/raid1/www/Hosts/bankrupt/TCR_Public/050302.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, March 2, 2005, Vol. 9, No. 51
Headlines
106 NORTH WALNUT LLC: Case Summary & Largest Unsecured Creditor
ACTIVANT SOLUTIONS: S&P Rates Proposed $120 Million Notes at B+
ADELPHIA COMMS: Settles Verizon Dispute for $10.85 Million
AEP INDUSTRIES: Moody's Puts B2 Rating on $175MM Sr. Unsec. Notes
AEP INDUSTRIES: S&P Revises Outlook on Low-B Ratings to Positive
AMERICAN TOWER: Restating Financials to Correct Lease Accounting
AMERICAN WAGERING: Court Confirms Amended Joint Chap. 11 Plan
ARMSTRONG WORLD: Futures Rep. Wants 9% Pay Hike to $600 per Hour
AVUS LLC: Case Summary & 20 Largest Unsecured Creditors
B&A CONSTRUCTION: Gets Interim Okay to Use Bank's Cash Collateral
BANC OF AMERICA: Fitch Rates $651,000 Mortgage Certificates at BB
BANC OF AMERICA: S&P Puts Double-B Ratings on Classes L & M Certs.
BEAR STEARNS: Fitch Puts BB Rating on $4.9 Mil. Class M-5 Certs.
BIOGEN IDEC: S&P Affirms Low-B Credit & Debt Ratings After Review
BROADBAND OFFICE: Wants to Hire Sturgill as Tax Accountant
CASELLI ENTERPRISES: Case Summary & 7 Largest Unsecured Creditors
CATHOLIC CHURCH: Tucson Files Amended Plan & Disclosure Statement
CONTINENTAL AIRLINES: Issuing Stock Options to Employees
CURATIVE HEALTH: S&P Puts B- Sr. Unsec. Rating on CreditWatch Neg.
CWMBS INC: Fitch Places Low-B Ratings on Cert. Classes B-3 & B-4
DATA TRANSMISSION: S&P Rates Planned $175M Sr. Sec. Loan at B+
DUKE FUNDING: Moody's Assigns Ba3 Rating to Subordinated Notes
EMPRESAS CASTELL: Case Summary & 19 Largest Unsecured Creditors
ENRON CORP: Committee Wants Court Nod on Derrick et al. Settlement
EXIDE TECH: Soros Fund Wants to Add Two More Directors to Board
FC CBO LTD: S&P Junk 2nd Priority Notes & Rates Sr. Notes at BB
FIRST FRANKLIN: Fitch Assigns BB+ Rating on $12.349 Mil. Certs.
FRIEDMAN'S INC: Court Approves $125 Million DIP Revolving Facility
FRIEDMAN'S: Gordon Bros. Wins Bid to Conduct Store Closing Sales
FRIEDMAN'S INC: Wants Equity Committee Appointment Deferred
GLASS GROUP: Files for Chapter 11 Protection in Delaware
GLASS GROUP INC: Case Summary & 20 Largest Unsecured Creditors
GLOBE METALLURGICAL: Trustee Asks Court to Convert Case to Chap. 7
GOODYEAR TIRE: S&P Puts B+ Rating on $1.2B Second-Lien Term Loan
HANGER ORTHOPEDIC: Earns $4 Million of Net Income in 4th Quarter
ICON HEALTH: S&P Cuts Corporate Credit Rating to CCC+ from B
INTERSTATE BAKERIES: QVT Financial Discloses 7.32% Equity Stake
KAISER ALUMINUM: Court OKs ABD Insurance as Retiree Benefit Expert
KINDERCARE LEARNING: S&P Withdraws B+ Rating After Sale Completed
LA SERENA PROPERTIES: Voluntary Chapter 11 Case Summary
LB COMMERCIAL: Moody's Junks Classes L & M Certificates
LEAP WIRELESS: Names S. Douglas Hutcheson Chief Executive Officer
LISTWORKS CORPORATION: Voluntary Chapter 7 Case Summary
LONGHORN CDO: Moody's Affirms Ba3 Rating on $11MM Sr. Sec. Notes
MANITOWOC CO: Names Robert Herre President of Marine Subsidiary
MERITAGE HOMES: Fitch Puts BB Rating on $350 Mil. 6.25% Sr. Notes
MERRILL LYNCH: Fitch Puts Low-B Ratings on Cert. Classes B-4 & B-5
MID OCEAN: Moody's Junks $10 Million Class B-1L Notes
MIRANT CORP: Caps Cascade Natural's Unsecured Claim at $592,709
MORGAN STANLEY: Fitch Rates Six Certificate Classes at Low-B
MORTGAGE CAPITAL: S&P Affirms BB Rating on Class F Certificates
MOSAIC COMPANY: Fitch Rates New $850M Senior Sec. Facility at BB+
NEW HEIGHTS: Wants to Surrender All Assets to Cook County, Ill.
NEXTWAVE TELECOM: Court Confirms Modified 3rd Joint Chap. 11 Plan
NORTEL NETWORKS: Declares Preferred Share Dividends
NS GROUP INC: S&P Withdraws B+ Corporate Credit Rating
OWENS-ILLINOIS: Fitch Junks Senior Subordinated Notes
OWENS CORNING: CSFB Files Post-Trial Reply Brief re Estimation
OWENS CORNING: Wants to Assume Provia Software Agreement
PARMALAT USA: All Impaired Classes Accepts Chapter 11 Plan
PARMALAT USA: Pension Benefit Objects to Plan Confirmation
PERKINELMER INC: Moody's Reviewing Low-B Ratings & May Downgrade
PLATTE RIVER: Fitch Withdraws BB+ Rating on School Revenue Bonds
RECYCLED PAPERBOARD: Comm. Taps Parente Randolph as Accountants
RESIDENTIAL ASSET: Fitch Puts BB+ Rating on $5.5M Class B Certs.
RESIDENTIAL ASSET: Moody's Pares Ratings on Five Classes to Low-B
RESIDENTIAL ASSET: Moody's Pares Ratings on Six Cert. Classes
RESOURCE FUNDING: Receiver Has Until April 8 to Solicit Bids
REPUBLIC ENGINEERED: Ohio Court Dismisses Chapter 11 Cases
ROSENDAHL FARMS: Case Summary & 20 Largest Unsecured Creditors
SHADOW CREEK: Case Summary & 7 Largest Unsecured Creditors
SHERIDAN MANOR LLC: Case Summary & 39 Largest Unsecured Creditors
SOLUTIA INC: Court Approves Contribution Settlement Procedures
SOLUTIA INC: B. Purcell Wants to File 474 Late Proofs of Claim
STILE ACQUISITION: Moody's Rates New Sr. Sec. Facilities at Low-B
STUDIO PROPERTIES: Case Summary & 3 Largest Unsecured Creditors
SUN WORLD: Black Diamond Completes $127.75 Million Asset Purchase
SYRATECH CORPORATION: Brings-In Deloitte & Touche as Auditors
SYRATECH CORP: Trustee Names Four Creditors to Serve on Committee
T MART INC: Case Summary & 15 Largest Unsecured Creditors
TWC HOLDINGS: S&P Puts B+ Rating on $26 Million Sr. Unsec. Notes
UAL CORP: PBGC to Appeal Court's Approval of Revised ALPA Pact
UAL CORP: Banks Want Court to Dismiss 14-Aircraft Repo Injunction
UNUMPROVIDENT: Fitch Revises Outlook on Low-B Ratings to Stable
US AIRWAYS: Wants to Ink Air Wisconsin Jet Service Pact
US AIRWAYS: Machinists Union Wants $130.5M Admin. Claims Allowed
VERITAS FINANCIAL: Taps Backenroth Frankel as Bankruptcy Counsel
VISTA HOSPITAL: Inks $1.2 Million Settlement Pact with Liljeberg
W.R. GRACE: Gets Court OK to Refund Defense Costs & Settle Claims
W.R. GRACE: David E. Shaw Discloses 4.7% Equity Stake
WASHINGTON MUTUAL: Fitch Puts BB Rating on $2.9M Class B-4 Certs.
WCI STEEL: Names Thomas J. Gentile Vice President & CFO
WELLS FARGO: Fitch Puts Low-B Ratings on Cert. Classes B-4 & B-5
WESTCHESTER MEDICAL: Moody's Reviewing Ba1 Rating & May Downgrade
WESTPOINT STEVENS: Inks Pact to Sell All Assets to WL Ross, et al.
WINN-DIXIE: Wants to Hire Skadden Arps as Lead Bankruptcy Counsel
WINN-DIXIE: Wants to Employ King & Spalding as Counsel
WINN-DIXIE: CEO Peter Lynch Gets $1.5 Million Retention Bonus
WOMEN FIRST: Court Okays Noteholder/Stockholder Settlement Pact
WORNICK COMPANY: S&P Revises Outlook on Low-B Ratings to Negative
YELLOW ROADWAY: Moody's Reviewing Ba1 Ratings & May Downgrade
* Upcoming Meetings, Conferences and Seminars
*********
106 NORTH WALNUT LLC: Case Summary & Largest Unsecured Creditor
---------------------------------------------------------------
Debtor: 106 North Walnut, LLC
dba Quality Home Sales
2184 Flatbush Avenue
Brooklyn, New York 11234
Bankruptcy Case No.: 05-15701
Type of Business: The Debtor
See http://www.qualityhomesalesny.com/
Chapter 11 Petition Date: February 28, 2005
Court: District of New Jersey (Newark)
Debtor's Counsel: Daniel J. Yablonsky, Esq.
Yablonsky & Associates, LLC
1430 Route 23 North
Wayne, New Jersey 07470
Tel: (973) 686-3800
Fax: (973) 686-3801
Total Assets: $ 3,000,100
Total Debts: $ 634,468
Debtor's Largest Unsecured Creditor:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Carlin & Ward, P.C. Legal Fees $13,250
P.O. Box 751
Florham Park, NJ 07932
ACTIVANT SOLUTIONS: S&P Rates Proposed $120 Million Notes at B+
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' debt rating
to Austin, Texas-based Activant Solutions Inc.'s proposed
$120 million senior unsecured floating rate notes.
At the same time, Standard & Poor's affirmed its 'B+' corporate
credit and senior unsecured debt ratings.
The proposed floating rate notes are rated the same as the
corporate credit rating, because of the minimal amount of secured
debt, a $15 million revolving credit facility, in the capital
structure. Proceeds from the proposed floating rate notes will
primarily be used to fund the acquisition of Speedware
Corporation, which was announced in January 2005. The outlook is
stable.
"The ratings on Activant reflect its narrow business profile and
limited financial flexibility, partly offset by a leading position
in its addressed niche markets and a significant amount of
recurring revenue," said Standard & Poor's credit analyst Ben
Bubeck.
Activant is a leading provider of business management software and
solutions to the automotive aftermarket, retail hardware market,
and lumber and building materials market. Following the Speedware
acquisition, the company also establishes a modest presence in the
wholesale trade vertical market. Pro forma for the proposed
floating rate notes, the company had approximately $295 million of
operating lease-adjusted total debt as of December 2004.
ADELPHIA COMMS: Settles Verizon Dispute for $10.85 Million
----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approved a stipulation among:
-- Adelphia Communications Corp. and its debtor-affiliates;
-- Reorganized Adelphia Business Solutions, Inc.; and
-- Verizon Communications, Inc., and its operating telephone
company subsidiaries.
Paul V. Shalhoub, Esq., at Willkie Farr & Gallagher, in New York,
relates that the ACOM Debtors, ABIZ, and Verizon are parties to
various interconnection agreements and other contractual
arrangements under federal and state tariffs, under which:
* Verizon provided the Debtors wholesale, retail, and high
capacity telecommunications services; and
* the Debtors provided telecommunications services and
facilities to Verizon.
The ACOM Debtors, ABIZ, and Verizon have had billing disputes
relating to the Verizon Contracts.
Verizon filed nine claims totaling in excess of $15,000,000 on
account of its services provided to the ACOM Debtors prior to the
bankruptcy petition date. Verizon also filed several claims
totaling $32,235,044 in ABIZ's cases. Moreover, Verizon alleged
to be owed certain amounts by the Debtors for services it rendered
after the Petition Date.
The stipulation is a product of months of protracted discussions
and negotiations. The terms of the stipulation, however, are
confidential and the ACOM Debtors, ABIZ and Verizon agree to file
the stipulation under seal.
The Stipulation provides for:
(a) a waiver by Verizon of its claims against the ACOM and ABIZ
Debtors; and
(b) the ACOM Debtors' payment to Verizon of $10,850,0000 in
full and complete satisfaction of all charges arising from
services Verizon provided to them on or after the
bankruptcy petition date through and including
March 31, 2004.
Through the Stipulation, the ACOM Debtors resolve significant
disputes and claims with Verizon without the risk an expense
associated with litigation. The settlement of claims and disputes
among the parties at this juncture, Mr. Shalhoub explains, will
allow the ACOM Debtors to proceed with a clean slate, without the
possibility of claims litigation obstructing the parties' going-
forward relationship.
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.
80; Bankruptcy Creditors' Service, Inc., 215/945-7000)
AEP INDUSTRIES: Moody's Puts B2 Rating on $175MM Sr. Unsec. Notes
-----------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to AEP Industries
Inc.'s proposed $175 million senior unsecured note, due 2013, and
concurrently affirmed AEP Industries' existing ratings.
Proceeds from the proposed issuance, along with drawings from the
company's existing $100 million borrowing base governed secured
revolver (not rated by Moody's), are intended to repay AEP
Industries' $200 million 9.875% senior subordinated note, due
2007, and to pay related fees and expenses.
Upon tender of the subordinated notes, the existing B3 rating will
be withdrawn. The proposed transaction is relatively credit
neutral with a minimal increase in financial leverage offset by
reduced interest expense (EBIT covers pro-forma interest expense
close to 2 times) and extended maturities.
While recognizing AEP Industries' solid performance during the
last three years despite having a prolonged adverse business
conditions (e.g. rapidly rising resin, energy costs, regulatory
compliance, and other operating expenses, intense competition,
global economic malaise, etc.), moderate levels of free cash flow
relative to debt well below 10% during the historical period and
projected during the intermediate term - as well as high financial
leverage with pro-forma debt to EBIT approaching 8 times
(approximately 4 times EBITDA) - continue to constrain the
ratings.
Moody's rating actions are:
* B2 assigned to the proposed $175 million senior unsecured
note, due 2013
* B3 affirmed $200 million 9.875% senior subordinated note, due
2007
* B1 affirmed senior implied rating
* B2 affirmed senior unsecured issuer rating (non-guaranteed
exposure)
The ratings outlook is stable.
The ratings actions are subject to the completion of the proposed
transactions and review of executed documentation.
The affirmation of the B1 senior implied rating also incorporates
AEP Industries' stated divestiture strategy (becoming
predominantly a North American business with limited European
operations), continued commitment to efficiency improvements,
solid volume, and modest lag effects on margins as cost increases
appear to be passing through to customers on a timely and
efficient basis. Liquidity appears to be adequate as net cash
generated by operations should be sufficient to fund working
capital needs throughout the near term.
In addition, reliance on the committed $100 million revolver is
highly likely to meet additional cash needs on a quarterly basis,
notably including financing capital expenditures. At closing of
the proposed transactions, there should be approximately
$40 million of borrowing base availability (minimal amount of
letters of credit outstanding) under the revolver to which orderly
access is expected throughout the near term. Liquidity benefits
from alternate liquidity potentially sourced from further asset
and business divestitures whose proceeds would be expected to
repay debt.
The stable ratings outlook continues to reflect tolerance for
limited adverse fluctuations in credit statistics. Moody's
acknowledges some positive momentum at AEP Industries as
profitability has been strengthening through the combination of
divesting businesses that have been drags on margin and by
realizing efficiency, price, and product mix improvements.
The ratings outlook could change to positive when there has been a
sustained improvement in free cash flow to debt at or above 10%
combined with meaningful growth in margins. Any deviation from
the company's stated debt reduction strategy could put downward
pressure on the ratings outlook.
The B2 rating assigned to the proposed note, issued by AEP
Industries, reflects the senior unsecured position in the
pro-forma capital structure and the effective subordination to a
sizable amount of secured debt (totaling approximately
$100 million consisting of revolver outstandings plus capital
leases, IRBs, and roughly $38 million of foreign borrowings).
Additionally, the proposed note rating is one notch below the
B1 senior implied rating because of the structural subordination
to all the liabilities at AEP Industries' subsidiaries (totaling
approximately $118 million pro-forma at closing). The B2 rating
also gives consideration to AEP Industries' sizable trade and
accrued liabilities (totaling approximately $120 million), which
are pari passu with the proposed note. AEP Industries is the
domestic operating entity with substantial foreign subsidiaries.
The proposed senior unsecured notes are not guaranteed.
The B2 rating for the proposed senior note is highly sensitive to
incremental increases in secured debt and increased liabilities at
AEP and its subsidiaries. Should there be any event causing the
subordination of the proposed notes to deepen or should enterprise
value materially decrease so as to heighten the expected loss on
the notes under a distress scenario, the rating could be
downgraded.
Headquartered in South Hackensack, New Jersey, AEP Industries,
Inc., manufactures, markets, and distributes a range of plastic
packaging products for the food, beverage, industrial and
agricultural markets. For the fiscal year ended October 31, 2004,
AEP has consolidated revenue of approximately $811 million.
AEP INDUSTRIES: S&P Revises Outlook on Low-B Ratings to Positive
----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on South
Hackensack, New Jersey-based AEP Industries, Inc., to positive
from stable.
At the same time, Standard & Poor's assigned its 'B' rating to
AEP's proposed $175 million senior notes due 2013, based on
preliminary terms and conditions. The 'B+' corporate credit
rating is affirmed. Pro forma for the transaction, total debt will
be approximately $280 million.
If completed as proposed, proceeds from the senior debt issuance
will be used, together with additional borrowings under the
company's existing bank credit facilities, to repay the
$200 million senior subordinated notes due 2007.
"The outlook revision reflects the expected improvement to AEP's
financial profile following the pending sale of the company's
Asia-Pacific subsidiaries and further consolidation of European
operations," said Standard & Poor's credit analyst Franco
DiMartino.
The proceeds from the Asia-Pacific sale, which should occur by the
end of fiscal 2005, are expected to be applied entirely toward
debt reduction. While the company continues to face high raw-
material costs and intensely competitive market conditions,
following the refinancing and upcoming asset sales, AEP will be
aided by an improved debt maturity profile and satisfactory
liquidity.
The ratings on AEP Industries reflect the company's vulnerability
to raw-material price volatility, the commodity nature of its
products, and a very aggressive financial profile, which more than
offset its below-average business profile with competitive
positions in a number of flexible packaging niches. AEP produces
various flexible packaging films in the U.S., Europe, and Asia.
The company benefits from solid market shares in its product
niches, but will become increasingly focused on the North American
market following the pending sale of its Asia-Pacific business and
retrenchment in Europe.
AMERICAN TOWER: Restating Financials to Correct Lease Accounting
----------------------------------------------------------------
American Tower Corporation (NYSE: AMT) disclosed that following a
review of its lease-related accounting practices, and in
consultation with its independent registered public accounting
firm, the Company has determined to restate its previously issued
financial statements for periods ending on or prior to
Sept. 30, 2004.
The Company will restate its financial statements to correct the
periods used to calculate depreciation expense and straight-line
rent expense relating to certain of its tower assets and
underlying ground leases. The primary effect of this accounting
correction will be to accelerate to earlier periods non-cash rent
expense and depreciation expense with respect to certain of the
Company's tower sites, resulting in an increase in non-cash
expenses compared to what has previously been reported. The
restatement will not impact historical or future cash flows
provided by operating activities, the timing or amount of payments
under the related ground leases, or compliance with any financial
ratio covenant under the Company's credit facility or other
financial covenants under its debt instruments.
The Company will amend the appropriate filings with the Securities
and Exchange Commission to include restated financial statements
for the three-year period ended December 31, 2003 and the first
three fiscal quarters of 2004. Accordingly, the financial
statements and the related independent auditors' reports contained
in the Company's prior filings with the Securities and Exchange
Commission should no longer be relied upon.
About the Company
American Tower -- http://www.americantower.com/-- is the leading
independent owner, operator and developer of broadcast and
wireless communications sites in North America. Giving effect to
pending transactions, American Tower operates approximately 15,000
sites in the United States, Mexico, and Brazil, including
approximately 300 broadcast tower sites.
* * *
As reported in the Troubled Company Reporter on Jan. 18, 2005,
Standard & Poor's Ratings Services placed its ratings on Boston,
Massachusetts-based wireless tower operator American Tower
Corporation, including the 'B-' corporate credit rating, and
related subsidiaries on CreditWatch with positive implications.
At Sept. 30, 2004, the company had $3.2 billion of total debt
outstanding.
"The CreditWatch listing reflects the expectation that the company
will continue to grow its tower co-locations and associated tower
operating cash flows over the next several years," explained
Standard & Poor's credit analyst Catherine Cosentino. "While such
growth provides the potential for meaningful debt reduction, a key
rating determinant will be the company's financial policy.
Accordingly, Standard & Poor's will discuss with management their
acquisition plans, as well as possible stock repurchases in order
to resolve the CreditWatch listing."
AMERICAN WAGERING: Court Confirms Amended Joint Chap. 11 Plan
-------------------------------------------------------------
American Wagering, Inc., (OTC Bulletin Board: BETMQ) reported that
the United States Bankruptcy Court for the District of Nevada
confirmed the Restated Amended Joint Plan of Reorganization of
American Wagering and its wholly owned subsidiary Leroy's Horse &
Sports Place, Inc.
American Wagering and Leroy's expect to emerge from bankruptcy on
or about March 11, 2005. Subsequently, American Wagering and
Leroy's shall continue to operate as going concerns, all American
Wagering common shareholders will retain their stock ownership in
the Company, and the American Wagering common stock shall continue
to trade on the OTC Bulletin Board.
In addition, all creditors, with the exception of Las Vegas
Gaming, Inc., and Michael Racusin dba M. Racusin & Co., will be
paid 100% of their approved claim plus interest at the Federal
Judgment Rate immediately following the Effective Date. Las Vegas
Gaming and Racusin will be paid pursuant to the settlement
agreements executed by the parties.
Victor Salerno, American Wagering's CEO, said, "We are extremely
pleased to finally be nearing the end of this long process.
Fending off hostile take-over attempts proved to dramatically
extend the timeline for emergence and increase the reorganization
expenses charged to the Company. We will continue to execute our
strategic plans based on our core competencies of operating race
and sports related businesses. We are confident in our ability to
implement this strategy and return the Company to its position as
one of the best companies in the race and sports industry."
Mr. Salerno continued, "On behalf of the board of directors and
management, I would like to extend my gratitude to our employees
for their hard work and dedication, and to our customers, vendors,
lenders and advisors for their support during this process."
Headquartered in Reno, Nevada, American Wagering, Inc. --
http://www.americanwagering.com/main.html-- owns and operates a
number of subsidiaries including, but not limited to, (1) Leroy's
Horse and Sports Place, which operates 47 race and sports books
licensed by the Nevada Gaming Commission, giving it the largest
number of books in the state; (2) Computerized Bookmaking Systems,
the dominant supplier of computerized sports wagering systems in
the state of Nevada; and (3) AWI Manufacturing (formerly AWI Keno)
is licensed by the Nevada Gaming Commission as a manufacturer and
distributor, and has developed a self-service race and sports
wagering kiosk. The Company filed for chapter 11 protection on
July 25, 2003 (Bankr. D. Nev. Case No. 03-52529). Thomas H. Fell,
Esq., at Gordon & Silver, Ltd., represents the Debtor in its
restructuring efforts. When the Debtor filed for bankruptcy, it
listed $13,694,623 in total assets and $13,688,935 in total debts.
ARMSTRONG WORLD: Futures Rep. Wants 9% Pay Hike to $600 per Hour
----------------------------------------------------------------
Dean M. Trafelet, serving as the legal representative for future
claimants in Armstrong World Industries, Inc., its and debtor-
affiliates' chapter 11 cases has served in that role for over
three years and has been compensated at the same hourly rate --
$550 per hour -- during that time. Most, if not all, of the
professionals retained in AWI's cases who are compensated on an
hourly basis have periodically increased their hourly rates since
their retention date to reflect economic and other conditions.
Certain of the professionals have increased their compensation by
approximately 15% to 25% since their retention.
Against this backdrop, the Futures Representative asks the U.S.
Bankruptcy Court for the District of Delaware to approve an
increase of his compensation rate to $600 per hour.
The Futures Representative believes that this modest increase in
his compensation is necessary and appropriate to reflect the
increase in his cost of living and overall inflation since his
appointment.
Since many other professionals have increased their hourly rates
without seeking the Court's approval, the Futures Representative
should be treated no differently. Moreover, the Futures
Representative believes it is appropriate for his hourly rate to
be increased, nunc pro tunc to January 1, 2005, since most
professional firms adjust their hourly rates effective as of the
first day of the new year.
Headquartered in Lancaster, Pennsylvania, Armstrong World
Industries, Inc. -- http://www.armstrong.com/-- the major
operating subsidiary of Armstrong Holdings, Inc., designs,
manufactures and sells interior finishings, most notably floor
coverings and ceiling systems, around the world. The Company and
its debtor-affiliates filed for chapter 11 protection on
December 6, 2000 (Bankr. Del. Case No. 00-04469). Stephen
Karotkin, Esq., at Weil, Gotshal & Manges LLP, and Russell C.
Silberglied, Esq., at Richards, Layton & Finger, P.A., represent
the Debtors in their restructuring efforts. When the Debtors
filed for protection from their creditors, they listed
$4,032,200,000 in total assets and $3,296,900,000 in liabilities.
(Armstrong Bankruptcy News, Issue No. 72; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
AVUS LLC: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------
Debtor: Avus LLC
dba AVUS Systems & Peripherals
14415 Don Julian Road
La Puente, California 91746
Bankruptcy Case No.: 05-13133
Type of Business: The Debtor distributes computer systems,
servers, networking hardware components,
software and accessories.
See http://www.avus.com/
Chapter 11 Petition Date: February 17, 2005
Court: Central District of California (Los Angeles)
Judge: Vincent P. Zurzolo
Debtor's Counsel: Ron Bender, Esq.
Levene Neale Bender Rankin & Brill
1801 Avenue of Stars Suite 1120
Los Angeles, CA 90067
Tel: 310-229-1234
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Huipu Electronic Co., Ltd. Trade debt $945,147
2/F, R2-A, HighTech
Industrial Park
Nanshan District, Shenzhen
Lite-On International Corp. Trade debt $850,322
726 S. Hillview Dr.
Milpitas, CA 95035
Advanced Micro Services Trade debt $834,181
One AMD Place
P.O. Box 3453
Sunnyvale, CA 94088
Aopen America Trade debt $499,820
1911 Lundy Ave.
San Jose, CA 95131
Maxtor Corporation Trade debt $477,946
P.O. Box 60000
San Francisco, CA 94160
Esys Distribution, Inc. Trade debt $321,675
19925 Harrison Ave.
Walnut, CA 91789
Tech Data Corporation Trade debt $286,162
P.O. Box 277847
Atlanta, GA 30384
Kingston Technology Trade debt $241,661
NEC Mitsubishi Trade debt $198,262
Fujitsu Computer Systems Trade debt $184,312
Corp.
Advueu Technology Inc. Trade debt $168,239
Hydro Power Trade debt $153,616
Micro Technology Concepts, Trade debt $151,651
Inc.
BMA Industrial Inc. Trade debt $144,712
Viewsonic Corporation Trade debt $143,245
Cyberlink Trade debt $124,380
Euler Hermes ACI Check Insurance $107,592
Compucity Technology Co., Trade debt $103,199
Ltd.
Converge Trade debt $101,930
Cyber Power Systems Trade debt $93,487
B&A CONSTRUCTION: Gets Interim Okay to Use Bank's Cash Collateral
-----------------------------------------------------------------
The Honorable Robert Brizendine of the U.S. Bankruptcy Court for
the Northern District of Georgia gave B&A Construction Co., Inc.,
interim authority to use cash collateral securing repayment of the
company's obligations to Branch Banking & Trust Company. B&A owes
the Bank more than $3 million. The Court will convene a final
hearing on March 21, 2005, at 11:00 a.m. to discuss final approval
of cash collateral use.
The Debtor is permitted to use the cash collateral to continue
operating its business to preserve its going concern value.
Without access to the Lender's cash collateral, the Debtor argued
that its estate will be irreparably harmed.
To adequately protect the interests of the Bank, the Debtor grants
the Lender a valid, attached, choate, enforceable and perfected
lien on and security interest in all postpetition assets.
Headquartered in Gainesville, Georgia, B&A Construction Co., Inc.,
is a commercial, highway and residential grading contractor. The
Company filed for chapter 11 protection on Feb. 18, 2005 (Bankr.
N.D. Ga. Case No. 05-20421). J. Robert Williamson, Esq., at
Scroggins and Williamson represents the Debtor in its
restructuring efforts. When the Company filed for protection from
its creditors, it estimated assets and debts between $10 million
to $50 million.
BANC OF AMERICA: Fitch Rates $651,000 Mortgage Certificates at BB
-----------------------------------------------------------------
Banc of America Mortgage Securities, Inc.'s mortgage pass-through
certificates, series 2005-2, are rated:
Groups 1 & 2 certificates:
-- $317,542,327 classes 1-A-1 through 1-A-13, 1-A-R,
1-A-MR, 1-A-LR, 2-A-1, 2-A-2, 30-IO, 30-PO, 15-IO, and
15-PO senior certificates 'AAA';
-- $4,071,000 class B-1, 'AA';
-- $1,629,000 class B-2, 'A';
-- $814,000 class B-3, 'BBB';
-- $651,000 class B-4, 'BB'.
The 'AAA' ratings on the senior certificates reflects the 2.50%
subordination provided by the:
* 1.25% class B-1,
* 0.50% class B-2,
* 0.25% class B-3,
* 0.20% privately offered class B-4,
* 0.20% privately offered class B-5 and
* 0.10% privately offered class B-6.
Classes B-1, B-2, B-3, and B-4, are rated 'AA,' 'A,' 'BBB,' and
'BB,' respectively, based on their respective subordination.
Classes B-5 and B-6 are not rated by Fitch.
The ratings also reflect the quality of the underlying collateral,
the primary servicing capabilities of Bank of America Mortgage,
Inc. (rated 'RPS1' by Fitch), and Fitch's confidence in the
integrity of the legal and financial structure of the transaction.
The transaction is secured by two pools of mortgage loans. Loan
groups 1 and 2, the 30-year loan group and the 15-year loan group,
respectively, are cross-collateralized and supported by the B-1
through B-6 subordinate certificates.
Loan groups 1 and 2 in the aggregate consist of 604 recently
originated, conventional, fixed-rate, fully amortizing, first
lien, one- to four-family residential mortgage loans with original
terms to stated maturity ranging from 120 to 360 months.
The aggregate outstanding balance of the pool as of Feb. 1, 2005,
(the cut-off date) is $325,685,250, with an average balance of
$539,214 and a weighted average coupon of 5.687%. The weighted
average original loan-to-value ratio -- OLTV -- for the mortgage
loans in the pool is approximately 64.54%. The weighted average
FICO credit score is 746. Second homes comprise 9.91% and there
are no investor occupied properties. Rate/Term and cash-out
refinances account for 37.06% and 23.66% of the loans in the
group, respectively. The states that represent the largest
geographic concentration of mortgaged properties are:
* California (48.79%),
* Florida (9.10%) and
* Virginia (5.06%).
All other states represent less than 5% of the aggregate pool
balance as of the cut-off date.
None of the mortgage loans are 'high cost' loans as defined under
any local, state or federal laws. For additional information on
Fitch's rating criteria regarding predatory lending legislation,
please see the press release issued May 1, 2003, entitled 'Fitch
Revises Rating Criteria in Wake of Predatory Lending Legislation,'
available on the Fitch Ratings web site at
http://www.fitchratings.com/
Banc of America Mortgage Securities, Inc., deposited the loans in
the trust, which issued the certificates, representing undivided
beneficial ownership in the trust. For federal income tax
purposes, elections will be made to treat the trust as three
separate real estate mortgage investment conduits. Wells Fargo
Bank, National Association will act as trustee.
BANC OF AMERICA: S&P Puts Double-B Ratings on Classes L & M Certs.
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to Banc of America Large Loan Inc.'s $700 million
commercial mortgage pass-through certificates.
The preliminary ratings are based on information as of
Feb. 28, 2005. Subsequent information may result in the
assignment of final ratings that differ from the preliminary
ratings.
The preliminary ratings reflect the experience and financial
strength of the sponsor and manager, the liquidity provided by the
fiscal agent, the historical and projected performance of the
collateral, the terms of the loan, and the transaction structure.
A copy of Standard & Poor's complete presale report for this
transaction can be found on RatingsDirect, Standard & Poor's Web-
based credit analysis system, at http://www.ratingsdirect.com/
The presale can also be found on the Standard & Poor's Web site at
http://www.standardandpoors.com/ Select Credit Ratings, and then
find the article under Presale Credit Reports.
Preliminary Ratings Assigned
Banc of America Large Loan Inc.
Class Rating Amount
----- ------ ------
A-1 AAA $258,486,000
A-2 AAA $64,621,000
X-1 AAA $632,000,000
X-2 AAA $632,000,000
B AA+ $52,283,000
C AA $23,462,000
D AA- $23,462,000
E A+ $23,462,000
F A $23,462,000
G A- $23,462,000
H BBB+ $46,924,000
J BBB $23,462,000
K BBB- $46,914,000
L BB+ $35,198,000
M BB- $54,802,000
BEAR STEARNS: Fitch Puts BB Rating on $4.9 Mil. Class M-5 Certs.
----------------------------------------------------------------
Bear Stearns SACO I Trust 2005-1, certificates are rated by Fitch
Ratings:
-- $115.8 million privately offered classes A and A-IO 'AAA';
-- $13.7 million privately offered class M-1 'AA';
-- $11.8 million privately offered class M-2 'A';
-- $10.3 million privately offered class B-1 'BBB';
-- $2.8 million privately offered class B-2 'BBB-';
-- $4.9 million privately offered class M-5 'BB'.
The 'AAA' rating on the senior certificates reflects the 29.75%
total credit enhancement provided by:
* the 8.30% class M-1,
* the 7.15% class M-2,
* the 6.25% class B-1,
* the 1.70% class B-2,
* the 3.00% class B-3, and
* the 3.35% initial overcollateralization -- OC.
All certificates have the benefit of monthly excess cash flow to
absorb losses, and the deal benefits from its 'turbo' structure
that uses any excess spread available after losses to continue to
pay down the most senior outstanding bonds until all of the deal
certificates are paid to zero. In addition, the ratings reflect
the quality of the loans and the integrity of the transaction's
legal structure, as well as the capabilities of EMC Mortgage
Corporation as master servicer and Wells Fargo Bank National
Association, as trustee.
All of the mortgage loans in the trust are second liens. As of
the cut-off date Feb. 1, 2005, the mortgage loans have an
aggregate balance of $164,887,712. The weighted average loan rate
is approximately 10.53%. The weighted average remaining term to
maturity is 241 months. The average cut-off date of the principal
balance of the mortgage loans is approximately $43,312. The
weighted average original loan-to-value ratio is 98.20%, and the
weighted average Fair, Isaac & Co. - FICO -- score was 675. The
properties are primarily located in:
* California (29.57%),
* Virginia (5.79%), and
* Washington (5.53%).
BIOGEN IDEC: S&P Affirms Low-B Credit & Debt Ratings After Review
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB+' corporate
credit and senior unsecured debt ratings on Biogen Idec, Inc.
The ratings have been removed from CreditWatch, where they had
been placed, with positive implications, on Nov. 24, 2004, pending
the launch of its high sales potential multiple sclerosis
-- MS -- treatment, Tysabri.
The outlook is positive.
"The rating actions are in response to the decision by Biogen Idec
and its co-development partner, Elan Corp. PLC, to suspend the
sale of Tysabri, which was only recently approved by the U.S. Food
and Drug Administration, due to two serious adverse events
affecting MS patients being treated with a combination therapy
consisting of Tysabri and Biogen Idec's own MS treatment,
Avonex," said Standard & Poor's credit analyst Arthur Wong.
Both adverse events involved patients, one confirmed fatal and one
suspected, who developed progressive multifocal eukoencephalopathy
-- PML, a very rare and usually fatal disease.
The near-investment-grade ratings on Cambridge, Mass.-based Biogen
Idec reflect the biopharmaceutical company's leading positions in
the treatment of cancer and MS, its favorable product growth
prospects in the intermediate term, and its strong financial
profile. These factors are partially offset by the company's high
revenue dependence on only two drugs, Avonex and Rituxan, and its
relatively thin near-term product pipeline.
Biogen Idec, Inc., is the third-largest biopharmaceutical company,
based on sales. It specializes in the development of monoclonal
antibody-based -- MAb -- cancer treatments and autoimmune disease
treatments. The company has five marketed products:
-- Avonex and Tysabri, for the treatment of MS;
-- Rituxan and Zevalin, both for the treatment of B-cell
Non-Hodgkin's lymphoma (NHL); and
-- Amevive, for the treatment of psoriasis.
The best-selling drug is Avonex, which holds a leading market
share in the highly competitive MS treatment category. Launched
in 1996, the drug generated $1.42 billion in sales in 2004, an
increase of 21% over the prior year. Meanwhile, the company's
cancer treatment, Rituxan, for NHL, is the best-selling cancer
treatment in the world. Rituxan was the first monoclonal antibody
approved by the FDA as a cancer treatment. Biogen Idec receives
only a portion of the profits on the drug, which is marketed by
Genentech in the U.S. and by Roche in Europe. Still, Rituxan
generated $615 million in revenue for Biogen Idec in 2004.
Even with the setback relating to Tysabri, Biogen Idec continues
to maintain a solid portfolio of products, with Avonex and
Rituxan, and a strong financial profile. The continued strength
of these two aspects of the rating may result in a ratings upgrade
later in the year.
BROADBAND OFFICE: Wants to Hire Sturgill as Tax Accountant
----------------------------------------------------------
Broadband Office, Inc., asks the U.S. Bankruptcy Court for the
District of Delaware for permission to employ Sturgill &
Associates LLP as its tax accountant.
Sturgill will:
a) prepare and file the Debtor's 2001, 2002, 2003, and
2004 Federal and Virginia Corporation income tax returns;
b) prepare and file the Debtor's tax returns for other tax
periods and/or tax returns for other jurisdictions that
might be needed (subject to further agreement by the
parties); and
c) provide general advice as to tax matters and income tax
planning that the Debtor may require.
The Firm will bill the Debtor based on its professionals' current
hourly rates:
Professional Rate
------------ ----
James G. Sturgill $200
Gerald L. Sturgill $150
Michael L. Shipley $130
To the best of the Debtors' knowledge, Sturgill is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
Headquartered in San Mateo, California, Broadband Office, Inc.,
filed for chapter 11 protection on May 9, 2001 (Bankr. D. Del.
Case No. 01-1720). BBO is now a non-operating company in the
process of liquidating its assets. Adam Hiller, Esq., and David
M. Fournier, Esq., at Pepper Hamilton LLP represent the company.
When the Company filed for protection from its creditors, it
listed $100 million in assets and debts.
CASELLI ENTERPRISES: Case Summary & 7 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Caselli Enterprises Inc.
2710 East Vista Ridge Drive
Orange, California 92867
Bankruptcy Case No.: 05-11005
Chapter 11 Petition Date: February 22, 2005
Court: Central District of California (Santa Ana)
Judge: James N. Barr
Debtor's Counsel: Sean A. O'Keefe, Esq.
Winthrop Couchot
660 Newport Center Drive, 4th Floor
Newport Beach, CA 92660
Tel: 949-720-4100
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 7 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
PN Pacific Retail Properties Rent $28,441
Linda Lippuncott
1631 B. Melrose Dr.
Vista, CA 92083
The Soco Group Fuel $28,000
5962 Priestly Dr.
Carlsbad, CA 92008
South Coast AQMD Fee $6,500
21865 Copley Dr.
Diamond Bar, CA 91765
Gerald Shaw, Esq. Legal fees $6,000
Southern California Edison Utility service $5,000
City of Ontario Utility service $1,900
Detailers Choice Product $500
CATHOLIC CHURCH: Tucson Files Amended Plan & Disclosure Statement
-----------------------------------------------------------------
The Diocese of Tucson delivered an Amended Plan of Reorganization
and Disclosure Statement to the U.S. Bankruptcy Court for the
District of Arizona on February 25, 2005. According to Reverend
Gerald F. Kicanas, D.D., Bishop of the Diocese of Tucson, the
Disclosure Statement has been amended, to provide, among other
things:
-- a modification of the Classification of Claims;
-- an additional provision addressing exculpation and
limitation of liability; and
-- a modification of the dissolution and release provision.
Classification of Claims
Tucson has added a category for Insurance and Benefit Claims
(Class 10) under the Amended Plan and Disclosure Statement. The
Diocese also revised the estimated distribution for certain
classes.
Class Description Recovery Under the Plan
----- ------------ -----------------------
N/A Administrative Paid in full, in cash
Claims Assuming an August 1, 2005 Effective
Date, the Diocese estimates that
the Allowed Administrative Claims
between February 25, 2005, and the
Effective Date would be
approximately $750,000 to $800,000
N/A Priority Paid in full, in cash
Unsecured Claims
N/A Priority Paid in full, in cash
Tax Claims
1 Prepetition To be satisfied by the Diocese
Employee Claims assuming and honoring policy
after the Effective Date
Estimated date of distribution
is varied depending on the
Employee's status and use of
vacation and sick leave time
Estimated amount of Allowed Claims
not to exceed $364,000
Impaired
2 Prepetition Paid in full, with half of the
Property Tax amount paid 30 days after the
Secured Claims Effective Date and the remaining
half paid six months after the
Effective Date
Estimated amount of Allowed Claims
not to exceed $8,754
Impaired
3 Other Secured Paid in full, which will be paid on
Claims January 24, 2007 -- the due date of
the Promissory Note payable to the
Escrow Agent
Estimated amount of Allowed Claims
not to exceed $3,300,000
Unimpaired
4 General Unsecured $500 will be distributed per claim
Convenience Claims 30 days after the Effective Date or
applicable Claim Payment Due
Estimated amount of Allowed Claims
not to exceed $7,353
Impaired
5 Parish Guaranty No distribution
Claims
Parishes will continue to pay in
accordance with terms
Estimated amount of Allowed Claims
not to exceed $7,268,203
Unimpaired
6 Parish Unsecured Estimated distribution is unknown
Claims
2.5% interest per annum, monthly
payments of $44,738 until paid in
full
Estimated amount of Allowed Claims
not to exceed $6,962,867
Impaired
7 General Unsecured Paid in full, in installments
Claims beginning 30 days after the
Effective Date and monthly after
that, until paid in full.
Obligations bear Interest at
4.5% per annum
Estimated amount of Allowed Claims
not to exceed $2,499,518
Impaired
8 Other Tort and Estimated distribution is unknown
Employee Claims
To be paid from proceeds of
applicable insurance to the extent
available; otherwise, no
distribution
Estimated amount of Allowed Claims
is unknown
Impaired
9 Tort Claims Estimated distribution is unknown
To be paid from proceeds of
Settlement Trust and Litigation
Trust
Settling Tort Claimants will have
Claims determined by Special Master
and placed in Tiers.
Distribution will depend on Tier in
which Tort Claim is placed and
aggravating or mitigating factors
Non-Settling Tort Claimants share
Pro Rata in proceeds of Litigation
Trust
Estimated amount of Allowed Claims
is unknown
Impaired
10 Insurance and $694,711 will be distributed per
Benefit Claims claim to be paid from proceeds of
applicable insurance or from
operations of the Diocese or the
Reorganized Debtor as the claims
are due
Unimpaired
11 Penalty Claims Estimated distribution is $0
Estimated amount of Allowed Claims
is unknown
Impaired
No holder of an Allowed Class 1 Priority Employee Unsecured Claim
will receive any Cash on account of the Claim except to the
extent otherwise provided for in the policies and procedures of
the Diocese.
The Class 9 Tort Claims include the claims of parents or spouses
of Tort Claimants who contend they were damaged because of
alleged abuse of their son or daughter or spouse.
Tort Claimants who have not otherwise had their Claims Allowed
prior to the Effective Date pursuant to an agreement between the
Tort Claimant and the Diocese, which is approved by the
Bankruptcy Court, will have their Claims treated and resolved
under either the Settlement Trust or the Litigation Trust. All
Tort Claimants will automatically be included in the Settlement
Trust unless the Tort Claimant has entered into a Claim Allowance
Agreement or affirmatively elects to have his or her Claim
treated under the terms of the Litigation Trust.
The Settlement Trust and the Litigation Trust will be funded from
the transfers by the Diocese on the Effective Date and any
earnings obtained by the Trustees from investments of the assets
after the Effective Date and any Insurance Action Recoveries
after the Effective Date. As part of the confirmation process,
the Bankruptcy Court will determine the allocation of the
transferred Cash and assets between the Settlement Trust and the
Litigation Trust.
Exculpation and Limitation of Liability
The Amended Plan provides that neither the Debtor, the
Reorganized Debtor, the Committee, the Unknown Claims
Representative, the Guardian ad Litem nor any of their
representatives will have or incur any liability to, or be
subject to any right of action by, any holder of a Claim or any
other party-in-interest for any act or omission in connection
with, relating to, or arising out of the Reorganization Case, the
pursuit of confirmation of the Plan, or the administration of the
Plan or the property to be distributed under the Plan, except for
their willful misconduct. In all respects, the parties will be
entitled to reasonably rely on the advice of counsel with respect
to their duties and responsibilities under the Plan or in the
context of the Reorganization Case.
Dissolution
On the occurrence of the Effective Date, the Official Committee
of Tort Creditors will dissolve. The Committee members will be
released from all rights and duties arising from or related to
the Reorganization Case. The Unknown Claims Representative and
the Guardian ad Litem will also be released from all rights and
duties arising from or related to the Reorganization Case.
A full-text copy of the Tucson's Amended Disclosure Statement is
available for free at:
http://bankrupt.com/misc/Tucson_Amended_Disclosure_Statement.pdf
A full-text copy of the Tucson's Amended Reorganization Plan is
available for free at:
http://bankrupt.com/misc/Tucson_Amended_Chapter11_Plan.pdf
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. 19;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
CONTINENTAL AIRLINES: Issuing Stock Options to Employees
--------------------------------------------------------
Continental Airlines (NYSE: CAL) plans to issue to its employees
stock options for approximately 10 million shares of Continental's
common stock in connection with the previously announced pay and
benefit reductions. The 10 million shares represent approximately
15 percent of the currently outstanding shares of common stock of
Continental.
This program applies to all U.S.-based employees, except officers
and members of Continental's board of directors, and international
employees where practical based on foreign laws and regulations.
The employee option grant is subject to New York Stock Exchange
acceptance of Continental's application for an exception to the
NYSE's shareholder approval requirement for grants of equity to
employees. In connection with the application, the audit
committee of Continental's board of directors determined that the
delay necessary in obtaining shareholder approval would seriously
jeopardize the financial viability of the company.
"These stock options will be a powerful incentive that reinforces
our culture of working together to win together," said Larry
Kellner, Continental's chairman and chief executive officer.
"Combined with our enhanced profit sharing plan, the options will
give employees a meaningful stake in the company's future
success."
The company anticipates that the options will be issued by the end
of March 2005, subject to the ratification of union agreements and
the NYSE's acceptance of Continental's exemption request described
above. Each stock option grant will represent the right to
acquire shares of Continental common stock at the closing price of
the common stock on the NYSE on the date of grant. The options
will become exercisable in three equal installments on the first,
second and third anniversaries of the date of grant, and will have
a term ranging from six to eight years.
As reported in the Troubled Company Reporter yesterday,
negotiators for the pilots of Continental Airlines, represented by
the Air Line Pilots Association, Int'l reached a tentative
agreement on a 45-month labor agreement with management
that provides job protection, pension protection and upside
protection while affording Continental the pilot cost savings the
company sought to support its business plan.
The tentative agreement is subject to approval by the pilots'
Master Executive Council a unit of ALPA. If approved by
the MEC, a ratification vote by the Continental pilot membership
will take place on March.
The new contract, if ratified, will save Continental more than
$200 million per year, a major portion of the $500 million in cost
cuts management says it needs from employees. In exchange for
these concessions, the pilots gained enhanced pension and job
security, stock options, and a variable compensation plan. The
contract includes a guarantee that the pilots will share in the
company's profits when Continental recovers from its current
financial problems.
About the Company
Continental Airlines -- http://continental.com/--is the world's
sixth-largest airline, serving 128 domestic and 111 international
destinations -- more than any other airline in the world -- and
serving nearly 200 additional points via codeshare partner
airlines. With 42,000 mainline employees, the airline has hubs
serving New York, Houston, Cleveland and Guam, and carries
approximately 51 million passengers per year. FORTUNE ranks
Continental one of the 100 Best Companies to Work For in America,
an honor it has earned for six consecutive years. FORTUNE also
ranks Continental as the top airline in its Most Admired Global
Companies in 2004.
* * *
Continental Airlines reported a $363 million loss for 2004. In a
recorded message on Feb. 11, 2005, Larry Kellner, Continental's
Chairman and Chief Executive Officer, told employees that losses
in January 2005 continued and are running more than $1.5 million
per day. Continental expects to incur a significant loss in 2005.
The carrier's balance sheet dated Sept. 30, 2004, shows $10.8
billion in assets and $685 million in shareholder equity.
As reported in the Troubled Company Reporter on Feb. 28, 2005,
Standard & Poor's Ratings Services placed its ratings on equipment
trust certificates and enhanced equipment trust certificates of:
-- America West Airlines Inc. (B-/Negative/--),
-- American Airlines Inc. (B-/Stable/--),
-- Continental Airlines Inc. (B/Negative/--), and
-- Northwest Airlines Inc. (B/Negative/--;
includes issues of NWA Trust No. 1 and NWA Trust No. 2 on
CreditWatch with negative implications. The rating action does
not affect issues that are supported by bond insurance policies.
Affected securities total about $13.2 billion.
"The CreditWatch review is prompted by Standard & Poor's concern
that a prolonged difficult airline industry environment,
characterized by high fuel prices, excess capacity, and intense
price competition in the domestic market, has weakened the
financial condition of almost all U.S. airlines and increased
the risk of widespread simultaneous bankruptcies," said Standard &
Poor's credit analyst Philip Baggaley.
CURATIVE HEALTH: S&P Puts B- Sr. Unsec. Rating on CreditWatch Neg.
------------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on specialty
infusion and wound care management services provider Curative
Health Services, Inc., on CreditWatch with negative implications.
This includes our 'B' corporate credit rating and 'B-' senior
unsecured debt rating on the company. CreditWatch with negative
implications means that the ratings could be lowered or affirmed
following the completion of Standard & Poor's review.
"The CreditWatch placement reflects our growing concern regarding
the company's liquidity, given the large semi-annual interest
payments (due in May and November), weak cash flow from
operations, and limited credit facility availability," said
Standard & Poor's credit analyst Jesse Juliano.
Standard & Poor's expects to review the company's 2004 full-year
performance and prospects for 2005, particularly given the change
to California's Medi-Cal reimbursement and demand for the key
Synagis product. Financial covenants could limit the company's
access to its revolving credit facility if the business performs
below the expectations considered when establishing the current
covenants. Standard & Poor's expects to complete its review of
this information within the next several months.
CWMBS INC: Fitch Places Low-B Ratings on Cert. Classes B-3 & B-4
----------------------------------------------------------------
Fitch rates CWMBS, Inc.'s mortgage pass-through certificates, CHL
Mortgage Pass-Through Trust 2005-6:
-- $772.0 million classes 1-A-1 through 1-A-16, 2-A-1, PO,
and A-R certificates (senior certificates) 'AAA';
-- $15.6 million class M certificates 'AA';
-- $4.8 million class B-1 certificates 'A';
-- $3.2 million class B-2 certificates 'BBB';
-- $1.6 million class B-3 certificates 'BB';
-- $1.2 million class B-4 certificates 'B'.
The 'AAA' rating on the senior certificates reflects the 3.50%
subordination provided by:
* the 1.95% class M,
* the 0.60% class B-1,
* the 0.40% class B-2,
* the 0.20% privately offered class B-3,
* the 0.15% privately offered class B-4, and
* the 0.20% privately offered class B-5 (not rated by
Fitch).
Classes M, B-1, B-2, B-3, and B-4 are rated 'AA', 'A', 'BBB',
'BB', and 'B', based on their respective subordination only.
Fitch believes the above credit enhancement will be adequate to
support mortgagor defaults. In addition, the ratings also reflect
the quality of the underlying mortgage collateral, strength of the
legal and financial structures, and the master servicing
capabilities of Countrywide Home Loans Servicing LP (Countrywide
Servicing), rated 'RMS2+' by Fitch, a direct wholly owned
subsidiary of Countrywide Home Loans, Inc.
The certificates represent an ownership interest in two groups of
conventional, fully amortizing mortgage loans. Loan group 1
consists of 30-year fixed-rate mortgage loans totaling
$666,264,459, as of the cut-off date, Feb. 1, 2005, secured by
first liens on one- to four-family residential properties. The
mortgage pool demonstrates an approximate weighted-average loan-
to-value ratio - LTV -- of 72.36%. Approximately 59.63% of the
loans were originated under a reduced documentation program. The
weighted average FICO credit score is approximately 741. Cash-out
refinance loans represent 18.31% of the mortgage pool and second
homes 5.82%. The average loan balance is $528,362.
The three states that represent the largest portion of mortgage
loans are:
* California (44.12%),
* New York (5.46%), and
* New Jersey (4.10%).
Loan group 2 consists of 30-year fixed-rate interest-only mortgage
loans totaling $96,836,063, as of the cut-off date, secured by
first liens on one- to four-family residential properties. The
mortgage pool demonstrates an approximate weighted-average LTV of
71.41%. Approximately 69.62% of the loans were originated under a
reduced documentation program. The weighted average FICO credit
score is approximately 744. Cash-out refinance loans represent
15.57% of the mortgage pool and second homes 5.92%. The average
loan balance is $576,405.
The three states that represent the largest portion of mortgage
loans are:
* California (58.52%),
* Washington (4.81%), and
* Texas (4.68%).
None of the mortgage loans are 'high cost' loans, as defined under
any local, state, or federal laws. For additional information on
Fitch's rating criteria regarding predatory lending legislation,
see the press release 'Fitch Revises Rating Criteria in Wake of
Predatory Lending Legislation,' dated May 1, 2003, available on
the Fitch Ratings web site at http://www.fitchratings.com/
Approximately 95.70% and 4.30% of the mortgage loans were
originated under CHL's Standard Underwriting Guidelines and
Expanded Underwriting Guidelines, respectively. Mortgage loans
underwritten pursuant to the Expanded Underwriting Guidelines may
have higher loan-to-value ratios, higher loan amounts, higher
debt-to-income ratios, and different documentation requirements
than those associated with the Standard Underwriting Guidelines.
In analyzing the collateral pool, Fitch adjusted its frequency of
foreclosure and loss assumptions to account for the presence of
these attributes.
CWMBS purchased the mortgage loans from CHL and deposited the
loans in the trust, which issued the certificates, representing
undivided beneficial ownership in the trust. The Bank of New York
will serve as trustee. For federal income tax purposes, an
election will be made to treat the trust fund as one or more real
estate mortgage investment conduits.
DATA TRANSMISSION: S&P Rates Planned $175M Sr. Sec. Loan at B+
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' ratings and
recovery ratings of '3' to Data Transmission Network Corporation's
planned $175 million senior secured credit facilities, indicating
a meaningful recovery (50%-80%) of principal in the event of a
payment default.
The credit facilities consist of a $20 million five-year revolving
credit facility and a $155 million seven-year tranche B term loan.
Proceeds will be used to refinance the company's outstanding debt.
At the same time, Standard & Poor's assigned its 'B+' corporate
credit rating to the company. The outlook is stable. About
$165 million of debt is expected to be outstanding following the
transaction.
"The ratings on Data Transmission Network reflect the Omaha,
Nebraska-headquartered company's high level of business risk
resulting from the uncertainty over management's ability to
stabilize revenues over the intermediate term and gradually grow
them by increasing sales to the existing subscriber base. Data
Transmission Network's markets are mature and have been hurt by a
long-term decline in subscribers and competitive market
conditions," said Standard & Poor's credit analyst Donald Wong.
"These factors are tempered by a strong financial profile for the
rating category, leading market positions, fairly predictable
revenues as the majority of them are derived from subscriptions,
broad and diversified customer base, free operating cash flow
generation, and modest required debt amortization," Mr. Wong
added.
The company is a leading business-to-business provider of real-
time information services to agricultural, commodities trading and
weather impacted businesses, and buyers and sellers of wholesale
refined fuels. Data Transmission Network provides industry news,
analysis, commentary, real-time market quotes and localized
weather information along with proprietary tools.
The company was acquired in a leveraged buyout in 2000. In
September 2003, Data Transmission Network filed for bankruptcy
protection under Chapter 11 and a prepackaged plan of
reorganization, and emerged a month later. The company's debt
levels were significantly reduced upon emergence.
Headquartered in Omaha, Nebraska, Data Transmission Network
Corporation, delivers targeted time-sensitive information via a
comprehensive communications system, including: Internet,
Satellite, leased lines and other technologies. The Company,
together with its debtor-affiliates filed for chapter 11
protection on September 25, 2003 (Bankr. S.D.N.Y. Case No.:
03-16051). Jeffrey D. Saferstein, Esq., at Paul, Weiss, Rifkind,
Wharton & Garrison LLP represents the Debtors in their
restructuring efforts. When the Company filed for protection from
its creditors, it listed estimated assets of more than
$100 million and debts of over $50 million.
DUKE FUNDING: Moody's Assigns Ba3 Rating to Subordinated Notes
--------------------------------------------------------------
Moody's Investors Service has assigned the ratings to Notes issued
by Duke Funding High Grade I, Ltd.:
* P-1 to $1,540,000,000 Class A-1 Commercial Paper Notes,
* Aaa to $660,000,000 Class A-1 LT-a Senior Secured Floating
Rate Notes Due 2045,
* Aaa to $117,500,000 Class A-2 Senior Secured Floating Rate
Notes Due 2045,
* Aa2 to $77,500,000 Class B Senior Secured Floating Rate notes
Due 2045,
* A2 to $48,500,000 Class C-1 Junior Secured Floating Rate Notes
Due 2045,
* A2 to $4,000,000 Class C-2 Junior Secured Fixed Rate Notes Due
2045,
* Baa2 to $15,000,000 Class D Mezzanine Secured Floating Rate
Notes Due 2045,
* Ba3 to the Subordinated Notes, and
* Baa3 to $8,000,000 Class X Combination Notes Due 2045.
The Moody's ratings of the Notes (other than the Combination
Notes, Subordinated Notes, and the Commercial Paper Notes) address
the ultimate cash receipt of all required interest and principal
payments, as provided by the Notes' governing documents, and are
based on the expected loss posed to Noteholders, relative to the
promise of receiving the present value of such payments. The
Moody's rating of the Combination Securities addresses only the
ultimate receipt of the "Rated Balance" (adjusted from time to
time).
The rating assigned to the Combination Notes relates solely to the
ultimate payment of principal and a coupon of 2% per annum as
provided in the governing documents. Accordingly, at any given
time, the portion of the Combination Notes to which the Moody's
rating applies will be an amount equal to the principal amount
stated on the Class X Combination Note Rated Balance Ledger.
The rating assigned to the Subordinated Notes addresses only the
ultimate cash receipt of all required principal payments.
The rating assigned to the Commercial Paper Notes addresses the
timely payment in full of principal and interest on such Notes on
or before the fifth Business Day following the Stated Maturity
Date of the Commercial Paper Notes. The rating assigned to the
Commercial Paper Notes may be adversely affected by any
qualification, downgrade or withdrawal of the ratings assigned to
the Put Counterparty or to the Liquidity Facility Counterparty.
The ratings reflect the risks due to the diminishment of cash flow
from the underlying portfolio consisting of RMBS Securities, CMBS
Securities, REIT Debt Securities, other Asset-Backed Securities
and Synthetic Securities due to defaults, the transaction's legal
structure and the characteristics of the underlying assets.
Duke Funding Management LLC will manage the selection, acquisition
and disposition of collateral on behalf of the Issuer.
EMPRESAS CASTELL: Case Summary & 19 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Empresas Castell Inc.
74-950 Country Club Drive
Palm Desert, California 92260
Bankruptcy Case No.: 05-11582
Chapter 11 Petition Date: February 22, 2005
Court: Central District of California (Riverside)
Judge: Meredith A. Jury
Debtor's Counsel: Stephen R. Wade, Esq.
400 N. Mountain Avenue Suite 214b
Upland, CA 91786
Tel: 909-985-6500
Total Assets: $100,000 to $500,000
Total Debts: $1 Million to $10 Million
Debtor's 19 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Ignacio D. Del Rio Loans $181,000
74950 Country Club Drive
Palm Desert, CA 92260
Sysco San Diego Trade debt $102,000
c/o Lisa E. Spiwak
Spiwak & Leeza
2660 Townsgate Rd., Ste. 530
Westlake Village, CA 91361
Rancho San Pablo $88,735
300 S. Palm Canyon
Palm Springs, CA 92262
Plaza La Flores Rent $62,318
Tortilleria California Trade debt $45,000
Republic Master Credit Trade debt $43,118
PAMCO Air Cond. Repair $41,503
US Food Service Trade debt $29,830
B&S Foods Trade debt $29,579
Ferguson & Bernheimer Atty. Fees $27,274
Golden Eagle Insurance Insurance $24,341
KVER-TV Advertising $18,830
United Seafood Trade debt $16,492
Mark Homme Atty. Fees $14,500
Desert Sun Advertising $13,245
Realty Trust $12,692
Cash Register Systems $10,191
SCE Utilities $7,500
Oscar Olivares $7,000
ENRON CORP: Committee Wants Court Nod on Derrick et al. Settlement
------------------------------------------------------------------
As previously reported, the U.S. Bankruptcy Court for the Southern
District of New York allowed the Official Committee of Unsecured
Creditors appointed in the chapter 11 cases of Enron Corporation
and its debtor-affiliates to commence state law claims against
certain former Enron officers and employees, including Richard B.
Buy, Enron's Chief Risk Officer. Accordingly, the Committee filed
a complaint in the 9th Judicial District Court of Montgomery
County. The Committee asserted claims for breach of fiduciary
duty, civil conspiracy, fraud, aiding and abetting breaches of
fiduciary duty, gross negligence, among others. The Committee
later amended its complaint to include additional defendants
including James V. Derrick, Jr., Enron's General Counsel. The
Action was removed to the United States District Court for the
Southern District of Texas, Houston Division.
In certain re-opened derivative actions, the Committee alleges
breaches of fiduciary duty, negligence, fraud and professional
malpractice against certain former Enron employees, officers,
directors and professionals that provided advice to Enron. Mr.
Buy, Mr. Derrick, Ken Harrison, and certain Outside Directors are
also defendants in those Derivative Actions.
Enron's director and officer liability insurance is rapidly
depleting, Stephen D. Lerner, Esq., at Squire Sanders & Dempsey,
LLP, in Cincinnati, Ohio, notes. Enron's D&O Insurance had an
original face amount of $350,000,000. The Committee began to
explore the possibility of a global settlement involving the
insured defendants. But the number of parties, the complexity of
claims, and certain obstacles to settlement rendered a global
settlement impossible at this time. The Committee turned to the
exploration of separate settlements. "Rather than see all of the
D&O Insurance consumed by defense costs, it made more sense for
the Committee to select one or more defendants and to propose
individual settlements," Mr. Lerner, says.
After consideration of the insured defendants, the Committee
elected to make a settlement demand on James Derrick -- because
Mr. Derrick had been dismissed from the consolidated action
caption Newby et al., v. Enron Corp., et al., and the allegations
made against him by the Committee did not involve intentional
wrongdoing, but instead claims of professional negligence. The
Committee offered to settle all claims against Mr. Derrick for
$20,000,000.
The Committee later learned that its demand caused great concern
among the director and officer defendants. "The potential for
the D&O Insurance to be rapidly depleted through satisfaction of
separate settlement demands of the Committee caused the director
and officer defendants to consider all possible strategies for
settlement or individual or collective use of the remaining D&O
Insurance," Mr. Lerner relates.
Counsel for the Outside Directors convened a mediation with the
Regents of the University of California, on behalf of the class
in the Newby action, to explore a separate settlement between the
Newby Plaintiffs and the Outside Directors.
Mr. Lerner tells the Court that during the D&O Mediation, counsel
for the Outside Directors contacted counsel for the Committee to
discuss the possible involvement of the Committee in a proposed
separate settlement. The Outside Directors hoped to obtain a
release from the Committee because of the Committee's
substitution as plaintiff real party-in-interest in the
Derivative Actions in which claims against the Outside Directors
were pending.
"The Committee and the Newby Plaintiffs faced a difficult
negotiation over the remaining D&O Insurance," Mr. Lerner
recounts. "The Newby Plaintiffs desired to have the
participation of Enron and the Committee in order to avoid
objections to the proposed settlement. On the other hand, the
Newby Plaintiffs held the view that any settlement with the
Outside Directors should result in the lion's share of the
proceeds going to the Newby Plaintiffs because of their direct
claims under Section 11 of the 1933 Securities Act and the 10b(5)
claims under the 1934 Act."
After negotiations, a tentative split and agreement was made
between the Committee and the Newby Plaintiffs, the terms of
which are embodied in a Stipulation of Settlement. The salient
terms of the Stipulation of Settlement executed by Mr. Derrick,
Mr. Buy, Mr. Harrison, certain Outside Directors, the Newby
Plaintiffs, and the Committee, are:
(1) The Newby Plaintiffs and the Committee will divide the
Available Insurance Proceeds with 82.8% allocated to the
Newby Plaintiffs and 17.2% allocated to the Reorganized
Debtors. Mr. Harrison would pay an additional sum of
$100,000 to the Committee.
(2) The Settling Defendants will receive full releases from
the Committee and the Enron estates. In addition, the
Settling Defendants will be dismissed from the Committee
Action and the Derivative Actions. In turn, the Settling
Defendants will provide releases to the Committee and the
Enron estates.
(3) The Settling Defendants deny any liability whatsoever.
(4) Approximately $13,000,000 will be taken out of the
remaining D&O Insurance to be set aside for the benefit of
certain non-settling defendants, who are also insureds
under the D&O Insurance. In return, the Individual Non-
Settling Defendants have agreed to forego any other claims
to the D&O Insurance, will not object to the settlement
and will agree to the proposed final judgment in the
interpleader action over D&O Insurance.
(5) The Committee and the Newby Plaintiffs will give a
settlement or judgment credit for personals payments that
the Individual Non-Settling Defendants will expend, up to
limited amounts.
The Committee asks Judge Gonzalez to approve the Settlement. The
other settlements reached under the Stipulation are subject to an
approval motion presented to the District Court.
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.
137; Bankruptcy Creditors' Service, Inc., 15/945-7000)
EXIDE TECH: Soros Fund Wants to Add Two More Directors to Board
---------------------------------------------------------------
In a Schedule 13D filing with the Securities and Exchange
Commission dated February 24, 2005, Soros Fund Management, LLC,
and George Soros jointly disclose that they each beneficially own
1,522,300 shares of Exide Technologies Common Stock, representing
a 6.2% equity stake in Exide Technologies.
On February 28, 2005, Soros sent this letter to Exide management:
Soros Fund Management LLC
888 Seventh Avenue
33rd Floor
New York, New York 10106
February 28, 2005
John P. Reilly
Michael P. Ressner
Eugene Davis
Exide Technologies
Crossroads Corporate Center
3150 Brunswick Pike, Suite 230
Lawrenceville, New Jersey 08648
Gentlemen:
Thank you for taking the time to speak with us recently, and
meet with us on February 24, 2005, regarding various matters
concerning Exide. We are encouraged by the recent efforts of the
Board of Directors and management to communicate with
stockholders and the Board's and management's seeming willingness
to consider input and proposals from stockholders. During our
meeting, we discussed several topics and we thought it might be
useful to write and summarize our position on corporate
governance matters. We emphasize that action on each of these
matters is integral and should be seen in their entirety.
First, we agree with you that the top priority now is
recruiting a new Chief Executive Officer to lead the Company and
we appreciated the opportunity you afforded us this past Friday
to speak with your top candidate. We are generally supportive of
him if the Board votes to select him and acceptable terms for his
retention can be negotiated and look forward to continuing a
constructive dialogue with him or whomever the next CEO may be.
Second, as we indicated during our meeting with you, we have
spoken with several well-qualified professionals who we believe
could be of assistance to Exide. Jerome York, one of these
professionals, has indicated that, subject to completion of
diligence regarding Exide, he would be willing to discuss with
you the possibility of joining the Board of Directors of Exide.
John Gildea, another experienced professional with whom we are
familiar, would also consider serving. We think Mr. York's and
Mr. Gildea's presence on the Board would be of significant
benefit to management in helping shape Exide's strategic
direction. Mr. York's and Mr. Gildea's biographical information
is enclosed with this letter. We hereby propose to the
Nominating Committee of the Board that each be nominated to join
the Board as soon as possible. We note that, under Exide's
certificate of incorporation, the Board may expand the number of
directors from seven to nine -- so the process of electing these
two well-qualified individuals could be accomplished by Board
action alone.
Third, in addition to increasing the size of the Board, we
believe that it would be in the best interests of Exide's
stockholders for the Board to recommend, for stockholder approval
at the 2005 annual meeting, an amendment to Exide's certificate
of incorporation that would eliminate the classified board and
permit the election of each director at the 2005 annual meeting,
and each annual meeting thereafter. We believe that the Board
should also recommend, for stockholder approval at the 2005
annual meeting, amendments to Exide's certificate of
incorporation and by-laws that would permit the removal of
directors without cause and allow for stockholders to call
special meetings, fix the number of directors and to fill
vacancies on the Board.
We look forward to continuing a dialogue with you and
management in an effort to enhance stockholder value.
Very truly yours,
/s/ Richard Brennan
Richard Brennan
Director
Soros Fund Management LLC
About Jerome York
Mr. York is Chief Executive Officer of Harwinton Capital
Corporation, a private investment company which he controls.
From February 2000 to September 2003, he was Chairman, President
and Chief Executive Officer of MicroWarehouse, Inc., a reseller
of computer hardware, software and peripheral products. Mr. York
previously served as Vice Chairman of Tracinda from September
1995 to October 1999 and as a director of MGM MIRAGE from
November 1995 to May 2002. Prior to joining Tracinda, Mr. York
served as Senior Vice President and Chief Financial Officer of
IBM Corporation from May 1993 to September 1995 and as a director
of IBM Corporation from January 1995 to September 1995. Prior
thereto, Mr. York served as Executive Vice President-Finance and
Chief Financial Officer of Chrysler Corporation from May 1990 to
May 1993 and as a director of Chrysler Corporation from April
1992 to May 1993. In addition, Mr. York serves on the boards of
directors of Apple Computer, Inc., Metro-Goldwyn-Mayer, Inc. and
Tyco International Ltd.
About John Gildea
Mr. Gildea has been a managing director and principal of Gildea
Management Company since 1990. Gildea Management Company and its
affiliates have been the investment advisor to The Network Funds,
which specializes in distressed company and special situation
investments. Mr. Gildea has served on the Board of Directors of
a number of restructured or restructuring companies, including
Amdura Corporation, American Healthcare Management, Inc., America
Service Group Inc., GenTek, Inc., Konover Property Trust, Inc.
and UNC Incorporated. Mr. Gildea serves on the Board of
Directors of Sterling Chemical and also serves on the Board of
Directors of several United Kingdom based investment trusts.
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. 62; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
* * *
As reported in the Troubled Company Reporter on Feb. 22, 2005,
Standard & Poor's Ratings Services lowered its corporate credit
rating on Exide Technologies to 'B+' from 'BB-'.
"The action was taken because of the company's weak operating
performance amid high commodity costs, and increased debt levels
that will result from a proposed new debt offering. It also
reflects the difficult operating environment facing the company,"
said Standard & Poor's credit analyst Martin King.
Lawrenceville, New Jersey-based Exide has pro forma total debt,
including the present value of operating leases, of about
$750 million. The rating outlook is negative.
FC CBO LTD: S&P Junk 2nd Priority Notes & Rates Sr. Notes at BB
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its rating on the senior
notes issued by FC CBO Ltd./FC CBO Corp., an arbitrage CBO
transaction, and removed it from CreditWatch with positive
implications, where it was placed Feb. 23, 2005.
The raised rating reflects factors that have positively affected
the credit enhancement available to support the senior notes since
the August 2003 rating action. The primary factor was an increase
in the level of overcollateralization available to support the
senior notes due to de-levering of the senior notes. According to
the most recent trustee report, dated Feb. 10, 2005, the senior
par value test was at 114.30%, up from 104.1% at the time of the
Aug. 12, 2003 rating action. Standard & Poor's noted that FC CBO
Ltd. carries defaulted securities at zero value in its par value
tests.
As part of its analysis, Standard & Poor's reviewed the results of
the current cash flow runs generated for FC CBO Ltd./FC CBO Corp.
to determine the level of future defaults the rated tranches can
withstand under various stressed default timing and LIBOR
scenarios, while still paying all of the rated interest and
principal due on the notes. The results of these cash flow
runs were compared to the projected default performance of the
performing assets in the collateral pool to determine whether the
rating assigned to the notes remains consistent with the credit
enhancement available.
Rating Raised and Removed From Creditwatch Positive
FC CBO Ltd.
Rating
Class To From
----- -- ----
Senior notes BB BB-/Watch Pos
Other Outstanding Rating
FC CBO Ltd.
Class Rating
----- ------
Second priority notes CC
Transaction Information
Issuer: FC CBO Ltd.
Co-issuer: FC CBO Corp.
Current manager: Prudential Investment Management
Underwriter: Goldman Sachs
Trustee: JPMorganChase Bank
Transaction type: Arbitrage corporate high-yield CBO
Tranche Initial Prior Current
Information Report Action Action
----------- ------- ------ -------
Date (MM/YYYY) 7/1997 8/2003 2/2005
Senior note rating AA BB- BB
Senior note balance $802.50mm $526.44mm 260.81mm
Second priority note rating BBB CC CC
Senior par value test 126.0%* 104.1% 114.3%
Senior minimum 120.0% 120.0% 120.0%
Sec. priority par value test 113%* 86.24% 77.55%
Second senior minimum 109.5% 109.5% 109.5%
* Approximation
Portfolio Benchmarks Current
-------------------- -------
S&P wtd. avg. rtg. (excl. defaulted) BB-
S&P default measure (excl. defaulted) 3.22%
S&P variability measure (excl. defaulted) 2.56%
S&P correlation measure (excl. defaulted) 1.06
Oblig. rtd. 'BBB-' and above 13.83%
Oblig. rtd. 'BB-' and above 48.35%
Oblig. rtd. in 'CCC' range 6.16%
Oblig. rtd. 'CC', 'SD', or 'D' 19.44%
S&P RATED Current
O/C (ROC) Rating Action
--------- -------------
Senior notes 108.94% (BB)
For information on Standard & Poor's CDO Portfolio Benchmarks and
Rated Overcollateralization -- ROC -- Statistic, please see "ROC
Report February 2005," published on RatingsDirect, Standard &
Poor's Web-based credit analysis system, and on the Standard &
Poor's Web site at http://www.standardandpoors.com/ Go to "Credit
Ratings," under "Browse by Business Line" choose "Structured
Finance," and under Commentary & News click on "More" and scroll
down to the desired article.
FIRST FRANKLIN: Fitch Assigns BB+ Rating on $12.349 Mil. Certs.
---------------------------------------------------------------
First Franklin Mortgage Loan Trust, mortgage pass-through
certificates, series 2005-FF1, are rated:
-- $995,932,000 class A-1A, A-1B, A-2A, A-2B, and A-2C 'AAA';
-- $84,589,000 class M-1 'AA+';
-- $59,274,000 class M-2 'A';
-- $17,288,000 class M-3 'A';
-- $15,436,000 class B-1 'A-';
-- $12,349,000 class B-2 'BBB+';
-- $6,792,000 class B-3 'BBB';
-- $12,349,000 class B-4 'BB+'.
The 'AAA' rating on the senior certificates reflects the 19.35%
total credit enhancement provided by:
* the 6.85% class M-1,
* the 4.80% class M-2,
* the 1.40% class M-3,
* the 1.25% class B-1,
* the 1.00% class B-2,
* the 0.55% class B-3,
* the 1.00% non-offered class B-4, and
* the 2.50% initial overcollateralization -- OC.
All certificates have the benefit of monthly excess cash flow to
absorb losses. In addition, the ratings reflect the quality of
the loans and the integrity of the transaction's legal structure,
as well as the primary servicing capabilities of Saxon Mortgage
Services, Inc. (rated 'RPS1' by Fitch) and JPMorgan Chase Bank,
National Association as trustee.
As of the cut-off date, Feb. 1, 2005, the mortgage loans have an
aggregate balance of $1,234,881,455. The weighted average loan
rate is approximately 6.692%. The weighted average remaining term
to maturity is 354 months. The average cut-off date principal
balance of the mortgage loans is approximately $203,306. The
weighted average original loan-to-value ratio is 82.70%, and the
weighted average Fair, Isaac & Co. score was 649. The properties
are primarily located in:
* California (42.54%),
* Texas (4.59%), and
* Illinois (4.46%).
FRIEDMAN'S INC: Court Approves $125 Million DIP Revolving Facility
------------------------------------------------------------------
Friedman's, Inc., (OTC Bulletin Board: FRDMQ) successfully closed
its $125 million postpetition financing facility on Feb. 25. As
previously announced, Friedman's had received a commitment letter
from Citicorp USA, Inc., and Citigroup Global Markets, Inc.,
providing for up to $150 million in debtor-in-possession
financing. Based on a refinement of its needs following its
recently announced store rationalization program, the Company
sought and received Court approval for a $125 million revolving
credit facility sufficient to permit the Company to continue to
repay its prepetition loans and fund ongoing operations during its
voluntary restructuring process. The Company is also permitted to
use the facility to fund certain payments to vendors under its
prepetition secured trade credit program, to purchase additional
inventory and for general corporate purposes.
Friedman's said that it used proceeds from the DIP financing
facility to repay the undisputed amount of its prepetition loans
and that certain prepetition loan claims disputed by the Company
would be subsequently allowed or disallowed by the Bankruptcy
Court. "With our final DIP financing in place, and the support of
the vendor community, and our employees, Friedman's is in an
excellent position to move to the next stage of the restructuring
process with confidence," said President and Chief Executive
Officer Sam Cusano.
Headquartered in Savannah, Georgia, Friedman's Inc. --
http://www.friedmans.com/--is the parent company of a group of
companies that operate fine jewelry stores located in strip
centers and regional malls in the southeastern United States. The
Company and its affiliates filed for chapter 11 protection on
Jan. 14, 2005 (Bankr. S.D. Ga. Case No. 05-40129). John W. Butler,
Jr., Esq., George N. Panagakis, Esq., Timothy P. Olson, Esq., and
Alexa N. Paliwal, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP represent the Debtors in their restructuring efforts. When
the Debtor filed for protection from its creditors it listed
$395,897,000 in total assets and $215,751,000 in total debts.
FRIEDMAN'S: Gordon Bros. Wins Bid to Conduct Store Closing Sales
----------------------------------------------------------------
Friedman's, Inc., (OTC Bulletin Board: FRDMQ) disclosed that a
joint venture composed of Gordon Brothers Retail Partners, LLC,
The Nassi Group, LLC, SB Capital Group LLC and Bobby Wilkerson,
Inc., was named the successful bidder at an auction conducted in
Chicago on Feb. 25 pursuant to procedures approved by the
U.S. Bankruptcy Court for the Southern District of Georgia to
select an agent to conduct store closing sales for 165 Friedman's
stores closing this spring. The successful agency agreement
provides that Friedman's will receive a guaranteed payment
equivalent to 41% of the aggregate cost of the Friedman's
inventory made available for sale plus a minimum payment of
$300,000 and up to 3% of additional merchandise sold during the
store closing program at those stores. Friedman's will also
receive 60% of sales proceeds received above the guaranteed amount
for its inventory sold through the store closing program after
payment of a 2% agency fee and sale expenses.
The Bankruptcy Court has scheduled a hearing today, March 2, in
Savannah to consider approval of the store closing program and
agent selection. Any objections to the program lodged by State
Attorneys General in the states in which the store closing program
will be conducted, if not resolved prior to the today's hearing,
will be heard by the Bankruptcy Court at a final hearing in
Savannah on March 7.
As reported in the Troubled Company Reporter on Feb. 16, 2005, the
store-closing program, which was previously reviewed with the
Official Committee of Unsecured Creditors appointed in the
Company's chapter 11 cases, was approved by the Company's Board of
Directors on Feb. 14, and pleadings were filed in the Bankruptcy
Court on the evening of Feb. 14.
The decision to close the stores followed a review of Friedman's
existing store operations as part of the Company's reorganization
strategy to improve operations and financial performance, said
President and Chief Executive Officer Sam Cusano.
The Company noted the stores plan to continue to operate until all
merchandise is sold. Mr. Cusano said the stores will remain open
and operate as usual while the Company prepares for inventory
disposition sales, which, pending Court approval, are expected to
begin the first week of March.
Headquartered in Savannah, Georgia, Friedman's Inc. --
http://www.friedmans.com/--is the parent company of a group of
companies that operate fine jewelry stores located in strip
centers and regional malls in the southeastern United States. The
Company and its affiliates filed for chapter 11 protection on
Jan. 14, 2005 (Bankr. S.D. Ga. Case No. 05-40129). John W. Butler,
Jr., Esq., George N. Panagakis, Esq., Timothy P. Olson, Esq., and
Alexa N. Paliwal, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP represent the Debtors in their restructuring efforts. When
the Debtor filed for protection from its creditors it listed
$395,897,000 in total assets and $215,751,000 in total debts.
FRIEDMAN'S INC: Wants Equity Committee Appointment Deferred
-----------------------------------------------------------
Friedman's, Inc., (OTC Bulletin Board: FRDMQ) formally responded
to the United States Trustee's request for comment regarding two
Class A shareholders who had sought the appointment of a separate
statutory equity committee to represent the holders of the
Company's Class A common shares in the Company's chapter 11 cases.
Consistent with its earlier informal response that it was
premature to support the formation of a statutory equity committee
or the formal recognition of an informal ad hoc equity committee,
the Company said that it would seek the deferral of any
appointment at this time.
On Feb. 8, the United States Trustee notified the Company that it
had deferred consideration of a separate request made on Jan. 31
by another Class A shareholder for the formation of an equity
committee as premature pending the filing of the Company's
statements and schedules in April 2005, and the completion of a
statutory creditors meeting thereafter. The Official Committee of
Unsecured Creditors in the Company's chapter 11 cases has informed
the Company that it intends to oppose the formation of a statutory
equity committee stating that the appointment would be "totally
unwarranted and highly inappropriate under all applicable and
legal considerations."
The Company will file a copy of its formal response to the United
States Trustee's inquiry on Form 8-K with the Securities and
Exchange Commission. Among the factors that are examined by the
United States Trustee when considering the appointment of a
statutory equity committee are:
-- whether the Company's shares are widely held and publicly
traded;
-- the size and complexity of the chapter 11 cases;
-- the delay and additional cost that would result if an equity
committee were appointed;
-- the likelihood of whether the debtor is insolvent;
-- the timing of the request relative to the status of the
chapter 11 cases; and
-- whether the interests are otherwise adequately represented.
With respect to the factors regarding adequacy of representation
and the likelihood of whether the Company is insolvent, the
Company's formal response states:
-- The Company believes that the Board of Directors, which is
presently composed of six members, all but one of which is
new to the Board of Directors in the nine months since
May 1, 2004 and the majority of which are independent
directors, adequately represents its stakeholders including
Class A shareholders, in its fiduciary mission in the
chapter 11 cases to maximize business enterprise value for
all of the Company's stakeholders. If the United States
Trustee ultimately determines that a statutory equity
committee should be appointed, the composition of the
committee should respect the Company's Delaware Certificate
of Incorporation, as amended, which is the Delaware law
document establishing the ground rules and expectations for
all investors purchasing the Company's common stock.
The Friedman's charter vests control of the Company,
including voting power for the election of directors and for
all other purposes "exclusively in the holders of Class B
Stock," except that Class A holders, voting as a separate
class, may elect up to 25% of the Company's directors.
-- As previously disclosed, due to the lack of restated and
audited financial statements, the Company is not presently
in a position to file financial information with the
Securities and Exchange Commission. The Company's first
monthly operating report in the chapter 11 cases for the
period from January 14 through Jan. 31, 2005, is scheduled
to be filed in the Bankruptcy Court on March 18, 2005 and
thereafter will be filed on Form 8-K with the Securities and
Exchange Commission. Subsequent reports will be filed on
the last calendar day of the month following the reporting
period.
-- In response to the specific inquiry made by the United
States Trustee and based on all of the relevant information
available to the Company (including various activities and
analyses undertaken to respond to the United States
Trustee), the Company believes that if the Bankruptcy Court
were required to make a determination yesterday, March 1,
there is a substantial likelihood that the Bankruptcy Court
would determine that the Company is not solvent. The
Company further believes that the Bankruptcy Court would
therefore also conclude that any plan of reorganization
capable of confirmation in accordance with the statutory
priority rules of the Bankruptcy Code would result in
holders of Friedman's common stock receiving no distribution
on account of their interest and cancellation of their
interests.
In light of the foregoing, the Company considers the value of the
Company's common stock to be highly speculative and cautions
equity holders that the stock may ultimately be determined to have
no value. Accordingly, the Company urges that appropriate caution
be exercised with respect to existing and future investments in
Friedman's common stock or any claims relating to prepetition
liabilities and/or other Friedman's interests such as warrants
convertible into equity interests. The Company also emphasized
that its response to the United States Trustee regarding
prepetition equity interests should have no impact on the
Company's current operations, liquidity or prospects for timely
emergence from chapter 11 reorganization.
Headquartered in Savannah, Georgia, Friedman's Inc. --
http://www.friedmans.com/--is the parent company of a group of
companies that operate fine jewelry stores located in strip
centers and regional malls in the southeastern United States. The
Company and its affiliates filed for chapter 11 protection on
Jan. 14, 2005 (Bankr. S.D. Ga. Case No. 05-40129). John W. Butler,
Jr., Esq., George N. Panagakis, Esq., Timothy P. Olson, Esq., and
Alexa N. Paliwal, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP represent the Debtors in their restructuring efforts. When
the Debtor filed for protection from its creditors it listed
$395,897,000 in total assets and $215,751,000 in total debts.
GLASS GROUP: Files for Chapter 11 Protection in Delaware
--------------------------------------------------------
The Glass Group, Inc., a molded glass manufacturer and decorator,
filed a petition for relief under chapter 11 of the U.S.
Bankruptcy Code in the United States Bankruptcy Court for the
District of Delaware, on Feb. 28, 2005. The Debtor cited a
rapidly diminishing capital, mounting trade debt, and higher
production costs, as reasons for its bankruptcy filing. At
Feb. 28, the Debtor owes $69.2 million to its secured lenders.
In order to reduce costs, manage expenditures and increase
productivity, the Debtor engaged and effectively implemented these
initiatives:
(a) obtaining concessions from its unions to its compensation
reduction;
(b) a 10% compensation reduction for salaried employees;
(c) a 10% reduction in the number of salaried employees;
(d) a 6% reduction in the number of hourly employees;
(e) assessment of an energy surcharge to customer accounts;
(f) qualification for exemption from the New Jersey energy
sales tax for businesses; and
(g) specific productivity improvements.
DIP Financing
The Debtor asked the Bankruptcy Court to approve a contemplated
debtor-in-possession credit facility of up to $40 million with
CapitalSource Finance LLC. Approval of the DIP Loan Agreement
will permit the Debtor to:
(a) continue its operations;
(b) maintain the going-concern value of the Debtor; and
(c) maximize the value of the Debtor pending reorganization
or sale.
Headquartered in Millville, New Jersey, The Glass Group, Inc. --
http://www.theglassgroup.com/-- manufactures molded glass
container and specialty products with plants in New Jersey and
Missouri. Its products include cosmetic bottles, pharmaceutical
vials, specialty jars, and coated containers. The Company filed
for chapter 11 protection on Feb. 28, 2005 (Bankr. D. Del. Case
No. 05-10532). Derek C. Abbott, Esq., at Morris, Nichols, Arsht &
Tunnell represents the Debtor in its restructuring efforts. When
the Debtor filed for protection from its creditors, it estimated
between $50 million to $100 million in debts and assets.
GLASS GROUP INC: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: The Glass Group, Inc.
1101 Wheaton Avenue, North Wing
Millville, New Jersey 08332
Bankruptcy Case No.: 05-10532
Type of Business: The Debtor is a molded glass container and
specialty products manufacturer with plants in
New Jersey and Missouri. Its products include
cosmetic bottles, pharmaceutical vials,
specialty jars, and coated containers.
See http://www.theglassgroup.com/
Chapter 11 Petition Date: February 28, 2005
Court: District of Delaware
Judge: Peter J. Walsh
Debtor's Counsel: Derek C. Abbott, Esq.
Morris, Nichols, Arsht & Tunnell
1201 North Market Street
PO Box 1347
Wilmington, Delaware 19899
Tel: (302) 658-9200
Fax: (302) 658-3989
Debtor's
Investment
Banker: SSG Capital Advisors, L.P.
Debtor's
Financial
Adviser: Focus Management Group, USA, Inc.
Estimated Assets: $50 Million to $100 Million
Estimated Debts: $50 Million to $100 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
South Jersey Gas Utility Provider $1,348,892
PO Box 6000
Hammonton, NJ 08037-6000
Attn: Edward J. Graham
Tel: (800) 377-8222
OMCO Mould, Inc. Trade Debt $710,681
One OMCO Square
Winchester, IN 47394
Tel: (765) 584-4000
Conectiv Power Delivery Utility Provider $657,276
PO Box 4875
Trenton, NJ 08650
Tel: (800) 642-3780
Caraustar and Quality Trade Debt $652,543
Partition Manufacturing
1401 West Eilerman Avenue
Litchfield, IL 62056
Tel: (217) 324-6591
Vesuvius Trade Debt $647,770
5866 Collections Center Drive
Chicago, IL 60693
Tel: (412) 843-8300
North American Refractories Trade Debt $548,482
Company
East Gate Commerce Center
Cincinnati, OH 45245
Tel: (513) 947-8400
Ameren UE Utility $528,120
PO Box 66301
Saint Louis, MO 63166
Tel: (314) 342-1111
Fax: (314) 206-0485
Marchem Trade Debt $386,678
855 Oak Hill Road
Mountain Top, PA 18707
Tel: (570) 474-7770
Reliant Energy Utility Provider $377,958
PO Box 25225
Lehigh Valley, PA 18002-5225
Metra Verre Trade Debt $327,428
ZI Rue des Etangs BP 34
76340 Blangy-sur-Bresle
France
Tel: 33 (0)23 297-5100
Fax: 33 (0)23 297-5138
Flatiron Capital Corporation Insurance Premium $300,669
950 17th Street, Suite 1300 Financing
Denver, CO 80202
Tel: (314) 991-7462
CenterPoint Energy Utility Provider $220,976
PO Box 201484
Houston, TX 77216-1484
Tel: (314) 991-7462
FMC Wyoming Corporation Trade Debt $202,366
Westvaco Road
Green River, WY 82935
Tel: (307) 875-2580
Fax: (307) 872-2308
Boxes, Inc. Trade Debt $186,155
1833 Knox Street
St. Louis, MO 63179-0100
U.S. Borax Trade Debt $164,666
Pittsburgh, PA 15251-6427
Transcorp, Inc. Transportation $138,499
606 Sixth Street Broker
Niagara Falls, NY 14301
Air Liquide Industrial U.S. Trade Debt $133,733
Philadelphia, PA 19178-4385
Franklin Bronze & Alloy Trade Debt $125,852
Company
655 Grant Street
Franklin, PA 16323
Emhart Glass SA Trade Debt $117,591
405 East Peach Street
PO Box 580
Owensville, MO 65066
Unimin Trade Debt $109,331
258 Elm Street
New Canaan, CT 06840
GLOBE METALLURGICAL: Trustee Asks Court to Convert Case to Chap. 7
------------------------------------------------------------------
Deirdre A. Martini, the U.S. Trustee for Region 2, asks the U.S.
Bankruptcy Court for the Southern District of New York to convert
the Chapter 11 bankruptcy case of Globe Metallurgical Inc., into a
Chapter 7 liquidation proceeding. In the alternative, the U.S.
Trustee says, the Court should dismiss Globe's Chapter 11
bankruptcy case.
The Court confirmed the Debtor's Second Amended Plan of
Reorganization on April 22, 2004.
Ms. Martini tells the Bankruptcy Court that:
a) since the Debtor's Plan was confirmed, it has not fully
complied with its duty to pay quarterly fees to the U.S.
Trustee as required by Section 1930(a)(6) of the Bankruptcy
Code; and
b) the Debtor has failed to provide the U.S. Trustee with
disbursement information for the 3rd and 4th quarter of
2004, and it has failed to pay its quarterly fees for those
two quarters, which is now estimated to be worth more than
$20,000.
Ms. Martini argues these facts demonstrate causes to convert or
dismiss the case under Section 1112(b) of the Bankruptcy Code.
The Court will convene a hearing at 10:00 a.m., on April 13, 2005,
to consider the merits of Ms. Martini's request.
Headquartered in Beverly, Ohio, Globe Metallurgical, Inc., is the
largest domestic producer of silicon-based foundry alloys and one
of the largest domestic producers of silicon metal. The Company
filed for chapter 11 protection on April 2, 2003, (Bankr. S.D.N.Y.
Case No. 03-12006). Timothy W. Walsh, Esq., at DLA Piper Rudnick
Gray Cary U.S., LLP, represents the Debtor in its restructuring
efforts. When the Company filed for protection from its
creditors, it listed estimated assets and debts of $50 million to
$100 million.
GOODYEAR TIRE: S&P Puts B+ Rating on $1.2B Second-Lien Term Loan
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned:
-- its 'BB' rating and '1' recovery rating to Goodyear Tire &
Rubber Company's $1.5 billion first-lien asset-backed
revolving credit facility, indicating a high expectation of
full recovery of principal in the event of default, and
-- its 'B+' rating and '2' recovery rating to the company's
$1.2 billion second-lien term loan, indicating the
likelihood that lenders will realize substantial (80%-100%)
recovery of principal in the event of default and that
minimal loss is expected.
At the same time, the 'B+' corporate credit rating on the company
was affirmed. Akron, Ohio-based Goodyear has total debt of about
$6.8 billion, and $6.0 billion of underfunded employee benefit
liabilities. The ratings outlook is stable.
The new credit facilities will replace Goodyear's existing
$1.95 billion asset-backed loan -- ABL -- facility, which was due
to expire in March 2006, and its $680 million revolving credit
facility, set to expire in April 2005.
Security for the new facilities will be enhanced by the addition
of a priority lien against the value of Goodyear's trademark,
certain other corporate assets, and a pledge of the stock of
certain foreign subsidiaries, in addition to existing priority
liens against domestic accounts receivable and inventory.
The bank refinancing will enhance Goodyear's financial flexibility
by extending debt maturities and ensuring an adequate source of
liquidity to meet working capital and other operating needs.
During the next few weeks, Goodyear intends to launch the
refinancing of its existing $650 million European credit facility
maturing April 2005.
"The ratings on Goodyear reflect the company's stressed financial
profile, characterized by low earnings, weak cash flow protection,
onerous debt service obligations, and heavy underfunded employee
benefit liabilities," said Standard & Poor's credit analyst Martin
King.
"These factors more than offset the company's business strengths,
including its position as one of the three largest global tire
manufacturers, with good geographic diversity, strong
distribution, and a well-recognized brand name," Mr. King added.
Goodyear is expected to continue to make progress in improving its
operating results. Upside rating potential is limited, however,
by an onerous debt burden, large near-term cash obligations, and
weak, albeit improving, earnings. Downside risk is limited by
improving market fundamentals, expectations of further progress in
North American operations, and Goodyear's fair liquidity.
HANGER ORTHOPEDIC: Earns $4 Million of Net Income in 4th Quarter
----------------------------------------------------------------
Hanger Orthopedic Group, Inc., (NYSE: HGR) reported net sales for
the quarter ended December 31, 2004, increased by $3.1 million, or
2.2%, to $145.9 million from $142.8 million in the prior year's
comparable quarter. The sales growth was primarily the result of
a $6.5 million, or 4.6%, increase from acquired practices and
$1.2 million, or 13.5%, increase in sales of the Company's
distribution segment. These increases were offset by a
$4.4 million, or 3.3%, decline in same-center sales in the
Company's O&P practices. The magnitude of the decline in same-
center sales exceeded our full year decline of 1.7% due to the
comparison with a strong fourth quarter of 2003 of 3.3%. Gross
profit for the fourth quarter of 2004 increased by $2.2 million to
$77.5 million, or 53.1% of net sales, compared to $75.3 million,
or 52.7% of net sales, in the fourth quarter of the prior year due
principally to the sales increase.
Income from operations decreased by $0.6 million in the fourth
quarter of 2004 to $15.7 million from $16.3 million in the same
period of the prior year due principally to a $0.7 million
increase in depreciation and amortization expenses. Selling,
general and administrative expenses increased by $1.8 million due
principally to the fixed costs of acquired practices. Other
significant fluctuations in the selling, general and
administrative expenses for the quarter included $1.0 million in
expenses related to Sarbanes-Oxley Section 404 compliance work and
$0.5 million in expenses associated with the previously announced
investigation of the West Hempstead matter. Additional
fluctuations include $0.6 million of business development and
marketing expenses offset by cost reductions of:
i) $1.6 million in labor and bonus expense,
ii) $0.7 million in bad debt expense, and iii) $0.4 million in
liability insurance.
Based on the above, net income applicable to common stock for the
fourth quarter of 2004 was $2.6 million. In the corresponding
period of the prior year, Hanger had a net loss applicable to
common stock of $9.7 million. The early extinguishment of debt
related to the tender and refinance of $134.4 million of the 111/4
% Senior Subordinated Notes completed in October of 2003 and
premium paid related to the repurchase and retirement in 2003 of
$30.0 million of 7% Redeemable Preferred Stock negatively impacted
fiscal 2003's results.
Net sales for the year ended December 31, 2004 increased by
$20.8 million, or 3.8%, to $568.7 million from $547.9 million in
the prior year. The sales growth was primarily the result of a
$24.6 million, or 4.5%, increase from acquired practices and
$4.7 million, or 13.2%, increase in sales of the Company's
distribution segment. These increases were offset by a
$8.9 million, or 1.7%, decline in same-center sales in the
Company's O&P practices. Gross profit for the year ended
December 31, 2004 was $292.8 million, or 51.5% of net sales,
compared to $289.5 million, or 52.8% of net sales, in the
comparable period of the prior year. The gross profit margin
decline was primarily due to a combination of a decline in
same-center sales growth driven by selective reimbursement cuts in
conjunction with increased labor expenses resulting from higher
employee health insurance costs and the inflationary impact on
salary expenses.
At the beginning of fiscal year 2002, the Company adopted SFAS
No. 142, "Goodwill and Other Intangible Assets," under which
goodwill and other intangible assets with indefinite lives are not
amortized. The decline in our Company's stock price in August of
2004 triggered an interim valuation of the goodwill and other
intangibles as of August 31, 2004. This interim valuation
resulted in a $45.8 million goodwill impairment charge. This
charge is non- cash and reflects management's best estimate of the
impairment as if a fully completed annual review had been
performed. On October 1, 2004, the annual review of goodwill was
performed, and the results supported the goodwill impairment
charge taken during the third quarter.
Income from operations, excluding the non-cash goodwill impairment
charge, decreased by $23.0 million to $60.5 million during 2004,
down from $83.5 million during 2003. The decrease in income from
operations is the result of a combination of the reduction in
gross profit margin and higher selling, general and administrative
expenses principally due to:
i) $5.6 million from the fixed costs of acquired practices,
ii) $3.4 million in additional labor and bonus expense,
iii) $3.4 million of business development, marketing expenses,
and new product lines,
iv) $2.5 million in facility and equipment rental expense,
v) $2.4 million in higher health and liability insurance
vi) $2.3 million related to Sarbanes-Oxley Section 404
compliance work, and
vii) $1.0 million associated with the investigation of the West
Hempstead billing allegations. The balance of the increase
was caused by inflationary pressures on our fixed expenses.
Based on the above, net loss applicable to common stock for the
year ended December 31, 2004, was $28.0 million, or approximately
$1.30 per diluted share. Excluding the non-cash goodwill
impairment charge and related tax effect, net income applicable to
common stock for the year was $0.47 per diluted share. In the
corresponding period of the prior year, Hanger had net income
applicable to common stock of $8.2 million, or $0.37 per diluted
share, for the year ended December 31, 2003. The early
extinguishment of debt related to the tender and refinance of
$134.4 million of the 111/4% Senior Subordinated Notes completed
in October of 2003 and premium paid related to the repurchase and
retirement in 2003 of $30.0 million of the Redeemable Preferred
Stock impacted the fiscal 2003's results. Otherwise, the Company
would have reported net income applicable to common stock of
approximately $0.98 per diluted share.
About the Company
Hanger Orthopedic Group, Inc., headquartered in Bethesda,
Maryland, is the world's premier provider of orthotic and
prosthetic patient-care services. Hanger is the market leader in
the United States, owning and operating 619 patient-care centers
in 44 states and the District of Columbia, with 3,300 employees
including 1,020 practitioners. Hanger is organized into four
units. The two key operating units are patient-care, which
consists of nationwide orthotic and prosthetic practice centers
and distribution, which consists of distribution centers managing
the supply chain of orthotic and prosthetic componentry to Hanger
and third party patient-care centers. The third is Linkia, which
is the first and only managed care organization for the orthotics
and prosthetics industry. The fourth segment is Innovative
Neutronics, which introduces emerging neuromuscular technologies
developed through independent research in a collaborative effort
with industry suppliers worldwide.
* * *
As reported in the Troubled Company Reporter on Nov. 16, 2004,
Standard & Poor's Ratings Services lowered its corporate credit
and senior secured debt ratings on Hanger Orthopedic Group Inc.,
an orthotics and prosthetics manufacturer, to 'B' from 'B+'.
Standard & Poor's also lowered its senior unsecured and
subordinated debt ratings on the company to 'CCC+' from 'B-'. The
outlook is negative.
"The downgrade reflects Standard & Poor's concern with declining
trends in Hanger's core business line and the uncertain acceptance
of the managed care program it has created for orthotics and
prosthetics," said Standard & Poor's credit analyst Jordan C.
Grant. "These uncertainties cloud prospects for a meaningful
recovery in the company's earnings and cash flow when Hanger has
recently violated a covenant on its senior secured credit facility
because of operating difficulties."
ICON HEALTH: S&P Cuts Corporate Credit Rating to CCC+ from B
------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on ICON
Health & Fitness Inc., including revising its corporate credit
rating to 'CCC+' from 'B', based on Standard & Poor's expectations
that pressure on:
-- sales,
-- margins,
-- cash flow, and
-- liquidity
is likely to continue over the near term.
The outlook is negative.
Based in Logan, Utah, ICON is the largest manufacturer and
marketer of home health and fitness equipment, which is sold
through multiple distribution channels. The company's products
are marketed under the brand names of NordicTrack, Weider,
Pro-Form, Healthrider, and others. At Nov. 27, 2004, total debt
outstanding was $401.1 million.
Sales of ICON's cardiovascular and strength-training equipment
have weakened. For the quarter ended Nov. 27, 2004,
cardiovascular equipment sales decreased 8.1% year-over-year, and
strength training equipment sales fell 22.7% (off a significantly
smaller base than the cardiovascular business) year-over-year.
Margin deterioration was caused by:
-- manufacturing inefficiencies,
-- lower sales volume,
-- high raw-material costs (steel, plastics, wood, and paper
products), and
-- increased transportation costs.
"While the company has taken steps to address higher material
costs, making some design changes and implementing price
increases, ICON will still absorb a sizable portion of cost
increases, reducing the probability of margin and cash flow
recovery," said Standard & Poor's credit analyst Andy Liu.
Although ICON's new manufacturing facility in China could help
alleviate some margin pressure over the intermediate term in terms
of slightly lower raw-material and wage costs, it will have a
minimal impact on fiscal year-end 2005 results and may reduce the
company's ability to respond to demand fluctuation in the longer
term.
INTERSTATE BAKERIES: QVT Financial Discloses 7.32% Equity Stake
---------------------------------------------------------------
QVT Financial, LP, is the investment manager for QVT Fund, LP,
which beneficially owned 2,649,274 shares of Interstate Bakeries
Corporation Common Stock as of December 31, 2004. QVT Financial
is also the investment manager for a separate discretionary
account managed for Deutsche Bank AG, which held 673,221 shares
of IBC Common Stock as of December 31, 2004. QVT Financial has
the power to direct the vote and disposition of the Common Stock
held by each of the Fund and the Separate Account.
Accordingly, QVT Financial may be deemed to be the beneficial
owner of 3,322,495 shares of IBC Common Stock, consisting of the
shares owned by the Fund and the shares held in the Separate
Account. QVT Financial GP LLC, as General Partner of QVT
Financial, may be deemed to beneficially own the same number of
shares of Common Stock reported by QVT Financial.
QVT Associates GP LLC, as General Partner of the Fund, may be
deemed to beneficially own the same number of shares of Common
Stock reported by the Fund.
Each of QVT Financial and QVT Financial GP LLC disclaim
beneficial ownership of the 2,649,274 shares of Common Stock
owned by the Fund and the 673,221 shares of Common Stock held in
the Separate Account.
No. of Shares Percentage
Beneficially Outstanding
Reporting Person Owned of Shares
---------------- ------------- -----------
QVT Financial, LP 3,322,495 7.32%
QVT Financial GP, LLC 3,322,495 7.32%
QVT Fund LP 2,649,274 5.84%
QVT Associates GP, LLC 2,649,274 5.84%
As of April 6, 2004, there are 45,383,839 shares of IBC Common
Stock issued and outstanding.
Headquartered in Kansas City, Missouri, Interstate Bakeries
Corporation is a wholesale baker and distributor of fresh baked
bread and sweet goods, under various national brand names,
including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R),
Merita(R) and Drake's(R). The Company employs approximately
32,000 in 54 bakeries, more than 1,000 distribution centers and
1,200 thrift stores throughout the U.S.
The Company and seven of its debtor-affiliates filed for chapter
11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No.
04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in
their restructuring efforts. When the Debtors filed for
protection from their creditors, they listed $1,626,425,000 in
total assets and $1,321,713,000 (excluding the $100,000,000 issue
of 6.0% senior subordinated convertible notes due August 15, 2014,
on August 12, 2004) in total debts. (Interstate Bakeries
Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
KAISER ALUMINUM: Court OKs ABD Insurance as Retiree Benefit Expert
------------------------------------------------------------------
Judge Fitzgerald authorizes the Official Committee of Retired
Salaried Employees to retain ABD Insurance & Financial Services,
Inc., as retiree benefits consultant nunc pro tunc as of March 4,
2004.
Kaiser Aluminum Corporation and its debtor-affiliates agree to
reimburse the Kaiser Aluminum Salaried Retirees Association for
the $30,000 KASRA advanced from its own funds to ABD, for the
benefit of the Retirees Committee.
Judge Fitzgerald holds that the Debtors' payment to KASRA will
not constitute an expense of the trust that has been created to
provide retiree benefits to salaried retirees of the Debtors,
under the settlement between the Debtors and the Retirees
Committee previously approved by the Court, in connection with
the Debtors' modification of retiree benefits.
Headquartered in Houston, Texas, Kaiser Aluminum Corporation --
http://www.kaiseral.com/--operates in all principal aspects of
the aluminum industry, including mining bauxite; refining bauxite
into alumina; production of primary aluminum from alumina; and
manufacturing fabricated and semi-fabricated aluminum products.
The Company filed for chapter 11 protection on February 12, 2002
(Bankr. Del. Case No. 02-10429). Corinne Ball, Esq., at Jones
Day, represents the Debtors in their restructuring efforts. On
June 30, 2004, the Debtors listed $1.619 billion in assets and
$3.396 billion in debts. (Kaiser Bankruptcy News, Issue No. 62;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
KINDERCARE LEARNING: S&P Withdraws B+ Rating After Sale Completed
-----------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its ratings and
outlook on KinderCare Learning Centers Inc., due to the completed
acquisition of KinderCare by Knowledge Learning Corporation.
As previously reported, Standard & Poor's Ratings Services placed
its ratings on preschool education and child-care services
provider KinderCare Learning Center Inc., on CreditWatch with
negative implications. This includes the company's 'B+' corporate
credit rating, its 'B+' senior secured rating, and its 'B-'
subordinated debt rating. CreditWatch with negative implications
means that the ratings could be lowered or affirmed following the
completion of Standard & Poor's review.
Portland, Oregon-based KinderCare is the largest provider of
proprietary center-based preschool education and child-care
services in the U.S., with 1,245 facilities in 39 states. The
company provides services to children up to 12 years of age, and
offers child care that emphasizes education and social
interaction.
LA SERENA PROPERTIES: Voluntary Chapter 11 Case Summary
-------------------------------------------------------
Debtor: La Serena Properties, LLC
331 Capitola Avenue Suite C
Capitola, California 95010
Bankruptcy Case No.: 05-50977
Type of Business: Real Estate
Chapter 11 Petition Date: February 24, 2005
Court: Northern District of California (San Jose)
Judge: James R. Grube
Debtor's Counsel: Bruce Lindsey, Esq.
Law Offices of Bruce Lindsey
P.O. Box 1817
Salinas, CA 93902
Tel: 831-757-1013
Total Assets: $7,314,494
Total Debts: $3,588,533
The Debtor do not have a list of creditors who are not insiders.
LB COMMERCIAL: Moody's Junks Classes L & M Certificates
-------------------------------------------------------
Moody's Investors Service upgraded the ratings of four classes,
downgraded the ratings of two classes and affirmed the ratings of
nine classes of LB Commercial Mortgage Trust, Commercial Mortgage
Pass-Through Certificates, Series 1998-C4.
Moody's rating actions are:
* Class A-1-a, $106,798,184, Fixed, affirmed at Aaa
* Class A-1-b, $693,553,000, Fixed, affirmed at Aaa
* Class X, Notional, affirmed at Aaa
* Class A-2, $433,564,239, Fixed, affirmed at Aaa
* Class B, $106,343,000, Fixed, upgraded to Aaa from Aa2
* Class C, $106,344,000, Fixed, upgraded to Aa1 from A2
* Class D, $121,535,000, Fixed, upgraded to A3 from Baa2
* Class E, $30,384,000, Fixed, upgraded to Baa1 from Baa3
* Class F, $50,640,000, Fixed, affirmed at Ba1
* Class G, $45,576,000, Fixed, affirmed at Ba2
* Class H, $15,192,000, Fixed, affirmed at Ba3
* Class J, $20,255,000, Fixed, affirmed at B1
* Class K, $10,128,000, Fixed, downgraded to B3 from B2
* Class L, $15,192,000, Fixed, downgraded to Caa2 from Caa1
* Class M, $10,128,000, Fixed, affirmed at Caa3
As of the February 15, 2005 distribution date, the transaction's
aggregate principal balance has decreased by 12.0% to $1.8 billion
from $2.0 billion at securitization. The Certificates are
collateralized by 272 loans ranging in size from less than 1.0% to
12.3% of the pool, with the top 10 loans representing 43.8% of the
pool. The pool consists of a large loan shadow rated component,
representing 35.9% of the pool, a conduit component, representing
60.3% of the pool, and a credit tenant lease component,
representing 3.8% of the pool.
The loans range in size from less than 1.0% to 12.3% of the pool,
with the top ten loans representing 43.8% of the pool. Eighteen
loans, representing 6.4% of the pool, have defeased and have been
replaced with U.S. government securities. The largest defeased
loan is the Mansards Apartment Community Loan ($42.6 million -
2.4%), which is the second largest conduit loan.
There are six loans, representing 1.6% of the pool balance, in
special servicing. Moody's has estimated losses of approximately
$7.0 million for all of the specially serviced loans. Two loans
have been liquidated from the pool resulting in realized aggregate
losses of approximately $8.9 million. Seventy-two loans,
representing 31.2% of the pool, are on the master servicer's
watchlist.
Moody's was provided with year-end 2003 operating results for
94.0% of the performing loans and partial year 2004 operating
results for 88.0% of the performing loans. Moody's weighted
average loan to value ratio for the conduit component is 88.3%,
compared to 85.6% at Moody's last full review in January 2003 and
92.0% at securitization. The upgrade of Classes B, C, D and E is
primarily due to increased subordination levels and stable overall
pool performance.
The downgrade of Classes K and L is due to realized and expected
losses from the specially serviced loans and LTV dispersion.
Based on Moody's analysis, 17.9% of the pool has a LTV greater
than 100.0%, compared to 10.2% at last review and 10.7% at
securitization.
The large loan component consists of six shadow rated loans. The
largest shadow rated loan is the TRT Holdings Loan ($219.0 million
-- 12.3%), which is secured by five Omni Hotels located in New
York (1), Chicago (1) and Texas (3). The portfolio contains 1,858
rooms with the hotels ranging in size from 337 to 410 rooms. The
portfolio's RevPAR for 2003 was $107.30, which represents a 15.8%
decline from securitization.
The strongest performer was the Omni Berkshire Place Hotel in New
York City, which experienced an 8.3% increase in RevPAR, from
$191.50 at securitization to $207.40 in 2003. Declines in RevPAR
for the other hotels ranged from 11.0% to 28.9%. The loan is on
the master servicer's watchlist due to low debt service coverage.
Moody's shadow rating is Ba3, compared to Ba2 at last review and
Baa1 at securitization.
The second largest shadow rated loan is the Mills Loan
($134.7 million - 7.6%), which is secured by a 1.2 million square
foot super regional mall located in Ontario, California. The
property's performance has improved since securitization due to
increased rents, stable expenses and amortization. The property
is 99.0% occupied, essentially the same as at securitization.
Moody's shadow rating is A3, compared to Baa2 at last review and
Baa3 at securitization.
The third largest shadow rated loan is the Arden II Loan
($108.0 million -- 6.1%), which is secured by a portfolio of
twelve Class B suburban office buildings located in southern
California. The portfolio totals approximately 2.2 million square
feet and has maintained a stable occupancy since securitization.
The portfolio is 92.0% occupied. Moody's shadow rating is A2, the
same as last review and compared to Baa1 at securitization.
The fourth largest shadow rated loan is the Fresno Loan
($66.3 million -- 3.7%), which is secured by the Fresno Fashion
Fair Mall, a 900,000 square foot super regional mall located in
Fresno, California. The property's performance has improved
significantly since securitization, largely due to its dominant
market position. The center is anchored by J.C. Penney, Macys and
Gottschalks. Moody's shadow rating is A2, compared to Baa2 at
last review and Baa3 at securitization.
The fifth largest shadow rated loan is the Bayside Loan
($57.5 million -- 3.2%), which is secured by the Bayside
Marketplace, a 250,000 square foot specialty retail center located
in Miami's Biscayne Bay. The property's performance has been
stable since securitization, although occupancy has dropped from
96.0% at securitization to 88.0% as of September 2004. Moody's
shadow rating is Baa3, compared to Ba1 at last review and at
securitization.
The sixth largest shadow rated loan is the Inland Portfolio Loan
($54.6 million -- 3.1%), which is secured by a portfolio of twelve
retail properties located in Illinois, Minnesota, Indiana, and
Wisconsin. The portfolio totals 1.2 million square feet and is
94.0% occupied as of October 2004, compared to 98.0% at
securitization. The loan is interest only through the Anticipated
Repayment Date (ARD) of October 1, 2008. Moody's shadow rating is
Baa2, the same as at last review and compared to A3 at
securitization.
The top three non-defeased conduit loans represent 5.5% of the
pool. The largest conduit loan is the Montgomery Mall Loan
($44.1 million -- 2.5%), which is secured by a 730,000 square foot
regional mall located in Montgomery, Alabama. The center is
anchored by Dillard's (171,000 square feet), J.C. Penney (176,000
square feet) and Parisian (113,000 square feet), which owns its
store. All of the anchors have indicated their intent to vacate
the center.
Dillard's went dark in March 2004 but is continuing to pay rent
until its lease expires in January 2006. J.C. Penney plans to
vacate when its lease expires in April 2005. Parisian has
indicated that it may also close its store when J.C. Penney
vacates. The borrower, an affiliate of Glimcher Realty Trust
(Moody's senior unsecured shelf rating Ba2), has indicated that it
is evaluating its options with respect to the upcoming ARD on
August 1, 2005. Moody's LTV is in excess of 100.0% compared to
86.7% at last review.
The second largest conduit loan is the Best Western President
Hotel Loan ($27.7 million -- 1.6%), which is secured by a 354-room
limited service hotel located in New York City. The hotel's
performance has declined since securitization. The loan is
current but on the servicer's watchlist due to low debt service
coverage. Moody's LTV is in excess of 100.0%.
The third largest conduit loan is the Hundred Oaks Shopping Center
Loan ($25.4 million - 1.4%), which is secured by a 700,000 square
foot power center located in Nashville, Tennessee. The property
is anchored by:
* Regal Cinemas (15.2% GLA; lease expiration August 2018),
* Burlington Coat Factory (12.2% GLA; lease expiration May
2008), and
* Media Play (6.6% GLA; lease expiration January 2011).
The center's occupancy is 77.0%, compared to 85.0% at
securitization. Moody's LTV is 84.9%, compared to 66.4% at last
review.
The CTL component includes 26 loans secured by properties under
bondable leases. The largest CTL exposures are:
* CVS ($16.7 million; Moody's senior unsecured rating A3),
* Kmart ($11.0 million) and Food Lion ($10.7 million;
* parent Delhaize America - Moody's senior unsecured rating
Ba1).
The weighted average shadow rating for the CTL component is Ba2,
the same as at last review and compared to Baa3 at securitization.
The pool collateral is a mix of:
* retail (39.2%),
* multifamily (14.4%),
* hotel (18.0%),
* office (13.5%),
* U.S. government securities (6.4%),
* industrial and self storage (4.0%),
* CTL (3.8%) and healthcare (0.7%).
The collateral properties are located in 35 states and Puerto
Rico. The highest state concentrations are:
* California (21.8%),
* New York (11.8%),
* Texas (11.8%),
* Florida (9.1%), and
* Illinois (7.3%).
All of the loans are fixed rate.
LEAP WIRELESS: Names S. Douglas Hutcheson Chief Executive Officer
-----------------------------------------------------------------
Leap Wireless International, Inc. (OTCBB:LEAP), a leading provider
of innovative and value-driven wireless communications services,
has appointed S. Douglas Hutcheson as chief executive officer,
president and director. Mr. Hutcheson most recently served as the
Company's president and chief financial officer, where he led the
Company through its financial restructuring.
"We are very excited to have Doug leading Leap at this very
important stage for the Company amid the rapidly evolving wireless
communications industry," said Mark H. Rachesky, M.D., Leap's
Chairman. "Doug's multifaceted experience, financial expertise
and success in creating value make him uniquely suited to lead the
Company and to strengthen its role as a leader in the wireless
industry. We congratulate him on his new appointment and look
forward to his efforts to further increase shareholder value."
Prior to his position as president and CFO of Leap, Mr. Hutcheson
held several positions with the Company, including executive vice
president and CFO, and senior vice president and CFO, a position
he assumed in 2002. Mr. Hutcheson also held the position of chief
strategy officer for Leap. Prior to joining Leap when it was
spun-out from QUALCOMM Incorporated in September 1998, Mr.
Hutcheson established and led the marketing and international
operations group in QUALCOMM's wireless infrastructure division.
While at QUALCOMM, Mr. Hutcheson led multiple teams negotiating
financing agreements, equipment purchases and joint ventures
throughout the world. Mr. Hutcheson earned a bachelor's degree in
mechanical engineering from California State Polytechnic
University, San Luis Obispo and obtained a master's degree in
business administration from the University of California, Irvine,
where he graduated Beta Gamma Sigma.
Leap also announced that the Company has named Dean Luvisa as
acting CFO and treasurer. Mr. Luvisa, who most recently served as
the Company's vice president, finance and treasurer, has been with
the Company since 1998. Mr. Luvisa was responsible for the recent
successful refinancing of the Company's 13-percent notes through
its January 2005 credit facilities. As vice president, finance
and treasurer, Mr. Luvisa was responsible for corporate funding,
lender relations, cash management, loan administration and risk
management. Prior to joining Leap, Mr. Luvisa was director of
project finance at QUALCOMM, where he was responsible for vendor
financing activities worldwide. Mr. Luvisa earned a bachelor's
degree in economics from Arizona State University, graduating
summa cum laude and an MBA in finance from the Wharton School at
the University of Pennsylvania.
Prior to Mr. Hutcheson's appointment, William Freeman, Leap's
previous CEO, resigned as an officer and director to pursue other
opportunities.
"We would like to thank Bill for the contributions he made to Leap
during his tenure with the Company," said Dr. Rachesky. "During
this period, Leap emerged from bankruptcy, launched new services
and products, and completed the syndication of significant new
credit facilities. We wish Bill luck on his future professional
endeavors."
The Company also said that it has initiated a search for a new
CFO.
About the Company
Leap Wireless -- http://www.leapwireless.com/-- headquartered in
San Diego, Calif., is a customer-focused company providing
innovative mobile wireless services that are targeted to meet the
needs of customers who are under-served by traditional
communications companies. With a commitment to predictability,
simplicity and value as the foundation of our business, Leap
pioneered Cricket(R) service, a simple and affordable wireless
alternative to traditional landline service. Cricket(R) service
offers customers unlimited anytime minutes within the Cricket(R)
calling area over a high-quality, all-digital CDMA network.
Operating in 39 markets in 20 states stretching from New York to
California, Cricket(R) service is available to customers in more
than 840 different municipalities.
* * *
As reported in the Troubled Company Reporter on Nov. 15, 2004,
Standard & Poor's Ratings Services assigned its 'B-' corporate
credit rating to San Diego, California-based wireless telecom
carrier Leap Wireless International Inc. The outlook is stable.
At the same time, Standard & Poor's assigned its 'B-' bank loan
rating to subsidiary Cricket Communications Inc.'s $650 million in
senior secured bank facilities (guaranteed by Leap), based on
preliminary documentation. A recovery rating of '3' also was
assigned to the loan, indicating an expectation for a meaningful
recovery of principal (50%-80%) in the event of a default.
Borrowings under the bank loan will primarily be used to repay
$350 million of debt issued to existing secured creditors under
the company's reorganization in bankruptcy.
"The ratings are constrained by the very high degree of business
risk facing Leap given the limited mobility of the company's
product offering compared with that of its competitors," explained
Standard & Poor's credit analyst Catherine Cosentino. Leap uses
1.9 GHz spectrum to offer an unlimited calling service within a
designated local franchise area for $29.99 (before taxes and fees)
within 39 separate market clusters across the U.S. Leap also
offers additional services and functionality for incremental
monthly fees, including calling features and long-distance
services, but does not provide any roaming capability currently.
Pricing is not substantially lower than that for the lower-end
offerings of the company's competitors (which also offer roaming),
making Leap's growth prospects uncertain.
LISTWORKS CORPORATION: Voluntary Chapter 7 Case Summary
-------------------------------------------------------
Debtor: The Listworks Corporation, Inc.
aka LW of NY, Inc.
aka Listworks, Specialized Fundraising Services, a
division of Listworks
15 Skyline Drive
Hawthorne, New York 10532-2152
Bankruptcy Case No.: 05-20106
Type of Business: The Debtor is engaged in list management.
Chapter 7 Petition Date: February 18, 2005
Court: Southern District of New York (White Plains)
Judge: Adlai S. Hardin Jr.
Debtor's Counsel: James Berman, Esq.
Zeisler & Zeisler, P.C.
558 Clinton Avenue
Bridgeport, Connecticut 06605
Tel: (203) 368-4234
Fax: (203) 367-9678
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $10 Million to $50 Million
LONGHORN CDO: Moody's Affirms Ba3 Rating on $11MM Sr. Sec. Notes
----------------------------------------------------------------
Moody's Investors Service had confirmed the ratings on two classes
of notes issued by Longhorn CDO (Cayman) Ltd.:
1) the U.S. $49,000,000 Class B Floating Rate Senior Secured
Notes Due 2012 (currently rated Baa2); and
2) the U.S. $11,000,000 Class C Floating Rate Senior Secured
Notes Due 2012 (currently Ba3).
Moody's noted that the notes had been under review for downgrade.
Merrill Lynch Investment Managers, Inc. is the manager of the
Issuer.
Issuer: Longhorn CDO (Cayman) Ltd.
Rating Action: Rating Confirmation
* Class: U.S. $49,000,000 Class B Floating Rate Senior Secured
Notes Due 2012
* Prior Rating: Baa2 (under review for downgrade)
* Current Rating: Baa2
* Class Description: U.S. $11,000,000 Class C Floating Rate
Senior Secured Notes Due 2012
* Prior Rating: Ba3 (under review for downgrade)
* Current Rating: Ba3
MANITOWOC CO: Names Robert Herre President of Marine Subsidiary
---------------------------------------------------------------
The Manitowoc Company, Inc., (NYSE: MTW) named Robert P. Herre as
president of Manitowoc Marine Group. Mr. Herre replaces Dennis E.
McCloskey, who has assumed a new role in handling special
corporate-level projects.
Mr. Herre brings more than 30 years of maritime industry
experience to the position, with an extensive background in
operations. He was previously Executive Vice President and Head
of Operations at Trinity Industries, Inc., where he was
responsible for all operational and financial aspects of the
company's six-plant shipbuilding segment. Mr. Herre has held
similar leadership positions at American Commercial Lines, LLC;
Walker Boat Yard, and The Valley Line Company.
"Robert Herre has the deep operational experience that we are
seeking for our marine segment," said Terry D. Growcock,
Manitowoc's chairman and chief executive officer. "Bob also
brings a strong record of success in financial management,
strategic development, and product innovation. We look forward to
applying his expertise and leadership to Manitowoc Marine Group."
"I'm very excited by this opportunity," Mr. Herre said.
"Manitowoc Marine Group has a growing slate of work for both
government and commercial customers and a set of shipyards that
position us well for both new-construction and repair work. I'm
confident we can achieve the operational improvements that will
allow us to drive growth in both revenue and profits."
Mr. Herre, 53, earned his bachelor's of science degree in marine
engineering from the United States Merchant Marine Academy and an
M.B.A. in finance and management from Xavier University. He also
holds a law degree from the University of Louisville.
About the Company
The Manitowoc Company, Inc. (S&P, BB- Corporate Credit Rating,
Stable Outlook) is one of the world's largest providers of lifting
equipment for the global construction industry, including lattice-
boom cranes, tower cranes, mobile telescopic cranes, and boom
trucks. As a leading manufacturer of ice-cube machines,
ice/beverage dispensers, and commercial refrigeration equipment,
the company offers the broadest line of cold-focused equipment in
the foodservice industry. In addition, the company is a leading
provider of shipbuilding, ship repair, and conversion services for
government, military, and commercial customers throughout the
maritime industry.
MERITAGE HOMES: Fitch Puts BB Rating on $350 Mil. 6.25% Sr. Notes
-----------------------------------------------------------------
Fitch Ratings has assigned a 'BB' rating to Meritage Homes
Corporation's (NYSE: MTH) $350 million, 6.25% senior notes due
March 15, 2015. The Rating Outlook is Stable. The issue will be
ranked on a pari passu basis with all other senior unsecured debt,
including Meritage's $400 million bank credit facility. Meritage
also has announced the pricing of its public offering of 900,000
shares of its common stock at a public offering price of $70.35
per share. The company intends to use proceeds from these two
offerings to repurchase up to all of its $280 million in
outstanding principal amount of 9 3/4% senior notes due 2011,
pursuant to a previously announced concurrent tender offer and
consent solicitation and to repay a portion of its credit
facility.
Ratings for Meritage are based on the company's successful
execution of its business model, conservative land policies, and
geographic and product line diversity. The company has been an
active consolidator in the homebuilding industry, which has led to
above-average growth during the past seven years, but has kept
debt levels somewhat higher than that of its peers. Management
has also exhibited an ability to quickly and successfully
integrate its acquisitions. In any case, now that the company has
reached current scale, there may be relatively less use of
acquisitions, and acquisitions are likely to be smaller relative
to Meritage's current size.
Risk factors include the inherent (although somewhat tempered)
cyclicality of the homebuilding industry. The ratings also
manifest the company's aggressive, yet controlled, growth strategy
and Meritage's capitalization and size.
The company's inventory turnover tends to be somewhat stronger
than the average public homebuilder, while its EBITDA and
EBIT-to-interest ratios tend to be lower and leverage a bit
higher, while the debt to EBITDA ratio is average. Although the
company has certainly benefited from the generally strong housing
market of recent years, a degree of profit enhancement is also
attributed to purchasing design and engineering, access to
capital, and other scale economies that have been captured by the
large national and regional public homebuilders in relation to
nonpublic builders. These economies, the company's presale
operating strategy, and return on equity and return on assets
orientation provide the framework to soften the margin impact of
declining market conditions in comparison with that of previous
cycles. Meritage's ratio of sales value of backlog to debt,
although lower than in the past, remains at roughly 2.1 times --
a comfortable cushion.
Meritage employs quite conservative land and construction
strategies. The company typically options or purchases land only
after necessary entitlements have been obtained so that
development or construction may begin as market conditions
dictate. Meritage extensively uses lot options. The use of
nonspecific performance rolling options gives the company the
ability to renegotiate price/terms or void the option, which
limits downside risk in market downturns and provides the
opportunity to hold land with minimal investment. Currently, 89%
of its lots are controlled through options, a higher percentage
than most public builders. Total lots, including those owned,
were approximately 39,000 at Dec. 31, 2004. This represents a
5.4-year supply, based on trailing 12 months deliveries. Over 85%
of its homes are presold. The balance is homes under construction
or homes completed in advance of a customer's order.
Fitch estimates that roughly half of Meritage's growth has
resulted from a series of acquisitions (seven during the past
seven and one-half years). The acquisitions have enabled the
company to build its position, often broadening product and
customer bases in existing markets. They have also enabled the
company to enter new markets. The combinations typically were
funded by debt and, to a lesser degree, by stock. Frequently,
there were earn-outs, which reduced risk and served to retain key
management. Now that Meritage has reasonable scale, there may be
less use of acquisitions. On average, acquisitions are likely to
be smaller, relative to Meritage's current size. Fitch believes
that management would balance debt and stock as acquisition
currency to at least maintain current credit ratios. (In effect,
that is the case relative to the recent Colonial Homes
acquisition, which is being temporarily funded by the revolving
credit facility.)
Meritage maintains a $400 million revolving credit facility, all
of which was available at the end of the fourth quarter of 2004.
The revolving credit agreement matures in May 2007. The company
has irregularly purchased moderate amounts of its stock in the
past. Meritage repurchased 1.1 million shares of common stock at
a cost of $35.4 million in 2004. Share repurchase authorization
of $50.0 million remains.
MERRILL LYNCH: Fitch Puts Low-B Ratings on Cert. Classes B-4 & B-5
------------------------------------------------------------------
Merrill Lynch Mortgage Investors, Inc. -- MLMI, mortgage
pass-through certificates, series MLCC 2005-A, are rated:
-- $531.2 million classes A-1, A-2, A-R, A-X, and privately
offered X-B (senior certificates) 'AAA';
-- $7,425,000 class B-1 'AA';
-- $4,125,000 class B-2 'A';
-- $2,200,000 class B-3 'BBB';
-- $1,925,000 privately offered class B-4 'BB';
-- $1,100,000 privately offered class B-5 'B'.
The $1,925,161 privately offered class B-6 certificates are not
rated by Fitch.
The 'AAA' rating on the senior certificates reflects the 3.40%
subordination provided by:
* the 1.35% class B-1,
* the 0.75% class B-2,
* the 0.40% class B-3,
* the 0.35% privately offered class B-4,
* the 0.20% privately offered class B-5, and
* the 0.35% privately offered class B-6 (which is not
rated by Fitch) certificates.
Classes B-1, B-2, B-3, B-4, and B-5 are rated 'AA', 'A', 'BBB',
'BB', and 'B', based on their respective subordination.
Fitch believes the above credit enhancement will be adequate to
cover credit losses. In addition, the ratings also reflect the
quality of the underlying mortgage collateral, strength of the
legal and financial structures, and the primary servicing
capabilities of PHH Mortgage Corporation, which is rated 'RPS1' by
Fitch.
The trust consists of 1,439 conventional, adjustable-rate mortgage
loans secured by first liens on one- to four-family residential
properties with an aggregate principal balance of $550,001,262 as
of the cut-off date (Feb. 1, 2005). Each of the mortgage loans
has a fixed rate for a period of 10 years, after which they are
indexed off the one-year LIBOR or six-month LIBOR. The average
unpaid principal balance as of the cut-off-date is $382,211. The
weighted average original loan-to-value ratio - OLTV -- is 72.41%.
The weighted average FICO is 731. Cash-out refinance loans
represent 46.22% of the loan pool. The three states that
represent the largest portion of the mortgage loans are:
* California (17.77%),
* Florida (11.07%), and
* New York (9.17%).
All of the mortgage loans were either originated by Merrill Lynch
Credit Corporation -- MLCC, pursuant to a private label
relationship with PHH Mortgage Corporation, or acquired by MLCC in
the course of its correspondent lending activities and
underwritten in accordance with MLCC underwriting guidelines. Any
mortgage loan with an OLTV in excess of 80% is required to have a
primary mortgage insurance policy. 'Additional collateral loans'
included in the trust are secured by a security interest in the
borrower's assets, which does not exceed 30% of the loan amount.
Ambac Assurance Corporation provides a limited purpose surety bond
that covers any losses in proceeds realized from the liquidation
of the additional collateral.
None of the mortgage loans are 'high cost' loans as defined under
any local, state, or federal laws. For additional information on
Fitch's rating criteria regarding predatory lending legislation,
see the press release 'Fitch Revises Rating Criteria in Wake of
Predatory Lending Legislation,' dated May 1, 2003, available on
the Fitch Ratings web site at http://www.fitchratings.com/
MLMI, the depositor, will assign all its interest in the mortgage
loans to the trustee for the benefit of certificate-holders. For
federal income tax purposes, an election will be made to treat the
trust fund as multiple real estate mortgage investment conduits.
Wells Fargo Bank Minnesota, National Association will act as
trustee.
MID OCEAN: Moody's Junks $10 Million Class B-1L Notes
-----------------------------------------------------
Moody's Investors Service had lowered the ratings of three classes
of notes issued by Mid Ocean CBO 2001-1 Ltd.:
1) to Baa2 (from Aa3), the U.S. $215,000,000 Class A-1L Floating
Rate Notes due November 2036 and U.S. $50,000,000 Class A-1
6.5563% Notes due November 2036;
2) to B2 (from Baa1), the U.S. $15,000,000 Class A-2L Floating
Rate Notes due November 2036; and
3) to Ca (from B2), the U.S. $10,000,000 Class B-1L Floating
Rate Notes due November 2036.
Moody's noted that all three classes of notes had been under
review for downgrade at the time of this rating action. The
transaction closed on October 25, 2001.
According to Moody's, its rating action results primarily from
significant deterioration in collateral coverage and quality.
Moody's noted that, as of the most recent monthly report on the
transaction, more than 31% of the collateral pool had a Moody's
rating of Ba1 or lower (5% limit) and that both collateral
coverage tests were failing, the Class A ratio was 102.37% (106%
test) and the Class B ratio was 98.23% (101% test).
Rating Action: Downgrade
-- Issuer: MID OCEAN CBO 2001-1 LTD.
-- Class Description: U.S. $215,000,000 Class A-1L Floating
Rate Notes due November 2036
* U.S. $50,000,000 Class A-1 6.5563% Notes due November 2036
* Prior Rating: Aa3 (under review for downgrade)
* Current Rating: Baa2
* Class Description: U.S. $15,000,000 Class A-2L Floating
Rate Notes due November 2036
* Prior Rating: Baa1 (under review for downgrade)
* Current Rating: B2
-- Class Description: U.S. $10,000,000 Class B-1L Floating
Rate Notes due November 2036
* Prior Rating: B2 (under review for downgrade)
* Current Rating: Ca
MIRANT CORP: Caps Cascade Natural's Unsecured Claim at $592,709
---------------------------------------------------------------
On February 28, 2001, Mint Farm Generation, LLC -- a Mirant
Corporation debtor-affiliate -- and Cascade Natural Gas
Corporation entered into an Agreement for Natural Gas Service in
the State of Washington, pursuant to which Cascade agreed to
transport natural gas to service the Debtors' Mint Farm generation
facility located in Longview, Washington. As of January 7, 2005,
the Debtors have not assumed or rejected the Contract.
On September 15, 2003, Cascade filed Claim No. 2037 against Debtor
Mirant Americas Development, Inc., for $440,229.59, based on
invoices for natural gas services.
On December 16, 2003, Cascade filed Claim No. 7307 against Mint
Farm, alleging a claim based on the Contract and indicating that
the Proof of Claim was "unliquidated but not less than $592,709.38
as of 11/03."
The Debtors objected to Cascade's claims. On November 16, 2004,
the Court entered a Scheduling Order and Discovery Plan.
To avoid litigation at this time between the Debtors and Cascade
regarding the Contract Claim, the parties agree and ask the U.S.
Bankruptcy Court for the Northern District of Texas to:
(a) vacate the Scheduling Order;
(b) disallow Claim No. 2037 filed against MADI;
(c) allow Cascade a general, prepetition unsecured claim for
$592,709.38 against Mint Farm for the limited purposes of
voting on a plan of reorganization and determining the
feasibility of any plan;
(d) defer, reserve and resolve the determination for
distribution purposes of any claim Cascade may have based
on the Contract, through the claim objection process; and
(e) cap any prepetition claim held by Cascade at $592,709.38.
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. 54; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
MORGAN STANLEY: Fitch Rates Six Certificate Classes at Low-B
------------------------------------------------------------
Fitch Ratings affirms Morgan Stanley Capital I Trust's commercial
mortgage pass-through certificates, series 2003-IQ4:
-- $157.6 million class A-1 'AAA';
-- $449.7 million class A-2 'AAA';
-- Interest-only class X-1 'AAA';
-- Interest-only class X-2 'AAA';
-- $18.2 million class B 'AA';
-- $23.7 million class C 'A';
-- $4.5 million class D 'A-';
-- $7.3 million class E 'BBB+';
-- $7.3 million class F 'BBB';
-- $8.2 million class G 'BBB-';
-- $8.2 million class H 'BB+';
-- $3.6 million class J 'BB';
-- $1.8 million class K 'BB-';
-- $5.5 million class L 'B+';
-- $1.8 million class M 'B';
-- $1.8 million class N 'B-'.
Fitch does not rate the $7.3 million class O certificates.
The rating affirmations reflect the stable pool performance and
minimal paydown since issuance. As of the February 2005
distribution date, the pool has paid down 2.9% to $706.5 million
from $727.8 million at issuance.
Fitch reviewed the credit assessments of these four loans:
* Mall at Millenia (9.9%);
* Federal Center Plaza (9.6%);
* 55 East Monroe (8.3%); and
* Oakbrook Center (3.4%).
All four loans maintain investment-grade credit assessments.
The third largest loan, 55 East Monroe, has seen a drop in
occupancy to 79.1% as of year end 2004 compared to 96.6% at
issuance due to several large tenants vacating, including the
third largest tenant. Despite the decline, the property's
occupancy is in line with the Central and East Loop submarkets of
Chicago.
To date, there have been no realized losses and no delinquent or
specially serviced loans.
MORTGAGE CAPITAL: S&P Affirms BB Rating on Class F Certificates
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its rating on class C of
Mortgage Capital Funding Inc.'s commercial mortgage pass-through
certificates series 1998-MC3. Concurrently, all other outstanding
ratings from this transaction are affirmed.
The rating actions reflect credit enhancement levels that provide
adequate support through various stress scenarios that include the
specially serviced and watchlisted loans. This includes the
largest loan in the pool, the Kranzco portfolio, which has a
balance of $61.3 million, or 8.7% of the pool, and is on the
watchlist.
As of February 2005, the trust collateral consisted of
194 commercial mortgages with an outstanding balance of
$705.1 million, down 22.4% since issuance. To date, there have
been three realized losses totaling $5.86 million (0.64% of the
initial pool balance).
The master servicer, GMAC Commercial Mortgage Corporation --
GMACCM, reported full-year 2003 net cash flow -- NCF -- debt
service coverage ratios -- DSCRs -- for 92.9% of the pool. Only
one loan (0.52%) has been defeased. Based on this information and
excluding defeasance, Standard & Poor's calculated the weighted
average DSCR for the pool at 1.43x, which improved slightly from
1.39x at issuance.
The current weighted average DSCR for the top 10 loans, which
comprises 29% of the pool, is 1.33x, compared to 1.30x at
issuance. DSCRs for four of the top 10 loans have weakened since
issuance. In addition to Kranzco, the seventh- and eighth-largest
loans appear on the watchlist for lower DSCRs and decreases in
occupancy.
However, both loans have improved leasing prospects with tenants
expected to take occupancy or renew. Property inspection reports
provided by GMACCM for the top 10 loans noted all of the
properties to be in good overall condition, except for one of the
centers in the Kranzco portfolio, which was noted as in fair
condition.
The Kranzco portfolio is secured by eight retail centers and a
stand-alone Wal-Mart store built between 1984 and 1991. Seven are
located in rural areas of Georgia, Virginia, Ohio, and Tennessee.
Two are near Atlanta and one is in Pensacola, Florida.
Wal-Mart Stores, Inc., (AA/Stable/A-1+) physically occupied all
nine stores at one time, but eight have been vacant for some time
due to the construction of nearby Wal-Mart Super Centers. The
remaining center with Wal-Mart in physical occupancy, Pickaway
Crossing, is expected to go dark later this year when a new Wal-
Mart Super Center is completed nearby.
Wal-Mart remains obligated on eight of the nine leases. The lease
on the stand-alone store expires in October 2005, while the
remaining seven leases expire between 2008 and 2011. Three of the
empty Wal-Marts have been successfully sublet:
-- Gold's Gym took a portion of the space (26%) in Snellville
Oaks;
-- Beall's took all of the space in Village Oaks, and
-- Fisher Auto Parts is using the space in Statler Crossing as
a warehouse.
That center received a variance to convert to industrial use. The
weighted average physical occupancy for the nine centers is 36%,
based on a rent roll dated December 2004. GMACCM reported
$6.055 million NCF resulting in a 1.15x DSCR for 2003 and a 1.12x
DSCR as of June 30, 2004.
Based on the rent roll, however, NOI DSCR could fall below 1.0x in
2006 if leasing activity remains stagnant. Given the low physical
occupancy of the centers and the poor demographics of many of the
locations, the loan presents a significant credit risk. The
anticipated repayment date for the loan is Oct. 1, 2008 and the
maturity date is Oct. 1, 2028. The interest rate through the
anticipated repayment date is 7.00% and thereafter, is 9.00%.
Seven loans totaling $19.6 million, or 2.8%, were reported as
specially serviced with Allied Capital Corporation -- Allied. Two
loans are current; three are 90-plus days delinquent, and two are
REO. There are no other delinquent loans in the pool. Allied
does not anticipate any principal losses for the two current but
specially serviced loans. The two REO assets are discussed below:
-- Amberley Suites Hotel has a current balance of $4.27 million
and a total exposure of $5.66 million (0.61%, $32,000 per
room). The 177-room unflagged hotel is located in Norcross,
Georgia. The hotel is currently operating at breakeven, but
a new contract with a local vocational school should improve
performance. Allied intends to stabilize the property and
then sell it next year. A June 2004 appraisal valued the
hotel at $2.7 million.
-- Comfort Inn Marietta has a balance of $3.12 million and a
total exposure of $4.06 million (0.44%, $33,500 per room),
and is secured by 121-room hotel in Marietta, Ohio that was
built in 1975. Allied is contemplating whether or not to
perform a recommended property improvement plan (PIP) in
order to keep the Choice Hotels flag. The PIP is expected
to cost $700,000. A June 2004 appraisal valued the hotel as
is at $2.75 million; however, the PIP is expected to add
value.
The servicer's watchlist includes 61 loans totaling
$231.9 million, or 32.9%. The loans are on the watchlist due to
low occupancies, DSCRs, or upcoming lease expirations, and were
stressed accordingly by Standard & Poor's.
The pool has geographic concentrations greater than 5% in:
-- California (11.6%),
-- New York (11.2%),
-- Florida (10.8%),
-- Georgia (8.4%), and
-- Maryland (5.5%).
Property type concentrations greater than 5% include:
-- retail (34.4%),
-- office (18.6%),
-- lodging (15.4%),
-- multifamily (15.3%), and
-- industrial (10.6%).
Standard & Poor's analysis supported the raised and affirmed
ratings.
Rating Raised
Mortgage Capital Funding Inc.
Commercial mortgage pass-thru certificates series 1998-MC3
Rating
------
Class To From Credit Enhancement
----- -- ---- ------------------
C AAA AA 26.57%
Ratings Affirmed
Mortgage Capital Funding Inc.
Commercial mortgage pass-thru certificates series 1998-MC3
Class Rating Credit Enhancement
----- ------ ------------------
A-1 AAA 38.48%
A-2 AAA 38.48%
B AAA 32.69%
D BBB+ 17.87%
E BBB- 13.69%
F BB 10.79%
X AAA N/A
MOSAIC COMPANY: Fitch Rates New $850M Senior Sec. Facility at BB+
-----------------------------------------------------------------
Fitch Ratings has assigned a 'BB+' rating to The Mosaic Company's
new $850 million senior secured credit facility. The Rating
Outlook is Stable.
The new credit facility consists of a $450 million revolver at
Mosaic, a $350 million Term Loan B at Mosaic Global Holdings Inc.,
and a $50 million Term Loan A at Mosaic Potash Colonsay ULC, an
operating subsidiary of Mosaic Global Holdings. Fitch rates the
components of the secured credit facility:
-- Mosaic Company senior secured revolving credit facility
'BB+';
-- Mosaic Global Holdings, Inc., senior secured term loans A
and B 'BB+'.
The ratings reflect the facility's strong collateral position and
the likelihood of principal recovery. The new facility is secured
by perfected first-priority interest in accounts receivable and
inventory, perfected first-priority interest limited to 65% of
voting equity at certain foreign subsidiaries, as well as certain
real property. The new facility imposes financial covenants,
cross-default and cross-acceleration provisions, limitations on
indebtedness, preferred equity and restricted payments, as well as
restrictions on the purchase or redemption of securities junior to
the credit facility. The new credit facility repaid and replaces
the secured revolver and term loan at Mosaic Global Holdings, as
well as the $160 million interim credit agreement at Mosaic. In
October 2004, Fitch indicated that the 'BB+' rating would be
assigned to the new Mosaic secured credit facility if such
facility was executed as expected.
At that time, Fitch also provided debt ratings:
-- Mosaic mandatory convertible preferred securities 'B';
-- Mosaic Global Holdings senior unsecured debt with
subsidiary guarantees 'BB';
-- Mosaic Global Holdings senior unsecured debt without
subsidiary guarantees 'BB-';
-- Phosphate Acquisition Partners LP senior secured notes 'BB-'.
The Mosaic Company is one of the largest global suppliers of
phosphate and potash fertilizers. Mosaic earned approximately
$246 million in EBITDA on $3 billion in revenue; the company had
$2.5 billion in debt at Nov. 30, 2004.
NEW HEIGHTS: Wants to Surrender All Assets to Cook County, Ill.
---------------------------------------------------------------
New Heights Recovery & Power, LLC, wants to surrender
substantially all of its assets to Cook County, Illinois, in full
satisfaction of the County's:
$207,978 secured claim;
$328,416 priority claim; and
$1,117 administrative expense claim.
As provided for in its confirmed First Amended Liquidating Plan,
the Debtor tried to sell its assets. The Plan contemplated that
the proceeds from that sale would be used to pay Cook County's
claims and make a distribution to holders of general unsecured
claims. Unfortunately, the Debtor received offers for less than
Cook County's aggregate claims.
The Debtor tells the U.S. Bankruptcy Court for the District of
Delaware that the failed asset sale effort on an enterprise basis
broke down for a variety of reasons, including (a) problems
relating to the viability of a transfer of the Debtor's operating
permits and (b) basic operational profitability issues.
The Debtor wants to conclude its chapter 11 case because it is
quickly running out of cash. The Debtor is additionally burdened
by expenses meant to secure its assets from theft, vandalism and
accidents.
In the event Cook County won't accept the assets, the Debtor wants
the Court to reclassify Cook County's claim as general unsecured
claims and direct the release of the County's liens on the Assets.
The Debtor will continue to market its assets before the March 9
hearing on this request in the hopes that it will receive an offer
to buy its assets for more than $537,511 -- the sum of Cook
County's claims.
General Unsecured Claim Holders Get Nothing
If the Debtor can't sell its Assets for more than $537,511 before
March 9, and if Cook County decides to accept the assets, holders
of general unsecured claims will get nothing. General Unsecured
Claims aggregate $30.1 million. Pursuant to the Liquidating Plan
confirmed by the Court on Sept. 22, 2004, holders of general
unsecured claims get their pro rata share of whatever's left of
the sale proceeds after paying the liquidation costs and all the
other claims.
Headquartered in Ford Heights, Illinois, New Heights Recovery &
Power, LLC -- http://www.tires2power.com/-- is the owner and
operator of the Tire Combustion Facility and other tire rubber
processing facilities. The Company filed for chapter 11
protection on April 29, 2004 (Bankr. Del. Case No. 04-11277).
Eric Lopez Schnabel, Esq., at Klett Rooney Lieber & Schorling
represents the Debtor in its restructuring efforts. When the
Company filed for chapter 11 protection, it listed both its
estimated debts and assets of $50 million. The Debtor first filed
for bankruptcy in March 26, 1996, as a result to the amendment of
the Retail Rate Law. It emerged towards the end of 1998.
NEXTWAVE TELECOM: Court Confirms Modified 3rd Joint Chap. 11 Plan
-----------------------------------------------------------------
The Honorable Judge Adlai S. Hardin of the U.S. Bankruptcy Court
for the Southern District of New York approved NextWave's plan of
reorganization, setting the stage for the company to emerge from
Chapter 11.
Holders of 209,632,292 shares of stock in NextWave Telecom, Inc.,
have voted to accept the company's Modified Third Joint Plan of
Reorganization and accepted the deal. That number of shares
represents 99.98% of the shares voted in Class 1J under NextWave's
Plan. As previously reported in the Troubled Company Reporter,
the modified plan gives shareholders the option of a cash
settlement or rolling the dice and investing in NextWave's new
business plan.
"[March 1] is a very special day for NextWave and all its
stakeholders," said Allen Salmasi, NextWave's Chairman and CEO.
"It has been a long and challenging road to get to this moment,
which makes it all the more special. We are pleased that the
years of effort have resulted in a Plan that pays creditors in
full and provides for significant distributions to equity holders.
I am grateful to the constituents of the NextWave estates and to
the bankruptcy court for their patience and tremendous support in
helping us achieve these results."
The Plan also opens the door to a bright new future for the
reorganized company to pursue broadband wireless opportunities on
a fully funded basis. Using the opportunity of the
reorganization, NextWave's initial plan includes a commercial
launch of broadband wireless operations in Las Vegas, Nevada and
in New York City.
"We strongly believe that new and emerging 4th generation IT-based
wireless technologies will provide us with cost advantages and an
ability to offer a unique and wider range of services that cannot
be offered over existing wireless networks," said Mr. Salmasi.
NextWave has invested in the development of certain emerging 4th
generation wireless technologies and devices in order to customize
their features and benefits and to accelerate the company's
time-to-market entry. NextWave will pursue a dual-use network
strategy by making its facilities available to government entities
for public safety applications at the same time the company offers
commercial broadband wireless services to the consumer market.
The effectiveness of NextWave's plan is subject to various
contingencies, including FCC regulatory approval of a transaction
whereby Verizon Wireless will acquire NextWave's PCS licenses.
That transaction already has been approved by the bankruptcy court
and has cleared the Hart-Scott-Rodino antitrust review process.
The company is confident that all remaining contingencies will be
satisfied in the near future.
Headquartered in Hawthorne, New York, NextWave Telecom, Inc. --
http://www.nextwavetel.com/-- was organized in 1995 to provide
high-speed wireless Internet access and voice communications
services to consumer and business markets on a nationwide basis.
NextWave is currently constructing a third-generation CDMA2000 1X
network in all of its 95 PCS markets whose geographic scope covers
more than 168 million POPs coast to coast, including all top 10
U.S. markets, 28 of the top 30 markets, and 40 of the top 50
markets. NextWave's "carriers' carrier" strategy allows existing
carriers and new service providers to market NextWave's network
services through innovative airtime arrangements. The company
filed for chapter 11 protection (Bankr. S.D.N.Y. Case No.
98-23303) on December 23, 1998. Deborah Lynn Schrier-Rape, Esq.
of Andrews & Kurth, LLP represents the Debtor.
NORTEL NETWORKS: Declares Preferred Share Dividends
---------------------------------------------------
The board of directors of Nortel Networks Limited declared a
dividend on each of the outstanding Cumulative Redeemable Class A
Preferred Shares Series 5 (TSX:NTL.PR.F) and the outstanding
Non-cumulative Redeemable Class A Preferred Shares Series 7
(TSX:NTL.PR.G).
The dividend amount for each series is calculated in accordance
with the terms and conditions applicable to each respective
series, as set out in the Company's articles. The annual dividend
rate for each series floats in relation to changes in the average
of the prime rate of Royal Bank of Canada and The Toronto-Dominion
Bank during the preceding month and is adjusted upwards or
downwards on a monthly basis by an adjustment factor which is
based on the weighted average daily trading price of each of the
series for the preceding month, respectively. The maximum monthly
adjustment for changes in the weighted average daily trading price
of each of the series will be plus or minus 4.0% of Prime. The
annual floating dividend rate applicable for a month will in no
event be less than 50% of Prime or greater than Prime. The
dividend on each series is payable on April 12, 2005, to
shareholders of record of such series at the close of business on
March 31, 2005.
Nortel Networks is a recognized leader in delivering
communications capabilities that enhance the human experience,
ignite and power global commerce, and secure and protect the
world's most critical information. Serving both service provider
and enterprise customers, Nortel delivers innovative technology
solutions encompassing end-to-end broadband, Voice over IP,
multimedia services and applications, and wireless broadband
designed to help people solve the world's greatest challenges.
Nortel does business in more than 150 countries. For more
information, visit Nortel on the Web at http://www.nortel.com/
For the latest Nortel news, visit http://www.nortel.com/news
* * *
As reported in the Troubled Company Reporter on Dec. 10, 2004,
Standard & Poor's Ratings Services placed its B-/Watch Developing
credit rating on Nortel Networks Lease Pass-Through Trust
certificates series 2001-1 on CreditWatch with negative
implications.
The rating on the pass-through trust certificates is dependent
upon the ratings assigned to Nortel Networks, Ltd., and ZC
Specialty Insurance, Co. This CreditWatch revision follows the
Dec. 3, 2004, withdrawal of the ratings assigned to ZC Specialty
Insurance, Co. Previously, the rating had a CreditWatch
developing status due to the CreditWatch developing status on the
rating assigned to Nortel.
The pass-through trust certificates are collateralized by two
notes that are secured by five single-tenant, office/R&D buildings
that are leased to Nortel ('B-'). Nortel guarantees the payment
and performance of all obligations of the tenant under the leases.
The lease payments do not fully amortize the notes. A surety bond
from ZC Specialty Insurance Co. insures the balloon amount.
NS GROUP INC: S&P Withdraws B+ Corporate Credit Rating
------------------------------------------------------
Standard & Poor's Ratings Services withdrew its 'B+' corporate
credit rating on NS Group Inc., at the company's request.
NS Group, Inc. -- http://www.nsgrouponline.com/-- is a premier
supplier of tubular products to the energy market. The energy
related products include seamless and welded tubular products that
are used as drill pipe, casing and production tubing. These
products are utilized in oil and natural gas drilling and
production applications and are referred to as oil country tubular
goods, or OCTG. NS Group also manufacture seamless and welded
line pipe. Line pipe products are primarily used as gathering
lines for the transmission and distribution of oil and natural
gas. Line pipe is utilized by both gas utility and transmission
companies. Sales of energy products represent approximately 90%
of the company's revenues.
NS Group also serves the industrial markets. The Company
manufactures pipe and tube for several industrial applications
including construction and water transmission.
OWENS-ILLINOIS: Fitch Junks Senior Subordinated Notes
-----------------------------------------------------
Fitch Ratings has affirmed the ratings for Owens-Illinois
(NYSE: OI) and revised the Rating Outlook to Positive from Stable.
Current ratings are:
-- Senior Secured Credit Facilities 'B+';
-- Senior Secured Notes 'B';
-- Senior Unsecured Notes 'CCC+';
-- Convertible Preferred Stock 'CCC'.
At the same time, Fitch assigned a 'CCC' rating to OI's senior
subordinated notes. OI assumed BSN's senior subordinated
debentures, 10.25% due 2009 and 9.25% due 2009, at the time of the
BSN acquisition. During the fourth quarter of 2004, OI's wholly
owned subsidiary Owens-Brockway issued 6.75% senior unsecured
notes due 2014 to refinance a large portion of BSN's subordinated
notes and to repurchase a substantial portion of OI's 7.15% notes
due 2005.
The ratings affect approximately $5.8 billion of debt and
preferred securities.
The revision in the Rating Outlook reflects positive revenue
trends, improving cash flow, and Fitch's expectation that the
company will continue to focus on margin improvement at BSN,
working capital management, productivity and cash generation,
which should help make further debt reduction possible in 2005.
The Outlook revision also reflects OI's successful divestiture of
its plastic container business, which allowed the debt reduction
discussed below. Concerns include the ongoing integration of BSN,
margin improvement at BSN, exposure to interest rate changes, and
an increase in capital expenditures, which could pressure free
cash flow. The ratings reflect OI's strong global market
positions, offset by high leverage, high capital spending
requirements, modest free cash flow generation relative to total
debt, and asbestos liabilities.
The company paid down $1.2 billion in debt during the fourth
quarter of 2004, using the proceeds from the sale of its
blow-molded plastic container business. OI also received $81.8
million in cash from the sale of its 20% equity interest in its
South African business -- Consol Limited, which also helped bring
down debt. Total debt at the end of 2004 was $5.4 billion, down
$65 million from 2003. In 2005, another $300 million of debt
reduction through free cash flow and sales of the two European
glass plants is expected, making the total debt reduction since
the BSN acquisition larger than Fitch originally expected.
Continued improvement in margins, working capital management, and
free cash flow could lead to further de-levering, which could help
improve credit profile. However, the Positive Outlook could be
subject to review if industry conditions don't support higher
revenue or if cash expenditures are higher for capital
expenditures, interest expense, or working capital.
A planned price increase in 2005 (about 3%) is expected to largely
offset inflation, and margin improvement is expected to come
largely from higher volumes, favorable product mix, and continued
productivity improvement. OI's margins have deteriorated over the
past several years due to weak operating conditions, higher costs,
lower pension income and a shift in product mix. The EBITDA
margin in 2004 was 19.6%, compared to 20.2% in 2003, 23.1% in
2002, and 24.3% in 2001 before adjustments for discontinued
businesses. While both pricing and volumes have improved with
economic conditions in 2004, costs for raw materials, rail and
truck freight, and energy were higher, resulting in margin
deterioration. In addition, lower margins at BSN (an 8% operating
margin, compared to a 16% operating margin at OI prior to the
acquisition) negatively affected OI's overall profitability in
2004.
OI's ongoing operating efficiency improvement initiatives, which
include global standardization of furnaces and machinery, global
sourcing, supply chain management, and uniform IT systems,
contributed to improved working capital during 2004. Cash flow
from operations - CFO -- rose to $617.7 million in 2004, up from
$351.1 million in 2003. CFO/debt improved to 11.5% in 2004 from
6.5% in 2003. While free cash flow of $156 million in 2004 was
slightly better than had been expected by Fitch, it remains low
relative to OI's total debt.
Gross asbestos payments were down slightly at $190 million in 2004
compared to $199 million in 2003 and $221 million in 2002. Fitch
believes that the total payment will continue to decline going
forward, given the relatively limited time that OI used asbestos
in its products (1948 through 1958) and the average age of the
claimants (76). An offsetting factor is the lack of asbestos-
related insurance proceeds. Since 2001, when OI received proceeds
of $164 million, insurance proceeds have been $25 million or less
($2.2 million in 2004) and are not expected to change materially.
OI took a charge for asbestos reserves in the amount of
$152.6 million in 2004 compared to $450 million in 2003.
OI has become more focused on cash flow since the company hired a
new CEO in April 2004. The company's efficiency improvement
programs as well as compensation structure together with stronger
business environment have resulted in positive free cash flow in
2004. Positive free cash flow and the downward trend in asbestos
payments are expected to help reduce debt going forward.
Debt/EBITDA was 4.4x, flat from 2003, and debt/capital was 77.4%,
down from 84.4% in 2003. The proportion of OI's floating rate
debt has declined to 40%, from 60% as recently as the middle of
2004, helping to reduce the company's sensitivity to higher
interest rates. Fitch expects the company to continue to improve
free cash flow and reduce debt in the intermediate term.
Owens-Illinois, with annual revenues of $6.2 billion, is the
largest manufacturer of glass containers in the world, with
leading positions in Europe, North America, Asia Pacific and South
America. OI also manufactures plastic packaging products and
closures.
OWENS CORNING: CSFB Files Post-Trial Reply Brief re Estimation
--------------------------------------------------------------
On behalf of Credit Suisse of First Boston, as agent for Owens
Corning's Bank Lenders, Ralph I. Miller, Esq., at Weil, Gotshal &
Manges LLP, in Dallas, Texas, asserts that the Post-Trial Briefs
filed by the Debtors, the Official Committee of Asbestos Personal
Injury Claimants, and the Official Representative of Future
Asbestos Personal Injury Claimants, fail to address most of the
key elements of the Bank Debt Holders' argument, which were
clearly presented in their Pre-Trial brief, opening statement,
trial evidence, and closing arguments. The Bank Debt Holders'
position can be split into two parts:
(1) In estimating liability for future claims against a
company in bankruptcy, one can use pre-bankruptcy claims
values as a starting point. However, according to Dr.
Peterson, extrapolations from historical claims values are
"problematic" if there have been or will be changes to the
bases on which the pre-bankruptcy claims were settled; and
(2) The vast majority of the huge difference between the
dollar amounts of the estimates of the Asbestos Claimants'
experts, on the one hand, and of Drs. Dunbar and Vasquez
on the other, was driven by seven major disputes, as to
which the Asbestos Claimants' estimates were unsupported
by any serious analysis and were indefensible.
Mr. Miller tells Judge Fullam that the Plan Proponents' Post-
Trial briefs completely ignored the fundamental principles
espoused by Dr. Peterson -- and concurred in by Dr. Vasquez --
which established that the Asbestos Claimants' attempt to
forecast the future liabilities by blindly extrapolating from the
past is patently improper under these circumstances. Instead,
they have continued to argue, as they did at the closing, that as
a matter of law, in conducting its estimation of the post-
bankruptcy claims the District Court is "required" to "determine
them the way they would be determined by state courts" -- or more
precisely, in the same way they would have been determined by
state courts in the 1990s.
The Plan Proponents consistently failed either to confront the
Bank Debt Holders' real arguments and the trial evidence
supporting them, or they have relied largely on anecdotal
testimony that was unsupported by any verifiable data or
analysis. After ignoring the issues that drive the majority of
the dollar differences between the competing estimates, the Plan
Proponents devoted much of their effort to criticizing Dr.
Dunbar's estimation method.
The Disputed Issues
Mr. Miller adds that the Plan Proponents also failed to make a
serious effort to address the major disputed issues among the
competing expert forecasts, or to refute the evidence, which
established that, their experts' estimates are unsupported and
indefensible. The seven major issues are:
(1) Propensity to sue;
(2) Unimpaired claim values;
(3) Punitive damages;
(4) Age adjustments to claim values;
(5) Adjustments to exclude claims supported by "Bad Doctors";
(6) Dismissal rates; and
(7) Discount rate.
The seven major disputes account for most of the difference in
the amounts of competing forecasts, Mr. Miller tells the Court.
When the District Court considers the evidence relating to these
disputes, it will be clear that the Asbestos Claimants have
either failed to dispute or are clearly wrong with respect to
virtually all of them.
CSFB presents in a chart the differences between the
methodologies of various experts, including Drs. Vasquez and
Dunbar, on most of the seven disputed issues. Mr. Miller notes
that Drs. Vasquez and Dunbar took a similar approach that is why
their estimates are in the same range -- and a fraction of Dr.
Peterson's.
A copy of the chart is available at no charge at:
http://bankrupt.com/misc/ComparisonofEstMethod.pdf
Mr. Miller insists that the Asbestos Claimants are not being
discriminated against "in any way, shape, or form." Mr. Miller
points out that the Banks' claims are liquidated non-contingent
uncontested claims. If there was any dispute concerning the
Banks' claims -- and there is not -- the validity of the claim
would be resolved by applying substantive state contract law.
Mr. Miller further explains that the allowability of the Bank
Debt Holders' claims, however, is a matter to be resolved under
federal bankruptcy law. The same legal framework applies to the
asbestos claims. "While those claims are contingent and
unliquidated, they, too, are analyzed under substantive state law
to determine their validity, but are subject to federal
procedural law and federal bankruptcy law to determine how much,
if any, of the claims will be allowed," Mr. Miller points out.
Mr. Miller also notes that this is no different from how any
other substantial contingent, unliquidated claim would be
estimated under Section 502(c) of the Bankruptcy Code.
Governing Law
Mr. Miller contends that the governing law in the case is simple:
The Court can not extrapolate from the pre-bankruptcy
settlement history without taking into account any
changes to the factors that impacted either the claims
filing rates and/or the value of claims between the pre-
bankruptcy era and the real world of 2005 and beyond in
which the claims will now be resolved.
The Bank Debt Holders believe that the threshold point is fatal
to the Plan Proponents' position, and their contention that the
District Court is required to simply replicate what would have
happened if the future claims had been filed in state court
litigations in the 1990s is specious. It is contradicted by Dr.
Peterson's writings and testimony and by Dr. Rabinovitz's work in
A.H. Robins (880 F.2d at 702), Dr. Vasquez's report and testimony
in this case, and even by the arguments asserted by the Plan
Proponents themselves when they seek to exclude from their
forecasts those chapters of Owens Corning's historical claims
experience which they don't like.
According to Mr. Miller, it is understandable that the Asbestos
Claimants would want to put blinders on the Court, bar it from
considering or applying the reforms that other federal courts and
trusts have implemented, and forecast the future by blindly
extrapolating from the 1990s state court litigation claims
values. Mr. Miller points out that the Plan Proponents' briefs
confirm that the system was "extraordinarily profitable" for
them. In any event, the notion that the District Court is
required, as a matter of law, to disregard the measures that the
federal courts and trusts have taken, and to instead mimic the
1990s state court system is clearly wrong from every perspective.
Competing Interests
Mr. Miller also tells Judge Fullam that there are stark
differences between the competing estimates, and examination of
those differences compels the conclusion that the Bank Debt
Holders' estimate is far more defensible than those of the
Asbestos Claimants or of the Debtors. The Asbestos Claimants'
estimates are tied inextricably to Owens Corning's historic
experience in the state court system prior to bankruptcy. But
the evidence has demonstrated overwhelmingly that the company's
claim history was shaped by factors that will not apply in any
bankruptcy claims resolution process -- either in the federal
tort system or a bankruptcy trust. These factors are:
* the whip of punitive damages;
* the inability to eliminate claims based on sham X-ray
readings conducted in mass screenings because it was cheaper
to pay such claims than it was to dispute them;
* the massive surge of claims that accompanied the NSP; and
* the corresponding decline of dismissal rates.
Mr. Miller notes that the Asbestos Constituencies' estimates
approximate what would happen if the abuses of a broken system
were perpetuated in the future.
Dr. Dunbar and Other Experts' Estimation
Mr. Miller argues that Dr. Dunbar prepared the most
sophisticated, precise and relevant estimate available to the
District Court for the allowable value of pending and future
asbestos personal injury claims against Owens Corning. Dr.
Dunbar performed more analyses, considered more sources of data,
and evaluated more alternative approaches than any of the other
experts. When mischaracterization of Dr. Dunbar's work by the
Plan Proponents are corrected, Dr. Dunbar's estimate of
$2.046 billion stands as the most reliable and realistic estimate.
Drs. Peterson and Rabinovitz, in contrast, use forecasting
methodologies designed to replicate the past, regardless of the
likelihood that future circumstances will change. So, they
project into the future all the abuses and anomalies of Owens
Corning's experience in the tort system.
The Debtors quite remarkably ignore the entire estimate prepared
by their expert, Dr. Vasquez. The Debtors are compelled to
concede that Dr. Vasquez and Mr. Mayer's combined estimate of
present and future asbestos liability is reasonable. This
concession notwithstanding, in their cross-examination and in
their brief the Debtors manipulate Dr. Vasquez's numbers in an
effort to inflate his estimate as high as possible.
The Debtors' current representations to the Court lack
credibility. Thus, CSFB asks the Court to consider Dr. Vasquez's
analysis as stated in his report, not the revisionist version
that Owens Corning crafted out by asking Dr. Vasquez to add items
back into his estimate, such as punitive damages, that he himself
does not believe should be added back.
As the Debtors have conceded, Dr. Vasquez's Method I estimate of
$3.2 billion, when combined with the value of pending claims, is
squarely within the range of reasonableness. Adjusting Dr.
Vasquez's Method 1 estimate to use the legally correct discount
rate of 8.1% brings his estimate to approximately $2.85 billion
-- very close to Dr. Dunbar's analysis. Using Dr. Dunbar's more
thorough and detailed analysis on the remaining issues would make
the Vasquez and Dunbar estimates even closer.
Because Dr. Dunbar's analysis incorporates all of these
adjustments, CSFB asks the Court to adopt Dr. Dunbar's
$2.046 billion asbestos liability estimation.
A full-text copy of the Bank Debt Holders' 79-page Reply to the
Plan Proponents' Post-Trial Briefs is available at:
http://bankrupt.com/misc/OWCTab50.pdf
Headquartered in Toledo, Ohio, Owens Corning --
http://www.owenscorning.com/-- manufactures fiberglass
insulation, roofing materials, vinyl windows and siding, patio
doors, rain gutters and downspouts. The Company filed for chapter
11 protection on October 5, 2000 (Bankr. Del. Case. No. 00-03837).
Mark S. Chehi, Esq., at Skadden, Arps, Slate, Meagher & Flom,
represents the Debtors in their restructuring efforts. At
Sept. 30, 2004, the Company's balance sheet shows $7.5 billion in
assets and a $4.2 billion stockholders' deficit. The company
reported $132 million of net income in the nine-month period
ending Sept. 30, 2004. (Owens Corning Bankruptcy News, Issue No.
100; Bankruptcy Creditors' Service, Inc., 215/945-7000)
OWENS CORNING: Wants to Assume Provia Software Agreement
--------------------------------------------------------
On March 20, 2000, Owens Corning entered into three agreements
with Provia Software, Inc.:
-- a Viaware(R) License Agreement,
-- a Viaware(R) Services Agreement and
-- a Viaware(R) Support Agreement.
Pursuant to these Software Agreements, Owens Corning utilizes
Provia's warehouse management system and yard management system.
Owen Corning also obtains from Provia related training,
installation, implementation and other professional services, as
well as technical support and updates, revisions and new versions
of the Software. The Software currently is installed at 28
warehouse facilities and plants. Plans are underway to have the
Software installed at six additional facilities in 2005.
The Software is a focal point of inventory management and product
distribution at the Facilities. The Warehouse Management System,
for example, tracks products received from production and
identifies, among other things, where products are stored, when
products are moved from a location, when products are to be
shipped, and when trailers are being loaded with products. Yard
Management Systems also tracks Owens Corning's trailers and common
carriers' fleets of trailers assigned to Owens Corning.
The Software automatically updates Owens Corning's enterprise
resource planning system, which runs substantially all aspects of
most of Owens Corning's businesses in an integrated manner. The
Software's ability to integrate well and directly interface with
the resource planning system, together with certain unique
functionality like the abilities to track curing periods for
certain finished goods and variable weight pallets, are some of
the attributes which led Owens Corning to select the Provia
Software.
On April 4, 2001, Provia filed Claim No. 2530 and asserted an
unsecured non-priority claim against Owens Corning for $271,432,
representing goods sold and services rendered pursuant to the
Software Agreements.
After certain discussions regarding the Claim and the Software
Agreements, the Parties agreed that Owens Corning will assume the
Supply Agreements and pay to Provia $206,000, as Cure Amount, in
full and complete satisfaction of Owens Corning's cure obligation
pursuant to Section 365 of the Bankruptcy Code.
The Debtors believe that assumption of the Software Agreements is
an appropriate exercise of Owens Corning's business judgment and
in the best interests of the Debtors' estates. Assumption of the
Software Agreements will permit Owens Corning to continue to
utilize the Software and obtain the related support and other
services for efficient and cost effective inventory management and
product distribution functions of Owens Corning's insulation,
composites and exterior vinyl businesses.
Accordingly, the Debtors seek the permission of the U.S.
Bankruptcy Court for the District of Delaware to assume the
Software Agreements and pay the Cure Amount.
Headquartered in Toledo, Ohio, Owens Corning --
http://www.owenscorning.com/-- manufactures fiberglass
insulation, roofing materials, vinyl windows and siding, patio
doors, rain gutters and downspouts. The Company filed for chapter
11 protection on October 5, 2000 (Bankr. Del. Case. No. 00-03837).
Mark S. Chehi, Esq., at Skadden, Arps, Slate, Meagher & Flom,
represents the Debtors in their restructuring efforts. At
Sept. 30, 2004, the Company's balance sheet shows $7.5 billion in
assets and a $4.2 billion stockholders' deficit. The company
reported $132 million of net income in the nine-month period
ending Sept. 30, 2004. (Owens Corning Bankruptcy News, Issue No.
100; Bankruptcy Creditors' Service, Inc., 215/945-7000)
PARMALAT USA: All Impaired Classes Accepts Chapter 11 Plan
----------------------------------------------------------
Pursuant to the order of the U.S. Bankruptcy Court for the
Southern District of New York approving the Revised Disclosure
Statement of Parmalat USA Corporation and its U.S.
debtor-affiliates , Bankruptcy Services, LLC, was instructed to
solicit votes from the holders of claims and equity interests
entitled to vote as of January 12, 2005, in these classes:
* PUSA Class 3;
* PUSA Class 4;
* Farmland Class 3a;
* Farmland Class 3b;
* Farmland Class 3c;
* MPA Class 3; and
* MPS Class 4.
Each holder of a claim or equity interest in the Voting Classes
was mailed a Solicitation Package and received an appropriate
form of ballot.
Bankruptcy Services Case Manager Diane Streany tells the Court
that creditors have voted overwhelmingly to accept the Debtors'
Plan.
Ms. Streany reports the results of the tabulation of properly
executed ballots received prior to the Voting Deadline:
______________________________________________________________
| | |
| | Total Ballots Received |
| |____________________________________________|
| | | |
| | Accept | Reject |
| Claims |______________________|_____________________|
| | Claim | No. of | Claim | No. of |
| | Amount | Claims | Amount | Claims |
|_________________|____________|_________|___________|_________|
| | | | | |
| PUSA Class 3 |$20,837,856 | 39 | $35,595 | 4 |
| | | | | |
| | (99.83%) |(90.70%) | (0.17%) | (9.30%) |
|_________________|____________|_________|___________|_________|
| | | | | |
| PUSA Class 4 | $0 | 0 | $0 | 0 |
| | | | | |
| | (0.00%) | (0.00%) | (0.00%) | (0.00%) |
|_________________|____________|_________|___________|_________|
| | | | | |
| Farmland | $5,112,575 | 203 | $904,429 | 52 |
| Class 3a | | | | |
| | (84.97%) | (79.61%)| (15.03%) |(20.39%) |
|_________________|____________|_________|___________|_________|
| | | | | |
| Farmland | $1 | 1 | $0 | 0 |
| Class 3b | | | | |
| | (100.00%) |(100.00%)| (0.00%) | (0.00%) |
|_________________|____________|_________|___________|_________|
| | | | | |
| Farmland | $59,413 | 72 | $14,739 | 9 |
| Class 3c | | | | |
| | (80.12%) |(88.89%) | (19.88%) |(11.11%) |
|_________________|____________|_________|___________|_________|
| | | | | |
| MPA Class 3 | $1,560,398 | 17 | $9,280 | 1 |
| | | | | |
| | (99.41%) |(94.44%) | (0.59%) | (5.56%) |
|_________________|____________|_________|___________|_________|
| | | | | |
| MPA Class 4 | $1 | 1 | $0 | 0 |
| | | | | |
| | (100.00%) |(100.00%)| (0.00%) | (0.00%) |
|_________________|____________|_________|___________|_________|
As reported in the Troubled Company Reporter yesterday, the
hearing to consider confirmation of the Debtors' Revised Plan has
been adjourned to March 7, 2005, at 10:00 a.m.
Headquartered in Wallington, New Jersey, Parmalat USA Corporation
-- http://www.parmalatusa.com/-- generates more than 7 billion
euros in annual revenue. The Parmalat Group's 40-some brand
product line includes milk, yogurt, cheese, butter, cakes and
cookies, breads, pizza, snack foods and vegetable sauces, soups
and juices and employs over 36,000 workers in 139 plants located
in 31 countries on six continents. The Company filed for chapter
11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No.
04- 11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at
Weil Gotshal & Manges LLP represent the Debtors in their
restructuring efforts. On June 30, 2003, the Debtors listed
EUR2,001,818,912 in assets and EUR1,061,786,417 in debts.
(Parmalat Bankruptcy News, Issue No. 45; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
PARMALAT USA: Pension Benefit Objects to Plan Confirmation
----------------------------------------------------------
The Pension Benefit Guaranty Corporation contends that the
proposed discharges, releases, and injunctions provided in the
Revised Plan of Reorganization of Parmalat USA Corporation and its
U.S. debtor-affiliates violate Sections 1141 and 524(e) of the
Bankruptcy Code.
The PBGC is the United States government agency that administers
the nation's mandatory defined benefit pension plan termination
insurance program. The U.S. Debtors and other members of their
corporate group are responsible for at least six benefit pension
plans and the PBGC provides termination insurance for all of
those. The Debtors and their non-debtor subsidiaries are either
the Pension Plan's "contributing sponsor," or are members of its
ERISA "controlled group."
On August 23, 2004, the PBGC filed claims for unfunded benefit
liabilities against the U.S. Debtors for an estimated cumulative
$33,142,300. The PBGC also filed liquidated and unliquidated
claims for minimum funding contributions due to the Pension Plans
for an estimated cumulative amount equal to $3,934,667. The PBGC
further filed unliquidated claims for premiums against the Debtors
with respect to the Pension Plans. The claims were filed assuming
that the termination date of the Pension Plans was April 16, 2004.
Vicente Matias Murrell, Esq., of the Office of the General
Counsel, in Washington, D.C., reminds the U.S. Bankruptcy Court
for the Southern District of New York that third parties --
including, inter alia, non-bankrupt affiliates of the Debtors and
their former and current employees, attorneys, agents and advisors
-- are not entitled to benefit from the U.S. Debtors' bankruptcy
by receiving exculpation and releases from past and future claims.
The offensive Plan provisions could later be construed to unfairly
wipe out claims that parties may not even know about. Those Plan
provisions would also contradict the explicit provisions of ERISA
that authorize the PBGC's and the defined pension plans' pursuit
of certain claims against parties who might benefit from the broad
scope of the release and injunction provisions.
Mr. Murrell notes that Section 524(e) expressly prohibits the
release of claims against non-debtors, providing that the
"discharge of a debt of the debtor does not affect the liability
of any other entity on, or the property of any other entity for,
such debt." In granting releases to third parties, the U.S.
Debtors may be facilitating the improper discharge of debts owed
to the Pension Plans. The Pension Plans are neither in bankruptcy
nor are they part of the Parmalat estates. Also, the Pension
Plans have not been supervised by the Court while the Debtors have
been in bankruptcy and the Court has had no role in making
decisions regarding their administration. Thus, there is no basis
for the Debtors or any other parties to obtain any type of relief
from any obligations due to the Pension Plans.
In addition, Title I of ERISA expressly bans exculpatory
provisions that relieve fiduciaries from liability for a breach of
fiduciary duty. As the legislative history of that provision
makes clear, "exculpatory provisions which relieve a fiduciary
from liability for breach of the fiduciary responsibility are to
be void and of no effect." Even if the U.S. Debtors attempt to
apply their Plan's exculpatory provisions to the Pension Plans,
the Pension Plans are continuing post-confirmation. Therefore,
there can be no exculpation of any liability that any parties may
owe to the Pension Plans.
Mr. Murrell informs the Court that immediately after the
Disclosure Statement Hearing and in subsequent communications, the
U.S. Debtors and the PBGC discussed the confirmation issues. The
Debtors and the PBGC started working together to effectuate a
consensual resolution on those confirmation-related issues. Those
issues are still currently unresolved. As it is apparent that
resolution of the issues will not occur before the Confirmation
Objection Deadline, the PBGC files its objection to preserve all
its rights.
The PBGC would be willing to withdraw its objections to the
offensive exculpatory and release provisions if the U.S. Debtors'
Plan clarifies that:
1. Reorganized Farmland will continue to be the contributing
sponsor of the Pension Plans, as defined under 29 U.S.C.
Section 1301(a)(13) and 29 C.F.R. Section 4001.2.
2. As a contributing sponsor of the Pension Plans,
Reorganized Farmland will fund the Pension Plans in
accordance with the minimum funding standards under ERISA,
29 U.S.C. Section 1082, pay all required PBGC insurance
premiums, 29 U.S.C. Section 1307, and comply with all
applicable requirements of the Pension Plans and ERISA.
3. No provisions of or proceeding within the Debtors'
reorganization proceedings, the Plan of Reorganization, or
the Confirmation Order, will in any way be construed as
discharging, releasing or relieving the Debtors,
Reorganized Farmland, or any other party in any capacity,
from any liability with respect to the Pension Plans or
any other defined benefit pension plan under any law,
governmental policy or regulation provision.
4. PBGC and the Pension Plans will not be enjoined or
precluded from enforcing any liability with respect to the
Pension Plans on account of, or as a result of any of the
provisions of the Plan, or the Plan's confirmation.
Mr. Murrell further argues that the U.S. Debtors' Plan is
ambiguous as to the fate of the Pension Plans once it is
confirmed. Article 7.16 of the Plan provides that
"(f)ollowing the effective date, Farmland presently intends to
cause Reorganized Farmland to continue to maintain the Pension
Plans. . . ." This vagueness is unacceptable, according to Mr.
Murrell, because whether Reorganized Farmland continues the
Pension Plans directly impacts the viability of the Plan the U.S.
Debtors are seeking to confirm.
Moreover, Title IV of ERISA provides the exclusive means of
terminating a pension plan. It contains strict standards that
must be met for a pension plan sponsor to seek pension plan
termination. If the Pension Plans terminate, Reorganized Farmland
would become immediately liable for all of the Pension Plans'
unfunded benefit liabilities, minimum funding contributions and
premiums for pension plan termination insurance due the PBGC.
Mr. Murrell tells the Court that the Reorganization Plan does not
contain any provisions for Reorganized Farmland's meeting that
obligation post-confirmation. If Reorganized Farmland cannot
commit to maintaining the Pension Plans, the Debtors' Plan as
proposed is unconfirmable.
The PBGC also wants the Debtors' Plan to provide that following
the Effective Date, Reorganized Farmland will continue to:
-- maintain the Pension Plans, subject to Farmland's right
to:
(i) amend, terminate or modify the Pension Plans as
permitted by the plans or applicable law; and
(ii) administer and operate the Pension Plan in
accordance with their terms and the applicable
provisions of ERISA and the Internal Revenue Code,
including funding the Pension Plans in accordance
with the minimum funding standards under ERISA; and
-- pay all insurance premiums due and owing with respect to
the Pension Plans to the PBGC.
As reported in the Troubled Company Reporter yesterday, the
hearing to consider confirmation of the Debtors' Revised Plan has
been adjourned to March 7, 2005, at 10:00 a.m.
Headquartered in Wallington, New Jersey, Parmalat USA Corporation
-- http://www.parmalatusa.com/-- generates more than 7 billion
euros in annual revenue. The Parmalat Group's 40-some brand
product line includes milk, yogurt, cheese, butter, cakes and
cookies, breads, pizza, snack foods and vegetable sauces, soups
and juices and employs over 36,000 workers in 139 plants located
in 31 countries on six continents. The Company filed for chapter
11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No.
04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at
Weil Gotshal & Manges LLP represent the Debtors in their
restructuring efforts. On June 30, 2003, the Debtors listed
EUR2,001,818,912 in assets and EUR1,061,786,417 in debts.
(Parmalat Bankruptcy News, Issue No. 45; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
PERKINELMER INC: Moody's Reviewing Low-B Ratings & May Downgrade
----------------------------------------------------------------
Moody's Investors Service has placed PerkinElmer, Inc.'s debt
ratings under review for possible upgrade.
The rating agency stated that the review will focus on a number of
key issues including:
1) sustainability and continued improvement in operating
margins, free cash flow generation and return on assets,
2) further progress in debt reduction,
3) an understanding of future acquisition/shareholder actions
and how such transactions would be prudently financed, and
4) a reading on the re-financing strategy for the company's
secured bank revolving credit and term loan facility.
The ratings under review for possible upgrade include:
* Ba1 for the senior secured revolving credit facility and
secured term loan;
* Ba2 for the senior implied rating;
* Ba2 for the senior unsecured notes;
* Ba3 for the senior subordinated notes and issuer rating; and
* (P)Ba2/(P)Ba3/(P)B1 for securities to be issued pursuant to a
415 shelf registration.
PerkinElmer, Inc., with operations divided into Life & Analytical
Sciences, Optoelectronics and Fluid Sciences, is experiencing
positive trends in all three segments. PerkinElmer, Inc.,
benefits from a high quality, diverse customer base that generates
a recurring revenue stream approaching 50% of total revenues.
Based on press release financial results for fiscal 2004, organic
revenue growth (8%) and expanding margins (EBIT margin of 10.4%)
led to free cash flow (cash flow from operations less capital
expenditures less dividends and excluding the impact of the
accounts receivable securitization program) of $146 million.
Debt-to-EBITDA improved to 1.49x compared to 2.65x at the end of
2003. Return on assets strengthened to 6.8% from 4.7% the prior
year and free cash flow-to-adjusted debt (balance sheet debt plus
outstandings under the accounts receivable securitization facility
plus a modified present value of operating leases excluding the
underfunded pension position) rose to 22.6% from 11.7%. Balance
sheet debt levels were reduced to $375 million with cash on hand
rising to over $197 million. With attractive growth opportunities
emerging in all three operating segments, Moody's anticipates
further improvement in credit metrics for all of 2005.
PerkinElmer, Inc., headquartered in Wellesley, Massachusetts, is a
$1.7 billion diversified high-technology company operating in
three business segments -- Optoelectronics, Life and Analytical
Sciences, and Fluid Sciences.
PLATTE RIVER: Fitch Withdraws BB+ Rating on School Revenue Bonds
----------------------------------------------------------------
Fitch Ratings withdraws the 'BB+' ratings of the Colorado
Educational and Cultural Facilities Authority -- CECFA -- charter
school revenue bonds, series 2002A and 2002B (taxable), issued for
the Platte River Academy -- PRA, a charter school in Douglas
County, Colorado. The series 2002A and 2002B bonds were advance
refunded or refunded to maturity from funds on hand, as well as
the proceeds of CECFA charter school revenue bonds, series 2004,
which were also issued for PRA. Fitch will no longer provide
ratings on the unenhanced or underlying credit quality of PRA.
Fitch's 'AAA' rating of the series 2004 bonds, based on an
insurance policy by XL Capital Assurance, Inc., is unaffected by
the withdrawal of the rating of the series 2002A and 2002B bonds.
RECYCLED PAPERBOARD: Comm. Taps Parente Randolph as Accountants
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey gave the
Official Committee of Unsecured Creditors of Recycled Paperboard,
Inc., permission to employ Parente Randolph LLC, as its
accountants and financial consultants.
Parente Randolph will:
a) assist the Committee in the current financial position of
the Debtor, including its books and records, and in
evaluating the Cash Management Systems currently being used
by the Debtor;
b) assist the Committee in evaluating the Debtor's wind-down
financial projections and test the reasonableness of the
assumptions used in developing the projections and prepare
hypothetical orderly or forced liquidation analyses;
c) assist the Committee in analyzing the financial
ramifications of any proposed transactions, including
potention DIP financing agreements, assumption/rejection
contracts, and management compensation, retention and
severance plans;
d) assist the Committee in its investigation of the acts,
conducts, assets , liabilities and financial condition of
the Debtor, the operation of its business, and the any other
matters relevant to the formulation of a proposed plan of
reorganization or liquidation;
e) assist and advise the Committee in the analysis of the
Debtor's Statements of Financial Affairs and Schedules of
Assets and Liabilities;
f) analyze financial information prepared by the Debtor,
including its Monthly Operating Reports, cash flow
projections and comparisons to actual projected performance;
g) assist the Committee in the evaluation of a proposed sale of
the Debtor's assets and its related procedures under Section
363 of the Bankruptcy Code, and render expert testimony on
behalf of the Committee, if required; and
h) provide all other accounting and financial services to the
Committee or its counsel that are appropriate and necessary.
Edward A. Philips, C.P.A., a Principal at Parente Randolph,
reports the Firm's professionals bill:
Designation Hourly Rate
----------- -----------
Principals/Directors $300 - $425
Managers/Senior Associates $175 - $300
Staff $100 - $175
Paraprofessionals $ 70 - $100
Parente Randolph assures the Court that it does not represent any
interest adverse to the Committee, the Debtor or its estate.
Headquartered in Clifton, New Jersey, Recycled Paperboard Inc.,
manufactures recycled mixed paper and newspaper to make index, tag
& bristol, and blanks. The Company filed for chapter 11
protection on November 29, 2004 (Bankr. D.N.J. Case No. 04-47475).
David L. Bruck, Esq., at Greenbaum, Rowe, Smith & Davis LLP,
represents the Debtor in its restructuring efforts. When the
Debtor filed for protection from its creditors, it listed total
assets of $17,800,000 and total debts of $41,316,455.
RESIDENTIAL ASSET: Fitch Puts BB+ Rating on $5.5M Class B Certs.
----------------------------------------------------------------
Fitch rates Residential Asset Securities Corporation -- RASC,
series 2005-KS2:
-- $100.1 million class A-I-1 'AAA';
-- $113.2 million class A-I-2 'AAA';
-- $9.3 million class A-I-3 'AAA';
-- $200.3 million class A-II-1 'AAA';
-- $22.3 million class A-II-2 'AAA';
-- $37.1 million class M-1 'AA+';
-- $28.9 million class M-2 'A+';
-- $8.3 million class M-3 'A';
-- $8.8 million class M-4 'BBB+';
-- $5.2 million class M-5 'BBB';
-- $4.4 million class M-6 'BBB-';
-- $5.5 million class B 'BB+'.
The 'AAA' rating on the senior certificates reflects the 19.05%
initial credit enhancement provided by:
* 6.75% class M-1,
* 5.25% class M-2,
* 1.50% class M-3,
* 1.60% class M-4,
* 1% class M-5,
* 0.75% class M-6,
* 0.50% class B, along with overcollateralization -- OC.
The initial and target OC is 1.20%. In addition, the ratings
reflect the strength of the transaction's legal and financial
structures and the attributes of the mortgage collateral. The
ratings also reflect the strength of the servicing capabilities
represented by Homecomings Financial Network, Inc. (rated 'RPS1'
by Fitch), and Residential Funding Corporation -- RFC -- as master
servicer.
The collateral pool consists of 3,843 fixed- and adjustable-rate
loans and totals $550 million as of the cut-off date. The
weighted average original loan-to-value ratio -- OLTV -- is
80.38%. The average outstanding principal balance is $143,228 the
weighted average coupon -- WAC -- is 7.22% and the weighted
average remaining term -- WAM -- is 357 months. 68.72% of the
loans have prepayment penalties. The loans are geographically
concentrated in:
* California (11.85%),
* Florida (7.87%) and
* Michigan (5.61%).
The loans were sold by RFC to RASC, the depositor. Prior to
assignment to the depositor, RFC reviewed the underwriting
standards for the mortgage loans and purchased all the mortgage
loans from mortgage collateral sellers who participated in or
whose loans were in substantial conformity with the standards set
forth in RFC's AlterNet program. The AlterNet program was
established primarily for the purchase of mortgage loans made to
borrowers that may have imperfect credit histories, higher debt to
income ratios or mortgage loans that present certain other risks
to investors. The depositor, a special purpose corporation,
deposited the loans in the trust, which then issued the
certificates. For federal income tax purposes, an election will
be made to treat the trust as three real estate mortgage
investment conduits.
RESIDENTIAL ASSET: Moody's Pares Ratings on Five Classes to Low-B
-----------------------------------------------------------------
Moody's Investors Service has downgraded five certificates from
Residential Asset Mortgage Products, Inc., Trust asset-backed
securitization deals from Series 2002-RS1, Series 2002-RS2 and
Series 2002-RS3. The transactions consist of a fixed-rate pool
(pool one) and an adjustable-rate pool (pool two).
These pools are made up of mortgages that are not eligible for
inclusion in Residential Funding Corporation's specific loan
program securitization because they do not satisfy the underlying
guidelines for those programs. The mortgage loans were originated
by a variety of different sellers and are serviced by HomeComings
Financial Network, Inc., a wholly owned subsidiary of RFC.
The most subordinate fixed-rate and adjustable-rate certificates
from the Series 2002-RS1 and 2002-RS2 and the most subordinate
adjustable-rate certificate from Series 2002-RS3 have been
downgraded because existing credit enhancement levels may be low
given the current projected losses on the underlying pools. The
collateral pools have taken significant losses, which may cause
eventual erosion of the overcollateralization.
The complete rating actions are:
-- Issuer: Residential Asset Mortgage Products, Inc.
Downgrades:
* Series 2002-RS1: Class M-I-3, downgraded to Ba3 from Baa2
* Series 2002-RS1: Class M-II-3, downgraded to Ba3 from Baa2
* Series 2002-RS2: Class M-I-3, downgraded to B3 from Ba2
* Series 2002-RS2: Class M-II-3, downgraded to B3 from Ba3
* Series 2002-RS3: Class M-II-3, downgraded to Ba3 from Baa2
RESIDENTIAL ASSET: Moody's Pares Ratings on Six Cert. Classes
-------------------------------------------------------------
Moody's Investors Service has downgraded six certificates from two
Residential Asset Securities Corporation subprime deals issued in
2001. The transactions are backed by fixed-rate and adjustable-
rate subprime mortgage loans originated by various originators.
The master servicer on the transaction is Residential Funding
Corporation -- RFC. Homecomings Financial Network is the primary
servicer for the majority of the loans in the two deals.
The subordinate classes in the fixed-rate group in the two
transactions have been downgraded because existing credit
enhancement levels may be low given the current projected losses
on the underlying pools. The collateral pools have taken
significant losses, which may cause gradual erosion of the
overcollateralization.
Moody's complete rating actions are:
-- Issuer: Residential Asset Securities Corporation
Downgrades:
* Series 2001-KS2; Class M-I-1, downgraded to A2 from Aa2
* Series 2001-KS2; Class M-I-2, downgraded to Baa2 from A2
* Series 2001-KS2; Class M-I-3, downgraded to Ba3 from Baa2
* Series 2001-KS3; Class M-I-1, downgraded to A2 from Aa2
* Series 2001-KS3; Class M-I-2, downgraded to Baa2 from A2
* Series 2001-KS3; Class M-I-3, downgraded to Ba3 from Baa2
RESOURCE FUNDING: Receiver Has Until April 8 to Solicit Bids
------------------------------------------------------------
On Sept. 8, 2003, David M. Levine, Esq., of Tew Cardenas LLP in
Miami, Florida, was appointed as Receiver for Resource Funding
Group, Inc., and various affiliated receivership entities in the
case against Viatical Capital, Inc., d/b/a Life Settlement
Network, Life Investment Funding Enterprises, Inc., Charles
Douglas York, and Robert Kingston Coyle filed by the Securities
and Exchange Commission in the U.S. District Court for the Middle
District of Florida. RFG was a viatical settlement provider based
in Sarasota, Florida. Since the appointment of the Receiver, the
assets of RFG and the affiliated receivership entities have been
managed in receivership.
Recently, the Receivership Court authorized the Receiver to
solicit bids for the portfolio of life insurance policies owned by
RFG and its affiliated RFG Trust. The face value of RFG Portfolio
is approximately $51,000,000. The Receiver prepared a bid package
for those persons or entities interested in submitting bids for
RFG Portfolio.
Contact:
Jack Brennan
Tew Cardenas, LLP
101 North Monroe Street, Suite 725
Tallahasse, FL 32301
Tel: 850-841-7770
for a bid package.
All bids must be received by April 4, 2005. Successful bidders
will be notified of the acceptance of their bids no later than
May 4, 2005. All bids will be accepted subject to Court approval.
About the Company
Over the last 25 years Resource Funding Group, Inc., has
established itself as the cornerstone of finance and support
services exclusively to the staffing industry. RFG stays in the
background providing maximum financial support along with a wide
range of administrative functions. Our comprehensive services give
you the time to devote yourself to driving the growth of your
organization. RFG is a subsidiary of a multi-billion dollar
publicly traded international provider of strategic staffing,
consulting and out-sourcing services. When we work together you
gain all the benefits of partnering with an industry leader while
still maintaining 100% equity of your business. RFG has had the
privilege of assisting thousands of clients in realizing their
business goals. Whether you are looking to escape restrictive
credit limits, free up your existing accounts receivable or build
the equity of your business to sell, RFG offers the best solution.
REPUBLIC ENGINEERED: Ohio Court Dismisses Chapter 11 Cases
----------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Ohio
dismissed the chapter 11 cases of Republic Engineered Products
Holdings, LLC, its and debtor-affiliates on Feb. 14, 2005.
The Debtors sought dismissal when it became apparent that their
businesses could not be rehabilitated. After the Debtors sold all
of their assets, they didn't have enough funds to pay the fees and
expenses to continue in chapter 11. Additionally, the Debtors'
lack of resources makes it impossible to confirm a chapter 11
plan.
As reported in the Troubled Company Reporter on Jan. 5, 2005, the
sale of the Debtors' assets to Perry Capital generated
substantially less than the $375 million that the Debtors owed to
its creditors. In fact, the sale did not generate enough to pay
the secured creditors, who were owed $330 million and who were
entitled under the Bankruptcy Code to be paid first. The Debtors
and their advisors, working with the Official Committee of
Unsecured Creditors and its advisors, agreed with the secured
creditors that $1 million would be set aside to pay for the wind
down of the Debtors and their bankruptcy estates. The funds will
be paid to holders of administrative claims. Holders of unsecured
claims will not get anything.
Headquartered in Fairlawn, Ohio, Republic Engineered Products
Holdings LLC were leading suppliers of special bar quality steel,
a highly engineered product used in axles, drive trains,
suspensions and other critical components of automobiles,
off-highway vehicles and industrial equipment. The Company filed
for chapter 11 protection on October 6, 2003 (Bankr. N.D. Ohio
Case No. 03-55118). Shawn M Riley, Esq., at McDonald, Hopkins,
Burke & Haber Co LPA and Martin J. Bienenstock, Esq., at Weil,
Gotshal & Manges LLP represented the Debtors in their
restructuring efforts. As of June 30, 2003, the Debtors listed
$481,000,000 total assets and $467,939,000 total debts.
ROSENDAHL FARMS: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Rosendahl Farms, Inc.
4624 West Nebraska Avenue
Caruthers, California 93609
Bankruptcy Case No.: 05-11295
Type of Business: The Debtor provides food-dehydrating services.
Chapter 11 Petition Date: February 23, 2005
Court: Eastern District Of California (Fresno)
Judge: Whitney Rimel
Debtor's Counsel: David R. Jenkins, Esq.
P.O. Box 1406
Fresno, CA 93716
Tel: 559-264-5695
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
IRS $440,000
Insolvency Section Stop HQ
5430
P.O. Box 99
San Jose, CA 95103
Unisource Worldwide, Inc. $180,127
File 57006
Los Angeles, CA 90074
Employment Development Dept. Statutory Lien $141,339
Bankruptcy/Special Procedures
Group
P.O. Box 826900
Sacramento, CA 94280
Blue Ridge Gas Co. $135,374
Palumbo Box & Lumber Co. $126,398
Suburban Propane $98,767
Leona Rosendahl $87,573
Pechiney Plastic Packaging $58,166
Fresno County Tax Collector $50,490
Willbur-Ellis Co. $38,019
Gilmore, Wood, Vinnard et al $36,306
Western Farm Service, Inc. $35,380
Sierra Chemical Co. $27,628
Bujulian Brothers, Inc. $25,648
Fruit Patch $25,357
Franchise Tax Board $16,000
Pacific Atlantic Crop $13,562
Exchange, Inc.
Fresno Cooperative Raisin $13,080
Lang, Richert & Patch $12,700
Toyota Motor Credit $12,557
SHADOW CREEK: Case Summary & 7 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Shadow Creek Partners, LLC
9960 Flying Cloud Drive
Eden Prairie, Minnesota 55347
Bankruptcy Case No.: 05-13099
Chapter 11 Petition Date: February 23, 2005
Court: District of Colorado (Denver)
Judge: A. Bruce Campbell
Debtor's Counsel: Lee M. Kutner, Esq.
Kutner Miller, P.C.
303 East 17th Avenue, Suite 500
Denver, CO 80203
Tel: 303-832-2400
Estimated Assets: $10 Million to $50 Million
Estimated Debts: $100,000 to $500,000
Debtor's 7 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Executive Aviation Trade debt $125,000
9980 Flying Cloud Drive
Eden Prairie, MN 55347
Shadow Creek Homeowners Trade debt $25,000
Association
0960 Upper Mesa Trail
Silverthorne, CO 80498
Baker & Hostetler Trade debt $22,888
303 E. 17th Ave., Ste 1100
Denver, CO 80203
Rocky Mountain Valuation Trade debt $20,000
Specialists
McGladrey & Pullen Trade debt $10,000
Porzak Bushong, LLP Trade debt $10,000
Horst Graphics Trade debt $4,112
SHERIDAN MANOR LLC: Case Summary & 39 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Sheridan Manor LLC
dba Sheridan Manor Nursing Home
fdba Sheridan Manor Nursing Home, Inc.
2799 Sheridan Drive
Tonawanda, New York 14150
Bankruptcy Case No.: 05-11352
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Williamsville Suburban LLC 05-11357
Type of Business: The Debtors are affiliates of Ridge View Manor
LLC. The Debtors operate nursing homes that
offer traditional nursing, sub-acute care,
rehabilitation, and assisted adult care.
Chapter 11 Petition Date: February 28, 2005
Court: Western District of New York (Buffalo)
Judge: Michael J. Kaplan
Debtor's Counsel: Elizabeth A. Green, Esq.
R. Scott Shuker, Esq.
Gronek & Latham, LLP
390 North Orange Avenue, Suite 600
Orlando, Florida 32801
Tel: (407) 481-5800
Fax: (407) 481-5801
Estimated Assets Estimated Debts
---------------- ---------------
Sheridan Manor LLC $1MM to $10MM $1MM to $10MM
Williamsville Suburban LLC $1MM to $10MM $1MM to $10MM
A. Sheridan Manor LLC's 19 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Long Term Care Risk Management Trade Debt $641,229
c/o Warren-Hoffman
170 Northpointe Parkway
Amherst, NY 14228-1884
Northern Healthcare Capital Trade Debt $242,067
99 Founders Plaza, Third Floor
PO Box 33078
East Hartford, CT 06108
Care Center Pharmacy Trade Debt $152,283
c/o Donald Nash Jr.
PO Box 552
Dunkirk, New York 14048
Main Street Pharmacy Trade Debt $119,007
247 Cayuga Road
Cheektowaga, NY 14225
Maxim Healthcare Services Trade Debt $114,227
12559 Collections Center Drive
Chicago, IL 60693
Forest Financial Inc. Refinancing of $98,490
9600 Main Street, Suite Three Workers' Compensation
Clarence, NY 14031-2093
Benefits Plus of New York Trade Debt $97,852
Niagara Mohawk Utilities $90,837
New York State Health Trade Debt $89,733
Facilities Association
Blue Cross and Trade Debt $76,495
Blue Shield of West New York
Medical Staffing Network Trade Debt $63,337
Harter, Secrest & Emery LLP Trade Debt $62,003
KLD Ventures and Summit Health Trade Debt $54,345
Catholic Health System Lab Trade Debt $35,627
D' Alba & Donovan CPA Fees $32,575
Wilcare Trade Debt $30,046
Direct Labor Training Trade Debt $30,000
MDTS Trade Debt $29,896
McKesson General Medical Trade Debt $28,604
B. Williamsville Suburban LLC's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Long Term Care Risk Management Trade Debt $442,136
c/o Warren-Hoffman
170 Northpointe Parkway
Amherst, NY 14228-1884
Niagara Mohawk Utilities $434,603
PO Box 4798
Syracuse, NY 13221
Northern Healthcare Capital Sold Accounts $400,282
99 Founders Plaza, Third Floor
PO Box 33078
East Hartford, CT 06108
2121 Main Street Pharmacy Trade Debt and $368,439
c/o Philip M. Marshall, Esq. Lawsuit
Amigone Sanchez Mattrey
1300 Main Place Tower
Buffalo, NY 14202
Care Center Pharmacy Trade Debt $268,646
c/o Donald Nash Jr.
PO Box 552
Dunkirk, NY 14048
Forest Financial Inc. Refinancing of $230,262
9600 Main Street, Suite Three
Clarence, NY 14031-2093
Blue Cross and Trade Debt $213,361
Blue Shield of West New York
PO Box 80
Buffalo, NY 14240-0080
Benefits Plus of New York Trade Debt $181,536
3685 Harlem Road, Suite 2A
Cheektowaga, NY 14215
Medical Staffing Network Trade Debt $155,663
Paley & Goldwyn, PL
901 Yamato Road, Suite 210
Boca Raton, FL 33431
Maxim Healthcare Services Trade Debt $154,488
12559 Collections Center Drive
Chicago, IL 60693
New 165 South Union, Inc. Trade Debt $151,980
Attn: Barry Portnoy
400 Centre Street
Newton, MA 02458
McKesson Medical-Surgical Trade Debt $150,775
PO Box 27100
Golden Valley, MN 55427-0100
New York State Health Trade Debt $142,678
Facilities Association
33 Elk Street, Suite 300
Albany, NY 12207-1010
MDTS dba Health Trac Trade Debt $110,635
PO Box 8000-445
Buffalo, NY 14267
Goodcare Home Health Service Trade Debt $102,666
315 Alberta Drive
Amherst, NY 14226
US Food Service Trade Debt $71,188
McKesson General Medical Trade Debt $70,856
NYSEG Solutions, Inc. Trade Debt $65,234
Sibley Nursing Personnel Trade Debt $63,081
Service
Nursefinders Trade Debt $54,627
SOLUTIA INC: Court Approves Contribution Settlement Procedures
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approved the procedures proposed by Solutia, Inc., and its
debtor-affiliates to resolve future environmental contribution
claims. The Settlement Procedures streamlines the process by
which additional settlements of relatively small contribution
claims would be deemed approved by the Court.
Settlement Procedures
The Settlement Procedures would apply only to settlement
agreements where the Debtors' estimated initial claim for
contribution was $5,000,000 or less based on the share of total
past and projected future response costs. Future environmental
contribution settlements generally will provide for the payment of
money by the defendant for:
(a) past and future recovery costs, along with a release of
contribution claims asserted against the defendant; or
(b) past costs, along with an agreement by the defendant to
join as a participating Potentially Responsible Party.
For settlements of contribution claims with Initial Claim Amounts
between $250,000 and $5,000,000, the procedures are:
(a) After the Debtors enter into an agreement to settle the
Initial Claim Amount, the Debtors must serve a notice of
the Proposed Settlement by e-mail, facsimile or overnight
delivery service on:
* the United States Trustee for the Southern District of
New York;
* counsel to the Official Committee of Unsecured
Creditors;
* counsel to the Official Committee of Retirees;
* counsel to the agents for the Debtors' postpetition
secured lenders;
* counsel to the indenture trustee for the secured public
debt securities issued by the Debtors;
* counsel to the ad hoc committee for the secured public
debt securities issued by the Debtors;
* counsel to the Official Committee of Equity Security
Holders;
* Pharmacia; and
* all non-debtor parties to the Settlement Agreement.
(b) Each Settlement Notice must include:
* a description of the environmental matter to which the
Proposed Settlement relates, the amount of the Initial
Claim Amount asserted against the settling party and the
material terms of the Proposed Settlement;
* the identity of the settling party or parties to the
Proposed Settlement and any relationships between the
party or parties and the Debtors;
* the business justifications in support of the Proposed
Settlement;
* instructions regarding the procedures to assert
objections to the Proposed Settlement; and
* assurance that any negotiations with respect to the
Proposed Settlement occurred at arm's-length basis
between the parties.
(c) With respect to each Settlement Notice, Interested Parties
will have through 5:00 p.m. (prevailing Eastern time) on
the 10th calendar day after the date of service of the
Notice to object to the Proposed Settlement.
(d) If any significant economic terms of a Proposed Settlement
are amended after transmittal of the Settlement Notice,
but before the expiration of the Notice Period, the
Debtors must send a revised Settlement Notice to all
Interested Parties describing the Proposed Settlement, as
amended. If a revised Settlement Notice is required, the
Notice Period automatically will be extended for an
additional 5 calendar days.
(e) Objections to any Proposed Settlement must:
* be in writing;
* state with specificity the grounds for objection; and
* be served on the Interested Parties and counsel to the
Debtors so as to be received before expiration of the
Notice Period.
(f) If no objections are properly asserted before the
expiration of the Notice Period, the Debtors will be
authorized to consummate the Proposed Settlement in
accordance with the terms and conditions of the underlying
contract or contracts.
Where there are a large number of Potentially Responsible Parties
at a particular site, there often are parties who only contributed
de minimis quantities of waste. To address contribution
settlements with these parties and for any Proposed Settlement
involving:
(a) the settlement of an Initial Claim Amount of $250,000 or
less; or
(b) the settlement of any Initial Claim Amount in exchange for
the agreement of the settling party to join the relevant
Potentially Responsible Party group without a release of
Solutia or Pharmacia's contribution claim;
the applicable Debtor or Debtors will be authorized to consummate
the De Minimis Settlement without further notice or further Court
approval, and the De Minimis Settlement will be deemed final and
fully authorized by the Court. However, within 45 calendar days
after the end of each quarter, the Debtors must provide Interested
Parties with a report itemizing the De Minimis Settlements
completed during the quarter.
As reported in the Troubled Company Reporter on Feb. 3, 2005,
Solutia, Inc., and Pharmacia Corporation are currently negotiating
environmental contribution settlements with six parties:
-- American Zinc,
-- Cyprus Amax,
-- Empire Chemical,
-- Kerr McGee,
-- Praxair, and
-- the United States.
The Debtors expect to negotiate settlements with numerous other
Potentially Responsible Parties.
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. 32; Bankruptcy Creditors' Service, Inc., 215/945-7000)
SOLUTIA INC: B. Purcell Wants to File 474 Late Proofs of Claim
--------------------------------------------------------------
Brayton Purcell represents numerous plaintiffs with asbestos-
related injuries who have claims against Solutia, Inc. The claims
are based on Solutia's alleged liability for claims against
Monsanto Company.
On October 15, 2004, Brayton Purcell received from the Debtors a
notice of the November 30, 2004 deadline for filing proofs of
claim. Brayton Purcell identified 474 clients with claims against
Solutia.
Crystal Howard, Esq., at Brayton Purcell, tells Judge Beatty of
the U.S. Bankruptcy Court for the Southern District of New York
that at about the same time, the firm was preparing claims for
5,500 plaintiffs in a different bankruptcy case with the same
November 30, 2004 deadline. By November 29, the proof of claim
forms had been completed for the 474 Brayton Purcell clients with
claims against Solutia. Due to a focus of manpower on completing
the submission of 5,500 claims on November 29, 2004, the final
pick-up time for Federal Express for the 474 proofs of claim to
arrive at the Court by November 30, was inadvertently missed.
As soon as it was discovered that the final Federal Express
pick-up had been missed, Brayton Purcell attempted to e-mail the
proofs of claim to the New York law firm. However, due to the
difficulties with e-mail transmission, these efforts were
unsuccessful. By the time Brayton Purcell was aware the e-mail
transmission failed due to the size of the attachment, it was too
late to make a timely filing. Due to the size of the submission,
it was also too late to send the proofs of claim by facsimile to
the New York law firm for hand delivery.
Brayton Purcell immediately delivered the 474 proofs of claim to
Federal Express to be delivered to the Court by the next
afternoon, December 1, 2004. The 474 proofs of claim submitted by
Brayton Purcell were received by the Court at 2:13 p.m. on
December 1, 2004.
Ms. Howard asserts that the inadvertently missed Federal Express
pick-up time, which resulted in Brayton Purcell submitting the
474 proofs of claim 21 hours after the expiration of the Bar Date,
constitutes excusable neglect under Rule 9006(b)(1) of the
Federal Rules of Bankruptcy Procedure.
The danger of prejudice to the Debtors, if any, is minimal as the
proofs of claim were filed only 21 hours late on the next business
day following the expiration of the Bar Date, Ms. Howard explains.
Any possible delay in processing the proofs of claim over this
period of 21 hours during which the Court was not even open for
business will result in very little prejudice to the Debtors.
Ms. Howard adds that although the reason for delay was within
Brayton Purcell's reasonable control, it is clear that Brayton
Purcell acted in good faith.
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. 33; Bankruptcy Creditors' Service, Inc., 215/945-7000)
STILE ACQUISITION: Moody's Rates New Sr. Sec. Facilities at Low-B
-----------------------------------------------------------------
Moody's assigned a B2 rating to the proposed new senior secured
bank credit facilities to both Stile U.S. Acquisition Corp. and
Stile Acquisition Corp. These two companies will become
co-parents to Masonite (previously Masonite International Corp.)
upon the acquisition of Masonite by an affiliate of Kohlberg
Kravis Roberts & Co. -- KKR. This concludes the review of the
ratings of Masonite, which was initiated on January 14, 2005 due
to the pending acquisition.
The ratings Moody's assigned to Stile are:
* Senior Implied, rated at B2;
* $350 million senior secured multi-currency revolving credit
facility, due 2011, rated B2;
* $1.175 billion senior secured term loan, due 2013, rated B2;
* $300 million 144A senior unsecured floating rate notes, due
2013, rated B3;
* $525 million 144A senior unsecured subordinated notes, due
2015, rated Caa1;
* Speculative Grade Liquidity Rating, rated SGL-2;
* Senior Unsecured Issuer Rating (non-guaranteed), rated Caa2.
The ratings of Masonite have been downgraded and will be withdrawn
at the transaction's close:
* Senior Implied, rated B2;
* 42 million Term Loan B, due 2008, rated B2;
* $571 million Term Loan C, due 2008, rated B2;
* Senior Unsecured Issuer Rating, rated B3.
The ratings outlook is stable.
The ratings are subject to final documentation that is consistent
with the Moody's understanding of the transaction.
The borrowers will consist of Stile U.S. Acquisition Corp. (U.S.
entity) and Stile Acquisition Corp. (Canadian entity). Both
companies will be subsidiaries of Stile Consolidated Corp., which
in turn will be a subsidiary of Stile Holding Corp. Following the
transaction, Stile may be renamed Masonite. Meanwhile, for
operating purposes, the company will continue to leverage off of
the well-known Masonite name.
The revolver will be split between a U.S. revolving commitment and
a Canadian revolving commitment. The U.S. entity will be
permitted to borrow under both the U.S. and Canadian revolving
commitments.
Proceeds from the revolver (to be undrawn at closing), term loan,
and notes, along with a meaningful equity contribution from KKR
and Masonite's management, will be used to fund the acquisition of
Masonite through the purchase of $1.9 billion of Masonite's
capital stock, the refinancing of outstanding debt, and also to
fund various other fees and expenses.
The purchase price is equivalent to just over 9 times 2004
reported EBITDA. Equity contribution from management of Masonite
will be a minimum of $25 million of the equity. Upon the
refinancing of the previously rated debt, Moody's will withdraw
its ratings on the "old" Masonite.
The ratings reflect Masonite's high leverage of over 6 times
EBITDA and free cash flow to total debt of under 6%, proforma for
the debt issuance. The high leverage and modest cash flow,
relative to the company's debt levels, limit the company's ability
to delever and respond to unexpected negative business
developments. Total debt proforma for the transaction totals
$2 billion and compares with 2004's annual revenues of
approximately $2.2 billion.
The ratings are also constrained by the company's acquisition
appetite. Since 1989, Masonite acquired over 55 companies and
Moody's expects this strategy to continue. The Notes are subject
to an acquisition basket which consists of:
-- an investment basket in a similar business equal to the
greater of $300 million or 10% of total assets; and
-- a general basket for investments equal to the greater of
$100 million or 4% of total assets.
The company's existing high margins and impressive market share
makes additional gains in these area challenging.
The ratings benefit from the company's impressive market position
with over 60% of the industry's revenue concentration shared by
Masonite and one of its competitors, relatively high margins,
strong brand recognition, and low capital expenditure
requirements. The majority of the company's doors are sold to the
repair, renovation and remodeling market thereby resulting in a
smaller impact from swings in housing starts. The company's
leading market position allows it to enjoy EBITDA margins of over
13%. The ratings also consider the company's revenue concentration
to the home centers and low product diversification.
The ratings consider recent increases in raw material (steel and
wood) costs that are used to manufacture doors and the company's
success in passing along these costs. Typically, raw materials
represent about 50% of the price of the finished product. The
ratings benefit from the company's variable cost structure.
Also, the ratings consider the equity contribution by KKR and the
retention of the existing management team.
The assignment of the SGL-2 liquidity rating is based on the
company's projected good cash flow generation, low capital
expenditures relative to its size, and the absence of significant
near-term principal repayment obligations. Additional liquidity
support comes from the expected availability under its
$350 million revolver.
Maximum usage due to seasonal working capital swings is
anticipated to be approximately $100 million. Stile's covenants
are expected to be have ample cushion. The covenants are to
include a Net Debt to EBITDA covenant set at a maximum of 7.9
times with step-down provisions and a net cash interest coverage
covenant set a minimum of 1.5 times with step-up provisions.
The B2 rating on Stile's $1.5 billion senior secured credit
facilities is rated at the same level as the senior implied
largely because it reflects the majority of the company's capital
structure. The senior secured credit facilities will be
guaranteed by each existing and future direct or indirect U.S.
subsidiary, Canadian subsidiary and a parent entity that directly
or indirectly owns both borrowers.
The facilities will be secured by a first priority pledge of
substantially all tangible and intangible assets, as well as
capital stock (65% of the voting stock of foreign subsidiaries).
The term loan will amortize in equal quarterly installments at an
annual rate of 1% per year. The facilities will include a 50%
excess cash flow sweep.
The B3 rating on Stile's $300 million senior unsecured floating
rate notes, which will be issued as units containing notes issued
by each of Stile U.S. and Stile, will be guaranteed on an
unsecured senior basis by Stile Consolidated Corp. (parent company
to both Stile U.S. Acquisition Corp. and Stile Acquisition Corp.),
by each other (Stile U.S. and Stile), and by each of the
subsidiaries guaranteeing the senior secured credit facilities.
The floating rate notes and guarantees are rated one notch below
the senior credit facilities to reflect their junior position to
the senior secured credit facilities.
The Caa1 rating on Stile's $525 million senior unsecured
subordinated notes, which will be issued as units containing notes
issued by each of Stile U.S. and Stile, will be guaranteed on an
unsecured senior subordinated basis by Stile Consolidated Corp.,
by each other (Stile U.S. and Stile), and by each of the
subsidiaries guaranteeing the senior secured credit facilities.
The subordinated notes and guarantees are rated two notches below
the senior credit facilities to reflect their subordination in
right of payment to all existing and future senior debt.
The floating rates notes and subordinated notes, have restricted
payment baskets consisting of:
* a $50 million general basket;
* the greater of either $60 million and 2% of the total assets
for investments in unrestricted subsidiaries;
* a $25 million basket in any calendar year for stock buyback
from management (with carry forward capped at $50 million in
any calendar year); and
* dividends on designated preferred stock to the extent issued
in accordance with the debt covenants and subject to
remaining above a 2:1 times fixed charge coverage.
The notes have certain limitations on incurring additional debt.
The stable outlook reflects the company's leading market position,
strong market position with the home centers, and the company's
focus on product development and operating efficiency helps
support the ratings. The ratings and or outlook may deteriorate
if the company's free cash flow was to weaken, if the company's
acquisition strategy would increase an already significant high
leverage, or if the growth in the home market was to decelerate
significantly. The ratings may improve if the company was to
significantly lower its debt burden or increase its free cash flow
to total debt to over 8% on a sustainable basis.
Moody's anticipates the company's EBITDA interest coverage for
fiscal year 2005 is expected to be above 2.3 times while its total
debt to EBITDA is expected to be below 5.8 times. The company's
fiscal year 2004 EBITDA was reported at $289 million. The
company's free cash flow to total debt ratio is expected to be
below 4% for 2005. However, Moody's expected free cash flow to
total debt ratio for 2006 to improve to over 5%.
The proposed notes, which will be issued in units as described
above, will be sold under Rule 144A and Regulation S of the
Securities Act of 1933.
Masonite International Corporation is headquartered in Ontario,
Canada. The company is a leading global manufacturer of doors and
door components with 82 facilities in 17 countries in North
America, Europe, Latin America, Asia and Africa. Revenues for
fiscal year 2004 was approximately $2.2 billion.
STUDIO PROPERTIES: Case Summary & 3 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Studio Properties, LLC
3326 Mary Street #601
Miami, Florida 33133
Tel: (786) 302-2666
Bankruptcy Case No.: 05-11346
Chapter 11 Petition Date: February 28, 2005
Court: District of Nevada (Las Vegas)
Debtor's Counsel: Robert C. Lepome, Esq.
330 South 3rd Street #1100b
Las Vegas, Nevada 89101
Tel: (702) 385-5509
Fax: (702) 385-3417
Total Assets: $5,503,000
Total Debts: $3,052,865
Debtor's 3 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Richard H. Sutter Personal Loan $115,000
Family Partnership
521 Washington Boulevard #803
Marina Del Rey, CA 90292
Naranjo Family Limited Partner Personal Loan $115,000
3326 Mary Street
Miami, FL 33133
Gary H. Kent Appraisal $1,700
2950 South Rancho Drive #200A
Las Vegas, NV 89102
SUN WORLD: Black Diamond Completes $127.75 Million Asset Purchase
-----------------------------------------------------------------
Sun World International, LLC, a limited liability company
100%-owned by entities managed by Black Diamond Capital
Management, L.L.C., has acquired substantially all of the assets
of Sun World International, Inc., for $127.75 million. Going
forward, the company will do business under the name of Sun World
International, LLC.
Sun World International, Inc., and its debtor-affiliates filed
voluntary chapter 11 petitions in the United States Bankruptcy
Court for the Central District of California on Jan. 30, 2003. An
auction of the company's assets was held on Jan. 13, 2005, with
the Bankruptcy Court confirming Black Diamond-managed entities as
the winning bidder, on Jan. 14.
"We are excited about Sun World's long-term value potential as a
leading agricultural producer and are committed to enhancing its
growth and profitability," stated Christopher Kipley, a Partner at
Black Diamond. "We intend to build upon Sun World's core
strengths and its excellent organization so that the company will
be able to continue to serve the needs of its customers.
"The acquisition is also good news for Sun World's vendors and
suppliers as the company will now have a stronger balance sheet
and significant cash resources."
Mr. Kipley added, "We would also like to thank all of Sun World's
employees for their hard work, loyalty and commitment throughout
the Chapter 11 process. We believe Sun World has a promising
future and look forward to working with them to develop Sun World
to its fullest potential."
About Black Diamond
Black Diamond Capital Management L.L.C. is a leading
privately-held alternative asset management firm with
approximately $6 billion under management in a combination of
hedge funds, structured vehicles and funds with distressed debt/
private equity control strategies. Founded in 1995, Black Diamond
has offices in Lake Forest, Illinois and Greenwich, Connecticut.
About Sun World International, LLC
Sun World International Inc., a leading producer of high value
crops and one of California's largest vertically integrated
agricultural concerns, filed for chapter 11 protection on Jan. 30,
2003 (Bankr. C.D. Calif. Case No. 03-11370). Mette H. Kurth,
Esq., at Klee, Tuchin, Bogdanoff & Stern LLP, represents the
Debtors in their restructuring efforts. When the Company filed
for protection from its creditors, it listed $148,000,000 in total
assets and $158,000,000 in total debts.
SYRATECH CORPORATION: Brings-In Deloitte & Touche as Auditors
-------------------------------------------------------------
Syratech Corporation and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Massachusetts, Eastern
Division, for authority to retain Deloitte & Touche LLP as
independent auditors, accountants and restructuring advisors.
Deloitte & Touche will perform:
a) audit services:
i) audit of financial statements;
ii) review of interim financial information;
b) reorganization services:
i) assist the Debtors' accounting and finance staff;
ii) provide advice and recommendations designed to assist
the Debtors in cash management procedures and invoice
cutoff processes;
iii) advise the Debtors to understand and establish new and
revised reporting processes;
iv) assist the Debtors' management and attorneys in their
efforts to understand, accumulate, assemble, compile
and format the information needed to prepare first day
motions;
v) assist the Debtors to accumulate and summarize their
real and personal property leases, contracts;
vi) advise the Debtors in their consideration, review and
reconciliation of the claims made by the Debtors'
creditors;
vii) attend and participate in meetings related to matters
within the scope of the reorganization services
described herein; and
viii) render other professional services as may be requested
by the Debtors.
Gregory W. Hunt, Executive Vice-President and CFO of Syratech,
discloses that they'll pay Deloitte & Touche $35,500 for statutory
audit and $12,000 for pension plan audit services. For the
Deloitte & Touche's reorganization services, its professionals
will bill the Debtors at their current hourly rates:
Designation Billing Rate
----------- ------------
Partner/Principal/Director $425 - $525
Senior Manager 350 - 425
Manager 300 - 350
Senior Consultant 250 - 300
Consultant 200 - 250
Paraprofessional 75 - 125
Sheila T. Smith, a principal at Deloitte & Touche, assures the
Court of her Firm's "disinterestedness" as that term is defined in
Section 101(14) of the Bankruptcy Code.
Headquartered in Boston, Massachusetts, Syratech Corporation --
http://www.syratech.com/-- manufactures, markets, imports and
sells tabletop giftware and home decor products. The Debtor along
with its affiliates filed for chapter 11 protection on
Feb. 16, 2005 (Bankr. D. Mass. Case No. 05-11062). When the
Company filed for protection from its creditors, it listed
$86,845,512 in total assets and $251,387,015 in total debts.
SYRATECH CORP: Trustee Names Four Creditors to Serve on Committee
-----------------------------------------------------------------
The United States Trustee for Region 1 appointed four creditors to
serve on an Official Committee of Unsecured Creditors in Syratech
Corporation's chapter 11 case:
1. U.S. Bank Trust National Association
Attn: James E. Murphy
100 Wall Street, Suite 1600
New York, New York 10005
Tel: 212-361-6174, Fax: 212-509-3384
2. Bennett Restructuring Fund, L.P.
Attn: Joseph Russick
2 Stamford Plaza, Suite 1501
281 Tresser Boulevard
Stamford, Connecticut 06901
Tel: 203-353-3101, Fax: 203-353-3113
3. Dalton Global Opportunity Fund
Attn: Brian O'Neil
12424 Wilshire Boulevard, #600
Los Angeles, California 90025
Tel: 310-882-4143, Fax: 310-442-5225
4. Breakwater Master Fund, Ltd.
Attn: Gregory Jordon
11111 Santa Monica Boulevard, Suite 1110
Los Angeles, California 90025
Tel: 310-914-9670, Fax: 310-914-9676
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtors'
expense. They may investigate the Debtors' business and financial
affairs. Importantly, official committees serve as fiduciaries to
the general population of creditors they represent. Those
committees will also attempt to negotiate the terms of a
consensual chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest. If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management with
an independent trustee. If the Committee concludes reorganization
of the Debtors is impossible, the Committee will urge the
Bankruptcy Court to convert the chapter 11 cases to a liquidation
proceeding.
Headquartered in Boston, Massachusetts, Syratech Corporation --
http://www.syratech.com/-- manufactures, markets, imports and
sells tabletop giftware and home decor products. The Debtor along
with its affiliates filed for chapter 11 protection on
Feb. 16, 2005 (Bankr. D. Mass. Case No. 05-11062). When the
Company filed for protection from its creditors, it listed
$86,845,512 in total assets and $251,387,015 in total debts.
T MART INC: Case Summary & 15 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: T Mart, Inc.
c/o Alan Segal
29 South LaSalle Street, Suite 334
Chicago, Illinois 60603
Bankruptcy Case No.: 05-06933
Type of Business: The Debtor is a wholesale petroleum distributor
for Marathon, BP, Phillips 66, Texaco, Sinclair,
Premcor, Transmontaine, Pure and Lion.
See http://www.tmartinc.com/
Chapter 11 Petition Date: February 28, 2005
Court: Northern District of Illinois (Chicago)
Judge: Jacqueline P. Cox
Debtor's Counsel: Norman B. Newman, Esq.
Much Shelist Freed Denenberg
Ament & Rubenstein, P.C.
191 North Wacker Drive, Suite 1800
Chicago, Illinois 60601
Tel: (312) 521-2492
Fax: (312) 521-2392
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 15 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Illinois Department of Revenue $2,454,000
P.O. Box 19031
Springfield, IL 627949031
Attn: Lisa Madigan
100 West Randolph Street
Chicago, IL 606013218
Mohammed Malik $200,000
91 Lawndale Boulevard
Frankfort, IL 604233121
c/o Barash & Everett, LLC
Attn: Keith Luymes
P.O. Box 165
Galva, IL 614340165
Mohammed Jumeh $200,000
c/o Roger Ray
115 North State Street
Geneseo, IL 612541345
Venture Fuels, LLC $70,000
P.O. Box 159
Onalaska, WI 54650
National Petroleum, Inc. $69,132
c/o Tom Pastrnak
1313 West 3rd Street
Davenport, IA 528021346
Gas Depot Oil Company $67,541
c/o Michael R. Lacey
122 West 22nd Street, Suite 300
Oak Brook, IL 605234071
Becker & Litterst, Ltd. $47,934
Signs By Phil $40,000
Internal Revenue Service $32,747
Special Processing Staff
J&S Liquidation $23,000
c/o Alex Rabin
Pine Tree Commercial Realty, LLC $12,596
Wisconsin Department of Revenue $3,822
Iowa Department of Revenue $3,011
Indiana Department of Revenue $1,930
State of Iowa Department of Justice $300
TWC HOLDINGS: S&P Puts B+ Rating on $26 Million Sr. Unsec. Notes
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' rating to the
$26 million senior unsecured notes due 2011 issued by The Wornick
Company's parent, TWC Holdings LLC -- TWC Holdings -- via rule
144A with registration rights.
The notes were co-issued by TWC Holdings Corporation, a subsidiary
of TWC Holdings that was formed for the sole purpose of
co-issuing the notes, which are being used to fund a dividend to
TWC Holdings' owners. TWC Holdings is assigned a 'B+' corporate
credit rating, the same as Wornick, its sole source of earnings
and cash flows. The outlook is negative.
At the same time, Standard & Poor's affirmed its 'B+' corporate
credit and other ratings on Wornick. The outlook is revised to
negative from stable. The Cincinnati, Ohio-based company has
around $150 million in debt.
"The outlook revision reflects a weaker financial profile
following the debt-financed dividend and a more aggressive
financial policy," said Standard & Poor's credit analyst
Christopher DeNicolo.
The dividend will cause Wornick's debt to capital to increase to
94% from 79% measured as of Oct. 2, 2004, the last date for which
financial information is publicly available. Similarly, debt to
EBITDA pro forma for the transaction will increase to over
6x from around 5x. The notes are structurally subordinated, as
they are not guaranteed by Wornick or its subsidiaries. Interest
on the notes can be paid in cash or "in kind" at the option of the
company. However, the payment of cash interest is currently
restricted by covenants in the indenture for the existing Wornick
secured notes.
The ratings on Wornick reflect a modest revenue base (around $200
million), limited diversity, and high leverage following a buyout
by Veritas Capital and subsequent debt-financed dividend. Those
factors are offset somewhat by the company's position as a leading
supplier of field rations to the U.S. military.
Wornick was acquired by Veritas Capital in June 2004 for a total
consideration of $155 million, which was funded by the proceeds
from $125 million of secured notes and $37.5 million of equity
from Veritas and management. The notes are secured by essentially
all of the assets of the company but share the collateral with a
small credit facility on a subordinated basis. Expected credit
ratios have been normalized for extraordinary production volumes
in 2003 due to the war in Iraq that are not likely to be repeated.
Cash flow protection and leverage measures are likely to be below
average for the rating in the near to intermediate term following
the debt financed dividend. Ratings could be lowered if military
revenues fall below expected levels or if cost reduction
initiatives do not result in improved earnings and cash
generation. The outlook could be revised to stable if leverage
declines faster than expected as a result of improved
profitability or higher than expected military or co-manufacturing
sales.
UAL CORP: PBGC to Appeal Court's Approval of Revised ALPA Pact
--------------------------------------------------------------
The Pension Benefit Guaranty Corporation will take an appeal to
the United States District Court for the Northern District of
Illinois, Eastern Division, from Judge Wedoff's Order granting
UAL Corporation and its debtor-affiliates' request to approve
modifications to their collective bargaining agreement with the
Air Line Pilots Association.
As previously reported, Bankruptcy Judge Eugene Wedoff approved
the Debtors' request to enter into a revised Tentative Agreement
between ALPA and United Airlines ratified by the pilots of United
in late January 2005. The agreement amends the pilots' current
collective bargaining agreement, effective Jan. 1, 2005, and will
provide $180 million in annual labor savings to the Company.
Approximately 77 percent of the eligible United pilot group cast
votes on the new labor agreement, which was approved by a vote of
75.46 percent to 24.54 percent.
The Revised Agreement contains certain wage and benefit
modifications that will benefit the Debtors' restructuring
efforts. Pilot base pay rates will be reduced by 11.8%, effective
Jan. 1, 2005, and will not increase until 2006. The previous
Agreement reduced pilot pay by 14.7%. Incentive pay for late
night and international flying will be eliminated, as will retiree
life insurance.
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. 76; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
UAL CORP: Banks Want Court to Dismiss 14-Aircraft Repo Injunction
-----------------------------------------------------------------
U.S. Bank and the Bank of New York ask the U.S. Bankruptcy Court
for the Northern District of Illinois to dismiss UAL Corporation
and its debtor-affiliates' complaint, which seeks to restrain the
Aircraft Trustees from repossessing 14 aircraft on lease to the
Debtors. James E. Spiotto, Esq., at Chapman & Cutler, in Chicago,
Illinois, argues that the Bankruptcy Court lacks jurisdiction
under antitrust laws. Only "a court of the United States" may
enter an injunction under Section 16 of the Clayton Act. A
bankruptcy court is not "a court of the United States," within the
meaning of that statute.
The alleged concerted activity to restructure contractual
obligations does not violate antitrust laws. The Debtors are not
in the market for new aircraft or expanding their scope of
business with the Trustees. The Debtors and the Trustees are
trying to renegotiate and settle outstanding debts and
obligations under pre-existing financing and lease arrangements.
There is no restraint of trade when parties affected by a
defaulting debtor resolve their claims in tandem. The Debtors
are not suffering antitrust injury in restructuring their debts
en masse.
The Debtors cannot complain because they actively participated
and benefited from this alleged conspiracy. The Debtors
previously told the Court that the collective negotiations with
the Trustees would save the estates more than $4,000,000,000.
More importantly, the Debtors stated that this cooperation would
preclude the possibility of a run on their aircraft by the
individual public debt groups, as each had a right to repossess
their aircraft under Section 1110 of the Bankruptcy Code. Having
secured those benefits through collective negotiation, the
Debtors cannot now assume a victim role because the cooperation
is not in their best interests.
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. 76; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
UNUMPROVIDENT: Fitch Revises Outlook on Low-B Ratings to Stable
---------------------------------------------------------------
Fitch Ratings affirmed the ratings on UnumProvident Corporation
and its wholly owned insurance subsidiaries and removed the
ratings from Rating Watch Negative. The Rating Outlook is Stable.
The rating action affects $3.1 billion of debt outstanding.
The rating action reflects Fitch's view that UNM has made material
progress in strengthening risk-based capital levels, resolving the
multistate market conduct exam, and improved GAAP and statutory
earnings. While UNM continues to maintain a leadership position
in the disability insurance market, the company continues to face
significant ongoing operating challenges to improve sales,
persistency, and loss experience, particularly in the group
disability business. Other concerns include the competitive
market conditions and the continued low interest-rate environment.
Fitch expects a further decline in UNM's group long-term
disability -- LTD -- persistency and lower new sales volume in
2005 resulting from pricing changes, negative market perception,
and the sluggish economy.
UNM continues to slowly improve its profitability after numerous
changes were instituted starting in late 2003. In particular,
both GAAP and statutory earnings, after adjusting for a multitude
of one-time items and restructuring costs during 2004, improved
over 2003. UNM focused efforts in 2004 on improving the
profitability of its group income protection with targeted rate
increases, adjusting the business mix, or case size, away from
certain unprofitable large accounts, and more stringent
underwriting. Statutory net income rose to $607.6 million in
2004, compared with $22.7 million in 2003. Fitch would expect
run-rate statutory earnings in the $400 million-$450 million
dollar range, noting the gain on the sale of the Canadian
operations boosted 2004 statutory earnings by $250.6 million net
of tax. UNM's GAAP net loss of $253 million in 2004 reflects,
among other small-scale charges and gains, the more significant
after tax losses of $629.1 million for the restructuring of its
individual disability insurance - IDI -- business, the
$71.9 million reserve strengthening associated with this closed-
block restructuring, and $87.8 million for the settlement of the
mutltistate market conduct review.
Fitch estimates UNM's combined statutory risk-based capital ratio
to be approximately 250% on a Fitch adjusted basis at year-end
2004. Absolute statutory capital at year-end 2004 increased to
$4.4 billion, up from $3.9 billion at year-end 2003 due to strong
statutory operating performance. Fitch's equity-adjusted
debt-to-total capital ratio of 26.3% at year-end 2004 is
essentially unchanged since year-end 2003.
The company's GAAP earnings-based interest coverage ratio was
approximately 5.0 times in 2004 after adjusting for the
restructuring of its individual disability insurance. In 2005,
Fitch expects cash interest expense and shareholder dividends of
approximately $235 million and $89 million, respectively, to be
covered by the approximately $250 million of cash currently at the
holding company and statutory dividend capacity from its insurance
subsidiaries in 2005 of approximately $663 million.
The Stable Rating Outlook reflects Fitch's expectations that UNM's
profitability for 2005 will be up slightly over that of 2004.
Fitch expects UNM to maintain RBC levels at a minimum of a 250% on
a Fitch basis to maintain the ratings. The adjusted leverage
ratio is expected to be maintained below a target of 25% with the
paydown of approximately $227 million in maturing debt, and the
coverage ratio is expected to remain in the 5.0x range in 2005.
Based in Chattanooga, Tennessee, UnumProvident Corp., is the
nation's largest provider of group and individual disability
insurance. UNM reported total assets of $50.8 billion and
shareholders' equity of $7.2 billion at Dec. 31, 2004.
These are affirmed with a Stable Rating Outlook by Fitch:
UnumProvident Corp.
-- Senior debt at 'BBB-'.
Provident Financing Trust I
-- Preferred stock at 'BB+'.
UnumProvident Group members:
* Unum Life Insurance Company of America
* Provident Life & Accident Insurance Company
* Provident Life and Casualty Insurance Company
* The Paul Revere Life Insurance Company
* First Unum Life Insurance Company
* Colonial Life & Accident Insurance Company
US AIRWAYS: Wants to Ink Air Wisconsin Jet Service Pact
-------------------------------------------------------
US Airways, Inc., and its debtor-affiliates ask Judge Mitchell of
the U.S. Bankruptcy Court for the Eastern District of Virginia for
permission to enter into the Jet Service Agreement with Air
Wisconsin Airlines Corporation.
Under the JSA, the Debtors will accept up to 70 CRJ-200, 50-seat
regional jets at prices equal to or lower than those paid to other
regional jet affiliates. The actual number of jets will vary,
subject to AWAC's commitments to third parties. However, the
Debtors could potentially receive up to 70 additional regional
jets.
The JSA has a 10-year term, but provides that if it is terminated
due to the Debtors' cessation of business, AWAC's claim for breach
will be a general unsecured claim, rather than an administrative
claim.
Brian P. Leitch, Esq., at Arnold & Porter, assures the Court that
the terms and conditions of the JSA are comparable to those of the
Debtors' agreements with other express carrier affiliates, albeit
at a lower price. Entry into the JSA is a condition of the DIP
Facility. Specific terms of the JSA are not available as major
portions are provided only in redacted form.
The Debtors are not bound to the JSA. Once the Order is entered,
the Debtors may talk to other parties or alter existing
arrangements with other regional jet providers. The Debtors are
free to continue to negotiate for new arrangements with other
regional jet service providers.
Headquartered in Arlington, Virginia, US Airways' primary business
activity is the ownership of the common stock of:
* US Airways, Inc.,
* Allegheny Airlines, Inc.,
* Piedmont Airlines, Inc.,
* PSA Airlines, Inc.,
* MidAtlantic Airways, Inc.,
* US Airways Leasing and Sales, Inc.,
* Material Services Company, Inc., and
* Airways Assurance Limited, LLC.
Under a chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.
US Airways and its subsidiaries filed another chapter 11 petition
on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian
P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning,
Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and
Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors
in their restructuring efforts. In the Company's second bankruptcy
filing, it lists $8,805,972,000 in total assets and $8,702,437,000
in total debts. (US Airways Bankruptcy News, Issue No. 83;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
US AIRWAYS: Machinists Union Wants $130.5M Admin. Claims Allowed
----------------------------------------------------------------
The International Association of Machinists and Aerospace
Workers, AFL-CIO makes four separate requests to the U.S.
Bankruptcy Court for the Eastern District of Virginia for
allowance of administrative expense payments in the chapter 11
cases of US Airways, Inc., and its debtor-affiliates.
Sharon Levine, Esq., at Lowenstein Sandler, in Roseland, New
Jersey, relates that on October 15, 2004, the Court approved the
Debtors' request for interim wage and benefits reduction pursuant
to Section 1113(e) of the Bankruptcy Code. On January 6, 2005,
the Court granted the Debtors' request to reject their collective
bargaining agreements with the IAM. As a result of the relief
granted in these Orders, the IAM-represented employees assert
four administrative claims.
District 142
The IAM District Lodge 142 employees want the Debtors to pay
$26,900,000 on an administrative priority basis, as postpetition
wages and benefits. This amount represents all claims due to the
District Lodge 142 employees arising out of wage and benefits
reductions derived from the collective bargaining agreements with
the Debtors. The District Lodge 142's administrative claim is
based upon:
Mechanics Pay Cut $11,600,000
Mechanics 401(k) Match 600,000
Stock Pay Cut 1,100,000
Stock 401(k) Match 100,000
Utility Pay Cut 2,300,000
Utility 401(k) Match 100,000
Maintenance Outsourcing 10,900,000
MTS Pay Cut 100,000
----------------------- -----------
Total Reductions $26,900,000
The District Lodge 142 employees also assert an administrative
claim for $85,000,000 representing the reduction in pension
benefits that lost as a result of the Orders. Ms. Levine says
this amount should be paid on an administrative priority basis,
as postpetition employee benefits.
District 141
Due to the Debtors' actions related to the collective bargaining
agreements, the IAM-represented District Lodge 141 employees,
Fleet Service Workers, took a pay cut of $13,600,000. The Court
should grant District Lodge 141 an administrative claim for this
amount.
The District Lodge 141 employees also have an administrative
claim for $5,000,000, which represents the reduction in pension
benefits that will be lost as a result of the Order. The IAM
wants the claim paid on an administrative priority basis.
Headquartered in Arlington, Virginia, US Airways' primary business
activity is the ownership of the common stock of:
* US Airways, Inc.,
* Allegheny Airlines, Inc.,
* Piedmont Airlines, Inc.,
* PSA Airlines, Inc.,
* MidAtlantic Airways, Inc.,
* US Airways Leasing and Sales, Inc.,
* Material Services Company, Inc., and
* Airways Assurance Limited, LLC.
Under a chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.
US Airways and its subsidiaries filed another chapter 11 petition
on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian
P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning,
Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and
Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors
in their restructuring efforts. In the Company's second bankruptcy
filing, it lists $8,805,972,000 in total assets and $8,702,437,000
in total debts. (US Airways Bankruptcy News, Issue No. 83;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
VERITAS FINANCIAL: Taps Backenroth Frankel as Bankruptcy Counsel
----------------------------------------------------------------
Veritas Financial Corporation asks the U.S. Bankruptcy Court for
the Southern District of New York for permission to employ
Backenroth Frankel & Krinsky, LLP, as its general bankruptcy
counsel.
Backenroth Frankel is expected to:
a) provide legal counsel with respect to the Debtor's powers
and duties as a debtor-in possession in the continued
operation of its business and management of its property
during its chapter 11 case;
b) prepare on behalf of the Debtor all necessary applications,
answers, orders, reports, and other legal documents which
may be required in connection with its chapter 11 case;
c) provide the Debtor with legal services with respect to
formulating and negotiating a plan of reorganization with
its creditors; and
d) perform all other legal services for the Debtor as may be
required during the course of its chapter 11 case, including
the institution of actions against third parties, objections
to claims, and the defense of actions which may be brought
by third parties against the Debtor.
Mark A. Frankel, Esq., a Member at Backenroth Frankel, is the lead
attorney for the Debtor. Mr. Frankel discloses that the Firm
received a $10,000 retainer. Mr. Frankel will bill the Debtor
$410 per hour for his services.
Other attorneys from Backenroth Frankel who will perform services
to the Debtor are Abraham Backenroth, Esq., who charges at
$450 per hour, and Scott Krinsky, Esq., who charges at $375 per
hour. Paralegals who will perform services to the Debtor will
charge at $125 per hour.
Backenroth Frankel assures the Court that it does not represent
any interest adverse to the Debtor or its estate.
Headquartered in New York City, New York, Veritas Financial
Corporation is in the financial services business, and its
principal activity is the ownership of a 63% shareholder interest
in East Coast Venture Capital, Inc., a Specialized Small Business
Investment Company, whose largest dealings involve financing New
York City's 'black' radio cars and small businesses. The Company
filed for chapter 11 protection on Feb. 10, 2005 (Bankr. S.D.N.Y.
Case No. 05-10774). When the Debtor filed for protection from its
creditors, it listed total assets of $30,731,500 and total debts
of $5,757,900.
VISTA HOSPITAL: Inks $1.2 Million Settlement Pact with Liljeberg
----------------------------------------------------------------
Vista Hospital of Baton Rouge, LLC, a subsidiary of Dynacq
Healthcare Inc. (OTCBB:DYII) and Chiu M. Chan, its chief executive
officer, have entered into a settlement agreement with Liljeberg
Enterprises International, L.L.C., to settle all matters between
the parties.
Dynacq agreed to pay $1.2 million in cash to Liljeberg, and
Liljeberg agreed to a full and final release of Dynacq, Vista
Hospital of Baton Rouge and Chui M. Chan from any and all claims
brought by Liljeberg and any of its affiliates against Dynacq and
its affiliates. The Board of Directors of Dynacq approved the
terms of the settlement on Feb. 25, 2005. The settlement
agreement is subject to the approval of the United States
Bankruptcy Court for the Southern District of Texas. Liljeberg
has further agreed not to oppose the Plan of Reorganization filed
by Vista Hospital of Baton Rouge, which is expected to be
confirmed in the near future. Once the settlement is final,
Liljeberg has agreed to cause to be dismissed with prejudice any
and all lawsuits filed by Liljeberg or any of its affiliates and
pending against Dynacq or any of its affiliates.
Chapter 11 Plan on File
The Debtor filed a plan of reorganization on Jan. 13, 2005. At
the same time, the hospital asked the U.S. Bankruptcy Court for
the Southern District of Texas to set a hearing to consider
confirmation of the Plan. The Debtor did not file a disclosure
statement, and says it doesn't need to because each class of
claims and interests described in the plan is unimpaired. Because
nobody's impaired, no solicitation process is necessary, and no
disclosure statement is not required, the Debtor explains.
The Bankruptcy Court deferred consideration of any matter
concerning the hospital's Plan or request for a waiver of the
requirement under Sec. 1125 of the Bankruptcy Code to prepare and
file a Disclosure Statement until the Debtor favorably resolved
Liljeberg's claim.
Dynacq Healthcare Inc. -- http://www.dynacq.com/-- is a holding
company. Its subsidiaries provide surgical healthcare services
and related ancillary services through hospital facilities and
outpatient surgical centers.
Headquartered in Houston, Texas, Vista Hospital of Baton Rouge,
LLC, operates a hospital facility in Baton Rouge, Louisiana. The
Company filed for chapter 11 protection on Oct. 8, 2004 (Bankr.
S.D. Tex. Case No. 04-44533). Basil A Umari, Esq., at Andrews &
Kurth represents the Debtor in its restructuring efforts. When
the Debtor filed for protection from its creditors, it estimated
assets and debts of between $1 million to $10 million.
W.R. GRACE: Gets Court OK to Refund Defense Costs & Settle Claims
-----------------------------------------------------------------
Before the bankruptcy petition date of W.R. Grace & Co., and
debtor-affiliates, National Union Fire Insurance Company of
Pittsburgh, Pennsylvania, issued National Union's Employee Benefit
Plan Fiduciary Liability Insurance Policy to W.R. Grace & Co. The
Policy provides for the payment, reimbursement or advancement of
reasonable and necessary fees, costs and expenses incurred in the
defense of "claims," as defined in the Policy. The Policy has a
limit of liability for all covered "loss," as defined in the
Policy, including defense costs. Settlements of "claims" are
included in the Policy's definition of "loss."
A lawsuit entitled "Evans v. Akers et al." has been filed in the
United States District Court for the District of Massachusetts
against members of the Debtors' Board of Directors and certain key
employees. A lawsuit entitled "Bunch, et al. v. W.R. Grace & Co.,
at al." has also been filed in the U.S. District Court for the
Eastern District of Kentucky against certain of the Debtors,
members of the Debtors' Board of Directors, and certain key
employees.
Subsequent to the Petition Date, notwithstanding the automatic
stay imposed by Section 362 of the Bankruptcy Code, the Defendants
have incurred, and likely will continue to incur, significant
defense costs in connection with the pending civil actions.
National Union has agreed to reimburse the Defendants' Defense
Costs and advance funds to settle the Actions. National Union,
however, reserves its rights, privileges and defenses under the
Policy, at law and in equity with respect to the Actions.
Payments, reimbursement or advancement of Defense Costs under the
Policy will be limited to the reasonable and necessary fees, costs
and expense charges by one "lead" law firm, any reasonable and
necessary local or other special counsel, and various other
service providers in support of the defense of the Actions for
each subset of the Defendants who reasonably require separate
counsel.
At the Debtors' behest, the U.S. Bankruptcy Court for the District
of Delaware to authorized National Union to:
(i) pay, reimburse, and advance Defense Costs, subject to a
full reservation of rights, to or for the benefit of the
Defendants under the Policy, for one lead law firm, any
reasonable and necessary local or other special counsel
and various other service providers; and
(ii) make Settlement Payments under the Policy.
Judge Fitzgerald also lifted the automatic stay for the limited
purpose of allowing the payments, reimbursement and advancement of
Defense Costs and Settlement Payments.
Headquartered in Columbia, Maryland, W.R. Grace & Co., --
http://www.grace.com/-- supplies catalysts and silica products,
especially construction chemicals and building materials, and
container products globally. The Company and its debtor-
affiliates filed for chapter 11 protection on April 2, 2001
(Bankr. Del. Case No. 01-01139). James H.M. Sprayregen, Esq., at
Kirkland & Ellis, and Laura Davis Jones, Esq., at Pachulski,
Stang, Ziehl, Young, Jones & Weintraub, represent the Debtors in
their restructuring efforts. (W.R. Grace Bankruptcy News, Issue
No. 79; Bankruptcy Creditors' Service, Inc., 215/945-7000)
W.R. GRACE: David E. Shaw Discloses 4.7% Equity Stake
-----------------------------------------------------
In a regulatory filing with the Securities and Exchange
Commission dated February 14, 2005, David E. Shaw reports holding
3,066,900 shares or 4.7% of the outstanding shares of W.R. Grace
& Co. Common Stock through:
No. of Shares Percentage
Beneficially Outstanding
Reporting Person Owned of Shares
---------------- ------------- -----------
D.E. Shaw Laminar Portfolios,
L.L.C. 3,066,900 4.7%
D.E. Shaw & Co., L.P. 3,066,900 4.7%
D.E. Shaw & Co., L.L.C. 3,066,900 4.7%
Mr. Shaw clarifies that he does not own any shares directly. By
virtue of his position as President and sole shareholder of D.E.
Shaw & Co., Inc., and D.E. Shaw & Co. II, Inc., Mr. Shaw says he
may be deemed to have the shared power to vote or direct the vote
of, and the shared power to dispose or direct the disposition of,
the 3,066,900 shares owned by D.E. Shaw Laminar Portfolios,
L.L.C., and, therefore, he may be deemed to be the beneficial
owner of those shares. Mr. Shaw disclaims beneficial ownership
of the 3,066,900 shares.
D.E. Shaw & Co., Inc., is the general partner of D.E. Shaw & Co.,
L.P., which in turn is the investment adviser of D.E. Shaw
Laminar Portfolios, L.L.C.
D.E. Shaw & Co. II, Inc., is the managing member of D.E. Shaw &
Co., L.L.C., which in turn is the managing member of D.E. Shaw
Laminar Portfolios, L.L.C.
Headquartered in Columbia, Maryland, W.R. Grace & Co., --
http://www.grace.com/-- supplies catalysts and silica products,
especially construction chemicals and building materials, and
container products globally. The Company and its debtor-
affiliates filed for chapter 11 protection on April 2, 2001
(Bankr. Del. Case No. 01-01139). James H.M. Sprayregen, Esq., at
Kirkland & Ellis, and Laura Davis Jones, Esq., at Pachulski,
Stang, Ziehl, Young, Jones & Weintraub, represent the Debtors in
their restructuring efforts. (W.R. Grace Bankruptcy News, Issue
No. 80; Bankruptcy Creditors' Service, Inc., 215/945-7000)
WASHINGTON MUTUAL: Fitch Puts BB Rating on $2.9M Class B-4 Certs.
-----------------------------------------------------------------
Washington Mutual Mortgage Securities Corp.'s mortgage
pass-through certificates, WMALT series 2005-1, are rated:
-- $463,808,682 classes 1-A-1 through 1-A-6, 2-A, 3-A, 4-A,
5-A-1, 5-A-2, 6-A-1, 6-A-2, 7-A-1 through 7-A-4, C-X, D-X,
C-P, 3-P, and R (senior certificates) 'AAA';
-- $11,779,474 class B-1 'AA';
-- $5,398,834 class B-2 'A';
-- $2,944,818 class B-3 'BBB';
-- $2,944,818 privately offered class B-4 'BB'.
The classes B-5 and-B-6 certificates are not rated by Fitch.
The 'AAA' rating on the senior certificates reflects the 5.50%
subordination provided by:
* the 2.40% class B-1,
* the 1.10% class B-2,
* the 0.60% class B-3,
* the 0.60% privately offered class B-4,
* the 0.50% privately offered class B-5, and
* the 0.30% privately offered class B-6 certificates.
The ratings on the class B-1 through B-4 certificates are based on
their respective subordination.
Fitch believes the above credit enhancement will be adequate to
support mortgagor defaults, as well as bankruptcy, fraud, and
special hazard losses in limited amounts. The ratings also
reflect the quality of the mortgage collateral, the capabilities
of Washington Mutual Bank, F.A. as servicer (rated 'RMS2' for
Alt-A primary servicer), and Fitch's confidence in the integrity
of the legal and financial structure of the transaction.
The mortgage loans deposited into the WMALT series 2005-1 trust
were purchased by Washington Mutual Mortgage Securities Corp.
directly or indirectly from affiliated or unaffiliated third
parties who either originated the applicable mortgage loans or
purchased the mortgage loans through correspondent or broker
channels.
The assets of the trust will consist of seven groups of 15- and
30-year fixed-rate loans, secured by first liens on one- to
four-family properties, with a total of 2,790 loans. As of
Feb. 1, 2005 (the cutoff date), the total original principal
balance is $490,803,051. The seven loan groups are
cross-collateralized.
The groups1 through 7 loans consist of 2,790 conventional, fully
amortizing, 15- and 30-year fixed-rate mortgage loans with an
aggregate original principal balance of $490,803,051. The average
unpaid principal balance is $175,915.07. The weighted average
original loan-to-value ratio - OLTV -- is 70.1%. Rate/term and
cash-out refinance loans represent 18.6% and 43.1% of the loan
pool, respectively. Second home and investor-occupied loans
constitute 1.6% and 34.5% of the group, respectively. The
weighted average FICO credit score for the group is 716. The
weighted average remaining term for the group is 339 months. The
states that represent the largest portion of the mortgage loans
are:
* California (29.67%),
* Arizona (6.66%),
* Illinois (5.99%),
* New York (5.89%), and
* Florida (5.03%).
All other states represent less than 5% of the outstanding balance
of the pool.
None of the mortgage loans are 'high cost' loans as defined under
any local, state, or federal laws. For additional information on
Fitch's rating criteria regarding predatory lending legislation,
see the press release 'Fitch Revises Rating Criteria in Wake of
Predatory Lending Legislation,' dated May 1, 2003, available on
the Fitch Ratings web site at http://www.fitchratings.com/
The certificates are issued pursuant to a pooling and servicing
agreement dated Feb. 1, 2005, among Washington Mutual Mortgage
Securities Corp., as depositor, Washington Mutual Bank F.A., as
servicer, and LaSalle Bank National Association, as trustee. For
federal income tax purposes, elections will be made to treat the
trust as two separate real estate mortgage investment conduits.
WCI STEEL: Names Thomas J. Gentile Vice President & CFO
-------------------------------------------------------
WCI Steel, Inc., reported that Thomas J. Gentile has been named
vice president and chief financial officer, effective immediately.
Mr. Gentile has served as WCI's treasurer and acting chief
financial officer since November 2003. He came to WCI in
Nov. 2002 as treasurer.
Patrick G. Tatom, WCI's president and chief executive officer,
said that Mr. Gentile's leadership during the company's ongoing
Chapter 11 reorganization and his diverse background in financial
management have been invaluable to WCI.
"Tom's broad experience in finance will greatly assist WCI as we
emerge from bankruptcy as a leaner, more competitive company," Mr.
Tatom said. "He has done a remarkable job heading our financial
operations during this restructuring process, and we are looking
forward to relying on his expertise and sound judgment in the
coming years."
Before coming to WCI, Mr. Gentile was with BP America, Inc., in
Cleveland for 23 years in a variety of treasury and accounting
posts, culminating in the position of regional treasurer for North
America. He began his career with KPMG, an international CPA
firm.
Mr. Gentile, 52, earned a bachelor's degree in accounting from
Cleveland State University and a master's degree in business
administration from John Carroll University.
WCI is an integrated steelmaker producing more than 185 grades of
custom and commodity flat-rolled steel at its Warren, Ohio
facility. WCI products are used by steel service centers,
convertors and the automotive and construction markets. WCI Steel
filed for chapter 11 protection on Sept. 16, 2003 (Bankr. N.D.
Ohio Case No. 03-44662). Christine M Pierpont, Esq., and G.
Christopher Meyer, Esq., at Squire, Sanders & Dempsey, L.L.P.,
represent the Company. When WCI Steel filed for chapter 11
protection it reported $356,286,000 in total assets and
liabilities totaling $620,610,000.
WELLS FARGO: Fitch Puts Low-B Ratings on Cert. Classes B-4 & B-5
----------------------------------------------------------------
Wells Fargo Alternative Loan 2005-1 Trust's mortgage asset-backed
pass-through certificates, series 2005-1, are rated:
-- $206,424,675 classes I-A-1, I-A-2, I-A-3, I-A-R, II-A-1,
II-A-2, II-A-3, II-A-4, III-A-1, III-A-2, A-WIO
(consisting of classes I-A-WIO, II-A-WIO, and III-A-WIO)
and A-PO (consisting of classes I-A-PO, II-A-PO, and
III-A-PO) 'AAA';
-- $4,998,000 class B-1 'AA';
-- $1,955,000 class B-2 'A';
-- $1,413,000 class B-3 'BBB';
-- $978,000 class B-4 'BB';
-- $652,000 class B-5 'B'.
The 'AAA' rating on the senior certificates reflects the 5%
subordination provided by the:
* 2.30% class B-1,
* 0.90% class B-2,
* 0.65% class B-3,
* 0.45% privately offered class B-4,
* 0.30% privately offered class B-5 and
* 0.40% privately offered class B-6.
The ratings on classes B-1, B-2, B-3, B-4 and B-5 reflect each
certificate's respective level of subordination. Class B-6 is not
rated by Fitch.
Fitch believes the amount of credit enhancement available will be
sufficient to cover credit losses. The ratings also reflect the
high quality of the underlying collateral, the integrity of the
legal and financial structures and the servicing capabilities of
Wells Fargo Bank, N.A. (WFB; rated 'RPS1' by Fitch).
Certain of the mortgage loans were underwritten using guidelines
that were less stringent than the general underwriting policies of
WFB. As a result, the mortgage loans may experience higher rates
of delinquencies, defaults, and losses.
The mortgage pool consists of three separate groups of mortgage
loans each containing 15- and 30-year fixed-rate loans. The three
groups are cross-collateralized.
The group I mortgage pool consists of fully amortizing, one-to
four-family, fixed interest rate, first-lien mortgage loans,
substantially all of which have original terms to maturity of
approximately 15 to 30 years.
As of the cut-off date, the group has an aggregate principal
balance of approximately $62,472,470 and an average balance of
$507,906. The weighted average original loan to value ratio --
OLTV -- of the pool is approximately 66.36%. The weighted average
coupon - WAC -- of the mortgage loans in the pool is approximately
6.233%. The weighted average FICO is 735. Second homes and
investor-occupied properties constitute 11.81% and 42.18% of the
loans in group 1, respectively. Rate/term and cashout refinances
account for 21.29% and 21.24% of the loans in group 1,
respectively. The three states that represent the largest
geographic concentrations are:
* California (42.08%),
* New York (10.16%), and
* New Jersey (5.25%).
The group II mortgage pool consists of fully amortizing, one-to
four-family, fixed interest rate, first-lien mortgage loans,
substantially all of which have original terms to maturity of
approximately 15 to 30 years. As of the cut-off date, the group
has an aggregate principal balance of approximately $68,618,518
and an average balance of $170,269. The weighted average OLTV of
the pool is approximately 73.03%. The WAC of the mortgage loans
in the pool is approximately 6.237%. The weighted average FICO is
724. All of the loans in group 2 are owner-occupied properties.
Rate/term and cashout refinances account for 18.01% and 30.78% of
the loans in group 2, respectively. The three states that
represent the largest geographic concentrations are:
* California (16.07%),
* New York (10.66%), and
* Florida (7.88%).
The group III mortgage pool consists of fully amortizing, one-to
four-family, fixed interest rate, first-lien mortgage loans,
substantially all of which have original terms to maturity of
approximately 15 to 30 years. As of the cut-off date, the group
has an aggregate principal balance of approximately $86,198,895
and an average balance of $126,391. The weighted average OLTV of
the pool is approximately 72.15%. The WAC of the mortgage loans
in the pool is approximately 6.347%. The weighted average FICO is
719. Second homes and investor-occupied properties constitute
11.72% and 88.28% of the loans in group 3, respectively.
Rate/term and cashout refinances account for 14.06% and 31.91% of
the loans in group 3, respectively. The three states that
represent the largest geographic concentrations are:
* California (20.60%),
* Florida (7.20%), and
* New York (6.14%).
None of the mortgage loans are 'high cost' loans as defined under
any local, state, or federal laws. For additional information on
Fitch's rating criteria regarding predatory lending legislation,
see the press release 'Fitch Revises Rating Criteria in Wake of
Predatory Lending Legislation,' dated May 1, 2003, available on
the Fitch Ratings web site at http://www.fitchratings.com/
WFHM sold the loans to Wells Fargo Asset Securities Corporation --
WFASC, a special purpose corporation, who deposited the loans into
the trust. The trust issued the certificates in exchange for the
mortgage loans. WFB, an affiliate of WFHM, will act as servicer,
master servicer and custodian, and Wachovia Bank, N.A., will act
as trustee. For federal income tax purposes, an election will be
made to treat the trust as a real estate mortgage investment
conduit for federal income tax purposes.
WESTCHESTER MEDICAL: Moody's Reviewing Ba1 Rating & May Downgrade
-----------------------------------------------------------------
Moody's has placed the Ba1 senior debt rating assigned to
Westchester Medical Center on Watchlist for possible downgrade,
affecting approximately $112 million of outstanding senior lien
bonds.
The $141.9 million of subordinated debt, which carries a guarantee
from Aaa-rated Westchester County (with a negative outlook), as
well as the 2002 Series F General Obligation bonds issued by
Westchester County on behalf of Westchester Medical Center, are
not affected by this Watchlist action.
This Watchlist action is prompted by the recent notification that
Westchester Medical's board of directors has decided to delay its
$14.5 million funding requirement, which was due February 1, into
New York State's pension plan, which represents the Medical
Center's share of the pension obligation, and our understanding
that a return to breakeven financial performance by the medical
center is not expected until 2006 rather than during 2005 as
forecasted at the time of our last rating action.
Unaudited financial results for the 2004 fiscal year indicate a
loss in excess of $55 million from operations. Very thin
liquidity has been an ongoing concern of Moody's and the decision
to delay making the pension payment when due indicates that
liquidity remains a continued problem. Unaudited cash at
December 31, 2004 was $24.3 million or 11.4 days of cash on hand
and 6.6% cash to debt.
The Westchester Medical board is expected to make its pension
payment following the implementation of the plan by the
consultants (who currently constitute the senior management team)
to improve the medical center's financial position and return to
break-even operations. The consultants do not believe WMC is
viable without external financial support.
Two plans are being proposed for the $60 million of external
support needed, with varying amounts of support provided in each
plan from county, state and federal sources. Moody's expects to
resolve this Watchlist action after reviewing the plan with the
management team to determine the likelihood that support will be
forthcoming and to better understand the current financial
shortcomings.
WESTPOINT STEVENS: Inks Pact to Sell All Assets to WL Ross, et al.
------------------------------------------------------------------
WestPoint Stevens, Inc., (OTC Bulletin Board: WSPTQ) has entered
into a definitive agreement for the sale of the Company to an
investor group. The investor group consists of WL Ross & Co. LLC
and holders of a majority of the Company's Senior Credit Facility,
including Contrarian Capital Management and CP Capital
Investments. The details of the agreement will be set forth in
papers being filed with the U.S. Bankruptcy Court for the Southern
District of New York and the Securities and Exchange Commission.
The agreement calls for the sale of substantially all of the
assets of WestPoint Stevens. As part of the agreement, equity in
the new company will be distributed to holders of outstanding
senior secured debt, and the new company will conduct a rights
offering, underwritten by the investor group, to raise
$207.5 million of equity capital. All of WestPoint Stevens'
Senior Credit Facility holders will have the equal right to
participate, and in certain circumstances WestPoint Stevens'
Second Lien Facility holders could participate in the rights
offering. The new company will repay WestPoint Stevens' debtor in
possession loan, satisfy certain administrative claims, and assume
WestPoint Stevens' ordinary course payables and certain other
postpetition liabilities, including bankruptcy emergence costs.
The agreement provides that WestPoint Stevens' Second Lien
Facility holders would receive $10.0 million released from
escrowed adequate protection payments provided they do not object
to the transaction and additional consideration in certain other
events if the sale is completed. Following the sale, WestPoint
Stevens will wind down its estate, and as a result, its unsecured
creditors could receive a small distribution and all shares of its
common stock would be cancelled with no payment.
WestPoint Stevens will submit the agreement to the Bankruptcy
Court for approval as promptly as possible. The agreement calls
for a closing no later than July 31, 2005, and a breakup fee of
$5 million in certain circumstances if a sale to a higher bidder
is consummated. If any qualified, competing bids are received by
the bidding deadline to be established by the Bankruptcy Court, an
auction will be held involving the competing bidders.
M. L. "Chip" Fontenot, WestPoint Stevens President and CEO
commented, "This is a major step toward the successful
reorganization of our company on a debt-free basis. We are
delighted that such a knowledgeable textile executive as Mr. Ross
shares our confidence in our future outlook." Wilbur Ross added,
"We look forward to helping management supplement WestPoint
Stevens' highly efficient domestic manufacturing with
international joint ventures to create a truly global home
fashions company."
Wilbur Ross, who will chair the new company, said, "We look
forward to helping management supplement WestPoint Stevens' highly
efficient domestic manufacturing with international joint ventures
to create a truly global home fashions company."
WL Ross & Co. manages private equity funds and has led the
acquisition or re-emergence from chapter 11 reorganization
proceedings of a number of steel, coal, textile and other
companies. The recapitalized WestPoint Stevens company is
expected to operate on a standalone basis after the closing.
WestPoint Stevens' financial advisor is Rothschild, Inc., and its
legal advisor was Weil, Gotshal & Manges. Jones Day and Hennigan,
Bennett & Dorman, LLP are the investor group's legal counsel.
Headquartered in West Point, Georgia, WestPoint Stevens, Inc., --
http://www.westpointstevens.com/-- is the #1 US maker of bed
linens and bath towels and also makes comforters, blankets,
pillows, table covers, and window trimmings. It makes the Martex,
Utica, Stevens, Lady Pepperell, Grand Patrician, and Vellux
brands, as well as the Martha Stewart bed and bath lines; other
licensed brands include Ralph Lauren, Disney, and Joe Boxer.
Department stores, mass retailers, and bed and bath stores are its
main customers. (Federated, J.C. Penney, Kmart, Sears, and Target
account for more than half of sales.) It also has nearly 60
outlet stores. The Company filed for chapter 11 protection on
June 1, 2003 (Bankr. S.D.N.Y. Case No. 03-13532). John J.
Rapisardi, Esq., at Weil, Gotshal & Manges, LLP, represents the
Debtors in their restructuring efforts.
WINN-DIXIE: Wants to Hire Skadden Arps as Lead Bankruptcy Counsel
-----------------------------------------------------------------
Winn-Dixie Stores, Inc., and its debtor-affiliates seek the
authority of the U.S. Bankruptcy Court for the Southern District
of New York to employ Skadden, Arps, Slate, Meagher & Flom, LLP,
as their lead restructuring and bankruptcy counsel during their
Chapter 11 cases.
Bennett Nussbaum, Winn-Dixie Stores, Inc.'s Senior Vice President
and Chief Financial Officer, relates that Skadden Arps began
providing restructuring and bankruptcy services to the Debtors on
February 2, 2005. The Debtors selected Skadden Arps because of
its recognized expertise in the field of debtors' and creditors'
rights and business reorganizations under Chapter 11 of the
Bankruptcy Code. Furthermore, Skadden Arps has resources
available to devote to the extensive legal services that will be
required in connection with the Debtors' Chapter 11 cases.
The Debtors have also selected King & Spalding, LLP, to serve as
bankruptcy co-counsel during their Chapter 11 cases, as well as to
continue to render non-bankruptcy services.
Skadden Arps will advise and consult with the Debtors as to the
division of responsibilities and the coordination of efforts with
King & Spalding to accomplish a speedy, successful, and cost-
effective reorganization, without unnecessary duplication of legal
services. Mr. Nussbaum emphasizes that Skadden Arps and
King & Spalding will have separate areas of responsibility.
As lead counsel, Skadden Arps will:
(a) advise the Debtors with respect to their powers and duties
as debtors and debtors-in-possession in the continued
management and operation of their businesses and
properties;
(b) attend meetings and negotiate with representatives of
creditors and other parties-in-interest and advise and
consult on the conduct of the Debtors' cases, including
all of the legal and administrative requirements of
operating in Chapter 11;
(c) take all necessary actions to protect and preserve the
Debtors' estates, including the prosecution of actions on
their behalf, the defense of any actions commenced against
their estates, negotiations concerning all litigation in
which the Debtors may be involved and objections to claims
filed against the estates;
(d) prepare on the Debtors' behalf all motions, applications,
answers, orders, reports and papers necessary to the
administration of the Debtors' estates;
(e) negotiate and prepare on the Debtors' behalf plan(s) of
reorganization, disclosure statement(s) and all related
agreements and documents and take any necessary action on
the Debtors' behalf to obtain confirmation of the plan(s);
(f) advise the Debtors in connection with any sale of assets;
(g) appear before the Court, any appellate courts, and the
United States Trustee, and protect the interests of the
Debtors' estates before those courts and the United States
Trustee; and
(h) perform all other necessary legal services and provide all
other necessary legal advice to the Debtors in connection
with the Chapter 11 cases.
The Debtors paid Skadden Arps an initial $500,000 retainer.
The Debtors will pay Skadden Arps at these hourly rates:
Partners $540 to $825
Counsel $535 to $640
Associates $265 to $495
Legal Assistants & Support Staff $90 to $195
Skadden Arps will continue to charge the Debtors for all other
services provided and for other charges and disbursements incurred
in the rendition of services.
D. J. Baker, Esq., a member of Skadden Arps, assures the Court
that the firm does not hold or represent any interest adverse to
the Debtors' estates and is a "disinterested person" as that term
is defined in Section 101(14) of the Bankruptcy Code.
Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc. --
http://www.winn-dixie.com/ -- is one of the nation's largest food
retailers. The Company operates stores across the Southeastern
United States and in the Bahamas and employs approximately 90,000
people. The Company, along with 23 of its U.S. subsidiaries,
filed for chapter 11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y.
Case No. 05-11063). David J. Baker, Esq., at Skadden Arps Slate
Meagher & Flom, LLP, and Sarah Robinson Borders, Esq., and Brian
C. Walsh, Esq., at King & Spalding LLP represent the Debtors in
their restructuring efforts. When the Debtors filed for
protection from their creditors, they listed $2,235,557,000 in
total assets and $1,870,785,000 in total debts. (Winn-Dixie
Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
WINN-DIXIE: Wants to Employ King & Spalding as Counsel
------------------------------------------------------
King & Spalding, LLP, has a long-standing relationship with
Winn-Dixie Stores, Inc., and its debtor-affiliates, having served
as their general corporate counsel in a variety of matters,
including litigation, antitrust matters, environmental matters,
general corporate matters, ERISA and other employee benefits
matters, securities law and SEC-related matters, and finance and
finance-related matters and transactions.
In addition, King & Spalding has been providing restructuring
advice to the Debtors. Thus, the Debtors believe that King &
Spalding has the necessary background to deal effectively with
many of the potential legal issues and problems that may arise in
the context of the Debtors' bankruptcy cases as well as with those
matters that exist independent of the bankruptcy cases.
The Debtors seek the authority of the U.S. Bankruptcy Court for
Southern District of New York to employ King & Spalding, as their
bankruptcy co-counsel to serve in conjunction with their lead
bankruptcy counsel, Skadden, Arps, Slate, Meagher & Flom, LLP.
King & Spalding will handle specific bankruptcy matters as
directed by the Debtors, and will continue to serve as the
Debtors' general corporate counsel during the pendency of the
Debtors' Chapter 11 cases.
Bennett Nussbaum, Winn-Dixie Stores, Inc.'s Senior Vice President
and Chief Financial Officer, assures the Court that King &
Spalding and Skadden Arps will not perform duplicative services
for the Debtors.
As bankruptcy co-counsel, King & Spalding will:
(a) assist the Debtors with respect to customer issues arising
as a result of the bankruptcy filings, including the scope
of first-day relief obtained with respect to those issues
and any subsequent relief that may be required;
(b) assist the Debtors with trust fund and consignment issues
relating to store goods and services, including the scope
of first-day relief obtained with respect to those issues
and any subsequent relief that may be required;
(c) assist the Debtors with respect to professional
compensation and retention matters in bankruptcy for both
Chapter 11 professionals and ordinary course professionals
and to coordinate compliance by those professionals with
the Bankruptcy Code and the orders of the Court;
(d) assist the Debtors with respect to utilities issues
arising in bankruptcy, including compliance with the
adequate assurance procedures approved by the Court and
handling all demands for additional adequate assurance;
(e) assist the Debtors with respect to non-bankruptcy
litigation issues and the impact of the bankruptcy on any
litigation, including providing notice of and enforcing
the automatic stay in actions against the Debtors, seeking
extensions of the automatic stay to non-Debtor parties if
necessary, responding to any motions to lift the automatic
stay, and assisting ordinary course professionals involved
in litigation matters with bankruptcy inquiries;
(f) assist the Debtors with insurance and workers compensation
issues that arise in the ordinary course of business or
result from the bankruptcy, including the scope of payment
authorization under first-day orders, coverage matters,
premium payments, premium financing, policy renewals, and
related matters;
(g) assist the Debtors with governmental tax, fee, and fine
issues that arise in the ordinary course of business or
result from the bankruptcy filings, including the scope of
payment authorization under first-day orders, any
objections to governmental claims, treatment issues, and
reorganization tax planning;
(h) assist the Debtors with respect to environmental issues
that arise in the ordinary course of business or result
from the bankruptcy filings, including the treatment of
environmental claims in bankruptcy;
(i) serve as conflicts counsel in the event that Skadden Arps
is unable to handle a particular bankruptcy matter,
including taking responsibility for certain claims
objections, executory contract or unexpired lease
rejections, or other disputed matters;
(j) handle other Chapter 11 matters as may be requested by the
Debtors, but without duplication of efforts with respect
to matters assigned by the Debtors to Skadden Arps;
(k) advise the Debtors with respect to their powers and duties
as debtors-in-possession in the continued management and
operation of their businesses;
(l) take all necessary action to protect and preserve the
Debtors' estates, including the prosecution of actions on
the Debtors' behalf, the defense of any actions commenced
against the Debtors, the negotiation of disputes in which
the Debtors are involved, and the preparation of
objections to claims filed against the Debtors' estates;
(m) prepare on the Debtors' behalf all necessary motions,
applications, answers, orders, reports, and other papers
in connection with the administration of the Debtors'
estates;
(n) continue to advise the Debtors with respect to the matters
traditionally handled by the firm, including litigation,
anti-trust matters, environmental matters, general
corporate matters, ERISA and other employee benefits
matters, securities law and SEC-related matters, and
finance and finance-related matters and transactions; and
(o) perform other legal services for the Debtors as may be
necessary and appropriate.
The Debtors will pay King & Spalding these hourly rates:
United States-based associates,
partners and counsel $195 to $725
Project assistants and paralegals $83 to $250
Prior to the bankruptcy petition date, King & Spalding received a
$250,000 retainer from the Debtors. The firm continues to hold
$20,740 as a "last bill" retainer subject to the future direction
and orders of the Court.
Sarah Robinson Borders, Esq., a partner at King & Spalding,
assures the Court that the firm is a "disinterested person," as
that term is defined in Section 101(14) of the Bankruptcy Code.
Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc. --
http://www.winn-dixie.com/ -- is one of the nation's largest food
retailers. The Company operates stores across the Southeastern
United States and in the Bahamas and employs approximately 90,000
people. The Company, along with 23 of its U.S. subsidiaries,
filed for chapter 11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y.
Case No. 05-11063). David J. Baker, Esq., at Skadden Arps Slate
Meagher & Flom, LLP, and Sarah Robinson Borders, Esq., and Brian
C. Walsh, Esq., at King & Spalding LLP represent the Debtors in
their restructuring efforts. When the Debtors filed for
protection from their creditors, they listed $2,235,557,000 in
total assets and $1,870,785,000 in total debts. (Winn-Dixie
Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
WINN-DIXIE: CEO Peter Lynch Gets $1.5 Million Retention Bonus
-------------------------------------------------------------
On February 17, 2005, Winn-Dixie Stores, Inc., entered into a
letter agreement with Peter L. Lynch, the Company's President and
Chief Executive Officer to set forth the terms and conditions
under which Winn-Dixie would pay Mr. Lynch to ensure his continued
service at least through December 31, 2005.
Upon execution of the Lynch Letter Agreement, Winn-Dixie paid Mr.
Lynch a $1,500,000 retention bonus, net of taxes required to be
withheld. The Retention Bonus is subject to forfeiture if his
employment is terminated on or before December 31, 2005, either by
the Company with cause or by Mr. Lynch without good reason and
other than for disability. In the event of forfeiture, Mr. Lynch
agreed to repay the Retention Bonus, without interest, as soon as
practicable but in any event within five days after the date of
termination of employment. However, any repayment obligation
lapses upon a change in control.
Winn-Dixie and Mr. Lynch intend that, except as otherwise required
by law, the Retention Bonus will not be taken into account in
determining the amount of Mr. Lynch's other benefits from Winn-
Dixie. However, the Retention Bonus is not in lieu of any other
payments or benefits to which Mr. Lynch might be or become
entitled under the Employment Agreement.
A full-text copy of the Lynch Letter Agreement is available for
free at:
http://www.sec.gov/Archives/edgar/data/107681/000119312505036220/dex101.htm
Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc. --
http://www.winn-dixie.com/ -- is one of the nation's largest food
retailers. The Company operates stores across the Southeastern
United States and in the Bahamas and employs approximately 90,000
people. The Company, along with 23 of its U.S. subsidiaries,
filed for chapter 11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y.
Case No. 05-11063). David J. Baker, Esq., at Skadden Arps Slate
Meagher & Flom, LLP, and Sarah Robinson Borders, Esq., and Brian
C. Walsh, Esq., at King & Spalding LLP represent the Debtors in
their restructuring efforts. When the Debtors filed for
protection from their creditors, they listed $2,235,557,000 in
total assets and $1,870,785,000 in total debts. (Winn-Dixie
Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
WOMEN FIRST: Court Okays Noteholder/Stockholder Settlement Pact
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware put its
stamp of approval on a settlement agreement among:
* Howard Konicov, the Liquidating Trustee representing the WFHC
Liquidating Trust -- successor-in-interest to Women First
HealthCare, Inc.;
* CIBC WMC, Inc.;
* Whitney Private Debt Fund, LP -- WPDF;
* JH Whitney Mezzanine Fund, LP -- JHWMF;
* Broad Street Associates, LLC -- BSA; and
* Greenleaf Capital, LP.
Disputes among the parties arose after the Debtor sold its
Bactrim(TM) assets to Mutual Pharmaceutical Company, Inc.,
fetching $4.2 million in net sale proceeds. Each of the parties
is asserting claims against the Bactrim proceeds.
The Settlement Agreement
The parties agree that:
(1) in addition to all amounts paid to CIBC, WPDF and JHWMF,
these noteholders will receive 50% of the net proceeds of
any sale of the Debtor's licensing rights to Esclim(TM);
(2) the stockholders -- CIBC, BSA and Greenleaf -- and the
Noteholders will return to the Liquidating Trust the
$2 million they received from the Bactrim Proceeds;
(3) the Noteholders and Stockholders will retain all transfers
received from or in behalf of the Debtor after the it filed
for bankruptcy until Dec. 3, 2004;
(4) the parties exchange mutual releases;
(5) the Noteholders and Stockholders will no longer have any
right to select a Liquidating Trustee or any member of the
Liquidating Trust Committee.
Details of the parties' disputes can be found in the Liquidating
Trust's motion. A copy of that pleading is available for a fee
at:
http://www.researcharchives.com/bin/download?id=050301020314
Headquartered in San Diego, California, Women First HealthCare,
Inc. -- http://www.womenfirst.com/-- is a specialty
pharmaceutical company dedicated to improve the health and
well-being of midlife women. The Company filed for chapter 11
protection on April 29, 2004 (Bankr. Del. Case No. 04-11278).
Robert A. Klyman, Esq., at Latham & Watkins LLP, and Michael R.
Nestor, Esq., and Sean Matthew Beach, Esq., at Young Conaway
Stargatt & Taylor, represent the Debtor in its restructuring
efforts. Kirt F. Gwynne, Esq., at Reed Smith LLP, represents the
Official Committee of Unsecured Creditors. When the Company filed
for protection from its creditors, it listed $49,089,000 in total
assets and $73,590,000 in total debts. The Court confirmed the
Debtor's Liquidating Plan on Dec. 28, 2004.
WORNICK COMPANY: S&P Revises Outlook on Low-B Ratings to Negative
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' rating to the
$26 million senior unsecured notes due 2011 issued by The Wornick
Company's parent, TWC Holdings LLC via rule 144A with registration
rights.
The notes were co-issued by TWC Holdings Corporation, a subsidiary
of TWC Holdings that was formed for the sole purpose of co-issuing
the notes, which are being used to fund a dividend to TWC
Holdings' owners. TWC Holdings is assigned a 'B+' corporate
credit rating, the same as Wornick, its sole source of earnings
and cash flows. The outlook is negative.
At the same time, Standard & Poor's affirmed its 'B+' corporate
credit and other ratings on Wornick. The outlook is revised to
negative from stable. The Cincinnati, Ohio-based company has
around $150 million in debt.
"The outlook revision reflects a weaker financial profile
following the debt-financed dividend and a more aggressive
financial policy," said Standard & Poor's credit analyst
Christopher DeNicolo. The dividend will cause Wornick's debt to
capital to increase to 94% from 79% measured as of Oct. 2, 2004,
the last date for which financial information is publicly
available. Similarly, debt to EBITDA pro forma for the
transaction will increase to over 6x from around 5x. The notes
are structurally subordinated, as they are not guaranteed by
Wornick or its subsidiaries. Interest on the notes can be paid
in cash or "in kind" at the option of the company. However, the
payment of cash interest is currently restricted by covenants in
the indenture for the existing Wornick secured notes.
The ratings on Wornick reflect a modest revenue base (around $200
million), limited diversity, and high leverage following a buyout
by Veritas Capital and subsequent debt-financed dividend. Those
factors are offset somewhat by the company's position as a leading
supplier of field rations to the U.S. military.
Wornick was acquired by Veritas Capital in June 2004 for a total
consideration of $155 million, which was funded by the proceeds
from $125 million of secured notes and $37.5 million of equity
from Veritas and management. The notes are secured by essentially
all of the assets of the company but share the collateral with a
small credit facility on a subordinated basis. Expected credit
ratios have been normalized for extraordinary production volumes
in 2003 due to the war in Iraq that are not likely to be repeated.
Cash flow protection and leverage measures are likely to be below
average for the rating in the near to intermediate term following
the debt financed dividend. Ratings could be lowered if military
revenues fall below expected levels or if cost reduction
initiatives do not result in improved earnings and cash
generation. The outlook could be revised to stable if leverage
declines faster than expected as a result of improved
profitability or higher than expected military or co-manufacturing
sales.
YELLOW ROADWAY: Moody's Reviewing Ba1 Ratings & May Downgrade
-------------------------------------------------------------
Moody's Investors Service placed the debt ratings of Yellow
Roadway Corporation and USF Corporation under review for possible
downgrade.
The ratings placed under review are:
* Yellow Roadway Corporation senior unsecured, issuer and
senior implied ratings at Ba1. Roadway LLC, guaranteed by
Yellow Roadway Corporation, senior unsecured at Ba1
* USF Corporation senior unsecured at Baa1
The review is prompted by the announcement that Yellow Roadway
would acquire the stock of USF Corporation for approximately
$1.37 billion and assume USF Corp.'s debt. The transaction is
expected to be financed with approximately 50% new stock and 50%
cash/debt, and expected to close over the summer following
regulatory review and shareholder approval.
Moody's review will focus on the particular challenges of managing
the two trucking companies, which have traditionally operated in
different market segments, in addition to management's plan for
near-term debt reduction and the target capital structure over
time. The review will also consider the ability to generate
incremental cash flow from margin expansion in the near-term under
a strong, but not sharply expanding economy, as well as the
prospects for the merger synergies proposed by management.
The implications of the large representation by the Teamsters
union at both companies will also be considered in the review.
Moody's will also evaluate the impact of any rationalization of
terminals and trucks to meet required returns or to satisfy
anti-trust requirements. Moody's will consider the position of
the USF Corporation debt in the capital structure of the new
company and the type of support for that debt.
The new company will have considerable size and scale as the
largest operator in the highly fragmented trucking market, with a
particularly broad product offering. Yellow Roadway is the
largest national less-than-truckload operator, formed through the
2003 merger of Roadway Corporation and Yellow Corporation, and USF
is one of the largest regional LTL operators. Pro-forma for fiscal
year 2004, the newly combined company would have had revenue of
approximately $9.2 billion and EBITDA of $700 million.
Similar to the strategy with Roadway, we expect Yellow Roadway
will maintain the USF brand name in the marketplace and to not
merge USF Corp.'s operations. Merger integration risks are
limited, therefore, and synergies are expected to come from
reducing duplicative back-office costs and improved purchasing
power, among other areas. However, USF is a regional LTL trucker
and Yellow Roadway spun off its own regional trucking company
several years ago, although those operations were considerably
smaller in size than USF and were not unionized.
Yellow Roadway Corporation is headquartered in Overland Park,
Kansas. USF Corporation is headquartered in Chicago, Illinois.
* Upcoming Meetings, Conferences and Seminars
---------------------------------------------
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 7-9, 2005
THE U.S. BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK AND
THE U.S. BANKRUPTCY COURT EASTERN DISTRICT OF NEW YORK
Mediator Skills Training
USBC Alexander Hamilton Custom House, One Bowling Green,
New York, NY
Contact:
http://www.nysb.uscourts.gov/pdf/mediator_training.pdf
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/
March 14, 2005
NEW YORK INSTITUTE OF CREDIT
13th Annual Judge Conrad B. Duberstein Moot Court
Competition
Chelsea Piers, NYC
Contact: 212-551-7920 or info@nyic.org
March 15, 2005
TURNAROUND MANAGEMENT ASSOCIATION
TMA Long Island Chapter Dinner with the County Executives
Jericho, NY
Contact: 312-578-6900 or http://www.turnaround.org/
March 19, 2005
NEW YORK INSTITUTE OF CREDIT
Business-Exchequer Metropolitan Credit Club Night at the
Races
Meadowlands
Contact: 212-551-7920 or info@nyic.org
March 23, 2005
TURNAROUND MANAGEMENT ASSOCIATION
TMA New Jersey Chapter Awards Ceremony
Newark Club
Contact: 312-578-6900 or http://www.turnaround.org/
March 29, 2005
NEW YORK INSTITUTE OF CREDIT
475 Esquire Toppers Credit Club Top Hat Award Presented to
John Daly, CIT
New York Hilton
Contact: 212-551-7920 or info@nyic.org
March 30, 2005
NEW YORK INSTITUTE OF CREDIT
Factoring 2005
Arno's Ristorante, NY
Contact: 212-551-7920 or info@nyic.org
March 31, 2005
TURNAROUND MANAGEMENT ASSOCIATION
TMA New York Chapter April Fools Party
University Club, NYC
Contact: 312-578-6900 or http://www.turnaround.org/
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 8-9, 2005
NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES
The NABT Spring Seminar
Don CeSar Beach Resort St. Petersburg, FL
Contact: 803-252-5646 or info@nabt.com
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
Northeast Bankruptcy Conference
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/
August 4, 2005
AMERICAN BANKRUPTCY INSTITUTE
Mid-Atlantic Bankruptcy Workshop
Hyatt Regency Chesapeake Cambridge, Maryland
Contact: 1-703-739-0800 or http://www.abiworld.org/
August 17-21, 2005
NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES
NABT Convention
Marriott Marquis Times Square New York, NY
Contact: 803-252-5646 or info@nabt.com
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 23, 2005
AMERICAN BANKRUPTCY INSTITUTE
International Insolvency Workshop
London, UK
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 1-2, 2005
INTERNATIONAL WOMEN'S INSOLVENCY & RESTRUCTURING CONFEDERATION
IWIRC 2005 Fall Conference
San Antonio, TX
Contact: http://www.iwirc.com/
November 2-5, 2005
NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
Seventy Eighth Annual Meeting
San Antonio, Texas
Contact: http://www.ncbj.org/
November 11, 2005
AMERICAN BANKRUPTCY INSTITUTE
Detroit Consumer Bankruptcy Workshop
Wayne State University, Detroit, MI
Contact: 1-703-739-0800 or http://www.abiworld.org/
November 14, 2005
TURNAROUND MANAGEMENT ASSOCIATION
Workout Workshop
Long Island, NY
Contact: 312-578-6900 or http://www.turnaround.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/
October 10-13, 2007
NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
National Conference of Bankruptcy Judges
Orlando, FL
Contact: http://www.ncbj.com/
September 24-27, 2008
NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
National Conference of Bankruptcy Judges
Scottsdale, AZ
Contact: http://www.ncbj.org/
2009 (TBA)
NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
National Conference of Bankruptcy Judges
Las Vegas, NV
Contact: http://www.ncbj.org/
2010 (TBA)
NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
National Conference of Bankruptcy Judges
New Orleans, LA
Contact http://www.ncbj.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, 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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