/raid1/www/Hosts/bankrupt/TCR_Public/050615.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, June 15, 2005, Vol. 9, No. 140
Headlines
A.P.I. INC: Files Second Amended Plan of Reorganization in Minn.
AAIPHARMA INC: Section 341(a) Meeting Slated for June 22
ADELPHIA COMMS: District Court Dismisses New Claims Against Banks
ADVANSTAR COMMS: 88.75% of Noteholders Agree to Amend Indenture
AEP INDUSTRIES: Posts $10 Million Net Loss in Second Quarter
AFC ENTERPRISES: Inks Agreement to Settle Derivative Lawsuits
ALDERWOODS GROUP: Offers to Exchange $200MM of 7-3/4% Senior Notes
ALLEGHENY ENERGY: Moody's Assigns Ba1 Senior Implied Rating
AMERICAN NATURAL: Debentureholders OKs Price Reduction & Extension
AMES DEPARTMENT: Court Approves GE Capital L/C Extension Agreement
AMCAST INDUSTRIAL: Committee Hires Reed & Assoc. as Appraiser
ANDRE S. TATIBOUET: Hires Wagner Choi as Bankruptcy Counsel
ANDROSCOGGIN ENERGY: Taps PricewaterhouseCoopers as Accountant
ARDENT HEALTH: Extends 10% Sr. Sub. Debt Tender Offer to July 13
ARMSTRONG WORLD: Gets Court OK to Assume Georgia Power Master Pact
BLOUNT INC: Moody's Upgrades $175M Sr. Sub. Notes' Rating to B3
BRAND SERVICES: S&P Junks $35 Million Second-Lien Term Loan
CATHOLIC CHURCH: Spokane Hires Marci Hamilton as Special Counsel
CATHOLIC CHURCH: U.S. Bank Can Set-Off Against Spokane's Account
COLAD GROUP: Taps Nowicki as Accountant & Financial Advisor
CONTINENTAL AIRLINES: Contributes $50 Million to Pension Plan
CRI RESOURCES: US Trustee Appoints Richard Diamond as Examiner
DELPHI CORPORATION: Moody's Affirms B2 Senior Implied Rating
DEVLIEG BULLARD: Chapter 7 Trustee Submits Final Report
EAGLEPICHER INC: Has Until July 29 to Make Lease Decisions
EAGLEPICHER INC: Hires Giuliani Capital as Financial Advisor
ENRON CORP: J.P. Morgan Inks $2.2 Billion Class Action Settlement
ENRON CORP: Veolia Holds $7.6 Million Allowed Unsecured Claim
EVEREST BROADBAND: Case Summary & 13 Largest Known Creditors
FEDERAL-MOGUL: Asbestos Claims Estimation Proceeding Begins
FEDERAL-MOGUL: Creditors Panel Wants Federalist Group as Advocate
FRANK FERACO: Case Summary & 20 Largest Unsecured Creditors
GATE ENGINEERING: Case Summary & 20 Largest Unsecured Creditors
GE-RAY FABRICS: Committee Hires Shumaker Loop as Legal Counsel
HAYES LEMMERZ: Settles Dispute on Nissan North's Warranty Claims
HIGH VOLTAGE: Ch. 11 Trustee Taps Studio Legale as Legal Counsel
HOME INTERIORS: Weak Performance Prompts S&P to Junk Credit Rating
HYNIX SEMICONDUCTOR: S&P Rates Proposed $750M Senior Notes at B+
JAKE'S GRANITE: Voluntary Chapter 11 Case Summary
KANSAS CITY SOUTHERN: Completes Solicitation of 9.5% & 7.5% Notes
KID'S CASTLE: Case Summary & 21 Largest Unsecured Creditors
LACY HENRY: Case Summary & 20 Largest Unsecured Creditors
LEONARD FARINOLA: Case Summary & 5 Largest Unsecured Creditors
MADISON AVENUE: Moody's Reviews CDO Ratings & May Upgrade
MERIDIAN AUTOMOTIVE: Court Limits Gavin Anderson's Indemnification
MERIDIAN AUTOMOTIVE: Panel Hires Winston & Strawn as Lead Counsel
MERIDIAN AUTOMOTIVE: Panel Hires Ashby & Geddes as Counsel
MIRANT: Views Exchanged on Relevance of Till Case in Valuation
MIRANT CORP: Gets Court Okay to View Troutman Client-Matter Files
MIRANT: CSFB Wary Over Releases in Gas Transmission Settlement
MPOWER HOLDING: Entry of Final Decree Delayed Until June 22
MPOWER HOLDING: Has Until June 22 to Object to Proofs of Claim
NATIONAL CENTURY: Inks Stipulations Tolling Statutes of Limitation
NEWAVE INC: Insufficient Cash Flow Spurs Going Concern Doubt
NORCROSS SAFETY: Soliciting Consents to Amend 9-7/8% Indenture
NORTHWEST AIRLINES: Reports Say Carrier's Closer to Bankruptcy
NORTHWEST AIRLINES: Heavy Losses Prompt S&P to Junk Ratings
NS REPACK: S&P Cuts Rating on $94 Million Notes to B+
PACER INT'L: Improved Financial Profile Cues S&P to Lift Ratings
PLATTE VIEW: Wants Access to HUD's Cash Collateral
R.F. CUNNINGHAM: Case Summary & 20 Largest Unsecured Creditors
RADIO ONE: Inks $800 Million Seven-Year Senior Credit Facility
RESIX FINANCE: S&P Lifts Ratings on Six Certificate Classes
ROBERT HARTLEY: Case Summary & 11 Largest Unsecured Creditors
S-TRAN HOLDINGS: Taps Taylor & Martin to Auction Personal Property
S-TRAN HOLDINGS: Can Sell Personal Property Assets at Auctions
SAFETY-KLEEN: Claims Objection Deadline Extended to December 13
SECURITY CAPITAL: Receives Revised Offer from Unit's Executives
SFBC INTERNATIONAL: Moody's Affirms B2 Rating on $160M Facility
SMC CHANTECLAIR: Voluntary Chapter 11 Case Summary
SOUPER SALAD: Wants Access to Cash Collateral & $3MM DIP Facility
SOUPER SALAD: Taps Collins May as General Bankruptcy Counsel
SOUPER SALAD: U.S. Trustee to Meet Creditors on July 19
SPIEGEL INC: Committee Files Revised Creditor Trust Agreement
STAR TELECOMMS: Trustee Has Until June 30 to File Final Report
STRUCTURED ASSET: Adequate Credit Support Cues S&P to Hold Ratings
STRUCTURED ASSET: S&P Junks Class B5 Certificates
TEXAS INDUSTRIES: Launches $600 Million Cash Tender Offer
TOYS 'R' US: Extends Tender Offer for 8-3/4% Debentures to June 28
TRIAD HOSPITALS: Fitch Holds BB- Rating on Senior Unsecured Debt
TWIN CORPORATION: Voluntary Chapter 11 Case Summary
UAL CORP: Court Approves Port of Portland Settlement Agreement
USURF AMERICA: Renames Company to Cardinal Communications
W.R. GRACE: Wants to Contribute $38.23 Million to Retirement Plans
WESTPOINT STEVENS: Settles Dispute Over INVISTA Litigation Claims
WESTPOINT STEVENS: Asks Court to Okay Harley Davidson License Deal
YES! ENTERTAINMENT: Court Delays Entry of Final Decree
YUKOS OIL: Yukos Board Nominates 11 Candidates for New Board
* Bridge Associates' Jean FitzSimon to Join Whitehall Jewellers
* Buckingham Doolittle Merges with Pheterson & Bleau
* L. Kevin O'Mara Joins Cadwalader as Corporate Partner
* Chadbourne & Parke Creates Fellowship at The Door Legal Services
* Sheila Smith Heads Deloitte Financial's Reorganization Services
* Houlihan Lokey Expands Sovereign Advisory Services Group
* Leonard Goldberger Joins Stevens & Lee Bankruptcy Team
* How New Bankruptcy Laws Impact Business-to-Business Collections
* Upcoming Meetings, Conferences and Seminars
*********
A.P.I. INC: Files Second Amended Plan of Reorganization in Minn.
----------------------------------------------------------------
A.P.I. Inc. delivered its Second Amended Plan of Reorganization to
the U.S. Bankruptcy Court for the District of Minnesota.
Terms of the Plan
As initially provided in the first chapter 11 Plan filed,
unimpaired claims, consisting of holders of wage, employee
benefits, and general unsecured claims will be paid in full on the
Plan's effective date.
Secured creditors LaSalle Bank National Association and Wells
Fargo Bank National Association will retain their liens on the
Debtor's property.
Asbestos personal injury claims will be transferred to an Asbestos
Trust on the Effective Date. API will pay the Asbestos Trust
$14.5 million. The Debtor's parent company, APi Group, Inc. will
pay the Asbestos Trust $500,000 on the Effective Date.
The Initial Payments will be used to:
(1) pay all amounts owed to professionals engaged by the
Official Committee of Asbestos Personal Injury Claimants
and the Official Representative for Future Asbestos
Personal Injury Claimants (other than those retained by the
Debtor), and
(2) pay $250,000 to the law firm of Sieben Polk LaVerdiere &
Dusich, P.A. for services rendered and expenses incurred in
connection with the negotiation of this Plan.
The balance will be use to partially pay asbestos claimants. API
will pay the Trust 80 quarterly payments of $325,000 starting on
the fourth month from the Effective Date. The Debtor needs to pay
the Trust a total of $26 million.
Equity interests will be cancelled.
A full-text copy of the Second Amended Plan of Reorganization is
available for a fee at:
http://www.researcharchives.com/bin/download?id=050614004857
Headquartered in St. Paul, Minnesota, A.P.I. Inc., f/k/a A.P.I.
Construction Company -- http://www.apigroupinc.com/-- is a
wholly owned subsidiary of the API Group, Inc., and is an
industrial insulation contractor. The Company filed for chapter
11 protection on January 5, 2005 (Bankr. D. Minn. Case No.
05-30073). James Baillie, Esq., at Fredrikson & Byron P.A.,
represents the Debtor in its restructuring. When the Debtor filed
for protection from its creditors, it listed total assets of
$34,702,179 and total debts of $63,000,000.
AAIPHARMA INC: Section 341(a) Meeting Slated for June 22
--------------------------------------------------------
The U.S. Trustee for Region 3 will convene a meeting of aaiPharma
Inc. and its debtor-affiliates' creditors at 11:00 a.m. on
June 22, 2005, in Room 2112 of the J. Caleb Boggs Federal Building
located at 844 King Street in Wilmington, Delaware.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Headquartered in Wilmington, North Carolina, aaiPharma Inc. --
http://aaipharma.com/-- provides product development services to
the pharmaceutical industry and sells pharmaceutical products
which primarily target pain management. AAI operates two
divisions: AAI Development Services and Pharmaceuticals Division.
The Company and eight of its debtor-affiliates filed for chapter
11 protection on May 10, 2005 (Bankr. Del. Case Nos. 05-11341 to
05-11350). Karen McKinley, Esq. and Mark D. Collins, Esq. at
Richards, Layton & Finger, P.A.; Jenn Hanson, Esq., and Gary L.
Kaplan, Esq., at Fried, Frank, Harris, Shriver & Jacobson LLP; and
the firm of Robinson, Bradshaw & Hinson, P.A., represent the
Debtors in their restructuring efforts. When the Debtors filed
for bankruptcy, the reported consolidated assets amounting to
$323,323,000 and consolidated debts totaling $446,693,000.
ADELPHIA COMMS: District Court Dismisses New Claims Against Banks
-----------------------------------------------------------------
In 2002, more than three dozen individual and class actions were
filed in various state and federal courts by purchasers of
Adelphia Communications Corporation debt and securities.
In 2003, 12 individual actions and 29 class actions were
transferred to the U.S. District Court for the Southern District
of New York for consolidation. The consolidated complaint
asserts claims under the Securities Exchange Act, the Trust
Indenture Act and various common laws. The plaintiffs allege
that massive fraud was perpetrated at ACOM by the Rigas Family,
assisted by auditors, underwriters, lawyers and other
professionals.
Dozens of defendants were named in the lawsuit, including ACOM
and certain of its officers and founders. Many of the defendants
filed motions to dismiss the claims against them, including
financial institutions predominantly comprised of previously
unnamed commercial banks that served as lenders to ACOM and
investment banks that served as the company's underwriters:
(1) Commercial banks:
* ABN AMRO Bank N.V.;
* Bank of America, N.A.;
* Barclays Bank PLC;
* Bank of New York Co., Inc.,
* The Bank of Nova Scotia;
* Citibank, N.A.;
* Citicorp U.S.A;
* Citigroup, Inc.;
* CIBC, Inc.;
* Credit Lyonnais, New York Branch;
* Deutsche Bank AG;
* Fleet National Bank;
* J.P. Morgan Chase & Co.;
* Morgan Stanley Senior Funding;
* Societe Generale, S.A.;
* SunTrust Bank; and
* Toronto Dominion (Texas) Inc.
(2) Investment banks:
* ABN AMRO, Inc.;
* Banc of America Securities LLC;
* Barclays Capital Inc.;
* Harris Nesbitt Corp. f/k/a BMO Nesbitt Burns Corp.;
* BNY Capital Markets, Inc;
* Bear, Stearns & Co. Inc.;
* Citigroup Global Markets Holdings, Inc., fka Salomon
Smith Barney Inc. and Smith Barney Inc.;
* CIBC World Markets Corp.;
* Credit Lyonnais Securities (USA) Inc.;
* Deutsche Bank Alex.Brown Inc.;
* Fleet Securities, Inc.;
* J.P. Morgan Securities, Inc.;
* Morgan Stanley Dean Witter;
* Morgan Stanley & Co Inc.;
* PCN Capital Markets, Inc.;
* Scotia Capital (USA) Inc.;
* SG Cowen Securities;
* SunTrust Equitable Securities; and
* TD Securities (USA) Inc.
The plaintiffs assert claims against the financial institutions
for, among others, preparing false and misleading registration
statements and the knowing or reckless making of false statements
in connection with the sale of securities.
In the consolidated complaint, plaintiffs also seek to add a host
of new claims that fall into two categories:
1. claims against previously unnamed lending banks and
underwriters; and
2. claims based on previously unchallenged securities and debt
offerings against Salomon Smith Barney, Inc., and Banc of
America Securities LLC based upon offering in:
-- October 1999,
-- November 1999,
-- September 2000,
-- June 2001,
-- November 2001, and
-- January 2002.
The financial institutions argue that the New Claims are time-
barred under the statute of limitations period that has
traditionally governed the Securities Act and the Exchange Act.
Plaintiffs however assert that the Sarbanes-Oxley Act of 2002
extended the limitations period.
In his 50-page Memorandum and Order dated May 27, 2005, Judge
Lawrence M. McKenna of the U.S. District Court of the Southern
District of New York points out that the Sarbanes-Oxley extension
only applies to proceedings that are commenced on or after
July 30, 2002. To determine when the consolidated class action
commenced, Judge McKenna based the date on the filing of the lead
plaintiff's complaint, which is June 3, 2002.
Since the consolidated action is deemed commenced before July 30,
2002, Judge McKenna finds that the new limitations period is
inapplicable.
Judge McKenna notes that the plaintiffs were placed on inquiry
notice of their claims against the financial institutions in June
2002, as well as the claims challenging the new transactions.
Furthermore, the District Court points out that plaintiffs
discovered certain facts necessary to assert the new claims more
than one year before those claims were filed. "As a result, the
new claims -- those asserted against financial institutions not
previously named, and those asserted against Salomon Smith and
Banc of America based on transactions not previously challenged
-- are dismissed, without prejudice, as time-barred under the
one-year statute of limitations period," Judge McKenna says.
The District Court finds that new Section 11 of the Securities
Act of 1933 claims against Salomon Smith and Banc of America,
challenging offerings in October 1999, November 1999, and
September 2000, relate back to the claims challenging the January
2001 offering. "The new [Section 11] claims against [Salomon
Smith and Banc of America] are thus timely under Rule 15(c)(2),
to the extent that they are being asserted by existing
plaintiffs. Plaintiffs will be given leave to replead facts
sufficient to demonstrate that there are existing plaintiffs able
to support a class asserting the new [Section 11 claims] against
[Salomon Smith and Banc of America]."
Judge McKenna, however, finds the new Section 12(a)(2) claims are
time-barred.
A full-text copy of the District Court's Order is available for
free at http://bankrupt.com/misc/McKennaMemorandumAndOrder.pdf
Headquartered in Coudersport, Pennsylvania, Adelphia
Communications Corporation (OTC: ADELQ) is the fifth-largest cable
television company in the country. Adelphia serves customers in
30 states and Puerto Rico, and offers analog and digital video
services, high-speed Internet access and other advanced services
over its broadband networks. The Company and its more than 200
affiliates filed for Chapter 11 protection in the Southern
District of New York on June 25, 2002. Those cases are jointly
administered under case number 02-41729. Willkie Farr & Gallagher
represents the ACOM Debtors. (Adelphia Bankruptcy News, Issue No.
95; Bankruptcy Creditors' Service, Inc., 215/945-7000)
ADVANSTAR COMMS: 88.75% of Noteholders Agree to Amend Indenture
---------------------------------------------------------------
Advanstar Communications Inc. received consents from holders of
approximately 88.75% of its outstanding Second Priority Senior
Secured Floating Rate Notes due 2008, as of 5:00 p.m., New York
City time, on June 13, 2005.
The consents are sufficient to effect all of the proposed
amendments to the indenture governing the Floating Rate Notes as
set forth in Advanstar's Offer to Purchase and Consent
Solicitation Statement dated May 31, 2005 and the related Consent
and Letter of Transmittal, pursuant to which the tender offer and
the consent solicitation are being made. The proposed amendments
eliminate, with respect to the Floating Rate Notes only,
substantially all of the restrictive covenants and certain default
provisions in the indenture governing the Floating Rate Notes.
The proposed amendments also release the security interest in the
collateral under the indenture and security documents with respect
to the Floating Rate Notes.
Advanstar also disclosed that, subject to the terms and conditions
of the tender offer and consent solicitation, it will pay the
total consideration, including the consent payment, to each holder
who validly tenders Floating Rate Notes on or prior to 5:00 p.m.,
New York City time, on June 28, 2005, the currently scheduled
expiration date for the tender offer and consent solicitation,
provided such holder's Floating Rate Notes are accepted in the
tender offer. The total consideration for the tender offer and
consent solicitation is $1,073 for each $1,000 principal amount
outstanding of Floating Rate Notes, which includes a $30 consent
payment. Holders should note that, as a result of principal
amortization, while each Floating Rate Note was issued in a face
amount of $1,000, the outstanding principal amount of each
Floating Rate Note is currently $982.50. Accordingly, a holder
will not receive $1,073 as the total consideration in respect of
each such Floating Rate Note, but rather an amount equal to 107.3%
of the actual outstanding principal amount of such Note. Holders
whose Floating Rate Notes are accepted for purchase in the tender
offer will also receive accrued and unpaid interest to, but not
including, the settlement date for the tender offer.
Floating Rate Notes tendered and not validly withdrawn prior to
the Consent Date may not be withdrawn except as may be required by
law. Floating Rate Notes tendered after the Consent Date may not
be withdrawn, except as may be required by law.
Advanstar will proceed to execute a supplemental indenture
effecting the proposed amendments to the indenture. The
supplemental indenture will become operative only if Advanstar
accepts the Floating Rate Notes for payment pursuant to the terms
of the tender offer. When the supplemental indenture becomes
operative, it will be binding on the holders of Floating Rate
Notes not purchased in the tender offer.
The closing of the tender offer is subject to certain conditions
set forth in the Statement.
Credit Suisse First Boston is the exclusive Dealer Manager and
Solicitation Agent for the tender offer and consent solicitation.
Questions regarding the tender offer and consent solicitation may
be directed to Credit Suisse First Boston's Liability Management
Group, at 800-20-1653 (toll free) or 212-538-0652 (collect).
Requests for the Statement, Consent and Letter of Transmittal or
other documents related to the tender offer and solicitation may
be directed to the Information Agent, Morrow & Co., Inc., at 800-
607-0088 (toll free).
About the Company
Advanstar Communications Inc. -- http://www.advanstar.com/-- is a
leading worldwide media company providing integrated marketing
solutions for the Fashion, Life Sciences and Powersports
industries. Advanstar serves business professionals and consumers
in these industries with its portfolio of 55 expositions and
conferences, 55 publications and directories, 75 electronic
publications and Web sites, as well as educational and direct
marketing products and services. Market leading brands and a
commitment to delivering innovative, quality products and services
enable Advanstar to "Connect Our Customers With Theirs."
Advanstar has approximately 1,000 employees and currently operates
from multiple offices in North America and Europe.
* * *
As reported in the Troubled Company Reporter on Apr. 8, 2005,
Standard & Poor's Ratings Services revised its outlook on
Advanstar Communications Inc. to negative from stable. At the
same time, Standard & Poor's affirmed its existing ratings on the
company, including its 'B' corporate credit rating. The Duluth,
Minnesota-based business-to-business media firm, which is analyzed
on a consolidated basis with its parent company, Advanstar Inc.,
had $753 million in consolidated debt on Dec. 31, 2004.
The outlook change follows Advanstar's announcement that it is
selling its trade show, publishing, and other businesses serving
five sectors. Gross proceeds for these assets, which produced
about 27% of the company's revenue, will total $185 million.
Advanstar has not specified for what the proceeds will be used,
which creates some concern.
"Barring a substantial debt reduction, the lost profit from the
sold assets will weaken the company's already marginal total
interest coverage, modest discretionary cash flow, and high debt
leverage," said Standard & Poor's credit analyst Steve Wilkinson.
In addition, using the excess liquidity from the sale for
acquisitions may not improve the company's business or financial
profile from that which existed prior to the asset sales.
AEP INDUSTRIES: Posts $10 Million Net Loss in Second Quarter
------------------------------------------------------------
AEP Industries Inc. (Nasdaq: AEPI) reported financial results for
its fiscal second quarter and six months ended April 30, 2005.
Net sales increased $28,342,000 or 18.1% in the 2005 second
quarter to $184,857,000 compared with $156,515,000 in fiscal 2004
second quarter. The worldwide net sales includes $2,730,000 of
positive impact of foreign exchange and other increases of
$25,612,000 or 16.4%. The other increases in net sales during the
2005 second quarter was primarily due to a 19.2% increase in unit
sales prices offset by a 2.3 percent decline in sales volume.
For the first six months of fiscal 2005, net sales rose
$65,905,000 or 22.2% to $362,179,000 compared with $296,274,000 in
the same period last year. Net sales includes $5,804,000 of
positive impact of foreign exchange and other increases of
$60,101,000 or 20.3%. For the six month period, theses other
increases in net sales was due to a 17.3% increase in unit prices,
combined with a 2.5% increase in sales volume.
Gross profit in the second quarter of fiscal 2005 decreased
$620,000 to $30,541,000 as compared to $31,161,000 in the same
quarter last year. The decrease in gross profit in the 2005
second quarter is due to the above-mentioned decrease in sales
volume. Gross profit per unit sold in the second quarter of
fiscal 2005 was consistent with the second quarter of fiscal 2004
reflecting the Company's continuing ability to pass resin price
increases through to its customers as incurred during the period.
Gross profit for the first six months of fiscal 2005 increased
$3,047,000 to $59,580,000 as compared with $56,533,000 in the same
six months of the prior fiscal year. This improvement is
primarily a result of the positive impact of foreign exchange
combined with improved operating efficiencies partially due to the
2.5 percent volume increase in the current period.
The Company reported income from operations of $16,014,000 for the
first six months of fiscal 2005, compared with $15,324,000 in the
same period last year. This improvement is primarily due to
increased sales volume in the current period, partially offset by
the continuing effect of the FIAP liquidation, increased legal and
advisory expenses, and costs related to the Company's
implementation of Sarbanes/Oxley.
For the second quarter of fiscal 2005, the Company reported a loss
from continuing operations of $6,361,000, compared with income
from continuing operations of $1,703,000 in the second quarter of
fiscal 2004. For the first six months of fiscal 2005, the Company
reported a loss from continuing operations of $7,065,000, compared
with income from continuing operations of $97,000.
For the 2005 second quarter the Company reported a loss form
discontinued operations of $4,262,000, compared with a loss from
discontinued operations of $2,496,000 in the same quarter last
year. The loss in the quarter is almost entirely due to the
quarter's losses in Asia/Pacific which operations were sold on
May 2, 2005.
For the 2005 second quarter the Company reported a net loss of
$10,623,000, compared with a net loss of $793,000 in the same
quarter last year. The net loss for the first six months of fiscal
2005 was $17,120,000 compared to $1,599,000 in the prior year.
"We are excited about the positive trends in our operating results
for the first six months of fiscal 2005. The improved operating
profits are a direct result of the global actions we have taken to
strengthen and better position our business over the past two
years. In addition, during our second quarter of fiscal 2005 the
company successfully refinanced $175,000,000 of its 9.875% Senior
Subordinated Debentures with the issuance of $175,000,000 of
7.875% Senior Notes. The full impact of this refinancing will not
be fully reflected in our financial statements until the third
quarter," commented Brendan Barba, Chairman and Chief Executive
Officer of the Company. Mr. Barba concluded by saying, "We remain
focused on shareholder value and expect to see operating and
financial metrics continue to improve over the coming quarters."
About the Company
AEP Industries Inc. manufactures, markets, and distributes an
extensive range of plastic packaging products for the
food/beverage, industrial and agricultural markets. The Company
has operations in four countries throughout North America and
Europe.
* * *
As reported in the Troubled Company Reporter on March 2, 2005,
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.
AFC ENTERPRISES: Inks Agreement to Settle Derivative Lawsuits
-------------------------------------------------------------
AFC Enterprises, Inc. (Nasdaq: AFCE) disclosed a joint settlement
agreement with the plaintiffs in the derivative lawsuits relating
to the restatement of its financial statements for fiscal years
2000, 2001 and the first three quarters of 2002. The settlement
agreement reported relates to the suit filed by plaintiffs on
June 5, 2003, and Aug. 7, 2003, claiming to be acting on behalf of
AFC against certain current and former members of AFC's board of
directors.
The agreement provides for the general terms of a settlement under
which the litigation would be dismissed with prejudice and AFC
would make modifications to certain of its corporate governance
policies and practices, most of which have already been
instituted, and pay approximately $517,000 in attorneys fees and
expenses to the derivative plaintiffs' counsel. No damages will
be paid by the officer or director defendants. The settlement
does not reflect any admission of liability by AFC or its current
or former officers or directors. The parties intend to enter into
a further agreement to set forth more specific terms of the
settlement. Any such agreement will be subject to court approval.
AFC expects to record a charge for this matter in the second
quarter of 2005 of approximately $517,000.
As previously reported on April 22, 2005, AFC also entered into a
settlement agreement, which is subject to court approval, with
respect to the securities class actions filed against the Company.
The derivative suits whose settlement was announced Monday
represented the last remaining litigation seeking damages from the
Company or its officers and directors arising out of the
restatement of its financial statements.
"We are pleased to have entered into a settlement agreement with
respect to the remaining litigation relating to the restatement.
We look forward to completing this process as we continue to focus
our attention on growing the Popeyes business," stated Frank
Belatti, Chairman and CEO of AFC Enterprises.
About the Company
AFC Enterprises, Inc. -- http://www.afce.com/-- is the
franchisor and operator of Popeyes(R) Chicken & Biscuits, the
world's second-largest quick-service chicken concept based on
number of units. As of April 17, 2005, Popeyes had 1,818
restaurants in the United States, Puerto Rico, Guam and 25
foreign countries. AFC's primary objective is to be the world's
Franchisor of Choice(R) by offering investment opportunities in
its Popeyes Chicken & Biscuits brand and providing exceptional
franchisee support systems and services.
* * *
As reported in the Troubled Company Reporter on April 21, 2005,
Standard & Poor's Ratings Services assigned its 'B+' rating to
Atlanta, Georgia-based AFC Enterprises Inc.'s planned $250 million
secured bank loan.
A recovery rating of '4' was also assigned to the loan,
indicating the expectation for marginal recovery of principal
(25%-50%) in the event of a payment default. Borrowings, along
with the proceeds from the sale of Church's Chicken, will be
used for a shareholder transaction and to repay the company's
debt.
At the same time, Standard & Poor's raised its corporate credit
rating on AFC to 'B+' from 'B'. The rating was removed from
CreditWatch, where it was previously placed with positive
implications. S&P says the rating outlook is stable.
ALDERWOODS GROUP: Offers to Exchange $200MM of 7-3/4% Senior Notes
------------------------------------------------------------------
Alderwoods Group, Inc., Senior Vice President Ellen Neeman relates
that on May 13, 2005, the Company filed a registration statement
with the Securities and Exchange Commission relating to the
exchange offer of its 7-3/4% Senior Notes due 2012.
Registration Rights Agreement
Alderwoods sold $200 million in aggregate principal amount of
7-3/4% senior notes due 2012 on August 19, 2004, to Bank of
America Securities LLC and Morgan Stanley & Co. In connection
with the sale of the outstanding notes, Alderwoods entered into a
registration rights agreement with the Initial Purchasers. Under
the Registration Rights Agreement, Alderwoods agreed to file and
use reasonable efforts to cause to become effective with the SEC a
registration statement with respect to the exchange of the
outstanding notes for exchange notes with terms identical in all
material respects to the terms of the outstanding notes.
The Exchange Offer
Alderwoods offers to exchange $1,000 principal amount of exchange
notes for each $1,000 principal amount of outstanding notes
properly tendered prior 5:00 p.m., New York City Time, on July 13,
2005, unless extended. Holders may tender their outstanding notes
in whole or in part in integral multiples of $1,000 principal
amount.
Exchange Notes: $200 million aggregate principal amount of
7-3/4% senior notes due 2012
Maturity: September 15, 2012
Interest
Payments: March 15 and September 15 of each year,
starting on September 15, 2005
Guarantees: The exchange notes will be guaranteed by all
of Alderwoods' subsidiaries.
Ranking: The exchange notes will be Alderwoods' and the
guarantees will be the guarantors' general
senior unsecured obligations. The notes will
rank:
* equally with all of Alderwoods' and the
guarantors' existing and future unsecured
and unsubordinated indebtedness; and
* senior to any of Alderwoods' future
subordinated debt.
The notes will be effectively subordinated to
all of:
* Alderwoods' and the guarantors' existing and
future secured debt to the extent of the
assets securing that debt, including any
borrowings under our amended senior secured
credit facility; and
* the indebtedness and other liabilities of
Alderwoods' subsidiaries not guaranteeing
the notes.
As of March 26, 2005, Alderwoods had
approximately $432 million of outstanding debt,
of which $1.6 million was debt of non-guarantor
subsidiaries, including $0.1 million of debt of
unrestricted subsidiaries.
Optional
Redemption: Alderwoods may redeem the exchange notes, in
whole or in part, at any time on or after
September 15, 2008, at specified redemption
prices, plus accrued and unpaid interest.
Alderwoods may also redeem up to 35% of the
exchange notes before September 15, 2007, with
the next cash proceeds from certain equity
offerings. However, Alderwoods may only make
those redemptions if at least 65% of the
aggregate principal amount of exchange notes
issued under the indenture remains outstanding
immediately after the occurrence of that
redemption.
Change of
Control: If Alderwoods experiences specific kinds of
changes in control, it must offer to purchase
the exchange notes at 101% of their face
amount, plus accrued and unpaid interest.
Exchange Agent: Wells Fargo Bank, N.A.
Other terms: * A holder may withdraw tender of outstanding
notes at any time before the expiration of
the exchange offer.
* Any outstanding notes not validly tendered
will remain subject to existing transfer
restrictions.
* The exchange of notes will not be a taxable
exchange for the United States federal
income tax purposes.
* Alderwoods will not receive any cash
proceeds from the exchange offer.
* Alderwoods' affiliates may not participate
in the exchange offer.
Ms. Neeman relates that the Exchange Offer is subject to a number
of conditions.
The exchange offer is not conditioned on any minimum principal
amount of outstanding notes being tendered for exchange.
Alderwoods reserve the right, subject to applicable law, at any
time and from time to time in its reasonable judgment to:
-- delay the acceptance of the outstanding notes;
-- terminate the exchange offer if specified conditions have
not been satisfied;
-- extend the expiration date of the exchange offer and retain
all tendered outstanding notes, subject, however, to the
tendering holders' right to withdraw their tender of
outstanding notes; and
-- waive any condition or otherwise amend the terms of the
exchange offer in any respect.
A full-text copy of the Prospectus is available for free at
http://ResearchArchives.com/t/s?20
Alderwoods Group is the second largest operator of funeral homes
and cemeteries in North America, based upon total revenue and
number of locations. As of June 19, 2004, the Company operated
716 funeral homes, 130 cemeteries and 61 combination funeral home
and cemetery locations throughout North America. Of the Company's
total locations, 59 funeral homes, 53 cemeteries and four
combination funeral home and cemetery locations were held for
sales as of June 19, 2004. The Company provides funeral and
cemetery services and products on both an at-need and pre-need
basis. In support of the pre-need business, the Company operates
insurance subsidiaries that provide customers with a funding
mechanism for the pre-arrangement of funerals. (Loewen Bankruptcy
News, Issue No. 99; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
* * *
As previously reported in the Troubled Company Reporter on
July 27, 2004, Standard & Poor's Ratings Services it affirmed its
'B+' corporate credit rating on the funeral home and cemetery
operator Alderwoods Group, Inc., and assigned its 'B' debt rating
to the company's proposed $200 million senior unsecured notes due
in 2012. At the same time, Standard & Poor's also assigned its
'BB-' senior secured bank loan rating and its '1' recovery rating
to Alderwoods' proposed $75 million revolving credit facility,
which matures in 2008, and to its proposed term loan B, which
matures in 2009. The existing term loan had $242 million
outstanding at March 27, 2004, but will be increased in size. The
bank loan ratings indicate that Standard & Poor's expects a full
recovery of principal in the event of a default, based on an
assessment of the loan collateral package and estimated asset
values in a distressed default scenario. The company is expected
to use the proceeds from the new financings to redeem $320 million
of 12.25% senior unsecured notes, repay a $25 million subordinated
loan, and fund transaction costs. As of March 27, 2004, the
company had $614 million of debt outstanding.
ALLEGHENY ENERGY: Moody's Assigns Ba1 Senior Implied Rating
-----------------------------------------------------------
Moody's Investors Service assigned a Senior Implied rating of Ba1
to Allegheny Energy, Inc. and also assigned a Speculative Grade
Liquidity Rating of SGL-2. This is the first time that Moody's
has assigned both such ratings to AYE. The company's other
ratings, including the Ba2 senior unsecured rating, remain
unaffected.
The Ba1 Senior Implied rating reflects the credit profile of the
AYE corporate family of companies, which includes investment grade
utility operating subsidiaries as well as a holding company whose
Ba2 senior unsecured rating reflects its still high balance
leverage. The Ba1 Senior Implied rating also reflects the
company's improved financial performance and the expectation that
AYE's credit profile will continue to improve over the next 2 to 3
years, with further debt reduction and substantial improvement in
cash flow, and that there will be a reasonably supportive
regulatory response to rate filings to recover increased costs and
outlays for environmental spending.
The SGL-2 speculative grade liquidity rating is reflective of a
good liquidity profile. AYE's 2004 consolidated cash from
operations, as adjusted by Moody's, of about $430 million more
than covered capital expenditures of about $265 million. Over the
next several years, the company's improving CFO is expected to
continue to cover the rising level of capital expenditures needed
to meet expected outlays for environmental spending.
The rating also considers AYE's improved liquidity position, which
includes cash on hand of about $175 million (as of March 31,
2005), and expected availability of approximately $250 million (at
closing) under a proposed new $400 million revolving credit
facility that the company is currently negotiating. This proposed
new revolver represents an increase over the current $200 million
facility and is designed to provide additional liquidity and to
cover any unexpected contingencies. The precise levels of the
financial covenants are still being negotiated and are likely to
be reset, although the company is expected to remain in compliance
with them. There is currently ample room under the existing
facility's covenants. The term is also being extended to 5 years.
The new revolver plus the current level of cash represent the
company's expected liquidity over the next several years. Other
alternative sources of potential liquidity, such as additional
asset sales beyond those that have already been announced but not
yet closed, are difficult because substantial assets are already
encumbered.
Headquartered in Greensburg, PA, Allegheny Energy, Inc. is an
integrated energy company that owns various regulated and
unregulated subsidiaries engaged in generation and distribution of
electricity, and other businesses. Its utility subsidiaries
deliver electricity to customers in:
* Maryland,
* Ohio,
* Pennsylvania,
* Virginia, and
* West Virginia,
It also delivers natural gas to customers in West Virginia.
AMERICAN NATURAL: Debentureholders OKs Price Reduction & Extension
------------------------------------------------------------------
American Natural Energy Corporation (TSX Venture: ANR.U) received
the requisite favorable vote of the holders of its outstanding 8%
Convertible Secured Debentures approving the adoption of
amendments to the terms of the related Trust Indenture. The final
proposed terms of the amendments were previously announced May 18,
2005 and include, among other
things, an extension of the maturity date of the Debentures to
Sept. 30, 2006, and the reduction through the extended maturity
date of the Debentures of the price at which the principal of the
Debentures can be converted into shares of Common Stock to
US$0.15 per share.
In addition to receiving the consent of the holders of 2/3 of the
principal amount of the Debentures outstanding, the adoption of
the amendments is subject the approval of the TSX Venture Exchange
and, with respect to the extension of the maturity date of the
Debentures and the reduction in the price per share at which
shares of common stock are issuable on conversion of the
Debentures, the approval of the stockholders of ANEC to the
amendment of the Certificate of Incorporation of ANEC to increase
the number of shares of Common Stock ANEC is authorized to issue
to 250 million from 100 million. The TSX Venture Exchange
approval have been received and ANEC is awaiting the outcome of
the vote of its stockholders on the proposal to amend its
Certificate of Incorporation which vote will be taken at ANEC's
upcoming annual meeting of stockholders scheduled to be held on
June 23, 2005.
American Natural Energy Corporation is engaged in the acquisition,
development, exploitation and production of oil and natural gas.
The company operates in St. Charles Parish, Louisiana. Since
December 31, 2001, the Company has engaged in several
transactions, which it believes will enhance its oil and natural
gas development, exploitation and production activities and our
ability to finance further activities. ANEC is publicly traded
on the TSX Venture Exchange as ANR.U.
At Mar. 31, 2005, American Natural Energy Corporation's balance
sheet showed a $10,991,124 stockholders' deficit, compared to a
$9,596,356 deficit at Dec. 31, 2004.
PricewaterhouseCoopers, LLP, expressed substantial doubt about
American Natural Energy Corporation's ability to continue as a
going concern after it audited the Company's financial statements
for the year ended Dec. 31, 2004. The auditing firm points to the
Company's accumulated deficit and working capital deficiencies.
The Company experienced a net loss of $1.5 million in the three
month period ended March 31, 2005, and has a working capital
deficiency and an accumulated deficit at March 31, 2005, all of
which lead to questions concerning its ability to meet its
obligations as they come due. The Company also has a need for
substantial funds to develop oil and gas properties and repay
borrowings. Historically the Company has financed its activities
using private debt and equity financing. American Natural
Energy has no line of credit or other financing agreement
providing borrowing availability. As a result of the losses
incurred and current negative working capital and other matters
described above, there is no assurance that the carrying amounts
of its assets will be realized or that liabilities will be
liquidated or settled for the amounts recorded.
AMES DEPARTMENT: Court Approves GE Capital L/C Extension Agreement
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
gave Ames Department Stores and its debtor-affiliates permission
into an agreement extending the letters of credit issued by GE
Capital and and pay the related fees.
The salient terms of the L/C Extension Agreement are:
(a) GE Capital will cause each of the Continuing L/Cs to be
continued from its expiry date, provided that GE Capital
will be under no obligation to incur obligations for
Continuing L/Cs having an expiry date that is later
than November 1, 2008 -- Termination Date -- or to
continue any Continuing L/Cs beyond the Termination Date.
(b) Each of the Continuing L/Cs provides for an automatic
renewal unless a notice of cancellation is delivered. GE
Capital will cause the cancellation of the Continuing L/Cs
during the applicable notice period first occurring on or
after November 1, 2007.
(c) Ames Merchandising will pay GE Capital:
(1) an L/C fee of 1.50% per annum on the face amount of
the Continuing L/Cs, payable monthly in arrears;
(2) its out-of-pocket expenses including reasonable legal
and other costs and fees incurred in connection with
the transactions; and
(3) any fees and charges that may be imposed by any of the
L/C Issuers.
(d) As security for the L/C Extensions, GE Capital will
continue to hold the Cash Collateral in an account at a
financial institution acceptable to GE Capital in an
amount equal to 104% prior to June 30, 2005, and at least
105% thereafter, of the maximum amount then available to
be drawn under the Continuing L/Cs.
(e) If the total amount of Cash Collateral will at any time
fall below the minimum amount, GE Capital will have the
right to require Ames Merchandising to deposit the
deficient amount. If the total amount of Cash Collateral
will at any time fall below 103% of the maximum amount
then available to be drawn under each applicable L/C
outstanding, GE Capital will have the right to cause the
cancellation of the Continuing L/Cs.
(f) If the credit rating of the bank, or financial institution
will at any time fall below AAA as rated by Standard &
Poor or Aaa as rated by Moody's, GE Capital will have the
right to withdraw the Cash Collateral and deposit it in a
financial institution of its choice.
(g) In the event that GE Capital makes any payments with
respect to any L/C Obligations or if they become due and
payable, GE Capital will apply the Cash Collateral to the
payment of the amounts. If the Cash Collateral is
insufficient to pay the amounts in full, Ames
Merchandising will, upon demand from GE Capital, reimburse
GE Capital within two business days.
(h) Upon receipt by GE Capital of reasonably satisfactory
written evidence that a Continuing L/C has expired or been
terminated and that no L/C Obligations remain outstanding,
GE Capital will pay Ames Merchandising any Cash Collateral
exceeding 105% of the maximum aggregate amount then
available to be drawn under all Continuing L/C's that are
then outstanding.
(i) On the Termination Date, upon receipt by GE Capital of
evidence of the termination or expiration and that no L/C
Obligations remain outstanding, GE Capital will pay any
remaining amount of the Cash Collateral, less the amount
of any fees, expenses or other obligations that Ames
Merchandising is required to pay or reimburse to GE
Capital or to indemnify GE Capital against, that may
remain outstanding and unpaid at the time.
(j) The obligation of Ames Merchandising to reimburse GE
Capital for payments made with respect to any L/C
Obligation will be absolute, unconditional and
irrevocable, without necessity of presentment, demand,
protest or other formalities.
(k) Ames Merchandising will indemnify GE Capital from any
claims, demands, liabilities and expenses that GE Capital
may incur or be subject to as a consequence of:
(1) the deemed issuance or continuance of any L/C or its
guaranty;
(2) its entering into and performing in accordance with
the Extension Agreement; or
(3) the failure of GE Capital to seek indemnification or
of any L/C Issuer to honor a demand for payment under
any L/C or guaranty as a result of any act or
omission, whether rightful or wrongful, of any present
or future de jure or de facto government or
governmental authority, in each case other than to the
extent solely as a result of the gross negligence or
willful misconduct of GE Capital.
(l) Ames Merchandising assumes all risks of the acts and
omissions of, or misuse of any L/C by any beneficiaries.
GE Capital will not be responsible for:
(1) the form, validity, sufficiency, accuracy, genuineness
or legal effect of any document issued by any party in
connection with the application for and issuance of
any L/C, even if it should in fact prove to be in any
or all respects invalid, insufficient, inaccurate,
fraudulent or forged;
(2) the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or
assign any L/C or the rights or benefits or proceeds
that may prove to be invalid or ineffective for any
reason;
(3) the L/C beneficiary's failure to comply fully with the
conditions required to demand payment under the L/C.
In the case of any payment by GE Capital under any L/C
or guaranty, GE Capital will be liable to the extent
the payment was made solely as a result of its gross
negligence or willful misconduct in determining that
the demand for payment under the L/C or guaranty
complies on its face with any applicable requirements
for a demand for payment under the L/C or guaranty;
(4) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail,
cable, telegraph, telex or otherwise, whether or not
they may be in cipher;
(5) errors in interpretation of technical terms;
(6) any loss or delay in the transmission or otherwise of
any document required in order to make a payment under
any L/C or guaranty thereof or of the proceeds;
(7) the credit of the proceeds of any drawing under any
L/C or guaranty; and
(8) any consequences arising from causes beyond GE
Capital's control.
As part of the DIP Financing Agreement, GE Capital held Ames
Merchandising funds for the payment of related fees and expenses.
GE Capital continues to hold $507,356 as of March 31, 2005. GE
Capital has agreed to apply first to the payment of its Legal
Fees, and the balance toward satisfying Ames' Cash Collateral
requirements under the L/C Extension Agreement.
As of April 14, 2005, outstanding obligations in
respect of the L/Cs were $37,589,498. The Wells Fargo Cash
Collateral account balance as of March 31, 2005, was $39,358,792.
Consistent with the practice under the DIP Financing Agreement,
GE Capital will provide Ames Merchandising with periodic
statements with respect to the GE Capital Legal Fees and any
Issuer Fees.
Ames Department Stores filed for chapter 11 protection on
August 20, 2001 (Bankr. S.D.N.Y. Case No. 01-42217). Albert
Togut, Esq., Frank A. Oswald, Esq. at Togut, Segal & Segal LLP
and Martin J. Bienenstock, Esq., and Warren T. Buhle, Esq., at
Weil, Gotshal & Manges LLP represent the Debtors in their
restructuring efforts. When the Company filed for protection
from their creditors, they listed $1,901,573,000 in assets and
$1,558,410,000 in liabilities. (AMES Bankruptcy News, Issue No.
69; Bankruptcy Creditors' Service, Inc., 215/945-7000)
AMCAST INDUSTRIAL: Committee Hires Reed & Assoc. as Appraiser
-------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in Amcast
Industrial Corporation's chapter 11 case, asks the U.S. Bankruptcy
Court for the Southern District of Ohio, Western Division, for
authority to hire Reed & Associates, Inc., as its real property
appraiser, nunc pro tunc to May 25, 2005.
Reed & Associates will provide site inspection, research, data
analysis and appraisal services in connection with the Committee's
investigation of liens purportedly encumbering the Debtor's real
property located at the city of Fayetteville in Washington County,
Arkansas.
Reed & Associates will charge:
a) a $2,500 flat fee for professional appraisal services if
the appraisal is for vacant land only, or $7,500 if the
appraisal will include building improvements.
b) a $125 hourly fee per hour for court preparation and
$150 per hour for court testimony.
The Committee assures the Court that Reed's employment and
retention is in everybody's best interests.
About Reed & Associates, Inc.
Founded in 1979, Reed & Associates, Inc. is a company involved in
providing Real Estate Appraisal Services on commercial,
residential, industrial, agricultural and special-purpose
properties. Reed & Associates, Inc. has provided appraisal
services for several large projects such as: The Northwest
Arkansas Regional Airport Authority for construction of the
Northwest Arkansas Regional Airport; Benton/Washington County Two-
Ton Water Project, City of Mena - Mena Airport Expansion; Corps of
Engineers - Surplus Land at Fort Chaffee, etc.
About Amcast Industrial
Headquartered in Dayton, Ohio, Amcast Industrial Corporation --
http://www.amcast.com/-- is a manufacturer and distributor of
technology-intensive metal products to end-users and supplier in
the automotive and plumbing industry. The Company and its debtor-
affiliates filed for chapter 11 protection on Nov. 30, 2004
(Bankr. S.D. Ohio Case No. 04-40504). Jennifer L. Maffett, Esq.,
at Thompson Hine LLP, represents the Debtors in their
restructuring efforts. When the Debtors filed for protection from
their creditors, they listed total assets of $104,968,000 and
total debts of $165,221,000.
ANDRE S. TATIBOUET: Hires Wagner Choi as Bankruptcy Counsel
-----------------------------------------------------------
Andre S. Tatibouet asks the U.S. Bankruptcy Court for the District
of Hawaii for permission to employ Wagner Choi & Evers as his
bankruptcy counsel, nunc pro tunc to April 5, 2005.
Wagner Choi will:
(a) advise the Debtor with respect to the requirements and
provisions of the U.S. Bankruptcy Code, Federal Rules of
Bankruptcy Procedure, Local Bankruptcy Rules, U.S. Trustee
Guidelines and any other bankruptcy related laws, rules or
regulations which may affect the Debtor;
(b) assist the Debtor in an analysis of bankruptcy related
financial options and preparation of a disclosure statement
and formulation of a chapter 11 plan of reorganization;
(c) advise the Debtor concerning the rights and remedies of the
estate and of the Debtor in regard to adversary proceedings
which may be removed to, or initiated in, the Bankruptcy
Court; and
(d) represent the Debtor in any proceeding or hearing in the
Bankruptcy Court in any action where the rights of the
estate or the Debtor may be litigated or affected.
James A. Wagner, Esq., a partner of Wagner Choi, disclosed that
the Firm received a $40,000 retainer. Wagner Choi's
professionals' bill:
Professional Hourly Rate
------------ -----------
James A. Wagner $380
Chuck C. Choi $250
James F. Evers $225
Neil J. Verbrugge $190
Paralegals $75
The Debtor believes that Wagner Choi is disinterested as that term
is defined in Section 101(14) of the U.S. Bankruptcy Code.
Andre S. Tatibouet owns the 246-room Coral Reef Hotel in Hawaii.
He also has a 4.8% interest in SWVP Keauhou, LLC, owner of the
Keauhou Beach Hotel, and an 80% ownership interest in American
Motel Acquisition Company, LLC, which has an ownership interest in
14 hotels and motels on the mainland. He filed for chapter 11
protection on April 5, 2005 (Bankr. D. Hawaii Case No. 05-00829).
James A. Wagner, Esq., at Wagner Choi & Evers, represents Mr.
Tatibouet. When Mr. Tatibouet filed for protection from his
creditors, he estimated $38,000,000 in assets and $50,000,000 in
debts.
ANDROSCOGGIN ENERGY: Taps PricewaterhouseCoopers as Accountant
--------------------------------------------------------------
Androscoggin Energy LLC sought and obtained permission from the
U.S. Bankruptcy Court for the District of Maine to employ
PricewaterhouseCoopers, LLP, as its accountant.
PwC will:
(a) prepare audited financial statements for the year ended
December 31, 2004, and its accompanying audit reports; and
(b) provide other function as requested by the Debtor.
Sean P. Riley, a member of PwC, disclosed that PwC's
professionals' bill:
Designation Hourly Rate
----------- -----------
Assurance:
Partner $800
Director $715
Senior Manager $650
Manager $440
Senior Associate $385
Associate $220
Intern $170
Paraprofessional $120
Technical Specialist:
Partner $1,320
Director $1,100
Senior Manager $1,100
To the best of the Debtors' knowledge, PwC and its accountants
who will work in the engagement:
(a) do not have connections with the Debtor, its creditors,
or other party-in-interest, or their attorneys,
(b) are "disinterested persons" as defined in Section 101(14)
of the U.S. Bankruptcy Code, as modified by Section 1107(b)
of the U.S. Bankruptcy Code, and
(c) do not hold or represent any interest adverse to the
Debtor's estates.
Headquartered in Boston, Massachusetts, Androscoggin Energy LLC,
owns, operates, and maintains an approximately 150-megawatt,
natural gas-fired cogeneration facility in Jay, Maine. The
Company filed for chapter 11 protection on November 26, 2004
(Bankr. D. Me. Case No. 04-12221). Michael A. Fagone, Esq., at
Bernstein, Shur, Sawyer & Nelson represents the Debtor in its
restructuring efforts. When the Debtor filed for protection from
its creditors, it listed total assets of $207,000,000 and total
debts of $157,000,000.
ARDENT HEALTH: Extends 10% Sr. Sub. Debt Tender Offer to July 13
----------------------------------------------------------------
Ardent Health Services LLC extended the expiration date for the
previously announced cash tender offer and consent solicitation by
its subsidiary, Ardent Health Services, Inc., for its outstanding
10% Senior Subordinated Notes due 2013 to 5:00 p.m., New York City
time, on July 13, 2005. The company has received tenders and
consents from holders of $224.97 million in aggregate principal
amount of the Notes, representing approximately 99.99% of the
outstanding Notes.
The price determination date will be 2:00 p.m., New York City
time, 10 business days prior to the Expiration Date. The
completion of the tender offer and consent solicitation is subject
to the satisfaction or waiver by the company of a number of
conditions, as described in the Offer to Purchase and Consent
Solicitation Statement dated April 15, 2005. Holders who validly
tender their Notes and which Notes are accepted for purchase are
expected to receive payment on or promptly after the date on which
the company satisfies or waives the conditions of the tender offer
and consent solicitation.
Requests for documents relating to the tender offer and consent
solicitation may be directed to the depositary and information
agent for the tender offer and consent solicitation:
Global Bondholder Services Corporation
(212) 430-3774 (collect)
(866) 389-1500 (U.S. toll-free).
Additional information concerning the tender offer and consent
solicitation may be obtained by contacting the dealer manager and
solicitation agent for the tender offer and consent solicitation
at:
Banc of America Securities LLC
(704) 388-9217 (collect)
(888) 292-0070 (U.S. toll-free)
About the Company
Ardent Health Services is a provider of health care services to
communities throughout the United States. Ardent currently owns
34 hospitals in 13 states, providing a full range of
medical/surgical, psychiatric and substance abuse services to
patients ranging from children to adults.
* * *
As reported in the Troubled Company Reporter on March 15, 2005,
Moody's Investors Service affirmed the ratings of Ardent Health
Services and changed the outlook to developing. This action
follows Ardent's announcement that it has entered into a
definitive agreement to sell its behavioral health division,
consisting of 20 behavioral hospitals, to Psychiatric Solutions,
Inc., in a transaction valued at $560 million.
These ratings were affirmed:
* $150 Million Senior Secured Revolving Credit Facility due
2008, B1
* $300 Million Term Loan B due 2011, rated B1
* $225 Million Senior Subordinated Notes due 2013, rated B3
* Senior implied rating, rated B1
* Senior Unsecured Issuer Rating, rated, B2
ARMSTRONG WORLD: Gets Court OK to Assume Georgia Power Master Pact
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware gave
Armstrong World Industries, Inc., and its debtor-affiliates
permission to assume their Master Contract with Georgia Power
Company for Electric Power Service. The Contract required Georgia
Power to provide electrical energy service to an AWI plant located
at 4520 Broadway, in Macon, Georgia.
The Original Master Power Agreement provided terms applying only
to the Macon Plant. The Original Agreement also provided a
monthly payment to Georgia Power calculated in accordance with the
applicable rate schedules. Under the Original Agreement, AWI
indemnified Georgia Power from any claim for personal injuries,
fatalities, or property loss resulting from the operation or
maintenance of AWI's electrical equipment and Georgia Power's
electrical equipment and facilities. In addition, at the original
term's expiration, the contract was automatically renewed for an
additional five years, with future five year renewals occurring
unless AWI provides Georgia Power with 30 days' written notice
prior to the expiration of any term. AWI also pays Georgia Power
a $1,000 monthly administrative charge.
The IS Contract Addendum
On April 29, 1996, the parties entered into an Interruptible
Service Contract Addendum to the Original Agreement, pursuant to
which AWI realized significant cost savings through IS credits.
Under the IS Contract Addendum, AWI agreed to interrupt a
designated portion of the load at the Macon Plant, and Georgia
Power agreed to credit AWI for interruptible load in accordance
with the applicable Standard IS Rider Schedule.
Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in
Wilmington, Delaware, told the Court that over the last four
years, AWI's status as an interruptible service customer resulted
in an average savings of $180,000 a year without any corresponding
interruptions in service at the Macon Plant.
The Amended Master Power Agreement
However, Mr. Collins noted that the IS Contract Addendum expired
in September 2004 in accordance with the applicable tariff. To
realize similar savings going forward, AWI deems it appropriate
and necessary to assume the Original Master Power Agreement as
amended by an Industrial Load Retention Rider and a Demand Plus
Energy Credit Contract Addendum and DPEC Rider.
Together, Schedule ILR-1 and the DPEC Amendment will replace the
expired IS Contract Addendum and result in savings comparable to
those previously realized by the Macon Plant under the expired IS
Contract Addendum. To receive the full economic benefit of
Schedule ILR-1, however, AWI must amend its existing contract with
Georgia Power to incorporate the DPEC Rider by June 1, 2005.
The proposed terms of Schedule ILR-1 are:
(1) Availability
Throughout Georgia Power's service area from existing
lines of adequate capacity.
(2) Application of Industrial Load Retention
* Part 1 -- Accounts on this rider will receive a 5.973%
increase to their monthly base bill. For RTP-HA
customers like AWI, the base bill is calculated on the
Customer Baseline load as defined in the tariffs; and
* Part 2 -- Accounts qualifying for this part of the rider
will receive the DPEC amount specified in the DPEC
rider. In October of each year, Georgia Power will
also calculate the amount eligible customers would have
been paid under the IS rider. The difference between
the amount of DPEC actually paid and the amount of the
calculated IS credit will be applied to the customer's
bill.
(3) Term
Schedule ILR-1 will expire on the earlier of
December 31, 2007, and the effective date of the next
Georgia Power Retail Rate Case.
Mr. Collins told Judge Fitzgerald that the new DPEC credit, plus
the credit available under Schedule ILR-1, is the mechanism
through which interruptible services customers may match the
former IS credit going forward. Mr. Collins explains that the
DPEC demand credit is projected to save the Macon Plant
approximately $105,000 a year. Moreover, the DPEC energy credit
will increase if an interruption is actually called -- $1.00/kWh
plus the demand credit of $25/kW. Mr. Collins says the credit
available through Schedule ILR-1 bridges the savings between the
prior IS Credits and the new DPEC credits, which amounts to an
annual $75,000 in estimated savings.
The salient terms of the DPEC Amendment are:
(1) Electricity will be available throughout Georgia Power's
service area from existing lines of adequate capacity.
(2) Georgia Power's service will be applicable to any customer
who chooses, at request, to provide at least 200 kW of
demand reduction.
(3) AWI will receive credits in exchange for reducing electric
demand during periods in which Georgia Power is
experiencing extreme supply and demand conditions. AWI
will reduce demand during a specified time period, and
Georgia Power will credit AWI's electric bill for the
demand reduction. There will be a minimum notice of
30 minutes for demand reductions. A monthly energy credit
will be paid in each billing month that includes a
reduction period. The demand credit will be paid in each
of the four summer billing months of June through
September.
(4) AWI will pay a $120 monthly administrative charge.
(5) The demand reduction will be limited to a maximum of eight
hours for each day.
(6) The contract addendum is for a one-year term, with
automatic renewals each successive year thereafter unless
terminated on 30 days' written notice by either party.
(7) Failure to comply with the termination procedure, or
termination without fulfilling the remainder of an
existing term, may result in a contract termination
penalty, equaling the demand credit received in the
previous year plus forfeiture of the demand credit in the
current 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.
As of March 31, 2005, the Debtors' balance sheet reflected a
$1.42 billion stockholders' deficit. (Armstrong Bankruptcy
News, Issue No. 77; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
BLOUNT INC: Moody's Upgrades $175M Sr. Sub. Notes' Rating to B3
---------------------------------------------------------------
Moody's Investors Service has upgraded the ratings of Blount Inc.
and its outstanding debt obligations. The rating outlook remains
positive.
Ratings upgraded:
* Senior implied rating, to B1 from B2
* Issuer rating, to B2 from B3
* $100 million of senior secured revolving credit facility, due
2009, to B1 from B2
* $315 million senior secured term loan B, due 2010, to B1
from B2
* $4.9 million Canadian term loan B, due 2010, to B1 from B2
* $175 million senior subordinated notes, due 2012, to B3
from Caa1
The upgrade reflects continuing improvement in Blount's operating
performance as evidenced by its:
* decreasing leverage,
* good cash flow generation, and
* solid margins despite pressures from high raw material costs.
The ratings also recognize the company's strong position in
providing equipment, accessories, and replacement parts to the
global forestry industry, and in particular its leading market
position in the cutting chain and chainsaw accessories business.
On the other hand, the ratings are constrained by:
* Blount's still considerable debt level,
* exposure to the cyclical lumber,
* paper and pulp end markets,
* high raw material costs, and
* fluctuations in foreign currency exchange rates.
The positive rating outlook remains, in anticipation of possible
further improvement in Blount's financial and operating
performance as a result of continuing favorable conditions in its
end-markets. Over the next twelve to eighteen months, factors
that could have favorable rating implications include sustained
revenue growth and free cash flow generation, and further debt
reduction supported by a more conservative long-term financial
policy. Factors that could have negative rating implications
include a sudden softening of its end markets, sharp increase in
raw material prices, as well as an abrupt appreciation of the US
dollar that may negatively impact its international sales.
Over the past 12 months, Blount benefited from favorable
conditions in the timber harvesting industry and a generally weak
dollar that increased the price competitiveness of its products in
the European market -- international sales accounted for 64% of
its total sales in 2004. While its outdoor products segment (61%
of 2004 sales) experienced steady sales increase, revenue from its
industrial and power equipment segment (32% of 2004 sales) surged
34% over 2003 due to both strong demand from the forestry industry
and expanded distribution through access to Caterpillar's dealer
network. Its previously underperforming lawnmower business (7% of
2004 sales) also showed marked improvement as a result of enhanced
product offerings.
Moody's notes that although Blount's restructuring efforts in
recent years contributed importantly to its recovery, cyclical
factors remain the driving force behind its financial performance.
As such, its reliance on the cyclical lumber, pulp and paper end
markets remains a constraint on its ratings. Additionally, given
its significant international sales, foreign exchange rates play
an important role in its performance in terms of both the price
competitiveness of its products in foreign markets and the
currency translation effect. Foreign currency fluctuations thus
can introduce an element of volatility in its financial
performance. However, Moody's notes that as the company steadily
moves to a less-leveraged capital structure, it should be in a
better position to withstand the volatility in the end markets,
foreign exchange rates, and raw material costs.
For the LTM period ended March 31, 2005, Blount's sales and
operating profits increased to $712 million and $117 million,
respectively, from $602 million and $92 million in the comparable
period last year. Funded debt decreased to approximately $494
million, or 3.6 times LTM EBITDA.
Adjusting for the roughly $54 million of under-funded pension
liabilities, total debt to EBITDA was about 4 times. LTM EBIT and
EBITDA coverage of interest expense has increased to 2.2x and
2.6x, respectively, from 1.3x and 1.7x in the LTM 3/31/04 period.
The company's cash flow generation has also improved considerably
as its profits increased. Free cash follow for the LTM March 2005
period represented about 10% of debt outstanding.
Blount Inc., headquartered in Portland, Oregon, is a leading
provider of:
* equipment,
* accessories, and
* replacement parts to the global forestry and construction
industries.
BRAND SERVICES: S&P Junks $35 Million Second-Lien Term Loan
-----------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating on scaffolding services provider Brand Services Inc.
following the company's recently announced intention to acquire
Canadian scaffolding services and concrete construction services
provider Aluma Enterprises Inc. for about $208 million.
Standard & Poor's also assigned its 'B' senior secured rating and
'2' recovery rating to Brand's $150 million supplemental term loan
and its 'CCC+' senior secured rating and '5' recovery rating to
Brand's $35 million second-lien term loan. The outlook is
negative.
The term loan issuances, along with a $30 million issuance of
preferred stock and existing cash on hand, will be used to fund
the Aluma acquisition.
Chesterfield, Missouri-based Brand had $487.2 million of debt
(including about $48 million senior subordinated pay-in-kind notes
issues by Brand's direct parent, Brand Intermediate Holdings Inc.)
as of March 31, 2005, pro forma for the acquisition and the term
loan issuances.
"The acquisition will increase an already highly leveraged capital
structure to just under 6x adjusted total debt to EBITDA," said
Standard & Poor's credit analyst Andrew Watt. "Furthermore, the
large size of the acquisition (which will increase revenues more
than 70% and EBITDA more than 60%) may pose additional challenges
to management," he continued. Brand will also be retaining
Aluma's concrete construction services forming and shoring
business, which is outside Brand's primary area of expertise.
The negative outlook reflects uncertainty regarding the successful
integration of Aluma's operations and the ability of Brand's new
senior management to effectively run the company from a financial
standpoint that is not detrimental to credit quality. An outlook
revision to stable could occur with improved operating performance
and credit measures.
CATHOLIC CHURCH: Spokane Hires Marci Hamilton as Special Counsel
----------------------------------------------------------------
The Diocese of Spokane's Chapter 11 case raises complex legal
issues related to the First Amendment to the U.S. Constitution,
Religious Freedom Restoration Act, Church Autonomy Doctrine, and
related Washington State Constitutional Issues that must be
resolved as part of its reorganization. The members of the
Committee of Tort Litigants require legal assistance in
determining positions on, and representations of, these issues.
For this reason, the Litigants Committee seeks authority from the
U.S. Bankruptcy Court for the Eastern District of Washington to
retain Marci A. Hamilton, Esq., as its special counsel.
Ms. Hamilton is one of the United States' leading First Amendment
scholars. She represented the City of Boerne, Texas, in a
successful challenge to the Religious Freedom Restoration Act, a
cause that resulted in the U.S. Supreme Court's decision in
Boerne v. Flores, 507 U.S. 521 (1997). Ms. Hamilton clerked for
Associate Judge Sandra Day O'Connor of the U.S. Supreme Court and
Chief Judge Edward R. Becker of the U.S. Court of Appeals for the
Third Circuit. She published numerous articles on First
Amendment issues and is the First Amendment expert for the Tort
Claimants' Committee in the Archdiocese of Portland's Chapter 11
case. Ms. Hamilton also represents numerous victims of clergy
abuse across the country.
As special counsel to the Litigants Committee, Ms. Hamilton will:
(a) provide legal advice with respect to Canon Law, the First
Amendment, the Constitution for the State of Washington,
Washington Law on Corporation Sole under RCW Chapter
24.12, the Religious Freedom Restoration Act, Section
2000bb of The Public Health and Welfare Code, and the
Church Autonomy Doctrine;
(b) prepare, on the Litigants Committee's behalf, necessary
documentation, certification, and other legal papers
relating to Spokane's affirmative defenses to the
Litigants Committee's complaint for declaratory relief and
substantive consideration filed against Spokane and
certain parishes; and
(c) perform other legal services for the Litigants Committee
that may be necessary and proper in the proceedings.
Ms. Hamilton will be paid an hourly fee of $500.
Hamid Rafatjoo, Esq., counsel to the Litigants Committee, assures
Judge Williams that Ms. Hamilton does not represent an interest
materially adverse to Diocese's estate and is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
Spokane Objects
"Employment of a constitutional law expert is unnecessary and
unwarranted and the proposed fees are exorbitant," Shaun M.
Cross, Esq., at Paine, Hamblen, Coffin, Brooke & Miller, LLP, in
Spokane, Washington, contends.
The Diocese of Spokane believes that the Litigants Committee is
already represented by highly qualified, experienced Los Angeles
legal counsel who have demonstrated they are well-versed and more
capable in researching, briefing and arguing the Federal and
State Constitutions, the Religious Freedom Restoration Act, and
Washington law.
Moreover, Mr. Cross tells Judge Williams that it is unclear
whether Ms. Hamilton has any experience in Washington law. It
does not appear that Ms. Hamilton is admitted to practice law in
Washington, Mr. Cross also notes.
The Diocese also insists that Ms. Hamilton disclose any and all
representation in matters relating to Catholic or Catholic-
affiliated organizations to avoid ambiguity as to whether she is
in fact disinterested and has no conflict.
As to the fees, the Diocese argues that the rate is far in excess
of any professional retained in the Diocese's Chapter 11 case, and
far exceeds the reasonable hourly rates of competent legal counsel
in the Spokane area.
"It is unclear what rate will be charged for time not relating to
expert counseling services, like time travel," Mr. Cross says.
Nor does Ms. Hamilton disclose any schedule for reimbursement of
costs.
* * *
Judge Williams authorizes the Litigants Committee to retain Ms.
Hamilton as special counsel. Ms. Hamilton will be reimbursed for
reasonable expenses, not to exceed $3,000, from estate funds.
The Roman Catholic Church of the Diocese of Spokane filed for
chapter 11 protection (Bankr. E.D. Wash. Case No. 04-08822) on
Dec. 6, 2004. Michael J. Paukert, Esq., at Paine, Hamblen,
Coffin, Brooke & Miller, LLP, represents the Spokane Diocese in
its restructuring efforts. When the Debtor filed for protection
from its creditors, it listed $11,162,938 in total assets and
$81,364,055 in total debts. (Catholic Church Bankruptcy News,
Issue No. 30; Bankruptcy Creditors' Service, Inc., 215/945-7000)
CATHOLIC CHURCH: U.S. Bank Can Set-Off Against Spokane's Account
----------------------------------------------------------------
U.S. Bank N.A. is the holder of several checking and money market
accounts belonging to the Diocese of Spokane. As of December 6,
2004, the total amount held in the accounts was in excess of
$3,800,000.
Shelley N. Ripley, Esq., at Witherspoon, Kelley, Davenport &
Toole, P.S., contends that the Diocese is obligated to U.S. Bank
under 10 credit cards, which are held by various officers and
employees of the Diocese. As of December 6, 2004, the outstanding
credit cards had a total balance due of $6,110. Interest and late
fees continue to accrue on the delinquent credit cards.
U.S. Bank wants to exercise its statutory right of set-off against
a checking account in the name of Diocese that had a balance in
excess of $3,600,000, but is prevented from doing so by reason of
the automatic stay.
Accordingly, U.S. Bank asks the Court to lift the automatic stay
so it may exercise its statutory right of set-off against the
Diocese's checking account.
Ms. Ripley points out that U.S. Bank is entitled to set-off the
amount owing under the credit cards against the Diocese' checking
account under the terms of the common law right of set-off.
The corporate officers and employee are personally responsible for
balances due under their corporate cards pursuant to the terms of
the account agreement. "If U.S. Bank is not allowed to exercise
its right of set-off and is forced to charge off these accounts,
negative credit information will be personally reported to the
credit bureaus against the corporate officers and employees who
are jointly responsible for the payment of the [Diocese's] credit
card accounts," Ms. Ripley explains.
* * *
Judge Williams lifts the automatic stay to allow U.S. Bank to
exercise its statutory right of set-off against the checking
account belonging to Spokane.
The Roman Catholic Church of the Diocese of Spokane filed for
chapter 11 protection (Bankr. E.D. Wash. Case No. 04-08822) on
Dec. 6, 2004. Michael J. Paukert, Esq., at Paine, Hamblen,
Coffin, Brooke & Miller, LLP, represents the Spokane Diocese in
its restructuring efforts. When the Debtor filed for protection
from its creditors, it listed $11,162,938 in total assets and
$81,364,055 in total debts. (Catholic Church Bankruptcy News,
Issue No. 30; Bankruptcy Creditors' Service, Inc., 215/945-7000)
COLAD GROUP: Taps Nowicki as Accountant & Financial Advisor
-----------------------------------------------------------
The Official Committee of Unsecured Creditors of The Colad Group,
Inc., sought and obtained permission from the U.S. Bankruptcy
Court for the Western District of New York to employ Nowicki and
Company, LLP, as its accountant and financial advisor, nunc pro
tunc to April 18, 2005.
Nowicki will:
a) review the Debtor's long-term business plan and financial
projections, including evaluation of the Debtor's business,
its competition and its prospects over the term of the
business plan period;
b) assess the Debtor's current capitalization and ownership
structure, sources of liquidity and ongoing capital
requirements for meeting the Debtor's growth objectives;
c) review and asses the Plan of Reorganization;
d) perform a valuation analysis of the Debtor as it relates to
the Plan of Reorganization;
e) assist the Committee in developing alternatives to the Plan
of Reorganization as appropriate;
f) assist the Committee in negotiating terms and conditions
with other constituencies in the Debtor's chapter 11
proceeding;
g) provide expert witness testimony concerning any of the area
encompassed by Nowicki's activities;
h) assist in the development and presentation of relevant
financial materials and analysis; and
i) provide other advisory services as the Committee and Nowicki
may agree relative to the Debtor's reorganization.
Raymond M. Nowicki, CPA, will supervise the accounting and
advisory services rendered. Mr. Nowicki disclosed that the hourly
rates for the Firm's professionals range from $110 to $160.
Mr. Nowicki assures the Court that his Firm is disinterested as
that term is defined in Section 101(14) of the Bankruptcy Code.
Headquartered in Buffalo, New York, Colad Group, Inc., --
http://www.colad.com/-- designs, develops and manufactures
packaging products. The Company filed for chapter 11 protection
on Feb. 3, 2005 (Bankr. W.D.N.Y. Case No. 05-10765). Raymond L.
Fink, Esq., at Harter, Secrest & Emery LLP represents the Debtor
in its restructuring efforts. When the Debtor filed for
protection from its creditors, it estimated assets of $1 million
to $10 million and debts of $10 million to $50 million.
CONTINENTAL AIRLINES: Contributes $50 Million to Pension Plan
-------------------------------------------------------------
Continental Airlines, Inc. (NYSE: CAL) has contributed $50 million
to its defined benefit pension plan from proceeds received in the
second closing under a secured term loan facility. Continental
Airlines and its wholly owned subsidiary, Continental Micronesia,
Inc., borrowed $50 million on June 10, 2005, raising the total
borrowed under the facility to $350 million.
"Our employee pension plan continues to be a high priority," said
Chairman and CEO Larry Kellner. "We are working hard to fulfill
our pension obligations and keep our promises to our employees."
The contribution is in addition to Continental's pension plan
contributions earlier this year, bringing its year-to-date pension
contribution to $180 million.
The closing of the initial $300 million borrowing under the term
loan facility occurred on June 1, 2005. With the completion of
the second funding on June 10, the facility is now fully funded.
Pension Expense and Contributions
Continental estimates its non-cash pension expense for 2005 will
be approximately $235 million, which includes the first quarter
curtailment charge of $43 million related to the freezing of the
portion of the company's defined benefit pension plan attributable
to pilots. The minimum required defined benefit pension plan
contribution during 2005 is estimated to be approximately
$266 million. Year-to-date Continental has contributed
12.1 million shares of ExpressJet Holdings, Inc., stock (a total
contribution value of $130 million) to its pension plan.
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.
* * *
As reported in the Troubled Company Reporter on Apr. 25, 2005,
Standard & Poor's Ratings Services lowered its ratings on selected
enhanced equipment trust certificates (EETCs) of Continental
Airlines Inc. (B/Negative/B-3) as part of an industrywide review
of aircraft-backed debt. Those and EETC ratings that were
affirmed were removed from CreditWatch, where they were placed
with negative implications Feb. 24, 2005.
"The rating actions reflect Standard & Poor's concern that
repayment prospects for holders of aircraft-backed debt could
suffer in a potential scenario of further multiple bankruptcies of
large U.S. airlines weakened by high fuel prices and intense price
competition," said Standard & Poor's credit analyst Philip
Baggaley. "Downgrades of EETCs were focused on debt instruments
that would be hurt in such a scenario, particularly debt backed by
aircraft that are concentrated heavily with large U.S. airlines
and junior classes that would be at greater risk in negotiated
restructurings or sale of repossessed collateral," the credit
analyst continued.
As reported in the Troubled Company Reporter on Feb. 28, 2005,
Standard & Poor's Ratings Services placed its single-B ratings on
Continental Airlines Inc. equipment trust certificates and
enhanced equipment trust certificates on CreditWatch with negative
implications. S&P's rating action does not affect issues that are
supported by bond insurance policies.
"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.
CRI RESOURCES: US Trustee Appoints Richard Diamond as Examiner
--------------------------------------------------------------
Steven Jay Katzman, the U.S. Trustee for Region 16, asked the U.S.
Bankruptcy Court for the Central District of California, Los
Angeles Division, to direct the appointment of an examiner in CRI
Resources, Inc.'s chapter 11 case. The Bankruptcy Court
determined that appointment of an examiner under 11 U.S.C. Sec.
1104 is appropriate in the Debtor's chapter 11 case.
The U.S. Trustee named Richard K. Diamond, Esq., to serve as the
examiner. Mr. Diamond will investigate:
a) the adequacy of consideration obtained by the Debtor in its
prepetition transactions with Cleveland Wrecking Company
and Aman Environmental Construction Company;
b) whether there are any prepetition creditors that are not
included in the Debtor's bankruptcy schedules; and
c) whether the management fees charged to the Debtor by
Cleveland Wrecking reflect the fair market rate for the
services provided.
The Debtor will pay Mr. Diamond up to $20,000 for his fees and
expenses related to this investigation.
Mr. Diamond will file a preliminary report of the investigation on
July 5, 2005. A hearing is scheduled on July 26, 2005 to review
this report.
Mr. Diamond assures the Court that he does not hold any interest
adverse to the Debtor or its estate.
A partner at Danning, Gill, Diamond & Kollitz, LLP, Mr. Diamond
specializes in reorganization and insolvency matters, with an
emphasis on appellate matters. He also serves as a Chapter 7
Panel Trustee appointed by the United States Trustee for the
Central District of California.
Headquartered in Los Angeles, California, CRI Resources Inc.
provides demolition services. The Company filed for chapter 11
protection on March 1, 2005 (Bankr. C.D. Calif., L.A. Div., Case
No. 05-13899). Stephen F. Biegenzahn, Esq., at Biegenzahn
Weinberg represents the Debtor's restructuring. When the Company
filed for protection from its creditors, it listed total assets of
$5,243,614 and total debts of $43,078,461.
DELPHI CORPORATION: Moody's Affirms B2 Senior Implied Rating
------------------------------------------------------------
Moody's Investors Service has affirmed the ratings of Delphi
Corporation, Senior Implied at B2 and Senior Secured Bank
Facilities at B1. The rating outlook is Negative. The bank loan
rating was initially assigned on May 19, 2005, as part of the
company's refinancing plan. The affirmation follows the
disclosure by the company in its 8-K filing with the SEC on June
9, 2005 that its Audit Committee had concluded that Delphi "did
not accurately disclose to credit rating agencies, analysts, or
the Board of Directors the amount of sales of accounts receivable
or factoring arrangements from the date of its separation from
General Motors until year-end 2004."
Moody's ratings on Delphi's existing and new debt instruments to
be issued as part of the company's financing plan were based upon
representations of Delphi's year-end 2004 financial condition and
assessments of Delphi's prospective financial performance and
liquidity which incorporated various assumptions. Among these
were the existence and availability of both account receivable
securitization facilities in the U.S. and Europe as well as
factoring lines of credit to Delphi's European subsidiaries.
The issues involved with the June 9 filing are not expected to
impact the company's access to its current credit commitments, nor
plans to close the expected $2.8 billion secured revolvoing credit
and term loan facility. Both the existence and availability of
the Receivable Financings and closing the $2.8 billion of
financing remain critical elements to the ratings. Delphi has
represented that it does not expect the June 9 disclosure to
affect the availability under its bank credit facilities.
Furthermore, Delphi expects to conclude its internal accounting
investigation related to other matters, issue restated financial
statements as necessary based on the conclusion of that
investigation, and become current in its periodic reporting
obligations on or before June 30th. Moody's ratings have also
assumed the company would be able to do so within indicated time
frames.
The nature of the disclosures in the June 9 filing underscore
concerns resident in the negative outlook. Among these issues
are:
* the company's ability to achieve sufficient levels of
earnings and cash flow from its business over the near term
to avoid significant further increases in indebtedness;
* its ability to conclude its internal accounting investigation
and release current financial information;
* its ability to maintain an adequate liquidity profile; and
* its ability to address internal control matters that relate
to recent accounting and disclosure issues.
Since Delphi's June 9th statement regarding the inaccurate
disclosure, Moody's has engaged in a series of discussions with
the company to re-validate representations and assumptions related
to the company's current and projected financial condition and
liquidity used to derive the ratings assigned on May 19. At this
time no further material deviations from the information utilized
in arriving at that rating assignment have been identified.
Should any further inaccuracies in the information provided by
management be discovered, or any subsequent revelations develop
from the accounting investigation or restated financial statements
with material adverse implications for creditors, the ratings
could be subject to further downgrade.
These ratings were affirmed:
-- Delphi Corporation
* Senior Implied, B2
* Senior Secured Term Loan, B1
* Bank revolving credit facility, B1 (incorporating the
granting of security for the facility in conjunction with
the new term loan)
* Senior Unsecured, B3
* Short term, Not Prime
* Shelf ratings:
+ (P)B3 for senior unsecured;
+ (P)Caa2 for subordinated; and
+ (P)Ca for preferred
+ Issuer rating, B3
-- Delphi Trust(s):
* Backed preferred, Caa2
* Shelf ratings, (P)Caa2
Delphi, headquartered in Troy, Michigan is one of the world's
largest suppliers of automotive components and had annual revenues
of approximately $29 billion in 2004.
DEVLIEG BULLARD: Chapter 7 Trustee Submits Final Report
-------------------------------------------------------
Montague S. Claybrook, the Chapter 7 Trustee overseeing the
liquidation of DeVlieg Bullard II, Inc., submitted his final
report to the U.S. Bankruptcy Court for the District of Delaware.
In his report, the Chapter 7 Trustee states that:
-- the Debtor has been examined under Section 343 of the U.S.
Bankruptcy Code;
-- he did not receive any property nor paid for any property
from the estate;
-- he has no objection to the exemptions claimed by the
Debtor; and
-- there are no more assets to distribute to unsecured
creditors.
All liens on the Debtor's property have been examined. The
Chapter 7 Trustee believes those liens are valid.
The Chapter 7 Trustee also said that the estate has been fully
administered and he wants to be discharged.
Headquartered in Machesney Park, Illinois, DeVlieg Bullard II,
Inc. -- http://www.devliegbullard.com/-- provides a comprehensive
portfolio of proprietary machine tools, aftermarket replacement
parts, field service and premium workholding products. The
Company filed for chapter 11 protection on July 21, 2004 (Bankr.
D. Del. Case No. 04-12097). The Court converted the case to a
chapter 7 liquidation proceeding on December 29, 2004. James E.
Huggett, Esq., at Flaster Greenberg, represents the Company. When
the Debtor filed for chapter 11 protection, it estimated debts and
assets of $10 million to $50 million.
EAGLEPICHER INC: Has Until July 29 to Make Lease Decisions
----------------------------------------------------------
The Honorable J. Vincent Aug, Jr., of the U.S. Bankruptcy Court
for the Southern District of Ohio, Western Division, granted
EaglePicher Incorporated and its debtor affiliates more time to
decide whether it wants to assume, assume and assign, or reject
its unexpired nonresidential real property leases.
The Debtors have until July 29, 2005, to make decisions on
28 unexpired nonresidential leased properties they use for parking
and office space and as production and warehouse facilities. A
schedule of the leases is available for a fee at:
http://www.ResearchArchives.com/bin/download?id=050614005815
The Debtors explain that the extension will ensure that an
informed, prudent business decision will be made with respect to
each lease as to whether assumption, assumption and assignment, or
rejection would be in the best interests of the estates and their
creditors.
The Debtors assure Judge Aug that the extension will not prejudice
the lessors and that they are current on all postpetition rent
obligations.
Headquartered in Phoenix, Arizona, EaglePicher Incorporated --
http://www.eaglepicher.com/-- is a diversified manufacturer and
marketer of innovative advanced technology and industrial products
for space, defense, automotive, filtration, pharmaceutical,
environmental and commercial applications worldwide. The company
along with its affiliates and parent company, EaglePicher
Holdings, Inc., filed for chapter 11 protection on April 11, 2005
(Bankr. S.D. Ohio Case No. 05-12601). Stephen D. Lerner, Esq., at
Squire, Sanders & Dempsey L.L.P., represents the Company. When
the Debtors filed for protection from their creditors, they listed
$535 million in consolidated assets and $730 in consolidated
debts.
EAGLEPICHER INC: Hires Giuliani Capital as Financial Advisor
------------------------------------------------------------
EaglePicher Incorporated and its debtor-affiliates, sought and
obtained permission from the U.S. Bankruptcy Court for the
Southern District of Ohio, Western Division, to employ Giuliani
Capital Advisors LLC as financial advisor for EaglePicher
Automotive Division.
The Debtors tell the Court that Giuliani Capital's capabilities
and experience are crucial to the Automotive Division's successful
restructuring.
Giuliani Capital will:
a) perform analyses related to available options, including
action plans, relative to the Automotive Division's
Hamilton, Jonesville and Manchester Facilities;
b) work with management to develop and manage a rolling
13-week receipts and disbursements cash flow forecast;
c) work with management, as necessary and appropriate, to
facilitate communications between the Automotive Division
and the financial advisors to the senior lender group;
d) develop and analyze with management a detailed plant
level and consolidated FY 2005 business plan, including
a review of the significant assumptions used in the
development of the business plan and the identification of
risks and opportunities contained
therein;
e) review and analyze product and costumer margin analysis,
including action plans to improve profitability and
potential costumer initiatives including pricing
discussions and potential cooperative de-sourcing of
business;
f) work with management to develop strategies to improve
profitability by evaluating cost drivers, including
facility, customer and organization rationalization,
including plant rationalization and cost reduction and cash
flow improvement analysis;
Giuliani Capital will also explore the potential sale of the
Automotive Division, and will:
a) give advise in developing a strategy for the sale;
b) assist in analyzing the financial effects of the proposed
sale;
c) assist the Debtors in the preparation, if necessary, of a
descriptive memorandum regarding the sale;
d) assist the Debtors in contacting potential buyers;
e) advise the Debtors in its negotiations regarding the
sale;
f) coordinate with the Legal counsel regarding the closing of
the proposed sale; and
g) provide assistance to the Automotive Division, in
coordination with legal counsel, with regard to planning
for a potential chapter 11 filing of the Division and
certain of its affiliates; and subsequent to any such
filing, aid in developing develop contingency plans and
analyses of impacts as well as communications plans with
costumers, suppliers and other parties-in-interest.
The Debtor outlines this compensation scheme in connection with
Giuliani Capital's engagement:
a) a $210,000 monthly advisory fee;
b) a success fee equal to $750,000 or 2% of the transaction
value, whichever is greater, upon completion of the
proposed sale;
c) a fee equal to $150,000 or 2% of the transaction value,
whichever is greater, in the event of a sale of individual
plants, production lines or other significant portion of
the assets or business of the Automotive Division,.
d) a fee of $500,000 if the Debtor rejects a Bona Fide offer
for the sale or $100,00 for a rejection of any Bona Fide
individual transaction offer.
The Debtor believes that Giuliani Capital is disinterested as that
term is defined in Section 101(14) of the U.S. Bankruptcy Code.
About Giuliani Capital
Giuliani Capital Advisors provides investment banking solutions
and independent advice to leaders dealing with complex business
challenges, strategic transactions, or financial distress. The
Firm provides a full range of capital raising, mergers and
acquisitions, and financial and operational restructuring
services.
About EaglePicher Automotive Division
EaglePicher Automotive is an operating unit of EaglePicher
Incorporated. Its Hillsdale and Wolverine Divisions are worldwide
suppliers of torsional and linear vibration dampers, micro bypass
filters, steering knuckles, pump components and rubber-coated
metallic and non-metallic gasketing for automotive OE and
aftermarket applications. EaglePicher Automotive operates 17
facilities in the U.S., Mexico and Germany from headquarters in
Inkster, Mich.
About EaglePicher Incorporated
Headquartered in Phoenix, Arizona, EaglePicher Incorporated --
http://www.eaglepicher.com/-- is a diversified manufacturer and
marketer of innovative advanced technology and industrial products
for space, defense, automotive, filtration, pharmaceutical,
environmental and commercial applications worldwide. The company
along with its affiliates and parent company, EaglePicher
Holdings, Inc., filed for chapter 11 protection on April 11, 2005
(Bankr. S.D. Ohio Case No. 05-12601). Stephen D. Lerner, Esq., at
Squire, Sanders & Dempsey L.L.P., represents the Company. When
the Debtors filed for protection from their creditors, they listed
$535 million in consolidated assets and $730 in consolidated
debts.
ENRON CORP: J.P. Morgan Inks $2.2 Billion Class Action Settlement
-----------------------------------------------------------------
JPMorgan Chase & Co. (NYSE: JPM) reached an agreement in principle
to settle the Enron class action litigation entitled Newby v.
Enron Corp., brought on behalf of Enron security holders. The
lawsuit is currently pending in the United States District Court
for the Southern District of Texas, Houston Division.
Under the terms of the settlement, JPMorgan Chase will make a
payment of $2.2 billion to the settlement class. Plaintiffs'
attorneys' fees will be paid out of the settlement. The
settlement does not include any admission of wrongdoing by
JPMorgan Chase. The company stated that it agreed to the
settlement solely to eliminate the uncertainties, burden and
expense of further protracted litigation. The class action
settlement must be approved by the Board of Regents of the
University of California (the lead plaintiff in the case) and the
Board of Directors of JPMorgan Chase. It is also subject to the
approval of the United States District Court for the Southern
District of Texas.
JPMorgan Chase said it expects to take a charge to earnings of
approximately $2 billion (pre-tax) or approximately $1.25 billion
(after-tax) this quarter to cover this settlement and to increase
its litigation reserves for its other remaining legal matters.
After taking this charge into account, the firm will remain well-
capitalized, with a Tier 1 capital ratio within the firm's
targeted ratios of 8.0% - 8.5%.
"We are working hard to put the uncertainty of litigation risk
behind us," said William B. Harrison, Jr., J.P. Morgan's Chairman
and CEO. "In this regard, the firm appreciates the efforts of the
Regents of the University of California and its advisors. By
settling this case and increasing reserves for our remaining legal
issues, the firm can better focus its energies on building our
great company and serving our clients and shareholders."
Of the approximately $2 billion addition to the litigation
reserves, approximately one half is associated with the potential
costs of Enron-related matters, including the cost of settling
this class action. The balance represents management's current
best estimate, after consultation with counsel, of the anticipated
additional costs under a prudent view of the current legal
environment associated with the remaining legal actions,
proceedings and regulatory inquiries pending against the firm.
The firm believes that its litigation reserves, after yesterday's
reserving action, are adequate to meet its remaining litigation
exposures, although the reserve may be subject to revision in the
future.
Other Settlements
With this latest multi-billion-dollar settlement, UC has now
obtained more than $4.7 billion for Enron investors, including:
-- $2 billion from Citigroup,
-- $222.5 million from Lehman Brothers,
-- $69 million from Bank of America,
-- $168 million from Enron's outside directors, and
-- $32 million from Andersen Worldwide.
Through the bankruptcy proceeding for the LJM2 partnership
involved in the Enron scheme, UC will secure a distribution of
approximately $32 million for investors.
Remaining defendants in the investors' lawsuit include:
-- Merrill Lynch,
-- Credit Suisse First Boston,
-- Canadian Imperial Bank of Commerce,
-- Barclays Bank,
-- Deutsche Bank,
-- Toronto-Dominion Bank,
-- Royal Bank of Canada and
-- the Royal Bank of Scotland,
all alleged to be key players in a series of fraudulent
transactions that ultimately cost Enron investors an estimated
$40-45 billion in market losses.
These banks allegedly set up false investments in clandestinely
controlled Enron partnerships, used offshore companies to disguise
loans and facilitated phony sales of phantom Enron assets. As a
result, Enron executives were able to deceive investors by
reporting increased cash flow from operations and by moving
billions of dollars of debt off Enron's balance sheet, thereby
artificially inflating securities prices.
Additional remaining defendants include Goldman Sachs, because of
its role as an underwriter of Enron securities, as well as former
officers of Enron, its accountants, Arthur Andersen, and certain
law firms.
Depositions in the case began in June 2004, with the trial slated
to begin in Houston on Oct. 16, 2006.
Recovered funds, to be split among investors who bought Enron
shares or publicly traded debt securities issued by Enron and
Enron-related entities between Sept. 9, 1997, and its Dec. 2001
bankruptcy filing, are earning interest. The court must approve
an allocation plan for the distribution. At this point, the total
amount of money that will be recovered and the total pool of
investor shares to receive it are unknown.
About JPMorgan Chase
JPMorgan Chase -- http://www.jpmorganchase.com/-- is a leading
global financial services firm with assets of $1.2 trillion and
operations in more than 50 countries. The firm is a leader in
investment banking, financial services for consumers and
businesses, financial transaction processing, asset and wealth
management, and private equity. A component of the Dow Jones
Industrial Average, JPMorgan Chase has its corporate headquarters
in New York and its U.S. consumer and commercial banking
headquarters in Chicago. Under the JPMorgan, Chase and Bank One
brands, the firm serves millions of consumers in the United States
and many of the world's most prominent corporate, institutional
and government clients.
About Enron Corporation
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 CORP: Veolia Holds $7.6 Million Allowed Unsecured Claim
-------------------------------------------------------------
Veolia North America Company filed Claim No. 22924 against Debtor
Artemis Associates, L.L.C., for amounts owed under a March 3,
1998 Stock Purchase Agreement. Veolia is formerly known as
Vivendi North America Company, formerly known as Anjou
International.
Veolia also filed Claim No. 6097 against Enron Corp. arising
under a Guaranty provided by Enron in favor of Anjou.
In a Court-approved stipulation, the parties agree that:
1. Veolia will have an allowed:
-- Class 185 general unsecured nonpriority claim for
$3,325,000; and
-- Class 79 general unsecured nonpriority claim for
$4,225,000.
2. Veolia releases Enron and Artemis for all liability arising
from the Claims, the Agreement or the Guaranty, except for:
-- the Allowed Claims; and
-- certain claims and defenses to claims relating to the
indemnification provisions of the Agreement solely
relating to liability, if any, with respect to Claim
No. 24497 filed by the State of Michigan Department
of Treasury against EFS VIII, Inc., formerly known as
Limbach Company.
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.
143; Bankruptcy Creditors' Service, Inc., 15/945-7000)
EVEREST BROADBAND: Case Summary & 13 Largest Known Creditors
------------------------------------------------------------
Debtor: Everest Broadband Networks, Inc.
aka Everes TV
One Executive Drive Sl10
Fort Lee, New Jersey 07024
Bankruptcy Case No.: 05-29509
Type of Business: The Debtor provides high-speed Internet access,
long-distance telephone service, digital
broadcast satellite TV and related broadband
applications in multi-tenant commercial and
hotels. The Debtor offers building tenants
a broad range of telephony services and advanced
Internet applications such as e-mail, tools to
build Web sites, site-hosting services,
e-commerce software, and virtual private
networks and IT professional services.
See http://www.everestbroadband.com/
Chapter 11 Petition Date: June 13, 2005
Court: District of New Jersey (Newark)
Debtor's Counsel: Timothy P. Neumann, Esq.
Broege, Neumann, Fischer & Shaver
25 Abe Voorhees Drive
Manasquan, New Jersey 08736
Tel: (732) 223-8484
Estimated Assets: $500,000 to $1 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 13 Largest Known Creditors:
Entity Claim Amount
------ ------------
Aaron Wolfson Unknown
1 State Street
New York, NY 10004-1417
Cisco Systems Unknown
170 West Tasman Drive
San Jose, CA 95134-1700
Citicorp Vendor Finance Unknown
Lario & Saldutti
89 North Haddon Avenue
Haddonfield, NJ 08033-2473
Eli Levitan Unknown
1 State Street
New York, NY 10004-1417
Global Crossing Unknown
Eric Linden, Esq.
27777 Franklin Road
Southfield, MI 48034-2337
Levitin Family Charitable Trust Unknown
1 State Street
New York, NY 10004-1417
MCI (Worldcom MFS) Unknown
P.O. Box 790351
Saint Louis, MO 63179-0351
Princeton Insurance Unknown
Pressler & Pressler
16 Wing Drive
Cedar Knolls, NJ 07927-1007
Robert Half International Unknown
Stuart Minion
33 Clinton Road
West Caldwell, NJ 07006-6716
Schoffstall Ventures Unknown
5790 Devonshire Road
Harrisburg, PA 17112-3508
Silicon Valley Bank Unknown
40 William Street
Wellesley, MA 02481-3999
Wolfson Equities Unknown
1 State Street
New York, NY 10004-1417
XO Communications Unknown
1111 Sunset Hills Road
Reston, VA 20190
FEDERAL-MOGUL: Asbestos Claims Estimation Proceeding Begins
-----------------------------------------------------------
A formal hearing to estimate the aggregate value of asbestos-
related personal injury claims against Federal-Mogul Corporation
and its debtor-affiliates began yesterday in Camden, N.J., before
the Honorable Joseph H. Rodriguez. The hearing will continue
today and tomorrow and the District Court has blocked-out Tuesday,
Wednesday and Thursday of next week to complete the trial. Judge
Rodriguez is unlikely to issue any type of bench ruling at the
conclusion of this multi-day trail proceeding.
At the Court's direction, the parties filed their final
witness lists, lists of trial exhibits, and pre-hearing
memoranda late last month.
Parties' Pre-Hearing Memoranda
A. Asbestos Claimants Committee & Futures Representative
The Official Committee of Asbestos Claimants, and Eric D. Green,
as the Legal Representative for Future Asbestos Claimants tell
the Court that the estimation proceeding will serve two purposes:
a. To enable the Court to resolve for U.S. bankruptcy purposes
any objections to confirmation of the Third Amended Joint
Plan of Reorganization, which are based in any way on an
aggregate estimate of T&N's liability to pending and future
U.S. and U.K. asbestos personal injury claimants; and
b. To provide Mr. Justice David Richards of the English High
Court with a fully developed legal and factual record that
attempts to answer the questions raised in his
communication to Bankruptcy Judge Raymond T. Lyons dated
December 22, 2004, and which could assist him in his own
resolution of similar issues as they arise in the
insolvency proceedings currently pending in the United
Kingdom.
A full-text copy of the Asbestos Claimants Committee and Futures
Representative's Pre-Hearing Memorandum is available free of
charge, at:
http://bankrupt.com/misc/ACC&FuturesPrehearingMemo.pdf
The Asbestos Claimants Committee and Futures Representative have
identified three legal issues which must be resolved to determine
whether the proposed Plan is fair to all creditor groups and
whether it satisfies the Bankruptcy Code's "best interest of
creditors" test.
According to Maribeth L. Minella, Esq., at Young Conaway Stargatt
& Taylor, LLP, in Wilmington, Delaware, the estimation hearing
raises three broad issues:
1. Why is estimation necessary?
2. What is the appropriate methodology to use in estimating
present and future asbestos personal injury liability?
3. How would U.S.-based claims against T&N Limited be valued
in the U.K. Insolvency Proceedings?
Ms. Minella notes that the resolution of the issues is not
binding on Justice Richards, but could speed up the resolution of
the parallel administration proceedings of T&N Limited and its UK
subsidiaries and avoid unnecessarily duplicative procedures in
the United Kingdom, Ms. Minella assures.
Why is Estimation Necessary?
To emerge from bankruptcy and for the creditors to be paid, it is
necessary to establish an estimated aggregate value of the
present and future asbestos personal injury claims.
Specifically, the estimation is necessary for three reasons:
1. To provide a basis for measuring the relative amounts of
asbestos personal injury claims on the one hand and, on the
other, claims lodged by other groups of unsecured
creditors, including those asserting asbestos-related
property damage claims and other unsecured commercial
claims;
2. An estimate of T&N's present and future asbestos personal
injury liability is required to determine whether the Plan
satisfies the "best interest of creditors" test; and
3. A special requirement for an estimate arises from the
pendency of the U.K. Insolvency Proceedings.
Methodology to Be Used
The Asbestos Claimants Committee and Futures Representative
assert that the best and the only valid basis to be used is "by
reference to the claims compensation criteria and values
established by T&N's pre-petition resolution of over 250,000
similar individual asbestos personal injury and death claims,
after taking into account both the historical trends in claims
filing rates and claim values as well as events that were
reasonably foreseeable as of the bankruptcy petition date."
Ms. Minella explains that the 250,000 resolved claims were:
-- brought against T&N in all 50 states and various
territories of the United States and in the United Kingdom;
-- litigated in both U.S. and U.K. courts; and
-- resolved either through trials or at values that the
company and the claimants agreed were acceptable for a
consensual resolution.
The Asbestos Claimants Committee's expert, Dr. Mark Peterson, and
the expert for the Official Committee for Property Damage
Claimants, Dr. Robin Cantor, agree with the general proposition,
Ms. Minella says. Both experts hold the view that T&N's past
claims resolution history is the proper evidentiary basis from
which to begin to estimate T&N's asbestos liability, Ms. Minella
adds.
Valuation of U.S.-based Claims Under English Law
The estimation, according to Ms. Minella, must include a
determination of how the U.S.-based claims would be valued in the
U.K. Insolvency Proceedings, which requires an analysis of
relevant English law on the treatment of tort claims arising
outside the United Kingdom. A determination by the Court of the
values that would be assigned in England to the U.S.-based claims
is necessary because a substantial part of T&N's assets are in
the United Kingdom. In a liquidation under Chapter 7, the only
value available to the asbestos personal injury and other U.S.
claimants against T&N would, as a practical matter, be whatever
they were able to obtain through the U.K. Insolvency Proceedings.
To value unliquidated tort claims, like T&N's asbestos personal
injury claims, the U.K. Administrators of T&N must determine, as
a matter of English law:
(1) that the claim, if proven, would result in the defendants'
liability; and
(2) the amounts that would be awarded for any meritorious
claims.
Ms. Minella tells the Court that the Asbestos Claimants Committee
and the Futures Representative will present testimony, and a
detailed written legal analysis by Barbara Dohmann, QC, showing
that in the U.K. Insolvency Proceedings U.S. law would be applied
to substantive issues of liability and damages.
$8.2 to $11.0 Billion for U.S. Claims,
$400 Million for U.K. Claims
The Asbestos Claimants Committee and the Futures Representative
assert that a reasonable estimate of the asbestos personal injury
claims against T&N, as of October 2001, is:
* within the range of $8.2 to $11.0 billion for claims
brought in the United States; and
* $400 million for claims brought in the United Kingdom.
Ms. Minella explains that the range estimates the present value
of the amounts T&N would have paid over the next four decades to
resolve asbestos personal injury claims in the U.S. and U.K. tort
systems if it had not filed for bankruptcy.
ACC & Futures Rep's Witness List
At the hearing, the Asbestos Claimants Committee and Futures
Representative will present as witnesses:
1. Paul Hanly, former U.S. National Trial Counsel to T&N;
2. Andrea Crichton, U.K. Asbestos Claims Manager for T&N;
3. Barbara Dohmann, Queen's Counsel, and an English Law
expert;
4. Laura Welch, M.D., Medical Expert; and
5. Mark Peterson, Ph.D., JD, Claims Estimation Expert.
Mr. Hanly and Ms. Crichton have extensive personal knowledge of
T&N's claims history and its procedures and strategies for
resolving claims. In broad outline, their testimony will show
that although there are obvious differences in the U.S. and U.K.
judicial systems, the bases of T&N's liability for asbestos
personal injury claims asserted by the vast majority of
plaintiffs against T&N were the same in both countries: That T&N
was responsible for:
-- asbestos-related injuries caused by exposure to its
asbestos-containing products; or
-- injuries caused by exposure to the asbestos fiber it
supplied to its subsidiaries.
Ms. Dohmann will establish the choice of law for liability and
for damages that would apply if T&N's asbestos personal injury
liability for claims based on events in the United States were
considered by a U.K. Court. She will explain that in her
opinion, under English law, U.S. principles for both liability
and amount of damages would be applied to those claims. In
particular, Ms. Dohmann will describe the basic elements for a
defendant to be liable under English law for injuries allegedly
caused by its asbestos-containing products.
A full-text copy of Barbara Dohmann's expert opinion is available
at no charge at:
http://bankrupt.com/misc/DohmannReport.pdf
Ms. Welch will explain and support the testimony of Mr. Hanly and
Ms. Crichton, and the assumptions regarding medical issues that
have been used by Dr. Cantor.
A full-text copy of Laura Welch's expert report is available at
no charge at:
http://bankrupt.com/misc/WelchReport.pdf
Dr. Peterson's Approach
Dr. Peterson will present the bases for his conclusion that the
present value of T&N's U.S. claims is within the range of $8.2 to
$11.0 billion, and that the liability for U.K. claims is $400
million. Dr. Peterson may also testify as a rebuttal witness to
the flaws in the methodology used, and results reached, by Dr.
Cantor.
Dr. Peterson's methodology utilizes data drawn from the T&N's
prepetition claims experience, both within the Center for Claims
Resolution and afterwards as a "stand-alone" defendant:
* epidemiological projections of the incidence of asbestos-
related cancers; and
* foreseeable trends and patterns in claiming behavior and
settlement costs.
The methodology is not a mechanical extrapolation of past
history, Ms. Minella explains. The historical data provide a
starting point, but adjustments are made for changes that can
reasonably be expected in the future, and for anomalies in the
historical patterns.
According to Ms. Minella, although the details in estimating
T&N's aggregate asbestos personal injury liability are
complicated, the propositions underlying the estimate are basic:
T&N's aggregate asbestos personal injury liability is the sum of:
(a) the estimated liability for claims pending but unresolved
on the Petition Date plus
(b) the present value of the estimated liability for claims
that can be expected to be filed in the years thereafter.
Dr. Peterson started his analysis by examining T&N's database of
pending claims and grouping the claims into categories of alleged
disease -- mesothelioma, lung cancer, other cancer, and non-
malignant disease. Next, he compared this universe of pending
claims to records of claims that T&N has previously resolved by
settlement or court judgment, taking into account those resolved
without payment as a result of rejection, withdrawal, or
abandonment.
A full-text copies of Mark Peterson's reports are available at no
charge at:
http://bankrupt.com/misc/PetersonExpertReport.pdf
http://bankrupt.com/misc/PetersonSupplReport.pdf
Dr. Cantors' Method is Flawed
In contrast, Dr. Cantor reaches a drastically lower estimate, for
two principal reasons:
(1) Dr. Cantor uses a flawed and downwardly biased approach to
calculate the number of future claims that will be filed
against T&N and ultimately paid; and
(2) Dr. Cantor's calculation of the "settlement averages" used
to value T&N's pending and future claims ignores not only
T&N's recent historical settlement averages and the
increasing trends in T&N's settlement averages but also
the reasons for those trends.
For all of these reasons, the Asbestos Committee and the Futures
Representative ask the Court rule that:
(a) the aggregate value of T&N's liability for present and
future U.S. asbestos personal injury claims liability is
between $8.2 and $11.0 billion;
(b) its liability for present and future U.K. asbestos
personal injury claims is $400 million; and
(c) an English court would apply the laws of the United States
to both the evaluation of liability and the measure of
damages for claims brought by persons who were exposed in
the United States to T&N's asbestos and asbestos-
containing products and who suffered asbestos-related
diseases in the United States as a result of that
exposure.
B. Asbestos PD Claimants
The Official Committee of Asbestos Property Damage Claimants
believes that appropriate value of all pending and future U.S.
asbestos personal injury claims against Debtor T&N Limited is
approximately $2.5 billion, net present value.
The PD Committee will offer expert testimony from Dr. Robin A.
Cantor, a Ph.D. economist and the leader of the Liability
Estimation practice at Navigant Consulting, Inc., at trial. The
PD Committee will demonstrate that Dr. Cantor's estimate is based
on extensive empirical analysis of T&N's pre-bankruptcy claims
history and is, as a matter of fact and law, the only appropriate
estimate offered.
The PD Committee argues that the estimate offered by the Asbestos
Claimants Committee and the Future Claimants Representative
ignores T&N's claims history. The PD Committee says the Asbestos
Claimants Committee and the Future Claimants Representative's
estimate projects wildly inflated claim counts and soaring claim
values based on unsupportable speculation that, for the
bankruptcy, the world of asbestos litigation would become an even
less hospitable place for T&N than it already was.
The PD Committee notes that each of the Plan Proponents and the
Trustees of the T&N Pension Plan has retained separate consulting
firms to estimate T&N's liabilities. The Plan Proponents,
however, will offer only Mark Peterson, the consultant retained
by the Asbestos Claimants Committee, to support the $11.1 billion
estimate of the aggregate value of U.S. asbestos personal injury
claims.
"It is not surprising that no other party will offer expert
testimony to corroborate Dr. Peterson's estimate," Theodore J.
Tacconelli, Esq., at Ferry Joseph & Pearce, P.A., in Wilmington,
Delaware, says.
The PD Committee believes that no other consultant retained in
the case has estimated T&N's liabilities at anything near the
$11.1 billion. "None would risk his or her professional
credibility trying to justify that number," Mr. Tacconelli tells
the District Court.
The Debtors' own estimate of T&N's liabilities is telling, the PD
Committee contends. The Committee points out that from 2000
through 2004, the Debtors have disclosed in filings with the
Securities and Exchange Commission that T&N's total potential
liability through 2012 would be $1.6 billion.
The PD Committee notes that the Debtors worked with National
Economic Research Associates, Inc., a nationally recognized
economic consulting firm, in coming up with the estimate in 2000.
Moreover, the Debtors have continued reporting the $1.6 billion
estimate even after they proposed the Plan, which incorporates
the $11.1 billion estimate. The Debtors have never suggested
that the NERA estimate wildly underestimates T&N's potential
liability.
Other estimates also show how unrealistic the Asbestos Claimants
Committee's current $11.1 billion estimate is. The PD Committee
reminds the District Court that in 2002 and 2004, before the
Asbestos Claimants Committee reached an agreement on the Plan,
the Asbestos Claimants Committee presented values ranging from
$5.7 billion to $6.6 billion. The Pension Trustees also
performed their own estimate, which ranged from $2.1 billion to
$5.5 billion. The joint administrators appointed in the U.K.
proceedings arrived at $5.3 billion using essentially the same
methodologies Dr. Peterson used before he doubled his estimate.
The PD Committee explains that Dr. Cantor's estimate is
conservative and likely overstates the allowable aggregate amount
of T&N's potential liabilities. Dr. Cantor makes no specific
adjustment downward to reflect the substantial changes in the
tort system that have occurred since 2001 -- like the legal
reforms in states where a large portion of T&N claims were filed
and efforts to stop the sham medical screening process which
generated tens of thousands of dubious claims -- all of which
will have the effect of decreasing future claim values and claim
counts.
The PD Committee tells Judge Rodriguez that Dr. Peterson repeats
in the Debtors' case many of the same errors and omissions that
caused Judge Fullam to reject his estimate in the Owens Corning
case as "extreme" and "too high".
The PD Committee has not estimated the value of the U.K. asbestos
personal injury claims. The PD Committee believes that the U.K.
claims are only a small fraction of the U.S. claims and will not
significantly affect recoveries for property damage claimants.
A full-text copy of the PD Committee's Pre-Trial Memorandum is
available at no charge at:
http://bankrupt.com/misc/PDCommitteePreTrialMemo.pdf
Headquartered in Southfield, Michigan, Federal-Mogul Corporation
-- http://www.federal-mogul.com/-- is one of the world's largest
automotive parts companies with worldwide revenue of some
US$6 billion. The Company filed for chapter 11 protection on
October 1, 2001 (Bankr. Del. Case No. 01-10582). Lawrence J.
Nyhan Esq., James F. Conlan Esq., and Kevin T. Lantry Esq., at
Sidley Austin Brown & Wood, and Laura Davis Jones Esq., at
Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C.,
represent the Debtors in their restructuring efforts. When the
Debtors filed for protection from their creditors, they listed
US$10.15 billion in assets and US$8.86 billion in liabilities.
At Dec. 31, 2004, Federal-Mogul's balance sheet showed a US$1.925
billion stockholders' deficit. At Mar. 31, 2005, Federal-Mogul's
balance sheet showed a US$2.048 billion stockholders' deficit,
compared to a US$1.926 billion deficit at Dec. 31, 2004.
(Federal-Mogul Bankruptcy News, Issue No. 80; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
FEDERAL-MOGUL: Creditors Panel Wants Federalist Group as Advocate
-----------------------------------------------------------------
Eric M. Sutty, Esq., at The Bayard Firm, in Wilmington, Delaware,
relates that the United States Senate has been considering
asbestos litigation reform legislation for several years. The
current iteration of the legislation is the "Fairness in Asbestos
Injury Resolution Act of 2005" or Senate Bill No. 525.
According to Mr. Sutty, the Fair Act would substitute an
administrative, no-fault compensation scheme for the existing
tort system with respect to personal injury claims arising from
exposure to asbestos in the United States. The Fair Act would
create an Office of Asbestos Injury Claims Resolution to
administer a trust fund to provide payment to claimants who are
determined to be eligible for compensation. Claimants would not
be required to trace exposure to a specific, responsible
defendant; rather, compensation would be based on eligibility
categories defined by diagnostic, medical, exposure and latency
criteria. The legislature, moreover, fixes the amount of
contributions to be made by asbestos defendants including
Federal-Mogul Corporation and its debtor-affiliates.
Mr. Sutty contends that the FAIR Act as currently proposed
incorporates a funding structure that is extremely
disadvantageous for the Debtors. Specifically, the FAIR Act
contribution requirement for the Debtors is approximately $2.5
billion -- the largest amount proposed from any single asbestos
defendant -- payable over the projected 30-year life of the trust
fund, Mr. Sutty says. "The onerous contribution requirement
would place an extreme financial strain on the reorganized
debtors. The FAIR Act, moreover, would not even resolve all of
the asbestos liabilities of the Debtors."
Mr. Sutty notes that the Debtors have material asbestos
liabilities in the United Kingdom and elsewhere outside of the
United States that would not be resolved by the FAIR Act. The
FAIR Act, however, would still potentially strip the Debtors of
certain of their insurance assets that would otherwise cover
these unresolved claims.
For all of these reasons, Mr. Sutty says, the Debtors and the
Official Committee of Unsecured Creditors have actively opposed
the FAIR Act. Indeed, the Creditors Committee and the Debtors
firmly believe that a better resolution of the Debtors' asbestos
liabilities is the resolution set forth in the proposed Third
Amended Joint Plan of Reorganization.
The Committee and the Debtors have collaborated on their
opposition to the FAIR Act since its first incarnation as
proposed in 2002. Mr. Sutty relates that counsel for the
Committee, Sonnenschein Nath & Rosenthal LLP's Public Law &
Policy Strategies Group, has taken the lead on these efforts due
to Sonnenschein's congressional advocacy experience and
expertise. Specifically, Sonnenschein initiated and has engaged
in a comprehensive strategy to actively oppose the FAIR Act
through a combination of aggressive congressional advocacy,
coalition development, and grassroots and media activity. These
efforts have involved:
(a) significant outreach and discussions with individual
Senators and their staff, including the Senate Majority
and Minority Leaders and all 18 members of the Senate
Judiciary Committee;
(b) participation in stakeholder meetings regarding the FAIR
Act;
(c) collaboration with the Committee's financial advisors and
bankruptcy counsel on presentations and advocacy documents
for use in outreach to the Senate;
(d) legal and policy analysis of the FAIR Act, including
detailed assessments of the changes among different
iterations, the impact of each iteration on the Debtors
and their creditors and the drafting of legislative
alternatives to specific proposals in the draft
legislation; and
(e) identification of more than two dozen companies, in
addition to more than a dozen major insurers, to
participate in coalition efforts designed to oppose trust
fund legislation.
The ultimate likelihood of enactment of the FAIR Act is
uncertain, Mr. Sutty says. "Recent heightened legislative
activities have increased the Committee's concerns over potential
Senate passage of the FAIR Act. As a result, the Committee's
advocacy efforts must shift, in part, to influencing the
consideration by the House of Representatives of any Senate-
passed versions of the FAIR Act as well as alternative
legislative measures to reform the asbestos litigation system."
Mr. Sutty adds that at present, two comprehensive asbestos
legislation reform bills are already pending in the House of
Representatives. "While Sonnenschein has been actively meeting
with House Judiciary Committee Members in recent weeks, the
importance of appropriately educating and engaging the House
Leadership on the adverse effect that a Senate-passed FAIR Act
would have on the Debtors cannot be overstated and negatively
impact the Debtors."
The Committee proposes to add a team of policy professionals with
extensive expertise on House legislative initiatives and relevant
relationships with key members of the House of Representatives.
The Creditors Committee asks the U.S. Bankruptcy Court for the
District of Delaware for permission to retain The Federalist Group
LLC as its congressional advocates, effective as of May 1, 2005.
Wayne L. Berman, a member of the Federalist Group, says that the
firm will be paid $40,000 per month and will be reimbursed for
actual expenses incurred.
The Federalist Group is a lobbying firm that includes some of
Washington's most respected and skilled former Executive and
Congressional officials and staff. Mr. Sutty notes that key
Federalist Group team members have both institutional knowledge
of and valued relationships on both Capitol Hill and in the
Executive Branch, with an emphasis on Republican Members of the
House of Representatives, that will complement the capabilities
of the Committee's existing public policy team.
Mr. Sutty asserts that the Federalist Group's services are
necessary and appropriate to ensure that the interests of the
Debtors' estates are adequately represented in the House of
Representatives and the ability to confirm and implement the Plan
is preserved.
Headquartered in Southfield, Michigan, Federal-Mogul Corporation
-- http://www.federal-mogul.com/-- is one of the world's largest
automotive parts companies with worldwide revenue of some
US$6 billion. The Company filed for chapter 11 protection on
October 1, 2001 (Bankr. Del. Case No. 01-10582). Lawrence J.
Nyhan Esq., James F. Conlan Esq., and Kevin T. Lantry Esq., at
Sidley Austin Brown & Wood, and Laura Davis Jones Esq., at
Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C.,
represent the Debtors in their restructuring efforts. When the
Debtors filed for protection from their creditors, they listed
US$10.15 billion in assets and US$8.86 billion in liabilities.
At Dec. 31, 2004, Federal-Mogul's balance sheet showed a US$1.925
billion stockholders' deficit. At Mar. 31, 2005, Federal-Mogul's
balance sheet showed a US$2.048 billion stockholders' deficit,
compared to a US$1.926 billion deficit at Dec. 31, 2004.
(Federal-Mogul Bankruptcy News, Issue No. 80; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
FRANK FERACO: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Frank J. Feraco
17 Rolling Hills Drive
Barrington Hills, Illinois 60010
Bankruptcy Case No.: 05-23499
Type of Business: The Debtor has a stake in Value Management
Group. Value Management Group is located at 330
North Wabash Avenue, Suite 3400 in Chicago,
Illinois 60611.
Chapter 11 Petition Date: June 13, 2005
Court: Northern District of Illinois (Chicago)
Debtor's Counsel: Deborah K. Ebner, Esq.
Law Office of Deborah K. Ebner
11 East Adams Street, Suite 800
Chicago, Illinois 60603
Tel: (312) 922-3838
Fax: (312) 922-8722
Total Assets: $3,323,121
Total Debts: $3,633,730
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Value Management Group Capital $750,000
330 North Wabash, Suite 3400 Contribution Due
Chicago, IL 60611
Mellon Bank Residence $375,000
One Mellon Center Value of Security:
Pittsburgh, PA 15259 $1,800,000
Value of Senior Lien:
$1,515,000
US Bank Unsecured $194,073
P.O. Box 790430 Credit Line
Saint Louis, MO 63179
Joan Feraco Amount due pursuant $103,000
c/o Stuart A. Reid, P.C. to Judgment for
222 East Wisconsin Avenue Marital Dissolution;
Suite 305 significant amount
Lake Forest, IL 60045 of which is
dischargeable
property settlement.
American Express $86,473
P.O. Box 297812
Fort Lauderdale, FL 33329
Union Planters Bank, NA $70,164
P.O. Box 387
Memphis, TN 38147
Gerber Plumbing $50,000
4800 West Touhy Avenue
Lincolnwood, IL
Internal Revenue Service Residence $48,532
200 West Adams, Suite 2300 Value of Security:
Chicago, IL 60606 $1,800,000
Value of Senior Lien:
$1,890,000
MBNA $47,188
P.O. Box 15137
Wilmington, DE 19886-5137
MBNA $12,188
P.O. Box 15137
Wilmington, DE 198865137
Cook County Collector Residence $10,890
County Building Value of Security:
Chicago, IL 60604 $1,800,000
Value of Senior Lien:
$1,938,532
Joan Feraco Hold Harmless $10,700
c/o Stuart A. Reid, P.C. Agreement
222 East Wisconsin Avenue incorporated in
Suite 305 Judgment for
Lake Forest, IL 60045 Dissolution of
Marriage on July 24,
2002. Amount is
an estimate.
Key Educational Loans Student Loan $10,700
P.O. Box 145418
Cincinnati, OH 45250
Nordstrom $8,491
P.O. Box 79134
Phoenix, AZ 85062
Chase Advantage $7,980
Chase Manhattan Bank USA, NA
P.O. Box 52195
Phoenix, AZ 85072
Citi Card $6,869
P.O. Box 6000
The Lakes, NV 89163
Green & Espel, Attorneys at Law $6,340
250 South 6th Street
Minneapolis, MN 55402
Continental Auto Sports $5,756
420 East Ogden
Hinsdale, IL 60521
Citiadvantage $5,027
P.O. Box 6000
The Lakes, NV 89163
Bank One $4,377
P.O. Box 15153
Wilmington, DE 19886
GATE ENGINEERING: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Gate Engineering Corporation
D 44 Marginal Street
Ext. Forest Hills
Bayamon, Puerto Rico 00959
Bankruptcy Case No.: 05-05395
Type of Business: The Debtor provides mechanical, electrical, and
refrigeration maintenance services to buildings,
mainly U.S. Government facilities.
Chapter 11 Petition Date: June 13, 2005
Court: District of Puerto Rico (Old San Juan)
Debtor's Counsel: Winston Vidal Gambaro, Esq.
P.O. Box 193673
San Juan, PR 00919
Tel: (787) 751-2864
Total Assets: $2,500,000
Total Debts: $2,471,646
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
BPPR-FLEXI RESERVA Line of credit $100,000
A/C 240-035387
P.O. Box 362708
San Juan, PR 00936
Capital Building Maintenance Sub-contractor $81,000
P.O. Box 19736
San Juan, PR 00910
BPPR-FLEXI RESERVA Line of credit $50,000
A/C 240-058977
P.O. Box 362708
San Juan, PR 00936
North Enterprises Inc. Materials & supplies $39,298
COSVI Medical insurance $21,999
BPPR-VISA Corp. Card Materials & supplies $16,200
A/C 4549-0310-0013-3582
Siemens Bldg. Technologies Sub-contractor $15,023
Popular Auto Capital leases $12,470
Waste Management De PR Waste disposal $9,000
Miguel Gierbolini Legal service $7,697
Roger Electric Materials & supplies $7,220
Sprint Telephone services $6,210
Refricentro Material & supplies $5,530
Lausell & Carlo, P.S.C. Legal service $4,855
RIMCO Repair services $4,683
Trane Export Inc. Materials & supplies $4,200
The Fuller Brush Co. Materials & supplies $3,838
of P.R. Inc.
San Juan Lighting Corp. Materials & supplies $3,749
City Office Supplies Office supplies $3,718
National Life Insurance Insurance $3,162
GE-RAY FABRICS: Committee Hires Shumaker Loop as Legal Counsel
--------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in Ge-Ray
Fabrics, Inc.'s case asks the U.S. Bankruptcy Court for the
Southern District of New York for permission to employ Shumaker,
Loop & Kendrick, LLP, as its legal counsel, nunc pro tunc to
May 23, 2005.
Shumaker Loop will:
(a) advise the Committee with respect to its rights, powers,
and duties in this case;
(b) assist and advise the Committee in consulting with the
Debtor relative to the administration of these cases;
(c) assist the Committee in analyzing the claims of the
Debtor's creditors and in negotiating with such creditors;
(d) assist with the Committee's investigation of the acts,
conduct, assets, liabilities, and financial condition of
the Debtor and of the operation of the Debtor's business;
(e) assist the Committee in its analysis of, and negotiations
with, the Debtor or any third party concerning matters
related to, among other things, the terms of a plan of
reorganization for the Debtor;
(f) assist the Committee in its analysis of, and negotiations
with, any debtor-in-possession or prepetition lender;
(g) assist and advise the Committee with respect to its
communications with the general creditor body regarding
significant matters in these cases;
(h) represent the Committee at hearings and other proceedings;
(i) review and analyze applications, orders, statements of
operations, and schedules filed with the Court and advise
the Committee as to their propriety;
(j) assist the Committee in preparing pleadings and
applications as may be necessary in furtherance of the
Committee's interests and objectives; and
(k) perform other legal services as may be required and are
deemed to be in the interests of the Committee in
accordance with the Committee's powers and duties as set
forth in the Bankruptcy Code.
David H. Conway, Esq., a partner of Shumaker Loop, disclosed that
Shumaker Loop's professionals' bill:
Designation Hourly Rate
----------- -----------
Partner $200 - $435
Associate $150 - $295
Legal Assistant $95 - $150
The Committee believes that Shumaker Loop is disinterested as that
term is defined in Section 101(14) of the U.S. Bankruptcy Code.
Headquartered in Manhattan, Ge-Ray Fabrics, Inc. --
http://www.geray.com/-- supplies circular knitted fabrics to the
apparel industry. The fabrics include cottons and synthetics,
with and without spandex, and range from basic jersey to high
fashion knits. Lustar Dyeing & Finishing, Inc., its subsidiary,
is a dyeing & finishing processing plant for textile fabrics.
The Debtors filed for chapter 11 on April 4, 2005, (Bankr.
S.D.N.Y. Case Nos. 05-12201 & 05-12207). When they filed for
bankruptcy, the Debtors reported assets and debts totaling between
$10 million to $50 million.
HAYES LEMMERZ: Settles Dispute on Nissan North's Warranty Claims
----------------------------------------------------------------
In October 2003, Nissan North America filed an action against
Hayes Lemmerz International, Inc., before a state court in
Tennessee asserting breach of contract and breach of warranty
claims. Hayes believes that the claims arose prior to the
confirmation date and was discharged by the Plan of
Reorganization.
Hayes' vice president for finance and chief financial officer,
James A. Yost, reports to the Securities and Exchange Commission
that the Company and Nissan North have reached a settlement
resolving all of the issues in the lawsuit.
Mr. Yost adds that the Company has established a reserve with
respect to the settlement.
Hayes Lemmerz International, Inc., is a world leading global
supplier of automotive and commercial highway wheels, brakes,
powertrain, suspension, structural and other lightweight
components. The Company filed for chapter 11 protection on
December 5, 2001 (Bankr. D. Del. Case No. 01-11490) and emerged in
June 2003. Eric Ivester, Esq., and Mark S. Chehi, Esq., at
Skadden, Arps, Slate, Meager & Flom represent the Debtors. (Hayes
Lemmerz Bankruptcy News, Issue No. 66; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
* * *
As reported in the Troubled Company Reporter on April 11, 2005,
Moody's Investors Service assigned a B2 rating for HLI Operating
Company, Inc.'s proposed $150 million guaranteed senior secured
second-lien term loan facility. HLI Opco is an indirect
subsidiary of Hayes Lemmerz International, Inc. The rating
outlook remains stable.
While the company has reaffirmed its earning guidance and the
senior implied and guaranteed senior secured first-lien facility
ratings remain unchanged at B1, Moody's determined that widening
of the downward notching of HLI Opco's guaranteed senior unsecured
notes was necessary to reflect additional layering of the
company's debt. The senior unsecured notes are effectively
subordinated to the proposed new senior secured second-lien term
facility, and approximately $75 million of higher-priority debt
will be added to the capital structure.
These specific rating actions were taken by Moody's:
* Assignment of a B2 rating for HLI Operating Company, Inc.'s
proposed $150 million guaranteed senior secured second-lien
credit term loan C due June 2010;
* Downgrade to B3, from B2, of the rating for HLI Operating
Company, Inc.'s $162.5 million remaining balance of 10.5%
guaranteed senior unsecured notes maturing June 2010 (the
original issue amount of $250 million was reduced as a result
of an equity clawback executed in conjunction with Hayes
Lemmerz's February 2004 initial public equity offering);
* Affirmation of the B1 ratings for HLI Operating Company,
Inc.'s approximately $527 million of remaining guaranteed
senior secured first-lien credit facilities, consisting of:
* $100 million revolving credit facility due June 2008;
* $450 million ($427.3 million remaining) bank term loan B
facility due June 2009 (which term loan is still expected to
be partially prepaid through application of about half of the
net proceeds of the proposed incremental debt issuance);
* Affirmation of the B1 senior implied rating;
* Downgrade to Caa1, from B3, of the senior unsecured issuer
rating (which rating does not presume the existence of
subsidiary guarantees).
HIGH VOLTAGE: Ch. 11 Trustee Taps Studio Legale as Legal Counsel
----------------------------------------------------------------
Stephen S. Gray, the Chapter 11 Trustee overseeing High Voltage
Engineering Corporation and its debtor-affiliates' bankruptcy
estates, sought and obtained permission from the U.S. Bankruptcy
Court for the District of Massachusetts to employ Studio Legale
avv. prof. Francesco Mucciarelli as his legal counsel, nunc pro
tunc to Feb. 23, 2005.
Mr. Gray will employ the Firm to provide him with legal advice on
certain aspects of Italian insolvency law. In particular, the
Trustee wishes to retain the Firm to advise him regarding the
proper exercise of control by a shareholder over an Italian
company that may be or may become insolvent. The Trustee selected
the Firm based on the recommendation of Bonelli Erede Pappalardo
LLP, which advised the Debtors on Italian commercial law and
Italian company law issues.
Marco Calleri, Esq., a member of Studio Legale avv. prof.
Francesco Mucciarelli, is the lead attorney for the Trustee. Mr.
Calleri charges $400 per hour for his services.
Mr. Calleri reports the Firm's professionals bill:
Designation Hourly Rate
----------- -----------
Partners $400-$500
Associates $200-$250
To the best of the Trustee's knowledge, Studio Legale avv. prof.
Francesco Mucciarelli is disinterested as that term is defined in
Section 101(14) of the U.S. Bankruptcy Code.
Headquartered in Wakefield, Massachusetts, High Voltage filed its
second chapter 11 petition on Feb. 8, 2004 (Bankr. Mass. Case No.
05-10787). Douglas B. Rosner, Esq., at Goulston & Storrs,
represents the Debtors in their restructuring efforts. In the
Company's second bankruptcy filing, it listed $457,970,00 in total
assets and $360,124,000 in total debts. Stephen S. Gray is the
Chapter 11 Trustee for the Debtors' estates. John F. Ventola,
Esq., at Choate, Hall and Stewart represents the Chapter 11
Trustee.
HOME INTERIORS: Weak Performance Prompts S&P to Junk Credit Rating
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on
decorative home accessories direct seller Home Interiors & Gifts
Inc., including its corporate credit rating to 'CCC+' from
'B-'.
At the same time, Standard & Poor's lowered the recovery rating to
'3' from '2', reflecting Standard & Poor's assessment that secured
lenders would receive a meaningful (50%-80%) recovery in the event
of a payment default. The outlook is negative. At March 31,
2005, Carrollton, Texas-based Home Interiors had about $471.4
million in debt outstanding.
"The downgrade reflects weaker-than-expected operating performance
for the first quarter of fiscal 2005, and the disclosure in the
company's recent 10Q filing that it may breach debt covenants on
its senior bank loan for the quarter ending June 30, 2005," said
Standard & Poor's credit analyst Martin S. Kounitz. The company
had previously received relief from covenant violations under its
bank facility for the fiscal year ended Dec. 31, 2004.
EBITDA for the quarter ended March 31, 2005, adjusted for non-cash
items, declined 32% versus the same period in 2004. Profitability
eroded because of lower unit volumes of orders, a lower average
order size per sales representative, and a decrease in the number
of orders per sales representative. Direct sellers face
increasingly challenging conditions from recent entrants into the
direct selling market. Additionally, higher gas prices and
inflation have reduced the discretionary income of Home Interiors'
target consumer. Home Interiors is highly leveraged and its
credit measures are weak. Standard & Poor's is concerned that
continued weak operating performance could lead to potential
violation of bank covenants in the next quarter.
HYNIX SEMICONDUCTOR: S&P Rates Proposed $750M Senior Notes at B+
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' rating to
Hynix Semiconductor Inc.'s (B+/Stable/--) proposed Floating Rate
Senior Notes due 2012, and Senior Notes due 2015. The size of the
issuances is expected to total US$750 million. The ratings on the
senior unsecured debt are subject to final documentation.
"The rating on Hynix reflects positive expectations for the
normalization of the company's operations following the early end
to the workout plan, in addition to its greatly improved debt
maturity profile upon refinancing of bank debt. Also, Hynix has a
solid position in the dynamic random access memory industry and a
good cost position," said Standard & Poor's analyst Eun Jin Kim.
"However, these strengths are offset by the semiconductor
industry's extremely challenging operating environment:
specifically, the notoriously cyclical and capital-intensive
nature of the industry and severe pricing pressures, particularly
on commodity-like products like DRAM, from which Hynix derives the
bulk of its revenues," Ms. Kim added.
The highly cyclical nature of the semiconductor industry has lead
to volatile profitability and considerable fluctuations in Hynix's
credit protection measures. During the industry upturn in 2004,
Hynix recorded exceptionally strong earnings, with a parent-only
EBITDA margin of 48.7% and return on capital of 31.5%. Total debt
to EBITDA also recorded a strong 0.6x. But prior to 2003, Hynix
recorded operating losses for three consecutive years. As some
softening in average selling prices is expected this year,
profitability margins and debt coverage should see some
deterioration. Margins will face further pressures once
operations normalize and sales, general & administrative expenses
rise to more reasonable levels.
Total debt stood at Korean won 1.8 trillion at the end of March
31, 2005 on a parent-only basis, of which almost W1.7 trillion is
restructured debt, which was set to mature in the fourth quarter
of fiscal 2006 under the workout plan. Standard & Poor's assumes
that Hynix will be able to refinance the restructured debt within
the next six months. The newly issued debt and secured bank loans
are expected to have a tenor of five or more years, thus
significantly improving Hynix's maturity schedule.
JAKE'S GRANITE: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: Jake's Granite Supplies, L.L.C.
P.O. Box 9026
Chandler Heights, Arizona 85227
Bankruptcy Case No.: 05-10601
Chapter 11 Petition Date: June 13, 2005
Court: District of Arizona (Phoenix)
Judge: Randolph J. Haines
Debtor's Counsel: Joseph E. Cotterman, Esq.
Gallagher & Kennedy, P.A.
2575 East Camelback Road
Phoenix, Arizona 85016-9225
Tel: (602) 530-8000
Fax: (602) 530-8500
Estimated Assets: $10 Million to $50 Million
Estimated Debts: $1 Million to $10 Million
The Debtor did not file a list of its 20 Largest Unsecured
Creditors.
KANSAS CITY SOUTHERN: Completes Solicitation of 9.5% & 7.5% Notes
-----------------------------------------------------------------
Kansas City Southern (NYSE:KSU) reported the expiration and
successful completion, as of 5:00 p.m., New York time, on June 10,
2005, of the previously announced solicitation of consents by its
wholly owned subsidiary, The Kansas City Southern Railway Company,
to amend the indentures, as supplemented where applicable, under
which KCSR's outstanding 9 1/2% Senior Notes due 2008 and
outstanding 7 1/2% Senior Notes due 2009 were issued. KCSR has
received the requisite consents from a majority of the outstanding
aggregate principal amount of each series of Notes.
Accordingly, upon the terms and subject to the conditions set
forth in the Consent Solicitation Statement dated May 11, 2005,
and as thereafter amended, KCSR, KCS, the other note guarantors,
and the trustee under each of the Indentures, respectively, have
signed supplemental indentures with respect to each such series of
Notes to permit TFM, S.A. de C.V., an indirect subsidiary of KCS,
to effect a settlement of certain disputes among TFM, Grupo
Transportacion Ferroviaria Mexicana, S.A. de C.V., an indirect
subsidiary of KCS, and the Mexican government. KCS does not know
when or if a settlement of these disputes will be consummated.
Holders of the Notes may request copies of the supplements to the
Indentures by contacting Investor Relations at KCSR at 427 West
12th Street, Kansas City, Missouri, 64105 (telephone 816-983-
1551).
About the Company
Headquartered in Kansas City, Mo., Kansas City Southern --
http://www.kcsi.com/-- is a transportation holding company that
has railroad investments in the U.S., Mexico and Panama. Its
primary U.S. holdings include The Kansas City Southern Railway
Company, founded in 1887, and The Texas Mexican Railway Company,
founded in 1885, serving the central and south central U.S. Its
international holdings include a controlling interest in TFM, S.A.
de C.V., serving northeastern and central Mexico and the port
cities of Lazaro Cardenas, Tampico and Veracruz, and a 50%
interest in The Panama Canal Railway Company, providing ocean-to-
ocean freight and passenger service along the Panama Canal. KCS'
North American rail holdings and strategic alliances are primary
components of a NAFTA Railway system, linking the commercial and
industrial centers of the U.S., Canada and Mexico.
* * *
As reported in the Troubled Company Reporter on Apr. 12, 2005,
Standard & Poor's Ratings Services affirmed its ratings, including
the 'BB-' corporate credit ratings, on Kansas City Southern and
unit Kansas City Southern Railway Co., and removed the ratings
from CreditWatch, where they were placed on Dec. 15, 2004.
At the same time, Standard & Poor's raised the corporate credit
rating of unit TFM S.A. de C.V. to 'BB-' from 'B' and removed the
rating from CreditWatch, where it was placed on Dec. 15, 2004.
In addition, Standard & Poor's assigned its 'B+' rating to TFM's
$460 million senior unsecured notes due 2012 and 2015. Proceeds
from the notes offering will be used to repay existing debt.
The rating actions follow Standard & Poor's review of the
operating outlook for both companies and the impact of Kansas City
Southern's acquisition of a controlling interest in Grupo TFM
(TFM's parent) on each company's credit profile. The outlook on
Kansas City Southern, Kansas City Southern Railway Co., and TFM is
negative.
"The upgrade of TFM reflects Standard & Poor's expectation that
the financial profile of TFM will improve over the near to
intermediate term due to the planned refinancing of high interest
rate debt, marketing and cost benefits from the recent
transaction, and favorable industry conditions" said Standard &
Poor's credit analyst Lisa Jenkins. "The affirmation of Kansas
City Southern ratings reflects Standard & Poor's belief that the
TFM transaction has improved Kansas City Southern's business
profile and that favorable industry conditions will enable Kansas
City Southern to improve its currently extended financial profile
to levels consistent with its rating over the near to intermediate
term."
KID'S CASTLE: Case Summary & 21 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Kid's Castle, Inc.
60 East Gloucester Pike
Barrington, New Jersey 08007-1323
Bankruptcy Case No.: 05-29625
Type of Business: The Debtor provides daycare services. The
Debtor previously filed for chapter 11
protection on Aug. 12, 1998 (Bankr. D. N.J. Case
No. 98-17565). Castle Academy, an affiliate,
also filed for chapter 11 protection on Oct. 18,
2004 (Bankr. D. N.J. Case No. 04-43205). The
owner, Maureen Lenahan, also filed for chapter
11 protection on Apr. 1, 2005 (Bankr. D. N.J.
Case No. 05-20123).
Chapter 11 Petition Date: June 13, 2005
Court: District of New Jersey (Camden)
Debtor's Counsel: E. Richard Dressel, Esq.
Flaster Greenberg P.C.
1810 Chapel Avenue West, 3rd Floor
Cherry Hill, New Jersey 08002
Tel: (856) 661-1900
Total Assets: $11,000
Total Debts: $1,566,907
Debtor's 21 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
OCWEN $605,000
Attn: Research Department
P.O. Box 785055
Orlando, FL 32878-5055
Internal Revenue Service $315,000
Cincinnati, OH 45999-0030
OCWEN Value of Security: $153,500
Attn: Research Department $9,000
P.O. Box 785055
Orlando, FL 328878-5055
New Jersey Department of Labor $80,000
and Workforce Development
P.O. Box 077
Trenton, NJ 08625-0077
New Jersey Division of Taxation $76,119
Revenue Processing Center
P.O. Box 248
Trenton, NJ 08625-0248
Deborah Ennis $71,573
23 Rondon Place
Berlin, NJ 08009
State of New Jersey $62,075
Division of Taxation
50 Barrack
P.O. Box 269
Trenton, NJ 08695-0269
David Hann $50,000
333 Haines Avenue
Barrington, NJ 08007
Internal Revenue Service $27,965
Cincinnati, OH 45999-0030
Paul Lazar $25,000
14 Lantern Lane
Cherry Hill, NJ 08002-1622
Charles J. Becker & Bros., Inc. $17,404
12300 McNutty Road
Philadelphia, PA 19154-1098
State of New Jersey $17,313
New Jersey Division of Taxation
Corporate Service Audit - B
P.O. Box 277
Trenton, NJ 08895-0277
George J. Baker & $14,400
Baker Architects
3204 Belgreen Road
Philadelphia, PA 19154
State of New Jersey $11,133
Division of Taxation
50 Barrack
P.O. Box 269
Trenton, NJ 08695-0269
Violet Brown $7,776
246 Oneida Place
North Plainfield, NJ 07060
State of New Jersey $7,725
Department of Treasury
One Port Center, Suite 200
Camden, NJ 08103
Sun Roofing $4,000
69 Schultz Avenue
Erial, NJ 08081
State of New Jersey $3,557
Division of Taxation
50 Barrack
P.O. Box 269
Trenton, NJ 08695-0269
State of New Jersey $3,557
Division of Taxation
50 Barrack
P.O. Box 269
Trenton, NJ 08695-0269
State of New Jersey $3,511
Division of Taxation
50 Barrack
P.O. Box 269
Trenton, NJ 08695-0269
Eirmann & DeMilt & $1,200
Associates, Inc.
102-18 159th Avenue
Howard Beach, NY 11414-3527
LACY HENRY: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Lacy M. & Judy B. Henry
P.O. Box 966
Atlantic Beach, North Carolina 28512
Bankruptcy Case No.: 05-04620
Chapter 11 Petition Date: June 13, 2005
Court: Eastern District of North Carolina (Wilson)
Judge: J. Rich Leonard
Debtor's Counsel: Trawick H Stubbs, Jr., Esq.
Stubbs & Perdue, P.A.
P.O. Drawer 1654
New Bern, North Carolina 28563
Tel: (252) 633-2700
Fax: (252) 633-9600
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
------ --------------- ------------
Internal Revenue Service $570,762
Attn: Insolvency I
320 Federal Place
Greensboro, NC 27402
Chase BankOne Credit Card $33,080
Attn: Managing Agent
P.O. Box 15153
Wilmington, DE 198865133
Carteret General Hospital Medical Services $18,400
Attn: Managing Agent
P.O. Drawer 1619
Morehead City, NC 28557
Internal Revenue Service Income Tax $17,994
Attn: Insolvency I
320 Federal Place
Greensboro, NC 27402
Chase BankOne Credit Card $12,631
Attn: Managing Agent
P.O. Box 15153
Wilmington, DE 198865133
First Citizens Bank Credit Card $11,432
Attn: Managing Agent
P.O. Box 9700
Hillsville, VA 243430700
Sears Credit Card $9,150
Attn: Managing Agent
P.O. Box 182149
Columbus, OH 432182149
Bank of America Credit Card $8,636
Attn: Managing Agent
P.O. Box 5270
Carol Stream, IL 601975270
Holy Cross Medical Services $8,400
Attn: Managing Agent
4725 North Federal Hwy
Fort Lauderdale, FL 33308
Chase BankOne Credit Card $6,914
Attn: Managing Agent
P.O. Box 15153
Wilmington, DE 198865130
Carteret County Tax Coll Taxes $4,462
Attn: Managing Agent
Courthouse Square
Beaufort, NC 285161898
Reed Jewelers Credit Card $4,007
Attn: Managing Agent
P.O. Box 659705
San Antonio, TX 782659705
New Hanover Co Tax Coll Taxes $3,775
Attn: Managing Agent
P.O. Box 18000
Wilmington, NC 28406
Chase Credit Card $2,797
Attn: Managing Agent
P.O. Box 15650
Wilmington, DE 198865650
Belk Credit Card $1,832
Attn: Managing Agent
P.O. Box 1099
Charlotte, NC 282011099
Carteret County Tax Coll Taxes $1,714
Attn: Managing Agent
Courthouse Square
Beaufort, NC 285161898
JC Penney Credit Card $1,619
Attn: Managing Agent
P.O. Box 960001
Orlando, FL 328960001
Carteret County Tax Coll Taxes $1,172
Attn: Managing Agent
Courthouse Square
Beaufort, NC 285161898
Town of Beaufort Tax Coll Taxes $1,112
Attn: Managing Agent
P.O. Box 390
Beaufort, NC 285160390
Town of Atlantic Bch Tax Taxes $810
Attn: Managing Agent
P.O. Box 10
Atlantic Beach, NC 28512
LEONARD FARINOLA: Case Summary & 5 Largest Unsecured Creditors
--------------------------------------------------------------
Debtors: Leonard J. Farinola & Angela A. Farinola
345 Rumson Road
Little Silver, New Jersey 07739
Bankruptcy Case No.: 05-29714
Type of Business: Leonard Farinola is a musician and Angela
Farinola is a medical secretary of Claudio
D'Alberti, MA.
Chapter 11 Petition Date: June 14, 2005
Court: District of New Jersey (Trenton)
Debtors' Counsel: Charles V. Sgro, Esq.
Law Office of Charles V. Sgro
612 Bergen Boulevard
Ridgefield, New Jersey 07657
Tel: (201) 941-0990
Total Assets: $2,274,996
Total Debts: $4,639,190
Debtor's 5 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Ocean Church Foundation Construction $2,000,000
c/o Baker & Hostetler, LLP Litigation
666 Fifth Avenue
New York, NY 10103
Nancy Liebowitz Suit by ex-wife $100,000
c/o Charles Epstein, Esq.
27 Warren Street
Hackensack, NJ 07601
Citi Bank Credit Card $17,914
c/o Acadent Collection
Service Inc.
10965 Decatur Road
Philadelphia, PA 19154-3210
Biagiotti, Marino & Montecallo Legal Fees $4,215
190 Moore
Street
Hackensack, NJ 07601
Pashman & Stein Legal Fees $1,157
Counselors At Law
Court Plaza South
21 Main Street
Hackensack, NJ 07601
MADISON AVENUE: Moody's Reviews CDO Ratings & May Upgrade
---------------------------------------------------------
Moody's Investors Service reported that as part of the rating
monitoring process it has placed these Class of Notes issued by
Madison Avenue CDO II, Limited, a collateralized debt obligation
issuance, on the Moody's Watchlist for possible upgrade:
(1) $415,000,000 Class A Floating Rate Notes Due 2014 rated A1.
(2) $31,000,000 Class B Floating Rate Notes Due 2014 rated B3.
Moody's noted that the transaction, which closed in March of 2001,
has experienced a reduction in the weighted average rating factor
of the underlying collateral pool. Also, the level of
overcollateralization has increased due to amortization of the
Class A Notes.
Moody's stated that placement on the Watchlist for possible
upgrade reflects Moody's opinion that the credit quality of the
Class A Notes and the Class B Notes may be improving.
Rating Action: Placement on Moody's Watchlist for possible upgrade
Issuer: Madison Avenue CDO II, Limited
The rating of these Classes of Notes have been placed on the
Moody's Watchlist for possible upgrade:
Class Description:
* U.S. $415,000,000 Class A Floating Rate Notes Due 2014
currently rated A1.
* U.S. $31,000,000 Class B Floating Rate Notes Due 2014
currently rated B3.
MERIDIAN AUTOMOTIVE: Court Limits Gavin Anderson's Indemnification
------------------------------------------------------------------
Judge Walrath of the U.S. Bankruptcy Court for the District of
Delaware authorizes Meridian Automotive Systems, Inc., and its
debtor-affiliates to employ, compensate, and reimburse Gavin
Anderson & Company, Inc., nunc pro tunc to the Debtors' bankruptcy
petition date, to provide corporate advisory, public relations,
and strategic and crisis communications services on the terms set
forth in the Engagement Letter, subject to these modifications:
(1) Gavin Anderson will not be entitled to indemnification or
reimbursement for services other than the services
provided under the Engagement Letter, without prior Court
approval;
(2) The Debtors will have no obligation to indemnify or
provide contribution or reimbursement to the firm for any
claim or expense that is either:
(a) judicially determined to have arisen from the firm's
negligence stemming from acts and omissions that are
not based on information provided by the Debtors,
gross negligence, willful misconduct, breach of
fiduciary duty, if any, bad faith or self-dealing; or
(b) settled prior to a judicial determination, after
notice and a hearing, to be a claim or expense for
which the firm should not receive indemnity or
reimbursement; and
(3) The firm must file an application with the Court, in the
event that it determines that it is entitled to payment of
any amounts by the Debtors on account of their
indemnification, contribution and reimbursement
obligations under the Engagement Letter, before the
earlier of (x) the entry of a final order confirming a
Chapter 11 plan in the Debtors' cases, and (y) the entry
of an order closing the Debtors' cases.
Furthermore, Judge Walrath eliminates the simple interest imposed
on the Debtors, pursuant to the Engagement Letter, if they fail
to pay any invoice within 45 days of its receipt. The simple
interest is computed at 1% over the prime rate of interest in
effect at The Chase Manhattan Bank, in New York City, on the
amount outstanding at the end of the 45-day period, until Gavin
Anderson receives the payment.
Headquartered in Dearborn, Mich., Meridian Automotive Systems,
Inc. -- http://www.meridianautosystems.com/-- supplies
technologically advanced front and rear end modules, lighting,
exterior composites, console modules, instrument panels and other
interior systems to automobile and truck manufacturers. Meridian
operates 22 plants in the United States, Canada and Mexico,
supplying Original Equipment Manufacturers and major Tier One
parts suppliers. The Company and its debtor-affiliates filed
for chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case
Nos. 05-11168 through 05-11176). James F. Conlan, Esq., Larry J.
Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at
Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon
L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks,
Esq., at Young Conaway Stargatt & Taylor, LLP, represent the
Debtors in their restructuring efforts. When the Debtors filed
for protection from their creditors, they listed $530 million in
total assets and approximately $815 million in total liabilities.
(Meridian Bankruptcy News, Issue No. 7; Bankruptcy Creditors'
Service, Inc., 215/945-7000).
MERIDIAN AUTOMOTIVE: Panel Hires Winston & Strawn as Lead Counsel
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors seeks authority from
the U.S. Bankruptcy Court for the District of Delaware to retain
Winston & Strawn LLP, as counsel in Meridian Automotive Systems,
Inc., and its debtor-affiliates' Chapter 11 cases, nunc pro tunc
to May 9, 2005.
Thomas L. Fitzpatrick, Esq., co-chairperson of the Committee,
informs Judge Walrath that Winston & Strawn has an extensive
restructuring and insolvency practice and is experienced in
dealing in other areas of the law like the employment relations,
tax, securities, intellectual property, corporate, finance, and
litigation. The firm represents debtors, creditors, committees
and other parties-in-interest in bankruptcy cases and in out-of-
court debt restructuring and workouts.
In light of Winston & Strawn's experiences and expertise and the
Debtors' business and financial affairs, the Committee believes
that the firm is well qualified to represent it in the Debtors'
cases.
As counsel, Winston & Strawn will:
(a) provide legal advice to the Committee with respect to its
duties and powers in the Debtors' cases;
(b) consult with the Committee and the Debtors concerning the
administration of the Debtors' cases;
(c) assist the Committee in its investigation of the Debtors'
acts, conduct, assets, liabilities, and financial
condition, operation of the Debtors' business, the
desirability of continuing or selling the Debtors'
business and assets, the formulation of a Chapter 11 plan
of reorganization, or any other matter relevant to the
Debtors' cases;
(d) assist the Committee in evaluating claims against the
Debtors' estates, including analysis of and possible
objections to the validity, priority, amount,
subordination, or avoidance of claims and transfers or
property in consideration of the claims;
(e) assist the Committee in participating in the formulation
of a Chapter 11 plan, including the Committee's
communications with the unsecured creditors concerning any
reorganization plan;
(f) assist the Committee with any effort to request the
appointment of a trustee or examiner;
(g) advise and represent the Committee in connection with
matters generally arising in the Debtors' cases, including
the obtaining of credit, the sale of assets, and the
rejection or assumption of executory contracts and
unexpired leases;
(h) appear before the Court, any other federal court, state
court or appellate courts; and
(i) perform other legal services, as may be required, which
are in the interests of unsecured creditors.
As compensation for Winston & Strawn's services, the Debtors will
pay the firm at its customary hourly rates, plus reimbursement of
actual and necessary expenses:
Partners $360 - $765
Associates $225 - $470
Legal Assistants $105 - $230
Eric E. Sagerman, Esq., a partner at Winston & Strawn, discloses
that the firm represented General Electric Capital Corporation in
April 2004 in conducting a due diligence review of loan documents
to assist GECC in determining whether to purchase a portion of
the commitments of the Debtors' lending syndicate. Winston &
Strawn never represented GECC in negotiations with Meridian, the
documentation of any purchase of debt of meridian or other
matters vis-a-vis Meridian. The attorney who reviewed the loan
documents for GECC is no longer associated with the firm.
GECC is not a lender to the Debtors as of the Petition Date.
Mr. Sagerman assures the Court that the firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code, as modified by Section 1107(b). The firm does
not hold or represent an interest adverse to the Committee or the
Debtors' estates.
The Committee, Mr. Fitzpatrick reports, has already sought Court
authority to retain Ashby & Geddes, P.A., as co-counsel. If it
becomes necessary for the Committee to participate in an action
involving one of Winston & Strawn's clients, Ashby will serve as
conflicts counsel with respect to that action unless the
Committee determines that it is appropriate to retain additional,
separate counsel or a sufficient waiver is obtained.
Headquartered in Dearborn, Mich., Meridian Automotive Systems,
Inc. -- http://www.meridianautosystems.com/-- supplies
technologically advanced front and rear end modules, lighting,
exterior composites, console modules, instrument panels and other
interior systems to automobile and truck manufacturers. Meridian
operates 22 plants in the United States, Canada and Mexico,
supplying Original Equipment Manufacturers and major Tier One
parts suppliers. The Company and its debtor-affiliates filed
for chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case
Nos. 05-11168 through 05-11176). James F. Conlan, Esq., Larry J.
Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at
Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon
L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks,
Esq., at Young Conaway Stargatt & Taylor, LLP, represent the
Debtors in their restructuring efforts. When the Debtors filed
for protection from their creditors, they listed $530 million in
total assets and approximately $815 million in total liabilities.
(Meridian Bankruptcy News, Issue No. 7; Bankruptcy Creditors'
Service, Inc., 215/945-7000).
MERIDIAN AUTOMOTIVE: Panel Hires Ashby & Geddes as Counsel
----------------------------------------------------------
Thomas L. Fitzpatrick, Esq., co-chairperson of the Official
Committee of Unsecured Creditors, tells the U.S. Bankruptcy Court
for the District of Delaware that the Committee has selected Ashby
& Geddes, P.A., as its Delaware counsel. The firm has substantial
experience in bankruptcy, insolvency, corporate reorganization and
debtor/creditor law and commercial law. The Committee believes
that the firm is well qualified to represent it in Meridian
Automotive Systems, Inc., and its debtor-affiliates' cases.
Accordingly, the Committee asks the Court to approve the
retention of Ashby & Geddes, effective as of May 11, 2005.
The Committee needs Ashby & Geddes to:
(a) provide legal advice regarding the rule and practices of
the Court applicable to the Committee's powers and duties
as an official committee appointed under Section 1102 of
the Bankruptcy Code;
(b) provide legal advice regarding any disclosure statement
and Chapter 11 plan of reorganization filed in the
Debtors' Chapter 11 cases and with respect to the process
for approving or disapproving disclosure statements and
confirming or denying a reorganization plan;
(c) prepare and review applications, motions, complaints,
orders, agreements and other legal papers filed on or
behalf of the Committee for compliance with the Court's
rules and practices;
(d) appear in Court to represent necessary motions,
applications and pleadings protecting the Committee's
interests and the Debtors' unsecured creditors; and
(e) perform other legal services for the Committee, as may be
necessary and proper in the Debtors' cases.
The Debtors will pay Ashby & Geddes for its services on an hourly
basis, plus reimbursement of expenses. The attorneys and
paralegals that will primarily render services to the Committee
and their hourly rates are:
Professional Position Rate
------------ -------- ----
William P. Bowden Partner $440
Christopher S. Sontchi Partner $395
Gregory A. Taylor Associate $285
Amanda M. Winfree Associate $165
Susan Brown Paralegal $150
William P. Bowden, Esq., a partner at Ashby & Geddes, assures
Judge Walrath that the firm is a "disinterested person" within
the meaning of Section 101(14) of the Bankruptcy Code. The firm
has no interest in or connection with any creditor, the
Committee, or other parties-in-interest in the Debtors' cases.
Headquartered in Dearborn, Mich., Meridian Automotive Systems,
Inc. -- http://www.meridianautosystems.com/-- supplies
technologically advanced front and rear end modules, lighting,
exterior composites, console modules, instrument panels and other
interior systems to automobile and truck manufacturers. Meridian
operates 22 plants in the United States, Canada and Mexico,
supplying Original Equipment Manufacturers and major Tier One
parts suppliers. The Company and its debtor-affiliates filed
for chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case
Nos. 05-11168 through 05-11176). James F. Conlan, Esq., Larry J.
Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at
Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon
L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks,
Esq., at Young Conaway Stargatt & Taylor, LLP, represent the
Debtors in their restructuring efforts. When the Debtors filed
for protection from their creditors, they listed $530 million in
total assets and approximately $815 million in total liabilities.
(Meridian Bankruptcy News, Issue No. 7; Bankruptcy Creditors'
Service, Inc., 215/945-7000).
MIRANT: Views Exchanged on Relevance of Till Case in Valuation
--------------------------------------------------------------
Judge Lynn of the U.S. Bankruptcy Court for the Northern District
of Texas asked the parties-in-interest, at a hearing on May 10,
2005, to determine the enterprise value of Mirant Corporation and
its debtor-affiliates, to answer two questions:
1. Does the holding of the United States Supreme Court in Till
v. SCS Credit Corp., 541 U.S. 465 (2004), establish a
standard independent from market value for assessing the
amount a party is entitled to receive in the context of a
cramdown under the Bankruptcy Code's absolute priority
rule?
2. Are cramdown principles under Section 1129(b) of the
Bankruptcy Code, including those enunciated in Till,
relevant to valuation of the Debtors, including the
determination of an appropriate weighted average cost of
capital in connection therewith?
Parties' Answers
(A) Wilson Shareholders
Certain shareholders represented by The Wilson Law Firm, P.C., in
Atlanta, Georgia, believes that the principles in Till v. SCS
Credit Corp., 541 U.S. 465, 124 S.Ct. 1951, 158 L.Ed.2d 787
(2004) applies to the Debtors' Valuation.
According to L. Matt Wilson, Esq., the Till case presents a
question as to which of the possible formulas for the
determination of the proper interest rate should lower courts
apply in determining the value of future streams of income or
payments under a discounted cash flow or net present value
calculation:
(1) the national prime rate plus a risk factor;
(2) the "risk-free" rate applied by Justice Thomas who
concurred in the Till case judgment; or
(3) the dissent proposed adoption of the contract rate as a
presumption adjustable by motion of the parties.
Mr. Wilson notes that applying each formula proposed in Till will
achieve the same very narrow range of interest rates -- between
5% and 8% -- under the facts and circumstances of the case, which
place equity "in the money." Though it is free to do so, Mr.
Wilson suggests that the Court need not "select" from one of the
three approaches in Till, but rather, need only rule as a matter
of law that Till applies.
(B) Debtors
According to Ian T. Peck, Esq., at Haynes and Boone, LLP, in
Dallas, Texas, the Till case provides a detailed and nuanced
discussion of the interest rate to which a secured lender is
entitled in connection with its receipt of deferred cash payments
under a Chapter 13 debt adjustment plan. The plurality,
concurrence and dissent each reach a different conclusion as to
the calculus to be used in determining that interest rate, Mr.
Peck explains. The plurality also states that its ruling is
likely applicable to other Bankruptcy Code provisions involving
deferred payments to creditors and interest holders, but suggests
that its ruling may be of limited import in the sharply different
commercial context of cramdown under Chapter 11, Mr. Peck further
relates.
The precise delineation of Till's application in Chapter 11 thus
remains unclear, Mr. Peck notes. "However, it is absolutely
clear that [the] application, if any, should be limited to the
context of plans of reorganization which provide for deferred
payments to creditors and interest holders."
Mr. Peck asserts that the Till decision has no relevance to the
Debtors' enterprise valuation. "To the contrary, applying Till
to the Debtors' enterprise valuation would disregard established
Supreme Court precedent."
(C) MAGi Committee
The Official Committee of Unsecured Creditors of Mirant Americas
Generation, LLC, believes that the Supreme Court's analysis in
Till case does not modify or overrule the valuation methodologies
generally recognized by both experts and the courts as being
appropriate for enterprise valuation in Chapter 11 cases.
Deborah D. Williamson, Esq., at Cox Smith Matthews Incorporated,
in San Antonio, Texas, relates that the issue before the Supreme
Court in Till was how to determine the appropriate rate of
cramdown interest that a secured creditor should receive under
Section 1325 of the Bankruptcy Code, to compensate the creditor
for receiving plan payments on his claim over time. In seeking
to balance the need for expediency in Chapter 13 cases with the
need to adequately compensate creditors for the possible risk of
nonpayment, the Supreme Court chose a "prime plus" formula rate
of interest. In choosing this particular rate, Ms. Williamson
says the Court was faced with a specific set of circumstances and
chose a solution tailored to meet those facts.
The Till opinion, Ms. Williamson says, does not state that it is
intended to address all aspects of valuation, including
enterprise valuation in a complex Chapter 11 case. Indeed, the
Supreme Court explicitly acknowledged in Till that other means of
determining an interest rate may be appropriate in Chapter 11
cases where, unlike cases under Chapter 13, substantial market-
based information relating to the risk of non-payment and the
debtor's cost of debt is available.
Moreover, the Supreme Court's Till opinion gives no indication
that it is intended to be controlling precedent with respect to
how courts should calculate both the cost of debt and the cost of
equity in valuations. Given that the Supreme Court's decision in
Till does not address these issues and decides only the cramdown
interest rate in the context of a Chapter 13 case, the opinion
does not substantially alter the Chapter 11 enterprise valuation
landscape, Mr. Williamson contends.
Therefore, MAGi Committee asserts, the decision should not change
the enterprise valuation methodologies accepted and utilized in
most complex Chapter 11 reorganizations.
(D) Equity Committee
The Official Committee of Equity Security Holders agrees that
"any recovery to creditors above the face amount of their claims,
plus compensation for the time value of money and the risk of
default, is violative of the absolute priority rule under the
Bankruptcy Code. "That concept has tremendous significance in
the context of the post-emergence distribution of equity
securities to Mirant Corp. creditors," Eric J. Taube, Esq., at
Hohmann, Taube & Summers, LLP, in Austin, Texas, tells the Court.
Mr. Taube notes that each of the experts in the Debtors' cases
has derived a weighted average cost of capital for use in the
discounted cash flow method of valuation. Among other
methodologies, the experts have used the capital asset pricing
model to determine the expected rate of return on the Debtors'
equity securities. Using these methodologies, the experts have
calculated the expected rate of return on the Debtors' equity
securities to be at least 15.1% -- nearly double the rate of
interest (prime plus an appropriate risk factor) to which
creditors are entitled under the principles of Till, Mr. Taube
relates.
To determine the appropriate rate of distributions to Mirant
Corp. creditors, Mr. Taube suggests that the Court must ensure
that to the extent the Mirant Corp. creditors receive primary
equity, they receive only their pro rata share of new equity
securities in light of the expected 15.1% rate of return.
The principles of Till, Mr. Taube says, govern the appropriate
distributions to creditors regardless of whether the value to be
distributed is nominally identified as equity securities or
corporate bonds.
(E) Mirant Corp. Committee
Representing the Official Committee of Unsecured Creditors of
Mirant Corporation, Paul N. Silverstein, Esq., at Andrews Kurth
LLP, in Dallas, Texas, contends that even if Till deemed to
provide guidance to the Debtors' valuation dispute, the
utilization of a "prime plus" approach to calculate the weighted
average cost of capital would lead to a perverse and grossly
overstated valuation.
Mr. Silverstein asserts that the Till decision offers no guidance
to the Debtors' valuation proceeding because:
(a) It is doubtful that Till ever should be looked to as
precedent in a Chapter 11 case, if the purpose of looking
to Till is the adoption of a "prime plus" formula for
determining an applicable rate of interest. Although the
plurality opinion points to the similarity between Section
1325(a)(5)(B)(ii) and Section 1129(b)(2)(B)(i) of the
Bankruptcy Code, the absence of a readily available market
for Chapter 13 exit financing weighed heavily in the
decision -- a market that Till itself recognizes readily
exists for corporate Chapter 11 debtors;
(b) Till is not a solvency or valuation decision. Rather, it
involved the determination of the proper rate of interest
to be paid for cramdown purposes under Chapter 13; and
(c) Till was limited to determining the value of debt, and has
no direct applicability to equity being distributed under
a plan -- a concept which simply does not exist in Chapter
13.
The Mirant Corp. Committee therefore asks the Court to determine
the weighted average cost of capital based on market driven
valuation methodologies -- methodologies that have been advocated
by all "experts" and all parties to the valuation dispute.
Headquartered in Atlanta, Georgia, Mirant Corporation --
http://www.mirant.com/-- is a competitive energy company that
produces and sells electricity in North America, the Caribbean,
and the Philippines. Mirant owns or leases more than 18,000
megawatts of electric generating capacity globally. 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. 66; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
MIRANT CORP: Gets Court Okay to View Troutman Client-Matter Files
-----------------------------------------------------------------
As reported in the Troubled Company Reporter on June 2, 2005,
Mirant Corporation and its debtor-affiliates asked the U.S.
Bankruptcy Court for the Northern District of Texas to compel
Troutman Sanders LLP to produce some documents regarding Southern
Company's spin-off of Mirant Corporation in 2000.
The Board of Directors of Mirant formed a special committee, in
spring 2004, to investigate potential claims and causes of action
that may be asserted against Southern or other parties arising
from Mirant's IPO and all other transactions and transfers leading
up to the Spin-Off. White & Case LLP was engaged to conduct the
investigation.
Before the Debtors filed for bankrupcty, Troutman Sanders LLP was
their primary outside counsel. Troutman represented Southern and
continues to represent Southern as its lead outside counsel.
Troutman also acted as "legal counsel" for Project Olympus,
simultaneously representing both Mirant and Southern.
Court Requests Briefs
At a hearing on May 26, 2005, the Court asked the parties to
submit briefs on the legal issue of whether Southern Company is
entitled to assert its attorney-client privilege to prevent
discovery of certain requested documents of its outside counsel,
Troutman Sanders L.L.P. The issues raised are:
1. Whether Troutman's performance of legal services both for
The Southern Company and for Mirant vitiates Southern
Company's attorney-client privilege vis-a-vis Mirant?
2. Whether the fact that there were overlapping directors
between Southern Company and Mirant before the spin-off on
April 2, 2001, cut off Southern Company's right to assert
attorney-client privilege with respect to the Troutman
documents vis-a-vis former subsidiary?
Parties' Briefs
A. The Southern Company
"A client, as a general rule, has a privilege to decline
disclosure of confidential communications with its lawyers on the
subject of representation," Evelyn H. Biery, Esq., at Fulbright &
Jaworski L.L.P., in Houston, Texas, explains. "The question here
is whether [The Southern Company's] privilege for communication
with [Troutman Sanders LLP] is abrogated in the particular
circumstances of this case. The answer is 'no'."
Ms. Biery relates that before the initial public offering in
September 2000, when Southern Company was the 100% parent of
Mirant, Troutman's representation of the two legal entities
presented no issue of conflict. "There is no requirement of
separate counsel for a parent and a subsidiary. A subsidiary
owes fiduciary duties to its parent, but the parent owes no
fiduciary duties to its subsidiary, and certainly has no duty to
disclose confidential attorney-client communications to the
subsidiary," Ms. Biery argues.
"The presence of overlapping directors does not affect this
rule," Ms. Biery continues. "After the IPO and after the spin-
off on April 2, 2001, there was no impropriety in Troutman's
representation of each company, particularly since the
relationship was the subject of a written agreement, by which
each client permissibly and properly agreed that it would not
have access to the confidences of the other."
B. Troutman Sanders
Frank Hill, Esq., at Hill Gilstrap, P.C., in Fort Worth, Texas,
asserts that there is no basis for the Debtors' position that
Southern Company cannot assert privilege against Mirant with
respect to pre-IPO file materials maintained by Troutman for its
representation of Southern. According to Mr. Hill, "under the
governing Delaware case law and Georgia ethics rules governing
lawyers, the Court can have no reasonable concern with respect to
Troutman's pre-IPO legal representations."
Mr. Hill notes that the Protocol for Legal Representation entered
into by Southern, Mirant and Troutman, is simply a mutual
conflicts waiver and an undertaking, which would be implied by
the ethics rules in any event, to maintain the confidences and
secrets of each client who grants that waiver. "Although the
Court seemed concerned about the Protocol, there is no reason to
be," Mr. Hill says. "The IPO took place four to six weeks
earlier, and formalizing Troutman's engagement situation was
totally appropriate if not ethically required."
Moreover, looking at the transactions and transfers that followed
the IPO, Mr. Hill points out that nothing occurred that should be
of structural concern to the Court regarding Troutman's role or
Southern's right to assert privilege.
Whatever may be the Debtors' basis for their threatened suit
against Southern, Mr. Hill expects that it must be bottomed on
alleged conduct which occurred while Mirant was a wholly owned
subsidiary of Southern. "The alleged conduct cannot, under
controlling Delaware corporate governance principles, be based on
a fiduciary duty owed by Southern to Mirant, for there was none."
Mr. Hill recounts that the Debtors allege they may have been
"forced" to enter into the Protocol, and therefore it should not
be given due recognition. Mr. Hill contends that Mirant
expressly ratified the Protocol in writing after it became
independent of Southern.
Southern's spin-off of its post-IPO 80% interest in Mirant
occurred on April 2, 2001. According to Mr. Hill, Mirant's
directors who were then officers or directors of Southern either
resigned their Southern or Mirant positions. Mirant became
completely independent of Southern after the spin-off, Mr. Hill
notes.
Mr. Hill maintains that Troutman's representations were neither
unusual nor suspect. "There is nothing unusual here that should
give the Court pause or cause the Court to think of Troutman's
files established . . . as somehow tainted or unworthy of
traditional privilege analysis. The case cannot be made for the
Court to blithely ignore or shove aside due consideration of
Southern's attorney-client privilege assertion," Mr. Hill says.
C. Debtors
Southern could not have reasonably expected that the documents
and communications asked would be kept confidential from Mirant,
Robin E. Phelan, Esq., at Haynes and Boone, LLP, in Dallas,
Texas, points out. "This fact does not change even if the
directors of Southern did not owe Mirant a fiduciary duty."
Mr. Phelan enumerates a variety of reasons why legal advice given
to a parent company is not confidential from a wholly owned
subsidiary:
(1) the attorney represents the entire corporate "enterprise"
and, thus, has a fiduciary duty to disclose information to
a member of that enterprise that could affect the member's
interest;
(2) the attorney jointly represents the parent and wholly
owned subsidiary in the same transaction and, thus,
information exchanged between a co-client and the attorney
is not considered confidential from the other co-client;
and
(3) the legal advice is imputed to the subsidiary because it
is known by the attorney for the parent company who is
deemed an agent of the subsidiary, as well as, because
legal advice given to a corporation is imputed to its
directors and, where some of those directors are also
directors of the subsidiary, the legal advice is imputed
to the subsidiary because a company is charged with notice
of everything known by its directors.
Mr. Phelan contends that the Protocol does not prevent disclosure
because the documents are not confidential from Mirant. The
Protocol is also inapplicable because it does not contain any
specific agreement by Mirant that legal advice Troutman may give
to Southern relating to the IPO and Spin-Off could be kept secret
from Mirant, Mr. Phelan says.
Mirant Corp. Committee Responds
to Southern and Sanders' Briefs
According to the Official Committee of Unsecured Creditors of
Mirant Corporation, the documents held by Troutman may be
categorized as Southern-only Documents, Mirant-only Documents and
Southern/Mirant Documents. These documents pertain to matters in
which Troutman represented only Southern, only Mirant, or Mirant
and Southern as co-clients.
John A. Lee, Esq., at Andrews Kurth LLP, in Houston, Texas,
contends that under the Sup. Ct. Standard 503(d)(5), no lawyer-
client privilege exists for "a communication relevant to a matter
of common interest between two or more clients if the
communication was made by any of them to a lawyer retained or
consulted in common, when offered in an action between any of the
clients. This is precisely our situation."
Troutman ignores the rule, Mr. Lee says, because the firm
allegedly argued that the Protocol creates an exception to the
rule. Mr. Lee contends that Troutman's assertion is wrong for
three reasons:
(1) The rule allows for no exceptions. Troutman was "retained
or consulted in common" by Southern and Mirant, and they
had a "common interest" in the IPO and Spin-Off, hence,
the lawyer-client privilege does not pertain to any
"communication relevant to" those matters of common
interest. To allow an exception would allow a lawyer to
choose one client over another, which the rule is designed
to prevent;
(2) The Protocol would only apply to communications after it
was in place -- November 15, 2000. If a communication
occurred before then, it necessarily could not have been
cloaked with the Protocol's "protection." Communications
that are not privileged when made do not become privileged
later, because the privilege applies only as necessary to
encourage open communication between lawyer and client;
and
(3) The Protocol does not even explicitly create an exception
to the rule. The Protocol, in relevant part, merely
obligates Troutman to "protect" and "not share"
"confidences" of each party.
Troutman has fulfilled its duty to protect these "confidences,"
Mr. Lee says. But the "confidences" provision is silent on who
owns a privilege, Mr. Lee points out. According to Mr. Lee, the
duty of a lawyer to maintain confidences is different from the
privilege. "The rule of client-lawyer confidentiality applies in
situations other than those where evidence is sought from the
lawyer through compulsion of law."
The issue is one "where evidence is sought from the lawyer
through compulsion of law," Mr. Lee emphasizes. "Confidential,
in contrast to privileged information is not protected from
discovery. Because the Protocol only addresses confidences, not
privileged information, it does not address the existing issue.
In addition, though the Protocol in other contexts deals with the
parties being adverse to each other in other matters, the
'confidences' provision does not. The Protocol, therefore,
applied to the clients' ongoing relationship, but not to the
situation we are in now -- the former co-clients being adverse
to each other."
Accordingly, the Protocol does not disturb the general rule that
privileges do not exist between co-clients.
Mr. Lee adds that Troutman cites no case for the nonsensical
proposition that the beneficiary of a fiduciary relationship
retains privileges against the fiduciary when otherwise no
privilege exists. A fiduciary duty may affect whether and how a
privilege should be asserted, but it does not affect whether the
privilege exists.
Mr. Lee points out that Southern is a co-client and, therefore,
can preclude Troutman from disclosing the Southern/Mirant
Documents to third parties. As to Mirant, however, it cannot
deprive a fellow co-client of its documents.
Troutman's representation of both Southern and Mirant is
distinguished from the joint defense privilege, which Troutman
and Southern apparently confuse. The joint defense privilege
pertains when different lawyers represent two clients, and the
rule in those situations is found in Sup. Ct. Standard 503(b)(3):
When the first client confidentially communicates "to a
lawyer representing another [client] in a matter of common
interest," the first client may have "a privilege to refuse
to disclose and to prevent any other person from disclosing"
that communication.
The Mirant Corp. Committee therefore asks the Court to order
Troutman to:
(a) identify all matters in which it contends it represented
only Southern;
(b) produce to Mirant all non-privileged documents in the
files of the matters; and
(c) produce to Mirant all documents in the files of matters in
which Troutman represented Mirant, either alone or jointly
with Southern.
If Troutman removes any documents from the files before
production because the document was mis-filed, it must identify
the document, the file from which it came, and the basis for the
removal of the document.
If a dispute arises regarding the issues, the parties may return
to the Court for resolution, the Mirant Committee suggests.
Judge Lynn Rules
The Court sustains Troutman's Objection in part and denies the
Debtors' request in part as they rely on Rule 2004 of the Federal
Rules of Bankruptcy Procedure and Section 542(e) of the
Bankruptcy Code.
Judge Lynn grants the Debtors' request to the extent that
Troutman Sanders will turnover of all the Debtors' client-matter
files or those that may be later designated in writing by the
parties. The files will be turned over only after Troutman had
reviewed the same to remove its own property or the property of
others. The Debtors will review the files at Troutman Sander's
offices where they are kept in the ordinary course of business.
The Debtors will pay copying costs except for original documents
that were provided to Troutman Sanders, which originals will be
copied at the expense of Troutman Sanders.
The Court will resolve any residual Section 542(e) dispute
between the Debtors and Troutman Sanders upon proper motion.
Headquartered in Atlanta, Georgia, Mirant Corporation --
http://www.mirant.com/-- is a competitive energy company that
produces and sells electricity in North America, the Caribbean,
and the Philippines. Mirant owns or leases more than 18,000
megawatts of electric generating capacity globally. 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. 66; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
MIRANT: CSFB Wary Over Releases in Gas Transmission Settlement
--------------------------------------------------------------
Credit Suisse First Boston, as agent under a Four Year Credit
Agreement dated July 17, 2001, and on behalf of Wachovia Bank,
N.A., has contacted Mirant Corporation and its debtor-affiliates
with a proposal regarding the Debtors' settlement with Gas
Transmission Northwest Corp.
CSFB wants to make certain that the proposed settlement and
release of GTN's claims does not impair, limit or prejudice any
claims that CSFB, the Lenders or Wachovia have or may have against
the Debtors.
As reported in the Troubled Company Reporter on June 6, 2005, the
Debtors and GTN agreed that GTN would have a final present value
allowed claim against Mirant Americas Energy Marketing, LP, equal
to $25,000,000, and another $25,000,000 against Mirant based on
the Guarantee, subject to reduction by the value of any
consideration paid or distributed to GTN from MAEM on the Allowed
Claim. GTN will retain the Guarantee Claim for any amount that
remains unsatisfied. Claim Nos. 6217, 6692 and 7915 are
withdrawn. The claim amount for Claim No. 7916 and 7917 are
deemed modified and amended.
Specifically, CSFB is concerned that the Settlement Agreement
contains extremely broad releases and waivers of essentially all
of GTN's claims against the Debtors.
Headquartered in Atlanta, Georgia, Mirant Corporation --
http://www.mirant.com/-- is a competitive energy company that
produces and sells electricity in North America, the Caribbean,
and the Philippines. Mirant owns or leases more than 18,000
megawatts of electric generating capacity globally. 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. 65; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
MPOWER HOLDING: Entry of Final Decree Delayed Until June 22
-----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved
Mpower Holding Corporation and its debtor-affiliates' request to
further delay entry of a final decree in their chapter 11 cases
pursuant to Rule 5009-1(a) of the Local Rules of Bankruptcy
Practice and Procedure.
The Court further delayed until June 22, 2005, the entry of a
final decree. The Court confirmed the Debtors' First Amended
Joint Plan of Reorganization on July 17, 2002, and the Plan took
effect on July 30, 2002.
The Debtors explain that they are still presently litigating an
adversary proceeding involving a post-confirmation action
commenced in the Missouri State Court by CBIZ Network Solutions,
Inc. That adversary proceeding is also currently pending before
the Bankruptcy Court.
The Debtors relate that there are also some remaining claims
objections that are pending before the Bankruptcy Court and are
awaiting resolutions.
The further delay in the entry of a final decree is therefore
necessary to ensure that the Debtors will have a full opportunity
to continue to prosecute or resolve the CBIZ Network adversary
proceeding and any pending claims objections, and to properly
evaluate those remaining claims.
Headquartered in Pittsford, New York, Mpower Holding Corporation
-- http://www.mpowercom.com/-- is the parent company of
Mpower Communications Corp., a leading facilities-based broadband
communications provider offering a full range of data, telephony,
Internet access and Web hosting services for small and medium-size
business customers. The Company and its debtor-affiliates filed
for chapter 11 protection on April 8, 2002 (Bankr. D. Del. Case
No. 02-11046). Pauline K. Morgan, Esq., and M. Blake Cleary,
Esq., at Young Conaway Stargatt & Taylor, LLP represents the
Debtors. When the Company filed for protection from its
creditors, it listed total assets of $490,000,000 and total debts
of $627,000,000.
MPOWER HOLDING: Has Until June 22 to Object to Proofs of Claim
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware gave Mpower
Holding Corporation and its debtor-affiliates an extension,
through and including June 22, 2005, to object to claims filed
against their estates.
The Court confirmed the Debtors' First Amended Joint Plan of
Reorganization on July 17, 2002, and the Plan took effect on
July 30, 2002.
The Debtors explain that since the Plan's confirmation, they have
successfully negotiated the consensual resolution or withdrawal of
additional claims, and they are currently negotiating the
resolution of claims filed by Allegiance Telecom and One Source
Teleservices.
The Debtors relate that the extension of the claims objection
deadline is warranted in order for them to make a careful
evaluation of all remaining claims and if objections or consensual
resolution for disputed claims will be necessary.
Headquartered in Pittsford, New York, Mpower Holding Corporation
-- http://www.mpowercom.com/-- is the parent company of
Mpower Communications Corp., a leading facilities-based broadband
communications provider offering a full range of data, telephony,
Internet access and Web hosting services for small and medium-size
business customers. The Company and its debtor-affiliates filed
for chapter 11 protection on April 8, 2002 (Bankr. D. Del. Case
No. 02-11046). Pauline K. Morgan, Esq., and M. Blake Cleary,
Esq., at Young Conaway Stargatt & Taylor, LLP represents the
Debtors. When the Company filed for protection from its
creditors, it listed total assets of $490,000,000 and total debts
of $627,000,000.
NATIONAL CENTURY: Inks Stipulations Tolling Statutes of Limitation
------------------------------------------------------------------
In November 2004, Jon Beacham and Frank P. Magliochetti entered
into separate stipulations with the Unencumbered Assets Trust --
successor-in-interest to National Century Financial
Enterprises, Inc., and its debtor-affiliates -- tolling the
running of the applicable statute of limitations with respect to
claims involving them.
J. Beacham and NCFE Entities Stipulate
In a stipulation Judge Calhoun approved, Mr. Beacham and the NCFE
Entities agree to extend the tolling period:
1. The running of any applicable statute of limitations and
all other time-based defenses in respect of any claim or
cause of action against Mr. Beacham that the NCFE Entities
might assert, is tolled as of May 16, 2005, until Tuesday,
November 17, 2005.
2. The assertion of any Claims by any of the Debtors and the
Trust that may be timely asserted or commenced as of
May 12, 2005, will not be barred by any statute of
limitations or time-based defense during the Extended
Tolling Period if any the claims were not barred by any
statute of limitations or time-based defense as of
November 16, 2004.
3. In the sole and absolute discretion of the Trust, the NCFE
Entities will be permitted to commence any litigation
against Mr. Beacham during the Extended Tolling Period.
Mr. Beacham will be permitted to fully assert all defenses,
setoffs, and counterclaims in the litigation, provided
that in defending any litigation asserting any Claims by
the NCFE Entities that may be timely asserted or commenced
as of May 12, 2005, Mr. Beacham will not plead or rely upon
any time-related defense that is based, in whole or in
part, upon the time that has run during the Tolling
Periods.
F. Magliochetti and NCFE Entities Stipulate
Mr. Magliochetti and the NCFE Entities also want to extend the
tolling of the statute of limitations. In a Court-approved
stipulation, Mr. Magliochetti and the NCFE Entities agree that:
1. The running of any applicable statute of limitations, in
respect of any claim or cause of action which Mr.
Magliochetti and the NCFE Entities might assert against
each other, is tolled.
2. The assertion of any Claims by the NCFE Entities or Mr.
Magliochetti that may have been timely asserted or
commenced as of the November 2004 Stipulation will not be
barred by any statute of limitations or time-based defense.
Each of the parties will be liable for the costs of the
other party, if it asserts a time-based or statute of
limitations defense in contravention of the Stipulation.
3. The Stipulation will terminate on the earlier of:
a. August 16, 2005, and
b. the first business day that is at least three months
following the later of the entry of a final order not
subject to appeal adjudicating all claims and causes
of action in:
-- the multi-district litigation In re National
Century Financial Enterprises, Inc., Investment
Litigation; or
-- the Retained Actions to the extent the Retained
Actions are brought by the NCFE Entities in any
proceeding other than Multi-District
Litigation.
4. In the event that Mr. Magliochetti gives notice at any
time during the Tolling Period to the Trust that any action
or claim has been brought against him which in any way
relates to the Debtors, the NCFE Entities or the NCFE
Claims, the NCFE Entities will have 30 days from that date
to file any of their claims after which time the Tolling
Period will expire and Mr. Magliochetti may assert any
time-based or statute of limitations defenses.
5. The Stipulation will be deemed to have become effective
retroactively as of November 17, 2004.
6. In the sole and absolute discretion of the Trust, the NCFE
Entities will be permitted to commence any litigation
against Mr. Magliochetti during the Tolling Period.
Headquartered in Dublin, Ohio, National Century Financial
Enterprises, Inc. -- http://www.ncfe.com/-- through the CSFB
Claims Trust, the Litigation Trust, the VI/XII Collateral Trust,
and the Unencumbered Assets Trust, is in the midst of liquidating
estate assets. The Company filed for Chapter 11 protection on
November 18, 2002 (Bankr. S.D. Ohio Case No. 02-65235). The Court
confirmed the Debtors' Fourth Amended Plan of Liquidation on
April 16, 2004. Paul E. Harner, Esq., at Jones Day, represents
the Debtors. (National Century Bankruptcy News, Issue No. 56;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
NEWAVE INC: Insufficient Cash Flow Spurs Going Concern Doubt
------------------------------------------------------------
Jaspers Hall & Johnson expressed substantial doubt about NeWave
Inc.'s ability to continue as a going concern after it audited the
Company's financial statements for the year eneded Dec. 31, 2004.
The auditing firm says that the company must generate sufficient
cash flow to meet its obligations and sustain its operation.
The Company lost $5,887,425 from operations through March 31,
2005. Included in the total $5,887,425 loss cited, the Company's
loss for the three months ended March 31, 2005 was $1,3291,480 as
compared to $2,599,612 for the three months ended March 31, 2004.
NeWave must continue to raise capital to fulfill its plan of
acquiring companies and assisting in the development of those
companies internally. If it is unable to raise any additional
capital, its operations will be curtailed. As of March 31,
2005, NeWave had total Current Assets of $817,947, Current
Liabilities of $851,106.
About the Company
NeWave Inc. (OTCBB: NWWV) -- http://www.newave-inc.com/-- is a
leading online auction and e-commerce solutions provider which
utilizes the internet to maximize profits and savings for it's
customers through its three subsidiaries; OnlineSupplier.com,
AuctionLiquidator and Online Discount Warehouse.
At Mar. 31, 2005, Newave Inc.'s balance sheet showed a $514,609
stockholders' deficit, compared to a $224,074 deficit at Dec. 31,
2004.
NORCROSS SAFETY: Soliciting Consents to Amend 9-7/8% Indenture
--------------------------------------------------------------
Norcross Safety Products L.L.C. and Norcross Capital Corp.
commenced the solicitation of consents from holders of their
9-7/8% Senior Subordinated Notes due 2011 to amend and waive
certain provisions of the Indenture governing the Notes, as
described in a consent solicitation statement being sent by the
Issuers to all holders of the Notes as of June 10, 2005, the
record date for the solicitation. The proposed amendments and
waivers are contingent on several factors, including the closing
of the proposed acquisition transaction pursuant to which Safety
Products Holdings, Inc., will purchase from NSP Holdings L.L.C.
all of the outstanding membership units of the Company and all of
the outstanding common stock of NSP Holdings Capital Corp., and
pursuant to which Safety Products will assume all of the
outstanding indebtedness of the Company and NSP Holdings.
The consent solicitation is conditioned on the receipt of consents
from holders of at least a majority in aggregate principal amount
of the outstanding Notes and other customary conditions and will
expire at 11:59 p.m., New York City time, on June 24, 2005, unless
extended. Subject to the conditions set forth in the Consent
Solicitation Statement, the Issuers will pay a consent fee equal
to 0.25% of the principal amount of Notes ($2.50 per $1,000
principal amount of Notes) to each holder that has delivered (and
not revoked) a valid consent to the proposed amendments and
waivers on or before June 24, 2005. Payment of such consent fee
will be conditioned upon, and made following, the closing of the
Acquisition, the operational effectiveness of the supplemental
indentures and the satisfaction of the other terms and conditions
contained in the Consent Solicitation Statement. The consent
solicitation may be amended, extended or terminated, at the option
of the Issuers, as set forth in the Consent Solicitation
Statement. For a complete statement of the terms and conditions
of the consent solicitation, holders of the Notes should refer to
the Consent Solicitation Statement.
The Solicitation Agent in connection with the consent solicitation
is Credit Suisse First Boston LLC. Questions regarding the
consent solicitation may be directed to:
Credit Suisse First Boston LLC
800-820-1653 (toll free)
212-538-0652 (collect)
D.F. King & Co., Inc. is serving as Information Agent and
Tabulation Agent in connection with the consent solicitation.
Requests for assistance in delivering consents or for additional
copies of the Consent Solicitation Statement should be directed
to:
D.F. King & Co., Inc.
800-848-2998 (toll-free)
212-269-5550 (collect)
About the Company
Norcross Safety Products L.L.C. is a leading designer,
manufacturer and marketer of branded products in the personal
protection equipment industry. The Company manufactures and
markets a full line of personal protection equipment for workers
in the general industrial, fire service and utility/high voltage
industries. The Company sells products under trusted, long-
standing and well-recognized brand names, including North, Morning
Pride, Ranger, Servus, Pro-Warrington and Salisbury. The
Company's broad product offerings includes, among other things,
respiratory protection, protective footwear, hand protection,
bunker gear and linemen equipment.
* * *
As reported in the Troubled Company Reporter on May 26, 2005,
Standard & Poor's Ratings Services placed its 'B+' corporate
credit rating and its other ratings on safety equipment provider
Norcross Safety Products LLC on CreditWatch with negative
implications. This action followed the announcement by the
company that Odyssey Investment Partners LLC will acquire it in a
transaction valued at $495 million. This buyout occurs just after
Norcross terminated an evaluation of strategic alternatives and
paid a $60 million preferred dividend to existing shareholders.
The purchase is expected to be funded with newly issued debt and
some equity, and there is about $50 million of cash at the
consolidated holding company. If the existing bank debt,
subordinated debt, and unsecured debt at the holding company are
redeemed, the ratings on those issues will be withdrawn. The
ratings on Norcross, including any new debt, will depend on the
as-yet-unknown capital structure. For the current 'B+' rating,
S&P's expectations are for total debt to EBITDA of 4x-5x. The
transaction is expected to close in the third quarter of 2005.
NORTHWEST AIRLINES: Reports Say Carrier's Closer to Bankruptcy
--------------------------------------------------------------
The Wall Street Journal says Northwest Airlines may not be able to
avert a chapter 11 filing after its latest $50 fare increase
failed to meet expected results.
Regulatory filings with the Securities and Exchange Commission
show that Gary Wilson, the company's Chairman of the Board of
Directors, dumped 2,500,000 shares of common stock, approximately
60% of his holdings in the company.
Northwest is currently negotiating with its labor unions to cut
$1.1 billion in annual labor costs.
Northwest is the world's fourth largest airline with hubs at
Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam,
and approximately 1,600 daily departures. Northwest is a member of
SkyTeam, an airline alliance that offers customers one of the
world's most extensive global networks. Northwest and its travel
partners serve more than 900 cities in excess of 160 countries on
six continents.
The carrier's reported losses since 2001. It lost about
$458 million in the first quarter of 2005 and $878 million during
2004.
Northwest's junk-rated 7-7/8% Notes due March 15, 2008, trade for
less than 50-cents-on-the-dollar today.
Northwest Airlines Corp.'s common shares are trading below $6 this
week. The stock was at $11 per share in December.
NORTHWEST AIRLINES: Heavy Losses Prompt S&P to Junk Ratings
-----------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on
Northwest Airlines Corp. and its Northwest Airlines Inc.
subsidiary, including lowering the corporate credit rating to
'CCC+' from 'B' and the short-term rating on Northwest Airlines
Corp. to 'C' from 'B-3'. All ratings are removed from
CreditWatch, where they were placed with negative implications on
May 3, 2005. The outlook is developing. Eagan, Minnesota-based
Northwest is the fourth-largest U.S. airline and has about $15
billion of debt and leases.
"The downgrade was based on expected heavy losses and negative
cash flow this year, the airline's inability thus far to secure
needed labor cost concessions, and sizable upcoming debt and
pension obligations," said Standard & Poor's credit analyst Philip
Baggaley. Northwest reported a substantial first-quarter 2005 net
loss of $440 million, due mostly to higher fuel prices and weak
pricing in the domestic market, and is likely to report a large
loss for the year, despite recent fare increases. Northwest has
so far obtained only $300 million of a total $1.1 billion in
annual labor concessions being sought.
The pilot union last year agreed to partial, interim annual
concessions, but other unions remain in negotiations and do not
appear to be close to agreements. Talks with the mechanics' union
are particularly problematic, with union leadership raising the
possibility of a strike (which could occur only following a 30-day
period after both sides are released from federally mediated
talks). Debt maturities for the remainder of 2005 through 2007
total almost $2.0 billion (not including certain aircraft-backed
debt that Northwest can extend at its option), and, absent
legislative changes, cash pension requirements in 2006 and 2007
will be significantly higher than the $420 million being paid this
year. Cash liquidity is a relative strength, with $2.1 billion of
unrestricted cash at March 31, but this amount is expected to
decline with losses and debt payments.
Ratings could be lowered if the airline is unable to make further
material progress in lowering its labor costs. Conversely, a
satisfactory resolution of labor negotiations could, along with
new pension legislation that extends the period over which
airlines can pay down funding deficits, lead to a modest upgrade.
A revision of the outlook to stable could occur if Northwest
achieves partial success in its labor and pension objectives, or
if a further deterioration of airline industry conditions cancels
out some of the anticipated savings from such initiatives.
NS REPACK: S&P Cuts Rating on $94 Million Notes to B+
-----------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on NS Repack
Ltd., a single-issue synthetic asset-backed security, to 'B+' from
'BB+'. At the same time, the rating is removed from CreditWatch
with negative implications, where it was placed March 11, 2005.
The March 11 CreditWatch placement followed a decision by Standard
& Poor's to review all ratings supported by multi-line insurance
companies that chose not to participate in Standard & Poor's
recently revised financial enhancement rating analysis. The NS
Repack Ltd. transaction is supported by a reinsurance policy by
Royal Indemnity Co. Royal decided not to participate in the FER
analysis, and as a result Standard & Poor's is unable to assume
that Royal will make immediate and uncontested payments under the
policy. In the absence of an FER analysis, Standard & Poor's
analyzed the actual insurance and reinsurance policies issued in
connection with the NS Repack transaction and gained comfort from
the strength of the policy language contained therein.
The lowered rating reflects both the possibility that claims will
be filed given the deterioration of the credit quality of the
underlying collateral, as well as some uncertainty that full and
timely payment of claims will be made. The 'BB+' corporate credit
and financial strength ratings assigned to Royal, as well as the
type of policy (debt service insurance) supporting the
transaction, were also taken into consideration when lowering the
rating on NS Repack Ltd. to 'B+'.
In December 2004, Standard & Poor's updated its policy regarding
transactions supported by FERs and now assigns an FER to all
insurers that have provided financial enhancement to transactions
rated by Standard & Poor's and that have committed to paying and
waiving all defenses.
Rating Lowered and Removed From Creditwatch Negative
NS Repack Ltd.
$94 million notes
Rating
Class To From
----- -- ----
Notes B+ BB+/Watch Neg
PACER INT'L: Improved Financial Profile Cues S&P to Lift Ratings
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit and
senior secured debt ratings on Pacer International Inc. to 'BB'
from 'BB-'. The outlook is now stable. The upgrade reflects
Pacer's significantly improved financial profile in recent years.
"We expect that favorable end-market demand and Pacer's commitment
to maintaining a less-leveraged capital structure will help it
sustain the improved credit protection measures," said Standard &
Poor's credit analyst Lisa Jenkins. Concord, California-based
Pacer has about $422 million of lease-adjusted debt.
Ratings reflect Pacer's high (albeit declining) debt leverage and
exposure to cyclical pressures (especially in its logistics
business), partially offset by a solid niche position in the
freight transportation and logistics industry and a somewhat
variable cost structure. Pacer's operations are centered around
two key business areas: the wholesale intermodal business and the
retail logistics business.
Pacer's intermodal business transports cargo containers stacked
two high on specially designed railcars. Its logistics services
include intermodal marketing, truck transportation brokerage,
freight forwarding, freight consolidation and handling, and supply
chain management services. Contractual arrangements that result in
a fair amount of stability in operating results benefit the
company's intermodal operations. Pacer's increased emphasis on
logistics services over the past few years, however, has increased
its exposure to competitive and cyclical pressures. To mitigate
cyclical pressures, Pacer relies on contracts and operating
arrangements with railroads, independent trucking operators, and
leasing companies. A significant portion of its equipment leases
allow for cancellation within three months or less.
While its reliance on leased equipment and contracts for the use
of others' facilities reduces Pacer's capital spending
requirements, it also makes Pacer more vulnerable to equipment
shortages and service disruptions by its partners. The wholesale
business is currently benefiting from increased volumes related to
strong intermodal demand, although it is also being somewhat
adversely affected by operating challenges at certain railroad
partners. Performance in the retail segment remains depressed,
but is being addressed through yield and business development
initiatives. Cash generation remains healthy.
Ratings incorporate an expectation that credit measures will
remain near current levels. If the company continues to pay down
debt and does not pursue material acquisitions, the outlook could
be revised to positive, although this is not expected in the near
term. Conversely, if credit measures deteriorate from current
levels due to business pressures or debt-financed acquisitions,
the outlook could be revised to negative.
PLATTE VIEW: Wants Access to HUD's Cash Collateral
--------------------------------------------------
Platte View Farm, LLC, asks the U.S. Bankruptcy Court for the
District of Colorado for authority to use cash collateral securing
repayment of a debt owed to the U.S. Dept. of Housing and Urban
Development.
The Debtor owns a 216-unit apartment complex located at 90 South
Miller in Brighton, Colorado. Under Section 221(d)(4) of the
National Housing Act, HUD insured a Deed of Trust Note and Deed of
Trust of the Debtor securing the property. HUD and the Debtor
also entered into a Regulatory Agreement, which like the Deed of
Trust, was duly filed and recorded in the Office of the Clerk and
Recorder of Adams County, Colorado on June 19, 2002.
Upon default of the Debtor of its mortgage payments, the Deed of
Trust Note and Deed of Trust were assigned to HUD on March 17,
2005.
The Debtor listed the secured debt for $18,348,255 in its
Schedules of Assets and Liabilities.
To provide the Debtor with necessary funding to continue the
operation, maintenance and development of the apartment complex,
HUD has agreed to a stipulation giving the Debtor continued use of
cash collateral in accordance with a proposed budget through
December 2005 projecting:
June July August September
---- ---- ------ ---------
Total
Income $172,684 $176,524 $182,100 $180,542
Total
Operating
Expenses $90,638 $96,447 $87,140 $89,741
October November December
------- -------- --------
Total
Income $180,689 $182,563 $180,543
Total
Operating
Expenses $84,880 $82,560 $90,170
The Debtor discloses it has $303,397 in the bank, which will be
remitted to HUD upon approval of the Court. The Debtor will grant
HUD a valid and perfected security interest in the apartments'
rents, profits and proceeds.
Headquartered in Englewood, Colorado, Platte View Farm, LLC, owns
a 216-unit apartment complex known as Platte View Landing
Apartments in Brighton, Colorado. The Company filed
for chapter 11 protection on Feb. 11, 2005(Bankr. D. Colo. Case
No. 05-12365). Bonnie Bell Bond, Esq., and Harvey Sender, Esq.,
at Sender & Wasserman, P.C., represent the Debtor in its
restructuring efforts. When the Company filed for protection from
its creditors, it estimated assets and debts from $10 million to
$50 million.
R.F. CUNNINGHAM: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: R.F. Cunningham & Company
191 Terry Road
Smithtown, New York 11787
Bankruptcy Case No.: 05-84105
Type of Business: The Debtor is a grain dealer, licensed under
Agriculture and Markets Law of New York.
Chapter 11 Petition Date: June 13, 2005
Court: Eastern District of New York (Central Islip)
Debtor's Counsel: Harold S. Berzow, Esq.
Ruskin Moscou Faltischek, P.C.
190 EAB Plaza
Uniondale, New York 11556
Tel: (516) 663-6596
Fax: (516) 663-6796
Total Assets: $8,416,240
Total Debts: $10,218,229
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Fulton-Marshall L.P. $959,629
1496 North Meridian Road
P.O. Box 568
Rochester, IN 46975
Attn: Jess Clark
Kaufman Grain Company $747,141
P.O. Box 56
309 East Attica
Rossville, IL 60963
Attn: Bob Lause
Southside Elevator $536,775
P.O. Box 323
4 East 15th Street
Vincennes, IN 47591
Agland Grain Inc. $458,882
1136 Clark Avenue
Bluffon, IN 46714
Howlett Farms Inc. $316,357
1112 East River Road
Avon, NY 14414
First Street Elevator $272,779
P.O. Box 323
Vincennes, IN 47591
Stockland Grain Company $217,348
P.O. Box 47
100 Oak Street
Stockland, IL 60967
Attn: Tim Metzinger
Payne Equity Exchange $214,824
P.O. Box 499
225 North Laura Street
Payne, OH 45880-0499
W.F. Ware Company, Inc. $185,612
Central Ohio Farmers Co-op, Inc. $160,485
Champaign Landmark $139,901
Bridgeport Grain Inc. $108,361
Burlington Northern Railroad $105,000
Farmers Grain Dealers $103,952
Top Ag Cooperative $102,591
Norfolk Southern Railway $99,441
Bruce Maybury $92,621
ADM Montezuma $91,689
Bill Large $80,498
Austic Farms $77,388
RADIO ONE: Inks $800 Million Seven-Year Senior Credit Facility
--------------------------------------------------------------
Radio One, Inc. (NASDAQ:ROIAK and ROIA) entered into an
$800 million senior credit facility. This new credit facility
is comprised of a $500 million 7-year revolving loan commitment
and a $300 million 7-year term loan commitment. The new credit
facility will be used to refinance the Company's existing senior
credit facility and will support working capital requirements and
general corporate purposes.
The new senior credit facility is rated BB by Standard & Poor's
and a Ba2 by Moody's.
Wachovia Capital Markets and Banc of America Securities served as
joint lead arrangers for the transaction.
Executive Vice President and CFO, Scott R. Royster stated, "This
credit facility represents another significant step in the broader
recapitalization of the business in 2005. This facility provides
considerable liquidity to the company, eliminates near-term
amortization requirements, and extends senior debt maturities,
while affording a more flexible covenant package that will allow
us to meet our stated strategic objectives. We feel that this
facility is an affirmation of the lender community's belief in
Radio One's business model and strategy."
About the Company
Radio One, Inc. -- http://www.radio-one.com/-- is the nation's
seventh largest radio broadcasting company (based on 2004 net
broadcast revenue) and the largest radio broadcasting company that
primarily targets African-American and urban listeners. Radio One
owns and operates 69 radio stations located in 22 urban markets in
the United States and reaches more than 13 million listeners every
week. Radio One also owns approximately 36% of TV One, LLC --
http://www.tvoneonline.com/-- a cable/satellite network
programming primarily to African-Americans, which is a joint
venture with Comcast Corporation and DIRECTV. Additionally, Radio
One programs "XM 169 The POWER" on XM Satellite Radio and owns 51%
of the common stock of Reach Media, Inc. --
http://www.blackamericaweb.com/-- owner of the Tom Joyner Morning
Show and other businesses associated with Tom Joyner, a leading
urban media personality.
RESIX FINANCE: S&P Lifts Ratings on Six Certificate Classes
-----------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on 10
classes of credit-linked notes from RESIX Finance Ltd. series
2002-A, 2003-A, and 2003-B. At the same time, the ratings on the
remaining classes from series 2003-B and on all subsequent series
are affirmed.
The performance of each note is linked to a class from a
particular RESI Finance Ltd. Partnership real estate synthetic-
investment security. The underlying transaction for each
partnership is a synthetic securitization of jumbo, 'A' quality,
fixed-rate, first-lien residential mortgage loans (the "reference
portfolio"). Unlike traditional mortgage-backed securitizations,
the actual cash flow from the reference portfolio is not paid to
the holders of the securities. Rather, the proceeds from the
issuance of the securities are invested in eligible investments.
Interest payable to the security holders is paid from income
earned on the eligible investments and payments from the Bank of
America under a financial guarantee contract.
The raised ratings on the RESIX Finance transactions reflect the
raised ratings on the same classes from the underlying RESI
Finance Ltd. Partnership real estate synthetic investment
securities. Bank of America uses the RESIX structure to fully
hedge its exposure to the underlying reference asset by entering
into a total return swap with a Cayman Island corporation, which
simultaneously issues credit-linked notes corresponding to the
risk level of each underlying asset.
All the underlying assets have experienced minimal delinquency
levels and no realized losses, except for series 2002-A, which
experienced a $16,749 loss (or 0.00014% of its original pool
balance). For all series, the remaining credit support on the
underlying assets should be sufficient to support the underlying
certificates at their rating levels, which results in the raised
and affirmed ratings for the RESIX Finance securities.
Ratings Raised
RESIX Finance Ltd.
Credit-linked notes
Rating
------
Series Class To From
------ ----- -- ----
2002-A B8 B8 AAA A
2002-A B9 B9 AAA A-
2002-A B11 B11 A+ BBB
2002-A B11-S B11-S A+ BBB
2003-A B8 B8 BBB+ BB+
2003-A B9 B9 BBB- BB-
2003-A B10 B10 BB B+
2003-A B10-S B10-S BB B+
2003-A B11 B11 B B-
2003-B B7 B7 BB+ BB
Ratings Affirmed
RESIX Finance Ltd.
Credit-linked notes
Series Classes Rating
------ ------- ------
2003-B B9 B9 B+
2003-B B10 B10 B
2003-B B11 B11 B-
2003-C B7 B7 BB
2003-C B8 B8 BB-
2003-C B9 B9 B+
2003-C B10 B10 B
2003-C B11 B11 B-
2003-CB1 B7 B7 BB+
2003-CB1 B8 B8 BB
2003-CB1 B9 B9 BB-
2003-CB1 B10 B10 B+
2003-CB1 B11 B11 B
2003-D B7 B7 BB
2003-D B8 B8 BB-
2003-D B9 B9 B+
2003-D B10 B10 B+
2003-D B11 B11 B
2004-A B7 B7 BB
2004-A B8 B8 BB-
2004-A B9 B9 B+
2004-A B10 B10 B
2004-A B11 B11 B-
2004-B B7 B7 BB+
2004-B B8 B8 BB
2004-B B9 B9 BB-
2004-B B10 B10 B+
2004-B B11 B11 B
2004-C B7 B7 BB
2004-C B8 B8 BB-
2004-C B9 B9 B+
2004-C B10 B10 B
2004-C B11 B11 B-
2005-A B7 B7 BB
2005-A B8 B8 BB-
2005-A B9 B9 B+
2005-A B10 B10 B
2005-A B11 B11 B-
ROBERT HARTLEY: Case Summary & 11 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Robert Paul & Roberta Faye Hartley
45 Dalton Drive
Ripley, West Virginia 25271
Bankruptcy Case No.: 05-21802
Chapter 11 Petition Date: June 13, 2005
Court: Southern District of West Virginia (Charleston)
Debtor's Counsel: Marshall C. Spradling, Esq.
100 Capitol Street, Suite 1110
Charleston, West Virginia 25301
Tel: (304) 343-2544
Fax: (304) 343-2546
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $500,000 to $1 Million
Debtor's 11 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Robert Paul Hartley Unknown
45 Dalton Drive
Ripley, WV 25271
Roberta Faye Hartley Unknown
45 Dalton Drive
Ripley, WV 25271
BB&T Unknown
P.O. Box 2306
Wilson, NC 27894
Holzer Medical Center Unknown
100 Jackson Pike
Gallapolis, OH 45631
MBNA America Unknown
P.O. Box 17054
Wilmington, DE 19884
Ohio Valley Bank Unknown
420 3rd Avenue
Gallipolis, OH 45631
Ohio Valley Bank Unknown
P.O. Box 240
Gallipolis, OH 45631
One Valley Bank Unknown
P.O. Box 1793
Charleston, WV 25326
West Virginia State Tax Department Unknown
L. Wayne Williams
P.O. Box 766
Charleston, WV 25323-0766
WV Bureau of Employment Programs Unknown
Marye Wright,
Legal Services Litigation
P.O. Box 2027
Charleston, WV 25327-2027
WV Worker's Compensation Unknown
Marye L. Wright, Esq.
P.O. Box 2027
Charleston, WV 25323-0921
S-TRAN HOLDINGS: Taps Taylor & Martin to Auction Personal Property
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware gave S-Tran
Holdings, Inc., and its debtor-affiliates permission to employ
Taylor & Martin, Inc., as their auctioneers.
The Debtors explain that they hired Taylor & Martin to assist them
in the auction of their equipment and personal property.
Taylor & Martin will:
1) prepare the Debtors' personal property assets for sale and
provide promotional support for the sale prior to the public
auction for those assets;
2) conduct a sale in a commercially reasonable manner, which
will be staffed by qualified auctioneers, informed sales
personnel, ringmen and transaction closing personnel in
order to properly display, sell, close and account for all
transactions relating to the asset sale;
3) prepare financial settlements in connection with the asset
sale and provide a coordinator to assist with equipment
marshalling, delivered unit count, sales site security,
contract labor and equipment preparation; and
4) provide labor and equipment necessary to transport all the
personal property assets to the auction sale sites and lease
the property for the auction sale sites.
Since the Debtors' bankruptcy petition date, Taylor & Martin
received a $135,000 Transportation Costs Fee for the marshalling
and transportation of the Debtors' personal property assets.
Under the terms of the Court-approved Engagement Agreement between
the Debtors and Taylor & Martin, the Firm will be paid with:
a) a 10% buyer's premium from each buyer in connection with the
sale of each item of equipment sold in an auction; and
b) a Commission Fee equal to 10% of the auction proceeds
received from the sale of all shop, office, dock and
miscellaneous personal property
To the best of the Debtors' knowledge Taylor & Martin is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
Headquartered in Cookeville, Tennessee, S-Tran Holdings, Inc.,
provides common carrier services and specialized in less-than-
truckload shipments and also supplies overnight and second-day
service to shippers in 11 states in the Southeast and Midwestern
United States. The Company and its debtor-affiliates filed for
chapter 11 protection on May 13, 2005 (Bankr. D. Del. Case No.
05-11391). Laura Davis Jones, Esq. at Pachulski, Stang, Ziehl,
Young, Jones & Weintraub P.C. represents the Debtors in their
restructuring efforts. When the Debtors filed for protection from
their creditors, they listed total assets of $22,508,000 and total
debts of $30,891,000.
S-TRAN HOLDINGS: Can Sell Personal Property Assets at Auctions
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
S-Tran Holdings, Inc., and its debtor-affiliates to sell their
personal property assets free and clear of liens, claims,
interests and encumbrances. The Court also approved the auction
procedures for the personal property asset sale.
The Debtors explain that they terminated all their operations on
May 5, 2005. Simultaneous with the shutdown of their operations,
the Debtors retained Taylor & Martin, Inc. as their auctioneers to
assist them in the liquidation of their assets.
Asset Sale &
The Engagement Agreement
Taylor & Martin will transport the Debtors' personal property
assets to locations in the vicinity of:
* Nashville, Tennessee;
* Charlotte, North Carolina;
* Cincinnati, Ohio; and
* Atlanta, Georgia.
The Firm will conduct a public auction in each of those four
locations.
The Debtors' personal property assets that are up for sale consist
of various trucks, tractors, trailers, motor vehicle equipment,
all shop, dock and office equipment, and other miscellaneous
personal property.
The Debtors and Taylor & Martin entered into an Engagement
Agreement on May 5, 2005. That Agreement governs the terms of the
Firm's retention by the Debtors and the terms of the auction
procedures for the sale of their personal property assets.
The Agreement calls for the sale of the personal property assets
in a public auction to be held approximately 45 days after the
shutdown of the Debtors' operations. Consequently, Taylor &
Martin will hold an auction for those assets on or after June 18,
2005.
The Debtors submit to the Court that the sale of their personal
property assets will maximize the value of their estates, minimize
the storage, insurance and other administrative costs of
maintaining those assets and is in the best interests of their
estates and their creditors.
Headquartered in Cookeville, Tennessee, S-Tran Holdings, Inc.,
provides common carrier services and specialized in less-than-
truckload shipments and also supplies overnight and second-day
service to shippers in 11 states in the Southeast and Midwestern
United States. The Company and its debtor-affiliates filed for
chapter 11 protection on May 13, 2005 (Bankr. D. Del. Case No.
05-11391). Laura Davis Jones, Esq. at Pachulski, Stang, Ziehl,
Young, Jones & Weintraub P.C. represents the Debtors in their
restructuring efforts. When the Debtors filed for protection from
their creditors, they listed total assets of $22,508,000 and total
debts of $30,891,000.
SAFETY-KLEEN: Claims Objection Deadline Extended to December 13
---------------------------------------------------------------
At the joint request of the Reorganized Safety-Kleen Corporation,
its debtor-affiliates and the Safety-Kleen Creditor Trustee, Judge
Walsh extends the deadline to object to proofs of claim through
and including December 13, 2005.
Jason M. Liberi, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, in Wilmington, Delaware, relates that the Reorganized Debtors
are responsible for objecting to and resolving all secured claims,
administrative claims and claims entitled to priority treatment
under the Bankruptcy Code. Oolenoy Valley Consulting, LLC, as
trustee of the Safety-Kleen Creditor Trust, is responsible for
objecting to general unsecured claims.
The Reorganized Debtors and the Trustee are continuing to
negotiate with parties that have responded to prior objections to
claims and to review and reconcile all of the remaining claims.
The extension of the claims objection deadline will provide more
time for the Reorganized Debtors and the Trustee to review the
claims and to file objections to any claims, if appropriate.
Headquartered in Delaware, Safety-Kleen Corporation --
http://www.safety-kleen.com/-- provides specialty services such
as parts cleaning, site remediation, soil decontamination, and
wastewater services. The Company, along with its affiliates,
filed for chapter 11 protection (Bankr. D. Del. Case No. 00-02303)
on June 9, 2000. Gregg M. Galardi, Esq., at Skadden, Arps, Slate,
Meagher, represents the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, they
listed $3,031,304,000 in assets and $3,333,745,000 in liabilities.
(Safety-Kleen Bankruptcy News, Issue No. 88; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
SECURITY CAPITAL: Receives Revised Offer from Unit's Executives
---------------------------------------------------------------
Security Capital Corporation (AMEX: SCC) received a revised offer
from Robert J. Bossart, Jonathan R. Wagner, Richard T. Kurth and
certain other current and former members of the senior management
team of CompManagement, Inc. ("Emerald Group") an indirect
subsidiary of the Company, along with their other equity partners,
to acquire all of the outstanding capital stock of Security
Capital at a price of $13.00 per share.
The CMI Revised Offer increases the price from the $10.85 per
share offer previously made by the Emerald Group that was
announced on Oct. 27, 2004. By its terms, the CMI Revised Offer
is subject to, among other things, the satisfactory review by the
Emerald Group and its financing sources of the Company's Form 10-K
for the fiscal year ended December 31, 2004 and is open for
acceptance until 5:00 p.m., Columbus, Ohio time, on June 20, 2005.
As previously announced on June 7, 2005, the Company's Board of
Directors has determined to pursue a formal sale process for the
Company in order to seek the highest price reasonably obtainable
for the stockholders of the Company and has retained UBS
Securities LLC to conduct such formal sale process. The Revised
Offer has therefore been referred to UBS Securities LLC for
consideration in connection with the formal sale process. It is
expected that the formal sale process will commence promptly after
the Company files its annual report on Form 10-K for the fiscal
year ended Dec. 31, 2004, which the Company currently believes
will be filed by June 17, 2005.
The Company also disclosed that, in light of the Board's
commitment to the formal sale process, all future offers to
acquire the Company will be referred to UBS Securities LLC and
will be considered in the context of that sale process. The
Company does not intend to make any further announcements
regarding the receipt of future offers.
Delisting Notice
Security Capital Corporation received a letter from the American
Stock Exchange, citing the Company's lack of compliance with the
AMEX's continued listing standards and accepting the Company's
plan to regain compliance with the AMEX's continued listing
standards by June 30, 2005, which the Company delivered to the
AMEX on May 18, 2005.
AMEX advised the Company that it is not in compliance with the
AMEX's continued listing standards because the Company failed to
timely file its Form 10-K for the fiscal year ended Dec. 31, 2004
and its Form 10-Q for the quarter ended March 31, 2005, as
required pursuant to Section 1101 of the AMEX Company Guide. The
May 23, 2005, AMEX letter noted that the Company's failure to
timely file the 2004 Form 10-K and the First Quarter Form 10-Q is
a material violation of the Company's listing agreement with the
AMEX and, therefore, pursuant to Section 1003(d) of the Company
Guide, the Company's securities are subject to suspension and
delisting from the AMEX. In addition, the Company is subject to
the procedures and requirements of Section 1009 of the Company
Guide.
Filing Delays
The filing of the Company's Form 10-Q for the quarter ended
Sept. 30, 2004, was delayed as a result of the Company's
previously announced internal investigation. The investigation
was completed, and the Third Quarter Form 10-Q was filed on
March 11, 2005. As a result of the delayed filing of the
Third Quarter Form 10-Q, the Company needs additional time to
complete its 2004 Form 10-K.
The Company had expected to file its First Quarter Form 10-Q by
June 15, 2005. The delay in filing the First Quarter Form 10-Q is
due to the continued delay in the filing of the 2004 Form 10-K and
the Company's need to select a new independent registered public
accounting firm to replace Ernst & Young LLP, the Company's
principal accountant, upon the completion of the Company's 2004
audit, which declined to stand for re-appointment as the Company's
principal accountant.
The Company says it will not be able to retain an independent
registered public accounting firm to replace Ernst & Young until
immediately following the filing of the 2004 Form 10-K.
About the Company
Security Capital Corporation operates as a holding company and
participates in the management of its subsidiaries, WC Holdings,
Primrose Holdings Inc. and Pumpkin Masters Holdings Inc.
WC is an 80%-owned subsidiary that provides cost-containment
services relative to direct and indirect costs of corporations and
their employees primarily relating to industrial health and
safety, industrial medical care and workers' compensation
insurance. WC's activities are primarily centered in California,
Ohio, Virginia, Maryland and, to a lesser extent, in other Middle
Atlantic states, Indiana and Washington. Primrose is a 98.5%-
owned subsidiary involved in the franchising of educational
childcare centers. Primrose schools are located throughout the
United States, except in the Northeast and Northwest. Pumpkin is
a wholly owned subsidiary engaged in the business of designing and
distributing Halloween-oriented pumpkin carving kits and related
accessories.
SFBC INTERNATIONAL: Moody's Affirms B2 Rating on $160M Facility
---------------------------------------------------------------
Moody's Investors Service affirmed its B2 rating for SFBC
International's revised credit facility. Moody's also affirmed
its senior implied rating of B2. The rating outlook is stable.
Ratings affirmed:
* $160 million Senior Secured Credit Facilities, rated B2
* Senior Implied Rating, rated B2
The ratings reflect:
* the challenges of managing a business that has grown rapidly
through acquisitions over the past few years;
* the integration risk associated with the recent PharmaNet
transaction;
* the decentralization of the company's operations and systems;
* its smaller size relative to larger competitors; and
* high geographic concentration of business in the U.S and
Canada.
Moody's notes that while SFBC has improved its internal control
systems and procedures and was not cited for any weakness by its
auditor in 2004 the company must strengthen the effectiveness of
PharmaNet's controls to be in compliance with Sarbanes-Oxley by
the end of 2005.
SFBC also faces industry risks such as:
* the short duration and lack of visibility on future business;
* potential cancellation of existing contracts; and
* strong customer buying power.
Factors mitigating these concerns include:
* an attractive and diversified customer base;
* high level of repeat business from existing pharmaceutical
customers;
* strong underlying growth in research and development spending
by the pharmaceutical industry; and
* solid growth prospects from generic manufacturers.
Additional factors supporting the rating include the minimal
amount of capital expenditure requirements to support future
growth, and the strategic fit and synergistic potential of the
PharmaNet acquisition.
Despite the listed credit strengths, Moody's is concerned with the
historically low levels of free cash flow generation on a combined
basis. Somewhat offsetting this risk is that management has
recently expanded and improved its facilities in both the United
States and Canada. While these largely discretionary investments
have negatively affected free cash flow in the short-term, they
are expected to generate revenue growth as the company will have
additional capacity for bioanalytical work and early Phase I-II
contracts. Due to the high fixed cost nature of these facilities,
additional volume will lead to an expansion in operating margins
and cash flow as the company leverages its operating expenses.
Since the company will require minimal capital spending going
forward to support future growth, free cash flow is expected to
increase as well.
Through a recent equity offering and the proposed amendment to the
credit facility, the company has reduced outstanding debt by
repaying its $120 million term loan B. The combination of higher
free cash flow and lower debt will allow the ratio of adjusted
free cash flow as a percentage of total adjusted debt to reach
approximately 7% to 8% by the end of the year. Moody's would not
expect a meaningful improvement in this ratio as the company is
expected to continue to make additional acquisitions and finance
them through external sources, including long-term debt.
The stable outlook anticipates that the company will continue to
grow internally at a solid pace through repeat business from
existing customers and contracts from new customers. As the
company continues to control operating expenses, leverage fixed
costs, and improve working capital management, internal growth
will translate into expanding operating margins and higher
operating cash flow. With limited incremental capital required to
support future growth, increased operating cash flow should
translate into higher free cash flow generation and debt reduction
over time, improving debt coverage statistics. There is a risk,
however, that challenges from integrating the PharmaNet
acquisition, pricing pressure from its pharmaceutical customers,
and potential contract cancellations could inhibit the company's
progress and prevent an improvement in the company's credit
metrics.
If the company is able to successfully integrate PharmaNet and
show sustained and meaningful improvement in free cash flow at a
rate that is greater than anticipated, the ratings could be
upgraded. Further, acceleration in the repayment of debt or
reduced future acquisition activity could lead to upward pressure
on the ratings.
Conversely, if the integration of PharmaNet is behind plan or
other factors lead to slower revenue growth, increased margin
pressure and a contraction in the level of free cash flow, the
outlook could change to negative. The ratings would also be
negatively affected if the company makes another transforming
acquisition similar to PharmaNet in size and scope.
SFBC International is seeking to amend its existing $160 million
Senior Secured Credit facilities to allow it to increase allowable
borrowing under its revolver from $40 million to $90 million, add
a $50 million accordion feature, and repay its outstanding Term
Loan. Earlier in the year, SFBC had used a portion of the
proceeds from a recent equity offering to reduce the amount
outstanding under its Term Loan B from $120 million to $49 million
at the end of March 2005. Following the amendment, the company
expects to have $25 million drawn under its revolver and no
outstanding term loan.
The B2 rating on the senior secured credit facilities reflects the
security of substantially all assets of SFBC International, its
present, and future subsidiaries, and by the pledges of all of the
equity interests of each of the borrower's direct and indirect
subsidiaries, which are limited to 65% of the foreign
subsidiaries. The rating on the senior secured facilities are at
the same level as the senior implied rating due to the high
proportion of assets consisting of goodwill and other intangible
assets.
SFBC International, based in Miami, Florida, is a leading North
American contract research organization providing specialized drug
development services to:
* pharmaceutical,
* biotechnology, and
* generic pharmaceutical companies.
SFBC offers Phase I through Phase IV and bioanalytical laboratory
services. Subsequent to its initial public offering in 2000, the
company has completed nine accretive acquisitions; SFBC has 30
offices and in excess of 2,000 employees. Over the twelve months
ended December 31, 2004, SFBC generated $284.4 million in revenue
and $56.0 million in EBITDA, pro-forma for the acquisition of
PharmaNet and Taylor Technology.
SMC CHANTECLAIR: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: SMC Chanteclair, Inc.
18912 Macarthur Boulevard
Irvine, California 92612
Bankruptcy Case No.: 05-14130
Type of Business: The Debtor operates a restaurant.
Chapter 11 Petition Date: June 13, 2005
Court: Central District of California (Santa Ana)
Judge: James N. Barr
Debtor's Counsel: Robert P. Goe, Esq.
Goe & Forsyther, LLP
660 Newport Center Drive #320
Newport Beach, California 92660
Tel: (949) 467-3780
Total Assets: Unknown
Total Debts: Unknown
The Debtor's list of its 20 Largest Unsecured Creditors was not
available at press time.
SOUPER SALAD: Wants Access to Cash Collateral & $3MM DIP Facility
-----------------------------------------------------------------
Souper Salad Inc. asks the U.S. Bankruptcy Court for the District
of Arizona for authority to use cash collateral securing repayment
of a $35 million loan provided by SummitBridge National
Investments LLC and SummitBridge Global Investments LLC.
The Debtor tells the Court that without access to the cash
collateral, it can't continue to operate its business and pay
vendors and suppliers for post-petition goods and services.
SummitBridge agrees to let the Debtor use the cash collateral to
fund postpetition operations. The Debtor will grant SummitBridge
a fully perfected first priority priming lien on all of its
assets.
In addition, SummitBridge will provide the Debtor a postpetition
revolving credit facility for $3,042,000 and honor outstanding
letters of credit for $1,931,000. The postpetition loan will be
accorded superpriority administrative claim status.
The Debtor will pay SummitBridge, as Administrative Agent for the
new loan, a $100,000 origination fee.
Headquartered in San Antonio, Texas, Souper Salad Inc. --
http://www.soupersalad.com/-- operates an all-you-care-to-eat
soup and salad bar restaurant chain. Daniel P. Collins, Esq., at
Collins, May, Potenza, Baran & Gillespie represents the Debtor in
its restructuring efforts. When the Debtor filed for protection
from its creditors, it listed $16,115,715 in assets and
$50,383,179 in debts.
SOUPER SALAD: Taps Collins May as General Bankruptcy Counsel
------------------------------------------------------------
Souper Salad, Inc., asks the U.S. Bankruptcy Court for the
District of Arizona for authority to employ Collins, May, Potenza,
Baran & Gillespie, P.C., as its general counsel nunc pro tunc to
June 6, 2005.
Collins May is expected to:
a) analyze the Debtor's financial situation, and render advice
in determining the course of action necessary to reorganize
effectively;
b) prepare and file the Debtor's statement of affairs,
schedules of assets and liabilities and plan of
reorganization;
c) represent the Debtor at the meeting of creditors and plan
confirmation hearing;
d) represent the Debtor in any adversary and contested
matters; and
e) negotiate with the Debtor's creditors and other parties-in-
interest.
Daniel P. Collins, Esq., at Collins May, will be the lead attorney
in the Debtor's case. Mr. Collins discloses that his billing rate
is from $185 to $280 per hour.
The Debtor paid Collins May a $25,000 retainer.
To the best of the Debtor's knowledge, Collins May is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
Headquartered in San Antonio, Texas, Souper Salad Inc. --
http://www.soupersalad.com/-- operates an all-you-care-to-eat
soup and salad bar restaurant chain. When the Debtor filed for
protection from its creditors, it listed $16,115,715 in assets and
$50,383,179 in debts.
SOUPER SALAD: U.S. Trustee to Meet Creditors on July 19
-------------------------------------------------------
The United States Trustee for Region 14 will convene a meeting of
Souper Salad, Inc.'s creditors at 1:30 p.m., on July 19, 2005, at
the U.S. Trustee Meeting Room located in 230 North First Avenue,
Suite 102 in Phoenix, Arizona. This is the first meeting of
creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy
cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Headquartered in San Antonio, Texas, Souper Salad Inc. --
http://www.soupersalad.com/-- operates an all-you-care-to-eat
soup and salad bar restaurant chain. Daniel P. Collins, Esq., at
Collins, May, Potenza, Baran & Gillespie represents the Debtor in
its restructuring efforts. When the Debtor filed for protection
from its creditors, it listed $16,115,715 in assets and
$50,383,179 in debts.
SPIEGEL INC: Committee Files Revised Creditor Trust Agreement
-------------------------------------------------------------
The Official Committee of Unsecured Creditors filed with the
U.S. Bankruptcy Court for the Southern District of New York and
circulated to parties-in-interest a revised Declaration of Trust
(Spiegel Creditor Trust) dated as of June 21, 2005, between Wells
Fargo Delaware Trust Company, as Delaware Trustee, and James M.
Gallagher, as managing trustee.
The Creditors Committee tells Judge Lifland that Wells Fargo and
Mr. Gallagher desire to form the Creditor Trust as a "statutory
trust" under the Delaware Statutory Trust Act, 12 Del.C.c 38, to
facilitate the implementation of the Debtors' Chapter 11 Plan.
The Debtors' Plan provides for the establishment of a creditor
trust to, among other things:
(1) hold, manage, liquidate and convert to cash the creditor
trust assets for the benefit of certain "Series A
Beneficiaries;"
(2) make distributions to the holders of allowed claims, other
than administrative claims; and
(3) settle, resolve and object to disputed and unresolved
claims.
Mr. Gallagher, a managing director at Morris Anderson &
Associates Ltd., may control and exercise authority over the
Creditor Trust Assets, over the management and disposition
thereof, and over the management and conduct of the business of
the Trust.
The Trust may retain Chadbourne & Parke LLP, as counsel, and
Zuckerman Spaeder LLP, as special litigation counsel. The Trust
may also retain other professionals, including, Capstone Advisory
Group, LLC, as financial advisor, Mintz Levin Cohn Ferris Glovsky
and Popeo, P.C., as counsel.
Wells Fargo is appointed to serve as the trustee of the Trust in
the State of Delaware for the sole purpose of satisfying the
requirement of Section 3807 of the Statutory Trust Statute that
the Trust has at least one trustee with a principal place of
business in Delaware. The Delaware Trustee may retain Potter
Anderson and Corroon LLP, as its counsel.
The fees, costs and expenses of the Professionals will constitute
Trust Administrative Expenses.
The Trust will dissolve Spiegel, Inc. no later than six months
after the Effective Date.
The Managing Trustee will be subject to oversight by a plan
oversight committee.
A full-text copy of the 82-page Revised Spiegel Creditor Trust is
available for free at:
http://bankrupt.com/misc/Revised_Creditor_Trust_Agreement.pdf
Headquartered in Downers Grove, Illinois, Spiegel, Inc. --
http://www.spiegel.com/-- is a leading international general
merchandise and specialty retailer that offers apparel, home
furnishings and other merchandise through catalogs, e-commerce
sites and approximately 560 retail stores. The Company filed for
Chapter 11 protection on March 17, 2003 (Bankr. S.D.N.Y. Case No.
03-11540). James L. Garrity, Jr., Esq., and Marc B. Hankin, Esq.,
at Shearman & Sterling, represent the Debtors in their
restructuring efforts. When the Company filed for protection from
its creditors, it listed $1,737,474,862 in assets and
$1,706,761,176 in debts. The Court confirmed the Debtors'
Modified First Amended Joint Plan of Reorganization, filed by the
Debtors, on May 23, 2005. Spiegel will emerge from bankruptcy as
Eddie Bauer Holdings Inc. Impaired creditors overwhelmingly voted
to accept the Plan. (Spiegel Bankruptcy News, Issue No. 48;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
STAR TELECOMMS: Trustee Has Until June 30 to File Final Report
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware gave Gordon
Hutchins, Jr. -- the Liquidating Trustee appointed to administer
the Liquidating Trust formed under the confirmed chapter 11 Plan
of Star Telecommunications, Inc. and its debtor-affiliates --
until June 30, 2005, to file a final report in the Debtors'
chapter 11 cases.
The Court also delayed until June 30, 2005, the automatic entry of
a final decree in the Debtors' chapter 11 cases.
The Court confirmed the Debtors and the Official Committee of
Unsecured Creditors' First Amended Joint Plan of Liquidation on
July 31, 2002, and the Plan took effect on Aug. 13, 2002.
Pursuant to the Plan, the Liquidating Trust was created and all
remaining assets of the Debtors were transferred to the Trust.
The Liquidating Trustee was appointed to wind up the Debtors'
estates and administer the Trust. On the Effective Date, the
Unsecured Creditors Committee was dissolved and replaced by the
Continuing Creditors Committee.
Mr. Hutchins explains that there are still six remaining avoidance
actions pending before the Bankruptcy Court. He and the
defendants for five of those avoidance actions have reached a
settlement and those five cases will soon be dismissed once Mr.
Hutchins receives the settlement proceeds in connection with those
five actions.
The only unresolved avoidance action is the directors' and
officer's liability action brought by the Continuing Creditors
Committee, which the District Court has only recently adjudicated
a motion to dismiss the complaint filed by the defendants.
The extension is therefore warranted to give Mr. Hutchins and the
Continuing Creditors Committee more opportunity to prosecute or
resolve the directors' and officer's liability action that could
result in a significant recovery for the estates.
Headquartered in Santa Barbara, California, Star
Telecommunications, Inc., was a leading provider of global
telecommunications services to consumers, long distance
carriers, multinational corporations and Internet service. The
Company and its debtor-affiliates filed for chapter 11 protection
on March 13, 2001 (Bankr. D. Del. Case No. 01-00830). Daniel A.
Lowenthal, III, Esq., at Thelen Reid & Priest LLP represents the
Debtors. When the Debtors filed for chapter 11 protection, they
listed total assets of $630,065,000 and total debts of
$284,634,000. The Court confirmed the Debtors and Unsecured
Creditors Committee's chapter 11 Plan on July 31, 2002, and the
Plan took effect on Aug. 13, 2002. Gordon Hutchins, Jr. is the
Liquidating Trustee for the confirmed Plan. Laura Davis Jones,
Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub P.C.
represents the Liquidating Trustee.
STRUCTURED ASSET: Adequate Credit Support Cues S&P to Hold Ratings
------------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on
371 classes from 29 series of mortgage pass-through certificates
issued by Structured Asset Investment Loan Trust.
The affirmed ratings reflect adequate actual and projected credit
support percentages, as well as low to moderate delinquencies and
cumulative realized losses. As of the May 2005 remittance period,
total delinquencies ranged from 1.01% (series 2005-3) to 20.22%
(series 2003-BC3), while cumulative realized losses ranged from
0.00% for the three transactions that closed in 2005 to 0.62% for
series 2003-BC4. In addition, these transactions have been
generating sufficient excess interest cash flow to cover net
losses. As a result, the transactions are at their respective
overcollateralization targets.
These transactions utilize a shifting interest structure, with
credit support provided by subordination, overcollateralization,
and excess spread. The collateral consists of subprime, fixed- or
adjustable-rate, first- or second-lien mortgage loans, secured by
one- to four-family residential properties.
Ratings Affirmed
Structured Asset Investment Loan Trust
Mortgage pass-through certificates
Series Class Rating
------ ----- ------
2003-BC1 A1, A2 AAA
2003-BC1 M1 AA
2003-BC1 M2 A
2003-BC1 M3 BBB+
2003-BC1 M4 BBB
2003-BC1 B BBB-
2003-BC2 A1, A2, A3 AAA
2003-BC2 M1 AA
2003-BC2 M2 A
2003-BC2 M3 BBB+
2003-BC2 M4-A, M4-F BBB
2003-BC2 B BBB-
2003-BC3 1-A2, 2-A2 AAA
2003-BC3 M1 AA
2003-BC3 M2 A
2003-BC3 M3 A-
2003-BC3 M4 BBB+
2003-BC3 M5 BBB
2003-BC3 B BBB-
2003-BC4 1-A2, 2-A2 AAA
2003-BC4 M1 AA
2003-BC4 M2 A
2003-BC4 M3 A-
2003-BC4 M4 BBB
2003-BC4 M5 BBB-
2003-BC5 1-A2, 2-A AAA
2003-BC5 M1 AA
2003-BC5 M2-A, M2-B A
2003-BC5 M3 A-
2003-BC5 M4 BBB+
2003-BC5 M5 BBB
2003-BC5 B BBB-
2003-BC6 1-A3, 2-A, 3-A1, 3-A2 AAA
2003-BC6 M1 AA
2003-BC6 M2 A
2003-BC6 M3 A-
2003-BC6 M-4 BBB+
2003-BC6 M5 BBB
2003-BC6 B BBB-
2003-BC7 1-A2, 2-A, 3-A2 AAA
2003-BC7 M1 AA
2003-BC7 M2 A
2003-BC7 M3 A-
2003-BC7 M4 BBB+
2003-BC7 M5 BBB
2003-BC8 1-A2, 2-A, 3-A2, 3-A3, A-IO AAA
2003-BC8 M1 AA
2003-BC8 M2 A
2003-BC8 M3 A-
2003-BC8 M4 BBB+
2003-BC8 M5 BBB
2003-BC8 B BBB-
2003-BC9 1-A2, 2-A, 3-A1, 3-A2, 3-A3 AAA
2003-BC9 M1 AA
2003-BC9 M2 A
2003-BC9 M3 A-
2003-BC9 M4 BBB+
2003-BC9 M5 BBB
2003-BC9 B BBB-
2003-BC10 1-A1, 1-A2, 2-A, 3-A2, 3-A3 AAA
2003-BC10 3-A4, 3-A5, A-IO, A4 AAA
2003-BC10 M1 AA
2003-BC10 M2 A
2003-BC10 M3 A-
2003-BC10 M4 BBB+
2003-BC10 M5 BBB
2003-BC10 B BBB-
2003-BC11 A3 AAA
2003-BC11 M1 AA
2003-BC11 M2 A
2003-BC11 M3 A-
2003-BC11 M4 BBB+
2003-BC11 M5 BBB
2003-BC11 B BBB-
2003-BC12 1-A, 2-A, 3-A, A-IO AAA
2003-BC12 M1 AA
2003-BC12 M2 A
2003-BC12 M3 A-
2003-BC12 M4 BBB+
2003-BC12 M5 BBB
2003-BC12 M6 BBB-
2003-BC12 B BB+
2003-BC13 1-A1, 1-A2, 1-A3, 2-A1, 2-A3 AAA
2003-BC13 3-A, A-IO AAA
2003-BC13 M1 AA
2003-BC13 M2 A
2003-BC13 M3 A-
2003-BC13 M4 BBB+
2003-BC13 M5 BBB
2003-BC13 M6 BBB-
2003-BC13 B BB+
2004-1 1-A1, 1-A2, 1-A3, A-IO AAA
2004-1 M1 AA
2004-1 M2 A
2004-1 M3 A-
2004-1 M4 BBB+
2004-1 M5 BBB
2004-1 M6 BBB-
2004-1 B BB+
2004-2 1-A1, 1-A2, 2-A, 3-A1, 3-A2, A-SIO, A4 AAA
2004-2 M1 AA
2004-2 M2 A
2004-2 M3 A-
2004-2 M4 BBB+
2004-2 M5 BBB
2004-2 M6 BBB-
2004-2 B BB+
2004-3 A1, A2, A3, A4, A5, A-IO AAA
2004-3 M1 AA
2004-3 M2 A
2004-3 M3 A-
2004-3 M4 BBB+
2004-3 M5 BBB
2004-3 M6 BBB-
2004-3 B BB+
2004-4 A1, A2, A3, A-SIO, A4 AAA
2004-4 M1 AA
2004-4 M2 AA-
2004-4 M3 AA-
2004-4 M4 A+
2004-4 M5 A
2004-4 M6 BBB+
2004-4 M7 BBB-
2004-4 B BB+
2004-5 A1, A2, A3, A-SIO AAA
2004-5 M1 AAA
2004-5 M2 AA+
2004-5 M3 AA
2004-5 M4 AA-
2004-5 M5 A
2004-5 M6 A-
2004-5 M7 BBB+
2004-5 M8 BBB
2004-5 B BBB-
2004-6 1-A1, 2-A1, 2-A2, A3, A-SIO AAA
2004-6 M1 AA
2004-6 M2 A
2004-6 M3 A-
2004-6 M4 BBB+
2004-6 M5 BBB
2004-6 M6 BBB-
2004-6 B BBB-
2004-7 A1, A2, A3, A4, A5, A6, A7, A8, A-SIO AAA
2004-7 M1 AA+
2004-7 M2 AA
2004-7 M3 AA-
2004-7 M4 A
2004-7 M5 A-
2004-7 M6 BBB+
2004-7 M7 BBB
2004-7 B BBB-
2004-8 A1, A2, A3, A4, A5, A6, A7, A8, A9 AAA
2004-8 A10, A11, A12, A13 AAA
2004-8 M1 AA+
2004-8 M2, M3, M4 AA
2004-8 M5 A
2004-8 M6 A-
2004-8 M7 BBB+
2004-8 M8 BBB
2004-8 M9, B1, B2 BBB-
2004-9 A1, A2, A3, A4, A5, A6, A7 AAA
2004-9 M1 AA+
2004-9 M2 AA
2004-9 M3 A+
2004-9 M4 A
2004-9 M5 A-
2004-9 M6 BBB+
2004-9 M7 BBB
2004-9 B1, B2 BBB-
2004-10 A1, A2, A3, A4, A5, A6, A7, A8, A9 AAA
2004-10 A10, A11 AAA
2004-10 M1 AA+
2004-10 M2 AA
2004-10 M3 AA-
2004-10 M4 A+
2004-10 M5 A
2004-10 M6 A-
2004-10 M7 BBB+
2004-11 A1, A2, A3, A4 AAA
2004-11 M1 AA+
2004-11 M2 AA
2004-11 M3 AA-
2004-11 M4 A+
2004-11 M5 A
2004-11 M6 A-
2004-11 M7 BBB+
2004-11 M8 BBB
2004-11 M9 BBB-
2004-11 B BB
2004-BNC1 A1, A2, A3, A4, A5, A-SIO AAA
2004-BNC1 M1 AA
2004-BNC1 M2 AA-
2004-BNC1 M3 A+
2004-BNC1 M4 A
2004-BNC1 M5 A-
2004-BNC1 M6 BBB+
2004-BNC1 M7 BBB
2004-BNC1 B1 BB
2004-BNC2 A1, A2, A3, A4, A5, A6 AAA
2004-BNC2 M1 AA+
2004-BNC2 M2 AA
2004-BNC2 M3 AA-
2004-BNC2 M4 A+
2004-BNC2 M5 A
2004-BNC2 M6 A-
2004-BNC2 M7 BBB+
2005-1 A1, A2, A3, A4, A5, A6, A7, A8 AAA
2005-1 M1 AA+
2005-1 M2 AA
2005-1 M3 AA-
2005-1 M4 A+
2005-1 M5 A
2005-1 M6 A-
2005-1 M7 BBB+
2005-1 M8 BBB
2005-1 M9 BBB-
2005-1 B BB
2005-2 A1, A2, A3, A4, A5, A6 AAA
2005-2 M1 AA+
2005-2 M2 AA
2005-2 M3 AA-
2005-2 M4 A+
2005-2 M5 A
2005-2 M6 A-
2005-2 M7 BBB+
2005-2 M8 BBB
2005-2 M9 BBB-
2005-2 B BB
2005-3 A1, A2, A3, A4, A5, A6, A7, A8, A9 AAA
2005-3 M1 AA+
2005-3 M2 AA
2005-3 M3 AA-
2005-3 M4 A+
2005-3 M5 A
2005-3 M6 A-
2005-3 M7 BBB+
2005-3 M8 BBB
2005-3 M9 BBB-
2005-3 B BB
STRUCTURED ASSET: S&P Junks Class B5 Certificates
-------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on class B5
from Structured Asset Securities Corp.'s mortgage pass-through
certificates from series 2003-6A to 'CCC' from 'B'. At the same
time, the ratings on the remaining classes are affirmed.
The rating on the class B5 is lowered due to losses incurred by
the collateral over the past three months, especially May 2005. As
of the May 2005 remittance report, the transaction has incurred
about 0.18% in cumulative realized losses. Approximately two-
thirds, or 0.12% ($835,127), were realized in May 2005. The loss
realized in May of 2005 effectively reduced the current credit
support to class B5 to 0.11% from the 0.25% original credit
support. Furthermore, approximately $275,378 in credit support
remains for class B5 relative to approximately $3.7 million
(1.45%) in seriously delinquent loans (90-plus days, foreclosure,
and REO). Total delinquencies, however, totaled 2.73%. The
rating will continue to be monitored closely and will be adjusted
in accordance to the available credit support.
The ratings on the other classes are affirmed due to adequate
actual and projected credit support percentages.
This transaction utilizes the shifting interest senior
subordinated structure. The collateral consist of Alternative-A
hybrid adjustable-rate mortgage loans with maturity of not more
than 30 years. The mortgage loans have a fixed-rate of interest
for a period of three, five, seven, or 10 years, after which each
adjust based on a specified index. The mortgage loans are secured
by first liens on one- to four-family residential properties.
Rating Lowered
Structured Asset Securities Corp.
Mortgage pass-through certificates series 2003-6A
Rating
Class To From
----- -- -----
B5 CCC B
Ratings Affirmed
Structured Asset Securities Corp.
Mortgage pass-through certificates series 2003-6A
Class Rating
----- ------
1-A1, 1-A2, 2-A1, 2-A2, 3-A1, 3-A2, 3-A3, 4-A1, 4-A2 AAA
B1 AA
B2 A
B3 BBB
B4 BB
TEXAS INDUSTRIES: Launches $600 Million Cash Tender Offer
---------------------------------------------------------
Texas Industries, Inc., (NYSE: TXI) commenced a cash tender offer
and consent solicitation for any and all of its $600,000,000
aggregate principal amount outstanding of 10-1/4% Senior Notes due
2011.
The Offer is scheduled to expire at 12:00 midnight, New York City
time, on July 14, 2005, unless extended or earlier terminated.
The consent solicitation will expire at 5:00 p.m., New York City
time, on June 24, 2005, unless extended or earlier terminated.
Tenders of Notes may be validly withdrawn and consents may be
validly revoked until the Withdrawal Rights Deadline.
The total consideration per $1,000 principal amount of Notes
validly tendered and not withdrawn prior to the Consent Payment
Deadline will be based on a fixed spread of 50 basis points over
the yield on the Price Determination Date of the 3-1/2% U.S.
Treasury Note due May 31, 2007. In addition, holders whose Notes
are validly tendered and accepted for purchase will receive
accrued and unpaid interest up to, but not including, the Initial
Payment Date. The total consideration will be calculated at 2:00
p.m., New York City time, on a date to be selected by the Company
which is at least 10 business days prior to the Expiration Date.
The Company currently expects this date to be June 30, 2005 unless
the Offer is extended. Holders who validly tender their Notes by
the Consent Payment Deadline will receive payment on the initial
payment date, which is expected to be on or about July 6, 2005.
In connection with the tender offer, TXI is soliciting consents to
certain proposed amendments to eliminate substantially all of the
restrictive covenants and certain events of default in the
indenture governing the Notes. TXI is offering to make a consent
payment (which is included in the total consideration described
above) of $30.00 per $1,000 principal amount of Notes to holders
who validly tender their Notes and deliver their consents at or
prior to the Consent Payment Deadline. Holders may not tender
their Notes without delivering consents or deliver consents
without tendering their Notes. No consent payments will be made
in respect of Notes tendered after the Consent Payment Deadline.
Tendered Notes may not be withdrawn and consents may not be
revoked after the time TXI and the trustee for the Notes execute
an amendment to the indenture governing the Notes to effect the
proposed amendments, which is expected to be 5:00 p.m., New York
City time, on June 24, 2005. Any extension, delay, termination or
amendment of the Offer will be followed as promptly as practicable
by a public announcement thereof.
The Offer is subject to the satisfaction of certain conditions
including:
(1) receipt of consents from holders of a majority in
principal amount of the outstanding Notes;
(2) execution of the Supplemental Indenture;
(3) consummation of new debt financings raising proceeds in
an aggregate amount sufficient to fund the tender; and
(4) certain other customary conditions.
The complete terms and conditions of the Offer are described in
the Offer to Purchase and Consent Solicitation Statement dated
June 13, 2005, copies of which may be obtained from D. F. King &
Co., Inc., the information agent for the Offer, at (800) 659-5550
(US toll free) or, for bankers and brokers (212) 269-5550.
TXI expects to fund the tender with the issuance of new senior
notes due 2013, the receipt of a dividend payment from its wholly
owned steel subsidiary, Chaparral Steel Company (assuming
completion by Chaparral Steel Company of its proposed debt
financings), and its existing cash.
TXI has engaged Banc of America Securities LLC to act as the
exclusive dealer manager and solicitation agent in connection with
the Offer. Questions regarding the Offer may be directed to:
Banc of America Securities LLC
High Yield Special Products
(888) 292-0070 (US toll-free)
(704) 388-9217 (collect)
Texas Industries, Inc. (NYSE: TXI) is a leading supplier of
building materials, primarily cement and structural steel. TXI is
the largest supplier of cement in Texas and a major cement
supplier in California. Structural steel products are distributed
throughout North America. On Dec. 15, 2004, TXI's Board of
Directors approved a plan to spin off the steel business by means
of a tax-free stock dividend to TXI shareholders. Upon completion
of the Offer and the requisite debt financing, mentioned above,
TXI intends to distribute the common stock of Chaparral Steel
Company to its existing shareholders as part of a previously
announced spin-off transaction.
* * *
Texas Industries' 10-1/4% senior notes due 2011 carry Moody's
Investor Services' B1 rating and Standard & Poor's BB- rating.
TOYS 'R' US: Extends Tender Offer for 8-3/4% Debentures to June 28
------------------------------------------------------------------
Toys "R" Us, Inc. (NYSE: TOY) reported that it has:
(i) increased the cash purchase price in its previously
announced tender offer for any and all of the outstanding
$200,000,000 principal amount of 8-3/4% Debentures due
September 1, 2021 from $950.00 to $970.00 for each $1,000
principal amount of Debentures tendered and accepted for
payment pursuant to the tender offer;
(ii) extended the consent payment deadline until 5:00 p.m., New
York City time, today, June 15, 2005, unless extended or
earlier terminated with respect to the related consent
solicitation to amend the indenture governing the
Debentures;
(iii) extended the time by which holders of the Debentures may
validly withdraw their Debentures until 11:59 p.m. New
York City time, today, June 15, 2005; and
(iv) extended the expiration time for the tender offer to
purchase the Debentures to 5:00 p.m., New York City time
on June 28, 2005, unless extended or earlier terminated by
the company.
Toys "R" Us commenced the tender offer and consent solicitation on
May 27, 2005.
The total consideration for each $1,000 principal amount of
Debentures tendered on or prior to the Consent Payment Deadline,
unless extended or earlier terminated, and accepted for payment
pursuant to the tender offer will be $1,000. The total
consideration will be the sum of a purchase price of $970.00 for
each $1,000 principal amount of Debentures tendered and accepted
for payment pursuant to the tender offer and a consent payment of
$30.00 for each $1,000 principal amount of Debentures validly
tendered prior to the Consent Payment Deadline and accepted for
payment. Holders who tender their Debentures must consent to the
amendments. Holders who validly tender their Debentures after the
Consent Payment Deadline, but prior to the Expiration Time, will
receive only the Tender Offer Consideration. In either case,
holders whose Debentures are purchased will also be paid accrued
and unpaid interest on the principal amount of Debentures tendered
to, but not including, the settlement date. The settlement date
of the offer is expected to be one business day after the
Expiration Time or promptly thereafter. As of 5:00 p.m., New York
City time, on June 10, 2005 a total of $46,533,000 in aggregate
outstanding principal amount of Debentures (representing
approximately 23.3% of the $200,000,000 of aggregate outstanding
principal amount of Debentures as of 5:00 p.m., New York City
time, on June 10, 2005) had been validly tendered and not
withdrawn.
Consummation of the tender offer and consent solicitation, and
payment of the Tender Offer Consideration and Consent Payment are
subject to the satisfaction or waiver of various conditions. The
proposed merger is not conditioned in any way on completion of the
tender offer and consent solicitation, and the tender offer and
consent solicitation are not conditioned in any way on completion
of the proposed merger. The closing of the proposed merger is
subject to various customary conditions, and there can be no
assurance that the proposed merger will be completed.
The proposed amendments to the indenture governing the Debentures
will be set forth in a supplemental indenture and are described in
more detail in the Offer to Purchase and Consent Solicitation
Statement. The supplemental indenture will not be executed unless
and until Toys "R" Us has received consents from holders of a
majority in outstanding principal amount of the Debentures, and
the amendments will not become operative unless and until Toys "R"
Us has accepted for purchase the Debentures pursuant to the tender
offer and consent solicitation.
The deadline for withdrawals of Debentures is 11:59 p.m., New York
City time, on June 15, 2005, unless extended by the Company in its
sole discretion. A holder of Debentures may not revoke its
consent without withdrawing its Debentures before the supplemental
indenture has been executed.
This announcement is not an offer to purchase or a solicitation of
an offer to sell or a solicitation of consents with respect to the
debentures. The tender offer and consent solicitation are being
made solely by the offer to purchase and consent solicitation
statement dated may 27, 2005.
About the Company
Toys "R" Us, Inc., is one of the leading specialty toy retailers
in the world. It currently sells merchandise through more than
1,500 stores, including 680 toy stores in the U.S. and 608
international toy stores, including licensed and franchise stores
as well as through its Internet sites at http://www.toysrus.com/
and http://www.imaginarium.com/and http://www.sportsrus.com/
Babies "R" Us, a division of Toys "R" Us, Inc., is the largest
baby product specialty store chain in the world and a leader in
the juvenile industry, and sells merchandise through 219 stores in
the U.S. as well as on the Internet at http://www.babiesrus.com/
* * *
As reported in the Troubled Company Reporter on March 21, 2005,
Fitch Ratings believes that Toys 'R' Us, Inc., could be
downgraded, and possibly into the 'B' category, following the
sale of the company to a joint venture formed by affiliates of
Kohlberg Kravis Roberts & Co., Bain Capital Partners LLC, and
Vornado Realty Trust.
This investor group has agreed to acquire TOY for $6.6 billion
and assume TOY's debt, which totals approximately $2.3
billion. TOY's senior notes are currently rated 'BB' by Fitch and
remain on Rating Watch Negative, where they were placed in August
2004. It is currently expected that the acquisition will be
financed with a material debt component. Vornado separately
announced this morning that it will be investing $450 million for
a one-third interest in the acquiring joint venture, implying a
total equity component of $1.35 billion. This, in turn, implies a
debt component of the purchase price in excess of $5 billion.
This amount of debt would push TOY's adjusted debt/EBITDAR to
around nine times on a pro forma basis from around 5.0 times in
the twelve months ended Oct. 30, 2004. It is possible that the
company will raise additional equity or engage in asset sales,
with the proceeds used to reduce acquisition debt. Nonetheless,
the Rating Watch Negative status reflects the expectation that
without a significant equity component to the financing, a
downgrade of potentially several notches would likely be
warranted. Fitch will base its final rating decision on an
assessment of the structure and financial profile of the acquiring
entity. Fitch will also continue to evaluate trends in TOY's
operations, which remain pressured by competition from the
discounters and general weakness in toy retailing.
TRIAD HOSPITALS: Fitch Holds BB- Rating on Senior Unsecured Debt
----------------------------------------------------------------
Fitch Ratings has assigned a 'BB+' rating to Triad Hospitals,
Inc.'s new $1.1 billion senior secured bank facility. Fitch has
also affirmed Triad's 'BB-' senior unsecured debt and 'B+' senior
subordinated debt ratings. The Rating Outlook is Stable.
Triad's new bank facilities include a $600 million, six-year
revolving credit facility and a $500 million, six-year term loan
A. Proceeds from the credit facilities will be used to refinance
the existing tem loans and fund the company's expansion efforts.
Triad's high speculative-grade ratings reflect the sustainability
and successful execution of the company's business model. Triad
concentrates it operations (hospitals and ambulatory surgery
centers) in small cities and selected urban markets and emphasizes
a collaborative approach with regards to acquisitions. Triad has
performed well relative to its peers in recent quarters,
demonstrating more stable admission growth and bad debt trends
than most industry participants. As a result, Triad's margins
(while somewhat lower than industry averages) have remained stable
as competitors' margins have been negatively impacted by volume
and bad debt volatility.
Additionally, Triad's debt levels have remained mostly stable
(debt at March 31, 2005 was $1.65 billion) as revenues and EBITDA
have grown, subsequently reducing leverage. Leverage (total
debt/EBITDA) for the last 12 months ended March 31, 2005 was 2.6
times (x), down from a high of 4.9x at Dec. 31, 2001. Leverage
will increase only slightly from current levels with the new,
larger bank facility as proceeds will mostly refinance existing
debt and Fitch anticipates leverage to improve by year-end.
Additionally, the better terms associated with the new facility
will reduce interest and commitment costs, effectively improving
coverage measures.
Triad generated $428 million in net cash flow from operations for
the LTM ended March 31, 2005 or 26% of total debt. Free cash flow
(NCFFO less capital expenditures) was negative $4.2 million for
the LTM ended March 31. 2005. The expectation that Triad will
generally generate negative free cash flow is incorporated in the
company's ratings as Fitch anticipates the company to use a mix of
cash flow and occasional borrowing to fund its expansion efforts.
A two notch rating on the bank facility reflects strong collateral
coverage for the secured facility.
With a portfolio of 53 general acute care hospitals and nine
ambulatory surgery centers, Triad Hospitals, Inc. is one of the
largest publicly owned hospital management companies in the U.S.
Triad concentrates it operations (hospitals and ambulatory surgery
centers) in small cities and selected urban markets primarily in
the southern, Midwestern and western U.S.
TWIN CORPORATION: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: Twin Corporation
10456 North Holly Road
Holly, Michigan 48442
Bankruptcy Case No.: 05-33001
Type of Business: The Debtor manufactures die cut products.
See http://www.twincorporation.com/
Chapter 11 Petition Date: June 13, 2005
Court: Eastern District of Michigan (Flint)
Debtor's Counsel: Dennis M. Haley, Esq.
Winegarden, Haley, Lindholm & Robertson, P.L.C.
G-9460 South Saginaw Street, Suite A
Grand Blanc, Michigan 48439
Tel: (810) 569-3600
Total Assets: Unknown
Total Debts: Unknown
The Debtor's list of its 20 Largest Unsecured Creditors was not
available at press time.
UAL CORP: Court Approves Port of Portland Settlement Agreement
--------------------------------------------------------------
As reported in the Troubled Company Reporter on May 20, 2005, Marc
Kieselstein, Esq., at Kirkland & Ellis, said the Port of Portland,
refused to enter into a new lease for the Portland International
Airport unless and until UAL Corporation and its debtor-affiliates
assume the soon-to-be expired existing lease and pay Portland's
prepetition claims as cure claims.
The Debtors had asked the Court to issue a preliminary injunction
to prevent the Port of Portland from denying or conditioning
access to the Portland International Airport. Mr. Kieselstein
explained that the Debtors' operations require ongoing and
uninterrupted access to PIA. If the Debtors are precluded from
the PIA because they will not enter into a discriminatory lease,
the airline will be operationally and economically wracked. The
Debtors will lose customers, goodwill, future sales and market
share. The Debtors need a preliminary injunction to prevent
Portland from engaging in discriminatory conduct.
Portland Opposes Preliminary Injunction
In response, the Port of Portland said the Court should not grant
the injunction because the Debtors are in no danger of suffering
irreparable harm.
Jason A. Rosenthal, Esq., at Foley & Lardner, in Orlando, Florida,
informs the Court that Portland will allow the Debtors to reserve
their rights to challenge the enforceability of these two
provisions. The Debtors can continue to operate at PIA under
terms of the lease while legally challenging these provisions.
Accordingly, the entry of a preliminary injunction is
inappropriate.
Settlement Agreement
The Port of Portland and the Debtors have reached a stipulation
to resolve their dispute. Portland will not condition a new
Lease based on the Debtors' status in Chapter 11. Portland
agrees that the Debtors are not delinquent on any postpetition
rent obligations under the Lease. The Debtors will pay Portland
$637,000 in full satisfaction of all postpetition rent under the
Lease. Portland withdraws its objection to the Debtors' request
for a preliminary injunction.
* * *
Judge Wedoff approves the Stipulation.
Headquartered in Chicago, Illinois, UAL Corporation --
http://www.united.com/-- through United Air Lines, Inc., is the
holding company for United Airlines -- the world's second largest
air carrier. The Company filed for chapter 11 protection on
December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M.
Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq.,
and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the
Debtors in their restructuring efforts. When the Debtors filed
for protection from their creditors, they listed $24,190,000,000
in assets and $22,787,000,000 in debts. (United Airlines
Bankruptcy News, Issue No. 88; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
USURF AMERICA: Renames Company to Cardinal Communications
---------------------------------------------------------
Usurf America, Inc. (OTC Bulletin Board: USUR) has been renamed
Cardinal Communications, effective immediately. The new stock
symbol will be announced when it is assigned.
The name was changed as a component of the recently completed
company-wide restructuring in which all of the broadband
technology and service provisioning divisions were combined under
the direction of long-time cable industry leader Dan Ryan and
renamed Cardinal Broadband. The new name reflects the company's
laser focus on providing state-of-the art broadband technology,
comprehensive infrastructure implementation services, and
provisioning world-class retail and wholesale integrated voice,
video, and data services.
"We are very proud of the restructure of our business and our
recent successes, including our recently released first quarter
results in which we grew revenue by over 2,900 percent year-over-
year and over 350 percent quarter-over-quarter," said Dave
Weisman, chairman and CEO. "The name Cardinal Communications
signifies that we are a diversified communications company
specializing in the design, implementation, and operation of
broadband communications for our over 20,000 retail customers and
our developer and municipality partners."
The Sovereign Companies operating division, which has built a
reputation as one of the leading developers of single and multi-
family homes that incorporate advanced next-generation
infrastructure and deliver retail broadband services to new
homeowners, will retain its identity under Cardinal
Communications. The division recently announced record sales
growth and the commencement of a new $25 million project.
The Get-A-Phone operating division, which delivers cost-effective
prepaid telephone services, will retain its name as well. Get-A-
Phone recently announced that business grew by over 20 percent in
the last quarter to over 17,000 subscribers.
"We have launched a set of ambitious plans to be the very best in
providing a soup-to-nuts set of technology development, design,
implementation, and long-term operation of advanced broadband
services to all of our customers," Weisman added. "Our new name
reflects our belief that we have assembled the right team and
business operations to be the leader in this new field and to
deliver superior service to all our customers. Our business
momentum and recent results bode well for our continued success."
About Usurf America, Inc.
Based in Broomfield, Colorado, Usurf America --
http://www.usurf.com/-- is implementing specific strategies
designed to leverage the Company's IP-based software technology
enabling fully ubiquitous voice, video and data product
deployments in targeted geographic regions of the United States.
Going Concern Doubt
Usruf's auditor stated in its report on the Company's financial
statements for the period ended Dec. 31, 2004, that due to
recurring losses there exists substantial doubt about the
Company's ability to continue as a going concern. For the three
months ended March 31, 2005, the Company incurred a net loss of
$1,260,604. As of March 31, 2005, USURF had an accumulated
deficit of $62,425,299. The Company is actively seeking customers
for its services.
W.R. GRACE: Wants to Contribute $38.23 Million to Retirement Plans
------------------------------------------------------------------
Through previously filed motions, W.R. Grace & Co. and its debtor-
affiliates sought and obtained the U.S. Bankruptcy Court for the
District of Delaware's permission to make contributions to the
Grace Retirement Plans for calendar years 2003 and 2004.
Subsequently, the Debtors contributed around $40 million to the
Retirement Plans in 2003, and around $20 million in 2004.
Grace Retirement Plans
The Prior Funding Motions included considerable background
regarding the Grace Retirement Plans and the importance of
maintaining those Plans and supporting their financial viability.
That background continues to be valid, Laura Davis Jones, Esq.,
at Pachulski, Stang, Ziehl, Young, Jones & Weintraub P.C., in
Wilmington, Delaware, says.
The information originally contained in the Prior Funding Motions
are updated, to provide that:
(a) The Grace Retirement Plans currently consist of 14 funded,
defined benefit pension plans, each of which is qualified
under Section 401(a) of the Internal Revenue Code;
(b) The most significant Grace Retirement Plan is the W. R.
Grace & Co. Retirement Plan for Salaried Employees, which
comprises approximately 81% of the assets and 83% of the
liability of the Grace Retirement Plans in the aggregate
-- depending on the measure of liability;
(c) The Debtors have a long history of providing employees
with defined benefit pension plans;
(d) Many of the Grace Retirement Plans are maintained pursuant
to collective bargaining agreements; and
(e) The employers that are considered competitors or peers of
the Debtors' businesses generally maintain defined benefit
pension plans for their employees;
Ms. Jones clarifies that the "plan year" of each Grace Retirement
Plan is a calendar year.
Funded Status of Grace Retirement Plans
Several different calculations to measure the liabilities and
assets of the Grace Retirement Plans, which were originally used
in the Prior Funding Motions, were also updated. The updated
amounts have been calculated by the actuary of the Grace
Retirement Pension Plans.
A table of the Updated Calculations is available for free at
http://bankrupt.com/misc/Funded_Status.pdf
Ms. Jones notes that, as indicated in the Updated Calculations,
the Grace Retirement Plans are currently underfunded by any
generally accepted measure. As of January 1, 2005, the amount by
which the Plans are underfunded ranges from $83 million to
$329 million, depending on the measure used.
Ms. Jones also explains that, while the asset value increased by
approximately $8 million during 2004, the "accumulated benefit
obligation" and the "projected benefit obligation" liabilities
also increased significantly. Based on the ERISA funding measure
of liabilities and assets under Section 412 of the Internal
Revenue Code, the amount of the underfunding also increased
significantly during 2004. Using the Economic Obligation as a
measure of liabilities, the amount of underfunding was
essentially unchanged from 2004 to 2005.
As a result of the funded status of the Grace Retirement Plans,
the Debtors were required to make an ERISA Section 4010 filing
with the Pension Benefit Guaranty Corporation for the 2004 plan
year. The ERISA Filing reported that the Plans were underfunded
by approximately $487 million as of December 31, 2004, calculated
on the basis required by the PBGC.
From a cash flow perspective, the Debtors believe that annual
benefit payments and other expenses from the Grace Retirement
Plans will continue to be significant for the foreseeable future,
totaling approximately $70 to $80 million per year. In 2004,
approximately $80 million was paid out of the Grace Retirement
Plans for benefit payments and to satisfy other expenses. As
specified in the Updated Calculations, the total market value of
assets as of January 1, 2005, was approximately $666 million.
The Debtors maintain that the amounts paid out each year
represent a high proportion of total assets, when compared to
comparable funded retirement plans of other employers, and
highlights the necessity to continue to make significant
contributions to the Grace Retirement Plans to assure their long-
term financial viability.
Employees Covered by the Grace Retirement Plans
Virtually all of the Debtors' current employees are covered by
one of the Grace Retirement Plans, Ms. Jones relates. The Grace
Salaried Plan alone covers more than 2,150 active, salaried
employees or 65% of the Debtors' workforce in the United States.
Ms. Jones tells Judge Fitzgerald that the Debtors' employees
consider continued benefit accruals under the Grace Retirement
Plans and the financial viability of those Plans as important
aspects of their employment relationship with the Debtors.
The Debtors' management believes that many of the Debtors'
employees closely monitor the financial viability of the Grace
Retirement Plans on an on-going basis through the Debtors' ERISA
and SEC disclosures, as well as other research techniques.
Management continues to receive many questions and comments from
the Debtors' workforce regarding the funding of the Grace
Retirement Plans and the Plans' long-term financial ability to
fulfill pension promises made to current and retired employees.
Ms. Jones states that the Debtors' management and employees are
motivated to continue working toward successfully creating value
for the Debtors' estates by growing the revenues and profits of
the businesses, with the expectation that at least a portion of
the cash generated by those efforts would be used to provide the
funding necessary to assure the long-term financial viability of
the Grace Retirement Plans. According to Ms. Jones, the efforts
of the Debtors' management and employees were largely responsible
for a successful 2004 for the Debtors' businesses.
Despite their employees' expectations that the successful
performance of the Debtors' businesses would help enhance the
long-term financial viability of the Grace Retirement Plans, the
employees continue to express increasing concern and anxiety.
The Debtors believe that continuing to make at least the legally
required minimum contributions to each of the Grace Retirement
Plans is essential to maintaining the morale of their workforce
and its confidence in management, and therefore, the productivity
and profitability of their businesses.
Previous Funding Approaches
In 2003, the Debtors tailored several aspects of the 2003 Funding
Motion to address concerns expressed by the official committees
in their Chapter 11 cases regarding the conservation of the
Debtors' cash. At the same time, that Motion recognized the
concerns of the Debtors' employees regarding the Grace Retirement
Plans and the employees' value to the Debtors' estates and their
vital role in a successful reorganization. Ms. Jones informs the
Court that the 2003 Funding Motion was intended to satisfy a set
of specific objectives.
The 2004 Funding Motion was also intended to address the concerns
expressed by the Committees, as well as the concerns of the
Debtors' employees. The 2004 Motion was designed to satisfy
similar, but fewer, objectives than the 2003 Motion.
Specifically, the 2004 Motion articulated an approach that was
intended to satisfy two objectives:
(a) satisfying all legally required minimum contributions
under Section 412 of the Internal Revenue Code; and
(b) avoiding the requirement imposed by ERISA Section 4011 to
provide underfunding notices to Grace Retirement Plan
participants for 2005.
The 05/06 Funding Approach
Consequently, the Debtors wish to make the minimum contributions
to the defined benefit retirement plans covering their employees
in the U.S. required under federal law during the period July 15,
2005, to April 15, 2006. The total of the legally required
minimums for the 05-06 Funding Period will be approximately
$38.2 million.
Ms. Jones informs Judge Fitzgerald that the 05/06 Funding
Approach seeks to continue the Debtors' objective of funding the
Grace Retirement Plans in a manner that takes into account the
concerns of the Committees with regard to the conservation of the
Debtors' cash. At the same time, it continues to address the
employees' concerns with regard to the long-term financial
viability of the Grace Retirement Plans, in light of updated
information and data regarding the Retirement Plan's funding
status and the amount of projected required future contributions.
Ms. Jones says that the 05/06 Funding Approach will satisfy only
the most important of the multiple objectives considered in the
Prior Funding Motions to make those contributions to the Grace
Retirement Plans that are necessary to satisfy the minimums that
are legally required by Section 412, for the 05-06 Funding
Period. Each contribution will be made no sooner than one month
before the deadline imposed by federal law.
The Debtors point out that the 05/06 Funding Approach will not
satisfy the objective, specified in each of the Prior Funding
Motions, to make contributions that would permit the Debtors to
avoid the requirement to distribute to its employees the pension
underfunding notices required by ERISA Section 4011. The Debtors
believe that distributing the underfunding notices could have a
significant adverse effect on the morale of their employees.
The funds to make the legally required minimum contributions
under the 05/06 Funding Approach will not be drawn from the
Debtors' DIP Credit Facility, but rather from available cash
raised primarily from repatriated funds from their non-debtor
affiliates.
The schedule of legally required minimum contributions to the
Grace Retirement Plans for the 05-06 Funding Period discloses:
_________________________ ___________________ ___________
| | | |
| Payment Due Date | Contributions | Plan Year |
|_________________________|___________________|___________|
| 2005 | | |
| July 15 | $7,540,083 | 2005 |
| October 15 | 8,732,502 | 2005 |
|_________________________|___________________|___________|
| 2006 | | |
| January 15 | 8,732,909 | 2005 |
| April 15 | 13,224,000 | 2006 |
|_________________________|___________________|___________|
| |
| Total $38,229,494 |
|_________________________________________________________|
Ms. Jones clarifies that all of the contributions listed on the
Schedule for the 2005 plan year are finalized, and are not
subject to change as a result of future market performance of the
assets of the Grace Retirement Plans. The contribution for the
2006 plan year is an estimate, and it may change depending on
2005 market performance of the assets of the Grace Retirement
Plans and any changes in applicable federal law, as well as any
changes in the Plans' demographics through December 31, 2005.
If the market performance of the Plans' assets results in lesser
legally required minimums for the 2006 plan year under Section
412, then the Debtors would make only the lesser required minimum
for 2006, not the amount listed on the Schedule, Ms. Jones
explains. If market performance, or other factors, result in
larger minimum contributions for 2006, then the larger
contribution for 2006 would be made when due.
Accordingly, the Debtors seek the Court's authority to make the
minimum contributions required by Section 412 of the Internal
Revenue Code to one or more of the Grace Retirement Plans for the
05-06 Funding Period and to make a small additional contribution
to offset certain PBGC variable rate premiums.
The Debtors believe that it is necessary to secure Court approval
for the payment of legally required minimum contributions for the
05-06 Funding Period at this time because the first due date with
respect to the contributions is July 15, 2005. This will
eliminate the need for the Debtors to incur the time and expense
associated with the submission of another funding request within
approximately six months.
Ms. Jones also relates that if the Court authorizes them to fund
the minimums for the 05-06 Funding Period, then the Debtors do
not anticipate filing another Grace Retirement Plan funding
motion for approximately one year to make legally required
minimum contributions for the subsequent 12-month period.
If the Debtors make only the legally required minimum
contributions, as proposed, employees will be notified that the
Grace Retirement Plans are underfunded for the 2006 plan year.
That notification would be mailed in the last quarter of 2006.
The Debtors maintain that the legitimate concerns of the
Committees will be addressed by the 05/06 Funding Approach
because the Debtors' cash will only be used to satisfy the
minimum contribution requirements imposed by federal law, and not
to make any additional contributions to satisfy any other
objective.
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, P.C., represent the
Debtors in their restructuring efforts. (W.R. Grace Bankruptcy
News, Issue No. 87; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
WESTPOINT STEVENS: Settles Dispute Over INVISTA Litigation Claims
-----------------------------------------------------------------
WestPoint Stevens, Inc. and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York to approve
a settlement of some litigation claims, pursuant to an agreement
with INVISTA S.ar.l, formerly known as Arteva Specialties S.ar.l.,
on behalf of itself, its parents, subsidiaries, divisions and
affiliates.
On August 12, 2003, the Debtors commenced an action in the United
States District Court for the Middle District of Alabama against:
-- Nan Ya Plastics Corporation, America;
-- Nan Ya Plastics Corporation;
-- Robert Bradley Dutton;
-- Wellman, Inc.;
-- Arteva Specialties, S.A.R.L.;
-- Arteva Services S.A.R.L.;
-- Troy F. Stanley, Sr.;
-- DAK Fibers LLC; and
-- E.I. DuPont de Nemours and Company.
The Debtors alleged in the complaint that the defendants engaged
in a conspiracy to fix, raise, maintain or stabilize the price of
polyester staple fiber beginning at least as early as 1999 and
continuing until at least 2001. In January 2004, the Action was
transferred to the United States District Court for the Western
District of North Carolina, where it was consolidated with, among
other things, the actions of over 30 other parties setting forth
similar causes of action.
John J. Rapisardi, Esq., at Weil, Gotshal & Manges, LLP, in New
York, tells the Court that the Debtors and INVISTA entered into
good faith, arm's-length negotiations to settle the claims
asserted by the Debtors against INVISTA in the Action. INVISTA,
along with one other defendant, Wellman, Inc., represent the
remaining group of defendants in the Action with whom the Debtors
had not settled their claims.
The Court had approved the Debtors' claims settlement with:
(a) E.I. DuPont de Nemours and Company, DAK Americas LLC, DAK
Fibers LLC, and Alpek S.A. de C.V. on January 29, 2004;
and
(b) Nan Ya Plastics Corporation, America, Nan Ya Plastics
Corporation, and Nan Ya Plastics Corporation, Taiwan, on
April 19, 2005.
Mr. Rapisardi reports that the Debtors are in the final stages of
negotiating a settlement with Wellman, Inc.
Pursuant to the Settlement Agreement, the Debtors will receive
amounts from INVISTA in exchange for the Debtors' release of their
claims against INVISTA in the Action.
The Debtors will immediately receive the Settlement Payment
without the need to engage in expensive and protracted litigation
in connection with asserting any of their Litigation Claims
against INVISTA. Although it is not possible to determine with
precise certainty the damages the Debtors incurred as a result of
INVISTA's alleged anti-competitive conduct, the Debtors believe
that the settlement amount will adequately compensate them for the
damages they incurred, Mr. Rapisardi notes.
Under Seal
Mr. Rapisardi discloses the Debtors are required by the terms of
the Settlement Agreement to keep the Settlement Agreement,
including the amount of the Settlement Payment, confidential.
Accordingly, the Debtors sought and obtained the Court's authority
to file the Settlement Agreement and the Settlement Amount under
seal. In accordance with the Sealing Order, the Settlement
Agreement and the Settlement Amount have been filed under seal and
copies of each have been made available to:
(i) the Office of the United States Trustee for the Southern
District of New York;
(ii) the attorneys for the Steering Committee and Icahn
Associates;
(iii) the attorneys for the Debtors' postpetition lenders; and
(iv) the attorneys for the statutory committee of unsecured
creditors.
Headquartered in West Point, Georgia, WestPoint Stevens, Inc., --
http://www.westpointstevens.com/-- is the #1 US maker of bed
linens and bath towels and also makes comforters, blankets,
pillows, table covers, and window trimmings. It makes the Martex,
Utica, Stevens, Lady Pepperell, Grand Patrician, and Vellux
brands, as well as the Martha Stewart bed and bath lines; other
licensed brands include Ralph Lauren, Disney, and Joe Boxer.
Department stores, mass retailers, and bed and bath stores are its
main customers. (Federated, J.C. Penney, Kmart, Sears, and Target
account for more than half of sales.) It also has nearly 60 outlet
stores. Chairman and CEO Holcombe Green controls 8% of WestPoint
Stevens. The Company filed for chapter 11 protection on
June 1, 2003 (Bankr. S.D.N.Y. Case No. 03-13532). John J.
Rapisardi, Esq., at Weil, Gotshal & Manges, LLP, represents the
Debtors in their restructuring efforts. (WestPoint Bankruptcy
News, Issue No. 47; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
WESTPOINT STEVENS: Asks Court to Okay Harley Davidson License Deal
------------------------------------------------------------------
WestPoint Stevens, Inc. and its debtor-affiliates enter into
various licensing agreements to obtain the right to manufacture
and sell products incorporating licensed trademarks. The Debtors
typically pay licensing and royalty fees on the sales of licensed
products, which are offset by charging a premium for the
established brand. John J. Rapisardi, Esq., at Weil, Gotshal &
Manges, LLP, in New York, explains that consumers tend to pay a
premium for a particular brand because they are seeking the
"lifestyle" look of that designer, just as in apparel. A
significant portion of the Debtors' sales is derived from
licensed, designer trademarks.
Mr. Rapisardi relates that since 1903, Harley Davidson Motor
Company, Inc., has been producing the most enduring and
recognizable motorcycles in the world. The Harley Davidson brand
has over 1,300 dealerships in 48 countries worldwide. The intense
loyalty to the brand, Mr. Rapisardi says, has spawned the Harley
Owners Group and the Buell Riders Adventure Group, which boast
over 600,000 members worldwide.
This intense brand loyalty has made Harley Davidson accessories
extremely popular and profitable, Mr. Rapisardi observes. In
2004, Harley Davidson realized revenue in excess of $223 million
from apparel and other general merchandise sales alone.
According to Mr. Rapisardi, Harley Davidson's interest in
expanding their product line into the bedding and bath products
market presents a unique opportunity for the Debtors to capitalize
on the Harley Davidson brand and success.
The Debtors, with the assistance of their professionals, entered
into negotiations with Harley Davidson for the acquisition of a
Harley Davidson license. After extensive, good faith and arm's-
length negotiations, the Debtors were able to reach an agreement
for use of the Harley Davidson brand. The salient terms of the
Harley Davidson Agreement are:
* The term of the Harley Davidson Agreement is through
March 31, 2009;
* The Debtors may manufacture and distribute products with the
Harley Davidson label, including sheets, pillowcases,
comforters, bedspreads, duvets, quilts, shams, bed ruffles,
coordinate window treatments, decorative pillows, bath towel
ensembles, shower curtains, bath accessories and bath rugs;
* The license conveyed to the Debtors by the Licensor is non-
exclusive;
* The Debtors will be selling products bearing the Harley
Davidson brand through approved channels of distribution in
the United States and Canada;
* The Debtors will have the right to distribute the products
through department stores, specialty stores, JC Penney,
Target and Harley Davidson Dealers;
* The Debtors may assign their rights under the Harley
Davidson Agreement to a successor-in-interest in connection
with a sale of substantially all of their assets pursuant to
Section 363(b) of the Bankruptcy Code or pursuant to a
Chapter 11 plan upon Harley Davidson's prior written
consent;
* The Debtors will pay Harley Davidson royalties:
-- $500,000 within 30 days of the Effective Date;
-- 12% of first quality product sales;
-- 5% Tech Touch products up to 30% of contractual year
sales;
-- 8% Tech Touch products above 30% of contractual year
sales; and
-- 6% of closeouts up to 15% of contractual year sales; and
* The royalties for each quarter must be at least:
-- Year One: $62,000,
-- Year Two: $50,000, and
-- Year Three: $52,000.
The Debtors have historically employed a strategy of building a
strong portfolio of proprietary brands through ownership of its
own trademarks and through licensing agreements. The Debtors
believe that the expansion of this portfolio with the addition of
brands like Harley Davidson is the best defense against the
competitive threat of direct importing by retailers.
The Debtors believe that their entry into the Harley Davidson
Agreement will allow them to take advantage of a unique
opportunity to expand their product line and increase market
share. Harley Davidson is seeking to expand its brand into the
juvenile market and has selected the Debtors as the right
manufacturer to assist in those efforts, Mr. Rapisardi says.
According to the Debtors' internal analysis as well as forecasts
of Harley Davidson, the parties project sales of the products to,
at a minimum, reach $10 million over the term of the Harley
Davidson Agreement.
The addition of Harley Davidson to the Debtors' portfolio of
brands may offer a strong alternative to and diminish the Debtors'
dependence on their other license agreements. The addition of
Harley Davidson to the portfolio, Mr. Rapisardi notes, may provide
the Debtors with flexibility and leverage in future negotiations
with other licensors.
Accordingly, the Debtors ask the U.S. Bankruptcy Court for the
Southern District of New York to approve its entry into the Harley
Davidson Agreement.
Prior to filing their request, the Debtors notified Icahn
Associates, the Steering Committee and WL Ross & Co. LLC of their
intent to enter into the Harley Davidson Agreement. The Debtors
received no objections.
Headquartered in West Point, Georgia, WestPoint Stevens, Inc., --
http://www.westpointstevens.com/-- is the #1 US maker of bed
linens and bath towels and also makes comforters, blankets,
pillows, table covers, and window trimmings. It makes the Martex,
Utica, Stevens, Lady Pepperell, Grand Patrician, and Vellux
brands, as well as the Martha Stewart bed and bath lines; other
licensed brands include Ralph Lauren, Disney, and Joe Boxer.
Department stores, mass retailers, and bed and bath stores are its
main customers. (Federated, J.C. Penney, Kmart, Sears, and Target
account for more than half of sales.) It also has nearly 60 outlet
stores. Chairman and CEO Holcombe Green controls 8% of WestPoint
Stevens. The Company filed for chapter 11 protection on
June 1, 2003 (Bankr. S.D.N.Y. Case No. 03-13532). John J.
Rapisardi, Esq., at Weil, Gotshal & Manges, LLP, represents the
Debtors in their restructuring efforts. (WestPoint Bankruptcy
News, Issue No. 47; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
YES! ENTERTAINMENT: Court Delays Entry of Final Decree
------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware delays
issuing a final decree formally closing the chapter 11 case of
YES! Entertainment Corporation. The Executive Sounding Board
Associates, Inc., the trustee of the YES! Entertainment Corp.
Liquidating Trust overseeing the liquidation of YES! Corp.'s
assets, requested the extension.
The Trustee needs the extension to allow for the resolution of the
adversary proceeding commenced against Wham-O.
In March 1998, YES! Entertainment sold its Food and Girls Activity
business units to Wham-O, Inc., in exchange for:
-- a $9.8 million up-front cash payment;
-- up to $600,000 more pending a final inventory
reconciliation;
-- a $2.5 million contingency payment to be earned based upon
certain performance criteria for the Food line in the
first year, and
-- royalties of up to $5.5 million over a seven-year period.
The Liquidating Trust says it can't make a final distribution
until the Wham-O Action is resolved and the full scope of
liquidated assets to be distributed is known.
Headquartered in Pleasonton, California, Yes! Entertainment
Corporation, developed, manufactured and marketed toys and other
entertainment and interactive products. The Company filed for
chapter 11 protection on February 9, 1999 (Bankr. D. Del. Case No.
99-273). Anthony M. Saccullo, Esq., and Jeffrey M. Schlerf, Esq.,
at The Bayard Firm represented the Debtor. When the Debtor filed
for protection from its creditors, it listed $18,635,000 in total
assets and $19,680,000 in total debts. Blank Rome Comisky &
McCauley, LLP, and Squadron Ellenoff Plesent & Sheinfeld LLP
represented the Official Committee of Unsecured Creditors. On
December 11, 2001, the Honorable Mary F. Walrath confirmed a First
Amended Plan of Reorganization. In April 2002, the Plan became
effective.
YUKOS OIL: Yukos Board Nominates 11 Candidates for New Board
------------------------------------------------------------
The Board of Directors of YUKOS Oil Company made a decision to
make a recommendation to the Annual General Meeting of
shareholders set for June 23, 2005, not to pay out dividend for
2004. The Board has also approved a list of candidates to be
nominated to the new Board of Directors to be elected at the
Annual General Meeting.
"In the absence of candidate nominations from the shareholders the
Board has exercised its right to nominate them independently,"
said Victor Geraschenko, Chairman of YUKOS Board of Directors.
"We have been successful in forming a team of highly professional
candidates capable of fully protecting the interests of creditors
and minority shareholders. Inclusion of representatives of YUKOS'
senior management in the list of candidates is driven by the
desire for even closer coordination between the Board and
executive bodies at a difficult time for the Company".
The list of candidates to the new Board of Directors of YUKOS Oil
Company comprises of:
(1) Yury Beilin - Deputy CEO, YUKOS Oil Company
(2) Francois Buclez - Director, Cube Capital Ltd
(3) Victor Geraschenko - Chairman of the Board of
Directors, YUKOS Oil Company
(4) Alexey Kontorovich - Director of the Institute of Oil
and Gas Geology, Siberian Branch of the Russian Academy
of Sciences
(5) Bernard Loze - President, Loze & Associes
(6) Yury Pokholkov - President, Tomsk Polytechnic
University
(7) Yevgeny Saburov - Director, Institute of the Problems
of Investing, Academic Advisor to Education Development
Institute, "Higher School of Economics" University
(8) Alexander Semikoz - Advisor to Executive Board,
Representative of Moscow Narodny Bank to the Board of
Directors of "Eurofinance Mosnarbak", Moscow Narodny
Bank, London
(9) Ivan Silaev - President of the Russian Union of
Mechanical Engineers
(10) Steven Theede - CEO, YUKOS Oil Company
(11) Vladimir Forosenko - independent consultant
As reported earlier, besides election of a new Board of Directors,
the Annual General Meeting on June 23, 2005, will discuss the
issues of approving YUKOS Oil Company's statutory annual report
for 2004, its annual financial statements, distribution of profit
and losses of YUKOS Oil Company for the past period.
The agenda of the Annual General Meeting will also include making
amendments to the Charter of YUKOS Oil Company, election of the
Auditing Commission, approval of Company's Auditors for 2005
fiscal year, and approval of the total amount of remuneration and
expenses reimbursement for members of the Board of Directors for
2005-2006.
Headquartered in Houston, Texas, Yukos Oil Company is an open
joint stock company existing under the laws of the Russian
Federation. Yukos is involved in the energy industry
substantially through its ownership of its various subsidiaries,
which own or are otherwise entitled to enjoy certain rights to oil
and gas production, refining and marketing assets. The Company
filed for chapter 11 protection on Dec. 14, 2004 (Bankr. S.D. Tex.
Case No. 04-47742). Zack A. Clement, Esq., C. Mark Baker, Esq.,
Evelyn H. Biery, Esq., John A. Barrett, Esq., Johnathan C. Bolton,
Esq., R. Andrew Black, Esq., Fulbright & Jaworski, LLP, represent
the Debtor in its restructuring efforts. When the Debtor filed
for protection from its creditors, it listed $12,276,000,000 in
total assets and $30,790,000,000 in total debts. (Yukos
Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
* Bridge Associates' Jean FitzSimon to Join Whitehall Jewellers
---------------------------------------------------------------
Bridge Associates, LLC (a nationally recognized restructuring
boutique) disclosed that Principal and General Counsel Jean
FitzSimon will be leaving the firm effective June 15 to accept the
position as Senior Vice President and General Counsel to Whitehall
Jewellers in Chicago.
During her career at Bridge, Ms. FitzSimon concentrated her
practice on compliance consulting, corporate governance and
enterprise-wide risk issues. She chairs the American Bar
Association Committee on Corporate Compliance and is a regular
speaker on compliance, ethics and corporate governance topics.
Ms. FitzSimon served as a Director of the American Bankruptcy
Institute from 1999 to 2003.
"Jean has been, and continues to be, a valued colleague, great
friend and a tremendous supporter of Bridge's work," said Anthony
H.N. Schnelling, Managing Director. "We will miss her guidance
and assistance sincerely. We wish her well at Whitehall and thank
her for all she has done for us."
Jean FitzSimon said, "While I am extraordinarily excited by this
opportunity, it is very hard to leave an organization as terrific
as Bridge. Tony, Carl, Mark and Dean have been wonderfully
supportive of me, including my decision to return to corporate
life. Bridge is the best turnaround consulting firm that I know.
They handle all of their cases, whether huge, such as Conseco or
United, or small, expertly, professionally and with a vigilant eye
always to the bottom line. It will always be one of the finest
organizations with which it has been my privilege to be
associated."
About Bridge Associates
Bridge Associates, LLC -- http://www.bridgellc.com/-- is a
leading turnaround, crisis and interim management firm, providing
a wide range of professional services to troubled enterprises.
Headquartered in New York City, Bridge professionals operate
nationwide from offices located in Tampa, Cleveland, Tulsa,
Houston, and Chicago.
* Buckingham Doolittle Merges with Pheterson & Bleau
----------------------------------------------------
Buckingham, Doolittle & Burroughs, LLP, disclosed its merger with
the Law Offices of Pheterson & Bleau, which specializes in labor
and employment law, business, executive contract work and
negotiation, complex litigation, and administrative law. The
merger strengthens Buckingham, Doolittle & Burroughs' presence in
the South Florida legal market and positions the firm for future
growth. The firm will continue to be known as Buckingham,
Doolittle & Burroughs.
"The Boca Raton office of Buckingham, Doolittle & Burroughs is one
of the firm's fastest growing locations due to the growth of the
region," said Nicholas T. George, president of Buckingham,
Doolittle & Burroughs. "The combination of our attorneys and
staff with those of Pheterson & Bleau provides additional depth to
the services we offer our clients - particularly in the areas of
labor and employment law and complex litigation."
According to Jeffrey Pheterson, senior partner of Pheterson &
Bleau, Buckingham, Doolittle & Burroughs offered the right
combination of experience and capabilities to take the firm's
labor and employment and complex litigation practice to the next
level.
"The legal market has become increasingly competitive in South
Florida," Mr. Pheterson said. "We knew that a merger was the
appropriate strategy for us to enhance the level of services we
provide to our clientele and further develop our areas of
specialization. Our decision to merge with Buckingham, Doolittle
& Burroughs was based upon the firm's growth and the extremely
high quality of legal professionals in the Boca Raton office."
Two Pheterson & Bleau attorneys will join the Boca Raton office of
Buckingham, Doolittle & Burroughs as a result of the merger:
Jeffrey Pheterson
Mr. Pheterson, who joins Buckingham, Doolittle & Burroughs as
shareholder, has practiced law for over 29 years in Florida. His
primary area of focus is labor and employment law, but he also
engages in legal counseling and, if required, litigation
concerning a variety of matters including executive contract
concerns, local governmental issues, business negotiations,
healthcare law, and complex civil litigation. Mr. Pheterson has
served as special counsel on many labor and employment matters. He
is a member of the Board of Trustees and currently serves as Board
Secretary to Bethesda Memorial Hospital, Inc. Through the law
firm, he will remain an active member of the Executive Committee
of the Corporate Partners Program of the Raymond F. Kravis Center
for Performing Arts. He formerly was the Chair of the Labor and
Employment Law Section of the Florida Bar, and is a member of the
Palm Beach County Bar Association, having served as its CLE
Employment Law Committee Chair in 2002, and a member of the South
Palm Beach County Bar Association.
Denise J. Bleau
Ms. Bleau, who joins the firm as partner, has practiced law for
over 19 years in Florida. Her primary area of focus is labor &
employment law. Ms. Bleau also has an active practice in the
areas of administrative and local government law, contract issues,
real estate litigation, and complex civil litigation. She has
served as special counsel on many labor and employment matters.
Ms. Bleau, the former Mayor of Lantana, is a member of the Palm
Beach County Bar Association.
"We sought to merge with a law firm that would fill an important
niche for the South Florida office but was also committed to our
standards of excellence in client service and experience," said
Michael Mopsick, managing partner of the Boca Raton office of
Buckingham, Doolittle & Burroughs. "We found that in Pheterson &
Bleau and look forward to working with them to strengthen our
South Florida office's employment and labor law practice."
About Buckingham, Doolittle & Burroughs, LLP
Since 1913, Buckingham, Doolittle & Burroughs, LLP has served
individuals and businesses in virtually every industry and trade.
The Firm provides a full range of legal services to clients, from
sole proprietors to multinational corporations, governmental
bodies, foundations and public organizations.
Offices are located in Akron, Canton, Cleveland, and Columbus,
Ohio, and Boca Raton, Florida.
Areas of Focus: Alternate Dispute Resolution; Appellate;
Bankruptcy; Business Law; Closely Held Companies; Commercial Law
and Complex Litigation; Computer Law; Construction Law;
Copyrights; Corporate Law; Creditors Rights; Criminal Law &
Government Investigation; Employee Benefits; Environmental; Family
Law; Finance Law; Franchise; Health Care; Health Personnel
Immigration; Home Care Agencies; Hospice Care Programs; Hospitals
& Health Systems; Immigration Law; Insurance Coverage; Insurance
Defense; Insurance Providers; Intellectual Property; Labor and
Employment Law; Land Use and Zoning; Litigation; Long-Term Care
Providers; Medical Malpractice Defense; Mergers and Acquisitions;
Non-Profit Organizations Law; Patents; Physicians and Physician
Groups; Private Foundations; Probate; Public Law; Publicly Held
Companies; Real Estate; School Law; Securities; Sports &
Entertainment Law; Succession Planning; Taxation; Toxic Tort;
Trademarks/Service Marks; Trade Secrets; Trial; Trust & Estate
Planning; White Collar Defense; Workers' Compensation.
* L. Kevin O'Mara Joins Cadwalader as Corporate Partner
-------------------------------------------------------
L. Kevin O'Mara has joined Cadwalader, Wickersham & Taft LLP as a
partner in the Corporate/Mergers & Acquisitions Department,
resident in New York. Mr. O'Mara formerly was a partner in the
New York office of Clifford Chance US LLP.
Mr. O'Mara focuses his practice on corporate law, private equity
and mergers and acquisitions. He has represented a broad range of
private equity funds and Fortune 100 corporations advising clients
in the technology, media, telecommunications and pharmaceutical
sectors in the US, Europe and Latin America.
"Kevin is an outstanding addition to both our New York office and
our corporate practice. I am delighted to welcome him to the
firm," stated Robert O. Link, Jr., Cadwalader's Chairman and
Managing Partner.
"Kevin is another strong addition to our expanding Corporate/M&A
Department. His practice complements the cornerstone of our
department, M&A, while also adding depth and breadth in the areas
of private equity and corporate governance. We are all looking
forward to working with him," stated Louis Bevilacqua, Chair of
Cadwalader's Corporate/Mergers & Acquisitions Department.
"I am looking forward to joining Cadwalader and collaborating with
its teams of highly regarded practitioners in the Corporate/M&A as
well as Banking, Capital Markets, Tax and Litigation Departments.
I cannot imagine a better platform to grow a business base serving
a wide range of client needs," stated Mr. O'Mara.
Mr. O'Mara joined Clifford Chance US LLP as a partner in 2000. He
received his B.A. from Haverford College and his J.D. from Temple
University where he was a member of the editorial staff of Temple
International and Comparative Law Journal.
Cadwalader, Wickersham & Taft LLP -- http://www.cadwalader.com/--
established in 1792, is one of the world's leading international
law firms, with offices in New York, London, Charlotte, and
Washington. Cadwalader serves a diverse client base, including
many of the world's top financial institutions, undertaking
business in more than 50 countries in six continents. The firm
offers legal expertise in securitization, structured finance,
mergers and acquisitions, corporate finance, real estate,
environmental, insolvency, litigation, health care, banking,
project finance, insurance and reinsurance, tax, and private
client matters.
* Chadbourne & Parke Creates Fellowship at The Door Legal Services
------------------------------------------------------------------
The international law firm of Chadbourne & Parke LLP expanded its
commitment to The Door Legal Services Center through the creation
of a Chadbourne & Parke Fellowship.
Christa Stewart, Director of The Door Legal Services Center,
commenting on the Fellowship program said, "I extend my
appreciation to Chadbourne for its support for this fellowship.
This position will dramatically increase our capacity to provide
legal services to youth in New York City."
Chadbourne will hire an attorney who, after an orientation period
at its New York office, will work for at least a year at The Door
Legal Services Center located at 555 Broome Street in Soho.
During the Fellowship period, the Chadbourne Fellow will be a
full-time employee of Chadbourne, receive Firm benefits and have
an office at the Firm in addition to space at The Door Legal
Services Center. The Fellow will be expected to report regularly
to Chadbourne on the work being done at The Door and to attend
Firm meetings and social functions.
At the conclusion of the Fellowship, it is Chadbourne's hope that
the Fellow will remain at the Firm and undertake a regular
workload in a practice area of the Fellow's choice.
The Door Legal Services Center was established in 1992 to address
the lack of free legal services for youth in New York City in need
of help with their legal problems. The Door, which is New York's
premier youth development agency, serves young people, ages 12-21,
primarily from low-income, single-parent families.
Chadbourne has had an externship program with The Door since 1998,
in which associates have been sent on 8-12 week assignments. This
program will continue.
Legal work at The Door Legal Services Center involves providing
advice on a broad range of issues. These can include such matters
as family law issues involving paternity, child support, divorce,
domestic violence, child custody and visitation rights; juvenile
matters including emancipation, the rights of youth in foster care
and obtaining government benefits; immigration issues for
undocumented clients; employment issues, such as unpaid wages; and
handling difficulties at school and with the police.
About The Door
The Door Legal Services Center was established in 1992 to address
the lack of free legal services for youth in New York City in need
of help with their legal problems. The Center provides a broad
range of counsel and advocacy services in civil matters. The
Door's mission is to empower young people to reach their potential
by providing comprehensive youth development services in a diverse
and caring environment. Each year over 7,000 young people, most
referred by their peers, come to The Door for primary health care,
prenatal care and health education, mental health counseling,
legal services, GED, ESL, computer classes, tutoring and homework
help, college preparation and computer classes, career development
services and training, job placement, daily meals, arts, sports
and recreational activities.
About Chadbourne & Parke LLP
Chadbourne & Parke LLP -- http://www.chadbourne.com/-- an
international law firm headquartered in New York City, provides a
full range of legal services, including mergers and acquisitions,
securities, project finance, corporate finance, energy,
telecommunications, commercial and products liability litigation,
securities litigation and regulatory enforcement, white collar
defense, intellectual property, antitrust, domestic and
international tax, reinsurance and insurance, environmental, real
estate, bankruptcy and financial restructuring, employment law and
ERISA, trusts and estates and government contract matters. The
Firm has offices in New York, Washington, D.C., Los Angeles,
Houston, Moscow, Kyiv, Warsaw (through a Polish partnership),
Beijing and a multinational partnership, Chadbourne & Parke, in
London.
* Sheila Smith Heads Deloitte Financial's Reorganization Services
-----------------------------------------------------------------
Deloitte Financial Advisory Services LLP, a subsidiary of Deloitte
& Touche USA LLP, has selected Sheila Smith to lead its
Reorganization Services Group. RSG, as it is known, is a service
within Deloitte FAS.
A prominent restructuring and turnaround professional, Smith, has
been a principal within the practice since 2000. She brings more
than 15 years' experience providing advisory services on
turnaround, bankruptcy and restructuring for multiple industries,
including manufacturing, retail, distribution and
telecommunications. She has helped numerous financial
institutions, equity investors and other stakeholders to maximize
recovery from distressed and bankrupt companies.
"Already a valuable member of the RSG practice for the past five
years, Sheila has both the track record and relationships to lead
the group in what has become a highly competitive market," said
Frank Piantidosi, Chairman and CEO, Deloitte FAS.
Smith's specific experience includes:
-- representing public and private companies going through
Chapter 11 seeking to reorganize and restructure their
balance sheets through a debt for equity swap or
compromise of debt;
-- advising creditor committees comprised of diverse
constituents, including conventional trade debt, under-
secured bank debt, convertible equity instruments and bond
holders;
-- assisting companies through liquidity crises in the
development of cash flows, identification of additional
working capital sources, cash management strategies and
unconventional financing approaches;
-- providing sophisticated analysis related to equitable
subordination, fraudulent conveyance, avoidance actions,
substantive consolidation, best interests and feasibility;
and
-- giving expert witness testimony on bankruptcy-related
issues in numerous jurisdictions, among others.
"We are the only fully-integrated reorganization practice among
the Big-4 firms," Smith said. "No other financial advisor can
match our depth, breadth, reach or industry knowledge in working
with bankrupt and distressed companies. This gives our group
tremendous advantage over the universe of niche and boutique
advisors," she said.
More than 1,400 professionals from the subsidiaries of Deloitte &
Touche USA LLP participated in a recent court-ordered assignment
in a major bankruptcy.
"Bankruptcy and restructuring work require broad experience in so
many areas - tax, valuation, accounting, operation and systems.
Part of our practice's value is our ability to access deep
industry knowledge and resources," she said.
Prior to Deloitte FAS, Smith served as managing director of
another Big-4 accounting firm's global financial strategies group,
focusing on corporate restructuring. Her bankruptcy
reorganization experience occurred while serving as the chief
financial officer for a building supply company that went bankrupt
and liquidated in the 1980s.
Smith holds memberships in several professional affiliations,
including: the American College of Bankruptcy; the Turnaround
Management Association of New England, where she served as former
president; the American Bankruptcy Institute; and the Commercial
Law League of America.
She has an advanced degree in special education from State
University of New York at Buffalo, and began her career as an
educator. A certified insolvency and structuring advisor, Smith
holds an M.B.A. from Boston University.
About Deloitte
Deloitte refers to one or more of Deloitte Touche Tohmatsu, a
Swiss Verein, its member firms and their respective subsidiaries
and affiliates. As a Swiss Verein, neither Deloitte Touche
Tohmatsu nor any of its member firms has any liability for each
other's acts or omissions. Each of the member firms is a separate
and independent legal entity operating under the names "Deloitte",
"Deloitte & Touche", "Deloitte Touche Tohmatsu" or other related
names. Services are provided by the member firms or their
subsidiaries or affiliates and not by the Deloitte Touche Tohmatsu
Verein.
Deloitte & Touche USA LLP is the US member firm of Deloitte Touche
Tohmatsu. In the US, services are provided by the subsidiaries of
Deloitte & Touche USA LLP (Deloitte & Touche LLP, Deloitte
Consulting LLP, Deloitte Financial Advisory Services LLP, Deloitte
Tax LLP and their subsidiaries), and not by Deloitte & Touche USA
LLP.
* Houlihan Lokey Expands Sovereign Advisory Services Group
----------------------------------------------------------
Houlihan Lokey Howard & Zukin, an international investment bank,
announced a major expansion of its Sovereign Advisory Services
Group with the joining of five senior officers, all formerly with
UBS's sovereign advisory practice.
The five are led by Derrill Allatt, who joined Houlihan Lokey at
the start of the year as a Managing Director, after serving as
Managing Director and Global Head of the Sovereign Advisory
Services team at UBS. He is now joined by his former colleagues,
Spencer Jones, Sebastian Espinosa, Alex Levintaner and Rafael
Molina. Spencer Jones became Head of UBS's sovereign advisory
practice after Derrill Allatt's departure and joins Houlihan Lokey
as a Managing Director. Sebastian Espinosa, Alex Levintaner and
Rafael Molina join Houlihan Lokey as
Directors.
All join Houlihan Lokey's Sovereign Advisory Services Group in the
firm's London office. The Group focuses on debt management, debt
restructuring, and other advisory services to sovereign
governments, for example, currently advising the Republic of Iraq
on the restructuring of an estimated $18 billion to $20 billion of
debt owed to non-Paris Club bilateral creditors.
James Zukin, Senior Managing Director of Houlihan Lokey, said:
"These highly experienced professionals bring an unrivaled track
record in developing innovative solutions to sovereign debt
problems, as well as the deliberative style that is important in
this business. The ability to attract this level of talent speaks
to the growing advantage of being a financial advisor that does
not trade, underwrite or initiate sovereign debt."
Derrill Allatt said: "Houlihan Lokey's longstanding global
leadership in financial restructuring and its extensive experience
negotiating with creditors of all types should make the firm the
advisor of choice for nations requiring outstanding debt
management advice."
Mr. Allatt and his team have provided advice on more than 30 Paris
Club debt restructurings, and have been involved in many of the
recent high-profile restructurings of official and private sector
external debt for middle-income countries, including the Dominican
Republic, Ecuador, Indonesia, Pakistan, Russia and the former
Yugoslavia.
Sebastian Espinosa has advised Ecuador, Pakistan and most recently
the Dominican Republic, including on their successful bond
restructuring implemented earlier this year. Alex Levintaner has
been working with the Russian Government since 1998, most recently
advising on Russia's negotiations with the Paris Club on prepaying
its Soviet-era rescheduled obligations. Rafael Molina has advised
countries such as Indonesia and Peru on debt matters in recent
years, including Peru's recent negotiations with the Paris Club on
prepayment.
Houlihan Lokey's Sovereign Advisory Services Group is based in
London and Los Angeles. Principal services offered by the group
include: the restructuring of sovereign debt owed to official
creditors through the Paris Club; the restructuring of debt owed
to bondholders, commercial banks and other creditors; domestic
debt restructurings; borrowing strategies; liability management;
evaluation of financing offers; institutional arrangements for
debt management; privatizations; investor relations; and advice on
sovereign credit ratings.
About Houlihan Lokey Howard & Zukin
Houlihan Lokey Howard & Zukin, an international investment bank
established in 1970, provides a wide range of services, including
mergers and acquisitions, financing, financial opinions and
advisory services, and financial restructuring.
Houlihan Lokey has ranked among the top 10 M&A advisors in the
U.S. for the past five years, has been the No. 1 provider of
fairness opinions for the past five years, and has one of the
largest worldwide financial restructuring practices of any
investment bank. The firm advised major parties in interest in 17
of the 25 largest U.S. corporate bankruptcies from 2000-04,
including the three largest bankruptcies of all time: WorldCom,
Enron and Conseco.
The firm has more than 650 employees in nine offices in the United
States and the United Kingdom. It annually serves more than 1,000
clients ranging from closely held companies to Global 500
corporations. For more information, visit Houlihan Lokey's Web
site at http://www.hlhz.com/
* Leonard Goldberger Joins Stevens & Lee Bankruptcy Team
--------------------------------------------------------
Stevens & Lee reported that Leonard P. Goldberger has joined the
firm as a shareholder in the Bankruptcy Department.
Mr. Goldberger brings nearly 30 years of experience in business
bankruptcy law to Stevens & Lee. He represents insurers in
asbestos, mass tort and environmental bankruptcy cases, and works
with clients in the acquisition and financing of financially
distressed businesses. Among his notable clients are ACE Group,
Fireman's Fund Insurance Company and St PaulTravelers.
A former Vice President, Director and Executive Committee member
of the American Bankruptcy Institute, Mr. Goldberger is the
current Chair of the American Bar Association's Committee on
Insurance Coverage Subcommittee on Insolvency and a member of the
ABA's Litigation Section and its Tort Trial and Insurance Practice
Section. He received a J.D. from Villanova University School of
Law and graduated summa cum laude from Temple University. He
lectures and writes on bankruptcy law topics and has appeared as a
guest commentator on Court TV.
Mr. Goldberger joins one of the largest and most experienced
bankruptcy practices in the Mid-Atlantic region. Stevens & Lee's
20 bankruptcy attorneys - located primarily in Philadelphia,
Wilmington and New York City - act as lead counsel to lenders,
creditors' committees and debtors in large complex matters,
including those with international components.
The department has experienced significant growth in the past
several months. On January 1, seven bankruptcy lawyers from
boutique firm Salomon Green & Ostrow joined the firm to open its
New York City office.
About Stevens & Lee
Stevens & Lee is a professional services firm of approximately 180
lawyers and more than 40 business and consulting professionals.
The firm represents clients throughout the Mid-Atlantic region and
across the country from 13 offices in the following locations:
Reading, Harrisburg, Lancaster, Philadelphia, Valley Forge, the
Lehigh Valley, Scranton and Wilkes-Barre, Pennsylvania; Princeton
and Cherry Hill, New Jersey; Wilmington, Delaware; and New York
City.
* How New Bankruptcy Laws Impact Business-to-Business Collections
-----------------------------------------------------------------
A Good Time To Be A Creditor:
How The New Bankruptcy Laws
Will Impact Business-To-Business Collections.
By Bob Bernstein, Esq.
Managing Partner
Bernstein Law Firm
Much has been written about the changes in the U.S. bankruptcy law
that becomes effective October 2005. Most of the stories seem to
center on how the changes will affect consumers. But if you're
involved in business-to-business collections, these changes affect
you as well. According to Bob Bernstein, managing partner of
Bernstein Law Firm, there is some good news for creditors in the
fine points of the new bill.
"Of course, it's hard to make generalizations about changes that
are so broad and sweeping," says Bernstein, whose firm specializes
in creditors' rights. "These are different laws that affect
different types of businesses. But overall, conditions have
become a bit friendlier for companies whose customers are
declaring bankruptcy."
He offers a few examples in "plain English":
* The new rules of reclamation:
Section 546(c)(1)--The period to make a reclamation demand
(recovering goods your company sold) has been expanded from 20 to
45 days. In other words, if you send goods to a debtor company
and it files bankruptcy, you now have 25 more days than you did
under the old laws in which to send them a letter essentially
saying, "We sent you 100,000 widgets and you failed to pay for
them. Send them back."
Section 503 (b)(9)--If you ship the goods within 20 days before
your customer files bankruptcy, you are now entitled to an
administrative claim. (Previously, you were entitled to a general
claim, which meant that you might receive pennies on the dollar at
some vague time in the future.) In other words, your claim is
viewed as a much higher priority than it was before, which should
increase the odds that you are compensated for the full value of
your goods.
* Commercial lease laws tighten up:
Section 364(d)(4) "tightens the reins" on debtors in favor of
lessors of non-residential properties. It states that the debtor
must immediately surrender the property to the lessor if an
unexpired lease is not assumed or rejected by the earlier of: 1)
120 days of bankruptcy filing or 2) when the reorganization plan
is confirmed. Under the old law, the debtor was required to take
action, but the guidelines weren't as strict. So, if you own
commercial property that you lease to tenants, the changes give
the law (and you) more "teeth."
* Protection from preference claims:
Section 547 was strengthened to limit preference claims to those
in excess of $5,000. In addition, any claims less than $10,000
must be filed in the court where the creditor is, rather than
where the bankruptcy is. This will reduce the number of "nuisance"
claims against creditors.
While it's true that recent changes favor creditors, bankruptcy
policy helps those who help themselves. Bernstein urges business
owners to keep a close eye on customers you suspect might be on
the verge of bankruptcy.
"You can probably recognize the signs that a customer is in
trouble," says Bernstein. "You know--they're slow in paying, or
they've stopped ordering, or you've heard rumors through the
grapevine--things like that. If you suspect bankruptcy looms on
the horizon, check the credit reports or contact your creditors'
rights attorney and have him or her look it up for you. Be
vigilant. Although there are no guarantees of collecting what
you're owed, generally speaking, the faster you take action, the
better."
About Bernstein Law Firm, P.C.
Bernstein Law Firm, P.C. is a family-owned and managed law firm
located in Pittsburgh, Pennsylvania. It is renowned for its
expertise in bankruptcy, retail and commercial collections, lease
enforcement, creditors' rights, and mortgage foreclosure. In
addition to its more than 35 years of experience in these areas,
the firm's capabilities include banking, administrative, real
estate, civil, business, and appellate law. Managing Partner Bob
Bernstein is board certified in creditors' rights and business
bankruptcy by the American Board of Certification and was named a
Pennsylvania Super Lawyer for 2004 and 2005, a designation awarded
to the top 5 percent of Pennsylvania lawyers and sponsored jointly
by Philadelphia Magazine and Politics Magazine.
For more information on the Bernstein Law Firm, visit
http://www.bernsteinlaw.com/
* Upcoming Meetings, Conferences and Seminars
---------------------------------------------
June 16, 2005
TURNAROUND MANAGEMENT ASSOCIATION
Asset Based Deals: How to Get Turnarounds Financed
Treasury Ballroom Portland, OR
Contact: http://www.turnaround.com/
June 16, 2005
TURNAROUND MANAGEMENT ASSOCIATION
TBA [Upstate New York]
Rochester, NY
Contact: 716-440-6615 or http://www.turnaround.org/
June 16, 2005
TURNAROUND MANAGEMENT ASSOCIATION
Colorado TMA Breakfast
The Oxford Hotel, Denver, CO
Contact: 303-457-2119 or http://www.turnaround.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 17, 2005
TURNAROUND MANAGEMENT ASSOCIATION
Troubled Loan Workout Program
IDS Center, Minneapolis, MN
Contact: 703-912-3309 or http://www.turnaround.org/
June 21, 2005
TURNAROUND MANAGEMENT ASSOCIATION
Sixth Annual Astros Baseball Outing
Minute Maid Park, Houston, TX
Contact: 713-839-0808 or http://www.turnaround.org/
June 21, 2005
TURNAROUND MANAGEMENT ASSOCIATION
Detroit Eighth Annual Golf Outing
Twin Lakes Golf & Swim Club, Oakland, MI
Contact: 248-593-4810 or http://www.turnaround.org/
June 22, 2005
TURNAROUND MANAGEMENT ASSOCIATION
Wine Tasting
Wine House Annex, Los Angeles, CA
Contact: 310-458-2081 or http://www.turnaround.org/
June 22, 2005
TURNAROUND MANAGEMENT ASSOCIATION
Fifth Annual Charity Golf Outing
Harborside International Golf Center, Chicago, IL
Contact: 815-469-2935 or http://www.turnaround.org/
June 23, 2005
TURNAROUND MANAGEMENT ASSOCIATION AND COMMERCIAL LAW
ASSOCIATION
Insolvency and Turnaround Management Seminar
NSW State Library Sydney, Australia
Contact: http://www.turnaround.org/
June 23, 2005
TURNAROUND MANAGEMENT ASSOCIATION
Third Annual Pacific Northwest Golf Tournament
Washington National Golf Club, Auburn, WA
Contact: acgseattle@acg.org or
http://www.turnaround.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
June 24, 2005
TURNAROUND MANAGEMENT ASSOCIATION
Golf Tournament
RattleSnake Point Golf Club, Toronto
Contact: http://www.turnaround.org/
June 28, 2005
TURNAROUND MANAGEMENT ASSOCIATION
Tampa Luncheon
The Centre Club Tampa, FL
Contact: 561-882-1331 or http://www.turnaround.org/
June 28, 2005
TURNAROUND MANAGEMENT ASSOCIATION
Family Night - Somerset Patriots Baseball
Commerce Bank Ballpark, Bridgewater, NJ
Contact: 908-575-7333 or http://www.turnaround.org/
June 28, 2005
TURNAROUND MANAGEMENT ASSOCIATION
"Hands On" Turnarounds
The Centre Club, Tampa, FL
Contact: 703-912-3309 or http://www.turnaround.org/
July 1, 2005
TURNAROUND MANAGEMENT ASSOCIATION
Long Island Chapter Manhattan Cruise (In Planning - Watch
for Announcement)
Departing from Manhattan
Contact: 516-465-2356; 631-434-9500
or http://www.turnaround.org/
July 6, 2005
TURNAROUND MANAGEMENT ASSOCIATION
SummerFest 2005
Milwaukee, WI
Contact: 815-469-2935 or http://www.turnaround.org/
July 8, 2005
TURNAROUND MANAGEMENT ASSOCIATION
Body of Knowledge Law Review (in preparation for the CTP
exam) [Chicago/Midwest]
Venue - TBA
Contact: 815-469-2935 or http://www.turnaround.org/
July 13, 2005
TURNAROUND MANAGEMENT ASSOCIATION
Breakfast Meeting
The Marriott Hotel, Tyson's Corner, VA
Contact: 703-912-3309 or http://www.turnaround.org/
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 21, 2005
NEW YORK SOCIETY OF SECURITY ANALYSTS
Investing in Distressed and Defaulted Debt
New York, NY
Contact: http://www.NYSSA.org/
July 21-22, 2005
ALI-ABA
Bankruptcy Abuse Prevention and Consumer Protection Act of
2005
Boston, MA
Contact: 1-800-CLE-NEWS; http://www.ali-aba.org
July 26, 2005
TURNAROUND MANAGEMENT ASSOCIATION
Luncheon - Organizational Assessment and Intervention
Citrus Club, Orlando, FL
Contact: http://www.turnaround.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 1, 2005
TURNAROUND MANAGEMENT ASSOCIATION
NJTMA Annual Golf Outing
Raritan Valley Country Club, Bridgewater, NJ
Contact: 908-575-7333 or http://www.turnaround.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 11-12, 2005
ALI-ABA
Bankruptcy Abuse Prevention and Consumer Protection Act of
2005
San Francisco, CA
Contact: 1-800-CLE-NEWS; http://www.ali-aba.org
August 12-13, 2005
CENTER FOR ENTREPRENEURSHIP
Insolvencies in Transition Economies
S"dert"rns H"gskola University College, Stockholm, Sweden
Contact: http://www.sh.se/enterforum/
August 17, 2005
TURNAROUND MANAGEMENT ASSOCIATION
South Florida Dinner
Venue TBA
Contact: http://www.turnaround.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
August 19, 2005
TURNAROUND MANAGEMENT ASSOCIATION
Annual Fishing Trip
Point Pleasant, NJ
Contact: 908-575-7333 or http://www.turnaround.org/
August 19, 2005
TURNAROUND MANAGEMENT ASSOCIATION
Body of Knowledge Accounting Review [Chicago/Midwest]
Venue - TBA
Contact: 815-469-2935 or http://www.turnaround.org/
August 30, 2005
TURNAROUND MANAGEMENT ASSOCIATION
Tampa Luncheon - Legal Roundtable (Regional Attorneys)
Centre Club, Tampa, FL
Contact: http://www.turnaround.org/
September 1-30, 2005
TURNAROUND MANAGEMENT ASSOCIATION
Education Program
Venue - TBA, Toronto, ON
Contact: http://www.turnaround.org/
September 8-9, 2005
TURNAROUND MANAGEMENT ASSOCIATION
Golf Tournament and TMA Regional Conference
Gideon Putnam Hotel, Saratoga Springs, NY
Contact: 716-667-3160 or http://www.turnaround.org/
September 8-11, 2005
AMERICAN BANKRUPTCY INSTITUTE
Southwest Bankruptcy Conference
(Including Financial Advisors/Investment Bankers Program)
The Four Seasons Hotel Las Vegas, Nevada
Contact: 1-703-739-0800 or http://www.abiworld.org/
September 12, 2005
TURNAROUND MANAGEMENT ASSOCIATION
Annual TMA-LI Chapter Board Meeting
Venue - TBA
Contact: 516-465-2356 or http://www.turnaround.org/
September 15, 2005
TURNAROUND MANAGEMENT ASSOCIATION
7th Annual Lender's Forum: Surviving Bank Mergers
Milleridge Cottage, Long Island, NY
Contact: 516-465-2356; 631-434-9500
or http://www.turnaround.org/
September 15, 2005
TURNAROUND MANAGEMENT ASSOCIATION
Colorado TMA Breakfast
The Oxford Hotel, Denver, CO
Contact: 303-457-2119 or http://www.turnaround.org/
September 16, 2005
TURNAROUND MANAGEMENT ASSOCIATION
Body of Knowledge Management Review [Chicago/Midwest]
Venue - TBA
Contact: 815-469-2935 or http://www.turnaround.org/
September 22, 2005
TURNAROUND MANAGEMENT ASSOCIATION
3rd Annual Workout Lenders Panel Luncheon
Union League Club, NYC
Contact: 646-932-5532 or http://www.turnaround.org/
September 22, 2005
TURNAROUND MANAGEMENT ASSOCIATION
Third Annual Workout Lenders Panel
Union League Club New York, NY
Contact: 908-575-7333 or http://www.turnaround.org/
September 23, 2005
AMERICAN BANKRUPTCY INSTITUTE
International Insolvency Workshop
London, UK
Contact: 1-703-739-0800 or http://www.abiworld.org/
September 22-25, 2005
TURNAROUND MANAGEMENT ASSOCIATION
Cross-Border Conference
Grand Hyatt Seattle, Seattle, WA
Contact: 503-223-6222 or http://www.turnaround.org/
September 26, 2005
AMERICAN BANKRUPTCY INSTITUTE
International Insolvency Workshop
Site to Be Determined London, England
Contact: 1-703-739-0800 or http://www.abiworld.org/
September 28, 2005
TURNAROUND MANAGEMENT ASSOCIATION
Joint CFA/RMA/TMA Networking Reception
Woodbridge Hilton, Iselin, NJ
Contact: 908-575-7333 or http://www.turnaround.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 12, 2005
TURNAROUND MANAGEMENT ASSOCIATION
Breakfast Meeting
Marriott Hotel, Tyson's Corner, VA
Contact: 703-912-3309 or http://www.turnaround.org/
October 18, 2005
TURNAROUND MANAGEMENT ASSOCIATION
TBA [Upstate New York]
Rochester, NY
Contact: 716-440-6615 or http://www.turnaround.org/
October 19, 2005
TURNAROUND MANAGEMENT ASSOCIATION
South Florida Dinner
Venue to be announced
Contact: http://www.turnaround.org/
October 19-23, 2005
TURNAROUND MANAGEMENT ASSOCIATION
2005 Annual Convention
Chicago Hilton & Towers, Chicago
Contact: 312-578-6900 or http://www.turnaround.org/
October 20, 2005
TURNAROUND MANAGEMENT ASSOCIATION
Colorado TMA Breakfast
The Oxford Hotel, Denver, CO
Contact: 303-457-2119 or http://www.turnaround.org/
October 25, 2005
TURNAROUND MANAGEMENT ASSOCIATION
Tampa Luncheon
Centre Club, Tampa, FL
Contact: http://www.turnaround.org/
October 27, 2005
TURNAROUND MANAGEMENT ASSOCIATION
Informal Networking *FREE Reception for Members*
The Davenport Press Restaurant, Mineola, NY
Contact: 516-465-2356 or http://www.turnaround.org/
November 1-2, 2005
INTERNATIONAL WOMEN'S INSOLVENCY & RESTRUCTURING CONFEDERATION
IWIRC 2005 Fall Conference
San Antonio, Texas
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 9, 2005
TURNAROUND MANAGEMENT ASSOCIATION
Breakfast Meeting
The Center Club, Baltimore, MD
Contact: 703-912-3309 or http://www.turnaround.org/
November 10, 2005
TURNAROUND MANAGEMENT ASSOCIATION
Second Annual Australian TMA Conference
Sydney, Australia
Contact: 9299-8477 or http://www.turnaround.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/
November 15, 2005
TURNAROUND MANAGEMENT ASSOCIATION
Speaker/Dinner Event
Fairmont Royal York Hotel, Toronto, ON
Contact: http://www.turnaround.org/
November 17, 2005
TURNAROUND MANAGEMENT ASSOCIATION
TBA [Upstate New York]
Buffalo, NY
Contact: 716-440-6615 or http://www.turnaround.org/
November 17, 2005
TURNAROUND MANAGEMENT ASSOCIATION
Colorado TMA Breakfast
The Oxford Hotel, Denver, CO
Contact: 303-457-2119 or http://www.turnaround.org/
November 29, 2005
TURNAROUND MANAGEMENT ASSOCIATION
Orlando Luncheon
Citrus Club, Orlando, FL
Contact: 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/
December 5-6, 2005
MEALEYS PUBLICATIONS
Asbestos Bankruptcy Conference
Ritz-Carlton, Battery Park, New York, NY
Contact: http://www.mealeys.com/
December 8, 2005
TURNAROUND MANAGEMENT ASSOCIATION
Holiday Gathering & Help for the Needy *FREE to Members*
Mack Hall at Hofstra University, Hempstead, NY
Contact: 516-465-2356 or http://www.turnaround.org/
December 8, 2005
TURNAROUND MANAGEMENT ASSOCIATION
Annual Board of Directors Meeting
Rochester, NY
Contact: 716-440-6615 or http://www.turnaround.org/
December 12-13, 2005
PRACTISING LAW INSTITUTE
Understanding the Basics of Bankruptcy & Reorganization
New York, NY
Contact: http://www.pli.edu/
December 14, 2005
TURNAROUND MANAGEMENT ASSOCIATION
Breakfast Meeting
Marriott Hotel, Tyson's Corner, VA
Contact: 703-912-3309 or http://www.turnaround.org/
March 2-5, 2006
NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES
2006 NABT Spring Seminar
Sheraton Crescent Hotel Phoenix, AZ
Contact: http://www.pli.edu/
March 22-25, 2006
TURNAROUND MANAGEMENT ASSOCIATION
TMA Spring Conference
JW Marriott Desert Ridge, Phoenix, AZ
Contact: http://www.turnaround.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 or 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/
October 25-28, 2006
NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
National Conference of Bankruptcy Judges
New Orleans, LA
Contact: http://www.ncbj.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, Christian Q. Salta, Jason A. Nieva, Lucilo Pinili,
Jr., 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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