the Southern District of New York for permission to
retain Fried, Frank, Harris, Shriver & Jacobson LLP, as their
general bankruptcy counsel.
Fried Frank has worked for the Debtors since July 2004 in
connection with efforts to restructure their businesses prior to
the Petition Date.
Fried Frank is expected to:
a) provide legal advice with respect to the Debtors' powers and
duties as debtors in possession in the continued operation
of their businesses and management of their properties,
including, general corporate, tax, litigation, real estate
and ERISA matters;
b) take necessary action to protect and preserve the Debtors'
estates, including the prosecution of actions on behalf of
the Debtors and the defense of actions commenced against the
Debtors;
c) prepare, present and respond to, on behalf of the Debtors,
necessary applications, motions, answers, orders, reports
and other legal papers in connection with the administration
of the Debtors' estates in their chapter 11 cases;
d) negotiate and prepare, on the Debtors' behalf, a plan of
reorganization, disclosure statement and all related
agreements and documents, and take any necessary action on
on the Debtors' behalf to obtain confirmation of that plan;
and
e) perform any other legal services for the Debtors that
appropriate and necessary in the Debtors' chapter 11 cases.
Bonnie Steingart, Esq., a Member at Fried Frank, is the lead
attorney for the Debtors. Ms. Steingart discloses that the Firm
received a $200,00 retainer. Ms. Steingart will bill the Debtors
$710 per hour for her services.
Ms. Steingart reports Fried Frank's professionals bill:
Designation Hourly Rate
----------- -----------
Partners $595 - $970
Counsel $420 - $850
Special Counsel $540 - $565
Associates $280 - $490
Legal Assistants $150 - $215
Fried Frank assures the Court that it does not represent any
interest adverse to the Debtors or their estates.
Headquartered in Manhattan, New York, Donnkenny, Inc., designs,
imports, and markets broad lines of moderately and better-priced
women's clothing. Almost all of the Debtors' products are
produced abroad and imported into the U.S., principally from
Bangladesh, China, Guatemala, Hong Kong, India, Korea, Mexico,
Nepal, and Vietnam. The Company and its debtor-affiliates filed
for chapter 11 protection on February 7, 2005 (Bankr. S.D.N.Y.
Case No. 05-10712). When the Debtor filed for protection from its
creditors, it listed total assets of $45,670,000 and total debts
of $100,100,000.
DONNKENNY INC: Look for Bankruptcy Schedules by March 7
-------------------------------------------------------
Donnkenny, Inc., and its debtor-affiliates ask the U.S. Bankruptcy
Court for the Southern District of New York for more time to file
their Schedules of Assets and Liabilities, Schedules of Current
Income And Expenditures, Schedules of Executory Contracts and
Unexpired Leases, and Statements of Financial Affairs. The
Debtors want until March 7, 2005, to file those documents.
The Debtors explain that in order to accurately prepare and
complete their Schedules and Statements, they must gather and
review voluminous amounts of information and prepare numerous
documents.
This task is particularly burdensome because of the recent staff
reductions, the individuals available to complete the task for the
Debtors are few and must divide their time between gathering the
information necessary for the Schedules and Statements and
managing the Debtors' business operations.
The Debtors relate that because of the complex nature of their
business affairs, and the need to operate their businesses while
the necessary information for the Schedules and Statements is
being compiled, they cannot file those documents within 15 days
after the Petition Date as required under Bankruptcy Rule 1007(c).
The Debtors assure the Court that the requested extension will
give them more time in working diligently with their staff in
completing and filing the Schedules and Statements on or before
the extension deadline.
Headquartered in Manhattan, New York, Donnkenny, Inc., designs,
imports, and markets broad lines of moderately and better-priced
women's clothing. Almost all of the Debtors' products are
produced abroad and imported into the U.S., principally from
Bangladesh, China, Guatemala, Hong Kong, India, Korea, Mexico,
Nepal, and Vietnam. The Company and its debtor-affiliates filed
for chapter 11 protection on February 7, 2005 (Bankr. S.D.N.Y.
Case No. 05-10712). Bonnie Steingart, Esq., at Fried, Frank,
Harris, Shriver & Jacobson LLP, represents the Debtors in their
restructuring efforts. When the Debtor filed for protection from
its creditors, it listed total assets of $45,670,000 and total
debts of $100,100,000.
DOUBLECLICK INC: Earns $10.6 Million of Net Income in 4th Quarter
-----------------------------------------------------------------
DoubleClick Inc. (Nasdaq: DCLK), the leading provider of data and
technology solutions for marketers, advertising agencies and web
publishers, disclosed its financial results for the fourth quarter
and full year ended Dec. 31, 2004, and gave its business outlook
for the first quarter of 2005.
"We benefited from significant margin improvements in Ad
Management and Email compared to the fourth quarter of 2003, and
had stronger than expected results from our Performics division,"
said Kevin Ryan, Chief Executive Officer, DoubleClick. "In
addition, we had our best quarter of cash flow from operations
generation in over four years."
Fourth Quarter Performance and Highlights
a. Margin improvements in its Ad Management and Email
products and better than expected revenue from
DoubleClick's Search Engine and Affiliate
Marketing products led to record gross and operating
margins in the Company's TechSolutions segment;
b. The Company recorded an over 40% increase in quarterly
cash flow from operations versus 4Q03;
c. The Performics division saw a quarterly revenue increase
of over 60% year on year;
d. The Company's Data Management quarterly revenue grew over
40% against 4Q03; and
e. The Company took steps to improve its Marketing Automation
business, including forming a partnership with Omniture to
market their site analytics product.
Fourth Quarter Results
DoubleClick reported revenue for the fourth quarter of
$83.5 million versus $72.9 million in the year-ago period. GAAP
net income for the most recent quarter was $10.6 million, compared
with $3.8 million, in the fourth quarter of 2003. The Company
achieved a gross margin of 74.8% during the quarter compared to
66.6% in the year-ago period. EBITDA was $17.4 million for the
fourth quarter of 2004 compared to $16.2 million in 4Q03. Total
GAAP operating expenses were $53.3 million in the quarter, versus
$47.9 million in the fourth quarter of 2003. Total company
headcount was 1,541 as of Dec. 31, 2004, against 1,223 twelve
months prior.
Fourth quarter 2004 results did not include any material unusual
items. Fourth quarter 2003 GAAP earnings were negatively impacted
by $5.4 million in charges related to the relocation of the
Company's New York headquarters. These charges were partially
offset by the reversal of a $1.3 million reserve relating to the
favorable resolution of certain tax matters.
DoubleClick generated $33.7 million in cash flow from operations
during the fourth quarter. The year over year increase in
quarterly cash flow from operations was driven primarily by higher
overall company GAAP net income and stronger working capital
versus 4Q03. The Company had $552.3 million in cash and
marketable securities, and had a net cash position of
$417.3 million, or $3.32 per share, as of Dec. 31, 2004.
Full Year Results
DoubleClick reported revenue for the full year of $301.6 million
versus $271.3 million in 2003. Full year 2004 GAAP net income was
$37.5 million, compared with $16.9 million, in the prior year.
The Company achieved a gross margin of 71.2% during the year
compared to 65.3% in 2003. EBITDA was $66.7 million for 2004
compared to $67.9 million in the prior year. Total GAAP operating
expenses were $192.7 million for the full year, versus
$164.4 million in 2003.
DoubleClick's full year 2004 GAAP net income and EBITDA benefited
from a non-operating gain of approximately $7.1 million from the
Company's sale of its 15% interest in AdLINK Internet Media AG and
from a restructuring credit relating to DoubleClick's Louisville,
Colorado facility, which lowered operating expenses by
$4.5 million. In addition, 2004 GAAP net income and EBITDA
benefited from a distribution from MaxWorldwide, Inc. of
approximately $2.4 million in connection with its plan of
liquidation and dissolution, and from the reversal of a
$1.5 million reserve relating to a prior acquisition. These gains
were partially offset by a write-down of DoubleClick's Enterprise
Marketing Solutions (EMS) business of approximately $5.6 million.
2003 GAAP net income was negatively impacted by $14.6 million in
accelerated depreciation charges associated with the relocation of
the Company's New York headquarters and the termination of a lease
for the Company's San Francisco facility. These charges were
partially offset by a $1.3 million reserve reversal relating to
the resolution of certain tax matters. GAAP net income and EBITDA
benefited from a net restructuring credit of $9.1 million
associated with these facilities and $1.4 million received by the
Company in connection with an insurance claim. These benefits
were partially offset by a $4.4 million loss relating to the
redemption of DoubleClick's 4.75% Convertible Subordinated Notes.
TechSolutions
The TechSolutions segment reported fourth quarter revenue of
$56.8 million versus $46.9 million in 4Q03. TechSolutions gross
margin was 79.2%, versus 68.1% in the December quarter of 2003.
TechSolutions operating margin was 25.0%, versus 11.0% in the
fourth quarter of 2003. Margins improved primarily because of
higher revenue from the Company's Ad Management, Email, Search
Engine Marketing, and Affiliate Marketing products.
For the full year, the TechSolutions segment recorded revenue of
$196.3 million, a gross margin of 74.4%, and an operating margin
of 15.9%. This compares to revenue of $175.4 million, a gross
margin of 63.4%, and an operating margin of 5.9% for full year
2003. The year-over-year quarterly and annual improvement in
revenue is primarily a result of the inclusion of the results of
Performics and SmartPath, which were acquired in June and March of
2004, respectively. Full year 2004 TechSolutions expenses were
adversely affected by the EMS write-down of approximately $5.6
million, and 2003 TechSolutions expenses included roughly $10.8
million in accelerated depreciation charges related to the
Company's facilities.
Ad Management
The Company's Ad Management revenue was $33.2 million in 4Q04
versus $34.1 million in the year-ago period. For the year, Ad
Management revenue was $128.1 million against $128.8 million in
2003. These declines were principally due to pricing declines
outweighing volume increases in the Company's Publisher business.
These declines were partially offset by an increase in revenues
from DoubleClick's Advertiser products, where volume increases
continued to outweigh price declines.
DoubleClick has recently signed several new contracts for use of
its Ad Management solutions. These wins include Ant Farm
Interactive, Friendster, I-level, IMHO Scandinavia, and Luxury
Link.
Marketing Automation
The Company's Marketing Automation products had revenue of
$14.5 million in the most recent quarter, against $12.8 million in
4Q03. For 2004, the division recorded revenue of $54.0 million
versus $46.6 million in the prior year. The year-over-year
revenue increase for the quarter and year was due to the
acquisition of SmartPath and organic growth from the Company's
Email business.
DoubleClick has struck new Marketing Automation deals with clients
including AOL France, AirAsia, and bonprix.
"We were pleased to see that gross and operating margins continued
to improve in our TechSolutions segment," said David Rosenblatt,
President of DoubleClick. "However, we plan to focus on making
sure that all of our products are achieving their optimal level of
growth in terms of both revenue and profitability."
Performics
The Company's Search Engine and Affiliate Marketing products
recorded revenue of $9.1 million in 4Q04, and $14.1 million for
the two quarters of 2004 in which Performics was a division of
DoubleClick. These figures were higher than DoubleClick's
previous outlook due largely to stronger than expected growth in
overall e-commerce and search advertising spending.
Agreements to use the division's solutions have recently been
reached with ADT Security Services, Armani Exchange, CountryWide
Financial, World Savings Bank, Yves Rocher, and Walt Disney
World's search program.
Data
DoubleClick reported Data segment revenue of $26.7 million in
4Q04, compared to $26.0 million in 4Q03. For the year, Data
segment revenue was $105.3 million, compared to $95.9 million in
2003. Overall Data gross margin was 65.3% for the quarter and
65.2% for the year, against 64.0% and 68.8% in the relevant prior
periods. Data operating margins were 21.3% and 22.3% for the
quarter and year, versus 22.6% and 28.4% in the comparable year
ago timeframes. Data segment margins declined versus the previous
year's periods primarily because a higher percentage of the
segment's sales were generated by the lower margin Data Management
Solutions (DMS) division.
Abacus
Abacus quarterly revenue was $22.4 million versus $23.1 million in
the year-ago period. Abacus annual revenue was $92.7 million
against $90.4 million in 2003. Abacus quarterly revenue fell
primarily because increases in U.S. Business to Business Alliance
revenue did not make up for lower spending by Business to Consumer
cataloguers. During the quarter, DoubleClick announced the
formation of a U.K. Business to Business Alliance, and added
77 net new members across all wholly owned Abacus Alliances
globally, bringing the total to over 2,500.
DMS
DMS generated $4.2 million in revenue for 4Q04 against the
year-ago quarter's $3.0 million. For full year 2004, DMS revenue
was $12.6 million versus $5.5 million in 2003. DoubleClick's DMS
business was acquired June 30, 2003, and its results were
consolidated beginning in 3Q03. Since the beginning of 4Q04, the
Company has signed over 20 new deals for the use of its DMS
solutions and its other smaller Data products.
"Fourth quarter DMS revenue grew by over 40% year over year, and
our U.S. Business to Business Alliance continued to show an even
faster growth rate" added Brian Rainey, President, Abacus, a
division of DoubleClick Inc. "In addition, we have signed up
several dozen members for our newer International Alliances."
First Quarter 2005 Outlook
DoubleClick's guidance presented below does not include the
potential impact of any mergers, acquisitions, divestitures or
business combinations that may be announced after the date hereof,
but does include the impact of retention bonuses and professional
fees related to the Company's strategic review announced
Oct. 31, 2004.
DoubleClick expects 1Q05 revenue to be between $70 million and
$75 million. The Company expects total Company gross margin to be
in the high 60s to low 70s percentage range. GAAP operating
expenses are expected to be between $51 million and $53 million.
Items in interest and other, net and taxes are expected to be
approximately $1 million, based on an assumed tax rate of
approximately 15%. The Company anticipates recording GAAP
earnings of between $(0.01) and $0.03 per share.
The Company's segment projections for 1Q05 are as follows:
a. TechSolutions revenue is expected to be between
$45 million and $50 million, including $28 million to
$31 million from Ad Management, $11 million to $13 million
from Marketing Automation, and approximately $6 million
from Performics. Overall TechSolutions gross margin is
expected to be in the mid 70s percentage range.
b. Data revenue is expected to be between $24 million and
$26 million, including approximately $20 million to
$22 million from Abacus; overall Data gross margin should
be in the low 60s percentage range.
"We are taking steps to ensure that we optimize our investments
while maintaining tight cost controls," said Bruce Dalziel, Chief
Financial Officer, DoubleClick. "In 2005, we expect to improve
upon our 2004 results."
About the Company
DoubleClick is the leading provider of data and technology
solutions for advertising agencies, marketers, and web publishers
to plan, execute, and analyze their marketing programs.
DoubleClick's marketing solutions help clients yield the highest
return on their marketing dollar. DoubleClick Inc. has global
headquarters in New York City and maintains 22 offices around the
world.
* * *
As reported in the Troubled Company Reporter on Nov. 4, 2004,
Standard & Poor's Ratings Services placed its 'B' corporate credit
rating on DoubleClick Inc. on CreditWatch with negative
implications following the company's announcement that it has
retained Lazard Freres & Co. to explore strategic options,
including a sale of part or all of its businesses,
recapitalization, extraordinary dividend, share repurchase or a
spin-off. The announcement followed the company's downward
revision of its 2004 operating outlook last week.
The New York, New York-based online advertising technology
provider had total debt outstanding of $135 million at
Sept. 30, 2004.
DYKESWILL LTD: Court Appoints Ben. B. Floyd as Chapter 11 Trustee
-----------------------------------------------------------------
Judge Richard S. Schmidt of the U.S. Bankruptcy Court for the
Southern District of Texas appointed Ben. B. Floyd as the Chapter
11 Trustee of Dykeswill, Ltd., on Jan. 31, 2005.
As contemplated by Sections 521, 704 and 1106 of the Bankruptcy
Code, Mr. Floyd will take over the Debtor's responsibilities.
As reported in the Troubled Company Reporter on Nov. 23, 2004,
Richard W. Simmons, the United States Trustee for Region 7, said
Dykeswill Ltd.'s principal, Everett C. Williams, has failed to
comply with the provisions of the Bankruptcy Code in the
performance of his duties pursuant to Section 1106 of the
Bankruptcy Code and should be displaced by a chapter 11 trustee.
The U.S. Trustee charged that Mr. Williams, on the Debtor's
behalf, has failed to file monthly operating reports for the
months of July, August and September and October 2004.
Furthermore, Mr. Williams, on the Debtor's behalf, has failed to
respond through his attorney, Dick Fuqua, Esq., to two e-mail
requests for documents and compliance with the Bankruptcy Code.
Specifically, the U.S. Trustee is waiting for the Debtor:
-- to file an application to employ an accountant as promised
at the creditors' meeting;
-- to file a partnership resolution permitting the Debtor to
file bankruptcy;
-- to provide proof of closing prepetition bank accounts;
-- to open postpetition debtor-in-possession bank accounts;
-- to provide the Trustee with financial statements submitted
to Laredo National Bank and First National Bank; and
-- to provide settlement statements for property acquisitions
and sales made by Dykeswill from January 1, 2000 to the date
of filing bankruptcy.
The U.S. Trustee told the Court that he contacted ten of the
debtor's creditors and those creditors or their attorneys express
a general mistrust of the Debtor's principal.
The U.S. Trustee interviewed one creditor, Mrs. Saminah
Aziz-Hodge, who told him that $400,000 of her money was lent for a
specific purchase of real estate to an entity owned by the
Debtor's principal who then transferred those funds to the Debtor
for general operating expenses. The Debtor's principal has failed
to cooperate in complying with a discovery request by Ms. Hodge,
the U.S. Trustee related.
The U.S. Trustee argued that the Debtor holds valuable real estate
assets. The disposition of those assets should be used to benefit
Debtor's creditors. However, the Debtor's principal has not
exhibited conduct consistent with the duties of a debtor-in-
possession. The Debtor was unable to timely file its Schedules of
Assets and Liabilities, the original creditor meeting had to be
rescheduled, a disclosure statement and plan of reorganization.
Mr. William's failures to act on behalf of Dykeswill constitute
cause for him to be removed and replaced by a chapter 11 trustee,
the Trustee contended.
Headquartered in Corpus Christi, Texas, Dykeswill Ltd., filed for
Chapter 11 protection on July 26, 2004 (Bankr. S.D. Tex. Case No.
04-20974). Harlin C. Womble, Jr., Esq., at Jordan, Hyden Womble
and Culbreth, P.C., represents the Debtor in its restructuring
efforts. When the company filed for protection from its
creditors, it listed over $10 million in assets and debts of more
than $1 million.
ENRON CORP: Wants Court to Disallow Washington's $245-Mil. Claims
-----------------------------------------------------------------
Enron Corporation and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York for a
judgment summarily disallowing and expunging Claim Nos. 24390 and
24547 filed on behalf of the State of Washington.
The Washington Claims are based on the Debtors' alleged
manipulation of the Pacific Northwest market for wholesale power.
The Washington Claims assert $245 million representing:
-- $75 million in civil penalties; and
-- $170 million as alleged "restitution, damages and
disgorgement of profits."
The Washington Claims are based on certain state statutes,
including the Washington Consumer Protection Act, the state
Criminal Profiteering Act, and federal antitrust, mail and wire
fraud statutes.
Edward A. Smith, Esq., at Cadwalader, Wickersham & Taft, in New
York, relates that in January 2004, the Debtors objected to the
Washington Claims. The Objection asserts that:
(i) the Federal Power Act preempts Washington's claims
relating to wholesale electricity rate-setting; and
(ii) because Washington has already litigated the market
manipulation claim before the Federal Energy Regulatory
Commission, which determined that the Pacific Northwest
energy market was competitive, Washington is collaterally
estopped from re-litigating that issue.
Pursuant to Rule 56 of the Federal Rules of Civil Procedure, made
applicable through Rule 7056 of the Federal Rules of Bankruptcy
Procedure, summary judgment is proper where there is no genuine
dispute of a material fact and a party is entitled to judgment as
a matter of law.
The Debtors believe they are entitled to a judgment on their
Objection summarily disallowing and expunging the Washington
Claims.
The Washington Claims are preempted by either the FPA or the
filed rate doctrine, Mr. Smith maintains. Through the FPA, the
U.S. Congress vested in the FERC exclusive jurisdiction over the
transmission and sale of wholesale electric energy and, a
fortiori, over whether market participants' conduct violates
FERC-approved tariffs. Similarly, under the Filed Rate Doctrine,
once FERC determines that a rate is just and reasonable, neither
the states nor courts can modify that rate. The Washington
Claims, although cast as arising under state or federal antitrust
racketeering and fraud statutes, require either a determination
of a "non-manipulated" rate, or adjudication of whether a tariff
was violated.
Furthermore, to the extent the Washington Claims encompass
alleged violations of the FPA, the FERC -- the only forum where
those claims can be adjudicated -- has already denied relief to
participants in the Pacific Northwest wholesale power market.
Washington is collaterally estopped from relitigating the issue.
Accordingly, as a matter of law, the Washington Claims must be
disallowed.
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. The Confirmed Plan took effect on
Nov. 17, 2004. Martin J. Bienenstock, Esq., and Brian S. Rosen,
Esq., at Weil, Gotshal & Manges, LLP, represent the Debtors in
their restructuring efforts. (Enron Bankruptcy News, Issue
No. 135; Bankruptcy Creditors' Service, Inc., 15/945-7000)
ENTERPRISE PRODUCTS: Files Prospectus for 10MM Common Share Offer
-----------------------------------------------------------------
Enterprise Products Partners L.P. (NYSE:EPD) has filed a
preliminary prospectus supplement for an offering of 10,000,000
common units representing limited partner interests. The
prospectus supplement also includes a 30-day option granted to the
underwriters to purchase up to 1,500,000 additional common units
to cover over-allotments.
Enterprise will use the net proceeds from this offering to
permanently reduce borrowings and commitments outstanding under
its 364-day acquisition revolving credit facility. Any remaining
proceeds will be used for general partnership purposes, which may
include acquisitions or the temporary reduction of amounts
borrowed under Enterprise's multi-year revolving credit facility.
UBS Securities LLC and Citigroup Global Markets Inc. are acting as
joint book-running managers for the offering. The co-managing
underwriters participating in this offering are Goldman, Sachs &
Co., Lehman Brothers Inc., Morgan Stanley & Co. Incorporated,
Wachovia Capital Markets, LLC, A.G. Edwards & Sons Inc., Merrill
Lynch, Pierce, Fenner & Smith Incorporated, Raymond James &
Associates Inc., Sanders Morris Harris Inc., RBC Capital Markets
Corporation and KeyBanc Capital Markets, a division of McDonald
Investments Inc. A copy of the preliminary prospectus supplement
can be obtained from any of the underwriters, including UBS
Securities LLC at 299 Park Avenue, 29th floor, New York, NY,
10171, or Citigroup Global Markets Inc. at Brooklyn Army Terminal,
140 58th Street, 8th floor, Brooklyn, N.Y. 11220. Any direct
requests to UBS should be to the attention of the Prospectus
Department at 212-713-8802, and direct requests to Citigroup
should be to the attention of the Prospectus Department at
718-765-6732 or by fax at 718-765-6734.
About the Company
Enterprise Products Partners L.P. is one of the largest publicly
traded energy partnerships with an enterprise value of more than
$14 billion, and is a leading North American provider of midstream
energy services to producers and consumers of natural gas, natural
gas liquids (NGLs) and crude oil. Enterprise transports natural
gas, NGLs and crude oil through 31,000 miles of onshore and
offshore pipelines and is an industry leader in the development of
midstream infrastructure in the Deepwater Trend of the Gulf of
Mexico. Services include natural gas transportation, gathering,
processing and storage; NGL and propylene fractionation (or
separation), transportation, storage, and import and export
terminaling; crude oil transportation and offshore production
platform services.
* * *
As reported in the Troubled Company Reporter on Sept. 24, 2004,
Standard & Poor's Rating Services affirmed its 'BB+' corporate
credit rating on Enterprise Products Partners L.P.
At the same time, Standard & Poor's assigned its 'BB+' senior
unsecured rating to Enterprise Products' subsidiary Enterprise
Products Operating L.P.'s proposed (in aggregate) $2.0 billion
note issues. The notes will be issued in four tranches, due 2007,
2009, 2014 and 2034.
Total debt principal outstanding at December 31, 2004 was
approximately $4.3 billion, which represented 44.2% of the
partnership's total capitalization. Enterprise had cash of
approximately $34 million at the end of 2004.
EXIDE TECHNOLOGIES: Sandell Has Ideas About Maximizing Value
------------------------------------------------------------
Castlerigg Master Investments Ltd., Sandell Asset Management
Corp., Castlerigg International Limited, Castlerigg International
Holdings Limited, and Thomas E. Sandell own 1,799,218 shares of
common stock, par value $0.01 per share, of Exide Technologies.
As of November 11, 2004, 24,161,910 shares of Exide common stock
were outstanding. Accordingly, Sandell Asset Management owns
a 7.5% stake in Exide.
In a Schedule 13D filing with the Securities and Exchange
Committee, Thomas E. Sandell, Director of Sandell Asset
Management, discloses that representatives of Sandell Asset
Management have recently engaged in discussions with members of
Exide's board of directors, as well as with several shareholders
of Exide. Sandell Asset Management may engage in further
communications with Exide or other parties-in-interest on a
variety of possible subjects regarding ways to increase
shareholder value.
According to Mr. Sandell, some of the suggestions that Sandell
Asset Management might make may affect control of Exide or may
relate to:
* changes to the board of directors or management of Exide;
* the merger, acquisition or liquidation of Exide;
* the divestiture of certain assets of Exide;
* a change in the present capitalization or dividend policy of
Exide; or
* a change in Exide's charter or by-laws.
On January 12, 2005, representatives of Sandell Asset Management
met with Exide representatives John P. Reilly, Michael P.
Ressner, Stuart H. Kupinsky and Ian J. Harvie in New York. At
the meeting, the participants discussed various matters,
including Exide's operations, management, the composition of its
board of directors and certain individuals as potential
candidates for the Exide board. The Sandell representatives
proposed the appointment of Perry J. Lewis and Mark C. Demetree
to the Exide board and reviewed with the Exide representatives
certain biographic information regarding these individuals.
At the conclusion of the meeting, the Exide representatives
indicated that they would consider and respond to the proposals
of the Sandell representatives.
Headquartered in Princeton, New Jersey, Exide Technologies is the
worldwide leading manufacturer and distributor of lead acid
batteries and other related electrical energy storage products.
The Company filed for chapter 11 protection on Apr. 14, 2002
(Bankr. Del. Case No. 02-11125). Matthew N. Kleiman, Esq., and
Kirk A. Kennedy, Esq., at Kirkland & Ellis, represent the Debtors
in their restructuring efforts. Exide's confirmed chapter 11 Plan
took effect on May 5, 2004. On April 14, 2002, the Debtors listed
$2,073,238,000 in assets and $2,524,448,000 in debts. (Exide
Bankruptcy News, Issue No. 60; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
EXIDE TECH: Will Release Fiscal 2005 Financial Results on Monday
----------------------------------------------------------------
Exide Technologies (NASDAQ:XIDE), a global leader in stored
electrical energy solutions, will release financial results for
the third quarter of fiscal 2005 ended Dec. 31, 2004, when the
market opens on Monday, Feb. 14, 2005.
Craig H. Muhlhauser, Exide's President and Chief Executive
Officer; J. Timothy Gargaro, Executive Vice President and Chief
Financial Officer, and other company executives will host a
conference call for members of the investment community to discuss
the Company's financial results and general business operations at
10:30 a.m. Eastern Time on Monday, Feb. 14, 2005. The conference
call information follows:
Date: February 14, 2005
Time: 10:30 a.m. Eastern Time
Domestic Dial-In Number: 877-780-2271
Int'l. Dial-In Number: 973-582-2737
For individuals unable to participate in the conference call, a
telephone replay will be available from 1:00 p.m. on
Feb. 14, 2005, until midnight on March 4, 2005 at:
Domestic Replay Number: 877-519-4471
International Replay Number: 973-341-3080
Passcode: 5696935
An audio webcast of the conference call can also be accessed via
http://www.exide.com/and will be available for one week.
RealPlayer or Windows Media Player will be required in order to
access the webcast.
Headquartered in Princeton, New Jersey, Exide Technologies is the
worldwide leading manufacturer and distributor of lead acid
batteries and other related electrical energy storage products.
The Company filed for chapter 11 protection on Apr. 14, 2002
(Bankr. Del. Case No. 02-11125). Matthew N. Kleiman, Esq., and
Kirk A. Kennedy, Esq., at Kirkland & Ellis, represent the Debtors
in their restructuring efforts. Exide's confirmed chapter 11 Plan
took effect on May 5, 2004. On April 14, 2002, the Debtors listed
$2,073,238,000 in assets and $2,524,448,000 in debts.
FEDERAL-MOGUL: Equity Committee Taps Deloitte's Actuarial Services
------------------------------------------------------------------
The Official Committee of Equity Security Holders appointed in the
chapter 11 cases of Federal-Mogul Corporation and its
debtor-affiliates seeks to modify the terms of Deloitte & Touche,
LLP's retention as their consultant and financial advisor.
Deloitte will perform actuarial analyses of the pension plan
relating to the Debtor' United Kingdom entities.
Garvan F. McDaniel, Esq., at Bifferato, Gentilotti & Biden, in
Wilmington, Delaware, tells the Court that the actuarial analyses
will entail assisting the Equity Committee in:
-- analyzing pension liabilities, including the analysis and
estimation of claims related to the 1989 T&N Retirement
Benefits Scheme;
-- analyzing the financial ramifications of any proposed
restructuring or funding of pension plans, including the
T&N Pension Scheme; and
-- assisting in any litigation, whether in the United States
or United Kingdom, relating to the amount of the T&N
Pension Scheme's Claim.
To the extent that the Equity Committee provides Deloitte's work
product to any of the Plan Proponents, it will be subjected to
joint prosecution and defense privileges and other provisions
regarding conflict between the Plan Proponents. Mr. McDaniel
notes that the relationship between the Equity Committee and the
other Plan Proponents may change if the Plan is not confirmed.
They may become adversarial with respect to some other plan that
may be proposed, Mr. McDaniel says.
Mr. McDaniel assures the Court that Deloitte's services with
respect to the actuarial analyses will not affect or limit
Deloitte's ability to act as financial advisor to the Equity
Committee in the future.
The extent of the work to be performed associated with the
actuarial analyses, according to Mr. McDaniel, was not
contemplated within the scope of Deloitte's duties under the
initial retention agreement. Thus, the Equity Committee asks
Judge Lyons not to subject or count against Deloitte's fee cap any
fees earned by the firm in connection with the actuarial services.
For its Actuarial Services, Deloitte will charge the Debtors based
on its standard hourly billing rates:
Partner or Principal $550 - $650
Senior Manager $475 - $550
Manager $425 - $475
Senior Consultant $325 - $375
Consultant $250 - $300
Paraprofessional $100 - $150
Mr. McDaniel says that Deloitte is in the process of reorganizing
some of its business units. As a result, some services, including
the Actuarial Analyses, incidental to the overall services to be
performed by Deloitte & Touche for the Equity Committee may be
performed by personnel now employed by or associated with Deloitte
affiliates like Deloitte Consulting LLP and Deloitte Tax LLP.
PD Committee Responds
Theodore J. Tacconelli, Esq., at Ferry, Joseph & Pearce, P.A., in
Wilmington, Delaware, informs Judge Lyons that the Official
Committee of Property Damage Claimants does not object to the
concept of expanding Deloitte's retention. The PD Committee asks
Deloitte to provide an estimate of the aggregate amount of fees it
believes will be incurred as a result of its expanded role.
The PD Committee wants the Court to cap Deloitte's allowable fees
at that amount, or, if the estimated amount is unreasonable, at an
amount as the Court deems proper.
* * *
Judge Lyons grants the Debtors' application, nunc pro tunc to
October 4, 2004. Deloitte's retention will continue in accordance
with the Initial Application, except that Deloitte's actuarial
services will be compensated on an hourly basis provided that the
fees will not exceed $200,000 and will not be subject to or count
against the firm's Fee Cap.
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. 72; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
FEDERAL-MOGUL: Navigant's Fees for PD Committee Work Top $156K Cap
------------------------------------------------------------------
In behalf of the Official Committee of Asbestos Property Damage
Claimants appointed in the chapter 11 cases of Federal-Mogul
Corporation and its debtor-affiliates, Theodore J. Tacconelli,
Esq., at Ferry, Joseph & Pearce, P.A., in Wilmington, Delaware,
tells Judge Lyons of the U.S. Bankruptcy Court for the District of
Delaware that due to a number of developments relating to the
access and transformation of data, Navigant Consulting, Inc.'s
analysis required staff time beyond that anticipated. These
developments refer to:
-- the need for conversion of data into a usable format;
-- the receipt of additional information regarding 4,498
records late in the process; and
-- unexpected delays in trying to resolve questions with
regard to certain data.
These developments, Mr. Tacconelli says, were unforeseen and
entirely beyond the control of both Navigant and the Asbestos PD
Committee. As a result, Navigant's total fees for services not
relating to deposition and trial preparation, amount to $184,208
and exceed the $156,000 fee cap by $28,208, as of January 7, 2005.
Robin Cantor, a Director of Navigant, explains that the fee cap
was based on a good faith estimate of the fees required to analyze
the Debtors' liability for asbestos personal injury claims. Mr.
Cantor relates that Navigant worked in an efficient and
cost-effective manner, making every effort to minimize costs to
the estate.
The PD Committee, therefore, asks the Court to allow payment to
Navigant in excess of the $156,000 fee cap.
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. 72; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
FOSTER WHEELER: Subsidiary Wins $18 Million Pact with SNC-Lavalin
-----------------------------------------------------------------
Foster Wheeler Ltd.'s (OTCBB: FWHLF) subsidiary, Foster Wheeler
North America Corp., has been awarded a contract valued in excess
of $18 million by SNC-Lavalin Power, Inc., of Redmond, Washington.
The booking will be included in the fourth quarter of 2004.
Foster Wheeler's Canadian subsidiary, headquartered in Ontario,
will design and supply a 55 MW boiler for Fibrominn LLC's landmark
green energy project in Benson, Minnesota. This will be the first
U.S. power plant to use poultry litter as its primary fuel. SNC
Lavalin is the EPC contractor for the project.
"Foster Wheeler North America Corp. remains committed to helping
its customers find environmentally sound methods of generating
power," said Bernard H. Cherry, president and chief executive
officer. "In addition to providing an alternative, more
environmentally friendly method of disposing of poultry-litter
waste, the plant's only by-product is ash that can be recycled as
fertilizer. This plant also contributes to the reduction of
greenhouse gas production through the displacement of existing
fossil-fueled generation by carbon-neutral biomass electricity."
The Benson plant will burn over 700,000 tons of poultry litter and
other biomass fuels per year under a long-term supply agreement
with Minnesota poultry producers. The plant is expected to be
operational in 2007.
Foster Wheeler has had a 15-year relationship with the founders of
Fibrominn's parent company, Fibrowatt LLC of Yardley,
Pennsylvania, having performed consultancy services for the UK
Fibrowatt Group when it built the world's first two poultry litter
fired power plants in the UK in the early 1990s, and having
supplied the boiler for that Group's 38.5 MW poultry litter power
plant at Thetford in the UK, which came on stream in 1998.
The UK Fibrowatt Group now holds a 30% stake in Fibrowatt LLC,
which was set up to develop multiple opportunities in the USA
using the Fibrowatt technology.
About the Company
Foster Wheeler Ltd. -- http://www.fwc.com/-- 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, upstream oil and gas, LNG and gas-to-liquids,
petrochemicals, 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 September 24, 2004, Foster Wheeler's balance sheet showed a
$441,238,000 stockholders' deficit, compared to an $872,440,000
deficit at December 26, 2003.
FRANKLIN CAPITAL: Board Wants Stockholders to Okay Name Change
--------------------------------------------------------------
Franklin Capital Corporation's (AMEX: FKL) Board of Directors has
unanimously determined to seek stockholder approval at its
upcoming annual meeting of stockholders to change its name from
"Franklin Capital Corporation" to "Patient Safety Technologies,
Inc."
"As a result of Franklin Capital's ongoing restructuring plan and
its recent acquisitions and investments in the patient safety
market, the name Franklin Capital Corporation no longer accurately
represents the nature of its business activities," said Milton
"Todd" Ault, III, the Chairman and Chief Executive Officer of
Franklin Capital. "Changing the name will allow us to more
accurately reflect and represent to the public at large what the
current business activities are."
To the extent stockholders approve the name change, Franklin
Capital also intends to seek a change to its current AMEX ticker
symbol "FKL" to one that is more consistent with its new name.
Franklin Capital has filed with the SEC a preliminary proxy
statement in connection with its upcoming annual meeting of
stockholders. The information contained in the preliminary proxy
statement is not complete and may be changed. Franklin Capital's
stockholders are advised to read the definitive proxy statement
relating to the annual meeting of stockholders of Franklin Capital
when it becomes available, as it will contain important
information.
Franklin Capital, its directors and its executive officers may be
deemed to be participants in the solicitation of proxies in
connection with the upcoming annual meeting of stockholders.
Information regarding these participants is contained in a filing
under Rule 14a-12 of the Securities and Exchange Act of 1934 filed
by Franklin Capital Corporation with the SEC on Jan. 3, 2005.
About the Company
Franklin Capital Corporation originates and services direct and
indirect loans for itself and its sister company Franklin
Templeton Bank and Trust, F.S.B. Eight different loan programs are
offered, allowing Franklin Capital Corporation to serve the needs
of prime, non-prime and sub-prime customers throughout the United
States.
* * *
As reported in the Troubled Company Reporter on Aug. 24, 2004,
Franklin Capital Corporation's former independent accountants,
Ernst & Young LLP, indicated in its reports dated March 5, 2004,
and March 7, 2003, on Franklin's financial statements, substantial
doubt about the company's ability to continue as a going concern.
These losses continue in 2004, with $1,146,010 of net realized
loss for the three months ended Sept. 30, 2004.
GLOBAL CROSSING: AGX Trustee Wants to Adopt Cross-Border Protocol
-----------------------------------------------------------------
On Nov. 18, 2002, Asia Global Crossing Ltd. sought the winding-up
of its business under the Companies Act 1981 of Bermuda. In
connection with the proceedings initiated by that petition, the
Bermuda Court appointed Mark Smith and James Smith as AGX's Joint
Provisional Liquidators.
To coordinate the administration of the AGX Debtors' United
States Case and their Bermuda Case, AGX Trustee Robert L. Geltzer
believes that it is appropriate to enter into a compromise with
the Joint Provisional Liquidators and implement a Cross-Border
Insolvency Protocol. Under the Protocol, there would effectively
be a stay of virtually all proceedings in the Bermuda Case until
the closing of the U.S. Case, while Mr. Geltzer pursues the
adversary proceedings which he has commenced and may in the
future commence, and the claims of creditors of the Debtors are
adjudicated, and where appropriate, paid, in the U.S. Case.
Mr. Geltzer and the Joint Provisional Liquidators have executed
the Protocol, dated as of December 13, 2004, which provides,
essentially, that:
(a) The Joint Provisional Liquidators will apply to the
Bermuda Court to approve the Protocol and seek directions
from the Bermuda Court that they need take no further
steps in the Bermuda proceedings unless and until a
certain time as contemplated by the Protocol pending the
closing of the U.S. Case.
(b) The Joint Provisional Liquidators will apply to the
Bermuda Court for a direction that they will have no
further involvement in the adjudication and payment of
claims or administration of AGX's case, with the exception
of the occurrence of presently unforeseen events requiring
the Joint Provisional Liquidators' renewed involvement.
(c) The functions and responsibilities of the Joint
Provisional Liquidators will be limited to consulting with
the Trustee and his retained professionals as may be
required and taking the steps necessary under Bermuda law
to seek a release and order of dissolution from the
Bermuda Court only on the closing of the U.S. Case.
(d) To the extent appropriate and possible under Bermuda law,
the Bermuda Court will give judicial assistance to the
Bankruptcy Court and apply Bermuda law remedies so as to
replicate the automatic stay imposed by Section 362 of the
Bankruptcy Code to prevent adverse actions against the
assets, rights and holdings of AGX's estate.
(e) With respect to the $400,000 received by the Joint
Provisional Liquidators from one or both of the Debtors
prior to the conversion of the U.S. Case to one under
Chapter 7, the Joint Provisional Liquidators have
represented to the Trustee that $397,637 has been
disbursed by them to their professional advisors and
themselves, and that those disbursements represent
services and expenses properly incurred on AGX's behalf.
Further, there remains a $29,204 due and owing amount to
the Joint Provisional Liquidators and their professional
advisors for services rendered and expenses billed through
the Protocol date. The Joint Provisional Liquidators have
represented to the AGX Trustee that the Outstanding Billed
Fees represent services and expenses that were properly
incurred on the AGX's behalf. Based on the Joint
Provisional Liquidators' representations, supporting
documents and a review of the same by the AGX Trustee's
accountants, the AGX Trustee has no objections to the
prior payments or of the outstanding billed fees. Thus,
pursuant to the terms of the Protocol, the Outstanding
Billed Fees will be paid in this manner:
(i) the Trustee will disburse to the Joint Provisional
Liquidators from the funds of AGX's estate $26,841;
and
(ii) the Joint Provisional Liquidators in turn will
disburse to its professional advisors the amount
received from the AGX Trustee, together with the
$2,363 amount which the Joint Provisional
Liquidators are presently holding as the
un-reimbursed balance of the previous $400,000 cash
advance, totaling $29,204, in amounts due to the
Joint Provisional Liquidators and their
professional advisors, or in other amounts as the
Bankruptcy Court may allow.
(f) The Trustee will advance $35,000 to the Joint Provisional
Liquidators to be used to defray any additional fees and
expenses incurred or to be incurred by the Joint
Provisional Liquidators or the their professional advisors
and not previously billed, including time incurred in
negotiating and reviewing drafts of the Protocol document.
In the event certain additional fees and expenses of the
Joint Provisional Liquidators or the Bermuda
representatives is less than the Advanced Amount, the
Joint Provisional Liquidators will remit the balance of
the unused Advanced Amount to the AGX Trustee. In the
event that the Joint Provisional Liquidators' additional
fees and expenses exceed the Advanced Amount, then the
Joint Provisional Liquidators may make a motion in the
U.S. Case, on notice in accordance with the applicable
provisions of the Bankruptcy Code and the Bankruptcy Rules
governing applications for compensation by professionals,
for an order of the Bankruptcy Court allowing fees and
expenses in excess of the Advanced Amount, and seeking
authorization for the AGX Trustee to pay any allowed fees
and expenses from the AGX's estate, without prejudice to
the right of any party with standing, including the AGX
Trustee, to object to any motion.
Mr. Geltzer tells Judge Bernstein that absent the Protocol, there
is a possibility that AGX would be entirely wound up by the Joint
Provisional Liquidators and dissolved in the Bermuda Case, thus
impeding his ability, among other things, to pursue and prosecute
adversary proceedings on the AGX's behalf in the U.S. Case, as he
might not have standing to commence and maintain those
proceedings on behalf of an entity no longer in existence under
Bermuda law.
Therefore, Mr. Geltzer asks the Court to approve the Protocol.
Headquartered in Florham Park, New Jersey, Global Crossing Ltd. --
http://www.globalcrossing.com/-- provides telecommunications
solutions over the world's first integrated global IP-based
network, which reaches 27 countries and more than 200 major cities
around the globe. Global Crossing serves many of the world's
largest corporations, providing a full range of managed data and
voice products and services. The Company filed for chapter 11
protection on January 28, 2002 (Bankr. S.D.N.Y. Case No.
02-40188). When the Debtors filed for protection from their
creditors, they listed $25,511,000,000 in total assets and
$15,467,000,000 in total debts. Global Crossing emerged from
chapter 11 on December 9, 2003. (Global Crossing Bankruptcy News,
Issue No. 73; Bankruptcy Creditors' Service, Inc., 215/945-7000)
HELIOS SERIES: Moody's Junks $24 Mil. Class C Floating Rate Notes
-----------------------------------------------------------------
Moody's Investors Service announced that it has completed its
review for possible downgrade of the Notes issued by the static
pool CDO, "Helios Series I Multi-Asset CBO, Ltd." and the rating
actions it has take are:
(i) the U.S.$443,000,000 Class A Floating Rate Notes due
December 13, 2036, formerly rated Aaa on watch for possible
downgrade, have been downgraded to Aa2;
(ii) the U.S.$27,000,000 Class B Floating Rate Notes due
December 13, 2036, formerly rated Aa2 on watch for possible
downgrade, have been downgraded to Baa2, and
(iii) the U.S.$24,000,000 Class C Floating Rate Notes due December
13, 2036, formerly rated B1 on watch for possible downgrade,
have been downgraded to Caa2.
As Moody's explained in connection with the placement of the above
notes on ratings review in January of this year, since its rating
action in late 2002 the combination of deteriorating credit
quality, the reported weighted average rating factor moved from
330 to 570 over the intervening period, and realized losses to the
principal balance of the issuer's underlying portfolio (the
reported junior overcollateralization ratio fell from 100.16% to
99.76% during the same period) outstripped the positive benefits
from the structure's required amortization of the Class A Notes
and Class C Notes (for the Class C notes, use of excess interest
proceeds only).
Rating Actions: Downgrade
-- Affected Tranches:
* (1) U.S.$443,000,000 Class A Floating Rate Notes due
December 13, 2036
Previous rating: Aaa on watch for possible downgrade
New rating: Aa2
* (2) U.S.$27,000,000 Class B Floating Rate Notes due
December 13, 2036
Previous rating: Aa2 on watch for possible downgrade
New rating: Baa2
* (3) U.S.$24,000,000 Class C Floating Rate Notes due
December 13, 2036
Previous rating: B1 on watch for possible downgrade
New rating: Caa2
HEXCEL CORPORATION: S&P Puts B+ Rating on $350 Million Bank Loan
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Standard & Poor's Ratings Services assigned its 'B+' bank loan
rating to Hexcel Corporation's proposed $350 million secured
credit facility, with a recovery rating of '2', indicating
expectations of a substantial recovery (80%-100%) of principal in
the event of payment default.
At the same time, Standard & Poor's affirmed its 'B+' corporate
credit and other ratings on the composite supplier, which were
raised to current levels on Jan. 27, 2005. The outlook is
positive.
"The ratings on Hexcel reflect a weak, but improving, financial
profile, stemming from high debt levels and participation in the
cyclical commercial aerospace industry," said Standard & Poor's
credit analyst Christopher DeNicolo.
The proceeds from the proposed credit facility will be used to
refinance the Stamford, Connticut-based firm's existing credit
facility, as well as other debt, lowering interest expense and
increasing cash available for further debt repayment. Leverage
will increase slightly due to the call premium on the notes to be
redeemed and transaction expenses.
Hexcel has used cash from operations and the proceeds from asset
sales and a preferred equity investment in 2003 to reduce debt
almost $250 million since 2001. As a result, debt to EBITDA has
declined to around 3x in 2004 from 15x in 2001.
In response to a difficult operating environment following the
Sept. 11, 2001, terrorist attacks, Hexcel instituted a
restructuring program, which has led to a $66 million reduction in
cash fixed costs. Therefore, operating margins have returned to
the low-teens percent area from the mid-single digits in 2001.
The lower cost structure should result in significant operating
leverage and margins will likely continue to improve as sales
increase. Other credit protection measures have similarly
strengthened, with funds from operations to debt of 17% and EBITDA
interest coverage of around 3x in 2004.
These trends are expected to continue as Hexcel uses free cash
flow to reduce debt and the commercial aerospace market recovers.
Improved conditions in almost all of the firm's major markets and
the weak U.S. dollar resulted in a 20% increase in revenues (17%
on a constant currency basis) in 2004.
Hexcel is the world's largest manufacturer of advanced structural
materials, such as lightweight, high-performance carbon fibers,
structural fabrics, and composite materials for the commercial
aerospace, defense and space, electronics, recreation, and
industrial sectors. The markets served are cyclical, but most
have growth potential where the company's materials offer
significant performance and economic advantages over traditional
materials.
Revenues and earnings are likely to benefit from favorable trends
in military aircraft, ballistics, and wind energy, as well as the
recovery in the commercial aircraft market. These improvements,
combined with lower debt levels and cost reduction efforts, could
result in a credit profile that warrants an upgrade in the
intermediate term.
HOLLINGER INC: Ernst & Young's Inspection Costs C$4.25 Million
--------------------------------------------------------------
Hollinger, Inc., (TSX:HLG.C)(TSX:HLG.PR.B) provides an update in
accordance with the guidelines pursuant to which the June 1, 2004,
management and insider cease trade order was issued. These
guidelines contemplate that Hollinger will normally provide
bi-weekly updates on its affairs until the time as it is current
with its filing obligations under applicable Canadian securities
laws. Reference should be made to Status Update Reports and other
press releases that have been previously filed by Hollinger and
which are available on SEDAR at http://www.sedar.com/
Supplemental Financial Information
As of the close of business on February 4, 2005, Hollinger and its
subsidiaries (other than Hollinger International and its
subsidiaries) had approximately US$44.6 million of cash or cash
equivalents, including restricted cash, on hand and Hollinger
owned, directly or indirectly, 782,923 shares of Class A Common
Stock and 14,990,000 shares of Class B Common Stock of Hollinger
International. Based on the February 4, 2005, closing price of
the shares of Class A Common Stock of Hollinger International on
the New York Stock Exchange of US$14.10, the market value of
Hollinger's direct and indirect holdings in Hollinger
International was US$222,398,214.
All of Hollinger's direct and indirect interest in the shares of
Class A Common Stock of Hollinger International are being held in
escrow in support of future retractions of its Series II
Preference Shares. All of Hollinger's direct and indirect
interest in the shares of Class B Common Stock of Hollinger
International are pledged as security in connection with
Hollinger's outstanding 11.875% Senior Secured Notes due 2011 and
11.875% Second Priority Secured Notes due 2011. In addition,
Hollinger has previously deposited with the trustee under the
indenture governing the Senior Notes approximately US$10.5 million
in cash as collateral in support of the Senior Notes (which cash
collateral is also collateral in support of the Second Priority
Notes, subject to being applied to satisfy future interest payment
obligations on the outstanding Senior Notes as permitted by
amendments to the Senior Indenture). Consequently, there is
currently in excess of US$221.8 million aggregate collateral
securing the US$78 million principal amount of the Senior Notes
and the US$15 million principal amount of the Second Priority
Notes outstanding.
Inspection
Ernst & Young, Inc., the Inspector, is continuing the inspection
of Hollinger's related party transactions pursuant to an Order of
Justice Colin L. Campbell of the Ontario Superior Court of
Justice. The Inspector has provided six interim Reports with
respect to its inspection of Hollinger. Counsel for the Inspector
and various parties are next scheduled to appear before Justice
Campbell today, February 9, 2005. Hollinger and its staff
continue to give their full and unrestricted assistance to the
Inspector in order that it may carry out its duties, including
access to all files and electronic data.
To February 4, 2005, the cost to Hollinger of the inspection
(including the costs associated with the Inspector and its legal
counsel and Hollinger's legal counsel) is in excess of
C$4.25 million.
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 and a portfolio of news media
investments, and a portfolio of revenue-producing and other
commercial real estate in Canada, including its head office
building located at 10 Toronto Street, Toronto, Ontario.
* * *
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.
HOLLY ENERGY: S&P Puts B+ Rating on $150 Mil. Sr. Unsecured Notes
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' corporate
credit rating to Holly Energy Partners L.P., a master limited
partnership.
At the same time, Standard & Poor's assigned its 'B+' senior
unsecured debt rating to Holly Energy's proposed $150 million
senior unsecured notes due 2015. The outlook is stable.
Pro forma the proposed offering, Dallas, Texas-based Holly Energy
will have $150 million of debt.
"The ratings on Holly Energy reflect its limited customer
diversification, a somewhat aggressive financial profile, the
likelihood of future acquisitions as Holly Energy continues to
grow, and the general partnership ownership by Holly Corporation,"
noted Standard & Poor's credit analyst Paul B. Harvey.
"In addition, the ratings include the stability provided by
long-term contracts for revenue and volume covering more than 70%
of current throughput and its position as the carrier of the
majority of Holly Corporation's and Alon USA Inc.'s (B/Stable/--)
refined products," he continued.
The senior unsecured debt is "notched" one level below the
corporate credit rating to reflect a potentially greater-than-15%
encumbrance of assets by senior debt related to Holly Energy's
$100 million credit facility.
The stable outlook reflects expectations for little earnings
volatility, thanks to long-term contracts on more than 70% of
volumes. Holly Energy is expected to remain acquisitive.
However, acquisitions should be funded in a balanced manner that
does not materially worsen debt leverage. Ratings improvement
will largely depend on Holly Energy's ability to attain greater
diversification among its cash flows, likely through acquisitions.
On the other hand, ratings could be lowered if future acquisitions
are not financed in a manner that maintains expected financial
metrics, or if contracted volumes and revenue decrease materially.
HORNBECK OFFSHORE: Launches $225 Mil. 6.125% Sr. Debt Tender Offer
------------------------------------------------------------------
Hornbeck Offshore Services, Inc., (NYSE: HOS) reported the
commencement of its offer to exchange any and all of the
$225,000,000 aggregate principal amount of its outstanding 6.125%
Series A Senior Notes due 2014 which were sold in accordance with
Rule 144A or Regulation S of the Securities Act of 1933 for an
equal aggregate principal amount of its 6.125% Series B Senior
Notes due 2014. The issuance of the New Notes has been registered
under the Act.
Hornbeck Offshore will accept for exchange any and all original
notes validly tendered and not validly withdrawn before the
expiration time of 5:00 p.m., New York City time on Mar. 7, 2005,
unless extended. Original notes validly tendered may be withdrawn
at any time before the Expiration Time only in accordance with the
withdrawal rights set forth in the exchange offer prospectus under
the caption "Exchange Offer - Withdrawal of Tenders."
Copies of the exchange offer prospectus and related transmittal
materials governing the exchange offer may be obtained from the
exchange agent, Wells Fargo Bank, National Association Wells Fargo
Bank, N.A., Corporate Trust Operations, MAC N9303-121, 6th &
Marquette Avenue, Minneapolis, Minnesota 55479 or by calling
1-800-344-5128.
About the Company
Hornbeck Offshore Services, Inc. is a leading provider of
technologically advanced, new generation offshore supply vessels
in the U.S. Gulf of Mexico and select international markets, and
is a leading transporter of petroleum products through its fleet
of ocean-going tugs and tank barges, primarily in the northeastern
U.S. and in Puerto Rico.
* * *
As reported in the Troubled Company Reporter on Nov. 17, 2004,
Moody's upgraded the senior implied rating for Hornbeck Offshore
Services, Inc., to Ba3 from B1, the issuer rating to Ba3 from B1
and assigned a Ba3 to the company's proposed $225 million senior
unsecured notes offering. The outlook is stable.
HUFFY CORP: Lasky & Rifkind Files Class Action Securities Lawsuit
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Lasky & Rifkind, Ltd., a law firm with offices in New York and
Chicago, has filed a lawsuit in the United States District Court
for the Southern District of Ohio, on behalf of persons who
purchased or otherwise acquired publicly traded securities of
Huffy Corp. (OTC:HUFCQ) between April 16, 2002 and August 13,
2004, inclusive -- the Class Period. The lawsuit was filed
against Huffy and certain officers and directors.
If you are a member of this class and wish to view a copy of a
complaint and join this class action, please e-mail us at
investorrelations@laskyrifkind.com and request a copy of the
complaint and a plaintiff certification. If you are a member of
the Class, you may move the Court no later than March 25, 2005 to
serve as a lead plaintiff for the Class. Any member of the
purported class may move the Court to serve as lead plaintiff
through counsel of their choice, or may choose to do nothing and
remain an absent class member. However, if you choose to remain
an absent class member, unless and until a class is certified, you
are not represented by counsel.
The complaint alleges that Defendants violated Sections 10(b) and
20(a) of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder. Specifically, the complaint alleges that
Defendants issued a series of materially false and misleading
statements regarding the Company's growth and long-term prospects.
More specifically, Defendants failed to disclose or misrepresented
that the Company was experiencing difficulties integrating the
McCalla and Gen-X acquisitions, that the Company's Canadian
operations were engaged in improper accounting practices by
failing to properly account for returns and reductions and failed
to timely write down the value of its inventory, that costs
resulting from its discontinued operations were draining cash from
the Company's operations and that as a result the Company was
quickly approaching insolvency.
On August 13, 2004, Huffy issued a press release indicating that
certain accounting entries, in the range of $3.5 to $5.0 million
related to customer deductions, credits and reserves and doubtful
accounts receivables for Huffy Sports Canada had been improperly
recorded. Shares of Huffy declined from $0.58 per share to $0.35
per share, a decline of 40%. Then on August 16, 2004, the Company
announced that the New York Stock Exchange had suspended trading
of Huffy shares. On October 20, 2004, the Company announced that
it filed for Chapter 11 bankruptcy protection.
If you bought Huffy securities between April 16, 2002 and August
13, 2004, inclusive, and would like to obtain information about
the lawsuit, then you are invited to call (800) 495-1868 to speak
with an advisor.
Headquartered in Miamisburg, Ohio, Huffy Corporation --
http://www.huffy.com/-- designs and supplies wheeled and related
products, including bicycles, scooters and tricycles. The Company
and its debtor-affiliates filed for chapter 11 protection on
Oct. 20, 2004 (Bankr. S.D. Ohio Case No. 04-39148). Kim Martin
Lewis, Esq., and Donald W. Mallory, Esq., at Dinsmore & Shohl LLP,
represent the Debtors in their restructuring efforts. When the
Debtors filed for protection from their creditors, they listed
$138,700,000 in total assets and $161,200,000 in total debts.
HUMAN GENOME: Posts $66.7 Million Net Loss in Fourth Quarter
------------------------------------------------------------
Human Genome Sciences, Inc. (Nasdaq: HGSI) released financial
results for the quarter and full-year periods ended Dec. 31, 2004,
and reiterated guidance for financial results anticipated for the
full year 2005.
The Company's net loss for 2004, in accordance with Generally
Accepted Accounting Principles (GAAP), was $242.9 million. This
compares to the net loss for 2003 of $185.3 million. The increase
in the net loss is due to an increase in development expenses for
the compounds now in clinical trials, restructuring charges and a
decrease in net investment income. These were partially offset by
a decrease in general and administrative expenses.
The Company's pro forma net loss for 2004 was $229.9 million,
which compares to its net loss for 2003 of $185.3 million. The
2004 pro forma net loss excludes a restructuring charge of
$15.4 million, which consists of: $7.7 million, for the
consolidation of facilities; $5.2 million, relating to the recent
retirement of the Company's former CEO; and $2.5 million, for the
previously announced reduction of staff. The pro forma net loss
also excludes a gain of $2.4 million, related to the
extinguishment of debt.
Total revenues for the year ended December 31, 2004 were
$3.8 million, compared to $8.2 million for the year-earlier
period. The decrease in revenues from 2003 to 2004 is due to
reduced amounts recognized from partners in connection with
license agreements. Revenues for 2004 included the ratable
recognition of license fees, in addition to a milestone payment
from a partner.
Human Genome Sciences' operating costs for the year ended
Dec. 31, 2004, increased as compared to the year-earlier period,
primarily due to increased manufacturing activities and an
increase in the size and number of clinical trials, partially
offset by reductions in discovery research activities and general
and administrative expenses.
For the quarter ended Dec. 31, 2004, the Company's net loss, in
accordance with GAAP, was $66.7 million. This compares to the net
loss of $48.9 million, for the year-earlier period. The increased
net loss is primarily due to increased development expense for the
compounds in clinical trials, a charge for restructuring and a
decrease in net interest income, partially offset by a decrease in
general and administrative expenses and a gain related to the
extinguishment of debt.
For the quarter ended Dec. 31, 2004, the Company's pro forma net
loss was $65.0 million. This compares to the net loss of
$48.9 million, for the year-earlier period. The pro forma net
loss excludes a restructuring charge of $4.1 million, which
consists of: $3.7 million, for the consolidation of facilities,
and $0.4 million, relating to the recent retirement of the
Company's former CEO. The pro forma net loss also excludes a gain
of $2.4 million, related to the extinguishment of debt.
Total revenues for the quarter ended Dec. 31, 2004, were
$0.8 million, compared to $4.6 million for the year-earlier
period. As noted above, the decrease is due to reduced amounts
recognized from partners in 2004 versus 2003.
At Dec. 31, 2004, cash and short-term investments totaled
$952.7 million, including $215.2 million of restricted
investments. This compares to $1.26 billion, including
$280.8 million of restricted investments at Dec. 31, 2003. The
decrease in investments required to be restricted resulted from
exiting one of the Company's lease agreements, as part of the
previously disclosed plan to consolidate its operations into fewer
locations.
As of Dec. 31, 2004, there were approximately 130.5 million shares
of Human Genome Sciences common stock outstanding.
H. Thomas Watkins, Chief Executive Officer, said, "Human Genome
Sciences made substantial progress toward commercialization in
2004. We sharpened our focus on those products in our clinical
pipeline that we believe have the highest therapeutic and
commercial potential. We realigned resources to reflect that
focus. We initiated six Phase 2 clinical trials and completed
enrollment in three Phase 2 trials. We introduced two new INDs,
HGS-TR2J for cancer and CCR5 mAb for HIV/AIDS. We completed an
agreement with GlaxoSmithKline for the development and
commercialization of Albugon for the treatment of diabetes, which
we believe provides strong validation of our albumin-fusion
technology. In 2005, we will complete a number of Phase 2 clinical
trials. We will clarify the development pathway for our most
promising compounds and make a number of go/no go decisions. We
will work to further define and advance our partnering objectives
and to monetize our less strategically critical assets. We expect
to complete the construction and begin the validation of our
large-scale manufacturing facility."
Steven C. Mayer, Executive Vice President and Chief Financial
Officer, said, "During 2004, we took a number of steps to align
resources more closely with our commercial objectives. We reduced
our 2004 expense by more than $40 million from our original
budget. We substantially reduced our anticipated five-year
expense growth rate. We consolidated facilities, in the process
freeing up $76 million in cash and reducing our total balance
sheet cash restriction associated with facilities financings to
$219 million. We also extended the maturity of a portion of our
convertible debt and reduced our interest expense by issuing $280
million in convertible subordinated notes due 2011 and by using
all of the proceeds to repurchase existing convertible debt due
2007."
Partnerships
GlaxoSmithKline. In October 2004, the Company announced a new
agreement with GlaxoSmithKline (GSK), under which GSK acquired
exclusive worldwide rights to develop and commercialize
Albugon(TM), a drug in late-stage preclinical development by Human
Genome Sciences for potential use in the treatment of diabetes.
Human Genome Sciences received an upfront fee and is entitled to
clinical development and commercial milestone payments that could
amount to as much as $183.0 million, as well as additional
milestones for other indications developed. Human Genome Sciences
will also receive royalties on the annual net sales of any
products developed and commercialized under the agreement.
GSK has completed a Phase 2 clinical trial of 480848, and has
indicated that it plans to advance 480848 to Phase 3 clinical
trials for the treatment of cardiovascular disease in the coming
months. 480848 is a small-molecule drug arising from the Human
Genome Sciences-GSK collaboration that inhibits the activity of
lipoprotein-associated phospholipase A2 (Lp-PLA2), an enzyme
associated with the development of atherosclerotic plaques. Human
Genome Sciences will receive a milestone payment if 480848 moves
into registration and will receive royalties if the compound is
commercialized. In addition, Human Genome Sciences has an option
to co-promote an approved drug in the North American and European
markets.
In September 2004, Corautus initiated a Phase 2B clinical trial to
evaluate the safety and efficacy of vascular endothelial growth
factor-2 (VEGF-2) for the treatment of severe cardiovascular
disease. This randomized, double-blinded, dose ranging and
placebo-controlled study will enroll up to 404 patients suffering
from Class III or Class IV angina, in medical centers throughout
the United States. Corautus was formed in February 2003 from the
merger of Vascular Genetics and GenStar Therapeutics. As of
December 31, 2004, Human Genome Sciences owned approximately 11%
of Corautus. Corautus holds the exclusive license to VEGF-2, a
novel gene that was discovered and characterized by Human Genome
Sciences, in the field of gene therapy. Human Genome Sciences is
entitled to royalties on the sales of any product developed and
commercialized under the agreement.
People
As of Dec. 31, 2004, Human Genome Sciences had approximately 825
employees.
Finances and Capital Projects
Financial Guidance for 2005
Human Genome Sciences reiterated the following guidance regarding
the financial results expected for the full year 2005:
Research and development expenses are expected to increase
approximately 10 percent from 2004 levels, as Human Genome
Sciences continues to expand clinical trials for drugs in its core
clinical development pipeline (but not including expenses related
to a potential Phase 3 clinical trial of LymphoStat-B in
rheumatoid arthritis).
General and administrative expenses are expected to remain flat
from 2004 to 2005.
The Company expects to earn interest income of approximately $13
million on its cash balances during 2005, net of interest expense
and capitalized interest.
Financial Transactions
In October 2004, the Company successfully completed a convertible
note offering placing $280 million principal amount of 2.25%
Convertible Subordinated Notes Due 2011. These notes are
convertible into Human Genome Sciences common stock at a price of
approximately $15.55 per share. The Company used all of the net
proceeds from the offering to repurchase approximately $278.2
million aggregate principal amount of its outstanding convertible
subordinated debt due in 2007. As a result of this transaction,
the Company extended the maturity of this portion of its
convertible debt from 2007 to 2011 and will realize interest
expense savings of approximately $5.0 million per year.
In December 2004, Human Genome Sciences announced an agreement
under which the Company will exit the facility at 9800 Medical
Center Drive as part of its plan to consolidate its operations
into fewer locations. Maryland Economic Development Corporation
(MEDCO) will continue to hold title to the facility, and has
entered into a new lease with a third party. This agreement
resulted in the freeing up of $76 million of cash by eliminating
the cash restriction associated with the financing of 9800 Medical
Center Drive. This reduced the total amount of cash restricted on
the Company's balance sheet, which is related to various facility
financings, from $294 million as of Sept. 30, 2004, to $215
million as of Dec. 31, 2004.
Facilities and Capital Projects
In 2004, Human Genome Sciences completed the installation and
initial Operating Qualification runs of the Clinical Production
facility at the Traville site. This facility includes two suites
with 1,600-liter bioreactors and associated purification
technology. The new facility effectively triples the Company's
capacity for production of human monoclonal antibodies for
clinical use using mammalian cell culture.
In addition, the Company is expanding mammalian production
capability at its Manufacturing and Process Development Plant by
adding a second 1,600-liter reactor to the existing suite. This
expansion is proceeding on budget and on schedule, and is expected
to be completed during the first half of 2005.
Construction of a Large Scale Manufacturing Plant is proceeding on
schedule and on budget. Construction is expected to be completed
in mid-2005.
About the Company
Human Genome Sciences - http://www.hgsi.com/-- is a Company with
the mission to treat and cure disease by bringing new gene-based
protein and antibody drugs to patients. HGS, Human Genome
Sciences, ABthrax, Albuferon, Albugon, and LymphoStat-B are
trademarks of Human Genome Sciences, Inc.
* * *
As reported in the Troubled Company Reporter on Oct. 4, 2004,
Standard & Poor's Ratings Services assigned a 'CCC' subordinated
debt rating to the proposed $250 million, 2.25% convertible
subordinated debt issue of Human Genome Sciences, Inc., a
development-stage biopharmaceutical company. The amount of the
notes can be increased by $50 million and the debt will mature in
2011.
At the same time, Standard & Poor's affirmed its 'B-' corporate
credit rating on Human Genome. All of the net proceeds from the
offering will be used to repurchase a portion of the company's
outstanding convertible subordinated debt, $500 million of which
is due in early 2007.
IMPERIAL HOME: Trustee Taps Ballard Spahr as Litigation Counsel
---------------------------------------------------------------
Montague S. Claybrook, the chapter 7 Trustee overseeing the
liquidation of Imperial Home Decor Group Holdings, Inc., and its
debtor-affiliates asks the U.S. Bankruptcy Court for the District
of Delaware for permission to retain Ballard Spahr Andrews &
Ingersoll, LLP, as his counsel.
The Trustee wants Ballard Spahr to litigate approximately
$3 million in potential avoidance actions, including preferential
and fraudulent transfers.
Mr. Claybrook believes that Ballard Spahr is well qualified to
represent him in an efficient and timely manner since the Firm is
familiar with the Debtors' cases having served as counsel to the
Official Committee of Unsecured Creditors.
Tobey M. Daluz, Esq., a partner at Ballard Spahr, discloses the
Firm's professionals' current hourly rates:
Professional Billing Rate
------------ ------------
Tobey M. Daluz $425
Jennifer A.L. Kelleher 290
Patricia A. Widdoss 270
Kelly G. Iffland 150
According to Mr. Daluz, the Debtors' still owe his Firm
$106,726.63 for its professional services to the Committee.
However, his Firm is ready to represent the Trustee. Mr. Daluz
assures the Court that the representation will not compromise the
best interest of the Debtors and their estates.
Headquartered in Cleveland, Ohio, Imperial Home Decor Group, Inc.
-- http://www.ihdg.com-- manufactures and distributes home and
commercial wall-coverings. The Company also provides online
wall-covering information sales services. Products and services
are sold to multiple industries. The Company and its
debtor-affiliates filed for chapter 11 protection on Dec. 27, 2003
(Bankr. D. Del. Case No. 03-13899). The Debtors' cases were
converted to chapter 7 on Sept. 1, 2004. Prior to the conversion
date, substantially all of the Debtors' assets were liquidated.
Currently, the estates are administratively insolvent. On
Sept. 9, Montague S. Claybrook was appointed as chapter 7 Trustee.
Duane David Werb, Esq., at Werb & Sullivan represents the Debtors.
When the Debtor filed for protection from its creditors, it
estimated $100 million in total assets and $100 million in debts.
INNOPHOS INC: S&P Junks $120 Million Senior Floating-Rate Notes
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on
Cranbury, New Jersey-based Innophos Inc., and removed the ratings
from CreditWatch where they were placed in November 2004. The
corporate credit rating was lowered to 'B' from 'B+'.
At the same time, Standard & Poor's assigned its 'CCC+' rating to
$120 million of floating-rate senior notes due 2015 to be issued
by Innophos Investments Holdings Inc., parent company of Innophos
Inc. Proceeds from the debt offering will fund a cash dividend to
the equity sponsors. The outlook is negative.
The downgrade reflects the unexpected increase in the already
aggressive debt load as a result of this transaction.
"Clearly, this debt issuance is inconsistent with a commitment to
improving the credit quality profile that had been factored into
prior ratings and signals a change in financial policy," said
Standard & Poor's credit analyst Wesley Chinn. "Credit quality is
also under pressure from financial uncertainties arising from tax
claims at a Mexican subsidiary."
The ratings of Innophos, a specialty chemical manufacturer owned
by Bain Capital, reflect:
-- a moderate sales base,
-- a narrow product line in a niche,
-- mature market,
-- some vulnerability to raw material costs and to the
cyclicality of general economic conditions, and
-- very aggressive debt leverage.
Moreover, exposure to potential demand reduction for phosphates in
the U.S. detergent market remains a concern given environmental
concerns at the state level, but the phase-out of phosphates for
home laundry detergents sold in the U.S. is complete. Further
demand reduction for the auto-dishwasher market in the U.S., or
the onset of unforeseen environmental concerns in Mexico, both of
which are key markets, will remain longer-range variables,
although these issues are not expected to impact Innophos based on
current information.
These negatives overshadow the company's:
-- solid position in the production of specialty phosphates,
-- stable volume growth,
-- expected higher earnings for 2005, and
-- good operating margins.
Specialty phosphates are used in various food and beverage,
consumer products, pharmaceutical, and industrial applications to
improve the texture and taste of food, make cleaning easier in
toothpaste, increase the effectiveness of active ingredients in
tablets, and improve the cleaning characteristics of detergents.
Innophos has leading shares in all three major product segments of
the specialty phosphates industry: purified phosphoric acid (which
is used in part in the downstream production of phosphate
derivatives), specialty salts and acids, and technical grade
sodium tri-polyphosphate. Specialty salts and acids account for
well over half of Innophos' operating income.
INTRAWEST CORP: Appoints M. Morfitt & A. Wasilov to Board
---------------------------------------------------------
Intrawest Corporation reported that the Board of Directors has
been expanded to include Ms. Marti Morfitt and Mr. Alex Wasilov
effectively immediately. Concurrently, Mr. Daniel Jarvis, a
management member of the Board of Directors, has resigned from his
Board position. Mr. Jarvis continues in his role as President and
Chief Executive Officer, Leisure and Travel Group. The Board of
Directors now consists of ten members with Mr. Joe Houssian,
chairman, president and chief executive officer as the sole
management member of the Board.
"It is an honour to welcome both Marti and Alex to the Board of
Intrawest," said Joe Houssian. "The addition of these two
individuals adds considerable experience while strengthening the
independence of the Board."
Ms. Morfitt is President and Chief Executive Officer of CNS, Inc.
-- The Breathe Right Company, a successful consumer health care
products company based in Minnesota. In her current role, Marti
has transformed CNS into a profitable consumer health care
products company operating in 25 countries. Prior to CNS, Marti
was part of the senior executive team at Pillsbury Company. She
is a director on a number of boards and holds an MBA from York
University in Toronto and a BBA from the University of Western
Ontario.
Mr. Wasilov has recently completed an assignment as Senior Advisor
with American Express having led the sale of Rosenbluth
International, one of the world's largest privately held corporate
travel companies with over $3 billion in annual sales, to American
Express. Prior to American Express, Alex was the President and
Chief Operating Officer of Rosenbluth and held a senior executive
position at Eastman Kodak Company. He is a director on a number
of boards and holds an MBA from the University of Rhode Island and
a BS in Business Administration from Pennsylvania State
University.
Intrawest Corporation (IDR:NYSE; ITW:TSX) --
http://www.intrawest.com/-- is one of the world's leading
destination resort and adventure-travel companies. Intrawest has
interests in 10 mountain resorts in North America's most popular
mountain destinations, including Whistler Blackcomb, a host venue
for the 2010 Winter Olympic and Paralympic Games. The company
owns Canadian Mountain Holidays, the largest
heli-skiing operation in the world, and a 67% interest in
Abercrombie & Kent, the world leader in luxury adventure travel.
The Intrawest network also includes Sandestin Golf and Beach
Resort in Florida and Club Intrawest -- a private resort club with
nine locations throughout North America. Intrawest is developing
five additional resort village developments at locations in North
America and Europe. Intrawest is headquartered in Vancouver,
British Columbia.
* * *
As reported in the Troubled Company Reporter on Sept. 24, 2004,
Moody's Investors Service assigned a B1 rating to Intrawest
Corporation's U.S. dollar-denominated 7.5% senior unsecured note
offering, due 2013 and Canadian dollar-denominated 7.5% senior
unsecured note offering, due 2009, for an aggregate amount of
approximately US$325 million. In addition, these rating actions
were taken by Moody's:
* Ratings assigned:
-- U.S. dollar-denominated 7.5% senior notes, due 2013
rated B1
-- Canadian dollar-denominated 7.5% senior notes, due 2009
rated B1
* Ratings affirmed:
-- Senior implied rating at Ba3
-- Senior unsecured issuer rating at B1
-- US$350 million 7.5% senior notes due 2013 rated B1
-- US$125 million 10.5% senior notes due 2010 rated B1
-- US$135 million 10.5% senior notes due 2010 rated B1
-- US$125 million 10.5% senior notes due 2010 rated B1
The ratings outlook is stable.
IPSCO INC: Will Webcast 2004 Fourth Quarter Results on Monday
-------------------------------------------------------------
IPSCO, Inc., (NYSE: IPS; Toronto) will webcast its 2004 fourth
quarter and year end results conference call at 10:00 AM EST on
Monday, February 14, 2005. During the call, IPSCO President and
CEO, David Sutherland and Senior Vice President and Chief
Financial Officer, Vicki Avril will discuss IPSCO Inc.'s quarterly
results.
Persons wishing to listen to the webcast may access it through the
Company's website at http://www.ipsco.com/ The conference call,
including the question and answer portion, will also be archived
on IPSCO's web site for three months.
IPSCO operates steel mills at three locations and pipe mills at
six locations in Canada and the United States. As a low cost
North American steel producer, IPSCO has a combined annual steel
making capacity of 3,500,000 tons and provides further processing
at its five cut-to-length lines located in both the U.S. and
Canada. The Company's tubular facilities produce a wide range of
tubular products including line pipe, oil and gas well casing and
tubing, standard pipe and hollow structurals.
* * *
As reported in the Troubled Company Reporter on Nov. 9, 2004,
Moody's Investors Service upgraded its senior implied rating for
IPSCO, Inc., to Ba2. The upgrade reflects IPSCO's much-stronger
financial performance in response to improved market conditions
for discrete plate, coil and tubular products, and its much
improved capitalization. In consideration of IPSCO's strong
credit metrics, low cost position, ability to further reduce
leverage as debt matures over the next two years, and the very
favorable near-term outlooks for its primary products, plate and
energy tubulars, Moody's changed IPSCO's rating outlook to
positive.
These ratings were upgraded:
* $200 million of 8.75% guaranteed senior unsecured notes due
2013 -- to Ba2 from Ba3,
* senior implied rating -- to Ba2 from Ba3, and
* senior unsecured issuer rating -- to Ba3 from B1.
As reported in the Troubled Company Reporter on February 26, 2004,
Standard & Poor's Ratings Services lowered its ratings on steel
producer IPSCO Inc., including the long-term corporate credit
rating, which was lowered to 'BB' from 'BB+'. At the same time,
Standard & Poor's lowered its rating on the company's 5.5%
cumulative redeemable first preferred shares to 'B' from 'B+'.
The downgrade affects about US$425 million in unsecured debt. The
outlook is stable.
ISLE OF CAPRI: Hosting Third Quarter Conference Call on Monday
--------------------------------------------------------------
Isle of Capri Casinos, Inc. (Nasdaq: ISLE) will release its third
quarter results before the market opens on Monday, Feb. 14, 2005,
and will host a conference call and simultaneous webcast on
Monday, Feb. 14, 2005, at 9:30 a.m. Central time.
The conference call will consist of a review of the third quarter
results and other statements by management, including business and
company trends that will be followed by a question-and-answer
session.
The toll-free telephone number to access the call for the U.S. is
800-230-1951. The international telephone number to access the
call is 612-332-0345. The conference call reference number is
770196.
The investor's conference call will be recorded and available for
review starting at 1:00 p.m. on Monday, Feb. 14, 2005, until
midnight on Monday, Feb. 21, 2005, by dialing 800-475-6701
(international: 320-365-3844) and access number 770196.
The live webcast will be accessible at http://phx.corporate-
ir.net/phoenix.zhtml?p=irol-eventDetails&c=68944&eventID=1014576
or on Isle of Capri's website at http://www.islecorp.com/
Following the call's completion, a replay will be available
on-demand on either website through May 12, 2005.
About the Company
Isle of Capri Casinos, Inc., a leading developer and owner of
gaming and entertainment facilities, operates 16 casinos in 14
locations. The company owns and operates riverboat and dockside
casinos in Biloxi, Vicksburg, Lula and Natchez, Mississippi;
Bossier City and Lake Charles (two riverboats), Louisiana;
Bettendorf, Davenport and Marquette, Iowa; and Kansas City and
Boonville, Missouri. The company also owns a 57 percent interest
in and operates land-based casinos in Black Hawk (two casinos) and
Cripple Creek, Colorado. Isle of Capri's international gaming
interests include a casino that it operates in Freeport, Grand
Bahama, and a two-thirds ownership interest in casinos in Dudley,
Walsal and Wolverhampton, England. The company also owns and
operates Pompano Park Harness Racing Track in Pompano Beach,
Florida.
* * *
As reported in the Troubled Company Reporter on Jan. 10, 2005,
Moody's Investors Service assigned a Ba2 rating to Isle of Capri
Casinos, Inc.'s proposed $650 million senior secured bank
facility. Proceeds from the new bank facility will be used to
refinance the company's existing Ba2 rated bank debt, and to help
fund expansion projects. Moody's also confirmed Isle's Ba3 senior
implied rating, B1 senior unsecured long-term issuer rating, and
B2 senior subordinated rating. The ratings outlook remains
stable.
These new ratings were assigned:
-- $400 million senior secured 5-year revolving credit
facility, at Ba2; and
-- $250 million senior secured 6-year term loan B, at Ba2.
These existing ratings were confirmed:
-- Senior implied rating, at Ba3;
-- $200 million 9% senior subordinated notes due 2012, at B2;
-- $500 million 7% senior subordinated notes due 2014, at B2;
-- $250 million senior secured revolving credit facility due
2007, at Ba2;
-- $206 million senior secured term loan facility due 2008, at
Ba2; and
-- Senior unsecured issuer rating, at B1.
The ratings on Isle's existing revolver and term loan will be
withdrawn once the new bank facility takes effect.
ISTAR ASSET: Moody's Junks $15,982,000 Class S Mortgage Bonds
-------------------------------------------------------------
Moody's Investors Service upgraded the ratings of eleven classes
and affirmed the ratings of six classes of iStar Asset Receivables
Trust, Collateralized Mortgage Bonds, Series 2002-1:
* Class A2, $125,845,932, Floating, affirmed at Aaa
* Class B, $39,955,000, Floating, affirmed at Aaa
* Class C, $26,637,000, Floating, affirmed at Aaa
* Class D, $21,310,000, Floating, upgraded to Aaa from Aa1
* Class E, $42,619,000, Floating, upgraded to Aaa from Aa2
* Class F, $26,637,000, Floating, upgraded to Aaa from A1
* Class G, $21,309,000, Floating, upgraded to Aa2 from A2
* Class H, $26,637,000, Fixed, upgraded to Aa3 from A3
* Class J, $26,637,000, Fixed, upgraded to A2 from Baa1
* Class K, $26,637,000, Fixed, upgraded to Baa1 from Baa2
* Class L, $21,310,000, Fixed, upgraded to Baa2 from Baa3
* Class M, $18,646,000, Fixed, upgraded to Baa3 from Ba1
* Class N, $23,973,000, Fixed, upgraded to Ba2 from Ba3
* Class O, $21,310,000, WAC, upgraded to Ba3 from B1
* Class P, $18,645,000, WAC, affirmed at B2
* Class Q, $15,983,000, WAC, affirmed at B3
* Class S, $15,982,000, WAC, affirmed at Caa2
The Certificates are collateralized by 29 loans, consisting of 23
mortgage loans and six mezzanine loans secured by borrowers'
equity interests, which range in size from less than 1.0% to 30.6%
of the pool based on current principal balances. The pool is
concentrated with the top three loan exposures representing 59.7%
of the outstanding pool balance and with the top five exposures
representing 80.5%.
As of the January 28, 2005 distribution date, the transaction's
aggregate certificate balance has decreased by approximately 47.4%
to $560.0 million from $1,065.5 million at closing as a result of
the payoff of nine loans initially in the pool and loan
amortization. There are no loans in special servicing and there
have been no losses since securitization.
Overall the collateral properties have performed as expected and
the current Moody's loan to value ratio ("LTV") for the pool
(including non-pooled senior debt) is 73.0%, compared to 84.6% at
securitization. This stable performance and the increased
subordination from amortization and loan payoffs has resulted in
the upgrade of Classes D, E, F, G, H, J, K, L, M, N and O.
The Headquarters/Mission-Critical Facilities Loan Portfolio
($171.4 million - 30.6%) is secured by first priority liens and
security interests in 15 cross-collateralized and cross-defaulted
loans on 15 office and industrial properties located in nine
states.
The properties are primarily single tenant facilities and
approximately 55.0% of the properties (based on respective loan
balances) are leased to investment grade tenants. The portfolio is
approximately 98.0% leased. The sponsor is iStar Financial
Affiliates. Moody's LTV and shadow rating are 68.8% and A3
respectively.
The Goodyear Tire & Rubber Loan ($98.6 million -- 17.6%) is
secured by first mortgage liens on six industrial/distribution
facilities with a total gross leasable area of 4.7 million square
feet. The properties are located in Georgia, Illinois, Texas,
Pennsylvania, and Ohio. The properties are subject to a single
20-year bondable, double-net lease with Goodyear Tire & Rubber
Company.
Goodyear's obligations under its lease are secured by additional
collateral in the form of a $20.0 million letter of credit. The
Goodyear Tire & Rubber Company has a Moody's senior unsecured debt
rating of B3. The sponsor of the loan is iStar Financial
Affiliates. Moody's LTV is 76.2%.
The Ford City Mall Loan represents a $64.6 million (11.5%) senior
participation in a $100.4 million loan secured by a 1.4 million
square foot regional mall located 10 miles southwest of Chicago,
Illinois. The mall, originally a manufacturing facility,
underwent an extensive renovation in 1989. The mall contains
three anchor tenants -- Sears, J.C. Penney and Carson Pirie Scott.
Another anchor space, previously occupied by Montgomery Wards,
remains vacant.
The loan has performed in-line with Moody's expectations. The
borrower is a land trust, whose trustee is American National Bank
and Trust Co. of Chicago and whose beneficial owner is Bearland
Vistas, Inc. Bearland Vistas Inc. is controlled by Mr. Samuel
Zell. Moody's LTV is 74.0%.
The Chelsea Piers Loan ($60.8 million - 10.9%) is a first
leasehold mortgage on Chelsea Piers Entertainment Center located
on Piers 59, 60 and 61 in New York City. The property includes
495,000 square feet of protective harbors and 1.7 million square
feet of useable building area. Useable building area includes
office space, retail and restaurant space, retail, television
studio space, a marina, and 1.3 million square feet allocated to
various entertainment and sports related venues.
Chelsea Piers is a unique property, one of the most visited
attractions in New York City, with no direct competition. Total
development costs exceeded $100.0 million. The loan has performed
in-line with Moody's expectations. The borrower is Chelsea Piers
L.P. The principals are Roland W. Betts, Tom A. Bernstein, and
David, A. Tewksbury. Moody's LTV is 53.2%.
The Longwood Loan ($55.5 million - 9.9%) is composed of three
separate mortgage notes representing a first ($33.5 million),
second ($13.0 million), third ($5.0 million) mortgage liens and a
fourth priority mezzanine loan ($4.0 million) secured by a
mixed-use property in downtown Boston.
The four loans all mature in December 2009. The first mortgage
amortizes while the second and third mortgage notes and the
mezzanine loan are interest only. The complex consists of:
(i) a 154-room full service Best Western Hotel that operates
as the Inn at Children's Hospital;
(ii) a 25-story, 154-unit apartment building;
(iii) 77,029 square feet office and retail space; and
(iv) a 104-space parking garage.
The loan has performed in-line with Moody's expectations. The
loan sponsor is Ronald M. Druker. The Drucker Company is a
privately owned Boston real estate development and management
company. Moody's LTV is 84.9%.
J.A. JONES: Insulation & Asbestos Creditors Demand Payroll Records
------------------------------------------------------------------
Mark E. Smith, Esq., at Smith McKenzie Rothwell & Barlow, P.S.,
counsel for the Insulation & Asbestos Workers Welfare Trust
creditors, wants the U.S. Bankruptcy Court for the Western
District of North Carolina to issue an order directing JA Jones,
Inc., to produce its payroll records from Jan. 2003 to the
present. The creditors demand that these records be submitted for
audit to:
Lockitch Clements & Rice, Certified Accountants
Attn: Don A. Curtis
534 Westlake Avenue North, Suite 300
Seattle, Washington, 98109-4398
The document request includes:
a) all payroll records including, check registers, time
cards and time sheets;
b) all W-2 forms; and
c) all tax reporting forms including quarterly tax reports.
The Trust asks the Court to intervene because the Debtor refused
to produce the payroll records due to a dispute with its successor
entity, CH2M Hill Company, Ltd. The payroll records are necessary
to determine ERISA Trust Fund contributions, Mr. Smith explains.
The Bankruptcy Court will convene a hearing on Feb. 22, 2005, at
9:30 a.m. in Room 111 of the Charles Jonas Federal Building in
Charlotte, North Carolina. All objections to the motion must be
filed with:
U.S. Bankruptcy Court
Western District of Carolina
Charlotte Division
P.O. Box 34189
Charlotte, North Carolina 28234-4189
and a copy must be served on:
Smith McKenzie Rothwell & Barlow, P.S.
Attn: Mark E. Smith, Esq.
500 Union Street, Suite 700
Seattle, Washington 98101
Headquartered in Charlotte, North Carolina, J.A. Jones, Inc., was
founded in 1890 by James Addison Jones. J.A. Jones is a
subsidiary of insolvent German construction group Philipp Holzmann
and a holding company for several US construction firms. The
Debtors filed for chapter 11 protection on September 25, 2003
(Bankr. W.D.N.C. Case No. 03-33532). John P. Whittington, Esq.,
at Bradley Arant Rose & White, LLP, and W. B. Hawfield, Jr., Esq.,
at Moore & Van Allen represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from its
creditors, it listed debs and assets of more than $100 million
each. On August 19, 2004, the United States Bankruptcy Court for
the Western District of North Carolina approved the Third Amended
and Restated Joint Plan of Liquidation of J.A. Jones' and certain
of its debtor-subsidiaries.
JAZZ PHOTO: U.S. Trustee Asks Court to Appoint Examiner
-------------------------------------------------------
The U.S. Trustee for Region 3 asks the U.S. Bankruptcy Court for
the District of New Jersey to appoint an examiner in Jazz Photo
Corp, Inc.'s chapter 11 proceeding.
The estate's largest asset is its litigation and Civil RICO claims
against Imation for supplying defective film, which resulted in
lost profits for Jazz estimated at $41 million. A jury trial
commenced before the Hon. Jose Linares in Jan. 2005. Judge
Linares engaged in efforts to bring parties to an amicable
resolution. However, there are substantial differences of opinion
among the parties.
The U.S. Trustee believes that it is in the best interest of the
estate for an independent party to come in and evaluate the value
of a reasonable litigation settlement, and an examiner appointed
pursuant to 11 U.S.C. Sec. 1104 would be ideal.
Jazz Photo Corp., is engaged in the design, development,
importation and wholesale distribution of cameras and other
photographic products in North America, Europe and Asia. The
Company filed for chapter 11 protection on May 20, 2003 (Bankr.
N.J. Case No. 03-26565). Michael D. Sirota, Esq., and Warren A.
Usatine, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A.,
represent the Debtor in its restructuring efforts. When the
Company filed for protection from its creditors, it listed
estimated debts and assets of $50 million.
MADISON RIVER: Moody's Rates Planned Senior Sec. Facilities at B1
-----------------------------------------------------------------
Moody's Investors Service has assigned a B1 rating to Madison
River Capital, LLC's, proposed senior secured credit facilities
and has upgraded the senior implied rating to B1 from B2, and the
rating for the Company's $200 million 13-1/4% senior unsecured
notes to B3 from Caa1.
The ratings assigned are:
* $400 Million Senior Secured Term B Loan (matures 7 years from
closing) -- B1
* $50 Million Senior Secured Term C Loan (matures 7 years from
closing) -- B1
* $5.6 Million Senior Secured Term D Loan (matures 7 years from
closing) -- B1
* Senior Secured Revolving Credit Facility (matures 7 years
from closing) -- B1
The ratings upgraded are:
* Senior Implied rating -- to B1 from B2
* Senior Unsecured Issuer rating -- to B3 from Caa1
* $200 million 13.25% Senior Notes due 2010 -- to B3 from Caa1
(rating to be withdrawn at closing)
The rating outlook remains stable.
The upgrade of the senior implied rating to B1 from B2 reflects
significantly improved pro forma (i.e. post-IPO) credit metrics.
The pending IPO will provide roughly $180 million of net common
equity proceeds to the company's capital structure.
Proceeds along with the proposed term loan will be used to
purchase the 13.25% senior notes, thereby reducing total debt by
over $100 million and significantly lowering interest expense.
The result is reduced leverage (from over 6.0x to under 4.5x) and
higher interest coverage (over 3x), placing the company's
financial metrics in line with its B1-rated (senior implied) rural
local exchange carrier peers.
The B1 senior implied rating reflects Madison River's still high
leverage (Moody's expects roughly 4.0-4.5x total debt to adjusted
EBITDA as of 2004 year end on a pro forma basis), vulnerability to
heightened wireless or cable telephony competition in its rural
markets, and its relatively flat top-line organic growth prospects
and limited post-dividend free cash flow.
Stable and dependable operating cash flow, a favorable regulatory
environment, barriers to competitive entry, and a shift in the
company's capital structure subsequent to the planned IPO to one
with a higher equity weighting, support the ratings. The ratings
also acknowledge Madison River's financial performance and
operating cash flow generation, which has exceeded Moody's
previous expectations.
EBITDA margins have improved from 47% at year-end 2002 to around
51% (as of Q3'04, adjusted for the effects of Hurricane Ivan).
Such improvements, along with capital spending reductions, have
improved pre-dividend cash flow generation. Sustained capital
expenditures at recently reduced levels below 7% of revenues are
predicated on the Company's recent network upgrades and overall
favorable configuration and supported by RLEC leading DSL
penetration rates. Capital spending levels are a key rating
driver for Madison River.
The stable outlook reflects Moody's view that Madison River's
improved cash flow capacity is sustainable and that operational
challenges stemming from network quality, regulatory changes or
cable competition will be slow to develop.
In late December 2004, Madison River Communications Corp.
announced an IPO of its common equity. Concurrent with the IPO,
the company will enter into new senior secured credit facilities -
- a term loan up to $455.6 million ($400 million Term B tranche,
$50 million Term C tranche, and a $5.6 million Term D tranche) and
a revolving credit facility up to $75 million.
Madison River will use the proceeds from the term loan and a
portion of the proceeds from the IPO to pay down the existing $380
million of Rural Telephone Finance Cooperative debt, and the $200
million 13.25% senior notes due 2010. Pro forma for the
transaction, Moody's expects that the Company's capitalization
will be comprised of roughly 50% each, debt and equity.
Relatively high pro forma leverage, which implies a slim level of
asset coverage of total debt obligations, constrains the B1 senior
implied rating. Nonetheless, the rating incorporates Moody's
belief that Madison River will continue to generate strong and
predictable operating cash flow, benefits from a favorable
regulatory environment and substantial barriers to competition.
Moody's believes further ratings improvements would require a
material reduction of the company's pro forma debt load.
Subsequent to the IPO, Madison River Communications Corp. will pay
a common dividend equal to roughly 75% of its free cash flow,
which is typical of similar recent RLEC IPO transactions.
Therefore, debt reduction through free cash flow generation will
occur only modestly over time and may be delayed if Madison River
needs to increase its capital expenditures, which run rate at less
than 7% of annual revenues and far lower than industry average, to
meet competitive challenges or improve service quality. Moody's
will likely raise Madison River's ratings if the company can
sustain debt to free cash flow levels around 5%. Conversely, if
EBITDA margins fall below 50% or EBITDA minus capex to interest
expense falls below 2.0x for an extended period of time, the
ratings would likely fall.
Moody's expects that Madison River Communications Corp., which
will become the borrower's parent subsequent to the
reorganization, and each of the borrower's direct and first tier
subsidiaries will jointly, severally and unconditionally guarantee
the bank credit facilities (collectively, the "guarantors").
Moody's further understands that all assets of the borrower and
guarantors, and a perfected security interest in all the capital
stock of the subsidiaries and intercompany notes directly owned by
the borrower and guarantors will secure the credit facilities.
Moody's does not notch up the credit facilities' ratings relative
to the senior implied rating. The proposed credit facilities will
comprise a preponderance of the Company's pro forma total debt.
The lack of notching also considers the absence of "junior
capital" in the pro forma capital structure.
The 13.25% senior notes are currently rated two notches below the
B1 senior implied rating since these notes are unsecured, do not
benefit from upstream operating subsidiary guarantees, are
effectively subordinated to all of the company's subsidiaries'
payables. The notes' lower priority claim on the company's assets
increases likelihood of impairment in a distress scenario.
Although the Company has faced limited threats from wireless and
technology substitution, cable, and VoIP services to date, Moody's
believes these will present increasing challenges to Madison River
over time. As a result, we expect continued secondary access line
losses (total access lines have been declining at roughly 2% per
year) and slow margin erosion, as the Company's bundled "No
Limits" offering and its position as the rural incumbent carrier
moderates some of the competitive challenges.
Madison River Capital LLC is a rural local exchange carrier
headquartered in Mebane, North Carolina.
MEYER'S BAKERIES: Wants to Hire Wright Lindsey as Counsel
---------------------------------------------------------
Meyer's Bakeries, Inc., and its debtor-affiliate ask the U.S.
Bankruptcy Court for the Western District of Arkansas for
permission to employ Wright, Lindsey & Jennings LLP as its
bankruptcy counsel.
Wright Lindsey will:
a) give legal advice to the Debtors' powers and duties with
regard to their business, the management of their
property and responsibilities as Debtor-in-Possessions
in a Chapter 11 bankruptcy proceeding;
b) answer such lawsuits as are pending and to take other
necessary action to avoid attachments of liens or
repossessions of the Debtors' property;
c) represent the Debtors in connection with any and all
adversary proceedings which may be instituted in this
court by creditors or other parties in interest;
d) prepare all necessary applications, answers, orders,
reports, other pleadings and legal documents required
under the Bankruptcy Code and by this Court;
e) assist the Debtors in negotiating the terms of a plan of
reorganization which might or might not include the sale
assets of the Debtors and prepare all pleadings necessary
to accomplish the consummation of a reorganization plan;
and
f) perform all other legal services for the Debtors which may
become necessary.
The Firm received a $100,000 retainer from the Debtors. Wright
Lindsey did not disclose the hourly rates of its professionals.
To the best of the Debtors' knowledge, Wright Lindsey is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
Headquartered in Hope, Arkansas, Meyer's Bakeries, Inc., produces
English muffins, bagels, bread sticks, energy bars, and hearth
baked specialty breads and rolls at its facilities in Hope and
Wichita. The Company and its affiliate filed for chapter 11
protection on Feb. 6, 2005 (Bankr. W.D. Ark. Case No. 05-70837).
Charles T. Coleman, Esq., at Wright, Lindsey & Jennings LLP
represents the Debtors in their restructuring efforts. When the
Company filed for protection from its creditors, it listed total
assets of $44,226,139 and total debts of $48,699,754.
MEYER'S BAKERIES: Wants Until July 26 to Decide on Leases
---------------------------------------------------------
Meyer's Bakeries, Inc. and its debtor-affiliate ask the U.S.
Bankruptcy Court for the Western District of Arkansas, Texarkana
Division, for more time to decide whether to assume, assume and
assign, or reject the Wichsan Ltd Partnership lease. The Debtors
tell the Court they will decide how to treat that lease agreement
some time between April 26 and July 26, 2005.
An extension through July 26, the Debtors say, will allow them to
properly determine whether the Wichsan Lease is necessary to their
restructuring and has any value to the estate.
Headquartered in Hope, Arkansas, Meyer's Bakeries, Inc., produces
English muffins, bagels, bread sticks, energy bars, and hearth
baked specialty breads and rolls at its facilities in Hope and
Wichita. The Company and its affiliate filed for chapter 11
protection on Feb. 6, 2005 (Bankr. W.D. Ark. Case No. 05-70837).
Charles T. Coleman, Esq., at Wright, Lindsey & Jennings LLP
represents the Debtors in their restructuring efforts. When the
Company filed for protection from its creditors, it listed total
assets of $44,226,139 and total debts of $48,699,754.
MIRANT CORP: Disclosure Statement Hearing Scheduled for April 20
----------------------------------------------------------------
Judge Lynn of the U.S. Bankruptcy Court for the Northern District
of Texas will hold a hearing to consider approval of the
Disclosure Statement explaining the plan of reorganization of
Mirant Corporation and its debtor-affiliates and any objections
that may be interposed on April 20, 2005, at 12:00 p.m. Prevailing
Central Time.
Any party objecting to the Disclosure Statement may serve -- but
not file with the Court -- its written objection to:
(1) Co-Attorneys for the Debtors
Thomas E. Lauria, Esq.
White & Case LLP
Wachovia Financial Center
200 South Biscayne Boulevard
49th Floor
Miami, Florida 33131
Facsimile: (305) 358-5744
(2) Co-Attorneys for the Debtors
Robin Phelan, Esq.
Haynes and Boone, LLP
901 Main Street
Suite 3100
Dallas, Texas 75202
Facsimile: (214) 651-5940
(3) Counsel for the Official Committee of Unsecured Creditors
of Mirant Corporation
Paul N. Silverstein, Esq.
Andrews & Kurth, L.L.P.
450 Lexington Avenue
New York, New York 10017
Jason S. Brookner, Esq.
Andrews & Kurth, L.L.P.
1717 Main Street, Suite 3700
Dallas, Texas 75201
Fredric Sosnick, Esq.
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022-6069
(4) Counsel for the Official Committee of Unsecured Creditors
of Mirant Americas Generation, LLC
Bruce R. Zirinsky, Esq.
Cadwalader, Wickersham & Taft
One World Financial Center
New York, New York 10281
Deborah D. Williamson, Esq.
Cox Smith Matthews Incorporated
112 East Pecan St., Suite 1800
San Antonio, Texas 78205-1505
(5) Counsel for the Official Committee of Equity Security
Holders
Howard L. Siegel, Esq.
Brown Rudnick Berlack Israels LLP
City Place I
185 Asylum Street
Hartford, Connecticut 06103-3401
Edward S. Weisfelner, Esq.
Brown Rudnick Berlack Israels LLP
120 West 45th Street
New York, New York 10036
Eric J. Taube, Esq.
Hohmann, Taube & Summers, L.L.P.
100 Congress Avenue, Suite 1600
Austin, Texas 78701
(6) Counsel to the Examiner
Richard M. Roberson, Esq.
Michael P. Cooley
Gardere Wynne Sewell LLP
3000 Thanksgiving Tower
1601 Elm Street
Dallas, Texas 75201
(7) U.S. Trustee
George McElreath
Office of the U.S. Trustee
1100 Commerce Street, Room 976
Dallas, Texas 75242
Facsimile: (214) 767-8971
Each Informal Objection must be actually received by the Service
Parties no later than 5:00 p.m. on March 8, 2005. The Debtors and
the objecting party will use reasonable efforts to resolve those
Informal Objections before the deadline of formal objections to
the Disclosure Statement.
The Debtors will file an amended Disclosure Statement at 4:00 p.m.
on March 25, 2005, reflecting among other things, the results of
the resolution of any Informal Objections. The Amended Disclosure
Statement filing deadline may be modified sua sponte by the Court
or a motion filed by the Debtors.
With respect to unresolved Informal Objections, the date by which
formal objections to the Disclosure Statement must be actually
filed and received by Service Parties will be fixed at 4:00 p.m.
on April 1, 2005.
Formal Objections to the approval of the Disclosure Statement will
be filed in writing, together with proof of service, with the
Court and served no later than Disclosure Statement Objection
Deadline. The written objections must include:
(a) the name and address of the objecting party and the nature
of the claim or interest of that party; and
(b) the particular basis and nature of any objection or
proposed modification.
Subject to the enlargement of the applicable time by the Court,
any party failing to file and serve an objection to the Disclosure
Statement will be barred from raising any objections at the
Disclosure Statement Hearing.
Notice of Disclosure Statement Hearing will be published once in
The Wall Street Journal (National Edition), the New York Times
(National Edition), and the USA Today.
Headquartered in Atlanta, Georgia, Mirant Corporation --
http://www.mirant.com/-- together with its direct and indirect
subsidiaries, generate, sell and deliver electricity in North
America, the Philippines and the Caribbean. Mirant Corporation
filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex.
03-46590). Thomas E. Lauria, Esq., at White & Case LLP,
represents the Debtors in their restructuring efforts. When the
Debtors filed for protection from their creditors, they listed
$20,574,000,000 in assets and $11,401,000,000 in debts. (Mirant
Bankruptcy News, Issue No. 53; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
MIRANT CORP: Confirmation Hearing Scheduled for June 8
------------------------------------------------------
Judge Lynn of the U.S. Bankruptcy Court for the Northern District
of Texas scheduled the hearing to consider confirmation of the
plan of reorganization of Mirant Corporation and its debtor-
affiliates, and any interposed objections, for 9:30 a.m. on
June 8, 2005.
Objections to the Plan must be filed and served on key parties-in-
interest by 4:00 p.m. on May 27, 2005. Simultaneously, voting on
the Plan will end at 4:00 p.m. on May 27, 2005.
Accordingly, any objections to confirmation of the Plan must be
filed in writing, together with proof of service, with the Court
and served no later than the Confirmation Objection Deadline. The
written objections must include:
(a) the name and address of the objecting party and the nature
of the claim or interest of that party; and
(b) the particular basis and nature of any objection or
proposed modification
Any party failing to file and serve an objection to the Plan will
be barred from raising any objections at the Confirmation Hearing.
Headquartered in Atlanta, Georgia, Mirant Corporation --
http://www.mirant.com/-- together with its direct and indirect
subsidiaries, generate, sell and deliver electricity in North
America, the Philippines and the Caribbean. Mirant Corporation
filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex.
03-46590). Thomas E. Lauria, Esq., at White & Case LLP,
represents the Debtors in their restructuring efforts. When the
Debtors filed for protection from their creditors, they listed
$20,574,000,000 in assets and $11,401,000,000 in debts. (Mirant
Bankruptcy News, Issue No. 53; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
NATIONAL ENERGY: Disclosure Statement Hearing Set for March 3
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Maryland will
convene a hearing at 10:30 a.m., on March 3, 2005, to consider the
adequacy of the Disclosure Statement explaining the Joint Plan of
Liquidation filed by the NEGT Energy Trading Holdings Corporation
and its debtor-affiliates and the Quantum Debtors.
Objections to the Disclosure Statement must be filed and served
by Feb. 18, 2005.
Requests for copies of the Disclosure Statement and the Plan
should be mailed to the Debtors' court-approved claims and
balloting agent at:
National Energy & Gas Transmission, Inc.
Claims Processing
c/o Bankruptcy Services, LLC
P.O. Box 5070
FDR Station
New York, NY 10150-5070
Requests for electronic copies of the Disclosure Statement and
the Plan should be made by sending an e-mail to Jennifer
Tittsworth of Whiteford, Taylor & Preston, LLP, at
jtittsworth@wtplaw.com
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. 35;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
NEWS CORP: Extends Common Stock Exchange Offer Until Feb. 22
------------------------------------------------------------
News Corporation (NYSE:NWS, NWS.A; ASX:NWS, NWSLV) disclosed that
a hearing has been scheduled to be held in the Court of Chancery
of the State of Delaware on March 1, 2005, to rule on plaintiffs'
motion for a preliminary injunction prohibiting completion of News
Corporation's previously announced exchange offer for outstanding
shares of Fox Entertainment Group, Inc.'s Class A common stock
(NYSE:FOX). News Corporation has extended the exchange offer,
previously scheduled to expire at midnight on Feb. 22, 2005, until
midnight, New York City time, on March 4, 2005.
Plaintiffs' motion for a preliminary injunction was brought in
connection with a previously filed purported class action lawsuit
on behalf of Fox stockholders other than News Corporation. News
Corporation believes that these claims are without merit and
intends to vigorously contest such allegations.
The exchange agent for the offer has advised News Corporation
that, as of 5:00 P.M., New York City time, Feb. 4, 2005, an
aggregate of approximately 1,099,398 shares of Fox Class A common
stock have been tendered to News Corporation in the exchange
offer. News Corporation had anticipated that the vast majority of
the shares that would be ultimately tendered in connection with
the offer would be tendered in the final few days before the final
expiration date of the exchange offer.
About the Company
News Corporation had total assets as of Dec. 31, 2004 of
approximately US$53 billion and total annual revenues of
approximately US$22 billion. News Corporation is a diversified
international media and entertainment company with operations in
eight industry segments: filmed entertainment; television; cable
network programming; direct broadcast satellite television;
magazines and inserts; newspapers; book publishing; and other.
The activities of News Corporation are conducted principally in
the United States, Continental Europe, the United Kingdom,
Australia, Asia and the Pacific Basin.
* * *
As reported in the Troubled Company Reporter on Jan. 27, 2005,
Moody's Investors Service confirmed News Corporation's debt
ratings of Baa3 senior unsecured. The rating outlook was changed
to positive. This rating action concludes the review initiated on
April 26, 2004.
The ratings that were confirmed include:
-- News America Incorporated:
* Baa3 senior unsecured
-- News Corporation Finance Trust II:
* Baa3 senior unsecured
-- News Corp Overseas Limited:
* Ba1 trust preferred shares
-- News Corporation Exchange Trust:
* Ba1 trust preferred shares
NORTHWESTERN CORP: Seeks Advanced Approval for Power Supply Deals
-----------------------------------------------------------------
NorthWestern Corporation d/b/a NorthWestern Energy (Nasdaq: NWEC)
began the process to obtain advanced approval from the Montana
Public Service Commission for two electricity supply agreements.
The advanced approval process is intended to provide NorthWestern
Energy, its electricity suppliers and customers with a greater
degree of financial certainty. The company previously sought and
received advanced approval for the Basin Creek power purchase
agreement. The Basin Creek plant, located near Butte, is expected
to be in service later this year.
The company is seeking MPSC approval of a previously announced
contract with Judith Gap Energy LLC to purchase 135 to 150
megawatts (MW) of electricity from its proposed wind farm in
Wheatland County and the power supply of 90 MW of baseload power
from the company's leasehold interest in Colstrip Unit 4. Both
agreements are the result of bids received through the company's
request for electricity supply proposals issued in 2004.
The company has asked the MPSC for a quick turnaround on the
Judith Gap Energy LLC contract. The developer is not willing to
begin construction on the project until the MPSC provides advanced
approval, yet the pricing for the wind project is tied to the
federal Production Tax Credit (PTC), which is only available to
wind projects that begin commercial operation on or before
Dec. 31, 2005. Therefore, NorthWestern's contract with Judith Gap
Energy LLC includes an advanced approval deadline of
March 31, 2005, in order to proceed with the binding agreement.
The Colstrip Unit 4 agreement covers an 11-1/2 year term at an
average price of $35.80 Mwh beginning July 1, 2007, which
coincides with the expiration of contracts now in place with PPL
Montana (PPLM). "This resource was the most attractive baseload
bid that we received," said John Hines, NorthWestern Energy's
director of energy supply planning. "Similar proposals were
priced at $39.75 per Mwh and higher. Based on our current price
forecasts and market conditions, we believe that we should hold
off on signing additional contracts for post-2007 baseload needs."
According to Mr. Hines, the company has been negotiating with PPLM
on a new agreement beginning Jul. 1, 2007. While the two
companies agreed on product and terms, they have not agreed on
price. "Under the current circumstances, our default supply
customers would be paying significantly more each year to PPLM for
the same product they receive today," said Mr. Hines. "On behalf
of our customers, we believe that's unacceptable. However, we've
asked the MPSC to give us guidance on this decision."
Mr. Hines also said that NorthWestern expects to forward
additional advanced requests to the MPSC for non-baseload
resources in the near future. One of these resources will help
"fill in" during those periods when the wind is not blowing or our
customers' electricity needs are substantial.
NorthWestern Energy is required to purchase electricity on behalf
of its customers, and it does so at cost. NorthWestern Energy has
been performing this default supply obligation since purchasing
the transmission and distribution business of Montana Power in
2002. Overall, electricity default supply rates increased 10
percent on Jul. 1, 2003, but have remained relatively constant
since then despite market volatility, adverse weather conditions
and supplier uncertainty.
Headquartered in Sioux Falls, South Dakota, NorthWestern
Corporation (Pink Sheets: NTHWQ) -- http://www.northwestern.com/
-- provides electricity and natural gas in the Upper Midwest and
Northwest, serving approximately 608,000 customers in Montana,
South Dakota and Nebraska. The Debtors filed for chapter 11
protection on September 14, 2003 (Bankr. Del. Case No. 03-12872).
Scott D. Cousins, Esq., Victoria Watson Counihan, Esq., and
William E. Chipman, Jr., Esq., at Greenberg Traurig, LLP, and
Jesse H. Austin, III, Esq., and Karol K. Denniston, Esq., at Paul,
Hastings, Janofsky & Walker, LLP, represent the Debtors in their
restructuring efforts. On the Petition Date, the Debtors reported
$2,624,886,000 in assets and liabilities totaling $2,758,578,000.
The Court entered a written order confirming the Debtors' Second
Amended and Restated Plan of Reorganization, which took effect on
November 1, 2004.
At Sept. 30, 2004, Northwestern Corp.'s balance sheet showed a
$602,981,000 stockholder's deficit, compared to a $585,951,000
deficit at Dec. 31, 2003.
NORTHEASTERN GEAR: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Northeastern Gear and Machine, Inc.
2398 North Penn Road
Hatfield, Pennsylvania 19440
Bankruptcy Case No.: 05-11617
Chapter 11 Petition Date: February 7, 2005
Court: Eastern District of Pennsylvania (Philadelphia)
Debtor's Counsel: Patricia M. Mayer, Esq.
Belknap & Mayer, PC
2222 Trenton Road
Levittown, PA 19056
Tel: 215-943-9800
Fax: 215-943-9936
Estimated Assets: $100,000 to $500,000
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Internal Revenue Service Federal Income Tax $800,000
Special Procedures Unit
P.O. Box 12051
Philadelphia, PA 19105
Thomas Publishing Trade Creditor $32,000
Alan Carpel
1129 Spruce St.
Philadelphia, PA 19107
HC Stark Trade Creditor $30,078
160 East Union Avenue
East Rutherford, NJ 07073
Select Living Management Rent Arrears $27,100
10 South Clinton Street (pass throughs)
Doylestown, PA 18901
Ron Wurz Rent Arrears $25,400
Aetna Insurance Premiums $25,000
Thomas Register Trade Creditor $18,800
DVIRC Trade Creditor $18,000
V & M Tool Trade Creditor $11,834
Hillside Custom Machine Trade Creditor $8,635
MA Material Research Trade Creditor $8,425
Reliance Gear Trade Creditor $6,470
Arrow Gear Company Trade Creditor $4,961
Starcut Sales Trade Creditor $4,772
GE Polymershapes Trade Creditor $4,486
Spectrum Machine Trade Creditor $4,168
Scheu & Kniss Trade Creditor $4,111
Solar Atmosphere Trade Creditor $3,501
Standard Steel Specialty Trade Creditor $3,160
Meritool Incorporated Trade Creditor $3,100
NRG ENERGY: NRG McClain Wants to Distribute $1.3M in Sale Proceeds
------------------------------------------------------------------
Ryan Blaine Bennett, Esq., at Kirkland & Ellis, LLP, in New York,
relates that NRG Energy Inc., and its debtor-affiliates previously
sought to dispose of their non-core assets, including a 77%
undivided ownership interest held by NRG McClain LLC in a 520 MW
gas-fired combined-cycle electric generating power plant located
in McClain County, Oklahoma. The McClain Energy Facility, 23%
owned by the Oklahoma Municipal Power Authority, engaged in the
business of generating and selling electric power.
The McClain Facility Sale
The Debtors consulted their financial advisors to identify and
evaluate various potential strategic and financial buyers for the
McClain Interest. Only Oklahoma Gas and Electric Company offered
to buy the McClain Interest. Subsequently on August 18, 2003,
OG&E entered into an asset purchase agreement with NRG McClain
for the McClain Interest. The McClain Sale closed on July 9,
2004, generating $159,950,000 in proceeds.
Prepetition Credit Agreement and ORCA
On November 28, 2001, NRG McClain entered into a credit agreement
with WestLB AG, New York Branch, as Agent and lender, and certain
lenders. As security for the Prepetition Loan, NRG McClain
pledged substantially all of its assets and all proceeds in favor
of WestLB for its benefit and the ratable benefit of the other
Prepetition Secured Lenders.
As further security:
(a) NRG Energy, Inc., pledged to WestLB all of its ownership
interests in NRG McClain;
(b) NRG McClain and certain of the Debtors assigned to WestLB
their interests under various contracts necessary for the
operation of the Facility; and
(c) NRG Energy issued a guarantee to the Prepetition Secured
Lenders with respect to certain obligations of NRG McClain
under the Prepetition Credit Agreement.
Pursuant to the Prepetition Credit Agreement, NRG McClain
required the consent of the Prepetition Secured Lenders to
effectuate the Sale of the McClain Interest, and the Prepetition
Secured Lenders were entitled to receive the Sale Proceeds.
Accordingly, the Debtors and the Prepetition Secured Lenders
entered into an Omnibus Restructuring and Consent Agreement,
dated as August 18, 2003. In addition to a conditional consent
to the Sale, the ORCA provided for the Prepetition Secured
Lenders' forbearance of remedies under the Prepetition Credit
Agreement pending the Sale, and an agreed upon procedure and
priorities for the distribution of the proceeds to be realized by
NRG McClain from the Sale.
NRG McClain Cash Collateral Stipulation
On August 18, 2003, NRG McClain, certain of the Debtors and
WestLB also entered into a Cash Collateral Stipulation. Under
the Stipulation, NRG McClain's revenues continued to be deposited
into the Revenue Account at La Salle Bank, from which NRG McClain
disbursed funds for the Facility's ongoing operating expenses.
To the extent funds in the Revenue Account were insufficient, NRG
Energy provided periodic advances to, or on behalf of, NRG
McClain to cover the timely payment of NRG McClain's operating
costs and to permit efficient operation of the Facility. The NRG
Support Payments were advanced to NRG McClain through a separate
account at LaSalle Bank, with certain Debtors receiving
reimbursement by way of periodic disbursements from the Revenue
Account, and certain direct payments from the co-owner of the
Facility, with WestLB's consent. Subject to certain conditions,
the NRG Support Payments were granted superpriority status under
the ORCA.
Prepetition Lenders' Secured Claim
As of its Petition Date, NRG McClain had incurred secured
obligations under the Prepetition Credit Agreement of at least
$160,571,695. NRG McClain also missed its December 31, 2002, and
June 30, 2003, payments to its Secured Lenders, which resulted in
a default under the Prepetition Credit Agreement and the
acceleration of the Prepetition Loan.
Pursuant to the ORCA, the Sale Order and the Cash Collateral
Stipulation, a substantial portion of the Sale Proceeds was
applied to reduce the Lenders' Secured Claim, leaving a remaining
balance of $1,507,528.
The remaining portion of the Sale Proceeds, with the Secured
Lenders' consent, was left with NRG McClain for the purpose of
satisfying certain administrative expense obligations that were
expected to accrue prior to the closing of its bankruptcy case.
As of February 3, 2005, $1,311,537 of the Sale Proceeds still
remains undisbursed.
Under the NRG Guarantee, NRG Energy is obligated to reimburse the
Prepetition Secured Lenders for the difference between the Lender
Balance and the NRG McClain Funds up to a certain amount.
WestLB, on the Prepetition Secured Lenders' behalf, has filed a
timely proof of claim against NRG for the NRG Contribution
Amount. In a subsequent agreement reached among NRG Energy, NRG
McClain and the Prepetition Secured Lenders, and as a settlement
of the NRG Contribution Claim, NRG Energy has agreed to pay the
NRG Contribution Amount, provided that the amount does not exceed
$663,259. In exchange, the Prepetition Secured Lenders agreed to
withdraw with prejudice the NRG Contribution Claim, as well as
all other claims related to NRG McClain filed against the
Debtors.
Mr. Bennett relates that as of February 3, 2005, the NRG
Contribution Amount is estimated at $431,923, based on NRG
McClain's books and records. This figure may change as
additional activity is posted to the Revenue Account in the days
preceding entry of an order granting NRG McClain's request to
distribute its sale proceeds.
Proposed Allocation
Pursuant to Section 363(b) of the Bankruptcy Code and the Sale
Order, NRG McClain proposes to distribute the NRG McClain Funds
to the Prepetition Secured Lenders. In accordance with Section
1930 of the Judicial Procedures Code, all outstanding fees
payable to the Office of the U.S. Trustee will be paid from the
McClain Funds.
Claimant Description Distribution
-------- ----------- ------------
Office of the U.S. Trustee Quarterly Fees $10,000
WestLB Interest Due $1,301,537
The proposed allocation is consistent with the terms of the ORCA,
and is supported by the Prepetition Secured Lenders, Mr. Bennett
emphasizes.
Accordingly, NRG McClain asks Judge Beatty to approve the
proposed allocation and authorize it to distribute the NRG
McClain Funds, without further delay.
NRG Energy, Inc., owns and operates a diverse portfolio of
power-generating facilities, primarily in the United States. Its
operations include baseload, intermediate, peaking, and
cogeneration facilities, thermal energy production and energy
resource recovery facilities. The company, along with its
affiliates, filed for chapter 11 protection (Bankr. S.D.N.Y. Case
No. 03-13024) on May 14, 2003. The Company emerged from chapter
11 on December 5, 2003, under the terms of its confirmed Second
Amended Plan. James H.M. Sprayregen, Esq., Matthew A. Cantor,
Esq., and Robbin L. Itkin, Esq., at Kirkland & Ellis, represented
NRG Energy in its $10 billion restructuring.
* * *
As reported in the Troubled Company Reporter on Dec. 14, 2004,
Standard & Poor's Ratings Services assigned its 'CCC+' rating to
NRG Energy Inc.'s (NRG; B+/Stable/--) proposed $400 million
convertible perpetual preferred stock. The outlook is stable.
O'SULLIVAN INDUSTRIES: S&P Junks Corp. Rating to CCC+ from B-
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on
O'Sullivan Industries Holdings Inc., and on the company's wholly
owned operating subsidiary, O'Sullivan Industries Inc.,
including its corporate credit ratings to 'CCC+' from 'B-'.
The outlook is negative. The furniture manufacturer's total debt
as of Dec. 31, 2004, was $222.6 million.
"The downgrade reflects continuing challenging operating
conditions and Standard & Poor's expectation that liquidity will
be weak relative to cash needs," said Standard & Poor's credit
analyst Martin Kounitz.
For the quarter ended Dec. 31, 2004, Lamar, Missouri-based
O'Sullivan earned negligible EBITDA, compared with about
$6.0 million for the same period in 2003. Profits were lower due
to an unfavorable mix, with greater sales of promotionally priced
products, unabsorbed overhead and higher raw material costs,
especially particleboard.
Standard & Poor's expects that continued intense competition from
Asian furniture manufacturers will pressure sales in 2005. With
lower sales volume and no relief on raw material costs, we expect
that profits will continue to be below expectations in 2005.
During the most recent quarter, the company increased its cash
flow from operations by reducing inventory and by improving
accounts receivable management.
OMNICARE INC: Launches Offer for 4.00% Trust Preferred Securities
------------------------------------------------------------------
Omnicare, Inc. (NYSE: OCR) has commenced an exchange offer under
which holders of up to $345 million aggregate liquidation value of
the 4.00% Trust Preferred Income Equity Redeemable Securities of
Omnicare's subsidiary, Omnicare Capital Trust I, may exchange such
Old Trust PIERS for Series B 4.00% Trust Preferred Income Equity
Redeemable Securities of Omnicare's subsidiary, Omnicare Capital
Trust II, and an exchange fee of $0.125 per $50 stated liquidation
amount of Old Trust PIERS. The Old Trust PIERS are convertible
under certain circumstances into the Company's common shares and
pay a fixed quarterly cash distribution, and under certain
circumstances pay contingent distributions. The New Trust PIERS
will have substantially similar terms to the Old Trust PIERS,
except that the New Trust PIERS will have a net share settlement
feature.
Omnicare has commenced the exchange offer as a result of the
adoption of EITF No. 04-8 by the Emerging Issues Task Force of the
Financial Accounting Standards Board (FASB) which, effective Dec.
15, 2004, changed the accounting rules applicable to Omnicare's
Old Trust PIERS and requires Omnicare to include the common stock
issuable upon the conversion of the Old Trust PIERS in Omnicare's
diluted shares outstanding for purposes of calculating diluted
earnings per share regardless of whether market price triggers or
other contingent features have been met. By committing to pay up
to the stated liquidation amount of the New Trust PIERS to be
converted in cash upon conversion pursuant to the new net share
settlement feature of the New Trust PIERS, Omnicare will be able
to account for the New Trust PIERS under the treasury stock
method, which is expected to be substantially less dilutive to
earnings per share than the "if-converted" method prescribed by
EITF 04-8.
The exchange offer will expire at 12:00 midnight, New York City
time, on Mar. 7, 2005, unless extended or earlier terminated by
Omnicare. Holders must validly tender their Old Trust PIERS prior
to the expiration date if they wish to participate in the exchange
offer. Lehman Brothers Inc. is the dealer manager and D.F. King &
Co., Inc. is the information agent for the exchange offer. Copies
of the prospectus and the related letter of transmittal may be
obtained from:
D.F. King & Co., Inc.
48 Wall Street, 22nd Floor
New York, New York 10005
Toll-Free: 800-758-5378
A registration statement relating to the securities to be issued
in the exchange offer has been filed with the Securities and
Exchange Commission but has not yet become effective. Such
securities may not be issued nor may the exchange offer be
accepted prior to the time the registration statement becomes
effective.
About the Company
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.
* * *
Omnicare's 6-1/8% senior subordinated notes due 2013 currently
carry Standard & Poor's 'BB+' rating and Moody's Ba2 rating.
PARAMOUNT RESOURCES: Completes Exchange Offer for Senior Notes
--------------------------------------------------------------
Paramount Resources Ltd. (TSX:POU) has successfully completed its
exchange offer and consent solicitation for its 7-7/8% Senior
Notes due 2010 and 8-7/8% Senior Notes due 2014.
US$132,343,000 aggregate principal amount of 2010 Notes and
US$81,250,000 aggregate principal amount of 2014 Notes were
validly tendered in the exchange offer. These amounts represent
approximately 99.31% of the outstanding 2010 Notes and 100% of the
outstanding 2014 Notes. Paramount issued US$213,593,000 aggregate
principal amount of 8-1/2% Senior Notes due 2013 on Feb. 7 and
paid an aggregate of approximately US$36,161,201 in cash, plus
accrued and unpaid interest, to tendering holders of 2010 Notes
and 2014 Notes as consideration for the 2010 Notes and 2014 Notes.
UBS Securities LLC acted as Dealer Manager and Solicitation Agent
for the exchange offer and consent solicitation. Global
Bondholder Services Corporation acted as Information Agent.
Paramount's proposed trust spinout transaction was conditional on
completion of the exchange offer. The special meeting of
securityholders required for approval of the spinout transaction
is expected to be held in mid to late March.
Paramount is a Canadian oil and natural gas exploration,
development and production company with operations focused in
Western Canada. Paramount's common shares are listed on the
Toronto Stock Exchange under the symbol "POU".
* * *
As reported in the Troubled Company Reporter on Dec. 23, 2004,
Moody's affirmed the B3 senior implied and assigned a B3 rating to
the company's new senior unsecured exchange notes offering for
Paramount Resources, Ltd, following the company's announced
spin-off of the majority of its reserves into a yet to be created
Unit Trust.
While the ratings have been affirmed, the outlook remains negative
and the company's ability to retain the ratings will depend on how
soon after the transaction's close that management clearly
declares in what time frame it will monetize the units to reduce
debt to supportable levels.
As reported in the Troubled Company Reporter on Dec. 15, 2004,
Standard & Poor's Ratings Services placed its 'B+' long-term
corporate credit and 'B' long-term senior unsecured debt ratings
on Calgary, Alberta-based Paramount Resources Ltd. on CreditWatch
with negative implications following the company's announcement of
its intention to seek shareholder and bondholder approval to
spin-off a portion of its existing asset base into a new Canadian
income trust. The proposed spin-off will affect the ratings on
the US$215 million of public debt remaining after the announced
repurchase of about US$85 million in debt.
PARMALAT GROUP: Securities Fraud Actions Consolidated by JPMDL
--------------------------------------------------------------
In December 2004, the Judicial Panel on Multidistrict Litigation
consolidated the Class Action Complaint initiated by Hermes Focus
Asset Management Europe, Ltd., and certain other investors with
three other securities litigation relating to Parmalat's collapse:
* Dr. Enrico Bondi v. Grant Thornton International, et al.
C.A. No. 1:04-6031;
* Robert McQueen v. Parmalat Finanziaria, S.p.A., et al.,
C.A. No. 1:04-47; and
* Ferri Giampolo v. Parmalat Finanziaria, S.p.A., et al.,
C.A. No. 1:04-367.
A copy of the JPMDL's Transfer Order (Docket No. 1653) is
available at no charge at:
http://www.jpml.uscourts.gov/Pending_MDLs/Securities/MDL-1653/MDL-1653-Trans
ferOrder.pdf
As reported in the Troubled Company Reporter on Oct. 28, 2004,
Investors, led by Hermes Focus Asset Management Europe, Ltd.,
commenced a class action lawsuit before the U.S. District Court
for the Southern District of New York against Parmalat's former
management, banks and auditors, alleging violations of the
Securities Exchange Act of 1934.
These investors purchased or otherwise acquired securities of
Parmalat Finanziaria SpA and its subsidiaries and affiliates
between and including January 5, 1999, and December 18, 2003, in
reliance on the company's materially false and misleading
financial statements and other public statements. The investors
seek more than $8,000,000,000 in damages after they lost their
money when Parmalat collapsed in December 2003 due to substantial
operating losses that had been concealed for over a decade.
The actions were centralized for coordinated or consolidated
pretrial proceedings before Judge Lewis A. Kaplan of the U.S.
District Court for the Southern District of New York.
The Panel acted upon the request of Deloitte Touche Tohmatsu, a
defendant in the securities litigation. The Panel found that the
actions involve common questions of fact and that centralization
before the New York District Court will serve the convenience of
the parties and witnesses and promote the just and efficient
conduct of the litigation. All actions, the Panel noted, share
factual questions arising from alleged misrepresentations or
omissions concerning Parmalat's financial condition and its 2003
insolvency. Centralization eliminates duplicative discovery,
prevent inconsistent pretrial rulings and conserve the resources
of parties-in-interest, their counsel and the judiciary.
Defendants Grant Thornton and Citigroup supported the request.
Dr. Bondi objected to Deloitte's proposition. Should his Illinois
Action be consolidated with the other securities litigation, Dr.
Bondi insisted that the other actions should be brought to
Illinois.
The Panel found the New York District Court an appropriate
transferee district since three of the four actions were already
pending before the New York District Court.
The Panel consisted of WM. Terrell Hodges, as Chairman, John F.
Keenan, D. Lowell Jensen, J. Frederick Motz, Robert L. Miller,
Jr., Kathryn H. Vratil and David R. Hansen.
Judges Hodges, Keenan and Motz took no part in the decision.
Other related actions, Judge Jensen says, will be treated as
potential tag-along actions.
Defendants Want Complaint Dismissed
Defendants to the Consolidated Securities Fraud Action ask Judge
Kaplan to dismiss the Complaint against them:
* Bank of America Corporation,
* Bank of America, N.A.,
* Banc of America Securities Limited,
* Credit Suisse First Boston,
* Grant Thornton International,
* Deloitte & Touche USA, LLP,
* Deloitte & Touche, LLP,
* Grant Thornton, LLP,
* Citigroup, Inc.,
* Citibank, N.A.,
* Vialattea, LLC,
* Buconero, LLC,
* Eureka Securitisation plc, and
* Banca Nazionale del Lavoro S.p.A.
The Defendants tell Judge Kaplan that the Complaint suffers from
numerous pleading deficiencies. The Complaint fails to state a
viable claim on which relief can be granted. The Pleadings fall
short of the mandates of the Private Securities Litigation Reform
Act and the requirements of the Federal Rules of Civil Procedure.
Moreover, the Plaintiffs fail to allege any fact from which the
District Court could draw a reasonable inference of causation.
Deloitte USA argues that the Complaint offers no factual support
for its "one-firm," agency and "alter ego" allegations against it.
The Plaintiffs do not allege any facts to show that Deloitte USA
controlled Deloitte & Touche-Italy's audit activities or that
Deloitte USA engaged in any wrongdoing. The Plaintiffs do not
allege that anyone was misled into believing that Parmalat's
financial statements had been audited by Deloitte USA.
BofA insists that it made no material misstatements to the
Plaintiffs and owed them no duty to disclose. BofA performed only
two functions for Parmalat and none of these services involved the
Plaintiffs.
Grant Thornton International is not, and has never been an auditor
and is not licensed anywhere in the world to perform audit work.
To circumvent this reality, the Plaintiffs simply pile up
conclusory allegations of Grant Thornton International's control
over, and unspecified involvement with, Grant Thornton S.p.A., now
known as Italaudit -- the Italian licensed accounting firm that
performed audit work for Parmalat. These conclusory allegations
are not sufficient to sustain liability against Grant Thornton
International as a matter of law, thus, all causes of action
against Grant Thornton International should therefore be
dismissed.
Grant Thornton, LLP, avers that the Plaintiffs are attempting to
shift their investment losses into the U.S. auditing firms that
had no involvement whatever in the alleged fraud that occurred in
Parmalat. Despite the Complaint's extraordinary length and level
of detail, the claims against Grant Thornton fail to meet even the
most minimal standards of pleading, much less the heightened
standards that apply in fraud cases under the federal securities
laws. The Complaint does not attribute a single act, statement,
or omission concerning Parmalat to Grant Thornton. The Complaint
is supported by nothing more than bare legal conclusions.
Citigroup tells Judge Kaplan that its alleged participation
consists of three legitimate business transactions and some
routine wire transfers, which Parmalat allegedly misrepresented in
its financial statements. Therefore, the Plaintiffs do not, and
cannot, allege that Citigroup made any actionable
misrepresentation to Parmalat investors. Under Central Bank,
allegations that one entity structured, arranged, or otherwise
participated in a business transaction that another entity
misrepresented or improperly disclosed fail to state a claim.
Citigroup also reasons that the Complaint does not allege facts
sufficient to plead fraud-on-the-market reliance
BASL is confident that the Plaintiffs have failed to allege that
it has minimum contacts with the United States, and therefore,
asserting personal jurisdiction over it would violate due process.
The Plaintiffs, furthermore, do not allege that Banca Nazionale
engaged in any wrongful conduct in connection with the sale of
Parmalat securities, or that it participated in the preparation or
issuance of any prospectus or financial statement by Parmalat, or
acted as a significant investment or commercial banker for
Parmalat.
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. When the U.S. Debtors filed for bankruptcy
protection, they reported more than $200 million in assets and
debts. (Parmalat Bankruptcy News, Issue No. 42; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
PARMALAT GROUP: Joint Status Report on Italian Proceedings Filed
----------------------------------------------------------------
Pursuant to the instruction of the U.S. District Court for the
Southern District of New York, on January 18, 2005, Dr. Enrico
Bondi, Deloitte & Touche S.p.A., Deloitte Touche Tohmatsu,
Deloitte & Touche USA, LLP, Deloitte & Touche, LLP, Grant
Thornton International, Grant Thornton, LLP, and Bank of America,
N.A. submitted to Judge Kaplan a Joint Report on the status of
proceedings in Italy.
Extraordinary Administration in the Parma Court
On December 24, 2003, Parmalat SpA was admitted to Extraordinary
Administration by the Ministry of Productive Activities. On the
same day, Dr. Enrico Bondi was appointed as Parmalat's
Extraordinary Commissioner and was authorized to have other
companies of the Parmalat group, including Parmalat Finanziaria
SpA, included in the Extraordinary Administration.
Parmalat and Finanziaria were declared insolvent by the Court of
Parma on December 27, 2003, and January 7, 2004. Additional
Parmalat Group companies were declared insolvent shortly
thereafter.
On June 21, 2004, Dr. Bondi filed a proposed restructuring plan.
On July 23, 2004, an amended plan was approved by the Minister of
Productive Activities. On December 28, 2004, by order of the
Parma Court, notice of the creditors' list was published in the
Gazzetta Ufficiale of Italy. With this notice, creditors will
have a final opportunity to exercise certain rights, including the
right to object to the admission or exclusion of claims. Accepted
unsecured creditors will have the right to vote on the Proposed
Restructuring Plan. The Proposed Restructuring Plan must be
approved by the majority of the accepted unsecured claims.
Non-voting allowed claims are counted as voting in favor of the
Proposed Restructuring Plan.
After it is approved by the Parma Court and when it becomes
effective, the Proposed Restructuring Plan will immediately be
enforceable as to all creditors in Italy, and the Extraordinary
Administration will be terminated, provided no appeals are filed.
The new company -- tentatively named "Assumptor" -- will assume
the assets and liabilities of certain entities subject to the
Extraordinary Administration, and will also assume control of all
litigation, including the actions filed in the United States.
Proceedings Before the Milan Court
There are pending proceedings before the Court in Milan which
encompass criminal, administrative and civil actions.
A. Criminal Defendants
Twenty-nine individuals have been named by the Milan prosecutor in
a proposed indictment. The charges sought by the prosecutor are
stock market rigging, false audits and obstruction of CONSOB -- a
quasi-public entity which is similar to the U.S. Securities and
Exchange Commission. These proceedings are at the preliminary
hearing stage in which the individuals named by the prosecutors
have the opportunity to review the charges, examine evidence and
formulate motions to dismiss the charges as to them.
At the conclusion of the preliminary hearing, the Milan Court will
rule on which individuals will stand trial on the charges. The
individuals include:
(a) former officers, directors, statutory auditors and
advisors of Parmalat and Finanziaria;
(b) two of Grant Thornton S.p.A.'s former partners -- Maurizio
Bianchi and Lorenzo Penca;
(c) Deloitte & Touche S.p.A.'s present and former partners
-- Guisseppe Rovelli and Adolofo Mamoli; and
(d) three of BofA's former employees -- Antonio Luzi, Luis
Moncada, and Luca Sala, who worked at BofA's Italian
branch until he left in the summer of 2003, after which he
joined Parmalat as a consultant.
The charges against the former BofA employees are limited solely
to stock market rigging.
The Milan prosecutors are also investigating other individuals who
are current or former employees of banking and financial
institutions. Richard A. Martin, Esq., at Heller Ehrman White &
McAuliffe, LLP, in New York, attorney for Deloitte & Touche
S.p.A., tells Judge Kaplan that they do not know when that
investigation will be concluded, or if it will be consolidated
with the pending proceedings. Press reports indicate that the
prosecutors intend to do so.
B. Administrative Proceedings
Four corporations are named as parties in the Milan proceedings
and are subject to potential administrative liability under Law
231 of 2001 -- Law 231:
-- Deloitte & Touche S.p.A. (the new entity resulting from the
business combination with the Italian member firm of the
Arthur Andersen membership association);
-- DT S.p.A. (the previous member firm of the DTT verein);
-- Italaudit S.p.A. (formerly Grant Thornton S.p.A.); and
-- BofA's Italian branch.
C. Civil Claims
Under the Italian Code of Criminal Procedure, persons claiming to
be victims of charged offenses can apply to the court to intervene
as parte civile or "civil parties" in pending criminal proceedings
to seek a civil judgment for damages. The responding parties to
the civil part of the criminal action include those criminal
defendants named in a civil party's complaint, and any individuals
or entities named by the civil party as potentially liable for the
payment of damages stemming from the offense of the named criminal
defendant -- the latter of whom are referred to as responsabile
civile, or "civil responsible."
Deloitte & Touche S.p.A., DT S.p.A., Italaudit S.p.A. and BofA's
Italian branch have been named as responsabile civile in certain
civil party complaints filed in the Milan proceedings. Thousands
of bondholders and shareholders claiming to have been economically
injured by the alleged criminal offenses have filed motions with
the Milan Court to appear as parti civili to seek redress of their
claimed damages. The court is expected to rule before the end of
February 2005 on their applications to appear as civil parties.
Dr. Bondi has also filed an application to appear as a civil party
against the individuals who are potential defendants in the
criminal case, but not against the companies facing administrative
claims. Applications to intervene as a civil party to the
criminal proceeding can be filed at any time before the criminal
trial begins. More claimants may seek to join the proceedings as
civil parties by then. The Milan Court will rule on these
applications before trial.
Criminal Investigation in Parma
The public prosecutors in Parma are conducting a separate criminal
investigation of the former Parmalat directors and officers, as
well as other individuals and companies, in connection with
charges that include criminal conspiracy and fraud leading to
Parmalat's bankruptcy.
No further formal information is available on the status of that
investigation. Italian newspapers recently reported that the
Parma public prosecutors are close to the end of their inquiry
with respect to the Parmalat insiders, and will soon file their
request for indictments against those insiders.
Civil Proceedings in Parma
During 2004, Dr. Bondi instituted two civil claims in the Court of
Parma against 27 individuals, including some of Parmalat's former
directors, officers, statutory auditors and advisors, seeking
damages as a result of their complicity in Parmalat's financial
collapse.
The civil suit also sought and obtained a preliminary
sequestration order, providing for pre-trial seizure of assets,
against those individuals, allowing Dr. Bondi to attach their
assets up to a total value of EUR11.903 billion.
In November 2004, Gian Paolo Zini and Giovanni Tanzi asserted two
separate impleader claims in one of the Parma civil actions
against certain individuals (including Dr. Bondi, Umberto
Tracanella and Guido Angiolini), certain entities (including
Italaudit S.p.A., Deloitte & Touche S.p.A., DT S.p.A., Capitalia
S.p.A., Banca Intesa BCI S.p.A., Nextra Investment Management
s.g.r., Banca Popolare di Lodi, San Paolo IMI S.p.A., UniCredit
S.p.A., Mediobanca S.p.A., Citibank, Archimede and Eureka) and the
Italian regulators (Banca d'Italia and CONSOB). The defendants
will have the opportunity to file motions addressing those claims.
"Claw Back" or Revocatory Actions
Under Article 67 of the Italian Bankruptcy Law, Dr. Bondi has also
instituted "claw-back" actions -- similar to actions to set aside
preferential transfers under U.S. bankruptcy law -- against
various financial institutions to recover payments made to them
during the one year period prior to Parmalat's declaration of
insolvency. Those actions include claims against UBS Limited for
EUR290 million, Deutsche Bank S.p.A. for EUR17 million, and Credit
Suisse First Boston International for EUR284 million. Those suits
remain pending.
Banca Intesa has agreed to pay EUR160 million to settle potential
"claw-back" claims against Nextra, its investment management arm,
related to a September 2003 bond issuance. The payment is subject
to administrative and judicial approval.
Other Civil Proceedings
A small number of individual bondholders and shareholders have
filed four civil claims in Milan against DT S.p.A., Italaudit and,
in two of those cases, also against these entities' present and
former partners individually. Another claim has been filed in
Parma against DT S.p.A. and others asserting claims of negligence.
These proceedings are in their early stages.
Moreover, Citibank filed an administrative law petition with the
Administrative Court in Lazio, Italy, on October 24, 2004,
challenging the Proposed Restructuring Plan and related decrees,
deeds and other documents. The court ordered the Ministry of
Productive Activities to produce certain documents on
Nov. 9, 2004. On January 9, 2005, the Attorney General filed
documents in compliance with the court order. The administrative
proceeding is still pending. An analogous petition challenging
the Proposed Restructuring Plan was filed by UBS in December 2004,
and is believed to be pending.
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. When the U.S. Debtors filed for bankruptcy
protection, they reported more than $200 million in assets and
debts. (Parmalat Bankruptcy News, Issue No. 42; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
PC LANDING: Has Until Mar. 31 to File Chapter 11 Plan
-----------------------------------------------------
PC Landing Corp. and its debtor-affiliates sought and obtained an
extension from the U.S. Bankruptcy for the District of Delaware of
their exclusive period to file a chapter 11 plan. The Debtors
have until March 31, 2005, to file a plan, and has, until
May 31, 2005, to solicit acceptances of that plan.
The Debtors need the extension to explore alternatives regarding
the disposition of their assets and to address disputes with Tyco,
AGC [Asia Global Crossing] and GX [Global Crossing]. PC Landing
doesn't want to formulate a plan without first resolving a number
of pending uncertainties. The Debtors assure the Court that
they've stabilized their cash flow after completion the "ANC
Settlement Agreement," which provided an inflow of $10.6 million.
PC Landing Corporation and its debtor-affiliates, own and operate
one of only two major trans-Pacific fiber optic cable systems with
available capacity linking Japan and the United States. The
Debtor filed for chapter 11 protection on July 19, 2002 (Bankr.
Del. Case No. 02-12086). Laura Davis Jones, Esq., at Pachulski
Stang Ziehl Young Jones & Weintraub represents the Debtors in
their restructuring efforts. When the Debtors filed for
protection from its creditors, it listed an estimated assets of
over $10 million and estimated debts of more than $100 million.
PEGASUS SATELLITE: Wants Administrative Claim Bar Date Established
------------------------------------------------------------------
Pegasus Satellite Communications, Inc. and its debtor-affiliates
ask the United States Bankruptcy Court for the District of Maine
to set the 20th day after the Effective Date as the last date to
file Administrative Claims against them. The Debtors further ask
the Court to approve the form and manner of notice of the proposed
administrative claim filing procedures.
According to Robert J. Keach, Esq., at Bernstein, Shur, Sawyer &
Nelson, in Portland, Maine, setting a date for filing
Administrative Claims will enable the Debtors to obtain complete
and accurate information regarding the nature, validity and scope
of all Administrative Claims, thus allowing the Debtors to
promptly and efficiently administer their Chapter 11 cases.
In line with the substantive consolidation provision in the Plan,
the Debtors propose that persons or entities wishing to assert an
Administrative Claim against one or more of the Pegasus Broadcast
Television Debtors are required to file a single Administrative
Claim in the Chapter 11 case of PBT and persons or entities
wishing to assert an Administrative Claim against one or more of
the Pegasus Satellite Television Debtors are required to file a
single Administrative Claim in the Chapter 11 case of PST.
Otherwise, persons or entities wishing to assert an
Administrative Claim against more than one Debtor are required to
file a separate Administrative Claim in the Chapter 11 case of
each Debtor.
These persons or entities are not required to file an
Administrative Claim:
a. any person or entity asserting an Administrative Claim
under Sections 328, 330(a), 331, 503 or 1103 of the
Bankruptcy Code for compensation or for services rendered
or expenses incurred in these Chapter 11 Cases on or prior
to the Effective Date of the Plan;
b. any person or entity that has already properly filed an
Administrative Claim against one or more of the Debtors
with either Trumbull or the Clerk of the Court for the
United States Bankruptcy Court for the District of Maine;
c. any person or entity whose claim against the Debtors has
been allowed by an order of the Bankruptcy Court entered on
or before the Administrative Claims Bar Date;
d. any trade creditor who has been paid in the ordinary course
of the Debtors' business; and
e. the U.S. Trustee for the District of Maine for fees arising
under Section 1930 of the Judiciary Procedures Code.
The Debtors want the Administrative Claims filed and received by
The Trumbull Group, LLC, on or before the Administrative Claims
Bar Date. Claimants failing to do so will:
(i) be forever barred, estopped and enjoined from asserting
the claim against the Debtors, the Reorganized Debtors or
the Liquidating Trustee; and
(ii) not receive or be entitled to receive any payment or
Distribution of property from the Debtors, the
Reorganized Debtors or the Liquidating Trustee or their
successors or assigns with respect to that Claim.
The Debtors intend to provide notice of the Administrative Claims
Bar Date by mailing a copy of the Administrative Claims Bar Date
Notice by United States mail, first class postage prepaid, to
parties-in-interest.
The Administrative Claims Bar Date Notice will:
(i) set forth the Administrative Claims Bar Date;
(ii) advise creditors under what circumstances they may file
an Administrative Claim;
(iii) alert creditors to the consequences of failing to timely
file an Administrative Claim;
(iv) set forth the address to which the Administrative Claim
must be sent for filing; and
(v) notify creditors that Administrative Claims must be
filed with original signatures and facsimile or e-mail
filings of Administrative Claims are not acceptable and
are not valid for any purpose.
The Debtors believe that the Administrative Claims Bar Date
Notice will provide creditors with sufficient information to file
properly prepared and executed Administrative Claims in a timely
manner.
Headquartered in Bala Cynwyd, Pennsylvania, Pegasus Satellite
Communications, Inc. -- http://www.pgtv.com/-- is a leading
independent provider of direct broadcast satellite (DBS)
television. The Company, along with its affiliates, filed for
chapter 11 protection (Bankr. D. Me. Case No. 04-20889) on
June 2, 2004. Larry J. Nyhan, Esq., James F. Conlan, Esq., and
Paul S. Caruso, Esq., at Sidley Austin Brown & Wood, LLP, and
Leonard M. Gulino, Esq., and Robert J. Keach, Esq., at Bernstein,
Shur, Sawyer & Nelson, represent the Debtors in their
restructuring efforts. When the Debtors filed for protection from
their creditors, they listed $1,762,883,000 in assets and
$1,878,195,000 in liabilities. (Pegasus Bankruptcy News, Issue
No. 18; Bankruptcy Creditors' Service, Inc., 215/945-7000)
PILLOWTEX CORP: Court Approves Beacon Blankets Settlement Pact
--------------------------------------------------------------
The United States Bankruptcy Court for the District of Delaware
gave Pillowtex Corporation and its debtor-affiliates permission to
enter into a settlement agreement with Beacon Manufacturing and
Beacon Blankets to settle all claims and defenses relating to a
$1,340,000 purchase money note, the Beacon Motions, and an
Adversary Action.
The salient terms of the Settlement Agreement include:
(a) Beacon Blankets will pay Beacon Manufacturing $450,000;
(b) The Beacon Motions will be withdrawn and the Adversary
Action will be dismissed with prejudice;
(c) Beacon Manufacturing, Pillowtex, and their related
entities will release and discharge Beacon Blankets from
all claims and liabilities, including all claims to any
interest in the Artwork or the Proceeds;
(d) Pillowtex will have an allowed $650,696 non-priority
unsecured claim against Beacon Blankets' estate; and
(e) Beacon Blankets and its related entities will release and
discharge Beacon Manufacturing and Pillowtex from all
claims and liabilities. Beacon Blankets will withdraw
all proofs of claim filed in the Chapter 11 cases of
Beacon Manufacturing and Pillowtex.
As reported in the Troubled Company Reporter on Nov. 25, 2004,
William H. Sudell, Jr., Esq., at Morris, Nichols, Arsht & Tunnell,
in Wilmington, Delaware, said in July 2001, Debtor Beacon
Manufacturing Company agreed to sell certain assets to Beacon
Blankets, Inc., in exchange for, among other things, a $1,340,000
purchase money note. As part of the Sale, Beacon Blankets executed
and delivered to Beacon Manufacturing a subordinated security
agreement, dated September 6, 2001, as security for the Note. The
Subordinated Security Agreement and other documents granted Beacon
Manufacturing security interests and liens in virtually all assets
of Beacon Blankets except certain real property in South Carolina,
subordinate to the security interests and liens held by The CIT
Group/Commercial Services, Inc. The security interests and liens
were duly perfected by Beacon Manufacturing.
Beacon Blankets filed a Chapter 11 petition in the U.S.
Bankruptcy Court for the Western District of North Carolina in
May 2002. The North Carolina Court granted Beacon Manufacturing
adequate protection for its prepetition secured claim against
Beacon Blankets, a security interest in and lien on virtually all
assets of Beacon Blankets.
Subsequently, Beacon Blankets liquidated its assets, paid in full
CIT Group's first-priority secured claim, and paid substantial
sums to Beacon Manufacturing.
Beacon Manufacturing asserts that its secured claim against
Beacon Blankets, as of October 20, 2004, comprises of $46,004 in
unpaid accrued interest and $366,943 in unpaid principal -- for a
total of $412,946 -- plus $247,748 in unpaid attorneys' fees and
expenses incurred through September 30, 2004.
Mr. Sudell relates that Beacon Blankets filed motions in its
Chapter 11 case:
(1) disputing Beacon Manufacturing's application of the
payments that it has received from Beacon Blankets to the
principal and interest owed under the Note;
(2) asserting that Beacon Manufacturing is subject to certain
surcharges under Section 506 (c) of the Bankruptcy Code;
(3) alleging that Beacon Manufacturing caused CIT Group to
improperly marshal proceeds of certain collateral to the
unjust benefit of Beacon Manufacturing; and
(4) alleging that Beacon Manufacturing did not properly
collect on certain accounts receivable that were owing to
Beacon Blankets and assigned to Beacon Manufacturing for
collection.
Moreover, Beacon Blankets commenced an adversary proceeding
against Beacon Manufacturing in the North Carolina Court for
determination of Beacon Blankets' and Beacon Manufacturing's
rights to certain artwork that Beacon Blankets liquidated for
$491,482 net proceeds. Beacon Manufacturing asserts that it owns
the title to and rights in the Artwork and the proceeds.
Headquartered in Dallas, Texas, Pillowtex Corporation --
http://www.pillowtex.com/-- sold top-of-the-bed products to
virtually every major retailer in the U.S. and Canada. The
Company filed for Chapter 11 protection on November 14, 2000
(Bankr. Del. Case No. 00-4211), emerged from bankruptcy under a
chapter 11 plan, and filed a second time on July 30, 2003 (Bankr.
Del. Case No. 03-12339). The second chapter 11 filing triggered
sales of substantially all of the Company's assets. David G.
Heiman, Esq., at Jones Day, and William H. Sudell, Jr., Esq., at
Morris Nichols Arsht & Tunnel, represent the Debtors. On
July 30, 2003, the Company listed $548,003,000 in assets and
$475,859,000 in debts. (Pillowtex Bankruptcy News, Issue No. 74;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
POPE & TALBOT: Postpones Release of 2004 Fourth Quarter Results
---------------------------------------------------------------
Pope & Talbot, Inc., (NYSE:POP) reported the postponement of its
year-end 2004 earnings release and conference call previously
scheduled for February 7, 2005.
Due to its operations in both Canada and the U.S., Pope & Talbot
has complex cross-border tax matters requiring extensive
calculation, analysis and review and has been unable to complete
the process in time for the February 7, 2005 release. The release
and management call will be rescheduled when that process is
complete.
Pope & Talbot -- http://www.poptal.com/-- is a pulp and wood
products company. The Company is based in Portland, Oregon and
traded on the New York and Pacific stock exchanges under the
symbol POP. Pope & Talbot was founded in 1849 and produces market
pulp and softwood lumber at mills in the U.S. and Canada. Markets
for the Company's products include the U.S., Europe, Canada, South
America, Japan, China, and the other Pacific Rim countries.
* * *
As reported in the Troubled Company Reporter on Sept. 30, 2004,
Moody's Investors Service affirmed the Ba2 senior implied, Ba3
issuer and Ba3 senior unsecured ratings of Pope & Talbot, Inc.
The rating outlook continues to be stable.
Ratings Affirmed:
* Ba3 for the US$75 million of 8.375% debentures and
US$50.8 million of 8.375% senior notes, both due
June 1, 2013,
* Ba2 for Pope & Talbot's senior implied rating, and
* Ba3 for its senior unsecured issuer rating.
As reported in the Troubled Company Reporter on July 15, 2004,
Standard & Poor's Ratings Services revised its outlook on pulp and
lumber producer, Pope & Talbot, Inc., to stable from negative.
The corporate credit and senior unsecured debt ratings are
affirmed at 'BB'.
REYNOLDS AMERICAN: Dist. Court Ruling Cues Moody's to Hold Ratings
------------------------------------------------------------------
Moody's Investors Service affirmed the ratings of Altria Group
Inc., British American Tobacco, Loews Corp. and Reynolds American
following a recent ruling by the District of Columbia Court of
Appeals in the case brought by the Department of Justice against
the industry. The rating outlooks of the four companies remain
negative.
The ratings affirmed are:
-- Altria Group Inc.:
* Baa2 for senior unsecured long-term debt
* Prime-3 for commercial paper
-- British American Tobacco:
* Baa1 for senior unsecured long-term debt
* Prime-2 for commercial paper
-- Loews Corp.:
* Baa1 for senior unsecured
* Baa2 for senior subordinated
-- Reynolds American:
* Ba2 for senior implied
* Ba2 for senior secured bonds
* B2 for senior unsecured bonds
The affirmation reflects the elimination of substantial legal risk
presented by the Department of Justice case against the cigarette
industry, because of a recent ruling by the District of Columbia
Court of Appeals.
In 1999, the U.S. government filed a claim under the Racketeering
Influenced and Corrupt Organizations (RICO) Act against various
cigarette companies operating in the US. In a pretrial ruling,
the presiding judge had held that if the industry was eventually
found liable the court should not be bound by any restriction in
requiring the disgorgement of alleged ill-gotten gains by the
industry.
In doing so, the judge took the opposite position of the one held
by another federal court, the Second Circuit Court of Appeals, in
another RICO case, Carson. The judge certified her ruling for
appellate review, allowing the industry to seek reversal of her
order by the District of Columbia Court of Appeals. The trial
started on September 21, 2004.
On February 4, 2005, a panel of the District of Columbia Court of
Appeals ruled in a 2-1 decision that no disgorgement should be
required in this case and, therefore, in all future similar RICO
cases filed in the District. This decision removes two
significant risks for the industry if it is found liable at
conclusion of the trial:
-- In the long term, a risk of substantial payments (the
government is seeking disgorgement of up to $280 billion
from the industry).
-- In the short term, a risk of bonding that could have led to
legal creditor liens against assets and a diversion into
escrow accounts of free cash flow normally upstreamed to the
parent obligors.
In a special comment dated September 1, 2004, we had indicated
that any decision by the District of Columbia Court of Appeals
that would have allowed any disgorgement at all could have led us
to place the ratings of all companies under review for possible
downgrade, due to the potentially severe reduction in free cash
flow available for debt service if the industry was found liable,
as well as a potential subordination of rated unsecured bonds to
secured legal creditor claims.
The prevention of any disgorgement decided by the Court of Appeals
leads us to affirm all the ratings. In a worst case, if the court
found liability, it could impose on the industry a change in
market practices that would probably not have a drastic effect on
its cash flow generation and would probably be stayed while
appeals proceed. Also, a verdict adverse to the industry might
not survive appeal to the District of Columbia Court of Appeals or
the U.S. Supreme Court.
The government has until March 19 to decide if it wants to appeal
the ruling. If it decides to do so, its two options are to seek a
full bench review of the panel ruling by the nine judges of the
District of Columbia Court of Appeals; and to seek review by the
U.S. Supreme Court.
We note that while not overwhelming, the chances that either Court
would seek review of the ruling are not insignificant for two
reasons:
-- Disagreement between the two majority judges, on one side,
and the dissenting judge on the other, is particularly deep,
extending beyond the issue of disgorgement to the very core
of the appeal process. In the dissenting judge's view, the
issue that the trial court judge had certified for appellate
review was the narrow question of whether Carson could be
applied. The dissenting judge believes that by holding that
no disgorgement should be allowed, the District of Columbia
Court of Appeals has ruled on a question that was not
certified for appeal and, in doing so, has perverted the
appeal process in the District.
-- There is now a split between federal circuits. In Carson,
the Second Circuit held that while it should be contained,
disgorgement is permissible. The District of Columbia has
now ruled that it is not. It is the normal role of the U.S.
Supreme Court to resolve conflicts between circuits,
although the Court is the ultimate judge of when it is
appropriate to do so.
If the government decides to seek review of the panel ruling, and
if such review is granted, Moody's would likely place the ratings
under review for possible downgrade if the panel ruling was
reversed and disgorgement allowed.
The outlook for the industry's companies remains negative for
reasons that are common to the industry and others that are
company-specific:
Reasons that are common to the industry:
* Legal risk remains high. The Engle product liability class
action case in Florida, which led to the award of $145
billion in punitive damages against the industry in 2000, and
the Price/Miles consumer fraud class action case in Illinois,
which led to an award of $10.1 billion against Altria's
Philip Morris USA in 2003 remain under review for appeal.
Several consumer fraud class actions have been certified in
various states over the last 12 months. However, we note
that none of these certifications have occurred in states
without bond caps.
* Pricing flexibility remains limited. In the U.S. cigarette
market, the main option available to cigarette companies to
offset volume decline is price increases. In recent years,
the rise in deep discounters, which offer a significantly
lower retail price to consumers, has curtailed the larger
companies' price flexibility. However, we note that the
industry introduced a price increase at the end of 2004. We
will monitor its effect on profitability.
Reasons that are company-specific:
-- British American Tobacco:
* Since July 2004, British American Tobacco combined Brown &
Williamson's (B&W) domestic business with R.J. Reynolds
under Reynolds American, 42% owned by British American
Tobacco, through B&W. In the context of the merger, B&W
obtained an indemnity from RJR for all existing and any
future litigation relating to its US business.
Moody's estimates that the maximum level of cash flow
affected by DOJ would be GBP500 million per year (i.e. we
factor British American Tobacco's share in dividend from
Reynolds American and the cash flow generated by BAT
Investments Ltd.), assuming that British American Tobacco
p.l.c. is ring-fenced from any claims from US Courts.
However, the loss of access to these cash flows is not
factored into the current rating. In addition the
negative outlook remains linked to the weak credit metrics
for the rating category. For 2005 onwards, Moody's
expects an improvement in British American Tobacco's
financial metrics in order to maintain the rating in the
Baa1 category. In particular, RCF to net adjusted debt is
expected to be around 17-20%.
-- Loews Corp.:
* Loews controls 91% of CNA Financial Corp., the insurance
holding company. In recent years, Loews has made various
equity contributions to CNA to support its capital
following losses related to the insurance group's
exposures to asbestos, environmental and core commercial
insurance and discontinued reinsurance operations. The
outlook on CNA is currently negative. However, Moody's
notes that capital adequacy appears to be trending
favorably, because of earnings and capital growth in 2004.
-- Reynolds American:
* The Company's main operating subsidiary faces a patent
infringement claim brought in federal court by a
competitor, Star Scientific. The first phase of the trial
started a few days ago. This case could potentially lead
to significant damages against RJR Tobacco Company. This
same subsidiary could also be asked to indemnify Japan
Tobacco for a $1.5 billion tax payment assessed by the
Province of Quebec against a former subsidiary of R.J.
Reynolds.
A combination of the factors could make the ratings of the three
US companies to go up and the outlook of British American Tobacco
to be stabilized:
Factors common to the industry:
* A drastic reduction in legal risk. All of the pending large
judgments against the industry (Engle and Price/Miles) would
have to be resolved in its favor. No class action claim in a
state without a bond cap or in federal court would be
scheduled for trial.
No case currently scheduled for trial would lead to larger
adverse verdicts. We note that the bill currently
contemplated in Congress that would lead to federal
jurisdiction over the vast majority of class actions would
lead, if passed, to a vast reduction in the risk from class
action related claims. Federal courts are significantly more
reluctant to certify class sections than many states; and in
federal court, a class certification may be appealed before
the trial starts.
* A full return to pricing flexibility. Many states have
passed laws increasing the escrow funding requirements of
small companies not participating in the 1998 Master
Settlement Agreement. Although a court has declared such a
law illegal in New York State, by burdening Master Settlement
Agreement nonparticipants with additional funding
requirements, these laws could lead to a return of the larger
companies pricing flexibility.
Company-specific factors:
-- Altria Group Inc.:
* The Company's expected free cash flow to gross debt
(calculated on a consolidating basis) would reach a
sustained level consistently above 15% (assuming the group
is not reorganized).
* A reorganization of the group, if it occurred, would be
done on terms favorable to Altria's bondholders.
-- British American Tobacco:
* The Company's expected retained cash-flow to net adjusted
debt would reach a sustained level above 17% in the
intermediate term
-- Loews Corp.:
* Company's expected free cash flow to gross debt would
reach a sustained level above 25%.
* CNA's rating outlook would improve from its current
negative level.
-- Reynolds American:
* The Company's expected free cash flow to gross debt would
reach a sustained level above 15%.
The factors that could place pressure on the ratings:
Factors common to the industry:
* A reversal of the D.C. Court of appeal panel ruling in the
Department of Justice case.
* An increase in overall legal risk, tied to the adverse court
rulings in Engle, Price/Miles or other cases.
Company-specific factors:
-- Altria Group Inc:
* The Company's expected free cash flow to gross debt
(calculated on a consolidating basis) reaches a sustained
level below 10% (assuming the group is not reorganized).
* A reorganization of the group, if it occurred, would be
done on terms unfavorable to Altria bondholders.
-- British American Tobacco:
* The company's expected retained cash-flow to net adjusted
debt would not reach a sustained level above 17% in the
intermediate term
* Any increase in the US legal exposure in particular any
indication of a weakening of the assumed ring-fence to
British American Tobacco plc from US courts and large
adverse court rulings.
-- Loews Corp.:
* The Company's expected free cash to gross debt reaches a
sustained level below 20%.
* A downgrade of CNA.
-- Reynolds American:
* The Company's expected free cash flow to gross debt
reaches a sustained level below 10%.
Based in New York, New York, Altria is a holding company,
controlling 100% of Philip Morris USA, a domestic tobacco
manufacturer; 100% of Philip Morris International, an
international tobacco manufacturer; 100% of Philip Morris Capital
Corp., a subsidiary engaged in leasing activities; and 84% of
Kraft Food Inc., a package food manufacturer.
Headquartered in London, England, British American Tobacco is the
world's second-largest listed tobacco company, owning 42% of
Reynolds American, through Brown and Williamson.
Headquartered in New York, New York, Loews Corporation is a
diversified holding company with subsidiaries engaged in
insurance, cigarette production, the operation of hotels, the
operation of oil and gas drilling rigs, and the distribution and
sale of watches.
Based in Winston-Salem, North Carolina, Reynolds American is the
parent company of RJR Tobacco Company, the second largest
cigarette company in the United States.
RIGGS NATIONAL: S&P Removes B- Ratings from CreditWatch
-------------------------------------------------------
Standard & Poor's Ratings Services removed its 'B-' ratings on
Washington, D.C.-based Riggs National Corporation (Riggs,
NASDAQ:RIGS) and its commercial banking subsidiary, Riggs Bank
N.A., from CreditWatch, where they were placed on Nov. 11, 2004.
The outlook is now negative.
"The ratings action reflects today's announcement that Riggs'
Board rejected PNC Financial Services revised merger bid," said
Standard & Poor's credit analyst Michael Driscoll.
Riggs' negative outlook reflects continued uncertainty of the
bank's legal liabilities, which will continue to negatively affect
profitability and the franchise in general. If quarterly losses
and capital erosion continue, the ratings could be lowered.
SOLUTIA INC: Court Approve DuPont Settlement Agreement
------------------------------------------------------
Solutia, Inc., ask the U.S. Bankruptcy Court for the Southern
District of New York to approve a settlement agreement with E.I.
du Pont de Nemours and Company.
DuPont and Solutia, Inc., through assignment from Monsanto
Company, are parties to an ACRN Purchase and Sale Agreement, dated
December 27, 1990. In February 2004, Solutia determined that the
ACRN Contract was not beneficial to its estate. Solutia delivered
a notice of immediate termination of the ACRN Contract in
accordance with the "hardship" termination provisions under the
ACRN Contract. Because Solutia understood that DuPont would
contest Solutia's right to terminate the ACRN Contract, Solutia
sought Court approval to reject the ACRN Contract under Section
365 of the Bankruptcy Code.
As anticipated, DuPont disputed the effectiveness of the purported
termination of the ACRN Contract. DuPont filed a sought to lift
the automatic stay to allow the arbitration of the disputed
termination of the ACRN Contract and certain other disputes among
the parties relating to the ACRN Contract. In a Court-approved
Stipulation, Solutia and DuPont agreed to submit certain disputed
claims relating to the ACRN Contract to arbitration, and agreed
that in the event the arbitrator were to determine that Solutia's
notice of termination of the ACRN Contract was not effective,
DuPont would not contest Solutia's rejection of the ACRN Contract
on terms further set forth in the stipulation.
On May 4, 2004, Solutia commenced an arbitration proceeding
against DuPont, in which Solutia filed a Demand for Arbitration
and DuPont filed a Response and Counterclaim to resolve the
numerous claims that Solutia and DuPont have asserted against each
other relating to the ACRN Contract.
Solutia asserted that:
(i) DuPont overcharged Solutia by $2.86 million for sales of
ACRN by DuPont to Solutia during the period from January
2000 through September 2002;
(ii) DuPont overcharged Solutia in a substantial, albeit yet
undetermined, amount for sales of ACRN by DuPont to
Solutia during the period from October 2002 through
February 2004; and
(iii) Solutia properly terminated the ACRN Contract effective
on February 20, 2004.
DuPont contended that:
(i) Solutia failed to pay DuPont for ACRN shipments in the
fourth quarter of 2003 and first quarter of 2004 and,
therefore, owes DuPont more than $9.15 million for
those shipments;
(ii) DuPont has been damaged in an amount in excess of
$27 million because of Solutia's failure to give DuPont
a three-year notice before terminating the ACRN
Contract; and
(iii) Solutia did not properly terminate the ACRN Contract
effective on February 20, 2004.
Settlement Agreement
The parties have been able to reach a global settlement that will
resolve all of the ACRN Disputes. Pursuant to the Settlement
Agreement, DuPont will have an allowed general unsecured claim
against Solutia for $4,609,356, representing $909,656 for a
shipment received by Solutia before the Petition Date and
$3,699,700 for certain operating costs incurred by DuPont through
March 31, 2004.
Moreover, Solutia and DuPont agree to completely release the other
from all claims, losses or liabilities of any kind or nature
relating to the ACRN Contract or the Arbitration. But they
acknowledge that the Settlement Agreement is not a waiver or
release of any other claim held by DuPont or Solutia that arises
under any other contract between the parties or otherwise.
* * *
Judge Beatty approves the Debtors' request.
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. 31; Bankruptcy Creditors' Service, Inc., 215/945-7000)
SYLVAN GOLF CENTERS: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Sylvan Golf Centers, Inc.
1208 Swamp Road
Fountainville, Pennsylvania 18923
Bankruptcy Case No.: 05-11436
Chapter 11 Petition Date: February 4, 2005
Court: Eastern District of Pennsylvania (Philadelphia)
Judge: Diane W. Sigmund
Debtor's Counsel: Edmond M. George, Esq.
Obermayer Rebmann Maxwell & Hippel, LLP
1617 John F. Kennedy Boulevard
One Penn Center, Suite 1900
Philadelphia, PA 19103
Tel: 215-665-3140
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
A.H. Cornell & Son, Inc. $146,488
P.O. Box 311
Jamison, PA 18929
Sylvan Properties, Inc. $29,792
1208 Swamp Rd.
Fountainville, PA 18923
Taylormade - Adidas $17,402
P.O. Box 406043
Atlanta, GA
ERB Enterprises, AL $15,650
Central School Bucks District $8,648
Mizuno USA Inc. $7,148
Hollrock Engineering, Inc. $6,301
Cleveland Golf $4,786
Harleysville Insurance $3,616
Sportexe $3,500
Lamborn Associates, Inc. $3,100
New Britain Township $2,948
Kevin DePaulis $2,630
Hartwell Sports, Inc. $2,050
Gen-X Sports $1,317
Top Flite Golf Company $711
The H2O Base $655
Spatolas Pizza $500
Dexter Shoe Co. $485
Marlin Leasing $312
TECO AFFILIATES: Disclosure Statement Hearing Set for Friday
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Arizona will hold a
hearing at 9:00 a.m., Prevailing Mountain Standard Time, on
February 11, 2005, to consider conditional approval of the
Disclosure Statement filed by Teco Energy, Inc.'s indirect
subsidiaries -- Panda Gila River, L.P., Union Power Partners,
L.P., Trans-Union Pipeline, L.P., and UPP Finance Co., LLC. The
Court will also hear the Debtors' request to schedule a combined
hearing to consider final approval of the Disclosure Statement and
confirmation of the Plan, and to approve the proposed solicitation
procedures.
The February 11 Hearing may be adjourned from time to time
without further notice.
Objections to the Disclosure Statement, if any, must be filed and
served no later than 4:00 p.m. M.S.T., on February 9, 2005.
On February 1, 2005, the Debtors filed amended drafts to the
Disclosure Statement and Plan. The amendments have been updated
to include all exhibits to the Plan and Disclosure Statement that
are presently available. The Debtors may continue to update the
exhibits from time to time as necessary.
Parties wishing to view the Motion, the Disclosure Statement, the
Plan, and any exhibits thereto, may access the Debtors' Web site
at http://www.kccllc.net/unionpower
A full-text copy of the Debtors' Plan of Reorganization is also
available at no charge at:
http://bankrupt.com/misc/tecoaffiliatesplan.pdf
and full-text copy of the Debtors' Disclosure Statement is
available at no charge at:
http://bankrupt.com/misc/tecoaffiliatesdisclosure.pdf
Proposed Critical Path
The Debtors' operations are seasonal, particularly with respect
the Gila Project. The demand for power, particularly from the
Gila Project, increases significantly as the summer months
approach. To maximize revenue possibilities and provide
stability to the Debtors' trading counterparties that provide gas
and purchase power, the Debtors believe that they need to emerge
from bankruptcy well before the significant increase in demand
for power in the summer months.
In addition, Craig D. Hansen, Esq., at Squire, Sanders, &
Dempsey, L.L.P., in Phoenix, Arizona, reminds the Court that the
Debtors' operations are dependent on their ability to continue to
effectively manage their current hedging contracts and engage in
new hedging activities in the ordinary course of business.
Mr. Hansen asserts that without the ability to effectively manage
these hedging activities, the Debtors significantly increase
their exposure to commodity price volatility and jeopardize the
stable supply of natural gas and the stable demand for their
power. As part of the process of providing the necessary comfort
levels to both current and prospective trading counterparties in
these hedging activities, the Debtors believe that it is critical
that an expedited, albeit orderly, time table for completion of
the bankruptcy proceedings be established at the outset of their
Chapter 11 cases.
The Debtors propose a "critical path" towards confirmation. The
dates will be subject to periodic review and modification based
on the circumstances then existing in their Chapter 11 cases.
Critical Task Suggested Timetable
------------- -------------------
(1) Petition Date January 26, 2005
(2) First Day Hearings January 27, 2005
(3) Hearing for Conditional February 7, 2005 (week of)
Approval of Disclosure
Statement and Solicitation
Procedures
(4) Hearing to Approve February 7, 2005 (week of)
Assumption of Certain
Safe Harbor Contracts
(5) Proposed Date Which Within 5 days following
Solicitation of Votes Begins Hearing on Conditional
Approval of Disclosure
Statement
(6) Final Hearing Regarding February 28, 2005 (week of)
First Day Motions
(7) Proposed Bar Date to File March 7, 2005
Proofs of Claim
(8) Proposed Voting Deadline March 14, 2005
(9) Proposed Deadline for March 18, 2005
Filing Objections to
Plan Confirmation
(10) Combined Hearing on Final March 28, 2005 (week of)
Approval of Disclosure
Statement and
Confirmation of the Plan
The Debtors believe that a critical path implementing these
timelines will permit the completion of their restructuring
before the summer months, thereby maximizing the return to all
creditors without disrupting the Debtors' hedging activities.
The dates may be changed, for good cause shown, on the motion of
the Debtors, the United States Trustee, creditors, or sua sponte
by the Court.
Panda Gila River, L.P., Union Power Partners, L.P., Trans-Union
Pipeline, L.P., and UPP Finance Co., LLC --
http://www.tecoenergy.com/-- own and operate the two largest
combined-cycle natural gas generation facilities in the United
States. The Debtors filed for bankruptcy protection on Jan. 26,
2005 (Bank. D. Ariz. Case No. 05-01143, and 05-01149 through
05-01151). Craig D. Hansen, Esq., Thomas J. Salerno, Esq., and
Sean T. Cork, Esq., at Squire, Sanders & Dempsey L.L.P., represent
the Debtors in their restructuring efforts. When the Debtors
filed for protection from their creditors, they listed
$2,196,000,000 in total assets and $2,268,800,000 in total debts.
(TECO Affiliates Bankruptcy News, Issue No. 3; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
TECO AFFILIATES: U.S. Trustee Unable To Appoint a Committee
-----------------------------------------------------------
Ilene J. Lashinsky, United States Trustee for the District of
Arizona, advises the U.S. Bankruptcy Court for the District of
Arizona that as of February 4, 2005, there has not been a
sufficient showing of creditor interest under Section 1102(b)(1)
of the United States Bankruptcy Code to allow the appointment of a
committee of unsecured creditors in the chapter 11 cases involving
Teco Energy, Inc.'s indirect subsidiaries -- Panda Gila River,
L.P., Union Power Partners, L.P., Trans-Union Pipeline, L.P., and
UPP Finance Co., LLC.
Panda Gila River, L.P., Union Power Partners, L.P., Trans-Union
Pipeline, L.P., and UPP Finance Co., LLC --
http://www.tecoenergy.com/-- own and operate the two largest
combined-cycle natural gas generation facilities in the United
States. The Debtors filed for bankruptcy protection on Jan. 26,
2005 (Bank. D. Ariz. Case No. 05-01143, and 05-01149 through
05-01151). Craig D. Hansen, Esq., Thomas J. Salerno, Esq., and
Sean T. Cork, Esq., at Squire, Sanders & Dempsey L.L.P., represent
the Debtors in their restructuring efforts. When the Debtors
filed for protection from their creditors, they listed
$2,196,000,000 in total assets and $2,268,800,000 in total debts.
(TECO Affiliates Bankruptcy News, Issue No. 3; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
TOWER AUTOMOTIVE: Law Firm Investigates Possible ERISA Violations
-----------------------------------------------------------------
Stull, Stull & Brody has commenced an investigation relating to
the 401(k) defined contribution plans of Tower Automotive, Inc.
(NYSE: TWR). Among other things, Stull, Stull & Brody is
investigating whether fiduciaries of the 401(k) plans of the
Company may have violated the Employee Retirement Income Security
Act of 1974 by failing to disclose the Company's true financial
and operating condition to participants and beneficiaries of the
plans and by offering Tower Automotive stock as an investment
option under the plans when it was not prudent to do so. Tower
Automotive and its domestic subsidiaries recently filed
voluntarily petitions in the United States Bankruptcy Court for
the Southern District of New York seeking reorganization relief
under Chapter 11 of the Bankruptcy Code. The Company also
recently announced that it has elected not to appeal an
application by the Staff of the New York Stock Exchange to the
Securities and Exchange Commission to delist Tower Automotive
common stock from the NYSE.
If you held Tower Automotive stock in an individual account under
any of the Company's 401(k) plans during the last several years
you may, if you wish, consult with a representative of Stull,
Stull & Brody at no cost or obligation. The contact information
for Stull, Stull & Brody is as follows:
Email: ssbny@aol.com
Fax: (212) 490-2022
Toll Free Number: 1-800-337-4983
(Edwin J. Mills, Esq. or Tzivia Brody, Esq.)
Mail: Stull, Stull & Brody
6 East 45th Street
New York, NY 10017
Stull, Stull & Brody has extensive experience in protecting the
rights of 401(k) plan participants and beneficiaries and
shareholders of public companies. Stull, Stull & Brody is
presently representing classes of 401(k) plan participants in many
class action cases throughout the country. Stull, Stull & Brody
maintains offices in New York and Los Angeles.
Headquartered in Grand Rapids, Michigan, Tower Automotive, Inc.
-- http://www.towerautomotive.com/-- is a global designer and
producer of vehicle structural components and assemblies used by
every major automotive original equipment manufacturer, including
BMW, DaimlerChrysler, Fiat, Ford, GM, Honda, Hyundai/Kia, Nissan,
Toyota, Volkswagen and Volvo. Products include body structures
and assemblies, lower vehicle frames and structures, chassis
modules and systems, and suspension components. The Company and
25 of its debtor-affiliates filed voluntary chapter 11 petitions
on Feb. 2, 2005 (Bankr. S.D.N.Y. Case No. 05-10576 through
05-10601). James H.M. Sprayregen, Esq., Ryan B. Bennett, Esq.,
Anup Sathy, Esq., Jason D. Horwitz, Esq., and Ross M. Kwasteniet,
Esq., at Kirkland & Ellis, LLP, represent the Debtors in their
restructuring efforts. When the Debtors filed for protection from
their creditors, they listed $787,948,000 in total assets and
$1,306,949,000 in total debts.
U.S. PLASTIC: Names Bruce Disbrow President & CEO
-------------------------------------------------
U.S. Plastic Lumber Corp. (Pink Sheets:USPL), a leader in
alternative lumber products, named Bruce C. Disbrow as its
President and Chief Executive Officer.
Mr. Disbrow, a 25-year veteran of RH Donnelley, most recently
served as President and Chief Executive of Dontech, a joint
venture between Donnelley and SBC Communications. During his
10-year tenure, Mr. Disbrow grew company margins by more than 10%,
created record revenues and made the $500 million company a highly
profitable entity.
In taking over USPL, Mr. Disbrow vowed to focus the company's
offering on the products that are patented, the most profitable
and of the highest quality. Also, he plans to improve customer
service dramatically and continue to develop a first class
management team.
"USPL's best days are ahead," said Mr. Disbrow. "This company has
the premium alternative wood products in the marketplace, and
their applications are without limit. Starting [today], USPL will
have a laser-like focus on customer service and on selling only
our most profitable products. This will be a great turnaround
story for our industry, and I am ready to get started."
During his tenure at Dontech, Mr. Disbrow achieved a number of
signature accomplishments that took the company to new heights
financially and culturally. Among other achievements, he improved
sales and sales productivity, significantly reduced the employee
turnover rate, changed the image and culture of the company and
transformed operations from "average" to "Best in Class,"
according to industry benchmarks.
"Bruce brings an outstanding track record of success in seeing
organizations through turnarounds," said Joseph E. Sarachek,
USPL's Chief Restructuring Officer from Triax Capital Advisors.
"In a short time Bruce has demonstrated a remarkable aptitude for
the industry. His experience in operations, sales and
administrative oversight will bring a new discipline to USPL and
provide the building blocks of its future success."
Mr. Disbrow plans to focus on USPL's four highest quality product
lines: structural lumber, HDPE decking and railing, spa/sauna
siding and truck scuff. He also will reorganize USPL's marketing
and distribution channels to ensure that the end users get the
products and services that they demand.
Prior to his nine-year tenure as Dontech's CEO, Mr. Disbrow spent
one year as Dontech's Vice President for Sales. Before Dontech,
Mr. Disbrow served in several positions with RH Donnelly,
including Vice President and General Manager of the Cincinnati
region, Assistant Vice President for Corporate Training and
Development and Assistant to the President.
About Triax Capital Advisors
Triax Capital Advisors provides advisory services to parties
involved with highly leveraged companies and special situation
investments. Triax offers expertise in three distinct areas:
Financial Restructuring, Operational Restructuring, Forensic
Accounting and Litigation Support and is further distinguished by
these core characteristics: focus on quality of work versus
quantity of engagements, hands-on involvement by senior
professionals, and flexible compensation structures that include
focus on success fee formulas. Triax Capital Advisors' Web site is
located at http://www.triaxadvisors.com/
Headquartered in Boca Raton, Florida, U.S. Plastic Lumber --
http://www.usplasticlumber.com/-- manufactures plastic lumber and
is the technology leader in the industry. The Company filed for a
chapter 11 protection on July 23, 2004 (Bankr. S.D. Fla. Case No.
04-33579). Stephen R. Leslie, Esq., at Stichter, Riedel, Blain &
Prosser, P.A., represents the Debtor in its restructuring efforts.
When the Debtor filed for protection from its creditors, it listed
$78,557,000 in total assets and $48,090,000 in total debts.
UAL CORP: Wants to Modify Stay to Effect Frankel Claim Set-Off
--------------------------------------------------------------
Before its chapter 11 petition, UAL Corporation and its
debtor-affiliates entered into a Marketing Services Agreement with
Frankel & Company. Under the Agreement, Frankel provided
advertising services to the Debtors for a fee, usually paid in
advance pursuant to a particular project. In some instances, the
advance payments exceeded the cost of services provided by
Frankel, resulting to a credit in the Debtors' favor. The
Debtors' Prepetition Credits with Frankel total $222,483.
On May 9, 2003, Frankel filed Claim No. 36739 for $490,988 based
on various unpaid invoices. Since $222,483 of that amount is
secured by the Prepetition Credits, the unsecured balance is
$268,505.
In their Seventh Omnibus Objection to Claims, the Debtors
asserted that the Frankel Claim should be reclassified, because
it improperly asserted priority or secured status.
On September 15, 2004, the Debtors sent a letter to Frankel
alleging a potential claim for preference transfers pursuant to
Section 547 of the Bankruptcy Code. Frankel disagreed with this
characterization. Subsequently, the Debtors reviewed their books
and concede that the Preference Claim is likely less than
originally asserted. The parties then engaged in negotiations
and agreed that:
a) Frankel will remit to the Debtors one half of the
Prepetition Credits, or $111,242 on a pro rata basis over a
12-month period, through a monthly deduction of the Debtors'
obligations for its ongoing services;
b) The secured portion of the Frankel Claim will be reduced to
$111,242;
c) The unsecured portion of the Frankel Claim will remain
at $268,505, for a $379,746 total claim amount; and
d) Frankel will set off the secured portion of its Claim
against the Prepetition Credits, resulting in a final,
allowed, general unsecured claim for $268,505.
Accordingly, the Debtors ask the Court to permit them to enter
into the Settlement and to modify the automatic stay to allow
Frankel to effect the set-off. The Settlement will provide the
Debtors with full and complete release from all claims and
obligations to Frankel. The Frankel Claim will be expunged and
the Debtors' claims agent will docket the final Claim in
Frankel's favor.
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. 75; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
UAL CORP: Court Approves Amended AMB Codina Transfer Agreement
--------------------------------------------------------------
The Hon. Eugene R. Wedoff of the U.S. Bankruptcy Court for the
Northern District of Illinois gave UAL Corporation and its
debtor-affiliates permission to enter into an amendment to the
Agreement for Transfer of Leasehold Interest with AMB Codina MIA
Cargo Center, LLC. The Transfer Agreement contemplated the
assignment and assumption of a development lease between the
Debtors and Miami-Dade County, Florida, and the sale of de minimis
assets located on the property to AMB. The Court approved the
transaction on Dec. 17, 2004.
As reported in the Troubled Company Reporter on Jan. 31, 2005,
during the closing on the assignment of the Lease, the Debtors
and AMB discovered that each party had been proceeding under
different assumptions for the rent payable to Miami-Dade County.
On Dec. 31, 2004, AMB delivered a Default Notice stating that the
Debtors breached their obligations under the Transfer Agreement,
due to the failure to disclose certain rental rate adjustment
notices for the Lease.
To resolve the dispute, the parties engaged in good faith
negotiations. As a result, the parties agreed to enter into the
Amendment to the Transfer Agreement.
Pursuant to the Amendment, the Debtors will reduce the purchase
price to AMB by $800,000 -- from $18,400,000 to $17,600,000. The
Debtors will grant AMB a license to use a portion of the premises
for a $37,480 monthly license fee. Commencing February 1, 2005,
AMB will assume a proportionate share of operating and
maintenance expenses payable under the Lease.
James H.M. Sprayregen, Esq., at Kirkland & Ellis, in Chicago,
Illinois, explains that the purchase price adjustment reflects
one-half the net present value of the difference between AMB's
assumptions for the rent and the actual rent payable to Miami-
Dade County.
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. 75; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
UNISPHERE WASTE: BondHolders File Suit for $1-Mil. Unpaid Fees
--------------------------------------------------------------
Unisphere Waste Conversion Ltd. reported that a lawsuit has been
filed by a 6% unsecured debenture holder against the Company for
non-payment of principal and interest amounting to $1,060,000.
On Feb. 1, the Company did not make interest payments due to
debenture holders in the amount of $625,000 on Jan. 31, 2005, and
will not make interest payments due to debenture holders in the
amount of $150,000 on Feb. 2, 2005. In addition the Company will
not make a principal payment due to a debenture holder of
$1,000,000 on Feb. 2, 2005.
As a result of the non-payment and other defaults with lenders,
the Company's other indebtedness may become due and payable.
The Company is unable to make its current payments and pay
indebtedness. The Company has met with representatives of the 10%
secured debenture holders and discussions are ongoing. The
Company's wholly owned subsidiary, Unisphere Tire Recycling, Inc.
(formerly, Enviro Tire Technologies Inc.) has filed a Notice of
Intention to Make a Proposal to its creditors under the Bankruptcy
and Insolvency Act (Canada).
A further lawsuit has been filed by a former employee, Victor
Sibilia, for $5,000,000 plus other ancillary relief and damages
against the four outside directors of the Company. The company
currently has five directors on its Board. The Company expects
that the outside directors will vigorously defend the lawsuit but
anticipates that they will also claim indemnity from the Company
for any damages that the court might assess against them.
Unisphere Waste Conversion Ltd. is a Canadian environmental
solutions company.
UNOVA INC: Posts $71.2 Million Net Loss in Fourth Quarter
---------------------------------------------------------
UNOVA, Inc. (NYSE:UNA) released their financial results for its
fourth quarter and fiscal year ended Dec. 31, 2004. The Company
also disclosed that a plan was initiated to offer its Industrial
Automation Systems (IAS) businesses for sale. The results of
operations for the IAS segment have been classified as
"discontinued operations" for all quarters and years referred to
in this release.
UNOVA reported 2004 fourth quarter revenues of $236.9 million and
earnings from continuing operations of $26.4 million, compared to
2003 fourth quarter revenues of $185.9 million and earnings from
continuing operations of $3.1 million. Including the impact of
discontinued operations, net losses for the fourth quarter of 2004
and 2003 were $71.2 million, and $2.2 million respectively.
"We ended 2004 with strong profit growth and robust demand for
Intermec products, especially from our core Systems and Solutions
product lines," said Larry D. Brady, Chairman and CEO.
"Investment in R&D activities throughout the year has allowed us
to close the year's final quarter with double digit operating
margins and significant revenue growth. We believe this momentum
coupled with recent advances in RFID standards provides a strong
foundation for our growth prospects in 2005."
Fiscal year 2004 revenues were $811.3 million and earnings from
continuing operations were $52.2 million, compared to 2003
revenues of $706.6 million and earnings from continuing operations
of $8.1 million. Including the impact of discontinued operations,
net losses for fiscal 2004 and 2003 were $49.1 million, and $19.3
million respectively. Revenues for fiscal years 2004 and 2003
include settlements for intellectual property (IP) disputes
regarding its smart battery patents in the amount of $19.7 million
and $18.7 million, respectively. The related operating profit
from the IP settlements for fiscal years 2004 and 2003 were $15.6
million and $12.5 million, respectively.
Corporate and other expenditures of $7.7 million for the fourth
quarter included incremental spending for outside resources and
independent audit fees related to compliance with the internal
control provisions of Sarbanes-Oxley Section 404.
The Company recorded a tax benefit from continuing operations of
$9.0 million in the fourth quarter of 2004 which primarily
reflects the recognition of earned tax credits and the benefit of
net operating losses resulting from foreign legal entity
restructuring.
In connection with the planned disposition of its IAS business
segment, the Company has received expressions of interest in both
the group as a whole and for the Cincinnati Lamb and Landis
Grinding businesses as separate transactions. The Company has
committed to a formal process to sell these businesses, resulting
in the reclassification to discontinued operations for financial
statement purposes. The loss from discontinued operations totaled
$97.7 million and $101.3 million, for the fourth quarter and
fiscal year 2004, respectively. The losses for both periods were
net of an $8.1 million tax benefit. The loss from discontinued
operations included a fourth quarter non-cash charge of $103.2
million, net of a $0.9 million tax benefit, reflecting the write-
down of the net assets of the Cincinnati Lamb division to
estimated fair value. The comparable loss from discontinued
operations, net of tax totaled $5.3 million and $27.4 million for
the 2003 fourth quarter and fiscal year, respectively. Fiscal
year 2003 loss from discontinued operations included an after tax
loss of $2.0 million from the sale of the Company's Lamb Body &
Assembly Systems division.
The Company's cash and cash equivalent position, including the $50
million classified as restricted cash, increased $56.5 million
during the fourth quarter to $267.9 million as of Dec. 31, 2004.
This represents the highest level in UNOVA's seven-year history.
The restricted cash is required by the Company's credit facility
until the Company retires its bonds due in March 2005. Total debt
remained unchanged at $208.5 million.
Automated Data Systems (ADS)
In the fourth quarter of 2004, revenues at the Company's ADS
segment, comprising Intermec Technologies, were $236.9 million,
representing a 27 percent increase in revenues over the comparable
prior-year quarter.
The ADS segment achieved a $29.0 million operating profit for the
fourth quarter of 2004, representing a 121 percent increase
compared to an operating profit of $13.1 million, for the fourth
quarter of 2003. Operating margins for ADS product and service
revenues were 12.3 percent in the fourth quarter of 2004, compared
to 7.7 percent for the prior-year quarter.
All major product and service revenue categories achieved double
digit growth over the comparable 2003 quarter. This was primarily
led by Systems and Solutions revenue growth of 35 percent,
Services growth of 14 percent and Printer and Media growth of 11
percent over the comparable prior-year period.
Geographically, North America revenues achieved an increase of 16
percent over the comparable prior-year period. Revenues in EMEA
increased 44 percent, Latin America revenues increased 43 percent
and revenues in Asia Pacific decreased 11 percent.
About the Company
UNOVA, Inc., headquartered in Everett, Washington, specializes in
mobile information technology for supply-chain logistics and
provides design and integration of manufacturing systems for the
global automotive, diesel engine and aerospace industries.
* * *
As reported in the Troubled Company Reporter on Dec. 8, 2004,
Moody's Investors Services has placed the Caa1 senior unsecured
long-term debt rating of UNOVA, Inc., under review for possible
upgrade. This action reflects improved financial performance in
both of the company's businesses, the expectation of further
progress, as well as UNOVA's strong liquidity measures.
Moody's noted that its review would encompass, among other things:
(1) the sustainability of revenue, margin and cash flow
expansion for both businesses -- Automated Data Systems --
ADS -- and Industrial Automation Systems -- IAS,
(2) the ability of the company to generate positive cash flow
going forward, given current working capital investment,
(3) liquidity planning after the utilization of cash on hand to
satisfy its $100 million note maturity in March 2005, and
(4) strategic plans surrounding its IAS business particularly
incorporating its realigned cost structure, its breakeven
financial performance and declining backlog.
Ratings placed under review for possible upgrade include:
* UNOVA, Inc.
-- Caa1 for senior unsecured notes totaling $200 million; and
-- (P)Caa1/(P)Caa3/(P)C for securities to be issued under its
415 shelf registration in the amount of $400 million.
VARTEC TELECOM: Selling DeSoto Property to Regional Mgt. for $455K
------------------------------------------------------------------
Vartec Telecom, Inc., and its debtor-affiliates seek the authority
of the U.S. Bankruptcy Court for the Northern District of Texas to
sell a 4.1686-acre tract of vacant land located at 1006 East
Pleasant Run Road in DeSoto, Texas, to Regional Management, Inc.,
for $455,000, subject to higher and better offers.
Bidding Procedures
Competing bids for the DeSoto Property should be submitted on or
before 5:00 p.m., Central Time, on February 18, 2005, to:
Michael G. Hoffman
VarTec Telecom, Inc.
2440 Marsh Lane
Carrollton, Texas, 75006
and copies must be delivered to:
Debtors' counsel:
William L. Wallander, Esq.
Vinson & Elkins, L.L.P.
Trammell Crow Center
2001 Ross Avenue, Suite 3700,
Dallas, Texas, 75201-2975
Counsel for the Debtors' DIP financing lender:
Toby L. Gerber, Esq.
Fulbright & Jaworski, L.L.P.
2200 Ross Avenue, Suite 2800
Dallas, Texas, 75201-2784
Counsel for the Official Committee of Unsecured Creditors:
Stephen A. Goodwin, Esq.
Carrington Coleman Sloman & Blumenthal, L.L.P.
200 Crescent Court, Suite 1500
Dallas, Texas, 75201
Counsel for the Official Committee of
Excel Independent Representatives:
Craig H. Averch, Esq.
White & Case, L.L.P.
633 West Fifth Street, Suite 1900
Los Angeles, California, 90071
Competing bids must be at least 5% higher than the $455,000
purchase price Regional Management, Inc.'s offered -- meaning at
least $477,750.
All bids must be accompanied by a cash deposit in an amount equal
to 10% of the total bid amount. Deposit checks should be made
payable to "VarTec Telecom, Inc." or funds can be wired to the
Debtors pursuant to wiring instructions to be provided by the
Debtors.
In the event that a bid, higher and better than Regional's, is
received, an auction will take place at the offices of:
Vinson & Elkins L.L.P.
2001 Ross Avenue, 3700 Trammell Crow Center
Dallas, Texas, 75201-2975
on February 22, 2005 at 9:00 a.m., and the highest and best bid
resulting from the auction will be presented to the Court for
approval.
At the auction, all parties should appear in person to bid,
although the Debtors (in their discretion) may allow bidding by
telephone.
Objection Deadline
Objections to the sale must be served on:
* the Debtors' counsel,
* counsel to the DIP lender,
* counsel to the Official Committee of Unsecured Creditors, and
* counsel to the Official Committee of Excel Independent
Representatives,
on or before 4:00 p.m., Central Time, on February 18, 2005.
No break-up fee is requested or provided for as part of this
proposed sale.
Brokers' Commission
The Debtors have agreed to pay two real estate agents. Options
Real Estate Investments, Inc. -- VarTec's agent -- and Quine &
Associates, Inc. -- Regional's agent, will split a 6% brokerage
commission if and when the proposed sale closes.
Sale Hearing
Judge Steven A. Felsenthal will convene a hearing to consider
approval of the sale on February 23, 2005.
Headquartered in Dallas, Texas, Vartec Telecom Inc. --
http://www.vartec.com/-- provides local and long distance service
and is considered a pioneer in promoting 10-10 calling plans. The
Company and its affiliates filed for chapter 11 protection on
November 1, 2004 (Bankr. N.D. Tex. Case No. 04-81695). Daniel C.
Stewart, Esq., William L. Wallander, Esq., and Richard H. London,
Esq., at Vinson & Elkins, represent the Debtors in their
restructuring efforts. When the Company filed for protection from
its creditors, it listed more than $100 million in assets and
debts.
WORLDSPAN L.P.: Gets Required Consent of 9-5/8% Senior Noteholders
------------------------------------------------------------------
Worldspan, L.P. and WS Financing Corp. have executed a first
supplemental indenture as described in the Issuers' Offer to
Purchase and Consent Solicitation Statement dated January 25, 2005
and the related Letter of Transmittal and Consent. The Issuers
have received the requisite consents of the holders of a majority
of their 9-5/8% Senior Notes due 2011 (CUSIP Nos. 98158EAA1 and
98158EAB9) not owned by the Issuers or their affiliates to the
proposed amendments described in the Offer to Purchase and Consent
Solicitation Statement.
Pursuant to the Offer to Purchase and Consent Solicitation
Statement, the consent solicitation commenced in connection with
the cash tender offer expired as of 5:00 p.m., New York City time,
on February 4, 2005. As of the Consent Date, the Issuers had
received the consent of the holders of approximately
$247.1 million aggregate principal amount of the Notes not owned
by the Issuers or their affiliates, representing 98.84% of the
total outstanding Notes not owned by the Issuers or their
affiliates. As a result, the Issuers have received the consents
necessary to amend the indenture governing the Notes.
As contemplated by the Offer to Purchase and Consent Solicitation
Statement, the Issuers and The Bank of New York, as trustee under
the indenture governing the Notes, have executed the Supplemental
Indenture that will eliminate substantially all of the restrictive
covenants and certain default provisions in the indenture
governing the Notes. Pursuant to the terms of the Supplemental
Indenture, the Amendments will not become operative until the time
that we accept the Notes for purchase, which we expect to be on or
about February 11, 2005.
Holders who have tendered their Notes prior to the Consent Date
may no longer withdraw their Notes or revoke their Consents. The
tender offer will expire at 11:59 p.m., New York City time, on
February 22, 2005, unless extended or terminated.
The Issuers have retained J.P. Morgan Securities, Inc., to serve
as Dealer Manager and Solicitation Agent for the tender offer and
consent solicitation. Requests for documents may be directed to
MacKenzie Partners, Inc., the Information Agent, by telephone at
(212) 929-5500 (collect) or (800) 322-2885 (toll free), or in
writing at 105 Madison Avenue, New York, New York 10016.
Questions regarding the tender offer may be directed to Leonard
Carey of J.P. Morgan Securities Inc., High Yield Capital Markets,
at (212) 270-9769 (collect).
This press release is neither an offer to purchase nor a
solicitation of an offer to sell the Notes. The offer is being
made solely by the Offer to Purchase and Consent Solicitation
Statement.
Worldspan, L.P., -- http://www.worldspan.com/-- is a leader in
travel technology services for travel suppliers, travel agencies,
e-commerce sites and corporations worldwide. Utilizing some of
the fastest, most flexible and efficient networks and computing
technologies, Worldspan provides comprehensive electronic data
services linking approximately 800 travel suppliers around the
world to a global customer base. Worldspan offers industry-
leading Fares and Pricing technology such as Worldspan e-Pricing,
hosting solutions, and customized travel products. Worldspan
enables travel suppliers, distributors and corporations to reduce
costs and increase productivity with technology like Worldspan Go!
and Worldspan Trip Manager XE. Worldspan is headquartered in
Atlanta, Georgia.
* * *
As reported in the Troubled Company Reporter on Feb. 3, 2005,
Standard & Poor's Ratings Services assigned its 'B' rating to
travel technology services provider Worldspan L.P.'s proposed
$440 million secured credit facility. The recovery rating is '2',
indicating expectations of substantial (80%-100%) recovery of
principal in the event of a payment default.
At the same time, a 'CCC+' rating was assigned to Worldspan's
proposed $350 million second-lien secured floating rate notes.
Upon completion of these transactions, the 'B+' corporate credit
rating on Worldspan would be lowered to 'B'; the 'BB-' rating on
Worldspan's $175 million secured credit facility and 'B-' rating
on $280 million of senior unsecured notes would be withdrawn. The
outlook is stable.
YUKOS OIL: Says It Should File a Chapter 11 Plan this Week
----------------------------------------------------------
Yukos Oil Company anticipates filing a Chapter 11 plan of
reorganization before February 11, 2005, the company disclosed in
papers filed with the United States Bankruptcy Court for the
Southern District of Texas.
According to Zack A. Clement, Esq., at Fulbright & Jaworski,
L.L.P., in Houston, Texas, the Plan will establish a priority
scheme to distribute value from the Debtor's Chapter 11 estate,
including the equitable subordination of the Russian Government
tax claim to the Debtor's legitimate lenders and trade creditors.
If confirmed, the Plan will significantly benefit the Debtor's
real creditors, including:
-- trade creditors owed over $190 million; and
-- lenders, including Societe Generale S.A., Citibank N.A.,
Commerzbank Aktiengesellschaft, Calyon S.A., Deutsche Bank
AG, ING Bank N.V., BNP Paribas, KBC Bank N.V., UFJ Bank
Netherland N.V., HSBC Bank PLC, and Moravel Investments
Limited, who are owed approximately $1.3 billion.
To implement the Plan, the Debtor will create a Litigation Trust,
which will own all of its causes of action and pursue those rights
in at least three ways:
(a) By filing actions in the Bankruptcy Court for (i)
violation of the automatic stay for any dismemberment of
the Debtor that has already occurred during its bankruptcy
case, or that may occur during the rest of the bankruptcy
case; (ii) improper postpetition transfers and fraudulent
conveyances; and (iii) any violations of the Section 524
discharge injunction that may occur in the future;
(b) By continuing the Debtor's existing application in the
European Court of Human Rights; and
(c) By the instituting of various legal actions in other legal
fora, seeking to recover damages caused to the Debtor.
The Litigation Trust will continue for the benefit of the
Debtor's creditors and shareholders, even if as a result of
continued persecution by the Russian Government, the Debtor, as it
currently exists, comes to an end.
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. 8; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
YUKOS OIL: Look for Schedules of Assets & Liabilities Today
-----------------------------------------------------------
Yukos Oil Company intends to file its schedules of assets and
liabilities today, February 9, 2005, and seek a deadline for the
filing of claims on or about May 1, 2005, Zack A. Clement, Esq.,
at Fulbright & Jaworski, L.L.P., said in papers filed with the
Bankruptcy Court.
Yukos indicates that it will express in its Schedules its belief
that the Russian Government tax claims are "disputed" and should
be allowed at $0.
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. 8; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
* John Rogovin Joins Wilmer Cutler as Partner in Washington Firm
----------------------------------------------------------------
Wilmer Cutler Pickering Hale and Dorr LLP welcomes John A. Rogovin
has as a Partner in its Washington, D.C. office, practicing in its
Communications and E-Commerce and Litigation Departments. He
brings with him nearly 20 years of experience in private practice
and with the federal government, most recently as General Counsel
of the Federal Communications Commission.
Mr. Rogovin was appointed General Counsel of the FCC in February
2003, after previously serving as Deputy General Counsel. As
General Counsel, Mr. Rogovin acted as the principal legal advisor
to the Chairman and Commissioners, providing advice on a wide
range of telecommunications and related matters. He played a
vital role in policy development and represented the Commission in
court on many important litigation matters, including Brand X v.
FCC (cable modem), Prometheus v. FCC (media ownership), and cases
involving local telephone competition. Mr. Rogovin also was the
FCC's lead negotiator in the $4 billion settlement of Next Wave v.
FCC (PCS licenses in bankruptcy).
Before his service at the FCC, Mr. Rogovin was at the U.S.
Department of Justice from 1993 to 1996 and then was a litigation
Partner and Communications Department chair at O'Melveny & Myers
LLP. At the Department of Justice, Mr. Rogovin was initially
Assistant to the Attorney General and then became the Deputy
Assistant Attorney General supervising the Federal Programs
Branch, which defends the U.S. in lawsuits challenging the
constitutionality or legality of governmental policies, programs
and actions.
In announcing Mr. Rogovin's departure from the FCC, Chairman
Michael Powell, said, "The Commission is losing an extraordinary
asset. John always provided sound and principled legal advice on
whatever matter we faced. I will miss his calm and wise counsel."
In welcoming Mr. Rogovin to Wilmer Cutler Pickering Hale and Dorr,
William J. Perlstein, Co-Managing Partner, said, "John's depth of
knowledge in the communications industry and his range of
experience as a litigator will make him an extremely valuable
asset to the firm's outstanding communications and litigation
practices. It is an honor to have him as our partner and we
anticipate that he will play a major role in continuing to shape
the most important rules governing all aspects of the
telecommunications industry."
Mr. Rogovin earned his A.B. from Columbia University and his J.D.
from the University of Virginia School of Law, where he was the
articles editor of the Virginia Journal of International Law. He
clerked for the Honorable Laurence H. Silberman in the United
States Court of Appeals for the D.C. Circuit. Mr. Rogovin is
admitted to practice in the District of Columbia and New York.
About Wilmer Cutler Pickering Hale and Dorr LLP
Wilmer Cutler Pickering Hale and Dorr LLP is nationally and
internationally recognized for its preeminent practices in
antitrust and competition; bankruptcy; civil and criminal trial
and appellate litigation (including government litigation and
strategy and international litigation); corporate (including
public offerings, public company counseling, start-up companies,
venture capital, mergers and acquisitions, and licensing);
financial services; intellectual property counseling and
litigation; international arbitration; life sciences; securities
regulation, enforcement and litigation; tax; telecommunications;
and trade. Wilmer Cutler Pickering Hale and Dorr LLP was formed
in May 2004 through the merger of two of the nation's leading law
firms, Hale and Dorr LLP and Wilmer Cutler Pickering LLP. With a
staunch commitment to public service, the firm is renowned as a
national leader in pro bono representation. The firm has more
than 1,000 lawyers and offices in Baltimore, Beijing, Berlin,
Boston, Brussels, London, Munich, New York, Northern Virginia,
Oxford, Waltham and Washington, D.C. For more information, visit
http://www.WilmerHale.com/
* Upcoming Meetings, Conferences and Seminars
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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.
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