/raid1/www/Hosts/bankrupt/TCR_Public/051226.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, December 26, 2005, Vol. 9, No. 305
Headlines
ALLIED HOLDINGS: Wants Until June 15 to Remove Actions
ALLIED HOLDINGS: Court Approves Key Employee Program
ALLIED HOLDINGS: Allied Systems Renews DaimlerChrysler Contract
AMC ENT: Loews Merger Spurs Sr. Secured Facility Refinancing Plan
AMERICREDIT CORP: Moody's Affirms B1 Sr. Unsecured Notes' Rating
ASARCO LLC: Three State Agencies Want An Examiner Appointed
ASARCO LLC: Identifies Four Qualified Candidates as New Directors
ASARCO LLC: Not Selling Surplus Properties in Utah & New Mexico
AUTOPISTA DEL MAYAB: Moody's Lowers Sr. Unsecured Rating to Ba1
BOYDS COLLECTION: Paul Weiss Approved as Committee's Counsel
BOYDS COLLECTION: Committee Taps Tydings & Rosenberg as Co-Counsel
BOYDS COLLECTION: Deloitte Tax Approved as Tax Services Provider
BROOKLYN HOSPITAL: Jaspan Schlesigner Okayed as Conflicts Counsel
BROOKLYN HOSPITAL: Committee Hires Otterbourg Steindler as Counsel
BROOKLYN HOSPITAL: Court Approves $25 Million DIP Loan from CIT
CALPINE CORP: US Trustee Sets Organizational Meeting for Jan. 6
CAPITAL AUTO: S&P Lowers Rating on $163.75M Preferred Securities
CELESTICA INC: Operating Performance Earns S&P's Low-B Ratings
CHAMPLAIN LTD: Fitch Assigns B- Rating to $90 Million Class Notes
CHUMASH CASINO: Good Operating Results Earn S&P's Positive Outlook
COLLINS & AIKMAN: Court Approves Key Employee Retention Program
DELTA AIR: Wants Until June 12 to Remove Civil Actions
DELTA AIR: Wants Court to Approve Term Sheet for 89 Aircraft
DELTA AIR: Wants to Pay $272,000 Tampa Airport Obligations
ENTERGY NEW ORLEANS: Wants Until April 21 to File Ch. 11 Plan
ENTERGY NEW ORLEANS: Panel Wants FTI's Hiring Extended After Jan.
ENTERGY NEW ORLEANS: To Pay Claims of Critical Restoration Vendors
EPIXTAR CORP: Wants to Hire The Lustigman Firm as Special Counsel
EPIXTAR CORP: Panel Taps Mesirow Financial as Financial Advisors
FASTENTECH INC: Moody's Affirms $175 Million Sub. Notes' B3 Rating
FEDERAL-MOGUL: Hires Duff & Phelps as Valuation Consultant
FLYI INC: Court Okays Payment of Prepetition Wages and Benefits
FLYI INC: Court Okays Injunction Against Utility Companies
FLYI INC: Chromalloy Wants Adequate Protection on LPT Modules
FOAMEX INT'L: Files Chapter 11 Plan & Disclosure Statement
FRASER PAPERS: Below-Average Cost Position Prompts S&P's B Ratings
FRESH CHOICE: Exits Chapter 11 Protection as Private Company
GENERAL FIRE: Fitch Affirms BB- Insurer Financial Strength Rating
GEORGIA-PACIFIC: S&P Shaves Corp. Credit Rating to BB- from BB+
GMAC COMMERCIAL: S&P's Rating on Class O Certs. Tumbles to D
GREAT LAKES: Stable Liquidity Prompts S&P to Affirm Junk Rating
HERTZ CORP: Acquisition Completion Spurs S&P to Chip Debt Ratings
ISLE OF CAPRI: S&P Affirms BB- Corporate Credit Rating
JAMES RIVER: Moody's Affirms $150 MM Unsecured Notes' Rating at B3
JP MORGAN: Fitch Rates $20.3 Mil. Class M-10 & M11 Certs. at Low-B
IAP WORLDWIDE: S&P Affirms Low-B Ratings on $610 Million Debts
KULLMAN INDUSTRIES: Committee Employs Lowenstein as Counsel
LOEWS CINEPLEX: AMC to Refinance Credit Facility & Buy Back Notes
LOGAN INTERNATIONAL: Court Confirms Amended Joint Chapter 11 Plan
MCLEODUSA INC: Court Gives Final Approval for Cash Collateral Use
MCLEODUSA INC: Has Until Jan. 31 to File Schedules and Statements
MEDICAL TECHNOLOGY: Court Sets Jan. 30 for Plan Confirmation
MESABA AVIATION: Committee Brings-In Squire Sanders as Counsel
MESABA AVIATION: Panel Hires Foley & Mansfield as Local Counsel
MESABA AVIATION: Committee Wants Rule 2004 Examination on Carrier
MIDLAND COGENERATION: S&P Pares $274MM Bonds' Rating to B from BB-
MMI PRODUCTS: Moody's Reviews $200MM Sr. Sub. Notes' Caa2 Ratings
MIRANT CORP: Court Rejects Move to Base Valuation on Till Case
NDCHEALTH CORP: Extends Senior Debt Tender Offer Until Jan. 19
NORTHWEST AIRLINES: Inks DIP Financing Pact With Airbus Group
NORTHWEST AIRLINES: DOT Denies SkyTeam Anti-Trust Application
OFFICEMAX INC: Moody's Downgrades Corporate Family Rating to Ba2
REFCO INC: Committee Can Hire Houlihan Lokey on Interim Basis
REFCO INC: Court Allows Panel to File Avoidance Action Against RSL
REFCO INC: VR Global Wants Court to Annul Automatic Stay
RESIDENTIAL ACCREDIT: Fitch Affirms Low-B Rating on Class B Certs.
ROMACORP INC: Files Plan and Disclosure Statement in Texas
ROMACORP INC: Court Approves Andrews Kurth as Bankruptcy Counsel
ROMACORP INC: Garden City Group Approved as Noticing Agent
SAINT VINCENTS: Parties Balk at $350MM GECC Replacement Financing
SAINT VINCENTS: Refinancing Mortgage Notes with DIP Facility
SAINT VINCENTS: Taps Proskauer Rose as Special Labor Counsel
SALOMON BROS: Fitch Downgrades Class B-4 Certs. to C from CC
SBA COMMS: SBA Senior Finance Obtains $160 Million Credit Facility
SHOPKO STORES: Extends Tender Offer for Senior Notes to Dec. 28
SKIN NUVO: Files 1st Amended Plan & Disclosure Statement in Nevada
SPIEGEL INC: Reorganized Debtors Want Chapter 11 Cases Closed
SOLUTIA INC: Inquip Files Notice to Perfect Lien on Sauget Asset
SOUNDVIEW HOME: S&P Junks Rating on Class M-2 Certificates
SUN HEALTHCARE: Underwriters Exercise of Over-Allotment Option
SYNDICATED FOOD: Wants Court Nod to Sell Equity Interests
UAL CORP: General Electric Contributes $500-Mil of Exit Facility
UAL CORP: Wants Until March 1 for Intercompany Tolling Order
US AIRWAYS: Inks $400 Million Agreement to Buy GE GEnx Engines
US AIRWAYS: Plans to Resell 7% Sr. Convertible Notes Due 2020
VARIG S.A.: Creditors Approve Restructuring Plan
VARIG S.A.: Remains Under NBRL Protection Until January 8
VINCENT SMITH: Section 341(a) Meeting Slated for January 11
VINCENT SMITH: Hires Case DiGiamberardino as Bankruptcy Counsel
WCA WASTE: Waste Systems Increases Line of Credit by $25 Million
WCA WASTE: Compensation Panel Accelerates Vesting of Stock Options
WELLS FARGO: Fitch Rates $3.1 Mil. Class B-4 & B-5 Certs. at Low-B
WELLS FARGO: Fitch Rates $2.7 Mil. Class B-4 & B-5 Certs. at Low-B
WOLF HOLLOW: S&P Affirms Low-B Ratings on $400 Million Term Loans
* BOND PRICING: For the week of Dec. 19 - Dec. 23, 2005
*********
ALLIED HOLDINGS: Wants Until June 15 to Remove Actions
------------------------------------------------------
Harris B. Winsberg, Esq., at Troutman Sanders, LLP, in Atlanta,
Georgia, tells the U.S. Bankruptcy Court for the Northern District
of Georgia that Allied Holdings Inc. and its debtor-affiliates are
parties to numerous civil lawsuits in courts throughout the United
States and Canada. Majority of the causes of action are for
automobile and products liability claims.
According to Mr. Winsberg, the Debtors have not had the
opportunity to conduct a meaningful review of the causes of
action to determine if removal of any of them is warranted under
Section 1452 of the Judiciary Code.
Mr. Winsberg explains that the Debtors have been focusing on a
myriad of matters attendant to their large and complex Chapter 11
cases. Since that time, the Debtors have expended energy
rejecting burdensome leases and executory contracts and
addressing matters concerning organized labor.
The Debtors are in the process of formulating a program to deal
with the large volume of prepetition civil litigation in which
they are involved, Mr. Winsberg relates. The Debtors believe
that this may involve a form of alternate dispute resolution or
other orderly process for resolving claims.
Accordingly, the Debtors ask the Court to extend the removal
period deadline through and including June 15, 2006.
Mr. Winsberg informs Judge Drake that the extension will provide
the Debtors an opportunity to make informed decisions concerning
the removal of the causes of action and will assure that the
Debtors do not forfeit any of their rights under Section 1452.
It will also permit them to continue focusing their time and
energy on reorganizing, Mr. Winsberg adds.
Mr. Winsberg assures the Court that the extension will not
prejudice the rights of other parties to the causes of action.
In the event of removal, any party to a removed action may seek
to have the action remanded pursuant to Section 1452, Mr.
Winsberg says.
Headquartered in Decatur, Georgia, Allied Holdings, Inc. --
http://www.alliedholdings.com/-- and its affiliates provide
short-haul services for original equipment manufacturers and
provide logistical services. The Company and 22 of its affiliates
filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga.
Case No. 05-12515). Jeffrey W. Kelley, Esq., at Troutman Sanders,
LLP, represents the Debtors in their restructuring efforts. When
the Debtors filed for protection from their creditors, they
estimated more than $100 million in assets and debts.
ALLIED HOLDINGS: Court Approves Key Employee Program
----------------------------------------------------
The Hon. Honorable W. Homer Drake finds that Allied Holdings,
Inc., and its debtor-affiliates have a sound business purpose for
proposing and implementing the Key Employee Retention Program.
Judge Drake agrees with the Debtors that there is a risk that
employees will resign.
"A bankruptcy filing is naturally an event that signals to
employees that the debtor is in considerable financial distress
and results in new concerns, uncertainties, and stress for the
employees," Judge Drake says.
The Court, however, notes that the severance provisions place too
many restrictions on the Debtors' ability to utilize employees
and may actually encourage an employee to resign in the event the
Debtors decide that an employee's job duties should be modified
or that the employee should be relocated.
In this regard, Judge Drake conditions approval of the severance
benefits in the KERP if the Debtors agree to eliminate these
triggers for severance benefits:
a) Voluntary resignation because of a material diminishment in
the scope of the employee's responsibilities and duties;
b) Voluntary resignation because of the assignment of duties
that are materially inconsistent with the employee's
current position or current duties and responsibilities;
and
c) Voluntary resignation due to relocation of the employee by
more than 50 miles without the employee's express written
consent.
The Court is persuaded by the arguments of the International
Brotherhood of Teamsters that the amount of bonuses to be paid to
the Tier 1 and 2 employees are not fair under the circumstances.
However, the Court is also convinced that waiting to implement
some form of KERP would be detrimental to the Debtors. To that
end, the Court finds that the severance provisions and some form
of retention bonus are necessary to retain the Debtors' Tier 1
and 2 employees.
Hence, the Court will approve the bonus provisions of the KERP
with these modifications:
(1) The Court finds that the payment of the first installment
of the stay bonus to the Tier 3 and 4 employees on
December 31, 2005, would be unreasonable, given the fact
that the employees would earn and receive the bonus for
staying with the Debtors for about two more weeks. The
Court will approve the KERP if the Debtors agree to move
the payment of the first installment of the bonus to
February 28, 2006. The amendment should also provide that
the second installment of bonus will be earned and payable
if the employee remains employed by the Debtors on the
earlier of April 30, 2006, or the date on which a plan is
filed.
(2) The Court will approve the KERP if the Debtors amend it to
provide that the stay or emergence bonus for the Tier 1
and Tier 2 employees will be payable in three
installments, the first payable upon the filing of a plan,
the second payable on confirmation of the plan, and the
third payable 60 days after the effective date of the
plan.
(3) The Court will approve the KERP if the Debtors amend it to
lower the percentages of the bonuses: Tier 1 employee
bonuses should not exceed 75% of annual salary and Tier 2
employee bonuses should not exceed 70%.
"[I]f the Debtors amend the KERP consistent with the Court's
conditions, the Court will enter an order granting the Debtors'
Motion . . . and will approve the KERP, as amended," Judge Drake
says.
A full-text copy of the Court's Order dated December 19, 2005, is
available at no charge at:
http://bankrupt.com/misc/KERPopinion.pdf
Headquartered in Decatur, Georgia, Allied Holdings, Inc. --
http://www.alliedholdings.com/-- and its affiliates provide
short-haul services for original equipment manufacturers and
provide logistical services. The Company and 22 of its affiliates
filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga.
Case No. 05-12515). Jeffrey W. Kelley, Esq., at Troutman Sanders,
LLP, represents the Debtors in their restructuring efforts. When
the Debtors filed for protection from their creditors, they
estimated more than $100 million in assets and debts.
ALLIED HOLDINGS: Allied Systems Renews DaimlerChrysler Contract
---------------------------------------------------------------
Allied Systems, Ltd., a subsidiary of Allied Holdings, Inc.,
successfully renewed its vehicle delivery agreement with
DaimlerChrysler Corporation. The agreement with DaimlerChrysler
will extend Allied's current contract through Sept. 30, 2007.
Pursuant to the terms of the renewed agreement, Allied will
continue performing vehicle delivery services at all of the
locations in North America that it currently serves for
DaimlerChrysler.
The contract renewal includes increases in the underlying rates
paid by DaimlerChrysler to Allied for vehicle delivery services
effective Oct. 1, 2005, and again effective Oct. 1, 2006.
Allied's current fuel surcharge program with DaimlerChrysler will
remain in place during the term of the Agreement.
The agreement remains subject to approval by the United States
Bankruptcy Court for the Northern District of Georgia.
Headquartered in Decatur, Georgia, Allied Holdings, Inc. --
http://www.alliedholdings.com/-- and its affiliates provide
short-haul services for original equipment manufacturers and
provide logistical services. The Company and 22 of its affiliates
filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga.
Case No. 05-12515). Jeffrey W. Kelley, Esq., at Troutman Sanders,
LLP, represents the Debtors in their restructuring efforts. When
the Debtors filed for protection from their creditors, they
estimated more than $100 million in assets and debts.
AMC ENT: Loews Merger Spurs Sr. Secured Facility Refinancing Plan
-----------------------------------------------------------------
AMC Entertainment Inc. plans to refinance its existing senior
secured credit facility and Loews Cineplex Entertainment
Corporation's existing senior secured credit facility in
connection with its planned merger with Loews Cineplex.
As reported in the Troubled Company Reporter on June 23, 2005, the
Company and Loews Cineplex entered into a definitive merger
agreement that would result in the combination of their
businesses.
The merger agreement also provides for the merger of their
respective holding companies, Marquee Holdings Inc. and LCE
Holdings, Inc., with Marquee Holdings Inc., which is controlled by
affiliates of J.P. Morgan Partners, LLC and Apollo Management,
L.P., continuing as the holding company for the merged businesses.
The current stockholders of LCE Holdings, Inc., including
affiliates of Bain Capital Partners, The Carlyle Group and
Spectrum Equity Investors, would hold approximately 40% of the
outstanding capital stock of the continuing holding company.
The merged company, to be called AMC Entertainment Inc., will be
headquartered in Kansas City, Missouri, and will own, manage or
have interests in approximately 450 theatres with about 5,900
screens in 30 states and 13 countries. Peter C. Brown, AMC
Chairman of the Board, Chief Executive Officer and President, will
remain in this role in the merged company. When combined, the
company will have approximately 24,000 associates serving more
than 280 million guests annually. An integration committee will
be formed in which Travis E. Reid, President and Chief Executive
Officer of Loews Cineplex Entertainment Corporation, and Brown
will serve as co-chairs. The integration committee also will
include representatives of the two sponsor groups.
Loews' Notes Repurchase
In addition, the Company intends to repurchase Loews' outstanding
9.0% senior subordinated notes due 2014 pursuant to a tender offer
and consent solicitation. The Company intends to consummate the
mergers concurrently with the refinancing of the Company's
existing senior secured credit facility and Loews' existing senior
secured credit facility, as well as the completion by Loews of a
tender offer for the Loews Notes.
In addition, the mergers are subject to antitrust approvals that
have resulted in agreements with the Department of Justice and
Attorneys General of California and the District of Columbia to
divest 10 theatres and 120 screens in 7 U.S. markets. Upon
completion of the mergers, the existing stockholders of Holdings
would hold approximately 60% of its outstanding capital stock, and
the current stockholders of LCE Holdings, Inc., including
affiliates of Bain Capital Partners, LLC, The Carlyle Group and
Spectrum Equity Investors, would hold approximately 40% of the
outstanding capital stock. The Company expects to pay costs and
incur expenses related to this transaction, including one-time
termination benefits, of approximately $80,000,000.
The completion of the tender offer for the Loews Notes is not a
condition to the consummation of the mergers. However, if Loews
does not complete the tender offer for the Loews Notes and the
related consent solicitation, then under the terms of the
indenture governing these notes, the Combined Company will be
required to make a change of control offer and give holders of the
Loews Notes an opportunity to sell the notes to the Combined
Company at a price of 101% of the principal amount of the notes,
plus accrued and unpaid interest and additional interest (as
defined in the indenture), if any, to the date of repurchase. The
Company has secured commitments to finance this repurchase offer,
should it become necessary.
About Loews Cineplex
Loews Cineplex Entertainment Corp operates motion picture theaters
primarily in major cities throughout the United States, Canada,
Spain, Hungary and Turkey. The company operates its theaters under
the Loews, Sony and Cineplex Odeon names.
About AMC Entertainment
Headquartered in Kansas City, Missouri, AMC Entertainment Inc.
http://www.amctheatres.com/-- is a subsidiary of Marquee Holdings
Inc. Through its circuit of AMC Theatres, AMC Entertainment
operates 229 theaters with 3,546 screens in the United States,
Canada, France, Hong Kong, Japan, Portugal, Spain and the United
Kingdom.
* * *
As reported in the Troubled Company Reporter on Aug. 5, 2004,
Standard & Poor's Ratings Services revised its outlook on AMC
Entertainment, Inc., to stable from positive, based on the
increased leverage that will result from the pending sale and
recapitalization of the company. At the same time, Standard &
Poor's affirmed its ratings, including its 'B' corporate credit
rating, on the company.
AMERICREDIT CORP: Moody's Affirms B1 Sr. Unsecured Notes' Rating
----------------------------------------------------------------
Moody's Investors Service affirmed AmeriCredit Corp.'s senior
unsecured debt rating at B1 and changed the outlook to positive
from stable.
The change in outlook reflects:
* AmeriCredit's sustained improvement in:
-- asset quality,
-- leverage,
-- profitability, and
-- liquidity; and
* adherence to its disciplined growth strategy since the last
rating action in September 2004 (outlook changed to stable
from negative).
AmeriCredit's performance has also benefited from continued
refinement of its proprietary credit underwriting model and the
positive effects of the overall favorable economic environment.
The ratings continue to be constrained by AmeriCredit's monoline
sub-prime focus which exacerbates its vulnerability to adverse
economic developments.
AmeriCredit has tempered its growth targets even as the management
team undertakes a measured refinement of the company's sub-prime
business model. This is intended to strengthen AmeriCredit's
near-prime platform and take advantage of incremental growth
opportunities through selective extensions of its market niche and
geographic presence. Examples are:
* the recently announced planned acquisition of
Bay View Acceptance Corp.;
* an extended term and higher loan to value prime originator
based in Covina, California; and
* AmeriCredit's intention to re-enter the Canadian market
gradually over the next several years.
Moody's believes that the adjustments AmeriCredit has made to its
business model have laid the foundation for sustainable and
profitable growth going forward. Further positive ratings actions
could be taken if AmeriCredit continues its successful
implementation of the disciplined growth strategy and continues to
demonstrate sustained improvements in asset quality and
profitability while maintaining prudent liquidity and leverage.
Ratings could be pressured downward by significant deviation from
the disciplined growth strategy and material deterioration in:
* asset quality,
* profitability,
* leverage, and
* liquidity.
This rating has been affirmed with a positive outlook:
AmeriCredit Corp.:
* Senior Unsecured Notes B1
AmeriCredit Corp. (ticker symbol ACF), an independent sub-prime
auto finance company based in Fort Worth, Texas, reported total
managed receivables of approximately $11 billion as of Sept. 30,
2005.
ASARCO LLC: Three State Agencies Want An Examiner Appointed
-----------------------------------------------------------
As previously reported in the Troubled Company Reporter on
Nov. 25, 2005, the ASARCO Official Committee of Unsecured
Creditors asks Judge Schmidt of the U.S. Bankruptcy Court for the
Southern District of Texas in Corpus Christi to appoint Douglas
McAllister as ASARCO's chief restructuring officer to assume the
rights and responsibilities of the board of directors and CEO.
According to Greg Abbott, Esq., Assistant Attorney General of the
United States Bankruptcy and Collections Division, ASARCO LLC's
status report on the search for chief executive officer and
additional directors indicates that the Debtor does not yet have
a firm commitment from any of the four proposed directors
regarding their willingness to serve on ASARCO's board of
directors.
Mr. Abbot also notes that ASARCO has not provided creditors and
parties-in-interest with an unequivocal statement that any of the
proposed directors is truly independent.
Certain state agencies assert that it would be improper and
potentially disastrous to the administration of ASARCO's Chapter
11 cases to allow ASARCO's Board to be comprised of a majority of
persons who are not subject to the Court's jurisdiction and
process. The State Agencies contend that the proposed directors
should be subject to a thorough and detailed background
examination, which includes their potential ties to any of
ASARCO's parent companies.
The States Agencies consist of:
* Texas Commission on Environmental Quality;
* State of New Jersey Department of Environmental Protection;
and
* Missouri Department of Natural Resources.
As ASARCO has proved unwilling to appoint a truly independent
Board of Directors, the State Agencies ask the Court to appoint
an examiner to check, inter alia, the background and alleged
substantial conflicts of interest posed by ASARCO's present sole
director, Carlos Ruiz Sacristan.
The State Agencies note that Mr. Ruiz owes conflicting and
irreconcilable duties to entities in competition with ASARCO and
has demonstrated bias in favor of ASARCO's ultimate parent
company, Grupo Mexico S.A. de C.V.
Specifically, the States Agencies seek that the Examiner look
into Mr. Ruiz's relationships with the any of the defendants in
the pending litigation challenging the sale of Southern Peru
Copper Corporation, including Americas Mining Corporation and
Grupo Mexico.
As ASARCO presently has no CEO, the State Agencies further ask
the Court to give the Examiner the power and authority to
undertake the duties of a Chief Restructuring Officer.
Headquartered in Tucson, Arizona, ASARCO LLC --
http://www.asarco.com/-- is an integrated copper mining,
smelting and refining company. Grupo Mexico S.A. de C.V. is
ASARCO's ultimate parent. The Company filed for chapter 11
protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207).
James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A.
Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter
Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq.,
at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in
its restructuring efforts. When the Debtor filed for protection
from its creditors,it listed $600 million in total assets and $1
billion in total debts.
The Debtor has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521
through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO
Pipe Company, Inc., Cement Asbestos Products Company, Lake
Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about
their asbestos-driven chapter 11 filings have appeared in the
Troubled Company Reporter since Apr. 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-
21346) also filed for chapter 11 protection, and ASARCO has asked
that the three subsidiary cases be jointly administered with its
chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was
converted to a Chapter 7 liquidation. (ASARCO Bankruptcy News,
Issue No. 12; Bankruptcy Creditors' Service, Inc., 215/945-7000).
ASARCO LLC: Identifies Four Qualified Candidates as New Directors
-----------------------------------------------------------------
As previously reported in the Troubled Company Reporter on
Nov. 25, 2005, the ASARCO Official Committee of Unsecured
Creditors asks the Richard S. Schmidt of the U.S. Bankruptcy Court
for the Southern District of Texas in Corpus Christi to appoint
Douglas McAllister as ASARCO's chief restructuring officer to
assume the rights and responsibilities of the board of directors
and CEO.
ASARCO's Status Report on CEO Search
At a hearing on Nov. 29, 2005, pertaining to the Official
Committee of Unsecured Creditors' request to appoint Douglas
McAllister as ASARCO LLC's chief restructuring officer, Carlos
Ruiz Sacristan, ASARCO's sole director, proposed to appoint at
least two additional directors to the company's board.
In compliance with the Court's direction and after a diligent and
intensive search, Mr. Ruiz has identified four potential
qualified and independent candidates -- two from the United
States and two from Mexico -- to join him on ASARCO's board.
Eric A. Soderlund, Esq., at Baker Botts L.L.P., in Dallas, Texas,
says that all of the candidates have expressed a tentative
willingness to serve, provided that certain conditions and issues
are satisfied and resolved. However, Mr. Soderlund notes, none
of the candidates is willing to serve if the ASARCO Committee,
the Official Committee of Unsecured Creditors of the Subsidiary
Debtors, and the Future Claims Representative contest his
nomination.
Mr. Soderlund adds that each of the candidates has expressed
reservations about serving without first resolving issues
regarding the Board composition and the manner in which it will
conduct its business. Each candidate's willingness to serve, Mr.
Soderlund explains, is also conditioned on the negotiation of an
acceptable compensation package that includes adequate D&O
insurance and Court-approved indemnification rights.
Mr. Ruiz is working diligently to negotiate mutually agreeable
terms with the candidates. Because of the progress made in
identifying potential new directors for the board, ASARCO has
concluded that it would be best to forego naming a chief
executive officer at the present time, instead of reserving the
responsibility for the appointment of a CEO to the new board of
directors.
The Proposed Directors
Mr. Ruiz discloses that the four qualified candidates are:
(1) H. Malcolm Lovett, Jr.
Holding a B.A. degree from Rice University and an M.B.A.
from Harvard, Mr. Lovett has served for the last nine
years as Chairman and CEO of Strategic Capital Corp. in
Houston, providing financial advisory, restructuring,
and crisis management services. He previously served as
an independent director and member of the restructuring
committee of EOTT Energy Corporation, and General Partner
of EOTT Energy Partners, L.P., a subsidiary company in the
Enron bankruptcy case. Mr. Lovett has many years of
experience in financial and management consulting, and
has particular expertise in advising companies
undergoing restructuring both in and out of bankruptcy.
He has also served as an advisory director to Post Oak
Bank in Houston and has served as an allied member of
the New York Stock Exchange.
(2) Edward R. Caine
Mr. Caine worked for 36 years in a variety of executive
and management positions with U.S. Steel. Following his
retirement from U.S. Steel in 1996, he was named
President and CEO of WCI Steel in Warren, Ohio. Under
his leadership, WCI Steel enjoyed a number of profitable
years until the worldwide collapse of the steel industry
in 2001. In 2004, Mr. Caine assumed the vice chairman
and CRO position for WCI Steel and the company enjoyed
its two best years in its history. Mr. Caine holds a
B.S. degree in Metallurgical Engineering from Grove City
College and an M.B.A. from Loyola University.
(3) Ruben Goldberg
Mr. Goldberg has extensive experience in commercial,
corporate, and investment banking, and has served as a
director on numerous corporate boards of Central and
South American companies. Mr. Goldberg was Vice
President, Corporate Group Head, for Bank of America NT
and SA from 1974 to 1981. He served from 1981 to 1984
as Vice President, Area Head, Representative for Wells
Fargo Bank, N.A. Mr. Goldberg then moved into investment
banking, eventually becoming President and member of the
board of directors of N.M. Rothschild & Sons, S.A., from
1992-1998. In 2001, Mr. Goldberg became CEO, Investment
Banking, for HSBC Bank Mexico, S.A. In 2003, Mr.
Goldberg founded Goldberg, Alerhand y Asociados, S.C.
where he serves today as Senior Director.
(4) Rogelio Gasca Neri
Mr. Neri currently serves as President of the Board of
Directors and CEO of CINTRA and its subsidiaries,
including Mexico's main airlines -- Mexicana and
Aeromexico. Since 2001, he has also served as a
consultant on iron and steel, energy policy and reform,
electricity, oil and gas, financing of infrastructure
projects and other basic industries.
Candidates Are Eminently Qualified
Mr. Soderlund tells Judge Schmidt that Mr. Lovett and Mr. Caine
are well-qualified to serve as directors on ASARCO's board
because of their many years of business experience, familiarity
with ASARCO's industry, and understanding of the issues germane
to reorganizing a large company.
Furthermore, Mr. Soderlund says that both Mr. Goldberg and Mr.
Gasca will neither submit to interviews by the ASRACO Committee
and the Subsidiary Committee.
In addition, Mr. Soderlund attests that none of the four
candidates has any ties to ASARCO's parent companies that would
in any way challenge their ability to act independently in
ASARCO's best interest.
El Paso Responds
H. Christopher Mott, Esq., at Gordon & Mott P.C., in El Paso
Texas, argues that the Status Report fails to comply with a
previous Court order requiring ASARCO to file a motion to seek
approval of at least two independent directors and a CEO by
December 10, 2005. Mr. Mott also points out that ASARCO has
failed and refused to make all of the "potential" directors
available for interview as required by that Order.
Accordingly, the City of El Paso asks the Court to require the
appointment of an independent and qualified CRO for ASARCO,
subject to the Court's approval.
Mr. Mott tells Judge Schmidt that ASARCO and its Chapter 11 case
currently appears to be a "rudderless ship" considering that:
-- Daniel Tellechea resigned from his CEO position several
weeks ago and has not been replaced;
-- no reorganization plan has been filed, or proposals even
formulated; and
-- little, if any, substantive progress has been made by
ASARCO with respect to its massive environmental
liabilities and obligations.
Mr. Mott also avers that the appointment of one independent CRO
would eliminate the need for ASARCO's estate to compensate five
directors, which should save time and money for the estate and
its constituencies.
Given the significant issues raised by the creditors regarding
the multiple claims against and conflicts of interest that exist
with respect to Grupo Mexico and Americas Mining Corporation and
Mr. Ruiz, Mr. Mott contends that the appointment of an
independent person to guide ASARCO is warranted under the
circumstances.
Headquartered in Tucson, Arizona, ASARCO LLC --
http://www.asarco.com/-- is an integrated copper mining,
smelting and refining company. Grupo Mexico S.A. de C.V. is
ASARCO's ultimate parent. The Company filed for chapter 11
protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207).
James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A.
Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter
Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq.,
at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in
its restructuring efforts. When the Debtor filed for protection
from its creditors,it listed $600 million in total assets and $1
billion in total debts.
The Debtor has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521
through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO
Pipe Company, Inc., Cement Asbestos Products Company, Lake
Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about
their asbestos-driven chapter 11 filings have appeared in the
Troubled Company Reporter since Apr. 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-
21346) also filed for chapter 11 protection, and ASARCO has asked
that the three subsidiary cases be jointly administered with its
chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was
converted to a Chapter 7 liquidation. (ASARCO Bankruptcy News,
Issue No. 12; Bankruptcy Creditors' Service, Inc., 215/945-7000).
ASARCO LLC: Not Selling Surplus Properties in Utah & New Mexico
---------------------------------------------------------------
As previously reported in the Troubled Company Reporter on
Oct. 11, 2005, ASARCO LLC seeks authority from the U.S. Bankruptcy
Court for the U.S. Bankruptcy Court for the Southern District of
Texas, Corpus Christi Division, to sell surplus real estate in
Salt Lake County, Utah, and Deming, New Mexico, free and clear of
liens, claims, encumbrances and interests. ASARCO also seeks to
assume the executory real estate contracts relating to the surplus
real estate.
Salt Lake Property
Western States Lodging and ASARCO, LLC, entered into a Real
Estate Purchase Contract dated July 15, 2005, for the sale of
6.9 acres known as 3422 South 700 West, located in Salt Lake
County for $2,000,000. ASARCO holds a $5,000 earnest money
deposit from Western States.
While the Utah Transit Authority appraised the property at $2.15
million in July 2005, ASARCO relates that it has had the property
on the market for four years, and has not received a better offer
from a serious buyer.
The closing date for the sale is Oct. 31, 2005.
Deming Property
As of July 13, 2005, ABC Mining, LLC, and ASARCO entered into a
Purchase and Sale Agreement for the sale "as is, where is" to ABC
Mining of ASARCO's mill site located on Peru Mill Road, in Town
of Deming, in County of Luna, New Mexico. The property,
consisting of 200 acres of permitted land for facility operations
and an additional 80 acres of unpermitted land adjacent to the
facility, is to be sold for $500,000, and the buyer has given
ASARCO a $50,000 earnest money contract. The site value is
estimated at $224,800, using appraisal comparables on Aug. 18,
2005.
ASARCO says the offer from ABC Mining is the best one received
from a serious buyer in eight years of marketing the property.
New Mexico Objects
The New Mexico Environment Department, the New Mexico Energy,
Minerals and Natural Resources Department, and the New Mexico
Office of the Natural Resources Trustee object to the sale of the
New Mexico property.
Patricia A. Madrid, Esq., the New Mexico Attorney General, tells
the Court that ASARCO LLC is seeking to split a unitary mining
facility in Luna County, New Mexico, into two parts. The mill
building, which is the portion of the facility with income-
generating potential, would be sold, while the tailings area,
which is the portion of the facility with the most significant
environmental contamination concerns, would be retained. The
State is deeply concerned about this attempt to split the Deming
Mill facility in two. The Energy, Minerals and Natural Resources
Department already rejected an attempt by ASARCO to do just this
for permitting purposes as not being in accordance with
applicable law.
Ms. Madrid also notes that the Environment Department no longer
permits mill operations at the facility. Reclamation is required
under permit issued by the Natural Resources Department's Mining
and Minerals Division.
Ms. Madrid relates that ASARCO has posted an $850,000 surety bond
from Seaboard Surety Company as financial assurance that the
closeout and reclamation required to assure public health and
well-being will be accomplished. The bond only covers the area of
the property for which there is a permit and closeout plan. The
tailings facility is not covered by the bond.
According to Ms. Madrid, a status revision to the permit issued
after approval of the reclamation plan expired on December 13,
2004. Thus, ASARCO currently is in violation of New Mexico law
for failure to obtain a permit renewal.
ASARCO has delayed in renewing its stand-by status, advising the
Division that it was seeking a buyer. Ms. Madrid says marketing
and sale of the facility does not relieve ASARCO of its
obligation to comply with applicable law.
Without active operations or having standby status renewed, the
New Mexico Mining Act requires ASARCO to commence reclamation
activities immediately, Ms. Madrid maintains. To date, it has
not. The Division repeatedly has advised ASARCO of its failure
to comply with regulatory requirements, Ms. Madrid says.
The Environment Department also has an interest in ensuring
ASARCO's compliance with applicable environmental laws. Ms.
Madrid explains the Deming Mill facility holds Air Permit No.
757-M-1 and National Pollutant Discharge Elimination System
Stormwater Baseline Multi-Sector General Permit No. NMR 005A468.
The Department seeks to ensure that ASARCO complies with its
environmental removal and remediation obligations under federal
and state law.
In 2004, ASARCO submitted, through its ASARCO Consulting, Inc.
subsidiary, a Preliminary Voluntary Remediation Plan for the
windblown tailings at the Deming Mill facility. The Environment
Department is concerned that the total dissolved solids and other
contaminants leaching from the tailings pond may have resulted in
groundwater contamination above allowed levels and that windblown
contaminants have impacted surrounding areas, to the detriment of
the public health and well-being.
ASARCO's remediation activities to date have been less than
adequate, Ms. Madrid notes.
The Office of the Natural Resources Trustee wants to ensure that
ASARCO, in addition to meeting its removal, remediation and
reclamation obligations, does not improperly avoid its liability
under federal and state law for damages to natural resources.
Ms. Madrid tells the Court that ASARCO may have obligations to
compensate for injuries to and conduct restoration of natural
resources under the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, the Federal Water
Pollution Control Act, the Oil Pollution Act of 1990, and the New
Mexico Natural Resources Trustee Act.
The Debtor's request is silent regarding how ASARCO intends to
obtain the requisite approval for transfer of its Permits, and
whether ABC Mining, LLC, intends to assume the burdens inherent to
mining and milling operations, which include permitting and
financial assurance obligations, Ms. Madrid says.
* * *
The proposed sales of the surplus real estate property located
in Salt Lake County, Utah, and in Deming, New Mexico, have been
terminated. Therefore, ASARCO LLC withdraws its request as moot.
Headquartered in Tucson, Arizona, ASARCO LLC --
http://www.asarco.com/-- is an integrated copper mining,
smelting and refining company. Grupo Mexico S.A. de C.V. is
ASARCO's ultimate parent. The Company filed for chapter 11
protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207).
James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A.
Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter
Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq.,
at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in
its restructuring efforts. When the Debtor filed for protection
from its creditors,it listed $600 million in total assets and $1
billion in total debts.
The Debtor has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521
through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO
Pipe Company, Inc., Cement Asbestos Products Company, Lake
Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about
their asbestos-driven chapter 11 filings have appeared in the
Troubled Company Reporter since Apr. 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-
21346) also filed for chapter 11 protection, and ASARCO has asked
that the three subsidiary cases be jointly administered with its
chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was
converted to a Chapter 7 liquidation. (ASARCO Bankruptcy News,
Issue No. 12; Bankruptcy Creditors' Service, Inc., 215/945-7000).
AUTOPISTA DEL MAYAB: Moody's Lowers Sr. Unsecured Rating to Ba1
---------------------------------------------------------------
Moody's Investors Service downgraded the Baa3 senior unsecured and
Ba1 subordinated global local currency ratings of Autopista del
Mayab to Ba1 and Ba2, respectively. ADM's Aa2.mx senior unsecured
national scale rating and ADM's Aa3.mx subordinated national scale
rating were also downgraded to Aa3.mx and A1.mx, respectively.
This concludes the review initiated on November 10, following the
general shutdown of the tourist areas of Canc£n and Cozumel due to
the damage caused by hurricane Wilma and the extended closure of a
portion of the road due to flooding.
The rating action reflects Moody's belief that cash flow coverages
in 2005 and 2006 will be weaker than previously expected due to
the lingering effects of hurricane Wilma. The storm resulted in
the closure of part of the road for several weeks due to flooding,
the subsequent need to make certain improvements to sections of
the road as required by the Secretaria de Comunicaciones y
Transportes, as well as a reduction in tolls charged for part of
the road. Moody's expects that financial performance will
continue to be relatively weak in 2006 since the rebuilding of the
tourist areas is not expected to be fully completed until at least
the end of the first quarter.
While the damage caused by Wilma was unprecedented for the region
prior to this year, the rating action also considers the toll
road's on-going exposure to similar events that could affect the
overall level of tourism in the region.
The stable outlook reflects significant progress in restoring the
tourist areas and the view that Canc£n and Cozumel will ultimately
remain highly attractive tourist destinations. Barring an
unforeseen delay in the restoration of the tourist areas and, or a
prolonged delay in the return of tourism to previous levels,
Moody's anticipates that traffic levels and cash flow coverages
will improve significantly in 2007.
Moody's believes that the reduction in cash flow for 2006 could be
partially offset by funding from the SCT to compensate ADM for the
suspension of tolls from Xcan to Canc£n since October 21 and for
the improvements required for certain sections of the road.
However, the amount of any funding is uncertain at this time. No
proceeds are expected from ADM's insurance providers since the
company's policies do not cover hurricane-related damage or
business interruptions.
Headquartered in Merida, Yucatan, Autopista del Mayab is a 245.5
km toll road linking the cities of Canc£n and Kantunil. The road
is owned by Consorcio del Mayab, S.A. de C.V., whose principal
members include:
* Canteras Peninsulares, S.A. de C.V.;
* Constructora Mool, S.A. de C.V.;
* Inmobiliaria Sucasa del Sureste, S.A. de C.V.; and
* C.L. Construcciones, S. de R.L. de C.V.
BOYDS COLLECTION: Paul Weiss Approved as Committee's Counsel
------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in The
Boyds Collection, Ltd., and its debtor-affiliates sought and
obtained permission from the U.S. Bankruptcy Court for the
District of Maryland to employ Paul, Weiss, Rifkind, Wharton &
Garrison LLP as its counsel, nunc pro tunc to Oct. 21, 2005.
The U.S. Trustee appointed the Creditors Committee on Oct. 21,
2005.
Specifically, the Firm will:
(a) represent and advise the Creditors Committee in its
communications with the Debtors, the United States Trustee,
any other official committee appointed in these cases,
individual creditors and other parties-in-interest, with
respect to the administration of the chapter 11 cases;
(b) conduct reviews as the Creditors Committee may require
concerning the acts, conduct, assets, liabilities, and
financial condition of the Debtors, the operation of the
Debtors businesses, any causes of action belonging to the
Debtors estates or creditors and any other matter of
significance to the Creditors Committee which may be
relevant to the chapter 11 cases;
(c) represent and advise the Creditors Committee in connection
with the formulation, negotiation and confirmation of a
chapter 11 plan for the Debtors;
(d) advise the Creditors Committee with respect to its rights
and obligations under the Bankruptcy Code;
(e) advise, assist and represent the Creditors Committee in the
performance of its duties and the exercise of its powers
under the Bankruptcy Code and the Bankruptcy Rules;
(f) prepare applications, motions and other papers for filing in
the chapter 11 cases and in any related proceedings, and
represent the Creditors Committee in proceedings herein or
therein;
(g) advise the Creditors Committee with respect to retaining a
financial advisor and other professionals, as needed, and
assist such advisor and other professionals as necessary;
and
(h) perform other legal services as may be required by the
Creditors Committee in the chapter 11 cases and in any
related proceedings.
The Committee has retained Tydings & Rosenberg as its co-counsel.
Paul Weiss' professionals current billing rates are:
Designation Hourly Rate
----------- -----------
Partners $615 - $830
Counsel $565 - $595
Associates $320 - $520
Legal Assistants $165 - $210
Legal Assistant Clerks $80
The attorneys primarily in charge with the Debtors' case and their
current billing rates are:
Attorney Designation Hourly Rate
-------- ----------- -----------
Andrew N. Rosenberg, Esq. Partner $740
Lori E. Kata, Esq. Associate $445
Mr. Rosenberg assures the Court that his Firm does not hold or
represent any interests materially adverse to the Creditors
Committee.
Headquartered in McSherrystown, Pennsylvania, The Boyds
Collection, Ltd. -- http://www.boydsstuff.com/-- designs and
manufactures unique, whimsical and "Folksy with Attitude(SM)"
gifts and collectibles, known for their high quality and
affordable pricing. The Company and its debtor-affiliates filed
for chapter 11 protection on Oct. 16, 2005 (Bankr. Md. Lead Case
No. 05-43793). Matthew A. Cantor, Esq., at Kirkland & Ellis LLP
represents the Debtors in their restructuring efforts. As of June
30, 2005, Boyds reported $66.9 million in total assets and $101.7
million in total debts.
BOYDS COLLECTION: Committee Taps Tydings & Rosenberg as Co-Counsel
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Maryland gave the
Official Committee of Unsecured Creditors appointed in The Boyds
Collection, Ltd., and its debtor-affiliates' chapter 11
proceedings, permission to employ Tydings & Rosenberg LLP as its
co-counsel nunc pro tunc to Oct. 25, 2005.
The Committee has retained Paul, Weiss, Rifkind, Wharton &
Garrison LLP to work with the Firm.
Specifically, Tydings & Rosenberg will:
(a) represent and advise the Creditors Committee in its
communications with the Debtors, the United States Trustee,
any other official committee appointed in these cases,
individual creditors and other parties-in-interest, with
respect to the administration of the chapter 11 cases;
(b) conduct reviews as the Creditors Committee may require
concerning the acts, conduct, assets, liabilities, and
financial condition of the Debtors, the operation of the
Debtors businesses, any causes of action belonging to the
Debtors estates or creditors and any other matter of
significance to the Creditors Committee which may be
relevant to the chapter 11 cases;
(c) represent and advise the Creditors Committee in connection
with the formulation, negotiation and confirmation of a
chapter 11 plan for the Debtors;
(d) advise the Creditors Committee with respect to its rights
and obligations under the Bankruptcy Code;
(e) advise, assist and represent the Creditors Committee in the
performance of its duties and the exercise of its powers
under the Bankruptcy Code and the Bankruptcy Rules;
(f) prepare applications, motions and other papers for filing in
the chapter 11 cases and in any related proceedings, and
represent the Creditors Committee in proceedings herein or
therein;
(g) advise the Creditors Committee with respect to retaining a
financial advisor and other professionals, as needed, and
assist its advisor and other professionals as necessary; and
(h) advise the Committee on the local rules and Court procedures
for this district;
(i) provide meeting facilities and support staff to assist the
Committee and Paul Weiss while in Baltimore, Maryland;
(j) perform other legal services as may be required by the
Creditors Committee in the chapter 11 cases and in any
related proceedings.
The Firm's professionals current billing rates are:
Designation Hourly Rate
----------- -----------
Partners $245-$325
Associates $145-$185
Legal Assistants $125
The attorneys primarily in charge with the Debtors' case and their
current billing rates are:
Attorney Designation Hourly Rate
-------- ----------- -----------
Alan M. Grochal Partner $325
Stephen M. Goldberg Partner $325
Mr. Grochal assures the Court that his Firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
Headquartered in McSherrystown, Pennsylvania, The Boyds
Collection, Ltd. -- http://www.boydsstuff.com/-- designs and
manufactures unique, whimsical and "Folksy with Attitude(SM)"
gifts and collectibles, known for their high quality and
affordable pricing. The Company and its debtor-affiliates filed
for chapter 11 protection on Oct. 16, 2005 (Bankr. Md. Lead Case
No. 05-43793). Matthew A. Cantor, Esq., at Kirkland & Ellis LLP
represents the Debtors in their restructuring efforts. As of June
30, 2005, Boyds reported $66.9 million in total assets and $101.7
million in total debts.
BOYDS COLLECTION: Deloitte Tax Approved as Tax Services Provider
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Maryland, Baltimore
Division, authorized the Boyds Collection, Ltd., and its debtor-
affiliates to employ Deloitte Tax LLP as their independent tax
service providers, nunc pro tunc to Nov. 14, 2005.
The Debtors told the Court that the Firm is well qualified to
provide them with tax services because Deloitte is familiar with
their business affairs.
Specifically, Deloitte will:
(a) prepare Federal and State tax returns for the Debtors and
their non-debtor affiliates for the year ending Dec. 31,
2005, and thereafter;
(b) analyze sales tax issues and prepare applicable reporting
related to the Debtors and their non-Debtor affiliates; and
(c) provide other tax compliance services as may be agreed to
by the Firm and the Debtors.
Edward Nevin disclosed that his Firm's professionals bill:
Designation Hourly Rate
----------- -----------
Partner/Principal/Director $600-$700
Senior Manager $340-$500
Senior Staff $220-$300
Mr. Nevin said that his Firm received approximately $312,000 for
its prepetition services.
Mr. Nevin assured the Court that his Firm does not hold any
interest adverse to the Debtors' estate.
Headquartered in McSherrystown, Pennsylvania, The Boyds
Collection, Ltd. -- http://www.boydsstuff.com/-- designs and
manufactures unique, whimsical and "Folksy with Attitude(SM)"
gifts and collectibles, known for their high quality and
affordable pricing. The Company and its debtor-affiliates filed
for chapter 11 protection on Oct. 16, 2005 (Bankr. Md. Lead Case
No. 05-43793). Matthew A. Cantor, Esq., at Kirkland & Ellis LLP
represents the Debtors in their restructuring efforts. As of
June 30, 2005, Boyds reported $66.9 million in total assets and
$101.7 million in total debts.
BROOKLYN HOSPITAL: Jaspan Schlesigner Okayed as Conflicts Counsel
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in The
Brooklyn Hospital Center and its debtor-affiliate's chapter 11
proceedings sought and obtained permission from the U.S.
Bankruptcy Court for the Eastern District of New York to employ
Jaspan Schlesigner Hoffman LLP as its Conflicts Counsel.
The U.S. Trustee for the Region 2 appointed the seven-member
Committee on Oct. 11, 2005.
Specifically, the Firm will:
(a) assist and advise the Committee in connection with the
Committee's investigation of the security interests, liens
and claims;
(b) commence, if necessary, and prosecute adversary proceedings
against the secured lenders and other necessary parties;
(c) attend meetings and negotiate with the Debtors'
representatives or any parties subject of the Committee's
investigation or against which the Committee may commence an
adversary proceeding in connection with any matter in which
JSH is involved on behalf of the Committee,;
(d) to take all necessary action to protect and preserve the
interests of the Committee and the unsecured creditors
including:
-- the prosecution of actions on their behalf; and
-- negotiations concerning litigation in which the Debtors
are involved;
(e) prepare all necessary adversary complaints and related
motions, applications, and other papers in support of the
Committee's position;
(f) appear and protect the Committee's interests, as
appropriate, before the Bankruptcy Court, Appellate Courts,
State Courts and the U.S. Trustee;
(g) perform other necessary legal services as appropriate;
(h) serve as conflicts counsel relating to a potential lender
and Bank of America as prepetition lender.
Harold D. Jones, Esq., a Partner at Jaspan Schlesigner, disclosed
that his Firm's professionals bill:
Designation Hourly Rate
----------- -----------
Partners/Counsel $415 - $525
Associates $250 - $390
Legal Assistants $180
Mr. Jones assures the Court that his Firm does not hold any
interest adverse to the Debtor's estate.
Headquartered in Brooklyn, New York, The Brooklyn Hospital Center
-- http://www.tbh.org-- provides a variety of inpatient and
outpatient services and education programs to improve the well
being of its community. The Debtor, together with Caledonian
Health Center, Inc., filed for chapter 11 protection on Sept. 30,
2005 (Bankr. E.D.N.Y. Case No. 05-26990). Lawrence M. Handelsman,
Esq., and Eric M. Kay, Esq., at Stroock & Stroock & Lavan LLP
represent the Debtors in their restructuring efforts. When the
Debtors filed for protection from their creditors, they listed
$233,000,000 in assets and $337,000,000 in debts.
BROOKLYN HOSPITAL: Committee Hires Otterbourg Steindler as Counsel
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of New York
authorized the Official Committee of Unsecured Creditors of The
Brooklyn Hospital Center and its debtor-affiliate asks to retain
Otterbourg, Steindler, Houston & Rosen, P.C., as its chapter 11
counsel.
Otterbourg Steindler will:
1) assist the Committee in its consultation with the Debtors
relative to the administration of their chapter 11 cases
and attend meetings and negotiate with the Debtors'
representatives;
2) assist and advise the Committee in its examination and
analysis of the conduct of the Debtors' affairs and in the
review, analysis and negotiation of any financing
agreements;
3) assist the Committee in the review, analysis and
negotiation of any plan of reorganization and an
accompanying disclosure statement that may filed;
4) take all necessary action to protect and preserve the
Committee's interests, including possible prosecution of
actions on its behalf, negotiations concerning all
litigation in which the Debtors are involved, and review
and analysis of claims filed against the Debtors' estates;
5) prepare on behalf of the Committee all necessary motions,
applications, answers, orders, reports and papers in
support of positions taken by the Committee;
6) appear before the Bankruptcy Court, the Appellate Courts
and the U.S. Trustee to protect the Committee's interests
before those courts and before the U.S. Trustee; and
7) perform all other legal services to the Committee that are
necessary in the Debtors' chapter 11 cases.
Glenn B. Rice, Esq., a member of Otterbourg Steindler, is one of
the lead attorneys for the Committee.
Otterbourg Steindler's professionals bill:
Designation Hourly Rate
----------- -----------
Partners & Counsel $450 - $725
Associate $240 - $525
Paralegals & Legal Assistants $175 - $195
Otterbourg Steindler assured the Court that it does not represent
any interest materially adverse to the Committee, the Debtors or
their estates.
Headquartered in Brooklyn, New York, The Brooklyn Hospital Center
-- http://www.tbh.org-- provides a variety of inpatient and
outpatient services and education programs to improve the well
being of its community. The Debtor, together with Caledonian
Health Center, Inc., filed for chapter 11 protection on Sept. 30,
2005 (Bankr. E.D.N.Y. Case No. 05-26990). Lawrence M. Handelsman,
Esq., and Eric M. Kay, Esq., at Stroock & Stroock & Lavan LLP
represent the Debtors in their restructuring efforts. When the
Debtors filed for protection from their creditors, they listed
$233,000,000 in assets and $337,000,000 in debts.
BROOKLYN HOSPITAL: Court Approves $25 Million DIP Loan from CIT
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of New York put
its stamp of approval to the Brooklyn Hospital Center and
Caledonian Health Center, Inc.'s request to secure postpetition
financing from CIT Lending Services Corporation.
The Debtors obtained up to $25 million in debtor-in-possession
financing from CIT, with a $6 million sub-limit for letters of
credit on behalf of Brooklyn Hospital. The DIP loan is
intended to:
-- fund the Debtors' working capital needs during the
course of their chapter 11 cases; and
-- prime the Dormitory Authority of the State of New York
and the United States Department of Housing and Urban
Development's prepetition and postpetition liens on
Brooklyn Hospital's accounts receivable.
Under a DIP loan agreement, the loan will carry a 2.5% annual
interest and will mature at the earlier to occur of:
(a) the second anniversary of the closing date of the
CIT DIP Loan Agreement; or
(b) the effective date of a plan of reorganization or
liquidation with respect to the Borrower.
To secure the DIP Loan, the Debtors grant CIT a first priority and
priming lien on and security interest in all of their:
a) postpetition and prepetition accounts receivable;
b) books, records and other documents relating to the
payment or collection of accounts receivable.
c) cash and non-cash proceeds of postpetition and
prepetition accounts receivable
Headquartered in Brooklyn, New York, The Brooklyn Hospital Center
-- http://www.tbh.org-- provides a variety of inpatient and
outpatient services and education programs to improve the well
being of its community. The Debtor, together with Caledonian
Health Center, Inc., filed for chapter 11 protection on
Sept. 30, 2005 (Bankr. E.D.N.Y. Case No. 05-26990). Lawrence M.
Handelsman, Esq., and Eric M. Kay, Esq., at Stroock & Stroock &
Lavan LLP represent the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, they
listed $233,000,000 in assets and $337,000,000 in debts.
CALPINE CORP: US Trustee Sets Organizational Meeting for Jan. 6
---------------------------------------------------------------
Deirdre A. Martini, the United States Trustee for Region II,
will convene an organizational meeting in Calpine Corp.'s chapter
11 cases at 10:00 a.m. on Friday, January 6, 2006. The meeting
will be held in the Manhattan Ballroom at the Grand Hyatt New York
hotel, located on Park Avenue at Grand Central Terminal.
The sole purpose of the meeting will be to form a committee or
committees of unsecured creditors in the Debtors' bankruptcy
cases. This is not the meeting of creditors pursuant to Section
341 of the Bankruptcy Code. However, a Debtor's representative
will attend and provide background information regarding the
cases.
Headquartered in San Jose, California, Calpine Corporation --
http://www.calpine.com/-- supplies customers and communities with
electricity from clean, efficient, natural gas-fired and
geothermal power plants. Calpine owns, leases and operates
integrated systems of plants in 21 U.S. states and in three
Canadian provinces. Its customized products and services include
wholesale and retail electricity, gas turbine components and
services, energy management and a wide range of power plant
engineering, construction and maintenance, and operational
services. Calpine was founded in 1984.
The Debtor and its affiliates filed for chapter 11 protection on
Dec. 20, 2005 (Bankr. S.D.N.Y. Case No. 05-60200). Richard M.
Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and
Robert G. Burns, Esq., at Kirkland & Ellis LLP represent the
Debtors in their restructuring efforts. When the Debtors filed
for protection from their creditors, they listed $26,628,755,663
in total assets and $22,535,577,121 in total debts.
CAPITAL AUTO: S&P Lowers Rating on $163.75M Preferred Securities
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
ratings on Capital Automotive REIT and Capital Automotive L.P. to
'BB+' from 'BBB-'.
At the same time, the ratings are removed from CreditWatch
negative, where they were placed Sept. 7, 2005, after the
announcement that CARS had entered into a definitive agreement to
be acquired.
Also, the rating on the company's $163.75 million of rated
preferred securities is lowered to 'B+' from 'BB+'. Concurrently,
the 'BB+' rating assigned to the company's new $2.2 billion
secured credit facility, which has a recovery rating of '3', is
affirmed.
Lastly, ratings are withdrawn on the company's $125 million 6.75%
monthly income notes and $175 million 5.46% senior unsecured
notes, which were redeemed in connection with the acquisition.
The outlook for this newly private entity is stable.
The lowered ratings, consistent with information relayed in a
Bulletin dated Nov. 29, 2005, follow the Dec. 16, 2005 close of
the company's leveraged buyout by Flag Fund V LLC, a limited
liability company advised by DRA Advisors LLC. Flag Fund V
intends to repurchase the previously rated preferred securities;
however, this is likely to occur at a later date.
Ratings Lowered; Off Watch Negative
Capital Automotive REIT/Capital Automotive L.P.
Rating
To From
-- ----
Corporate credit BB+/Stable/-- BBB-/Watch Neg/--
Preferred stock B+ BB+/Watch Neg
Rating Affirmed
Secured Credit Facility BB+(Recovery rtg:3) BB+(Recovery rtg:3)
Rating Withdrawn
Senior unsecured NR BBB-/Watch Neg
CELESTICA INC: Operating Performance Earns S&P's Low-B Ratings
--------------------------------------------------------------
Fitch Ratings has initiated coverage of Celestica Inc. by
assigning these ratings:
-- Issuer default rating 'BB-';
-- Unsecured credit facility 'BB-';
-- Senior subordinated debt 'B+'.
The Rating Outlook is Stable. Fitch's action affects
approximately $750 million of debt.
The ratings and Outlook reflect Celestica's relatively weak but
improved operating performance and concentration to traditional
end markets (communications infrastructure and computing), which
are characterized by more mature growth prospects and have
resulted in Celestica's greater historical operating performance
volatility than its more diversified competitors.
Furthermore, Fitch expects EBIT margins for the electronics
manufacturing services industry will remain thin, particularly for
companies with traditional EMS models that focus primarily on
contract design and manufacturing activities. Competition from
faster growing original design manufacturers and/or the ODM model,
particularly in consumer electronics and other nontraditional end
markets with more attractive growth rates, remains a concern, as
does expectations for greater program-specific demand volatility
across the industry.
Ratings strengths center on the company's:
* historically conservative capital structure,
* improved leverage ratios mostly from higher profitability
but also recent debt reduction,
* adequate liquidity position with limited near-term debt
maturities,
* Fitch's comfort with the EMS industry's ability to generate
cash from working capital in a declining sales environment,
and
* positive long-term trends supporting additional penetration
of the design and manufacturing outsourcing model.
The ratings incorporate Fitch's belief that Celestica's operating
performance should gradually improve, driven by additional cost
savings related to the company's significant and ongoing
restructuring activities. These restructuring and efficiency
initiatives should also result in more efficient working capital
management, which Fitch anticipates will lead to greater
consistency in generating cash from working capital during periods
of low or negative revenue growth. While these initiatives should
ultimately result in stronger credit protection measures, Fitch
expects utilization rates will remain at less than optimal levels
in the absence of significant revenue growth and are likely to
result in additional restructuring.
While Fitch recognizes the increased volatility associated with
large customer programs and an end market portfolio that is less
diversified than those of certain competitors could negatively
affect top-line results, Celestica's organic revenue growth should
be flat to slightly positive for 2006.
At the same time, Fitch believes the continuation of recent
negative organic revenue growth trends would be due to the
company's reduced competitiveness and could result in negative
rating actions. Demand in Celestica's largest end markets,
(communications infrastructure and computing), which continues to
represent approximately 75% of total revenues, is expected to grow
in the low single digits through 2006.
Fitch also believes Celestica's ongoing efforts to diversify its
revenue mix by increasing penetration in faster growing
nontraditional end markets, which may include additional smaller
acquisitions, will be successful but take longer than anticipated,
given the intense competition from not only other tier 1 EMS
providers but also Asian providers and ODMs with significant
historical capabilities in these markets, particularly consumer
electronics.
Total leverage adjusted for rents was 4 times for the LTM ended
Sep. 30, 2005, versus 5.5x for the LTM ended Sep. 30, 2004 and
5.6x for the LTM ended Sep. 30, 2003. EBITDA to interest incurred
fell to 8.2x for the LTM ended Sep. 30, 2005, versus 20x for the
LTM ended Sep. 30, 2004 and 37.3x for the LTM ended Sep. 30, 2003.
Fitch notes that interest incurred has increased significantly as
a result of Celestica repaying its approximately $350 million of
LYONS during the third quarter of 2005 and annual interest expense
is likely to be $50 million-$60 million going forward.
As of Sep. 30, 2005, liquidity was adequate with no near-term debt
maturities and was supported by approximately $900 million of cash
and cash equivalents and an undrawn $600 million senior unsecured
revolving credit facility expiring 2007. The leverage covenant
contained within the credit agreement limits the incurrence of
additional debt to approximately $340 million as of Sep. 30, 2005.
Celestica also has an agreement providing the company with the
ability to sell up to $300 million of accounts receivable to a
third party financial institution. Fitch anticipates that
Celestica will renew the agreement, which is scheduled to expire
in December 2005. Celestica's cash conversion cycle was a
Fitch-estimated 50 days for the LTM ended Sep. 30, 2005, down from
56 for fiscal 2004 but up from 49 days for fiscal 2003. Fitch
recognizes the longer lead times and lower inventory turns
associated with high-mix communications equipment and believes
improvements in CCC days are limited to approximately 40 days. As
of Sep. 30, 2005, total debt was approximately $750 million and
consisted of $500 million 7.875% senior subordinated notes due
2011 and $250 million 7.625% senior subordinated notes due 2013.
CHAMPLAIN LTD: Fitch Assigns B- Rating to $90 Million Class Notes
-----------------------------------------------------------------
Fitch Ratings has assigned a 'B-' rating to Champlain Limited's
$75 million class A variable-rate notes due 2009 and a 'B-' rating
to Champlain's $15 million class B variable-rate notes due 2009.
Fitch's ratings reflect:
* its review of AIR Worldwide Corporation's risk analysis and
models used to analyze the covered risks,
* the loss distributions resulting from AIR's analysis, and
* the transaction's structural soundness.
Champlain is a Cayman Islands exempted company formed solely to
issue the variable-rate notes, enter into a counterparty contract
with Montpelier Reinsurance Ltd., a Class 4 Bermuda-based
reinsurance company, and conduct activities related to the notes'
issuance. Montpelier Re is a worldwide provider of catastrophe
reinsurance products and services. Fitch rates Montpelier Re's
insurer financial strength 'BBB'.
The counterparty contract provides for payments to Montpelier Re
following certain earthquake events in Japan or the U.S.,
excluding Hawaii and Alaska, and certain hurricane events in the
Gulf or East Coast of the U.S. during the next three years.
Proceeds from the notes collateralize Champlain's obligations
under the counterparty contract.
Fitch's ratings are based on risk-adjusted modeled results, in
which the transaction's base-case modeled results were adjusted to
consider uncertainty associated with the model's frequency and
severity assumptions and methodology. Fitch then compared these
risk-adjusted modeled results with the catastrophe bond rating
grid as part of its overall rating process. Fitch's analysis of
the transaction's structure included a review of Champlain's
organizational documents, contracts between Champlain, and other
parties and various legal opinions.
Champlain Limited:
-- Class A variable-rate notes due 2009 'B-';
-- Class B variable-rate notes due 2009 'B-'.
CHUMASH CASINO: Good Operating Results Earn S&P's Positive Outlook
------------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on the
Chumash Casino & Resort Enterprise to positive from stable.
At the same time, Standard & Poor's affirmed its 'BB' issuer
credit and senior unsecured debt ratings on the CCRE.
"The outlook revision reflects our assessment that operating
results at the CCRE's Chumash Casino continue to be good,
resulting in credit measures that are at a level that is strong
for the rating," said Standard & Poor's credit analyst Michael
Scerbo. In addition, it is Standard & Poor's expectation that
this trend is likely to continue in the near term.
While the CCRE does not publicly disclose its financial
statements, its financial profile is strong for its 'BB' issuer
credit rating. Standard & Poor's expects that this will remain
the case.
COLLINS & AIKMAN: Court Approves Key Employee Retention Program
---------------------------------------------------------------
Judge Steven W. Rhodes approves Collins & Aikman Corporation and
its debtor-affiliates' Key Employee Retention Plan -- the
Retention Plan and the Success Sharing Plan -- subject to certain
modifications.
Regarding the Retention Plan, Judge Rhodes rules that:
(a) The Key Employees are entitled to a retention payment of:
Tier Retention Payment
---- -----------------
A between 40% and 50% of base salary
B between 30% and 35% of base salary
C between 20% and 25% of base salary
(b) Total payments under the Retention Plan, excluding certain
plant closing payments, if any, will not exceed $9,300,000
in the aggregate; and
(c) To the extent eligible, the participants in the Retention
Plan will receive:
(1) 25% of the payment on February 15, 2006;
(2) 25% of the payment on July 14, 2006; and
(3) any remaining unpaid payments on the date that is the
earlier of(x) 45 days after the effective date of a
plan of reorganization; and (y) the date the Key
Employee is terminated without cause by the Debtors
following a sale pursuant to Section 363 of the
Bankruptcy Code of the business unit in which the
affected Key Employee is employed.
Judge Rhodes emphasizes that payments to employees under the
Plant Closing Payments, other than pursuant to existing
collective bargaining agreements or as otherwise required by
applicable law, should not exceed $3,500,000 in the aggregate.
Furthermore, Judge Rhodes permits the Debtors to allocate Plant
Closing Payments to union employees at plants where relevant,
existing collective bargaining agreements do not contain
severance provisions.
Success Sharing Plan
Key Employees may be participants in the Retention Plan and the
Success Sharing Plan provided that all payments to them under the
Retention Plan will be credited against any amounts payable to
them under the Success Sharing Plan. The credited payments will
not be distributed to any employee under the Success Sharing
Plan, Judge Rhodes says.
In addition to the employees approved to participate in the
Success Sharing Plan, Judge Rhodes rules that no more than two
additional Key Employees may participate in the annual bonus
program and severance components of the Success Sharing Plan. Up
to 41 Key Employees may participate in the Success Sharing Plan
pool bonus.
Headquartered in Troy, Michigan, Collins & Aikman Corporation
-- http://www.collinsaikman.com/-- is a global leader in cockpit
modules and automotive floor and acoustic systems and is a leading
supplier of instrument panels, automotive fabric, plastic-based
trim, and convertible top systems. The Company has a workforce of
approximately 23,000 and a network of more than 100 technical
centers, sales offices and manufacturing sites in 17 countries
throughout the world. The Company and its debtor-affiliates filed
for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case
No. 05-55927). When the Debtors filed for protection from their
creditors, they listed $3,196,700,000 in total assets and
$2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News,
Issue No. 21; Bankruptcy Creditors' Service, Inc., 215/945-7000)
DELTA AIR: Wants Until June 12 to Remove Civil Actions
------------------------------------------------------
Delta Air Lines, Inc., and its debtor affiliates ask the Hon.
Prudence Carter Beatty of the U.S. Bankruptcy Court for the
Southern District of New York to extend the time period during
which they may file notices of removal with respect to any civil
actions pending as of the Petition Date and covered by Section
1452 through and including the later to occur of:
(i) June 12, 2006; or
(ii) 30 days after entry of an order terminating the automatic
stay with respect to any particular action sought to be
removed.
The Debtors' request is without prejudice to their right to seek
further extensions of the removal deadline.
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, in New York,
relates that, as of the Petition Date, one or more of the Debtors
were party to numerous judicial and administrative proceedings
involving a diverse assortment of claims.
Given the number of Prepetition Actions and the variety of
claims, as well as the enormous amount of time and effort the
Debtors have had to devote since the Petition Date to resolving
other significant aspects of these Chapter 11 cases, the Debtors
have not been able to analyze and make a determination regarding
the removal of each Prepetition Action, Mr. Huebner states.
Consequently, the Debtors believe that it is advisable to seek an
extension to allow them the opportunity to carefully consider the
possible removal of each Prepetition Action and to ensure that
they do not forfeit valuable rights under Section 1452.
The Debtors' Chapter 11 cases are exceedingly large and complex,
Mr. Huebner notes. Since the Petition Date, numerous significant
business and legal issues have arisen that have required and will
continue to require a great deal of time on the part of the
Debtors employees and professionals. The Debtors and their
professionals have devoted much time and effort to:
(i) stabilize the Debtors' business operations in order to
maximize the value of the Debtors' estates;
(ii) continue Bankruptcy Code Section 1113 negotiations and
taking part in related proceedings before the Court;
(iii) analyze a significant number of nonresidential real
property leases in order to determine whether to assume or
reject them;
(iv) evaluate various aircraft financing arrangements in light
of Section 1110 of the Bankruptcy Code; and
(v) compile information from books, records and documents
relating to thousands of claims, assets and contracts to
prepare their schedules of assets and liabilities,
schedules of current income and expenditures, schedules of
executory contracts and unexpired leases and statements of
financial affairs.
Section 1452(a) provides that "[a] party may remove any claim or
cause of action in a civil action other than a proceeding before
the United States Tax Court or a civil action by a governmental
unit to enforce such governmental unit's police or regulatory
power, to the district court for the district where such civil
action is pending, if such district court has jurisdiction of
such claim or cause of action under [28 U.S.C.] section 1334."
If the claim or cause of action in a civil action is pending when
a case under the Bankruptcy Code is commenced, Bankruptcy Rule
9027(a)(2) further provides that a notice of removal may be filed
only within the longest of (A) 90 days after the Petition Date,
(B) 30 days after entry of an order terminating a stay, if the
claim or cause of action in a civil action has been stayed under
Section 362 of the Bankruptcy Code, or (C) 30 days after a
trustee qualifies in a Chapter 11 reorganization case but not
later than 180 days after the Petition Date.
The Debtors submit that the extension is in the best interests of
their estates, their creditors and all parties-in-interest. Mr.
Huebner explains that the extension will permit the Debtors to
make a full assessment of the possible removal of Prepetition
Actions and thereby maximize the potential recovery for their
creditors while protecting their rights under Section 1452. He
adds that the Debtors' adversaries will not be prejudiced by the
extension because the adversaries may not prosecute a Prepetition
Action absent relief from the automatic stay. Moreover, any
party whose proceeding is removed may seek to have it remanded
under Section 1452(b).
Judge Beatty will convene a hearing to consider the Debtors'
request on January 5, 2006. Objections are due December 27,
2005.
Headquartered in Atlanta, Georgia, Delta Air Lines --
http://www.delta.com/-- is the world's second-largest airline in
terms of passengers carried and the leading U.S. carrier across
the Atlantic, offering daily flights to 502 destinations in 88
countries on Delta, Song, Delta Shuttle, the Delta Connection
carriers and its worldwide partners. The Company and 18
affiliates filed for chapter 11 protection on Sept. 14, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner,
Esq., at Davis Polk & Wardwell, represents the Debtors in their
restructuring efforts. As of June 30, 2005, the Company's balance
sheet showed $21.5 billion in assets and $28.5 billion in
liabilities. (Delta Air Lines Bankruptcy News, Issue No. 15;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
DELTA AIR: Wants Court to Approve Term Sheet for 89 Aircraft
------------------------------------------------------------
Pursuant to Sections 362, 363 and 1110 of the Bankruptcy Code and
Rules 2002, 4001, 6004 and 9019 of the Federal Rules of
Bankruptcy Procedure, the Delta Air Lines, Inc., and its debtor-
affiliates ask the U.S. Bankruptcy Court for the Southern District
of New York to:
(a) authorize Delta Air Lines, Inc., to execute and to perform
its obligations under a Restructuring Term Sheet
negotiated with an ad hoc committee of holders of aircraft
indebtedness regarding transactions that affect 89
aircraft and related engines, equipment, and documents;
(b) extend the 60-day period set forth in Section 1110 of the
Bankruptcy Code on the terms set forth in the Term Sheet;
(c) approve the method of calculating prepetition unsecured
claims that is set forth in the Term Sheet; and
(d) authorize Delta to negotiate, execute and perform under
definitive agreements implementing the terms of the Term
Sheet.
The Ad Hoc Committee is comprised of holders of aircraft
indebtedness that have participated in leases and financing
transactions involving 32 Model MD-88 aircraft, 34 Model 757-232
aircraft, 18 Model 767-332 aircraft and five Model 767-332ER
aircraft. The Ad Hoc Committee is represented in the Debtors'
cases by Peter D. Schellie, Esq., at Bingham McCutchen LLP, in
Washington, D.C.
Under the leases and other financing arrangements, Delta has the
right to use the Aircraft, all engines, appliances and related
parts and equipment, and all records, logos and documents.
Michael E. Wiles, Esq., at Debevoise & Plimpton LLP, in New York,
recounts that the Ad Hoc Committee has previously stipulated to a
limited extension of the 60-day period specified in Section 1110
through and including December 14, 2005, to permit the parties to
finalize the Term Sheet. The Stipulation provided that, if Delta
complied with certain conditions and continued to perform its
obligations under the Stipulation, the 60-day Section 1110 period
would automatically be further extended through January 17, 2006.
Pursuant to the Term Sheet, the Ad Hoc Committee agrees to permit
Delta to continue to operate the Aircraft, which represents a
large and significant component of Delta's fleet. At the same
time, Delta will realize significant savings as a result of the
revised payment terms and other modifications to the Aircraft
Agreements, Mr. Wiles avers.
Applicability of the Restructurings
The restructurings contemplated in the Term Sheet apply to
Aircraft Agreements concerning Aircraft in which members of the
Ad Hoc Committee have (x) a controlling interest, or (y) a
minority interest of 20% or more of the amount of certificates
outstanding on the Aircraft.
However, Delta retained the right to continue to deal with other
parties that have interests in the Aircraft and to negotiate and
agree to terms different from those specified in the Term Sheet.
Payment Terms
The Debtors and the Ad Hoc Committee agree to modify the Aircraft
Agreements in a variety of respects.
The Term Sheet revises the payment terms of each Aircraft
Agreement. The modified payment terms vary based on the
Aircraft's model and the year it was manufactured. The precise
amount of the reduction varies for each Aircraft. The adjusted
payment amounts also take effect on various schedules, again
based on the model of the Aircraft. Some of the agreed-upon
payments are to be deferred, and Delta has agreed to pay interest
on the deferred payments at the rate of LIBOR plus 4.50%.
Duration
The Term Sheet extends the terms of the Aircraft Agreements so
that the restructured leases will have terms ranging from five to
eight years from November 4, 2005, with differences being based
on the Aircraft model and the maintenance cycle of the Aircraft.
The Term Sheet also permits the renewal of some, but not all, of
the Aircraft Agreements after the expiration of the extended
terms.
For Aircraft Agreements that include a renewal option, the Term
Sheet provides that Delta must give 12 months' notice of the
exercise of that option, and that the renewal should be at fair
market value, with a floor of 50% of the agreed rent for the
Aircraft under the Term Sheet.
Rejection or Abandonment and Return of Aircraft
The Term Sheet provides that Delta may reject Aircraft Agreements
or abandon Aircraft Equipment and may return Aircraft Equipment
that is subject to the Aircraft Agreements. If Delta does so, it
must comply with certain termination obligations, which require
Delta to provide at least four months' advance notice of the
effective date of any rejection or return. In addition, Delta
will be obligated to continue to make payments for the rejected
or returned Aircraft Equipment during the four-month notice
period.
Upon giving the notice, Delta must pay any unpaid deferred
payments. Upon return of the Aircraft Equipment, Delta must make
a payment equal to an additional eight months of payments at the
agreed upon rates.
The Term Sheet also provides detailed specifications as to the
physical condition in which any rejected or abandoned Aircraft
Equipment must be returned, based on the Aircraft's model type.
Prepetition Unsecured Claims
The Term Sheet describes the manner by which the unsecured
prepetition claims with respect to the transactions in which
members of the Ad Hoc Committee are involved are to be
calculated. The Term Sheet provides, however, that any claim
amounts agreed upon as between the members of the Ad Hoc
Committee and Delta will be subject to the conventional claims
resolution and allowance processes. The Term Sheet further
provides that no agreement will attempt to determine who -- as
between the members of the Ad Hoc Committee and any other person
-- is entitled to any portion of the claim reflecting tax
indemnities.
Extension of Section 1110 Period
The Term Sheet provides for a further extension of the 60-day
period for all purposes under Section 1110 with respect to the
applicable Aircraft Equipment. The Term Sheet provides that the
extension will remain in effect with respect to particular
Aircraft until the earliest of the date:
(a) on which Delta and the Ad Hoc Committee enter into
definitive documentation with respect to the Aircraft
and the documentation becomes effective;
(b) on which Delta rejects or abandons the Aircraft pursuant
to the Term Sheet, and
(c) of a Default by Delta under the Term Sheet or under any
of the definitive documents, if effective, that are
contemplated by the Term Sheet and that relate to the
Aircraft.
If the extension has been terminated as to a particular Aircraft
pursuant to a Default by Delta, Delta must comply with the same
Termination Obligations that apply to rejection or abandonment
and the return of the Aircraft Equipment.
Under the Term Sheet, the Ad Hoc Committee cannot terminate the
Term Sheet or make a demand under Section 1110 for any of the
applicable Aircraft Equipment prior to the termination of the
extension.
Additional Terms
A "Default" under the Term Sheet consists of:
(1) a default by Delta under the Term Sheet that is not cured
within five business days; or
(2) with respect to any of the definitive documents that are
entered into pursuant to the Term Sheet, a default by
Delta that is not cured within the applicable cure period
specified in those definitive documents.
Delta agrees to pay certain reasonable fees and expenses of the
Financing Parties and the Ad Hoc Committee related to aspects of
the pending bankruptcy proceeding relevant to the interests of
the Financing Parties and the members of the Ad Hoc Committee and
the negotiation, documentation and implementation of the Term
Sheet.
Delta filed a redacted copy of the Term Sheet and Fee Letter with
the Court. Delta withheld information regarding the fees and
expenses it paid to the advisors to the Financing Parties and the
Ad Hoc Committee.
Implementation of the Term Sheet
The Term Sheet will be implemented through the negotiation of new
operating leases and financing or loan documents for the relevant
Aircraft. The Term Sheet requires the Parties to use their best
efforts to complete the new operating leases and financing or
loan documents within six months of the Court's approval of the
Term Sheet.
Notwithstanding the six-month period, the Term Sheet requires
the new operating leases and financing or loan documents to be
finalized before the Court approves a disclosure statement for
Delta's plan of reorganization.
Headquartered in Atlanta, Georgia, Delta Air Lines --
http://www.delta.com/-- is the world's second-largest airline in
terms of passengers carried and the leading U.S. carrier across
the Atlantic, offering daily flights to 502 destinations in 88
countries on Delta, Song, Delta Shuttle, the Delta Connection
carriers and its worldwide partners. The Company and 18
affiliates filed for chapter 11 protection on Sept. 14, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner,
Esq., at Davis Polk & Wardwell, represents the Debtors in their
restructuring efforts. As of June 30, 2005, the Company's balance
sheet showed $21.5 billion in assets and $28.5 billion in
liabilities. (Delta Air Lines Bankruptcy News, Issue No. 15;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
DELTA AIR: Wants to Pay $272,000 Tampa Airport Obligations
----------------------------------------------------------
Delta Air Lines, Inc., and its debtor-affiliates seek the U.S.
Bankruptcy Court for the Southern District of New York's
permission to pay $272,000 due to the Hillsborough County Aviation
Authority on Dec. 30, 2005.
On March 1, 1993, the Hillsborough Aviation Authority issued
$8,000,000 in principal amount of bonds to refinance the bonds it
issued in 1982. The earlier bonds had been issued to finance the
cost of acquiring, constructing, and installing an overhaul and
maintenance base facility for commercial aircraft at the Tampa
International Airport in Florida. The financing was governed by
a Third Supplemental Indenture of Trust entered into between the
Authority and Barnett Banks Trust Company, N.A., as trustee --
predecessor-in-interest to The Bank of New York, the current
Trustee -- dated as of March 1, 1993.
Delta and the Hillsborough Aviation Authority are parties to a
Lease and Debt Service Agreement dated December 1, 1982, as
supplemented by a Second Supplemental Lease and Debt Service
Agreement dated March 1, 1993. The Agreement requires Delta to
make payments on the 1993 Bonds. Covered Payments are paid in
arrears semi-annually. The next Covered Payment for $272,000 is
due on December 30.
The Debtors' $1,900,000,000 DIP Credit Agreement with General
Electric Capital Corporation provided, among other things, that
certain payments by Delta of prepetition obligations could
constitute an Event of Default.
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, in New York,
New York, tells Judge Beatty that some or all of the December 30
Payment may not be a postpetition payment under Section 365(d)(3)
of the Bankruptcy Code and may relate in part to the prepetition
period. However, Delta believes that at this time it is not
necessary to raise or litigate this issue.
Mr. Huebner contends that if Delta does not make the December 30
Payment or only makes a portion of the Payment, it risks a party
taking the position that Delta is in default under the Lease,
potentially subjecting Delta to various contractual remedies,
including termination of the Lease.
The Debtors request that the payment of the $272,000 be without
prejudice to the positions of any of the Parties, including as to
whether the Covered Payments are true lease obligations or
prepetition financing obligations.
Headquartered in Atlanta, Georgia, Delta Air Lines --
http://www.delta.com/-- is the world's second-largest airline in
terms of passengers carried and the leading U.S. carrier across
the Atlantic, offering daily flights to 502 destinations in 88
countries on Delta, Song, Delta Shuttle, the Delta Connection
carriers and its worldwide partners. The Company and 18
affiliates filed for chapter 11 protection on Sept. 14, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner,
Esq., at Davis Polk & Wardwell, represents the Debtors in their
restructuring efforts. As of June 30, 2005, the Company's balance
sheet showed $21.5 billion in assets and $28.5 billion in
liabilities. (Delta Air Lines Bankruptcy News, Issue No. 15;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
ENTERGY NEW ORLEANS: Wants Until April 21 to File Ch. 11 Plan
-------------------------------------------------------------
Section 1121(b) of the Bankruptcy Code provides for an initial
period of 120 days after the Petition Date during which a debtor
has the exclusive right to propose a plan of reorganization. In
addition, Section 1121(c)(3) provides that if a debtor proposes a
plan within the Exclusive Proposal Period, it has 180 days after
the Petition Date to solicit acceptances of that plan.
Entergy New Orleans, Inc., asks the U.S. Bankruptcy Court for the
Eastern District of Louisiana to extend the time period within
which it has the exclusive right to:
(a) file a plan until April 21, 2006; and
(b) solicit acceptances of that plan until June 20, 2006.
Elizabeth J. Futrell, Esq., at Jones, Walker, Waechter,
Poitevent, Carrere & Denegre, LLP, in Baton Rouge, Louisiana,
relates that in determining whether "cause" to extend exclusivity
periods exists, courts rely on these factors:
-- The size and complexity of the case;
-- The necessity of sufficient time to permit the debtor to
negotiate a plan of reorganization and prepare adequate
information;
-- The existence of good faith progress toward reorganization;
-- The fact that the debtor is paying its bills as they become
due;
-- Whether the debtor has demonstrated reasonable prospects
for filing a viable plan;
-- Whether the debtor has made progress in negotiations with
its creditors;
-- The amount of time which has elapsed in the case;
-- Whether the debtor is seeking an extension of exclusivity
in order to pressure creditors to submit to the debtor's
reorganization demands; and
-- Whether an unresolved contingency exists.
The Debtor asserts that the size and complexity of its Chapter
11 case constitute cause to extend the Exclusive Periods.
Moreover, Hurricane Katrina imposed myriad logistical and other
complexities that sufficiently justify extension of the
Exclusivity Periods, Ms. Futrell points out.
Ms. Futrell asserts that in the relatively short time since the
Petition Date, the Debtor has regularly evidenced its good faith
and cannot be said to have requested the extension to pressure
creditors.
Ms. Futrell maintains that the Debtor's prospects for filing a
viable plan of reorganization, given additional time to negotiate
the plan, are more than reasonable. "An extension will allow the
Debtor to focus on plan issues in due course and to make proper
decisions with regard to its reorganization efforts."
Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc.
-- http://www.entergy-neworleans.com/-- is a wholly owned
subsidiary of Entergy Corporation. Entergy New Orleans provides
electric and natural gas service to approximately 190,000 electric
and 147,000 gas customers within the city of New Orleans. Entergy
New Orleans is the smallest of Entergy Corporation's five utility
companies and represents about 7% of the consolidated revenues and
3% of its consolidated earnings in 2004. Neither Entergy
Corporation nor any of Entergy's other utility and non-utility
subsidiaries were included in Entergy New Orleans' bankruptcy
filing. Entergy New Orleans filed for chapter 11 protection on
Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697). Elizabeth J.
Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker,
Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the
Debtor in its restructuring efforts. When the Debtor filed for
protection from its creditors, it listed total assets of
$703,197,000 and total debts of $610,421,000. (Entergy New
Orleans Bankruptcy News, Issue No. 8; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
ENTERGY NEW ORLEANS: Panel Wants FTI's Hiring Extended After Jan.
-----------------------------------------------------------------
As previously reported, the U.S. Bankruptcy Court for the Eastern
District of Louisiana authorized the Official Committee of
Unsecured Creditors of Entergy New Orleans Inc. to retain FTI
Consulting, Inc., as its financial advisors, subject to a Court
re-examination of the need for FTI's services to the Committee
after December 31, 2005.
In this regard, the Committee seeks the Court's authority to
continue the retention of FTI as financial advisors for January
2006 and thereafter.
Philip K. Jones, Jr., Esq., at Liskow & Lewis, APLC, in New
Orleans, Louisiana, tells the Court that FTI's continued services
are necessary to enable the Committee to evaluate transactions
between Entergy New Orleans, Inc., its parent, and affiliates,
and to determine whether any of the transactions warrant the
Committee's prosecution of an action for preferences, fraudulent
conveyances, other avoiding power claims, subordination or any
other any claims, counterclaims or causes of action, objections,
contests or defenses against Entergy Corporation or its
affiliates.
The Committee states that FTI's continued services will enable it
to assess and monitor the efforts of the Debtor and their
professional advisors to maximize the value of their estates and
to reorganize successfully.
The Committee believes that without FTI, it will not be able to
consider independent analysis of financial or regulatory
information pertaining to the Debtor nor present that analysis to
the Court.
In particular, FTI will:
(a) assist the Committee in the review of financial related
disclosures required by the Court, including the Schedules
of Assets and Liabilities, the Statement of Financial
Affairs and Monthly Operating Reports;
(b) assist in the review of the Debtor's performance of cost
or benefit evaluations with respect to the affirmation or
rejection of various executory contracts and leases;
(c) assist in the review of financial information distributed
by the Debtor to creditors and others, including, but not
limited to, cash flow projections and budgets, cash
receipts and disbursement analysis, analysis of various
asset and liability accounts, and analysis of proposed
transactions for which Court approval is sought;
(d) assist in the review and preparation of information and
analysis necessary for the confirmation of a plan in the
Debtor's Chapter 11 case;
(e) assist in the evaluation and analysis of avoidance
actions, including fraudulent conveyances and preferential
transfers as to affiliates and the parent of the Debtor;
(f) provide litigation advisory services with respect to
accounting and regulatory matters, along with expert
witness testimony on case-related issues as required by
the Committee; and
(g) render other general business consulting or other
assistance as the Committee or its counsel may deem
necessary that is consistent with the role of a financial
advisor.
The Committee informs the Court that it does not owe FTI any
prepetition fees and expenses.
As agreed by the parties, FTI will shift to compensation on an
hourly rate basis for January 2006 and thereafter. The hourly
rates of FTI's professionals are:
Senior Managing Directors $560 - $625
Directors and Managing Directors $415 - $560
Consultants $280 - $385
Associates $205 - $280
Although compensation of FTI professionals is to be based on the
hourly rates, the parties agree that FTI's compensation will be
capped at $100,000, plus reimbursement of actual and necessary
expenses incurred, for January 2006. For February 2006 and all
subsequent months, FTI's compensation would be capped at $75,000
per month, plus reimbursement of actual and necessary expenses
incurred.
Albert S. Conly, senior managing director at FTI Consulting,
Inc., assures the Court that the firm is a "disinterested person"
as the term is defined in Section 101(14) of the Bankruptcy Code.
According to Mr. Conly, FTI will conduct an ongoing review of its
files to ensure that no conflicts or other disqualifying
circumstances exist or arise. If any new material facts or
relationships are discovered, FTI will supplement its disclosure
to the Court. FTI has also agreed not to share with any person
or firm the compensation to be paid for its professional
services.
Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc.
-- http://www.entergy-neworleans.com/-- is a wholly owned
subsidiary of Entergy Corporation. Entergy New Orleans provides
electric and natural gas service to approximately 190,000 electric
and 147,000 gas customers within the city of New Orleans. Entergy
New Orleans is the smallest of Entergy Corporation's five utility
companies and represents about 7% of the consolidated revenues and
3% of its consolidated earnings in 2004. Neither Entergy
Corporation nor any of Entergy's other utility and non-utility
subsidiaries were included in Entergy New Orleans' bankruptcy
filing. Entergy New Orleans filed for chapter 11 protection on
Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697). Elizabeth J.
Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker,
Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the
Debtor in its restructuring efforts. When the Debtor filed for
protection from its creditors, it listed total assets of
$703,197,000 and total debts of $610,421,000. (Entergy New
Orleans Bankruptcy News, Issue No. 8; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
ENTERGY NEW ORLEANS: To Pay Claims of Critical Restoration Vendors
------------------------------------------------------------------
As reported in the Troubled Company Reporter on Oct. 7, 2005,
Entergy New Orleans Inc., sought and obtained the U.S. Bankruptcy
Court for the Eastern District of Louisiana's authority to pay
prepetition claims owing to third-party suppliers and contractors
that are essential to:
* the uninterrupted function of their business operations; and
* the recovery of the New Orleans metropolitan area in the
aftermath of Hurricane Katrina.
In the alternative, the Court permits the Debtor to pay up to
$23 million in prepetition claims of the Critical Restoration
Vendors in the ordinary course of business.
The obligations to Critical Restoration Vendors include:
a) obligations owed to Critical Vendors that do not have
formal contracts with the Debtor;
b) obligations owed to Critical Vendors whose contracts with
the Debtor will shortly expire, or whose contracts can be
terminated under both non-bankruptcy laws and the
Bankruptcy Code; and
c) obligations owed to Critical Vendors, who may suspend or
limit performance of the supply of goods and services to
the Debtor.
Bridgeline Supports Debtor's Request
John F. Higgins, Esq., at Porter & Hedges, L.L.P., in Houston,
Texas, refutes Western Gas Resources, Inc.'s assertion that it is
entitled to critical vendor status because its contract with
Entergy New Orleans, Inc., is a forward contract.
The Western Agreement is not a forward contract and Western Gas
does not enjoy the protections afforded to Bridgeline Gas
Marketing, LLC, Mr. Higgins contends. Bridgeline may terminate
the Bridgeline Contract under Section 556 of the Bankruptcy Code
without lifting the automatic stay because it is a forward
contract.
Mr. Higgins points out that unlike the Western Contract, the
Bridgeline Contract includes a transaction confirmation executed
on January 1, 2005, which provides the Debtor with both firm and
interruptible gas supply through March 31, 2006. Mr. Higgins
elaborates that the Bridgeline Contract is a contract for the
future purchase or sale of gas that is not traded on a national
exchange.
Western's transaction confirmation expired by its terms March 31,
2005. Western Gas does not argue that it had any executory
agreement, much less a forward contract, to sell gas to the
Debtor as of the Petition Date. Neither the Debtor nor Western
Gas had any future obligation to buy or sell gas under the
Western Contract as of the Petition Date. Western Gas' apparent
willingness to provide gas on a firm basis to the Debtor does not
change the nature of the Western Contract, Mr. Higgins maintains.
As of the Petition Date, the Bridgeline Contract was a "forward
contract" under the Bankruptcy Code, Mr. Higgins asserts.
Although Bridgeline had a right to terminate and liquidate the
Bridgeline Contract pursuant to Section 556, it agreed to
continue performing under the Contract provided that the Debtor
paid Bridgeline's prepetition claim.
* * *
The Honorable Jerry A. Brown of the Bankruptcy Court for the
Eastern District of Louisiana authorizes the Debtor to pay, in the
ordinary course of business, the prepetition claims of the
Critical Restoration Vendors. The Court clarifies that that Clean
Harbors Pumping is a Critical Restoration Vendor while Citi-
Capital Bankers Leasing is not.
Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc.
-- http://www.entergy-neworleans.com/-- is a wholly owned
subsidiary of Entergy Corporation. Entergy New Orleans provides
electric and natural gas service to approximately 190,000 electric
and 147,000 gas customers within the city of New Orleans. Entergy
New Orleans is the smallest of Entergy Corporation's five utility
companies and represents about 7% of the consolidated revenues and
3% of its consolidated earnings in 2004. Neither Entergy
Corporation nor any of Entergy's other utility and non-utility
subsidiaries were included in Entergy New Orleans' bankruptcy
filing. Entergy New Orleans filed for chapter 11 protection on
Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697). Elizabeth J.
Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker,
Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the
Debtor in its restructuring efforts. When the Debtor filed for
protection from its creditors, it listed total assets of
$703,197,000 and total debts of $610,421,000. (Entergy New
Orleans Bankruptcy News, Issue No. 7; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
EPIXTAR CORP: Wants to Hire The Lustigman Firm as Special Counsel
-----------------------------------------------------------------
Epixtar Corp. and its debtor-affiliates ask the U.S. Bankruptcy
Court for the Southern District of Florida for permission to
employ The Lustigman Firm, P.C. as its special counsel.
The FTC and North Carolina Litigation
In October 2003, the Federal Trade Commission filed a suit against
Epixtar Corp., its ISP Subsidiaries and their president at that
time, William Rhodes, in the case of Federal Trade Commission v.
Epixtar Corp., Case No. 03-CV-8511 at the U.S. Bankruptcy Court
for the Southern District of New York.
The FTC alleged in its suit that the three defendants deceptively
marketed a free 30-day Internet service to small businesses and
non-profit organizations. The FTC obtained an ex parte temporary
restraining order that provided for an asset freeze and
appointment of a temporary receiver. The three defendants are in
the process of concluding negotiations before the FTC.
The Attorney General of North Carolina filed a proceeding in the
Wake County Court against the three defendants relating to the
three defendants' marketing of ISP Services in the case of North
Carolina v. Epixtar Corp., Case No. 03CVS006934. That case is
currently the subject of settlement negotiations.
The Debtors wants to employ the Lustigman Firm as their special
counsel in the FTC and North Carolina Litigation due to the Firm's
extensive experience in defending regulatory matters brought by
the FTC and state attorneys general throughout the U.S.
The Firm will assist and advise the Debtors in all matters and
render necessary legal services in connection with the FTC and
North Carolina Litigation.
Sheldon S. Lustigman, Esq., and Andrew Lustigman, Esq., are the
lead attorneys in this engagement. Mr. S. Lustigman charges $425
per hour for his services, while Mr. A. Lustigman charges $400 per
hour.
Mr. S. Lustigman disclosed that other professionals from the
Lustigman Firm performing services to the Debtors will charge from
$125 to $425 per hour.
The Lustigman Firm assures the Court that it does not represent
any interest materially adverse to the Debtors and is a
disinterested person as that term is defined in Section 101(14) of
the Bankruptcy Code.
Headquartered in Miami, Florida, Epixtar Corp. --
http://www.epixtar.com/-- f/d/b/a Global Assets Holding Inc.,
aggregates contact center capacity and robust telephony
infrastructure to deliver comprehensive, turnkey services to the
enterprise market. The Company and its debtor-affiliates filed
for chapter 11 protection on Oct. 6, 2005 (Bank. S.D. Fla. Case
No. 05-42040). Michael D. Seese, Esq., at Kluger, Peretz,
Kaplan & Berlin, P.L., represents the Debtors in their
restructuring efforts. When the Debtors filed for protection from
their creditors, they listed total assets of $30,376,521 and total
debts of $39,158,724.
EPIXTAR CORP: Panel Taps Mesirow Financial as Financial Advisors
----------------------------------------------------------------
The Official Committee of Unsecured Creditors of Epixtar Corp. and
its debtor-affiliates ask the U.S. Bankruptcy Court for the
Southern District of Florida for permission to employ Mesirow
Financial Consulting LLC, as its financial advisors.
Mesirow Financial will:
1) prepare a valuation for the Debtors' ISP Subsidiaries in
support of the Committee's efforts to analyze the Debtors'
proposed settlement with Laurus Master Fund, Ltd.; and
2) perform all other financial advisory services to the
Committee or its counsel to assist the Committee in the
Debtors' chapter 11 cases.
James Feltman, a Senior Managing Director of Mesirow Financial,
reports the Firm's professionals bill:
Designation Hourly Rate
----------- -----------
Sr. Managing Directors $590 - $650
& Managing Directors
Sr. Vice-Presidents $480 - $570
Vice-Presidents $390 - $450
Senior Associates $300 - $360
Associates $190 - $270
Paraprofessionals $140
Mesirow Financial assures the Court that it does not represent any
interest materially adverse to the Committee and the Debtors and
is a disinterested person as that term is defined in Section
101(14) of the Bankruptcy Code.
The Court will convene a hearing at 2:00 p.m., on Jan. 11, 2006,
to consider the Committee's request.
Headquartered in Miami, Florida, Epixtar Corp. --
http://www.epixtar.com/-- f/d/b/a Global Assets Holding Inc.,
aggregates contact center capacity and robust telephony
infrastructure to deliver comprehensive, turnkey services to the
enterprise market. The Company and its debtor-affiliates filed
for chapter 11 protection on Oct. 6, 2005 (Bank. S.D. Fla. Case
No. 05-42040). Michael D. Seese, Esq., at Kluger, Peretz,
Kaplan & Berlin, P.L., represents the Debtors in their
restructuring efforts. When the Debtors filed for protection from
their creditors, they listed total assets of $30,376,521 and total
debts of $39,158,724.
FASTENTECH INC: Moody's Affirms $175 Million Sub. Notes' B3 Rating
------------------------------------------------------------------
Moody's Investors Service changed the outlook on the ratings for
FastenTech, Inc. to negative from stable. Concurrently,
FastenTech's B1 corporate family rating, Ba3 senior secured rating
and B3 senior unsecured rating were affirmed.
The change in outlook to negative is based on:
* Moody's concerns over the heightened risks posed by the
company's recent acquisition activity;
* existing and projected negative free cash flow generation;
and
* Moody's concern that FastenTech's margin performance will
remain under pressure over the near term due to a continued
shift in sales mix away from higher margin aerospace-grade to
lower margin specialized components.
These ratings have been affirmed:
* B1 corporate family rating;
* Ba3 on the $170 senior secured revolving credit facility
due 2010; and
* B3 on the $175 million of senior subordinated notes,
due 2011.
Ratings outlook has been changed to negative from stable.
In fiscal 2005, FastenTech experienced rapid growth reporting net
sales of $327.5 million, a 35% increase over 2004. Driven by
improving trends in most end-markets and improved economic
conditions, organic sales grew by a solid 11%. Acquisitions
contributed $59.5 million to net sales growth.
Operating margins, however, have been negatively impacted by:
* an adverse shift in mix away from higher margin aerospace-
grade components;
* increased raw material costs that were not passed through in
the application-specific segment; and
* generally lower margins at the acquired companies.
Though Moody's anticipates improved margin performance in 2006,
the rating agency expects, for the reasons outlined above, margin
improvement to be constrained at levels below that of 2004.
FastenTech's cash flow generation was weak in 2005, mainly as a
result of increased working capital investment to support revenue
growth. For the same reasons, Moody's projects continued weak
cash flow generation in 2006 as the company increases investment
in working capital and capital expenditures to support its growth.
The company's acquisitive strategy also means that future cash
flow will likely be used for funding acquisitions instead of debt
reduction.
At September 30, 2005, funded debt on a pro forma basis, including
the fiscal 2006 acquisitions of BNC and Erie Bolt, totaled
approximately $303 million, or 4.8 times LTM EBITDA. Including
approximately $37 million of preferred stock and accrued
dividends, total leverage would have been 5.4 times. For this
period on a pro forma basis, LTM EBIT would have covered cash
interest expense approximately 1.6 times.
With projected credit metrics lagging those appropriate for the
rating, uncertainty as to near-term demand in certain key end-
markets as well as uncertainty as to the when positive free cash
flow for debt reduction can be generated, Moody's changed the
outlook to negative. Should the end markets for large gas
turbines show sustained recovery and lower expected military
demand be offset by continued organic growth in other segments,
the outlook could be returned to stable, if such improvements are
coupled with a meaningful reduction in debt levels.
Moody's expectations for a B1 rating include free cash flow as a
percentage of debt over 6%, EBIT to cash interest coverage greater
than 2.0 times and funded debt to EBITDA less than 4.5 times.
Conversely, the ratings or outlook could be pressured:
* by unanticipated integration challenges;
* a substantial decline in end-market conditions; and
* if the deviation from the above mentioned benchmarks
increases.
A downgrade could also result from material debt-financed
acquisition activity, or if financial liquidity were to
deteriorate materially.
FastenTech, Inc., based in Minneapolis, Minnesota, is a
manufacturer of specialty fasteners and fastener systems in the
US. It is a privately-held holding company that operates through
its subsidiaries. Pro forma revenues for the twelve months ended
September 30, 2005, assuming all recent acquisitions had occurred
at the beginning of the quarter ended September 30, 2004, were
approximately $400 million.
FEDERAL-MOGUL: Hires Duff & Phelps as Valuation Consultant
----------------------------------------------------------
With the consent of the U.S. Bankruptcy Court for the District of
Delaware, Federal-Mogul Corporation and its debtor-affiliates
employed Standard & Poor's Corporate Value Consulting to provide
fresh start valuation and related services in 2004, in
anticipation of requiring fresh start valuation services.
S&P commenced, but did not complete, the fresh start valuation
services for the Debtors. In early 2005, the Debtors asked S&P
to halt those services as it became clear that the effective date
of their reorganization plan would not occur in the near future.
On September 30, 2005, S&P merged with Duff and Phelps LLC.
Concurrently, a management-led buyout of S&P's valuation division
occurred. The new firm operates under the Duff & Phelps name.
As a result of the merger, the same S&P team that was authorized
to perform the valuation services in 2004 became employees of
Duff & Phelps.
John J. Gasparovic, Esq., senior vice president and general
counsel of Federal Mogul Corporation, tells the Court that in
light of recent events surrounding the Debtors' Chapter 11 cases,
the Debtors believe it is prudent to restart the process of
developing fresh start accounting procedures.
By this motion, the Debtors seek the Court's permission to employ
Duff & Phelps to provide services that are necessary for their
fresh start accounting procedures as well as valuations that are
derived from or based on the fresh start valuations.
The Debtors believe that Duff & Phelps' retention will
substantially benefit them and their estates because it will
allow them to continue utilizing the services of experienced
consultants who are most familiar with their assets and
businesses.
Required Valuation Services
Duff & Phelps will provide valuation services and a stand-alone
valuation report with respect to:
(a) Fresh Start Valuation, which involves estimating the fair
value of the Debtors' tangible and intangible assets and
in connection with those valuations, estimating the
business enterprise value of the Debtors' reporting units;
(b) Collateral Valuation for Exit Financing, which involves
determining estimates of the fair market value as well
as the orderly liquidation value and the forced
liquidation value of the Debtors' U.S. accounts
receivable, inventory, and fixed assets, which the Debtors
believe will facilitate their efforts to secure exit
financing;
(c) Insurable Value, which involves utilizing the fresh start
valuations and analyses to provide the Debtors and their
insurers with insurable value estimates with respect to
the fixed assets, which will, depending on the terms of
the subject policy or policies, value either the
reproduction cost new or the reproduction cost new less
accrued depreciation considered for insurance purposes;
(d) Valuation in Compliance with the Fair Market Value Method
of Allocation and Apportionment of Interest Expense, which
involves performing analysis to enable the Debtors and
their accountants to compute the consolidated average
assets of the affiliate group by foreign tax credit
limitation basket and the apportionment ratios for each
basket, as required by Section 864(e) of the Internal
Revenue Code;
(e) Equity Valuation-Foreign Subsidiaries, which involves
estimating the fair market value of equity of the
Debtors' foreign subsidiaries for use in connection with
the Debtors' tax structuring; and
(f) Fixed Asset Reconciliation, which involves taking an
inventory of certain plant assets and reconciling the
inventoried assets to the fixed asset ledger for the
purpose of enhancing internal controls and potential
property tax savings related to the fixed asset ledger.
FAS 142 Services
The Debtors also require annual valuation procedures to comply
with the provisions of Statement of Financial Accounting
Standards No. 142 issued by the Financial Accounting Standards
Board, as that statement pertains to the Debtors' recorded
goodwill.
Statement of Financial Accounting Standards No. 142 eliminates
the amortization of goodwill and indefinite-lived intangible
assets and initiates an annual review for the impairment of those
assets.
The FAS 142 services include:
* Phase I -- performing a valuation of each of Federal-Mogul's
reporting units, by estimating the Fair Value of each
reporting unit based on consideration of the Discounted Cash
Flow Method, the Guideline Public Company Method, and the
Market Transaction Method and on consideration of any
applicable control premiums.
* Phase 2 -- performing a valuation of the tangible and
intangible assets of certain reporting units, with the
ultimate scope of Phase II to be determined by working with
the Debtors and the Debtors' auditors, based on the results
of Phase I testing.
The FAS 142 Services are similar in nature and methodology to the
required valuation services to be provided by Duff & Phelps.
Accordingly, the Debtors also want to employ Duff & Phelps to
perform the FAS 142 Services for the year ending December 31,
2005.
The Debtors will pay Duff & Phelps for the Required Valuation
Services based on its discounted hourly rates:
Managing Directors $425
Directors $383
Managers $320
Senior Associates $236
Associates $163
Analysts $110
Administrative Personnel $47
The rates are subject to periodic adjustments in the normal
course of business.
Duff & Phelps has agreed that its total fees will not exceed
$1,780,000 and that its total out-of-pocket expenses will not
exceed $135,000. In addition, there will be fee caps on each of
the individual required valuation services projects. If certain
of the services are not performed, the cap will be reduced by the
amount of the applicable estimated fees for those services.
The Cap does not include any services related to supporting any
valuation reports upon review by any independent auditor or
authorized third party recipients or changes in scope of the
Required Valuation Services. Those additional services will be
billed at the hourly rates.
Mr. Gasparovic asserts that Duff & Phelps' fees with respect to
valuation services is fair and reasonable for these reasons:
-- A number of additional tasks relating to the Required
Valuation Services were identified, while other tasks had a
scope greater than S&P had originally contemplated.
-- As a matter of general accounting practice, it is not
possible to re-use fresh start accounting analyses more
than six months after they are developed. Given that a
number of S&P's earlier fresh start valuation work is now
more than six months old, new analyses will need to be
done.
Duff & Phelps estimates that it will charge the Debtors $25,000
per year, plus out-of-pocket expenses, for the FAS 142 Services.
The Debtors' management -- including the Debtors' chief financial
officer and general counsel -- will periodically review the fees
and costs incurred by Duff & Phelps. Attention to Duff & Phelps'
fees and costs will enable the Debtors to guard against the
performance of duplicative or unnecessary services by any
professionals in their cases.
To the best of the Debtors' knowledge, the firm and its
principals and management do not represent or hold any material
adverse interest to the Debtors or their estates with respect to
which matters for which Duff & Phelps is to be employed, they are
disinterested, and they do not have any connections with the
Debtors, their officers, affiliates, creditors or any other
party-in-interest.
U.S. Trustee Objects
The Unites States Trustee says the proposed retention of Duff &
Phelps suggests that Duff and Phelps will have indemnification
provisions, which are not warranted and may be inconsistent with
prior decisions of the bankruptcy court in the district.
On behalf of Kelly Beaudin Stapleton, the United States Trustee
for Region 3, Richard L. Schepacarter, Esq., tells the Court that
there is a provision for redress that would improperly divest the
Court of its jurisdiction. That treatment is inconsistent with
their professional obligations as a fiduciary to the estate, he
notes.
Thus, the U.S. Trustee asks the Court to deny the Debtors'
Application.
Court Order
Pursuant to an agreement between the U.S. Trustee, the Debtors
and Duff & Phelps, Judge Lyons permits the Debtors to enter into
an engagement letter to employ Duff & Phelps.
The Court emphasized that neither the Debtors nor Duff & Phelps
will be protected from liability on any claim arising under or
relating to their Engagement Letter or the services provided by
Duff & Phelps if it is finally determined by a court of competent
jurisdiction that the claim has arisen solely from that party's
bad faith, gross negligence or willful misconduct. There will be
no cap on liability under the Engagement Letter other than the
Cap on fees and expenses to be paid to the firm for its services,
Judge Lyons rules.
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 Oct. 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
Corp.'s U.K. affiliate, Turner & Newall, is based at Dudley Hill,
Bradford. (Federal-Mogul Bankruptcy News, Issue No. 99;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
FLYI INC: Court Okays Payment of Prepetition Wages and Benefits
---------------------------------------------------------------
As of the Petition Date, FLYi, Inc., and its debtor-affiliates had
3,283 employees, of which 1,375 are covered by collective
bargaining agreements. As a result of the Debtors' Chapter 11
filing, certain employee obligations have accrued or remained
unpaid. These employee obligations include prepetition
compensation, business expenses, employee benefits, severance
obligations and other privileges.
Prepetition Compensation
Brendan Linehan Shannon, Esq., at Young Conaway Stargatt &
Taylor, LLP, in Wilmington, Delaware, relates that many of the
Debtors' employees have accrued various sums for prepetition
compensation in the form of wages, salaries, overtime pay,
incentive pay, bonuses, other contractual compensation, sick pay,
vacation pay, holiday pay, and other accrued compensation.
The Debtors estimate $2,751,000 in total unpaid gross Prepetition
Compensation as of the Petition Date.
Prepetition Business Expenses
The Debtors customarily reimburse their employees for a variety
of business expenses incurred in the ordinary course of business.
Reimbursed business expenses include, but are not limited to
those incurred in connection with travel, relocation, and long-
distance and cellular phone charges.
The Debtors estimate that their obligation for Prepetition
Business Expenses to non-flight crew employees was approximately
$350,000 as of the Petition Date and approximately $365,000 with
respect to the hourly allowances for flight crews.
Prepetition Benefits
The Debtors' employee benefit programs include:
(a) health, dental, vision, prescription drug, life,
accident, property and disability benefits and
insurance;
(b) 401(k) savings plans for certain of their employees; and
(c) flexible spending accounts and college savings plans.
The Debtors estimate that the value of the unpaid Prepetition
Benefits was $2,100,000 as of the Petition Date.
Prepetition Administrative Costs
The Debtors use the services of consultants to facilitate the
administration and maintenance of their employee benefits.
The Debtors estimate that the amount of unpaid Prepetition
Administrative Costs was $200,000 as of the Petition Date.
Severance and Retention Payments
Prior to the Petition Date, the Debtors decided to reduce their
operations and, as a consequence, reduced their non-union
Workforce. Although those persons were paid prior to the
Petition Date for wages, benefits and severance, some checks
issued to those persons have not yet been presented to, or
cleared, the relevant bank. The Debtors believe that those
amounts do not exceed $225,000.
Prepetition Station Closing Obligations
The Debtors want to pay their employees who remain at stations to
be closed closing severance and retention payments in an amount
not to exceed $100,000 in the aggregate. None of those employees
is an insider, and the Debtors expect the average severance and
retention payment to equal $1,400 per employee.
Employees Severance
The Debtors also want to pay to non-union employees terminated
postpetition up to two weeks pay in lieu of notice. However, any
severance payable to an employee will be reduced, dollar for
dollar, by any amounts paid to that employee under any applicable
law related to the termination of that employee's employment.
With respect to their union employees, the Debtors intend to pay
severance in accordance with the terms of the collective
bargaining agreements.
Travel Privileges
The Debtors have agreed to provide travel privileges to their
terminated employees. The Debtors also offer travel privileges
to their employees, including their dependents, whose employment
may be terminated in the future.
Employee Obligations Must be Paid
The Debtors believe that payment of their employee obligations is
necessary to sustain the morale of their current employees during
the pendency of their bankruptcy proceedings, Mr. Shannon tells
the Court. "At this early stage, the Debtors simply cannot risk
the substantial damages to their businesses that would likely
attend any decline in their employees' moral attributable to the
Debtors' failure to pay these severance-related items."
Judge Walrath authorizes the Debtors, in accordance with their
stated policies and in their sole discretion, to pay:
* the Prepetition Compensation not exceeding $4,500,000;
* the Prepetition Business Expenses not in exceeding $800,000;
* the Prepetition Benefits, not exceeding $2,500,000; and
* the Prepetition Administrative Costs not exceeding $250,000.
The Court also authorizes the Debtors to pay Prepetition
Severance Amounts not exceeding $500,000, and honor the Travel
Privileges; provided that the Debtors will not be permitted to
pay Prepetition Compensation and prepetition Severance Amount in
an aggregate amount in excess of $10,000 per employee absent
Court order.
Headquartered in Dulles, Virginia, FLYi, Inc., aka Atlantic Coast
Airlines Holdings, Inc. -- http://www.flyi.com/-- is the parent
of Independence Air Inc., a small airline based at Washington
Dulles International Airport. The Debtor and its six affiliates
filed for chapter 11 protection on Nov. 7, 2005 (Bankr. D. Del.
Case Nos. 05-20011 through 05-20017). Brendan Linehan Shannon,
Esq., M. Blake Cleary, Esq., and Matthew Barry Lunn, Esq., at
Young, Conaway, Stargatt & Taylor, represent the Debtors in their
restructuring efforts. As of Sept. 30, 2005, the Debtors listed
assets totaling $378,500,000 and debts totaling $455,400,000.
(FLYi Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service,
Inc., 215/945-7000).
FLYI INC: Court Okays Injunction Against Utility Companies
----------------------------------------------------------
As reported in the Troubled Company Reporter on Nov. 24, 2005,
FLYi, Inc., and its debtor-affiliates ask the U.S. Bankruptcy
Court for the District of Delaware for interim and final orders:
a. prohibiting the Utility Companies from altering, refusing,
or discontinuing services to, or discriminating against,
the Debtors on:
* the basis of their Chapter 11 filing; or
* account of any unpaid invoice for service provided by any
of the Utility Companies to any of the Debtors prior to
the Petition Date; and
b. establishing procedures for:
* determining requests for assurance of payment; and
* modifying the amount of assurance of payment demanded by
Utility Companies as adequate, including potentially to
zero dollars.
* * *
For the period from the Petition Date until the resolution of a
particular request for assurance, by agreement or in connection
with a Determination Hearing, the Debtors will furnish assurance
of payment to each requesting Utility Company.
Any unused assurance of payment provided by the Debtors to a
Utility Company in accordance with the Court's Order or the
Determination Procedures must be returned to the Debtors within
30 days after the effective date of:
a. the Debtors' Plan of Reorganization; or
b. a conversion of the Debtors' Chapter 11 cases to Chapter 7.
Headquartered in Dulles, Virginia, FLYi, Inc., aka Atlantic Coast
Airlines Holdings, Inc. -- http://www.flyi.com/-- is the parent
of Independence Air Inc., a small airline based at Washington
Dulles International Airport. The Debtor and its six affiliates
filed for chapter 11 protection on Nov. 7, 2005 (Bankr. D. Del.
Case Nos. 05-20011 through 05-20017). Brendan Linehan Shannon,
Esq., M. Blake Cleary, Esq., and Matthew Barry Lunn, Esq., at
Young, Conaway, Stargatt & Taylor, represent the Debtors in their
restructuring efforts. As of Sept. 30, 2005, the Debtors listed
assets totaling $378,500,000 and debts totaling $455,400,000.
(FLYi Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service,
Inc., 215/945-7000).
FLYI INC: Chromalloy Wants Adequate Protection on LPT Modules
-------------------------------------------------------------
Chromalloy Gas Turbine Corporation asks the U.S. Bankruptcy Court
for the District of Delaware to:
a. compel Independence Air, Inc., to provide adequate
protection to Chromalloy in the LPT Modules of GE Engine
Services, pursuant to Section 363(e) of the Bankruptcy
Code; or
b. grant it relief from the automatic stay to recover the GE
LPT Modules and return them to GE, pursuant to
Section 362(d)(1).
In an agreement dated Nov. 19, 2004, GE agreed to allocate
three GE LPT Modules to Independence to facilitate the removal,
repair and replacement of the equipment from Independence's
aircraft. As a result, Independence would be able to remove
three LPT modules from its aircraft, replace them with the three
GE LPT Modules, and continue the operation of their aircraft.
The recently removed LPT modules could then be serviced and
returned to the aircraft. The process would continue until all
of Independence's LPT modules were serviced.
To facilitate the Agreement, on January 14, 2005, GE entered into
an agreement with Chromalloy where GE agreed to deliver the GE
LPT Modules to Chromalloy, as Independence's nominee. Chromalloy
agreed to return the modules to GE in cleared condition by
March 31, 2006, or on completion of GE's program, whichever
occurred first. In the event Chromalloy failed to deliver the GE
LPT Modules to GE, then Chromalloy would be liable for the then-
current full catalog price of the modules.
The current price of each GE LPT Module is between $900,000 and
$1,000,000.
Chromalloy installed the GE LPT Modules into three of
Independence's aircraft engines. Independence continues to fly
the aircraft with the engines in which the GE LPT Modules have
been installed.
Mark T. Hurford, Esq., at Campbell & Levine, LLC, in Wilmington
states that Chromalloy must be given adequate protection under
Section 363(e) because Independence is using GE's LPT Modules.
Chromalloy will have no recourse if Independence returns the
aircraft to lessors without removing the GE LPT Modules. In this
instance, Chromalloy would potentially be responsible to GE for
up to $3,000,000.
In the event that Chromalloy's interests in the GE LPT Modules
are not adequately protected, Chromalloy seeks relief from the
automatic stay.
Headquartered in Dulles, Virginia, FLYi, Inc., aka Atlantic Coast
Airlines Holdings, Inc. -- http://www.flyi.com/-- is the parent
of Independence Air Inc., a small airline based at Washington
Dulles International Airport. The Debtor and its six affiliates
filed for chapter 11 protection on Nov. 7, 2005 (Bankr. D. Del.
Case Nos. 05-20011 through 05-20017). Brendan Linehan Shannon,
Esq., M. Blake Cleary, Esq., and Matthew Barry Lunn, Esq., at
Young, Conaway, Stargatt & Taylor, represent the Debtors in their
restructuring efforts. As of Sept. 30, 2005, the Debtors listed
assets totaling $378,500,000 and debts totaling $455,400,000.
(FLYi Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service,
Inc., 215/945-7000).
FOAMEX INT'L: Files Chapter 11 Plan & Disclosure Statement
----------------------------------------------------------
Foamex International Inc. (FMXIQ.PK) and its debtor-affiliates
filed their proposed Joint Plan of Reorganization and accompanying
Disclosure Statement with the U.S. Bankruptcy Court for the
District of Delaware on Dec. 23, 2005. Subject to approval of the
Plan by the Bankruptcy Court, the Company expects to emerge from
chapter 11 in the spring of 2006.
In September 2005, Foamex reached an agreement in principle with
holders of a majority in amount of senior secured notes on the key
terms of a proposed restructuring to restore the financial health
of the Company. As part of this process, the Company voluntarily
filed for chapter 11 protection, allowing Foamex to expedite and
complete its restructuring while operating without disruption.
"[Fri]day's filing of the Plan is a key step in the restructuring
process and moves us closer to our goal of emerging as a
financially stronger company and solidifying our position as the
leading supplier of polyurethane foam solutions," Tom Chorman,
President and Chief Executive Officer of Foamex, stated. "This
important milestone would not have been possible without the hard
work and dedication of our employees and the support of our
customers and suppliers. Working with our creditors, other
stakeholders and the Court, we look forward to guiding the Company
into a new phase of stability and growth."
About the Plan
Under the proposed Plan, which is subject to creditor acceptance
and confirmation by the Bankruptcy Court, Foamex's financial
restructuring will be primarily achieved through a debt-for-equity
conversion resulting in the reduction of approximately
$500 million of total indebtedness from pre-petition amounts.
Foamex's existing common stock will be cancelled and no
distribution will be available for current shareholders.
Terms of the Plan
The terms of the Plan include:
-- Full payment in cash to holders of Allowed Administrative
Claims, Priority Tax Claims, DIP Financing Claims, Other
Priority Claims and Other Secured Claims;
-- Holders of Allowed Senior Secured Note Claims will receive
their pro rata share of 100% of the new common stock of
reorganized Foamex, subject to dilution;
-- Holders of Allowed Senior Subordinated Note Claims will
receive their pro rata share of New Warrants permitting them
to purchase up to 5% of the new common stock of reorganized
Foamex, subject to dilution, provided that the class of such
Claims votes to accept the Plan;
-- Holders of Allowed General Unsecured Claims will receive
their pro rata share of $1.5 million, provided that the
distribution to such holders does not exceed 5% of the
allowed amount of their Claims, and provided further that
the class of such Claims votes to accept the Plan;
-- Holders of Old Preferred Stock, Old Common Stock and Other
Equity Interests will receive nothing under the Plan and
their shares and interests in Foamex will be cancelled on
the effective date of the Plan; and
-- A new Board of Directors for the reorganized company will be
appointed by the Holders of Allowed Senior Secured Note
Claims as the owners of the New Common Stock of the
reorganized Company.
The Disclosure Statement includes a historical profile of the
Company, a description of distributions to creditors and an
analysis of the Plan's feasibility, as well as many of the
technical matters required for the confirmation process, such as
descriptions of who will be eligible to vote on the Plan and the
voting process itself.
A hearing on the adequacy of the Disclosure Statement has been
scheduled for Jan. 26, 2006. Court approval of the Disclosure
Statement will allow Foamex to begin solicitation of votes for
confirmation of the Plan.
Headquartered in Linwood, Pa., Foamex International Inc. --
http://www.foamex.com/-- is the world's leading producer of
comfort cushioning for bedding, furniture, carpet cushion and
automotive markets. The Company also manufactures high-
performance polymers for diverse applications in the industrial,
aerospace, defense, electronics and computer industries. The
Company and eight affiliates filed for chapter 11 protection on
Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693).
Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP,
represent the Debtors in their restructuring efforts. Houlihan,
Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the
ad hoc committee of Senior Secured Noteholders. As of July 3,
2005, the Debtors reported $620,826,000 in total assets and
$744,757,000 in total debts.
FRASER PAPERS: Below-Average Cost Position Prompts S&P's B Ratings
------------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' long-term
corporate credit and senior unsecured debt ratings on paper
producer Fraser Papers Inc.
The outlook has been revised to negative from stable, reflecting:
* the monetization of the company's New Brunswick
timberlands;
* the negative effect of an appreciating Canadian dollar; and
* other cost pressures on the company's cash flow generation
and earnings.
The company has about $164 million in debt outstanding.
The company announced that it is selling its New Brunswick
timberlands into a newly formed Income Fund. The company will
receive cash proceeds in addition to a 23% stake in the new fund.
Although the decision to sell the timberlands was expected,
Standard & Poor's believes the longer term credit risk on Fraser
Papers will likely increase, as the proceeds will either be
returned to shareholders, or used to further invest in paper
production assets.
"Given the poor returns experienced by Fraser Papers' paper
operations, the decision to sell the timberlands will not improve
the credit profile from a long-term credit perspective, despite
the fact that it will enhance liquidity in the short term," said
Standard & Poor's credit analyst Daniel Parker.
The ratings on Fraser Papers reflect:
* its below-average cost position;
* limited product diversity;
* exposure to volatile paper and lumber prices; and,
* to a lesser extent, foreign exchange risk.
These risks are partially offset by the company's liquidity and
financial flexibility.
Fraser Papers' focuses on specialty paper sales, the prices for
which are less volatile than the straight commodity grades. About
70% of Fraser Papers' current production consists of specialty,
niche market products. The company believes it has leading
positions in bible papers, pharmaceutical inserts, and various
technical specialties.
Fraser Papers' operations are focused in the northeast U.S. and
Canada. Similar to other Canadian producers of paper and wood
products, the company is vulnerable to both the ongoing softwood
lumber dispute and the currency volatility between the U.S. and
Canadian dollars. A one-cent appreciation of the Canadian dollar
versus the U.S. dollar negatively affects EBITDA by about
$4 million.
The outlook is negative. The combination of a higher Canadian
dollar, and high fiber and energy costs, will hurt Fraser Papers'
earnings and cash flow in the near term. The company's cash
position and the financial flexibility afforded by the sale of the
New Brunswick timberlands holdings compensates for the current
poor cash generation results. In the longer term, however, the
industry supply and demand fundamentals for uncoated freesheet and
other fine paper grades could deteriorate further, if capacity
issues are not resolved. A material increase in leverage, or a
failure to improve cash generation would have negative rating
implications.
FRESH CHOICE: Exits Chapter 11 Protection as Private Company
------------------------------------------------------------
Fresh Choice, Inc., disclosed that its Plan of Reorganization, as
previously confirmed by the U.S. Bankruptcy Court for the Northern
District of California, became effective on Dec. 21, 2005. Fresh
Choice will emerge from Chapter 11 as a privately held company.
"We're excited to embark on this new chapter in the company's
history," said Tim O'Shea, president and chief executive officer
for Fresh Choice. "Through the commitment and overwhelming
support of our valued guests, employees and suppliers, Fresh
Choice has emerged as a much stronger, more vibrant entity.
Amazing new healthy menu options combined with an enhanced dining
experience are just a few of the changes restaurant guests can
expect."
Headquartered in Morgan Hill, California, Fresh Choice, Inc. --
http://www.freshchoice.com/-- owns and operates a chain of more
than 40 salad bar eateries, mostly located in California. The
company filed for chapter 11 protection on July 12, 2004 (Bankr.
N.D. Calif. Case No. 04-54318). Debra I. Grassgreen, Esq., at
Pachulski, Stang, Ziehl, Young, Jones & Weintraub P.C. represents
the Debtor in its restructuring efforts. When the Debtor filed
for protection from its creditors, it listed $29,651,000 in total
assets and $14,348,000 in total debts.
GENERAL FIRE: Fitch Affirms BB- Insurer Financial Strength Rating
-----------------------------------------------------------------
Fitch Ratings has affirmed General Fire and Casualty Company's
'BB-' insurer financial strength rating. Additionally, Fitch
revised GenFire's Rating Outlook to Positive from Stable.
The Positive Rating Outlook reflects the reduced legal and
accounting uncertainty following the resolution by GenFire's
parent, GF&C Holding Company, of nearly all pending issues
associated with GenFire's restatement of its 2003 financial
statements. The Positive Rating Outlook also reflects operational
and competitive benefits derived from GenFire's resumed pursuit of
new business in its key California market as of December 2005.
Fitch views both of these developments as material and positive
for the rating.
Key factors that Fitch will consider for a future upgrade include:
* controlled premium growth and a successful profitable
return to its key state of California,
* improved financial flexibility, and
* consistent favorable operating results without further
adverse development, contributing to steady surplus growth.
Fitch believes the effect of the restatement on the company's
policyholders' surplus is manageable and has been replenished to
more than its prior level. Although dividend capacity is limited
due to 2004's net losses, required debt service at the holding
company has also declined substantially due to repayment of debt
and the extinguishment of contingent liabilities related to the
restatement.
Fitch's rating of GenFire still considers consequences related to
the financial restatement, which hindered the company's longer
term growth and development. Fitch believes that the company has
somewhat limited access to new capital due to a reduced premium
base following the ceasing of business in California and greater
susceptibility to market risks due to reduced market presence and
a more competitive pricing environment. Fitch does, however,
believe access has recently improved with the material reduction
in debt and contingent liabilities.
The rating was downgraded to 'BB-' from 'BB+' and placed on Rating
Watch Negative in March 2005 following GenFire's notification that
it would need to restate its 2003 annual financial statements.
The restatement allowed for a change in accounting of a major
reinsurance contract due to concerns regarding appropriate levels
of risk transfer. This contract has been nonrenewed and commuted
effective Dec. 31, 2004.
GenFire is a specialty property and casualty insurer, which since
1999, has operated under a new and unique business model centered
on its patent-pending policy form and web-based technology. The
company focuses on specialty niches in the commercial multiperil
business segment, such as integrated agribusiness and other
targeted commercial classes. Idaho-based GenFire reported
statutory policyholders' surplus and assets of $13.6 million and
$38.0 million, respectively, at Sept. 30, 2005.
Fitch has affirmed these rating:
General Fire & Casualty Company
-- Insurer financial strength at 'BB-'.
The Outlook is Positive.
GEORGIA-PACIFIC: S&P Shaves Corp. Credit Rating to BB- from BB+
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term corporate
credit rating and senior unsecured debt ratings on forest products
producer Georgia-Pacific Corp. by two notches, to 'BB-' from
'BB+'. Standard & Poor's also lowered its short-term corporate
credit rating on the company to 'B-2' from 'B-1'. All ratings on
GP, except for the senior unsecured debt ratings, were removed
from CreditWatch where they were placed on Nov. 14, 2005, with
negative implications. The outlook is positive.
At the same time, Standard & Poor's lowered its ratings, including
its corporate credit rating, on GP's affiliate, Koch Cellulose LLC
to 'BB-' from 'BB' to equalize them with GP's ratings.
The downgrade reflects a significant increase in debt associated
with GP's purchase by unrated Koch Industries Inc. GP's total
debt at closing will be about $17 billion. Although Koch
Cellulose will remain a separate subsidiary, GP and Koch Cellulose
will guarantee each other's debt. The ratings on Koch Cellulose
will be withdrawn when transaction is completed.
"We have factored in the potential for profit enhancement through
various manufacturing-efficiency and cost-reduction initiatives
and possible asset sales to reduce debt," said Standard & Poor's
credit analyst Thomas Watters. "However, GP's weaker financial
profile augments the specter of risk associated with successfully
executing meaningful restructuring and rationalization efforts
through the business cycle, including elevated spending to
accomplish the improvements."
The unsecured debt ratings remain on CreditWatch with negative
implications pending our review of the company's proposed
$11 billion senior secured credit facilities. The ratings on
unsecured debt could be lowered by as much as two notches below
the corporate credit rating, depending on S&P's assessment of the
level of priority liabilities in GP's new capital structure.
Koch, one of the largest privately held companies in the U.S., is
acquiring GP for $13.2 billion plus $8 billion of assumed or
refinanced debt. GP will operate as a privately held, indirectly
wholly owned subsidiary of Koch and be independently managed.
GMAC COMMERCIAL: S&P's Rating on Class O Certs. Tumbles to D
------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on six
classes of GMAC Commercial Mortgage Securities Inc.'s commercial
mortgage pass-through certificates from series 2001-C1.
At the same time, ratings on four classes from this transaction
are lowered, including class O, which is downgraded to 'D' from
'CCC-'. Additionally the ratings on seven others are affirmed.
The raised and affirmed ratings reflect credit enhancement levels
that provide adequate support through various stress scenarios.
The rating on class O is set to 'D' following a $1.6 million
principal loss to the class in November 2005. The other lowered
ratings reflect anticipated losses from the assets secured by
loans with the special servicer as well as credit enhancement
degradation due to cumulative pool losses of $14.5 million to
date.
As of the remittance report dated Dec. 15, 2005, the collateral
pool consisted of 97 loans with an aggregate principal balance of
$764.7 million, down from 101 loans totaling $864.1 at issuance.
The master servicer, GMAC Commercial Mortgage Corp., provided
year-end 2004 and interim 2005 net cash flow debt service coverage
figures for 95% of the non-defeased pool. Defeased loans
represent $64.8 million of the overall pool. Based on this
information, Standard & Poor's calculated a weighted
average DSC of 1.23x, down from 1.32x at issuance. The trust has
experienced four losses totaling $14.5 million. Two loans in the
pool are delinquent and are the only loans with the special
servicer, also GMACCM. One of the two loans with the special
servicer has an appraisal reduction amount in effect for $440,415.
The top 10 loans have an aggregate outstanding balance of
$274.9 million. The weighted average DSC for the top 10 loans is
1.23x, compared to 1.27x at issuance. While the performance of
the collateral supporting three of the top 10 loans has improved
significantly, substantial declines in performance of the
collateral supporting four other loans in the top 10 loans has
also occurred. Additionally, six of the top 10 loans are on
GMACCM's watchlist. Also, another top 10 loan has a DSC below
1.10x. Standard & Poor's reviewed property inspections for all of
the collateral properties securing the top 10 loans and all were
characterized as "good."
The Sandhurst Apartments in Charlotte, North Carolina, is a
162-unit multifamily property built in 1967 that secures a
$3.3-million loan. This loan is more than 90 days delinquent and
is one of the two loans with the special servicer. It was
transferred to the special in July 2005 for monetary default.
Since the transfer, the borrower has only made one payment. As of
Nov. 30, 2005, occupancy was 72%, and the borrower states that the
property is generating negative cash flow for the 11-month period.
An appraisal for $2.3 million was received in September 2005 and
the special servicer is moving forward with foreclosure on the
collateral.
The Finley Terrace Apartments in Irving, Texas, is a 142-unit
multifamily property built in 1968. The property is REO, and the
associated $3.1 million loan is the other loan with the special
servicer. As of Feb. 28, 2005, the DSC was 0.97x; as of
Nov. 27, 2005, occupancy was 89%. The property is listed for sale
at $3.5 million and an ARA of $440,415 is in effect on the loan
based upon an appraisal from February 2005.
The master servicer reported a relatively large watchlist of 37
loans with an aggregate outstanding balance of $336.9 million,
which reflects the weak performance of several collateral
properties in the pool. Included on the watchlist are the second-
, fourth-, sixth, seventh-, eighth-, and 10th-largest loans.
Also, the fifth-largest loan reported a year-end 2004 DSC that was
below 1.10x. The second-, eighth-, and 10th-largest loans are all
secured by multifamily properties in the western U.S. that are
experiencing soft occupancy and consequential declines in their
respective DSCs. For year-end 2004, the respective DSCs were
0.98x, 1.19x, and 0.96x, while the respective occupancies were
97%, 89%, and 88%.
The fourth-largest loan is secured by the Long Island Industrial
portfolio, which includes 10 properties with 873,562 aggregate sq.
ft. Following a drop in occupancy to 89% as of Dec. 31, 2004, the
DSC for the loan fell to 0.96x as of June 30, 2005. Upcoming
lease roll in 2006 is approximately 18% of the total space.
The sixth-largest loan is secured by the Premier Centre in
Mandeville, Lousiana, which is on the north shore of Lake
Pontchartrain. The 250,351-sq.-ft. retail property was added to
the watchlist following Hurricane Katrina. As of Sept. 22, 2005,
the borrower reported debris on the property and only minor damage
to the collateral building's roof flashing. The borrower also
noted all of the tenants were open albeit on limited hours.
The Laurel Office Building, a 211,812-sq.-ft. office building in
the Detroit suburb of Livonia, Michigan, secures the
seventh-largest loan in the pool. The loan was added to the
watchlist due to a decline in DSC associated with decreased
occupancy at the collateral property. As of June 30, 2005,
occupancy was 94% and DSC for the six-month period was 1.06x.
While not on the watchlist, the fifth-largest loan reported a DSC
of 0.98x for year-end 2004 after reporting a DSC of 1.01x for
year-end 2003. The 195,983-sq.-ft. Southdale Office Building in
the Minneapolis suburb of Edina, Minnesota, secures the loan.
Although the loan is not on GMACCM's watchlist, its ongoing weak
performance does represent a potential credit issue.
Standard & Poor's stressed the loans on the watchlist, along with
other loans with credit issues, as part of its pool analysis. The
resultant credit enhancement levels support the raised, affirmed,
and lowered ratings.
Ratings Raised
GMAC Commercial Mortgage Securities Inc.
Mortgage Pass-Through Certs Series 2001-C1
Rating
Class To From Credit enhancement
----- -- ---- ------------------
B AAA AA 19.85%
C AA A 15.61%
D A A- 13.92%
E A- BBB+ 11.66%
F BBB+ BBB 9.96%
G BBB BBB- 8.27%
Ratings Lowered
GMAC Commercial Mortgage Securities Inc.
Mortgage Pass-Through Certs Series 2001-C1
Rating
Class To From Credit enhancement
----- -- ---- ------------------
L B- B 1.49%
M CCC+ B- 0.92%
N CCC- CCC+ 0.36%
O D CCC- 0.00%
Ratings Affirmed
GMAC Commercial Mortgage Securities Inc.
Mortgage Pass-Through Certs Series 2001-C1
Class Rating Credit enhancement
----- ------ ------------------
A-1 AAA 25.22%
A-2 AAA 25.22%
H BB 4.88%
J BB- 4.03%
K B+ 3.18%
X-1 AAA N/A
X-2 AAA N/A
N/A - Not applicable.
GREAT LAKES: Stable Liquidity Prompts S&P to Affirm Junk Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'CCC+' corporate
credit rating and all other ratings on Great Lakes Dredge & Dock
Corp. and removed the ratings from CreditWatch with negative
implications, where they were placed on June 10, 2005. The
outlook is stable.
As of Sept. 30, 2005, the Oak Brook, Illinois-based dredging
service provider had roughly $253 million in total debt on the
balance sheet.
"The affirmation of the ratings reflects stabilization in the
company's liquidity position and modest improvement in operating
performance," said Standard & Poor's credit analyst James Siahaan.
The company has benefited from better industry conditions in 2005
than in 2004. Still, earnings remain under pressure, funding
issues at the Army Corps of Engineers remain uncertain, liquidity
remains somewhat strained, and competitive threats have increased.
The ratings on Great Lakes continue to reflect the company's:
* vulnerable business risk profile,
* highly leveraged financial risk profile, and
* limited liquidity.
Great Lakes operates the largest fleet of dredging equipment in
the U.S. The domestic dredging industry is mature and competitive.
Revenues are subject to annual appropriations by the federal
government and local jurisdictions that provide matching funds.
Order patterns are intermittent and operations are vulnerable to
adverse weather conditions, which can significantly delay projects
and increase costs on fixed-price contracts.
Although the dredging industry has relatively few participants in
its larger market segments, aggressive competitors have reduced
Great Lakes' share of the combined domestic bid market to less
than 30%, compared with a historical average above 40%. This
increased competition, which is partly a result of excess capacity
in the industry, has placed pressure on the company's
profitability. Looking ahead, a better bid market and operating
leverage from additional projects could improve margins.
In addition to its dredging business, the firm owns an 85% stake
in North American Site Developers Inc., a provider of commercial
and industrial demolition services mainly in the New England
region. Although NASDI's sales and earnings are tied in part to
the highly cyclical commercial and construction markets, its
limited working- and fixed-capital needs should enable it to
continue generating some free cash flow in the intermediate term.
Still, the demolition business represents little more than 10% of
company sales.
HERTZ CORP: Acquisition Completion Spurs S&P to Chip Debt Ratings
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on Hertz
Corp. after the successful completion of its $14 billion
acquisition on Dec. 21, 2005. The corporate credit rating was
lowered to 'BB-' from 'BBB-', and the senior unsecured debt
rating was lowered to 'B' from 'BBB-'. All ratings were removed
from CreditWatch, where they were initially placed on
April 21, 2005.
At the same time, a 'B' rating was assigned to Hertz's EUR225
million 7.875% senior notes due 2013. The 'BB+' rating and '1'
recovery rating on the company's $1.6 billion asset-backed loan
facility, the 'BB' rating and '1' recovery rating on its
$2.25 billion term facility, and the 'B' rating on $600 million of
10.5% subordinated notes due 2015 are all affirmed. The company's
'A-3' commercial paper rating has been withdrawn. The outlook is
stable.
"The ratings on Hertz reflect a weakened financial profile after
the successful completion of its $14 billion acquisition, reduced
financial flexibility, and the price competitive nature of
on-airport car rentals and equipment rentals," said Standard &
Poor's credit analyst Betsy Snyder.
"Ratings also incorporate Hertz's position as the largest global
car rental company and the strong cash flow its businesses
generate."
Hertz was acquired from Ford Motor Co. by Clayton, Dubilier & Rice
Inc., The Carlyle Group, and Merrill Lynch Global Private Equity.
The acquisition, which added $2 billion of debt to Hertz's balance
sheet, will result in an increase in its borrowing costs. Pro
forma for the acquisition, credit ratios will weaken from their
previous relatively healthy levels. In addition, the company's
historically strong financial flexibility will decline somewhat,
with over two-thirds of its tangible assets secured.
Park Ridge, New Jersey-based Hertz, the largest global car rental
company, participates primarily in the on-airport segment of the
car rental industry. This segment, which generates approximately
69% of Hertz's consolidated revenues, is heavily reliant on
airline traffic. Demand tends to be cyclical, and can be affected
by global events. Hertz has also grown its off-airport business,
the segment of the car rental business that is less cyclical and
more profitable, but which is dominated by 'BBB+' rated Enterprise
Rent-A-Car Co. Through its Hertz Equipment Rental Corp.
subsidiary, Hertz also operates one of the larger industrial and
construction equipment renters in the U.S., along with some
European locations. This market had been depressed for several
years due to the weak economy and overexpansion by several market
participants, but has experienced improving trends since 2004 as
market participants reduced their capacity growth and demand
strengthened.
ISLE OF CAPRI: S&P Affirms BB- Corporate Credit Rating
------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on Isle of
Capri Casinos Inc., including its 'BB-' corporate credit rating.
At the same time, all ratings were removed from CreditWatch with
negative implications where they were placed on Sept. 1, 2005.
The outlook is negative. About $1.2 billion in debt was
outstanding as of Oct. 23, 2005.
On Dec. 21, 2005, Isle indicated that it would bid for a gaming
license in Pennsylvania. The company, through a joint development
agreement with the Lemieux Group LP, seeks to build a gaming
facility and new multi-purpose arena in Pittsburgh. The project
could include a temporary gaming facility and construction may
begin in early calendar 2007. Although the cost of construction
has not been disclosed, Standard & Poor's expects that spending
associated with a permanent facility would likely be meaningful
given the estimated size of the Pittsburgh gaming market.
However, spending would be spread over a couple of years and S&P
expects that it would be completed in a manner that is aligned
with the current ratings. Also, there are multiple bidders for a
site in this area of the state, so it is uncertain as to whether
Isle will move forward with this project.
JAMES RIVER: Moody's Affirms $150 MM Unsecured Notes' Rating at B3
------------------------------------------------------------------
Moody's Investors Service lowered James River Coal Company's
outlook to negative from stable and affirmed all debt ratings.
Moody's also lowered James River's speculative grade liquidity
rating to SGL-4, reflecting weak liquidity, from SGL-3. The
change in outlook to negative was prompted by James River's poor
operating performance in the third quarter of 2005 and Moody's
belief that the company is likely to continue to suffer poor
operating performance over the next two to three quarters as it
transitions to two new mines and continues to experience a high
level of operating costs at all of its operations.
The lowering of the speculative grade liquidity rating to SGL-4
reflects the lack of cushion in the financial covenants of James
River's $100 million credit agreement and Moody's belief that the
company may default on these covenants at December 31, 2005 if it
does not receive an amendment or waiver from its banks.
These ratings were affirmed:
* $150 million of senior unsecured notes due 2012, B3
* $100 million senior secured credit agreement, B1
* Corporate family rating, B2
This rating was lowered:
* Speculative grade liquidity rating to SGL-4 from SGL-3
The lowering of the outlook to negative reflects James River's
weak third quarter operating performance, in which it recorded
EBIT of negative $4.6 million in an otherwise buoyant coal market,
and Moody's expectation that this type of performance will
continue for at least the next two quarters. The poor performance
reflects both a high cost base and the costs associated with the
company's struggle to transition to two new mines and curtail
operations at two mines that are in the process of being closed.
Moody's believes that the company is likely to continue to
experience poor financial performance in at least the fourth
quarter of 2005 and the first quarter of 2006 as it completes the
transition program and generally struggles with a high cost base.
Moody's also believes that the company may record negative free
cash flow in 2006, particularly if it continues with its capex
program, which the company has indicated will total $85 million to
$88 million in 2006. Approximately $27 million of this program is
targeted for growth capex, which the company currently has some
flexibility to curtail.
The B2 corporate family rating considers:
* the difficult mining conditions and high cost base of the
company's thin seam Kentucky coal mines;
* its lack of profitable operating history; and
* its small size.
The ratings favorably reflect:
* the diversity derived from James River's 24 mines;
* its union-free status;
* its reserve base of high quality central Appalachian and
Illinois Basin coal and current strong prices for this coal;
* anticipated stable long-term demand for coal;
* the company's favorable capital structure; and
* its relatively low level of workers' compensation, pension,
and reclamation obligations.
The negative outlook could be returned to stable if James River
successfully completes its transition to new mines on a timely
basis and demonstrates the ability to generate consistent
operating income and generate breakeven free cash flow. Given the
company's relatively high level of anticipated capex over the next
few years and sensitivity to swings in coal prices and operating
costs, Moody's would expect the company to be in a position to
consistently generate FCF to debt in the range of 10% before
considering an upgrade.
The rating could be lowered if the company continues to record
negative EBIT beyond the first quarter of 2006, or, in a downturn
in the coal market, is unable to manage its portfolio of mines in
a manner that maximizes the use of its most efficient operations.
The rating could also be lowered if the company undertakes debt-
financed expansion or acquisitions that are detrimental to its
capital structure and debt coverage ratios.
Moody's downgraded James River's speculative grade liquidity
rating to SGL-4 (indicating weak liquidity) from SGL-3 (indicating
adequate liquidity). If James River's overall performance
continues to deteriorate over the next couple of quarters, the
company may need to seek an amendment or waiver to avoid violating
some of the financial covenants contained in its credit agreement.
Although James River was in compliance with the credit agreement
financial covenants at September 30, 2005, there is very limited
cushion under these covenants and any slippage from current levels
would put the company in default and potentially limit access to
the revolving credit facility.
In addition, Moody's expects the company, over the course of the
next 12 months, to be free cash flow negative given the relatively
high capital expenditure levels anticipated in 2006. Moody's SGL
methodology characterizes the situation as evidencing weak
liquidity. The company's alternate liquidity is limited to the
sale of existing operations, an unlikely occurrence in Moody's
view.
James River Coal Company, based in Richmond Virginia, is engaged
in the mining and marketing of steam and industrial coal and had
revenues in the fiscal year ended December 31, 2004 of $346
million.
JP MORGAN: Fitch Rates $20.3 Mil. Class M-10 & M11 Certs. at Low-B
------------------------------------------------------------------
Fitch Ratings has rated the J.P. Morgan Mortgage Acquisition Corp.
2005-OPT2, asset-backed pass-through certificates, which closed on
Dec. 21, 2005, are rated by Fitch Ratings:
-- $739,689,000 classes A-1A, A1B, A-2 through A-4 'AAA';
-- $34,370,000 class M-1 'AA+';
-- $31,466,000 class M-2 'AA';
-- $19,848,000 class M-3 'AA-';
-- $16,459,000 class M-4 'A+';
-- $15,491,000 class M-5 'A';
-- $14,039,000 class M-6 'A-';
-- $13,555,000 class M-7 'BBB+';
-- $11,618,000 class M-8 'BBB';
-- $10,650,000 class M-9 'BBB-';
-- $10,650,000 privately offered class M-10 'BB+';
-- $9,680,000 privately offered class M-11 'BB'.
The 'AAA' rating on the senior certificates reflects the 23.60%
initial credit enhancement provided by the 3.55% class M-1, the
3.25% class M-2, the 2.05% class M-3, the 1.70% class M-4, the
1.60% class M-5, the 1.45% class M-6, the 1.40% class M-7, the
1.20% class M-8, the 1.10% class M-9, the 1.10% privately offered
class M-10, the 1.00% privately offered class M-11, and 4.20%
initial and target overcollateralization. All certificates have
the benefit of monthly excess cash flow to absorb losses.
In addition, the ratings also reflect the quality of the loans,
the integrity of the transaction's legal structure as well as the
capabilities of Option One Mortgage Corp. as servicer, U.S. Bank
national Association as trustee, and JPMorgan Chase bank as
securities administrator.
The certificates are supported by two collateral groups. Group I
mortgage loans consist of fixed-rate and adjustable-rate, first
and second lien mortgage loans with principle balances that
conform to Fannie Mae and Freddie Mac loan limits. The mortgage
loans have a cut-off date pool balance of $453,138,211.
Approximately 24.43% of the mortgage loans are fixed-rate mortgage
loans and 75.57% are adjustable-rate mortgage loans. The weighted
average loan rate is approximately 7.245%. The weighted average
remaining term to maturity is 356 months. The average principal
balance of the loans is approximately $170,545. The weighted
average original loan-to-value ratio is 78.61%. The properties
are primarily located in California, Florida, and Massachusetts.
Group II mortgage loans, which total $515,040,503 as of the
cut-off date, consist of fixed-rate and adjustable-rate mortgage
loans secured by first and second liens on mortgaged properties
that have original principal balances that may or may not conform
to Fannie Mae and Freddie Mac guidelines. Approximately 24.35% of
the mortgage loans are fixed-rate mortgage loans, and 75.65% are
adjustable-rate mortgage loans. The weighted average loan rate is
7.195%, and the weighted average remaining term to maturity is 356
months. The average principal balance of the loans is $213,798,
and the weighted average original loan-to-value ratio is 79.35%.
The properties are primarily located in California, New York, and
Florida.
For federal income tax purposes, multiple real estate mortgage
investment conduit elections will be made with respect to the
trust estate.
Option One was incorporated in 1992 and began originating and
servicing subprime loans in February 1993. Option One is a
subsidiary of Block Financial, which is, in turn, a subsidiary of
H & R Block, Inc.
IAP WORLDWIDE: S&P Affirms Low-B Ratings on $610 Million Debts
--------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit rating on IAP Worldwide Services Inc.
At the same time, Standard & Poor's affirmed its 'B+' bank loan
rating and the '2' recovery rating on IAP's proposed $490 million
first-lien credit facility. S&P also affirmed its 'B-' bank loan
rating and '5' recovery rating on IAP's proposed $120 million
second-lien term loan. The outlook is negative.
The issues are part of a proposed recapitalization, which the
company is using to finance a dividend to shareholders. Proceeds
from the issuances will be used to fund roughly $146 million of
dividends and to refinance the company's existing debt
obligations.
Cape Canaveral, Florida-based IAP is a provider of contingency
operations, facilities management, and technical services to the
U.S. military and civilian agencies. The company will have about
$535 million of pro forma debt after the proposed transaction.
"The ratings affirmation reflects the company's good operating
performance, but also the high leverage levels associated with the
proposed recapitalization and the company's more aggressive
financial policy," said Standard & Poor's credit analyst James
Siahaan. "The affirmation also takes into account a reduction in
the size of the proposed dividend to shareholders and the
corresponding reduction in leverage."
The proposed dividend is being reduced to $146 million from
$186 million. The company has a strong rebid record on contracts.
Still, the transaction would give the company little room to
maintain the current ratings if profitability declined or if the
company's other strategic and financial decisions led to
additional deterioration in the
financial profile.
The ratings on IAP reflect the company's revenue concentration
from a few large contracts and the less-predictable nature of its
contingency support operations, which contribute most revenues and
profits. These weaknesses are partly mitigated by the low fixed-
capital intensiveness of operations. The rating also factors in
the slight integration challenges the company will face following
its March 2005 acquisition of Johnson Controls World Services Inc.
The largest company segment is contingency support, which has
provided 63% of 2005 year-to-date revenues. This segment includes
power generation, emergency disaster relief, air traffic control,
and transport operations in the U.S. and in war theaters overseas.
Facilities management, meanwhile, has contributed 24% of revenues.
Through this segment, the company maintains U.S. military bases in
the U.S. and overseas. The technical services segment has
contributed 13% of 2005 revenues. Most of the company's revenues,
53% year-to-date, were generated in the U.S., though they are also
concentrated in Kuwait and Iraq.
Unrated Cerberus Capital Management L.P., a private investment
firm, owns 74% of IAP, while the original founders own the rest.
KULLMAN INDUSTRIES: Committee Employs Lowenstein as Counsel
-----------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in Kullman
Industries, Inc.'s chapter 11 proceedings, asks the U.S.
Bankruptcy Court for the District of New Jersey for permission to
employ Lowenstein Sandler PC as its counsel.
The Firm will:
(a) advise in respect of the Committee's duties and powers;
(b) assist the Committee in investigating the acts, conduct,
assets, liabilities, and financial condition of the Debtor,
the operation of the Debtor's business, potential claims,
and any other matters relevant to the case or to the sale of
assets or confirmation of a Plan of Reorganization;
(c) participate in the formulation of a Plan;
(d) assist the Committee in requesting the appointment of a
Trustee or Examiner, should such action be necessary; and
(e) perform other legal services as may be required and be in
the interest of the Committee and creditors.
Bruce Buechler, Esq., a member at Lowenstein Sandler, discloses
that his Firm's professionals bill:
Designation Hourly Rate
----------- -----------
Members $320 - $595
Senior Counsel $295 - $425
Counsel $265 - $375
Associates $165 - $300
Legal Assistants $75 - $150
Mr. Buechler assures the Court that his Firm does not hold any
interest adverse to the Committee.
Headquartered in Lebanon, New Jersey, Kullman Industries, Inc.
-- http://www.kullman.com/-- is a modular construction builder.
The company filed for chapter 11 protection on Oct. 17, 2005
(Bankr. D. N.J. Case No. 05-60002). James N. Lawlor, Esq., at
Wollmuth, Maher & Duetsch, LLP represents the Debtor in its
restructuring efforts. When the Debtor filed for protection from
its creditors, it estimated assets between $1 million and $10
million and debts between $10 million to $50 million.
LOEWS CINEPLEX: AMC to Refinance Credit Facility & Buy Back Notes
-----------------------------------------------------------------
AMC Entertainment Inc. plans to refinance its existing senior
secured credit facility and Loews Cineplex Entertainment
Corporation existing senior secured credit facility in connection
with its planned merger with Loews Cineplex.
As reported in the Troubled Company Reporter on June 23, 2005, the
Company and Loews Cineplex entered into a definitive merger
agreement that would result in the combination of their
businesses.
The merger agreement also provides for the merger of their
respective holding companies, Marquee Holdings Inc. and LCE
Holdings, Inc., with Marquee Holdings Inc., which is controlled by
affiliates of J.P. Morgan Partners, LLC and Apollo Management,
L.P., continuing as the holding company for the merged businesses.
The current stockholders of LCE Holdings, Inc., including
affiliates of Bain Capital Partners, The Carlyle Group and
Spectrum Equity Investors, would hold approximately 40% of the
outstanding capital stock of the continuing holding company.
The merged company, to be called AMC Entertainment Inc., will be
headquartered in Kansas City, Missouri, and will own, manage or
have interests in approximately 450 theatres with about 5,900
screens in 30 states and 13 countries. Peter C. Brown, AMC
Chairman of the Board, Chief Executive Officer and President, will
remain in this role in the merged company. When combined, the
company will have approximately 24,000 associates serving more
than 280 million guests annually. An integration committee will
be formed in which Travis E. Reid, President and Chief Executive
Officer of Loews Cineplex Entertainment Corporation, and Brown
will serve as co-chairs. The integration committee also will
include representatives of the two sponsor groups.
Loews' Notes Repurchase
In addition, the Company intends to repurchase Loews' outstanding
9.0% senior subordinated notes due 2014 pursuant to a tender offer
and consent solicitation. The Company intends to consummate the
mergers concurrently with the refinancing of the Company's
existing senior secured credit facility and Loews' existing senior
secured credit facility, as well as the completion by Loews of a
tender offer for the Loews Notes.
In addition, the mergers are subject to antitrust approvals that
have resulted in agreements with the Department of Justice and
Attorneys General of California and the District of Columbia to
divest 10 theatres and 120 screens in 7 U.S. markets. Upon
completion of the mergers, the existing stockholders of Holdings
would hold approximately 60% of its outstanding capital stock, and
the current stockholders of LCE Holdings, Inc., including
affiliates of Bain Capital Partners, LLC, The Carlyle Group and
Spectrum Equity Investors, would hold approximately 40% of the
outstanding capital stock. The Company expects to pay costs and
incur expenses related to this transaction, including one-time
termination benefits, of approximately $80,000,000.
The completion of the tender offer for the Loews Notes is not a
condition to the consummation of the mergers. However, if Loews
does not complete the tender offer for the Loews Notes and the
related consent solicitation, then under the terms of the
indenture governing these notes, the Combined Company will be
required to make a change of control offer and give holders of the
Loews Notes an opportunity to sell the notes to the Combined
Company at a price of 101% of the principal amount of the notes,
plus accrued and unpaid interest and additional interest (as
defined in the indenture), if any, to the date of repurchase. The
Company has secured commitments to finance this repurchase offer,
should it become necessary.
About AMC Entertainment
Headquartered in Kansas City, Missouri, AMC Entertainment Inc.
http://www.amctheatres.com/-- is a subsidiary of Marquee Holdings
Inc. Through its circuit of AMC Theatres, AMC Entertainment
operates 229 theaters with 3,546 screens in the United States,
Canada, France, Hong Kong, Japan, Portugal, Spain and the United
Kingdom.
About Loews Cineplex
Loews Cineplex Entertainment Corp operates motion picture theaters
primarily in major cities throughout the United States, Canada,
Spain, Hungary and Turkey. The company operates its theaters under
the Loews, Sony and Cineplex Odeon names.
* * *
As reported in the Troubled Company Reporter on Sept. 8, 2005,
Standard & Poor's Ratings Services, in light of a steep drop in
movie theater attendance in the current year, revised its outlook
on Loews Cineplex Entertainment Corp. (B/Negative/--) to negative
from positive.
LOGAN INTERNATIONAL: Court Confirms Amended Joint Chapter 11 Plan
-----------------------------------------------------------------
The Honorable Elizabeth L. Perris of the U.S. Bankruptcy Court for
the District of Oregon confirmed the Amended Joint Plan of
Reorganization filed by Logan International II LLC and Logan Farms
II LLC.
Judge Perris signed a Confirmation Order on Dec. 22, 2005, after
finding that the Plan meets the 13 standards for confirmation
required under Section 1129(a) of the Bankruptcy Code.
Summary of the Plan
The Plan provides for the sale of substantially all of the
Debtors' assets to R.D. Offut Company-Northwest. After the
closing of the sale, Logan International will reconfigure and
reduce its French fry business to one centered primarily on
contracts with the U.S. Department of Agriculture.
Due to the post-closing reduction of its business operations,
Logan International will liquidate its existing inventory and
accounts receivables. The cash proceeds from the sale of assets
to R.D. Offut and the liquidation of Logan International's
inventory and accounts receivables will be used to pay most
secured creditors.
All secured creditors' claims under the Plan will be paid in full.
Revenues from Logan International's future operations and future
consideration to be received from R.D. Offut under the asset sale
will be used to pay any remaining balance to secured creditor
claims and general unsecured creditors. After the sale of the
Farm Property to R.D. Offut, Logan Farms will lease back the Farm
Property and in turn sublease the property to third parties.
Under the R.D. Offut Sale Transaction, Logan Farms will receive an
option to repurchase the farm property from R.D., which Logan
Farms intends to exercise. Proceeds from subleases in excess of
lease payments to R.D., will be used to Logan Farms' remaining
creditors.
General unsecured claims against Logan Farms, totaling
approximately $2,500 will receive their pro rata share of
quarterly payments commencing on Dec. 30, 2006, and continuing
until all claims are paid in full.
General unsecured claims against Logan International, totaling
approximately $2,500,000 will receive their pro rata share of
quarterly payments commencing December 2006 and continuing until
all claims are paid in full.
Holders of intercompany claims will not receive any distributions
under the Plan, while holders of equity interests in the Debtors
will retain their equity interests in the Reorganized Debtors.
Holders of equity interests will not receive any distributions on
account of their equity interests until all general unsecured
claims against the Debtors have been paid in full.
A full-text copy of the Disclosure Statement is available for a
fee at:
http://www.researcharchives.com/bin/download?id=051117033129
Headquartered in Irrigon, Oregon, Logan International II LLC
-- http://www.loganinternational.com/-- is a manufacturer and
wholesaler of frozen French fries. The Debtor and its debtor-
affiliate filed for chapter 11 protection on January 18, 2005
(Bankr. D. Ore. Lead Case No. 05-38286). Leon Simson, Esq., at
Ball Janik LLP represents the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they estimated between $10 million to $50 million in
assets and $10 million to $50 million in debts.
MCLEODUSA INC: Court Gives Final Approval for Cash Collateral Use
-----------------------------------------------------------------
As previously reported in the Troubled Company Reporter on Nov. 4,
2005, Judge Squires of the U.S. Bankruptcy Court for the Northern
District of Illinois gave McLeodUSA Incorporated and its
debtor-affiliates authority to use all Cash Collateral of
their prepetition secured lenders, except amounts held in an
Escrow Account.
Prepetition Debts
Before the bankruptcy filing, McLeodUSA Incorporated and its
debtor-affiliates borrowed money under two credit agreements
arranged by JPMorgan Chase Bank, N.A.:
Amount Outstanding
Credit Facility As of Petition Date
--------------- -------------------
Senior Prepetition Credit Agreement
dated April 16, 2002 $107,340,000
Junior Prepetition Credit Agreement
dated May 31, 2000 $677,277,946
The Debtors' obligations under these agreements are secured by
first priority liens on substantially all of their assets. All
of the Debtors' cash and other proceeds generated from the
Prepetition Collateral as of the Petition Date constitute cash
collateral of the Prepetition Lenders within the meaning of
Section 363(a) of the Bankruptcy Code.
Adequate Protection
As adequate protection for any diminution in the value of the
Prepetition Collateral, the Debtors and the Prepetition Lenders
have agreed that the Prepetition Lenders should be granted:
(A) a lien junior to the liens under a postpetition financing
agreement,
(B) payment of current cash interest at the contractual non-
default rate in respect of the senior of the two Credit
Facilities,
(C) payment of all fees and expenses of the agent and the
lenders under the Credit Facilities,
(D) after repayment of the postpetition financing facility,
application of proceeds from asset sales:
(1) to repayment of unpaid obligations under the senior
of the two Credit Facilities,
(2) to cash collateralize outstanding letters of
credit, and
(3) to the repayment of unpaid obligations under the
junior of the two Credit Facilities, and
(E) the usual and customary claims, priorities and other
protections provided to prepetition secured creditors.
Court Issues Final Order
Judge Squires authorizes McLeodUSA Incorporated and its debtor
subsidiaries to use all cash collateral of the prepetition
secured lenders, and directs the Secured Prepetition Lenders to
turn over to the Debtors all Cash Collateral they received or
held, except for amounts held in an Escrow Account.
The Court will not permit the Debtors to use the Cash Collateral
held in an Escrow Account unless certain conditions under the DIP
Credit Agreement are satisfied. The Court rules that the
Prepetition Secured Lenders are entitled to adequate protection
of their interest in the Cash Collateral, among other things.
Judge Squires also authorizes McLeodUSA to borrow money and
obtain letters of credit pursuant to a postpetition financing, up
to an aggregate principal or face amount, inclusive of amounts
authorized by the Interim Order, of $50,000,000. The Court
permits McLeodUSA's debtor-affiliates to guarantee the borrowings
and obligations with respect to the letters of credit.
The Court allows the Debtors and JP Morgan Chase Bank, N.A., as
Prepetition Agent, to extend the expiration date of letters of
credit issued pursuant to certain Existing Agreements for a
period not to exceed one year from the expiration date of each of
the letter of credit.
Headquartered in Cedar Rapids, Iowa, McLeodUSA Incorporated --
http://www.mcleodusa.com/-- provides integrated communications
services, including local services in 25 Midwest, Southwest,
Northwest and Rocky Mountain states. The Debtor and its
affiliates filed for chapter 11 protection on Oct. 28, 2005
(Bankr. N.D. Ill. Case Nos. 05-53229 through 05-63234). Peter
Krebs, Esq., and Timothy R. Pohl, Esq., at Skadden, Arps, Slate,
Meagher and Flom, represent the Debtors in their restructuring
efforts. As of June 30, 2005, McLeodUSA Incorporated reported
$674,000,000 in total assets and $1,011,000,000 in total debts.
McLeodUSA Inc. previously filed for chapter 11 protection on
January 30, 2002 (Bankr. D. Del. Case No. 02-10288). The Court
confirmed the Debtor's chapter 11 plan on April 5, 2003, and
that Plan took effect on April 16, 2002. The Court formally
closed the case on May 20, 2005. (McLeodUSA Bankruptcy News,
Issue No. 7 Bankruptcy Creditors' Service, Inc., 215/945-7000).
MCLEODUSA INC: Has Until Jan. 31 to File Schedules and Statements
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois
entered a formal written order approving McLeodUSA Incorporated
and its debtor-affiliates' Disclosure Statement and confirming the
Plan of Reorganization on Dec. 16, 2005.
The Court found that the Disclosure Statement contains adequate
information, within the meaning of and for all purposes of
Sections 1125 and 1126(b) of the Bankruptcy Code. The Court also
approved the procedures used to solicit acceptances of the Plan.
McLeodUSA Incorporated and its debtor-affiliates stepped Judge
Squires through the 13 statutory requirements under Section
1129(a) of the Bankruptcy Code necessary to confirm their Joint
Prepackaged Plan of Reorganization:
A. The Plan complies with the applicable provisions of the
Bankruptcy Code, thus, satisfying Section 1129(a)(1) of the
Bankruptcy Code.
B. The Plan satisfies Section 1129(a)(2) of the Bankruptcy Code.
Specifically, the Debtors:
(a) are proper debtors under Section 109;
(b) comply with applicable provisions of the Bankruptcy Code;
and
(c) comply with the applicable provisions the Bankruptcy Rules
and the Solicitation Scheduling Order in transmitting the
Plan, the Disclosure Statement, the Ballots and related
documents and notices and in soliciting and tabulating
votes on the Plan.
C. In determining that the Plan has been proposed in good faith,
the Court has examined the totality of the circumstances
surrounding the formulation of the Plan. The Debtors filed
the Chapter 11 cases and proposed the Plan with legitimate
and honest purposes including, among other things:
(a) the reorganization of the Debtors' businesses;
(b) the preservation and maximization of the Debtors'
business enterprise value through a rapid, efficient
reorganization under Chapter 11;
(c) restructuring of the Debtors' debt structure;
(d) maximization of the recovery to holders of claims; and
(e) preserving jobs of the Debtors' employees in connection
with the Debtors' go-forward operations.
The Plan represents extensive arm's-length negotiations among
the Debtors and the "Majority Prepetition Lenders", as well
as each group's legal and financial advisors, and reflects
the best interests of the Debtors' estates and creditors.
D. Any payment made or to be made by the Debtors or by a person
issuing securities or acquiring property under the Plan, for
services or for costs and expenses in or in connection with
the Chapter 11 cases, or in connection with the Plan and
incident to the Chapter 11, has been approved by the Court as
reasonable, thereby satisfying Section 1129(a)(4) of the
Bankruptcy Code.
E. The Debtors complied with Section 1129(a)(5). The identity
and affiliation of six of the seven proposed initial directors
of Reorganized McLeodUSA were identified in a Plan Supplement
filed on December 9, 2005. The methodology for selecting the
remaining director of Reorganized McLeodUSA was disclosed to
the Bankruptcy Court prior to the Confirmation Date. Existing
senior officers of the Debtors will remain in place after the
Effective Date. The appointment to, or continuance in, those
offices of all the persons is consistent with the interests of
holders of Claims against and Interests in the Debtors and
with public policy. No insiders, other than current officers
of the Debtors, are proposed to serve as officers or directors
of the Reorganized Debtors.
F. After confirmation of the Plan, the Debtors' businesses will
not involve rates established or approved by, or otherwise
subject to, any governmental regulatory commission. Hence,
Section 1129(a)(6) is not applicable in the Debtors' cases.
G. The Plan satisfies Section 1129(a)(7). The liquidation
analysis attached to the Debtors' Disclosure Statement and
other evidence proffered or adduced at the Confirmation
Hearing:
(a) are persuasive and credible;
(b) have not been controverted by other evidence; and
(c) establish that each holder of an Impaired Claim or
Interest either has accepted the Plan or will receive or
retain under the Plan, on account of the Claim or
Interest, property of a value, as of the Effective Date,
that is not less than the amount that the holder would
receive or retain if the Debtors were liquidated under
Chapter 7 of the Bankruptcy Code on that date.
H. Classes 1, 2, 3 and 7 are presumed to have accepted the Plan
under Section 1126(f). Classes 4 and 5 have voted to accept
the Plan in accordance with Sections 1126(c) and (d) of the
Bankruptcy Code. While Holders of Claims in Class 6 are being
paid 100% of their Allowed Claim, pursuant to the Solicitation
Scheduling Order, the Debtors were not required to solicit
votes from Holders of Class 6 Lease Rejection Claims and Class
6 is deemed to have rejected the Plan. Classes 8 and 9 are
not entitled to receive or retain any property under the Plan
and, therefore, are deemed to have rejected the Plan pursuant
to Section 1126(g). Although Section 1129(a)(8) has not been
satisfied with respect to Classes 6, 8 and 9, the Plan is
confirmable because the Plan satisfies Section 1129(b) with
respect to the Classes.
The percentages of Holders of Claims in Classes that voted to
accept the Plan are:
Classes Percentage Percentage
Entitled Accepting Accepting
to Vote (Dollar Amount) (Number of Claims)
-------- --------------- ------------------
Class 4 100% 100%
Class 5 97% 97.3%
I. The treatment of Administrative Claims, Priority Tax Claims
and Non-Tax Priority Claims pursuant to the Plan satisfies the
requirements of Sections 1129(a)(9)(A), (B) and (C).
J. Classes 4 and 5 are Impaired Classes of Claims that have voted
to accept the Plan with respect to all of the Debtors. To the
Debtors' knowledge, these Impaired Claims do not contain
insiders whose votes have been counted. Therefore, the
requirement of Section 1129(a)(10) that at least one Class of
Claims against or Interests in the Debtors that is impaired
under the Plan has accepted the Plan, determined without
including any acceptance of the Plan by any insider, has been
satisfied.
K. Evidence proffered or adduced at the Confirmation Hearing with
respect to feasibility:
(a) is persuasive and credible; and
(b) establishes that confirmation of the Plan is not likely to
be followed by the liquidation, or the need for further
financial reorganization, of the Reorganized Debtors, thus
satisfying the requirements of Section 1129(a)(11) of the
Bankruptcy Code.
L. All fees payable under Section 1930 of the Judiciary
Procedures Code have been paid or will be paid on the
Effective Date, thus satisfying the requirements of Section
1129(a)(12).
M. All retiree benefits will be treated as executory contracts
and assumed pursuant to the Plan, hence, the requirements of
Section 1129(a)(13) are satisfied.
Substantive Consolidation
Judge Squires finds that the Debtors' substantive consolidation
for the purposes of treating Classes 4, 5 and 6 under the Plan
will:
(a) maximize and facilitate the prompt distribution to the
Debtors' creditors; and
(b) permit the Debtors' creditors to avoid the harm that
likely would result absent substantive consolidation and
confirmation of the Plan embodying it.
The Court believes that the substantive consolidation will
provide enhanced treatment to Classes 4, 5 and 6, will not unduly
harm any creditor or party-in-interest and is in the best
interest of the Debtors, their estates and creditors.
Plan Objections
On the Effective Date, all claims of the SBC Entities will be
reinstated without restriction. The assumption of the Debtors'
executory contracts with the SBC Entities will not impair or
modify the SBC Entities' contractual and legal rights under the
SBC Entities' Contracts; provided, however, that any provisions
in the SBC Entities' Contracts which are unenforceable under
Section 365(e) will remain unenforceable. Any open proceedings
involving the Debtors and the SBC Entities will continue in their
current forum without impact on the bankruptcy proceedings.
The Priority Tax Claims of the Iowa Department of Revenue and the
Illinois Department of Revenue will continue to accrue interest
at the statutory rate after the Petition Date, to the extent
required by applicable law or required to "reinstate" the claim
within the meaning of the Plan.
Nothing in the Plan will in any way limit, modify, waive, amend,
alter or otherwise affect the rights, obligations and remedies of
Yellow Book USA, Inc., and the McLeodUSA Entities under the
"Amended and Restated Publishing, Branding and Operating
Agreement dated April 29, 2003." Any provision in the Yellow
Book Agreement, which is unenforceable under Section 365(c) will
remain unenforceable as against the Debtors or the Reorganized
Debtors.
Schedules and Statements
The Court extends to Jan. 31, 2006, the Debtors' deadline to
file their:
(a) schedules of assets and liabilities;
(b) statements of financial affairs;
(c) schedule of current income and expenditures;
(d) statements of executory contracts and unexpired leases;
(e) list of equity security holders; and
(f) any other schedule or statement required under Bankruptcy
Rule 1007.
Headquartered in Cedar Rapids, Iowa, McLeodUSA Incorporated --
http://www.mcleodusa.com/-- provides integrated communications
services, including local services in 25 Midwest, Southwest,
Northwest and Rocky Mountain states. The Debtor and its
affiliates filed for chapter 11 protection on Oct. 28, 2005
(Bankr. N.D. Ill. Case Nos. 05-53229 through 05-63234). Peter
Krebs, Esq., and Timothy R. Pohl, Esq., at Skadden, Arps, Slate,
Meagher and Flom, represent the Debtors in their restructuring
efforts. As of June 30, 2005, McLeodUSA Incorporated reported
$674,000,000 in total assets and $1,011,000,000 in total debts.
McLeodUSA Inc. previously filed for chapter 11 protection on
January 30, 2002 (Bankr. D. Del. Case No. 02-10288). The Court
confirmed the Debtor's chapter 11 plan on April 5, 2003, and
that Plan took effect on April 16, 2002. The Court formally
closed the case on May 20, 2005. (McLeodUSA Bankruptcy News,
Issue No. 7 Bankruptcy Creditors' Service, Inc., 215/945-7000).
MEDICAL TECHNOLOGY: Court Sets Jan. 30 for Plan Confirmation
------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas in
Fort Worth approved the Disclosure Statement explaining the First
Amended Plan of Reorganization filed by Medical Technology, Inc.
The Honorable Russell F. Nelms determined that the Disclosure
Statement contained adequate information -- the right kind of the
right amount for creditors to make informed decisions when asked
to vote for the Plan.
The Court will convene a hearing on Jan. 30, 2006, at 9:00 a.m.
Objections to the Plan, if any, must be served by Jan. 13, 2006.
Relevant components of the Debtor's Plan include:
-- the full payment of unsecured creditors;
-- a restructuring and extension of secured debts; and
-- the full payment of Orthodontics Inc. and Generation II
USA Inc.'s claims (totaling more than $6.8 million) from a
judgment awarded by the U.S. District Court for the Western
District of Washington, Seattle Division, if the Debtor's
pending appeal is denied.
Payments due under the Plan will be funded from the Reorganized
Debtor's income and other sources of funds, including future
borrowing or sale of stock. The Reorganized Debtor will be
responsible for making all distributions or payments on account of
allowed claims as contemplated in the Plan.
Treatment of Claims
Convenience claims, consisting of any allowed claim of $2,000 or
less and any allowed claim for which the holder elects to reduce
to $2,000, will be paid in full within two months from the
effective date of the Plan. Convenience claims total
approximately $30,777.
Tax Claims totaling approximately $86,800 will be paid in full on
the effective date.
Allowed critical vendor claims, totaling approximately $367,714,
will be paid within 30 days after the effective date.
The approximate $1.6 million secured claim of North MARQ on
account of two prepetition building loans will be treated in
accordance with section 1124(2) of the Bankruptcy Code. The Plan
provides that:
a) the Debtor will cure any default existing on these loans
on or prior to the effective date of the Plan;
b) the maturity of the two loans will be reinstated as
it existed prior to any default; and
c) the holder of the building notes will be compensated for
any damages incurred as a result of any reasonable
reliance on contractual provision in accordance with
section 1124(2)(c) of the Bankruptcy Code.
Chase Bank's secured claim, totaling approximately $1.3 million,
will be paid according to these terms:
a) The Chase Receivable Line will be paid in 36 equal monthly
installments. The receivable line will continue to be
secured by a first lien and security interest in the chase
collateral and will continue to bear interest at the non-
default rare. The Reorganized Debtor will maintain a
borrowing base at least $200,000 over the unpaid balance
of the receivable line and will provide Chase with a
Borrowing Base Certificate on a monthly basis.
b) The Chase Equipment Line and the Chase Advancing Note will
be paid in 36 equal monthly installments. The Equipment
Line and Advancing Note will continue to be secured by a
first lien and security interest in the chase collateral
and will continue to bear interest at the non-default
rate.
The Reorganized Debtor will execute and deliver to Chase Bank
documents renewing and extending the Advancing Note, Receivable
Line and Equipment Line.
Ford's secured claim will be paid in accordance with the terms of
applicable agreements governing the loan.
The Debtor can elect to pay other secured claims, totaling
approximately $47,406, either:
a) through the return of the collateral securing the claim;
b) in installments over a period of six years at the prime
rate of interest; or
c) by allowing the claim holder to offset in satisfaction of
its secured claim.
General unsecured claims, totaling approximately $1,709,783, will
be paid according to these terms:
a) unsecured claim holders can elect to reduce their claim to
$2,000 and will be treated as a convenience claim; or
b) receive full payment of their claims in 60 equal
installments, plus interest, beginning on the initial
distribution date.
Disputed Litigation Claims
The Debtor continues to dispute any liability in the patent
infringement lawsuit filed by the Generation II companies and has
appealed the judgment awarded by the Seattle District Court. The
Debtor also contests its liability on various other lawsuits
seeking damages for breach of contract, breach of implied warranty
and negligence. All claims resulting from these lawsuits are
classified as contested claims.
Any allowed claim of the Generation II companies, totaling
approximately $6.8 million, will be paid in 120 equal monthly
installments, plus interest, beginning on the initial distribution
date. Pending the District Court's decision on the appeal, the
Debtor will make monthly deposits of interest accrued on the
judgment amount into an escrow account.
Any judgment awarding damages to David. N. Pinkus and Brandon Joel
Bailey will be paid solely through applicable insurance policies.
The claim of Frank R. Noyes, MD, will be adjudicated and allowed
as apart of the litigation pending before the U.S. District Court
for the Southern District of Ohio. Claims arising from this
litigation, if any, will be paid in 120 equal monthly
installments, plus interest, beginning on the initial distribution
date.
Any allowed claim of dj Orthopedics, LLC, will be paid in 120
equal monthly installments, plus interest, beginning on the
initial distribution date.
Equity interest holders will retain their interest in the
Reorganized debtor.
Headquartered in Grand Prairie, Texas, Medical Technology, Inc.,
dba Bledsoe Brace Systems -- http://www.bledsoebrace.com/home.asp
-- manufactures and distributes orthopedic knee braces, ankle
braces, ankle supports, knee immobilizers, arm braces, sport
braces, boots, and walkers. The Debtor filed chapter 11
protection on July 25, 2005 (Bankr. N.D. Tex. Case No. 05-47377).
J. Robert Forshey, Esq., Jeff P. Prostok, Esq., and Julie C.
McGrath, Esq., at Forshey & Prostok, LLP, represent the Debtor in
its restructuring efforts. When the Debtor filed for
protection from its creditors, it estimated assets and debts
between $10 million to $50 million.
MESABA AVIATION: Committee Brings-In Squire Sanders as Counsel
--------------------------------------------------------------
The Official Committee of Unsecured Creditors of Mesaba Aviation,
Inc., sought and obtained the U.S. Bankruptcy Court for the
District of Minnesota's authority to retain Squire, Sanders &
Dempsey L.L.P. as its counsel, nunc pro tunc to Nov. 10, 2005.
The Committee relates that Squire Sanders possesses extensive
knowledge in the areas of law relevant to the Debtor's Chapter 11
case. The firm had represented either debtors or committees in
numerous significant Chapter 11 cases.
As the Committee's counsel, Squire Sanders will:
a. advise the Committee with respect to its rights, powers and
duties in the Debtor's Chapter 11 Case;
b. assist and advise the Committee in its consultations with
the Debtor relative to the administration of the case;
c. assist the Committee in analyzing the claims of and in
negotiation with the Debtor's creditors;
d. assist the Committee in analyzing the relationships with
creditors, equity interest holders and other parties-in-
interest;
e. assist with their investigation of the acts, conduct,
assets, rights, liabilities and financial condition of the
Debtor and of the operation of the Debtor's business;
f. advise the Committee in connection with any proposed sales
of the Debtor's assets;
g. investigate, file and prosecute litigation on behalf of the
Committee;
h. assist the Committee in its analysis of, and negotiations
with, the Debtor or any third party concerning matters
related to the terms of a plan of reorganization or
liquidation for the Debtor;
i. assist and advise the Committee with respect to its
communications with the general creditor body regarding
significant matters in the Debtor's Chapter 11 case;
j. represent the Committee at hearings and other proceedings;
k. review and analyze applications, orders, statements of
operations and schedules filed with the Court and advise
the Committee with respect to the same;
l. assist the Committee in preparing pleadings and
applications as may be necessary in its interests and
objectives; and
m. 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.
Squire Sanders' standard hourly rates are:
Position Hourly Rate
-------- -----------
Legal Assistants $30 - $220
Associates $165 - $425
Partners $280 - $675
Squire Sanders will seek reimbursement of actual, necessary
expenses it will incur in connection with its representation of
the Committee.
Craig D. Hansen, Esq., a partner at Squire Sanders, believes that
the firm does not hold or represent any interest adverse to the
Debtor's estate. However, Mr. Hansen discloses, some potential
parties-in-interest and their subsidiaries are or were previously
clients of Squire Sanders but in matters not related to the
Debtor's Chapter 11 case.
Mesaba Aviation, Inc., d/b/a Mesaba Airlines --
http://www.mesaba.com/-- operates as a Northwest Airlink
affiliate under code-sharing agreements with Northwest Airlines.
The Company filed for chapter 11 protection on Oct. 13, 2005
(Bankr. D. Minn. Case No. 05-39258). Michael L. Meyer, Esq., at
Ravich Meyer Kirkman McGrath & Nauman PA, represents the Debtor in
its restructuring efforts. When the Debtor filed for protection
from its creditors, it listed total assets of $108,540,000 and
total debts of $87,000,000. (Mesaba Bankruptcy News, Issue No. 7;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
MESABA AVIATION: Panel Hires Foley & Mansfield as Local Counsel
---------------------------------------------------------------
The Official Committee of Unsecured Creditors of Mesaba Aviation,
Inc., seeks the U.S. Bankruptcy Court for the District of
Minnesota's authority to retain Foley & Mansfield, P.L.L.P., as
its local counsel.
The Committee believes that Foley & Mansfield is competent and
experienced in Chapter 11 and related bankruptcy matters.
As local counsel for the Committee, Foley & Mansfield will:
a. consult with the Debtor regarding the administration of its
Chapter 11 case;
b. investigate the acts, conduct, assets, liabilities and
financial condition of [the Debtor];
c. participate in the formulation of a plan;
d. advise unsecured creditors of the decisions of the
Committee as to any proposed plan;
e. collect and file with the Court acceptances or rejections
of the plan;
f. request the appointment of a trustee or examiner if the
Committee deems it appropriate; and
g. perform other services as the Committee believes are in the
interest of the unsecured creditors.
Foley & Mansfield's attorneys and paralegals charge these hourly
rates:
Position Hourly Rate
-------- -----------
Partners $300
Associates $200
Paralegals $100
Payment of invoices from the firm, as received on a monthly
basis, is subject to a 20% holdback.
Thomas J. Lallier, Esq., a partner at Foley & Mansfield,
discloses that although the firm has represented General Electric
Capital Corporation, an affiliate of General Electric
Corporation, the firm has not represented General Electric or any
of its affiliates in connection with the Debtor or the case.
Further, Mr. Lallier attests that the firm is disinterested
within the meaning of Section 327(a) and Rule 2014 of the Federal
Rules of Bankruptcy Procedure.
* * *
Judge Kishel approves the Committee's request.
Mesaba Aviation, Inc., d/b/a Mesaba Airlines --
http://www.mesaba.com/-- operates as a Northwest Airlink
affiliate under code-sharing agreements with Northwest Airlines.
The Company filed for chapter 11 protection on Oct. 13, 2005
(Bankr. D. Minn. Case No. 05-39258). Michael L. Meyer, Esq., at
Ravich Meyer Kirkman McGrath & Nauman PA, represents the Debtor in
its restructuring efforts. When the Debtor filed for protection
from its creditors, it listed total assets of $108,540,000 and
total debts of $87,000,000. (Mesaba Bankruptcy News, Issue No. 7;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
MESABA AVIATION: Committee Wants Rule 2004 Examination on Carrier
-----------------------------------------------------------------
Pursuant to Rule 2004 of the Federal Rules of Bankruptcy
Procedure, the Official Committee of Unsecured Creditors of
Mesaba Aviation, Inc., seeks the U.S. Bankruptcy Court for the
District of Minnesota's permission to issue subpoenas to MAIR
Holdings, Inc., Mesaba's parent company, for:
-- inspection and production of documents; and
-- oral examination to designated MAIR representatives.
Bankruptcy Rule 2004 provides for the examination of any person,
and may relate to "any matter which may affect the administration
of the debtor's estate."
The Committee believes that MAIR currently holds in excess of
$120,000,000 in cash, cash equivalents and short-term
investments. Stephen D. Lerner, Esq., at Squire Sanders &
Dempsey L.L.P., in Cincinnati, Ohio, notes that the Debtor's
operations appear to account for in excess of 95% of MAIR's
consolidated operating revenue and for substantially all of
MAIR's income.
To carry out its mandate to investigate the Debtor's financial
condition and financial affairs, the Committee requires discovery
from MAIR. Given the nature and extent of the Debtor's
relationship with MAIR, Mr. Lerner asserts that the document
requests and Rule 2004 examinations of MAIR are necessary to
carry out that investigation to:
-- facilitate the Committee's understanding of the Debtor's
financial affairs; and
-- determine whether the Debtor may have claims against MAIR.
A full-text copy of the Schedule of Documents to be produced by
MAIR is available for free at:
http://bankrupt.com/misc/MAIR_DocsAndSchedule.pdf
Mesaba Aviation, Inc., d/b/a Mesaba Airlines --
http://www.mesaba.com/-- operates as a Northwest Airlink
affiliate under code-sharing agreements with Northwest Airlines.
The Company filed for chapter 11 protection on Oct. 13, 2005
(Bankr. D. Minn. Case No. 05-39258). Michael L. Meyer, Esq., at
Ravich Meyer Kirkman McGrath & Nauman PA, represents the Debtor in
its restructuring efforts. When the Debtor filed for protection
from its creditors, it listed total assets of $108,540,000 and
total debts of $87,000,000. (Mesaba Bankruptcy News, Issue No. 7;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
MIDLAND COGENERATION: S&P Pares $274MM Bonds' Rating to B from BB-
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on Midland
Cogeneration Venture L.P.'s $274 million bonds to 'B' from 'BB-'.
The bonds were issued by Midland Funding Corp. II and The Economic
Development Corp. of the County of Midland.
The rating on the bonds remains on CreditWatch with negative
implications where it was placed Nov. 3, 2005.
The rating action reflects Standard & Poor's concern that if
natural gas prices remain high after 2007, when a large portion of
MCV's natural gas hedges expire and Consumers Power Co. invokes
its regulatory out right under the power purchase agreement in
2007, then MCV's cash reserves could be depleted.
"Under certain natural gas price scenarios, MCV would not have
sufficient cash to make lease payments," said Standard & Poor's
credit analyst Arleen Spangler.
The rating remains on CreditWatch with negative implications to
reflect the uncertainty that remains regarding the actions the
partners may take with respect to MCV.
Standard & Poor's expects to resolve the CreditWatch once the
partners intentions with respect to MCV are known.
MCV was formed in 1987 to convert a portion of an uncompleted
Consumers' nuclear unit into a natural gas-fired cogeneration
facility. The plant's net electricity capacity is about 1,500 MW.
MMI PRODUCTS: Moody's Reviews $200MM Sr. Sub. Notes' Caa2 Ratings
-----------------------------------------------------------------
Moody's Investors Service placed the debt ratings of MMI Products
on review for possible downgrade to reflect the company's
difficulties in maintaining margins in certain product lines and
to reflect the company's needs to refinance its senior
subordinated notes due to a trigger in its bank credit facilities.
These ratings have been placed under review:
* $188.7 million 11.25% senior subordinated notes, due 2007,
rated Caa2;
* $11.3 million 13% senior subordinated notes, due 2007,
rated Caa2; and
* Corporate Family Rating, rated B3.
In its review, Moody's will focus on:
* MMI's ability to raise prices to offset its higher raw
material costs;
* its ability to refinance its subordinated notes; and
* the company's general liquidity needs.
The decision to place the company on review reflects the
company's:
* weak pricing power in certain product categories;
* reduced demand for certain of its fence products; and
* significant revolver usage.
The swings in inventory levels have had, and are anticipated to
have, a significant effect on the company's working capital;
hence, free cash flow generation may remain volatile.
Additionally, the company's credit facility was recently amended
to stipulate the following: an event of default will occur if the
$200 million of senior subordinated notes are not refinanced on or
before December 15, 2006. Moody's notes that the credit
facility's fixed charge coverage ratio requirement was also
amended from 1.1 times to 1.0 times.
The ratings are further impacted by high leverage ratios and low
interest coverage. Moody's projects the company's debt to EBITDA
FYE for 2005 to be around 5.7 times before adjusting for the
company's $88 million in PIK notes and EBITDA to cash interest
expense for the same period is 1.6 times. The company's likely
performance for 2006 is difficult to ascertain given the
uncertainties in steel prices and the company's ability to
increase prices due to highly competitive environment.
At the same time, the company's ratings benefit from:
* the company's current positive free cash flow generation;
* expected cost rationalization opportunities; and
* the potential for an increase in non-residential building and
infrastructure construction activity going forward.
Headquartered in Houston and dating back to 1953, MMI Products,
Inc. is a manufacturer and distributor of products for the
construction industry. The manufactured products include:
* chain link fence,
* steel grid mesh used as structural support for concrete
construction, and
* supports and other accessories for steel reinforcing bars
used in concrete construction;
all of which are produced from steel rod.
The major customers include:
* contractors,
* dealers,
* distributors,
* manufacturers, and
* fabricators
throughout the continental United States.
Revenues for FYE 2004 were approximately $674 million.
MIRANT CORP: Court Rejects Move to Base Valuation on Till Case
--------------------------------------------------------------
As previously reported, the U.S. Bankruptcy Court for the Northern
District of Texas temporarily halted the process to determine the
value of Mirant Corporation and its debtor-affiliates' estates to
pave the way for the Debtors and their key constituencies'
agreement to enter into a consensual plan of reorganization. The
Court also deferred issuance of a memorandum opinion on the
Valuation proceeding until confirmation of the Debtors' Plan.
The Bankruptcy Court has recently confirmed the Debtors' Plan.
Judge Lynn now explains and substantiates his Letter Rulings
regarding the Valuation Process.
In his 74-page Memorandum Opinion dated December 9, 2005, Judge
Lynn addresses a number of confirmation issues, including the
tests of Section 1129(a)(7) and (11) of the Bankruptcy Code and
the relevance of Till v. SCS Credit Corp., 541 U.S. 465 (2004), to
the Debtors' Valuation. The Court believes it would be
appropriate and beneficial to the parties to issue the Memorandum
Opinion in connection with confirmation of the Debtors' Plan
because:
-- certain shareholders represented by The Wilson Firm, LLC,
have indicated an intent to appeal the confirmation;
-- an appellate court should have the benefit of the reasoning
underlying the Letter Ruling; and
-- some objections to confirmation of the Plan concerned the
failure to complete the valuation process.
A full-text copy of Judge Lynn's Memorandum Opinion on Mirant's
Valuation Process is available for free at
http://ResearchArchives.com/t/s?3ec
The Till Case
At a hearing on May 10, 2005, Judge Lynn asked the parties to
answer questions relating to the relevance of Till v. SCS Credit
Corp., 541 U.S. 465 (2004), to the Debtors' Valuation.
The Debtors and the Wilson Shareholders, among other parties,
disagree about the significance of the decision in Till case to
the determination of the value of Mirant Group.
According to Judge Lynn, the Debtors and the creditors'
committees are mistaken in their reliance on the Till
jurisprudence. They also failed to appreciate the guidance
available to the Court in Till and its usefulness in deciding the
valuation issue, he notes.
Judge Lynn concludes that, while the Till case is extremely
useful in designing an approach to valuation, it does not
provide, as a matter of law, a specific range of interest rates
required to satisfy unsecured claims pursuant to Section
1129(b)(2)(B)(ii) of the Bankruptcy Code.
Court's Ruling
For a court to assign a specific value or narrow range of values
to a subject, it must either adopt an expert's opinion or be able
to adjust the number generated by the expert to account for
changes in assumptions considered necessary by the court, Judge
Lynn says.
Judge Lynn points out that he cannot accept unchanged any of the
values for Mirant Group that have been placed in evidence. For
example, the data used by Miller Buckfire Ying & Co. and The
Blackstone Group, especially the data used for future commodity
prices, was stale by the time of the Valuation Hearing. The
value arrived at by Peter J. Solomon Company, even if the Court
was persuaded it was otherwise correct, was flawed by reliance on
the reports of Benjamin Schlesinger and Associates, Inc., and
Slater Energy Consultants, Inc.
Moreover, recalculation of cash flows, whether under the Business
Plan or as produced by one of the expert advisors, is too complex
an operation for the court to undertake, Judge Lynn explains.
Changes to commodity prices and other assumptions and data affect
too many other variables -- emissions cost, dispatch versus
capacity, use of tax attributes, etc. -- to allow estimation of
overall change in value.
The Court cannot simply weigh the opinions of the various experts
to arrive at a melded value, Judge Lynn opines. The values
opined to in the expert reports range from (1) $7,200,000,000 by
Houlihan Lokey Howard & Zukin, the expert hired by the Official
Committee of Mirant Americas Generation LLC, to (2)
$13,600,000,000 by PJSC. In so complex a case, for the court to
simply average these numbers -- derived based on varying
assumptions and data -- would make a mockery of the valuation
process and would be terribly unfair to parties whose rights are
thereby disposed of, Judge Lynn says. The remaining way to
arrive at a number based on the record would be to patch together
the best of each valuation before the court.
While this might be practical for the Caribbean or Philippine
operations, the number of interconnected variables otherwise
prohibits that selective melding of experts' opinions, Judge Lynn
explains.
"Consequently, the Court concludes it is necessary to recalculate
the value of Mirant Group based on necessary changes in data and
assumptions. In doing so, the court adopts as the basis for
valuation the Business Plan and Blackstone's "5/2 Report".
At best, Judge Lynn says, the valuation of an enterprise like
Mirant Group is an exercise in educated guesswork. "At worst it
is not much more than crystal ball gazing. There are too many
variables, too many moving pieces in the calculation of value of
Mirant Group for the court to have great confidence that the
result of the process will prove accurate in the future.
Moreover, the court is constrained by the need to defer to
experts and, in proper circumstances, to Debtors' management."
"It may be that there are better ways to determine value than
through courtroom dialectic," Judge Lynn suggests. "That said,
the court must work within the system created by Congress -- and,
in valuing a company in chapter 11, that system contemplates an
adversary contest among parties before a neutral judge. The
court believes all participants in the Valuation Hearing
performed their duties to their constituencies, Debtors' estates,
the public and the court, for which it expresses its
appreciation."
Accordingly, Judge Lynn denies the Wilson Shareholders' motion
asking the Court to determine, based on Till v. SCS Credit Corp.,
541 U.S. 465 (2004), that the enterprise value of Mirant Group
must, as a matter of law, exceed the total debt of Mirant Group.
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. 88 Bankruptcy Creditors'
Service, Inc., 215/945-7000)
NDCHEALTH CORP: Extends Senior Debt Tender Offer Until Jan. 19
--------------------------------------------------------------
NDCHealth Corporation (NYSE: NDC) extended the expiration date
for the previously announced cash tender offer and consent
solicitation for its $200 million outstanding of 10-1/2% senior
subordinated notes due 2012 from 12:00 midnight, New York City
time, on Monday, Jan. 9, 2006 to 5:00 p.m., New York City time,
on Thursday, Jan. 19, 2006.
As of 5:00 p.m. New York City time on Dec. 22, 2005, the consent
payment deadline, the company received tenders and consents from
holders of $197.6 million in aggregate principal amount of the
Notes, representing approximately 98.8% of the outstanding Notes.
As previously reported, the requisite consents to adopt the
proposed amendments to the indenture governing the Notes,
including shortening the redemption notification period from 30
days to three days, have been received, and a supplemental
indenture to effect the proposed amendments described in the Offer
to Purchase and Consent Solicitation Statement dated Dec. 9, 2005,
has been executed. However, the amendments will not become
operative until the Notes are accepted for payment pursuant to the
terms of the tender offer.
It is expected that the total consideration will be calculated at
2:00 p.m., New York City time, on Thursday, Jan. 5, 2006. 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 Dec. 9, 2005.
Copies of the Offer to Purchase and Consent Solicitation Statement
may be obtained from MacKenzie Partners, Inc., the information
agent for the transaction, at (800) 322-2885 (US toll free) or,
for bankers and brokers (212) 929-5500. Questions may be directed
to Banc of America Securities LLC, High Yield Special Products, at
(888) 292-0070 (US toll-free) and (704) 388- 9217 (collect).
Headquartered at Atlanta, Ga., NDCHealth Corporation --
http://www.ndchealth.com/-- is a leading information solutions
company serving all sectors of healthcare. Its network solutions
have long been among the nation's leading, automating the exchange
of information among pharmacies, payers, hospitals and physicians.
Its systems and information management solutions help improve
operational efficiencies and business decision making for
providers, retail pharmacy and pharmaceutical manufacturers.
* * *
As reported in the Troubled Company Reporter on Sept. 1, 2005,
Moody's Investors Service has placed the ratings of Per Se
Technologies, Inc. and NDCHealth Corporation on review for
possible downgrade, following Per Se's announcement of August 29th
to acquire NDCHealth's physician, hospital, and retail pharmacy
businesses for $665 million. The transaction is expected to be
funded with a combination of cash and equity and is likely to
increase Per-Se's debt leverage substantially. The acquisition is
expected to close by early calendar 2006 and is subject to
shareholder and regulatory approvals.
Per-Se's total acquisition consideration of $665 million includes
refinancing NDCHealth's outstanding $270 million debt at closing.
As part of the transaction, Wolters Kluwer will purchase the
pharmaceutical information management business from NDCHealth for
$382 million in cash. NDCHealth's review will focus on the
refinancing plan for NDCHealth's $270 million outstanding debt.
To the degree all of this debt is refinanced as anticipated by
Per-Se, the outstanding ratings for NDCHealth will likely be
withdrawn.
Per Se's review will focus on:
1) the prospects for revenue and cost synergies associated with
the acquisition;
2) levels of debt and equity financing chosen to consummate the
transaction;
3) anticipated integration costs associated with the
acquisition;
4) prospects to reduce NDCHealth's costs for accounting
controls, which have elevated over the past twelve months as
NDCHealth has restated revenues within its physician
business; and
5) anticipated revenues and costs associated with NDCHealth's
information management business, anticipated to be sold to
Wolters Kluwer.
Per Se ratings on review for possible downgrade:
* Corporate Family rating of B1
* $75 million secured revolving credit facility maturing
June 2007 rated B1
NDC ratings on review for possible downgrade:
* Corporate Family rating of B1
* $125 million secured term loan due 2008 rated B1
* $100 million secured revolving credit facility due 2008
rated B1
* $200 million senior subordinated notes due 2012 rated B3.
NORTHWEST AIRLINES: Inks DIP Financing Pact With Airbus Group
-------------------------------------------------------------
Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP,
in New York, relates that Northwest Airlines, Inc., has been
engaged in negotiations to restructure the terms of its aircraft
leases, purchase agreements, product support agreements and
finance and security agreements with the Airbus entities.
The Airbus Entities are Airbus S.A.S., AVSA, S.A.R.L., Airbus
North America Customer Services, Inc., Airbus Leasing IV, Inc.,
Airbus Financial Services and Airbus Finance Company, Ltd.
The negotiations have resulted in the parties entering into a
term sheet, dated December 7, 2005, which provides for Northwest
Airlines' assumption of the aircraft agreements and leases, as
modified, and entry into new financing agreements.
A319 Purchase Agreement
Northwest Airlines and AVSA were parties to an Airbus A319-100
Purchase Agreement, as amended, whereby Northwest Airlines agreed
to purchase from AVSA a number of A319 and A320 model aircraft.
The Airbus Entities agreed to finance the purchase of certain
aircraft.
Pursuant to the Term Sheet, Northwest Airlines and the Airbus
Entities agree to modify the terms of the A319 PA:
(i) deductions from pre-delivery payments made under the
original A319 PA will be applied against the final
contract price Northwest Airlines will owe AVSA at the
time of the delivery of each of the A319 Aircraft in 2005;
(ii) delivery of certain A319 and A320 aircraft will be
deferred until 2009 through 2011;
(iii) Northwest Airlines has the option to cancel the deferred
A319 and A320 aircraft scheduled for future delivery,
provided that Northwest Airlines complies with certain
notice requirements;
(iv) a substantial portion of the pre-delivery payments held in
respect of the A319 PA will be transferred for application
under the parties' purchase agreement for A330 model
aircraft; and
(v) all option aircraft and roll-over option aircraft will be
cancelled.
AVSA will provide or procure financing for 85% of the price of
the relevant A319 Aircraft currently scheduled to be delivered to
Northwest Airlines in 2005.
The financing will be on more favorable terms and conditions than
the A319/A320 loans made prepetition because the Northwest
Airlines' obligation to repay the debt will be on a timetable
that is more advantageous to the Debtor.
A330-300 Purchase Agreement
Northwest Airlines and AVSA were parties to an Airbus A330-300
Purchase Agreement, as amended, which provided for the purchase
and delivery terms of A330 model aircraft. AVSA agreed to
provide financing for Northwest Airlines' purchase of A330
aircraft.
Under the Term Sheet, the parties have agreed to execute a new
A330 finance letter agreement, pursuant to which certain of the
Airbus Entities will provide or procure financing for 85% of the
price of up to 10 of the remaining A330 aircraft scheduled to be
delivered in 2006 and 2007. The financing is on terms similar to
the A330 aircraft finance letter agreement entered into
prepetition, with the changes as specified in the Term Sheet,
including cross-collateralization.
Admin. Claims Under A319 & A330 PAs
Northwest Airlines and the Airbus Entities also agree that, if
the Debtor's case were to be converted to a Chapter 7 liquidation
or if a liquidating Chapter 11 plan were confirmed, the Airbus
Entities' administrative claims under the assumed A319 PA and the
assumed A330 PA would be liquidated at the amount of pre-delivery
payments then held by the Airbus Entities under those contracts.
Since the Airbus Entities were in possession of the pre-delivery
payments on the Petition Date, Mr. Petrick says assumption of the
agreements will not effectively increase the administrative
burdens on the estate. That is, if Northwest Airlines had
elected to reject the contracts instead of assuming them, the
Airbus Entities would have had a secured rejection claim to the
extent of the payments in hand.
Agreements With Airbus Leasing
Before the Petition Date, Airbus Leasing subleased 10 Airbus A320
aircraft to Northwest Airlines. Under the Term Sheet, the
parties agree to amend the Subleases with respect to all 10 of
the A320 aircraft.
The key terms of the Amended Sublease Agreements provide, inter
alia, that:
(i) Northwest Airlines will pay, as an administrative expense,
$165,000 per month for each aircraft to Airbus Leasing,
which represents a substantial reduction in the Basic Rent
payable to Airbus Leasing under the Subleases;
(ii) Airbus Leasing will be entitled to an allowed general
unsecured claim against Northwest Airlines' bankruptcy
estate a currently unliquidated amount for damages arising
out of the modification of the Subleases and for potential
claims arising under the other operative documents; and
(iii) in the case of certain liquidation scenarios, Airbus
Leasing's administrative claim for breach is liquidated
and capped.
Agreement With Airbus Financial Services
Northwest Airlines and Airbus Financial Services, as agent to the
lenders, entered into an Amended and Restated Loan Agreement in
March 996. The Loan Agreement is secured by a collateral package
consisting of:
-- 46 DC-9 aircraft, some of which are parked and the
remainder of which are in revenue service;
-- two B757-200 aircraft; and
-- a large inventory of spare parts.
Pursuant to the Term Sheet:
(i) Northwest Airlines agrees to make all scheduled payments
of principal and interest in accordance with the
provisions of the Loan Agreement;
(ii) the Loan Agreement will be reinstated as part of Northwest
Airlines' plan of reorganization;
(iii) Northwest Airlines will grant the Airbus Entities
immediate replacement liens on all parts covered by
certain spare parts security agreements entered into by
the parties that Northwest Airlines acquires or has
acquired since the Petition Date;
(iv) Northwest Airlines will apply certain net proceeds from
the sale of collateral, if any is sold in excess of the
value of postpetition additions to collateral, to pay down
principal;
(v) if Northwest Airlines takes Airbus aircraft out of service
it will be obligated to prepay the loan in part;
(vi) the automatic stay will be lifted in case of default;
(vii) Northwest Airlines agrees that the Airbus Entities have
Section 1110 rights with respect to the portion of the
Term Loan Collateral consisting of spare parts acquired
after October 22, 1994; and
(vi) the Airbus Entities will forbear from attempting to
enforce Section 1110 rights and enforcing certain
covenants until one year after confirmation of Northwest
Airlines' plan of reorganization so long as Northwest
Airlines is not in default under the Loan Agreement.
The Airbus Entities have sought adequate protection of their
interest in the collateral. They have contended to Northwest
Airlines that the spare parts in the collateral pool acquired
after October 22, 1994, is covered by Section 1110(a)(3) of the
Bankruptcy Code and that the automatic stay has expired with
respect to the spare parts.
The modifications agreed to in the Term Sheet resolve the
adequate protection motions, Mr. Petrick says.
Agreements With Airbus Finance Company
Northwest Airlines and Airbus Finance Company, Ltd., as
administrative agent to the lenders, are parties to credit
agreements with respect to financing two Airbus A330-323
aircraft, with FAA Registration Nos. N810NW and N811NW.
Northwest Airlines has filed Section 1110(a) agreements with
respect to these two aircraft loans.
Pursuant to the Term Sheet, Northwest Airlines agrees that the
mortgage loans relating to the two A330s are oversecured by
valid, perfected first priority security interests, and the
financing agreements for the two A330s will be modified:
(i) Northwest Airlines will make all scheduled payments for
these aircraft in accordance with the provisions of the
credit agreements; and
(ii) Northwest Airlines will cause the mortgage loans to be
reinstated as part of Northwest Airlines' plan of
reorganization.
The financing agreements for the two A330s will be modified, in
part, to include provisions effecting cross-default and cross-
collateralization arrangements between these loans and other
financings provided by the Airbus Entities.
Northwest Wants Airbus Deal Approved
Northwest Airlines seeks the Court's authorization to:
1. obtain secured postpetition financing from the Airbus
Entities and grant security interests and liens with
respect to the loan;
2. assume the A319 PA, the A330 PA, and the Amended Sublease
Agreements and implement the procedures provided for in
the Term Sheet;
3. utilize estate property to purchase and lease Airbus
aircraft pursuant to the Modified Airbus Agreements;
4. comply with and implement all aspects of the Term Sheet;
5. file the Term Sheet and proposed financing agreements
under seal, in accordance with the confidentiality
provision of the Term Sheet.
Mr. Petrick notes that the postpetition financing has been
structured in a way to maximize Northwest Airlines' financial
flexibility going forward. It does not confer a general
superpriority right of payment. Although cross-collateralization
is contemplated, it is limited to the collateral already pledged,
or to be pledged, to the Airbus Entities. In all events, the
Airbus Entities would have insisted on a covenant prohibiting
junior liens on its postpetition collateral.
Because of the high loan-to-value ratio contemplated by the
postpetition financing, it is unlikely that any other lender
would find a second lien to be of any value. No other property
of Northwest Airlines will be pledged to secure the postpetition
financing. Thus, Northwest Airlines' unencumbered assets will
remain unencumbered and potentially available to secure other
financing.
Mr. Petrick adds that the Term Sheet and the proposed financing
documents contain highly sensitive information, which the Debtor
and the Airbus Entities deem proprietary and confidential.
Integrated Package
The Term Sheet was negotiated and entered into as an integrated
package. The consideration being provided by each party is not
severable, Mr. Petrick tells the Court.
According to Mr. Petrick, absent the integrated agreements
embodied in the Term Sheet, Northwest Airlines would be exposed
to a number of risks:
(a) It would not be able to perform its obligations on the
aircraft purchase agreements, which are due in December
2005 and January 2006 and thereafter. This would result
either in a need to reject the agreements or in the Airbus
Entities seeking to modify the stay so as to terminate
them. Either outcome would result in the loss of access
to needed aircraft deliveries, the exposure to a
substantial claim by the Airbus Entities, and the Airbus
Entities' retention of over $100,000,000 in pre-delivery
Payments;
(b) The Airbus Entities would be able to exercise Section
1110 rights to repossess 10 aircraft currently in revenue
service that at the moment enjoy only a very short term
consensual extension;
(c) The Airbus Entities would demand an adequate protection
order in respect of the Term Loan Collateral, which
includes a large portion of Northwest Airlines' spare
parts inventory.
Northwest Airlines Corporation -- http://www.nwa.com/-- is
the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and
approximately 1,400 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 Company and 12 affiliates filed for chapter
11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-
17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at
Cadwalader, Wickersham & Taft LLP in New York, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in
Washington represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they listed $14.4 billion in total assets and $17.9
billion in total debts. (Northwest Airlines Bankruptcy News,
Issue No. 12; Bankruptcy Creditors' Service, Inc., 215/945-7000)
NORTHWEST AIRLINES: DOT Denies SkyTeam Anti-Trust Application
-------------------------------------------------------------
Northwest Airlines (OTC: NWACQ) expressed its disappointment and
surprise at the U.S. Department of Transportation's decision to
deny the application of a group of airlines in the SkyTeam
alliance for international anti-trust immunity on trans-Atlantic
routes.
The application, filed in September of 2004, sought to bridge the
ATI already held by Air France, Alitalia, CSA Czech Airlines and
Delta Air Lines, with the ATI already held by KLM Royal Dutch
Airlines and Northwest Airlines.
"We are truly surprised and disappointed by the DOT's actions,"
said Andrea Fischer Newman, senior vice president of government
affairs. "The decision is inconsistent with all of the DOT's
prior decisions wherein they have consistently granted ATI to
other global alliances, especially when, as here, the proposal is
pro-competitive and will greatly benefit consumers."
"Northwest's request was simple. Today, there are three global
alliances. Members of one alliance, SkyTeam, asked the DOT for
ATI for the integration of their intra-alliance operations.
Approval is critical for SkyTeam to provide maximum benefits to
both U.S. consumers and the participating airlines. A more fully
integrated SkyTeam offers significant advantages. Major
corporations, which are sophisticated consumers of airline
services, support SkyTeam's request. These companies, including
General Motors, General Mills, Ford, and FedEx, say that an
expanded SkyTeam will improve flight schedules, reduce travel
times, add new service and lower fares," Fischer Newman continued.
"[Wednes]day's DOT decision places these benefits in jeopardy, and
does not help Northwest's efforts to emerge from bankruptcy. It
is also inconsistent with the DOT's recent efforts to obtain 'open
skies' between the U.S. and European Union, as well as
liberalization of airline ownership and control issues," she
added.
"At a time when the Administration is calling for further
liberalization and consolidation, it is hard to see how this
decision is consistent with that policy."
Northwest intends to respond to the DOT's show cause order and
will review all of the company's options as it moves forward.
The SkyTeam alliance of airlines, which includes Aeromexico, Air
France, Alitalia, Continental Airlines, CSA Czech Airlines, Delta
Air Lines, KLM, Korean Air and Northwest Airlines, serves over 35
million passengers annually.
Northwest Airlines Corporation -- http://www.nwa.com/-- is the
world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and
approximately 1,400 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 Company and 12 affiliates filed for chapter
11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-
17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at
Cadwalader, Wickersham & Taft LLP in New York, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in
Washington represent the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, they
listed $14.4 billion in total assets and $17.9 billion in total
debts.
OFFICEMAX INC: Moody's Downgrades Corporate Family Rating to Ba2
----------------------------------------------------------------
Moody's Investors Service downgraded the corporate family and
senior unsecured ratings of OfficeMax, Inc., to Ba2 from Ba1, and
left these ratings on review for further possible downgrade,
confirmed the Baa2 rating on the senior notes due 2013, and
affirmed the SGL-2 speculative grade liquidity rating.
Ratings downgraded and left on review for possible further
downgrade:
* Corporate family rating to Ba2 from Ba1; and
* Senior unsecured notes, debentures and MTN's to Ba2 from Ba1.
Rating confirmed:
* Senior notes due 2013 at Baa2.
Rating affirmed:
* Speculative grade liquidity rating of SGL-2.
Ratings withdrawn:
* Senior shelf at (P) Ba1; and
* Preferred shelf at (P) Ba3.
The ratings downgrade is due to OMX's weak operating performance
for the first nine months of 2005, particularly in its Retail
segment, which is barely profitable, leading to a negative free
cash flow profile and increased leverage despite the continued
reductions in debt. Debt/EBITDA (assuming Moody's standard
analytic adjustments) has increased to 4.2x on an LTM basis as a
result of the weakened operating performance, which when combined
with reduced margins and operating cash flow results in credit
metrics that are inconsistent with a Ba1 corporate family rating.
The confirmation of the Baa2 rating on the senior notes, which
have been paid down to roughly $17 million, reflects the 106%
collateral in the form of the pledge of Aa2 rated securities which
are held by a trustee.
Moody's ongoing rating review will focus on OMX's continued
attempts to re-generate retail momentum and improve operating
performance, which will begin with an evaluation of fourth quarter
performance and continue with a review of the company's prospects
for 2006. Particular attention will be paid to EBIT margin and
EBITDA generation, with clear and definite progress toward an
EBITDA level of roughly $400 million for 2006 necessary to hold
the ratings at the Ba2 level. If Moody's concludes that
insufficient progress is being made to achieve this level of
EBITDA, a further one notch downgrade is likely.
The SGL-2 speculative grade liquidity rating represents good
liquidity, and reflects OfficeMax's ability to largely self-fund
its working capital needs over the next twelve months, though
small drawings on the credit facility may be necessary to briefly
fund peak needs. The rating also considers the company's ability
to generate free cash flow, which has been adversely affected by
one time charges the first nine months of 2005, and the additional
comfort of good availability on its $500 million asset-based bank
credit facility (which matures in June 2010). Covenants are not
applicable until availability falls below $75 million, which
Office Max comfortably exceeds.
OfficeMax Incorporated, headquartered in Itasca, Illinois, is a
major retailer and wholesaler of office supplies with 925 stores.
REFCO INC: Committee Can Hire Houlihan Lokey on Interim Basis
-------------------------------------------------------------
As reported in the Troubled Company Reporter on Nov. 29, 2005, the
Official Committee of Unsecured Creditors of Refco Inc., and its
debtor-affiliates sought the U.S. Bankruptcy Court for the
Southern District of New York's authority to retain Houlihan Lokey
Howard & Zukin Capital, Inc., as its investment banker, effective
as of Oct. 28, 2005.
Pursuant to an Engagement Letter with the Committee:
(1) Houlihan will be paid $250,000 per month, for the first
two months of the engagement and $150,000 per month for
each subsequent month. The first payment of $250,000 will
be due immediately upon the Court's approval of Houlihan's
retention. Fifty percent of any Monthly Fees paid after
the ninth Monthly Fee will be credited against the
transaction fee in an aggregate amount not to exceed the
transaction fee. In the event that Houlihan receives in
cash the Transaction Fee prior to the ninth month of its
engagement, any Monthly Fee payable to Houlihan after the
ninth month will be reduced from $150,000 to $75,000 until
the aggregate amount of those credits equal the
Transaction Fee.
(2) Houlihan will be paid an additional one-time fee of
$2,000,000, which will be payable in cash on the
consummation of any Transaction, whether that
consummation occurs during Houlihan's engagement or
during the 12 months following the effective date of the
termination of its engagement.
(3) In the event that:
(i) Houlihan continues to perform professional
services in the Debtors' cases after six months
from the engagement's effective date, and at each
six-month interval thereafter that Houlihan
continues to provide services; or
(ii) Houlihan is asked to provide services beyond those
called for in the Engagement Letter,
Houlihan will be entitled to seek an additional or
increased Transaction Fee. The Committee and Houlihan
will negotiate in good faith regarding the possible
additional or increased Transaction Fee.
(4) Houlihan and its affiliates will be indemnified and held
harmless by the Debtors to the fullest extent lawful,
from and against any and all losses and claims. In
addition, the Indemnified Parties will be reimbursed for
any legal or other expenses reasonably incurred by them
at the time those expenses are incurred. However, there
will be no liability to the Debtors under the indemnity
and reimbursement agreement for any loss or claim that
is finally judicially determined to have resulted
primarily from the willful misconduct or self-dealing
of any Indemnified Party.
* * *
The Court authorizes, on an interim basis, the Official Committee
of Unsecured Creditors to retain Houlihan Lokey Howard & Zukin
Capital, Inc., as its investment bankers, nunc pro tunc to
October 28, 2005.
Subject to the Court's ruling at a final hearing, the Honorable
Robert D. Drain of the Southern District of New York Bankruptcy
Court finds that the proposed $2,000,000 transaction fee and the
monthly fee payment are "reasonable" as defined in Section 328(a)
of the Bankruptcy Code.
Headquartered in New York, New York, Refco Inc. --
http://www.refco.com/-- is a diversified financial services
organization with operations in 14 countries and an extensive
global institutional and retail client base. Refco's worldwide
subsidiaries are members of principal U.S. and international
exchanges, and are among the most active members of futures
exchanges in Chicago, New York, London and Singapore. In addition
to its futures brokerage activities, Refco is a major broker of
cash market products, including foreign exchange, foreign exchange
options, government securities, domestic and international
equities, emerging market debt, and OTC financial and commodity
products. Refco is one of the largest global clearing firms for
derivatives.
The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts. Refco
reported $16.5 billion in assets and $16.8 billion in debts to the
Bankruptcy Court on the first day of its chapter 11 cases. (Refco
Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
REFCO INC: Court Allows Panel to File Avoidance Action Against RSL
------------------------------------------------------------------
The Official Committee of Unsecured Creditors seeks the U.S.
Bankruptcy Court for the Southern District of New York's authority
to bring an avoidance action, on behalf of Debtor Refco Capital
Markets, Ltd., against non-Debtor Refco Securities LLC.
Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in
New York, relates that after the Petition Date, (i) approximately
$117,000,000 of securities were transferred from RCM Euroclear
Account Nos. 11982 and 21939 to Euroclear Account No. 99909, an
account established in the name of RSL; and (ii) some or all of
the RCM Securities were subsequently liquidated.
The Transfers are:
Securities Transferred Securities Transferred
Date of From RCM Acct. 11982 From RMC Acct. 21939
Transfer To RSL Acct. 99909 To RSL Acct. 99909
-------- ---------------------- ----------------------
10/31/2005 $1,847,874
10/31/2005 $4,747,361
10/31/2005 $1,663,556
10/31/2005 $3,115,364
10/31/2005 $4,973,611
10/31/2005 $4,973,611
10/31/2005 $7,317,322
10/31/2005 $10,885,337
10/31/2005 $9,778,128
10/31/2005 $4,916,520
10/31/2005 $14,773,983
10/31/2005 $24,556,639
11/01/2005 $6,527,398
-------------------- -----------------------
TOTAL $54,218,684 $62,894,439
==================== =======================
Since the dates on which the Transfer were made, the Committee
has repeatedly demanded the return of the RCM Assets to the RCM
Euroclear Account or, in the alternative, to an RCM segregated
account.
Mr. Despins states that the Committee's demand for the return of
the RCM Assets was most recently asserted on December 12, 2005,
at a Chambers Conference before the Honorable Robert D. Drain of
the Southern District of New York Bankruptcy Court.
Despite conceding the impropriety of the Transfer and that the
Transfers constitute postpetition transfers subject to avoidance
under Section 549 of the Bankruptcy Code, Refco Inc., and its
debtor-affiliates have not yet complied with the Committee's
demand, Mr. Despins tells the Court.
The Committee's counsel has been advised by the Debtors' counsel
that the Debtors intend to submit an order directing that the RCM
Assets be returned to RCM, but that the Securities and Exchange
Commission, the regulatory body overseeing RSL, insisted that any
order be without prejudice to anyone's rights to seek the return
of funds to RSL.
Mr. Despins argues that any order entered has to be with
prejudice to the ability of any party to seek the return of the
funds to RSL unless it can be shown that the Transfers did not
violate Section 549 of the Bankruptcy Code.
In the event that the RCM Assets are again transferred or
otherwise disposed of, it will be difficult, if not impossible,
for RCM and its creditors to recover the RCM Assets, Mr. Despins
points out.
The Committee further asks the Court to:
(a) find, on a preliminary basis, that the Transfers are
avoidable pursuant to Section 549 of the Bankruptcy Code;
and
(b) direct, pursuant to Rule 7064 of the Federal Rules of
Bankruptcy Procedure, the immediate turnover of the RCM
Assets to an RCM segregated account, to be held in escrow
pending the entry of a final order resolving the Avoidance
Action.
* * *
Judge Drain grants the Committee's request. The Debtors will
cause RSL to promptly return the securities that were included in
the Transfers and the proceeds from subsequent sales of any of
those securities to the accounts in which they were held as of
the Petition Date, without prejudice to the rights of all parties
who claim any interest in or entitlement to the Returned Assets.
Judge Drain rules that the Returned Assets will be retained in
the accounts in which they were held as of the Petition Date and
to which they are to be returned through June 2006, unless the
Court, on appropriate application and with notices to all
parties-in-interest enters a further order to change that period;
provided, however, that any cash or cash equivalents included in
the Returned Assets may be transferred from the Euroclear
accounts only to an account at a U.S. Trustee-approved depository
institution, and may be converted into U.S. dollars in
connection with that transfer, but if and only if:
-- the account to which cash or cash equivalents are
transferred is separate from any other account;
-- the cash transferred is fully traceable; and
-- the cash is held in that account for the balance of the
six-month period remaining at the time of that transfer
unless the Court enters an order to shorten that period.
Headquartered in New York, New York, Refco Inc. --
http://www.refco.com/-- is a diversified financial services
organization with operations in 14 countries and an extensive
global institutional and retail client base. Refco's worldwide
subsidiaries are members of principal U.S. and international
exchanges, and are among the most active members of futures
exchanges in Chicago, New York, London and Singapore. In addition
to its futures brokerage activities, Refco is a major broker of
cash market products, including foreign exchange, foreign exchange
options, government securities, domestic and international
equities, emerging market debt, and OTC financial and commodity
products. Refco is one of the largest global clearing firms for
derivatives.
The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts. Refco
reported $16.5 billion in assets and $16.8 billion in debts to the
Bankruptcy Court on the first day of its chapter 11 cases. (Refco
Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
REFCO INC: VR Global Wants Court to Annul Automatic Stay
--------------------------------------------------------
On November 14, 2005, VR Global Partners, L.P., Paton Holdings
Ltd., VR Capital Group Ltd., and VR Argentina Recovery Fund Ltd.
filed a complaint in the Supreme Court of the State of New York,
County of New York against non-debtor Refco Securities LLC. The
VR Entities sought the return of at least $500,000,000 in
distressed debt and emerging market securities held by Refco
Securities on their behalf.
Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Feld LLP, in
New York, tells the U.S. Bankruptcy Court for the Southern
District of New York that managing the VR Assets involves complex
risks, including risks as to currency and equity market
fluctuations and political and economic developments in emerging
market countries all over the globe. Refco Securities' refusal
to deliver the VR Assets to the VR Entities has cut-off the VR
Entities' ability to manage these risks, and has placed the VR
Entities, their investors and other innocent parties in serious
peril.
By this motion, the VR Entities ask the Court to:
(a) confirm that neither the commencement nor prosecution of
the Refco Securities Lawsuit, through and including,
enforcement of a final judgment, violates the automatic
stay of Section 362(a) of the Bankruptcy Code; or
(b) in the alternative, to the extent the Court finds that the
Automatic Stay is in fact implicated by the Refco
Securities Lawsuit, grant an annulment of the Automatic
Stay with respect to the Refco Securities Lawsuit.
Mr. Hodara contends that the automatic stay is inapplicable to
the Refco Securities Lawsuit because:
* Refco Securities is not a debtor or debtor-in-possession
and, therefore, not entitled to the protections of the
automatic stay; and
* the VR Assets are held in custodial accounts by Refco
Securities, not in accounts of any of Refco Inc., and its
debtor-affiliates.
Accordingly, the automatic stay should not, and does not, prevent
the Refco Securities Lawsuit from going forward in the State
Court.
Furthermore, Mr. Hodara asserts that "cause" exists for annulling
the automatic stay with respect to the Refco Securities Lawsuit:
* The relief sought in the Complaint will result in a complete
resolution of the VR Entities' claims for legal and
equitable relief against Refco Securities.
* The Refco Securities Lawsuit will neither materially
interfere with the administration of the Chapter 11 cases
nor result in any delay in distributions to creditors of the
Debtors' estates.
* The Refco Securities Lawsuit primarily involves third
parties. The plaintiffs and sole defendant in the Refco
Securities Lawsuit are non-Debtors.
* Pursuit of the Refco Securities Lawsuit in State Court will
neither prejudice the interests of creditors of the Debtors'
estates nor cause any delay in the administration of the
Chapter 11 Cases.
* The interests of judicial economy will be served by allowing
the Refco Securities Lawsuit to proceed in State Court.
* The balance of harms weighs heavily in favor of permitting
the Refco Securities Lawsuit to go forward. The VR Entities
have been, and will continue to be harmed should the
Automatic Stay remain in place because it will prevent the
VR Entities from managing the specialized risks attendant to
the VR Assets.
Debtors Object
The Debtors believe that the VR Entities' request should be
denied because it is stayed pursuant to a November 28, 2005,
Court Order staying "Estate Property Issue" proceedings.
The Debtors further contend that the request is procedurally
improper. Rule 7001 of the Federal Rules of Bankruptcy Procedure
governs adversary proceedings and requires parties seeking a
declaratory judgment to file a complaint. VR Global clearly asks
a declaratory judgment but does so by way of a motion instead of
a complaint.
Committee Responds
The Official Committee of Unsecured Creditors opposes VR
Entities' request solely on the ground that consideration of the
motion is premature because it implicates the Estate Property
Issues.
Disposition of the Motion would require the Court to determine
whether the Disputed Assets are property of the VR Entities,
Refco Securities, or one of the Debtors' estate.
"At this early stage of the Chapter 11 cases, it is impossible to
ascertain whether the property at issue is property of the
Debtors, and therefore, whether the automatic stay would be
implicated by prosecution of the State Court Action," Luc A.
Despins, Esq., at Milbank Tweed Hadley & McCloy LLP, in New York,
avers.
Thus, the Committee asks the Court to stay disposition of the
Motion until the other Estate Property Issues are decided.
VR Entities Talk Back
The plain language of the Adversary Stay Order demonstrates that
the stay applies only to the Refco Securities Lawsuit and not the
VR Entities' Motion, Mr. Hodara points out.
Nor is an adversary proceeding required to seek relief from an
automatic stay, Mr. Hodara continues. Rule 4001(a)(1) of the
Federal Rules of Bankruptcy Procedure specifically allows for a
party to seek relief from an automatic stay in the form of a
contested matter, without commencing an adversary proceeding.
Headquartered in New York, New York, Refco Inc. --
http://www.refco.com/-- is a diversified financial services
organization with operations in 14 countries and an extensive
global institutional and retail client base. Refco's worldwide
subsidiaries are members of principal U.S. and international
exchanges, and are among the most active members of futures
exchanges in Chicago, New York, London and Singapore. In addition
to its futures brokerage activities, Refco is a major broker of
cash market products, including foreign exchange, foreign exchange
options, government securities, domestic and international
equities, emerging market debt, and OTC financial and commodity
products. Refco is one of the largest global clearing firms for
derivatives.
The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts. Refco
reported $16.5 billion in assets and $16.8 billion in debts to the
Bankruptcy Court on the first day of its chapter 11 cases. (Refco
Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
RESIDENTIAL ACCREDIT: Fitch Affirms Low-B Rating on Class B Certs.
------------------------------------------------------------------
Fitch Ratings affirms these Residential Accredit Loan, Inc.
mortgage-pass through certificates:
Series 2001-QS18
-- Class A at 'AAA';
-- Class M-1 at 'AAA';
-- Class M-2 at 'AA';
-- Class M-3 at 'BBB';
-- Class B-1 at 'BB';
-- Class B-2 at 'B'.
The affirmation reflects subordination and deal performance in
line with expectations and affects approximately $39.6 million of
outstanding certificates.
As of the November 2005 distribution report, the pool factor for
the transaction is currently at 11% outstanding. Classes M-1,
M-2, M-3, B-1 and B-2 currently benefit from 19.67%, 12.07%,
8.68%, 4.45%, and 1.90% subordination, respectively. The
90+ delinquencies represent 7.14% of the mortgage pool, while
foreclosures and real estate owned represent 1.64% and 2.20%,
respectively. There are 310 loans remaining in the deal.
The underlying collateral for the series consists of conventional,
fully amortizing, 30-year fixed-rate, mortgage loans secured by
first liens on one- to four-family residential properties. The
master servicer is GMAC RFC which is rated 'RMS1' by Fitch.
Further information regarding current delinquency, loss, and
credit enhancement statistics is available on the Fitch Ratings
Web site at http://www.fitchratings.com/
ROMACORP INC: Files Plan and Disclosure Statement in Texas
----------------------------------------------------------
Romacorp, Inc., and its debtor-affiliates unveiled to the U.S.
Bankruptcy Court for the Northern District of Texas their Joint
Plan of Reorganization and accompanying Disclosure Statement.
Terms of the Plan
Under the Plan, Priority Non-Tax Claims will receive in full
satisfaction of their claim, cash equal to the allowed amount of
such claim.
On the Distribution date, holders of GE Capital Franchise
Financial Corp. Secured Claim and GECFFC Guaranty Claim will
receive, at the option of the Reorganized Debtors:
(i) a cash payment to cure any prepetition default,
reinstatement of the underlying secured debt,
reinstatement of all liens, and the Reorganized Debtors'
promise to perform its obligations under the original
credit agreement; or
(ii) payment of the secured claim in full, in cash.
Holders of Allowed Other Secured Claim will receive on the
distribution date, at the option of the Debtor:
(i) collateral securing the claim;
(ii) cash in an amount equal to the lesser of:
* the allowed amount of such claims with interest and
other fees; or
* the value of the collateral securing the claim;
(iii) a cash payment to cure any prepetition default,
reinstatement of the underlying secured debt,
reinstatement of all liens, and the Reorganized Debtors'
promise to perform its obligations under the original
credit agreement; or
(iv) other treatment that the Reorganized Debtors and holder of
the claim agree on.
Holders of Senior Noteholder Claims will receive on the
distribution date, a pro rata share of the Reorganized Restaurant
Holdings common stock.
Holders of General Unsecured Claims may elect to receive either:
(a) a pro rata share of the Reorganized Restaurant Holdings
Common Stock along with the holders of the Senior
Noteholder Claims, or
(b) cash equal to 20% of the claim and subject to a maximum
payout of $1 million to all allowed general unsecured
claims.
Should payment for holders who choose cash exceed $1 million,
distributions to holders who made the elections will be reduced
accordingly on a pro rata basis. General Unsecured Claim holders
may not split between cash and stock.
If the holder of a general unsecured claim:
* fail to decide between stock or cash, or
* splits its election between stock and cash,
the holder will be deemed to have chosen the cash option.
Holder of the Sentinel Management Fee Claim will, on the effective
date, be deemed to have waived and withdrawn its claim.
Intercompany claims will be reviewed by the Debtors and adjusted,
continued or discharged, as the Debtors deem appropriate.
Equity Interests in Restaurant Holdings will be deemed cancelled
and void in exchange for a payment of $200,000 to be shared pro
rata among the holders of the equity interests.
Legal, equitable and contractual rights of holders of Equity
Interests in the Subsidiary Debtors will remain unaltered.
Headquartered in Dallas, Texas, Romacorp, Inc., own and operate
the Tony Roma chain of restaurants with 22 company-owned stores,
86 domestic franchise stores and 118 international franchise
stores. The Debtor and seven of its affiliates filed for chapter
11 protection on November 6, 2005 (Bankr. N.D. Tex. Case No.
05-86818). Peter S. Goodman, Esq., Jason S. Brookner, Esq.,
Monica S. Blacker, Esq., and Matthew D. Wilcox, Esq., at Andrews
Kurth LLP represent the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, they
listed $20,769,000 in total assets and $76,309,000 in total debts.
ROMACORP INC: Court Approves Andrews Kurth as Bankruptcy Counsel
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas,
Dallas Division, authorized Romacorp, Inc., and its debtor-
affiliates to employ Andrews Kurth LLP as their bankruptcy
counsel, nunc pro tunc to Nov. 6, 2005.
Andrews Kurth will:
(a) advise the Debtors with respect to their powers and duties
as debtors-in-possession in the continued operations of
their businesses and management of their properties;
(b) take all necessary action to protect and preserve the
Debtors' estates, including the prosecution of action on
behalf of the Debtors, the defense of any actions
commenced against the Debtors, the negotiation of disputes
in which the Debtors are involved and the preparation of
objections to claims filed against the estates;
(c) prepare on behalf of the Debtors, as debtors-in-
possession, all necessary motions, applications, answers,
orders, reports, and papers in connection with and
required for the orderly administration of the estates;
(d) negotiate and prepare on behalf of the Debtors a
disclosure statement, plan of reorganization and all
related documents; and
(e) perform any and all other legal services for the Debtors
in connection with their chapter 11 cases that the Debtors
determine are necessary and appropriate.
Jason S. Brookner, Esq., a partner at Andrews Kurth LLP, disclosed
that the Firm received a $125,000 retainer. The Firm's
professionals bill:
Professional Hourly Rate
------------ -----------
Peter S. Goodman, Esq. $595
Jason S. Brookner, Esq. $450
Monica S. Blacker, Esq. $380
Matthew D. Wilcox, Esq. $235
Designation Hourly Rate
----------- -----------
Attorneys $180 - $695
Paralegals $85 - $205
The Debtors believe that Andrews Kurth LLP is disinterested as
that term is defined in Section 101(14) of the U.S. Bankruptcy
Code.
Andrews Kurth LLP -- http://www.akllp.com/-- is a full-service
law firm.
Headquartered in Dallas, Texas, Romacorp, Inc., own and operate
the Tony Roma chain of restaurants with 22 company-owned stores,
86 domestic franchise stores and 118 international franchise
stores. The Debtor and seven of its affiliates filed for chapter
11 protection on November 6, 2005 (Bankr. N.D. Tex. Case No.
05-86818). When the Debtors filed for protection from their
creditors, they listed $20,769,000 in total assets and $76,309,000
in total debts.
ROMACORP INC: Garden City Group Approved as Noticing Agent
----------------------------------------------------------
The Honorable Barbara J. Houser of the U.S. Bankruptcy Court for
the Northern District of Texas, Dallas Division, approved
Romacorp, Inc., and its debtor-affiliates' request to employ The
Garden City Group, Inc., as their notice, claims and balloting
agent.
Garden City Group will:
(a) prepare and serve required notices in the Debtors' cases;
(b) receive proofs of claim at a post office box, if directed
to do so by the Court, and maintain copies of all proofs
of claim and proofs of interest filed in the Debtors'
cases;
(c) maintain official claims registers in the Debtors' cases
by docketing all proofs of claim and proofs of interest in
a claims database;
(d) implement necessary security measures to ensure the
completeness and integrity of the claims registers;
(e) transmit to the Clerk's Office a copy of the claims
registers in a monthly basis unless requested more or less
frequently by the Clerk's Office;
(f) maintain an up-to-date mailing list for all entities that
have filed proofs of claim or proofs of interest and make
that list available upon request to the Clerk's Office or
any party-in-interest;
(g) provide access to the public for examination of copies of
the proofs of claim or proofs of interest filed in the
Debtors' cases without charge during regular business
hours;
(h) record all transfers of claims pursuant to Bankruptcy Rule
3001(e) and provide a notice of those transfers;
(i) comply with applicable federal, state, municipal and local
statutes, ordinances, rules, regulations, orders and other
requirements;
(j) provide temporary employees to process claims as
necessary;
(k) provide a website to provide information about the
Debtors' cases;
(l) provide a toll-free "800" number to provide information
about the Debtors' cases and receive questions about the
Debtors' case;
(m) promptly comply with further conditions and requirements
as the Clerk's Office or the Court may at any time
prescribe;
(n) provide other claims processing, noticing, balloting and
related administrative services as may be requested from
time to time by the Debtors; and
(o) act as balloting agent, which may include some or all of
the these services:
1. print of ballots including the printing of creditor and
shareholder specific ballots;
2. prepare voting reports by plan class, creditor, or
shareholder and amount for review and approval by the
client and its counsel;
3. coordinate the mailing of ballots, disclosure statement
and plan of reorganization to all voting and non-voting
parties and provide affidavit of service; and
4. receive ballots at a post office box, inspecting
ballots for conformity to voting procedures, date
stamping and numbering ballots consecutively, and
tabulating and certifying the results.
Neil L. Zola, the executive vice president and chief operating
officer of The Garden City Group, Inc., disclosed that the Firm
received a $5,000 retainer.
The Debtors believe that The Garden City Group, Inc., is
disinterested as that term is defined in Section 101(14) of the
U.S. Bankruptcy Code.
The Garden City Group, Inc. -- http://www.gardencitygroup.com/--
specializes in noticing, claims processing, balloting and other
administrative tasks in reorganization cases.
Headquartered in Dallas, Texas, Romacorp, Inc., own and operate
the Tony Roma chain of restaurants with 22 company-owned stores,
86 domestic franchise stores and 118 international franchise
stores. The Debtor and seven of its affiliates filed for chapter
11 protection on November 6, 2005 (Bankr. N.D. Tex. Case No. 05-
86818). Peter S. Goodman, Esq., Jason S. Brookner, Esq., Monica
S. Blacker, Esq., and Matthew D. Wilcox, Esq., at Andrews Kurth
LLP represent the Debtors in their restructuring efforts. When
the Debtors filed for protection from their creditors, they listed
$20,769,000 in total assets and $76,309,000 in total debts.
SAINT VINCENTS: Parties Balk at $350MM GECC Replacement Financing
-----------------------------------------------------------------
As previously reported in the Troubled Company Reporter on
Nov. 22, 2005, Saint Vincents Catholic Medical Centers of New York
and its debtor-affiliates asked the U.S. Bankruptcy Court for the
Southern District of New York for permission to enter into as
commitment letter for up to $350 million in postpetition financing
with General Electric Capital Corporation.
Objections
A. RCG
RCG Longview II, LP, is a secured creditor of the Debtors
pursuant to:
(i) a subordinate promissory note, dated May 18, 2005, with a
$10,000,000 principal amount and
(ii) a subordinate promissory note, dated June 27, 2005, with a
$6,000,000 principal amount.
The Notes are secured by junior, perfected lien in and
security interest by three properties located in Manhattan -- the
West Village Properties -- and subordinate assignment of all
leases of the Properties.
As of December 15, 2005, the Debtors owe RCG $18,125,003
consisting of $16,000,000 in principal, $1,992,000 in accrued
interest, $99,600 in late fees, and $32,403 in legal fees.
Interest and late fees continue to accrue at a per diem rate of
$11,200, Fred B. Ringel, Esq., at Greene Genovese & Gluck, P.C.,
in New York, relates.
On June 27, 2005, the Dormitory Authority of the State of New
York executed two separate Subordination of Mortgage documents,
expressly subordinating its mortgages on the Properties to the
"lien, terms, covenants and conditions of" RCG's Loan A Mortgage
and Loan B Mortgage on the Properties.
The Debtors have specified in the GE DIP Motion that they intend
to use the proceeds of the GE Capital DIP Facility to, inter
alia, "repay the outstanding DASNY prepetition secured debt."
The request makes no provision to implement the Subordinations of
the Mortgages with respect to this payment, Mr. Ringel notes.
Mr. Ringel argues that, by virtue of the Subordination of
Mortgages, the DASNY's interest in the Properties is junior and
subordinate to that of RCG. Accordingly, the DASNY cannot
receive any funds in connection with its security interest in the
Properties unless and until the RCG claim is paid in full.
Pursuant to Section 510(a) of the Bankruptcy Code, RCG asks the
Court to enforce the Subordination of Mortgages and direct the
Debtors to pay the $18,125,003, plus additional accruals to the
day of payment, to RCG rather than the DASNY. At the very least,
RCG wants the amount withheld from any distribution to the DASNY
and placed in escrow pending further adjudication as to the
relative rights of RCG and the DASNY.
B. City of New York
Michael A. Cardozo, Esq., Corporation Counsel of the City of New
York, explains that, every year, the City sells thousands of
unpaid real estate tax liens in securitized sales of tax liens to
various trusts set up by the City for that purpose. The unpaid
prepetition real estate tax liens are sold to The Bank of New
York as Collateral Agent and Custodian for the trusts, as part of
a much larger portfolio of delinquent real estate tax liens.
After acquiring the tax liens, the trusts and the indenture
trustee retain JER Revenue Services as a servicing agent to
process payments and make collections on the tax liens. The
proceeds obtained by the servicing agent go first to paying off
the bonds and then, after the bonds are retired, the proceeds go
to the City as the owner of the trusts.
The GE Capital DIP Facility Primed Creditors List proposes to
prime certain tax liens held by JER concerning the Debtors'
property at 555 Avenue of the Americas, in New York City.
Mr. Cardozo argues that the City's liens for unpaid real estate,
water, and sewer and emergency repair liens cannot be primed. He
notes that any statutory City liens have first priority under the
Administrative Code of the City of New York, including but not
limited to:
(a) the emergency repair liens referred to on the List;
(b) the liens for unpaid real estate taxes, water and sewer
charges or any Health Department liens, on any of the
properties pledged to General Electric Capital
Corporation; and
(c) the tax liens for unpaid real estate taxes and water and
sewer charges, if any, sold by the City to any of its
trusts and the tax certificates issued, to the extent the
tax liens remain unsatisfied.
Mr. Cardozo adds that to the extent that there are any
unsatisfied City liens or tax liens sold by the City entitled to
first priority, these liens cannot be primed.
He asserts that the Debtors cannot prime a lis pendens filed by
the City on November 24, 1999, in connection with its Crown
Hights 4th Amendment Urban Renewal Plan in action pending in
Kings County Supreme Court. That property, which consists of a
vacant lot previously owned by St. Mary's Hospital of Brooklyn
was taken by the City in condemnation before the Petition Date.
The title to the property vested in the City prepetition, by
Order signed on January 27, 2000.
The City further opposes to the Debtors' proposal to prime the
mortgage held by Primary Care Development Corporation on the St.
Dominic Facility, and related UCC filings naming the New York
City Industrial Development Agency as a secured party with
respect to the Facility.
Mr. Cardozo points out that the St. Dominic Facility is subject
to a lease-leaseback transaction financed by DASNY bonds with a
principal balance of approximately $6,200,000 as of June 30,
2005. The City of New York is the ultimate obligor under the
bonds. The Debtors leased the St. Dominic Family Health Center
to the DASNY, which subsequently leased it to the City, which in
turn, subleased the property to Primary Care. Primary Care then
entered into an Operating Lease Agreement dated as of October 1,
1996, with the Debtors.
The amount due by Debtors under the Operating Lease is equal to
the debt service under the St. Dominic bonds. Defaults under the
Operating Lease by the Debtors and Primary Care ultimately affect
the City, which must repay the debt under the St. Dominic Bonds
to the DASNY. It is for this reason that the UCC filings list
the IDA as a secured party, Mr. Cardozo explains.
C. Citicorp
Citicorp Leasing, Inc., is a secured creditor of the Debtors
pursuant to various financing equipment leases including:
(a) a master lease agreement pursuant to which Saint Vincent's
Medical Center of Richmond financed the acquisition of a
Honeywell Energy Management System; and
(b) master leases that Citicorp acquired from Fleet Capital
Leasing and Fleet Capital Leasing Healthcare Funding. The
Equipment Leases are secured by, among other things, the
Honeywell Energy Management System, a number of
ambulances, and various medical equipment.
Gerald C. Bender, Esq., at Stroock & Stroock & Lavan LLP, in New
York, tells the Court that as of the Petition Date, and pursuant
to the Equipment Leases, the Debtors owed Citicorp in excess of
$1,300,000.
Citicorp does not consent to being primed and the subordination
of its liens. Mr. Bender says that subordinating the Citicorp
liens would be inappropriate and prejudicial to Citicorp.
The Debtors cannot satisfy the mandates of Section 364(d)(1) of
the Bankruptcy Code, Mr. Bender argues. Thus, the Debtors could
continue with their existing DIP financing or obtain postpetition
financing from a different lender without the need to prime
existing liens. Allowing the Debtors to prime existing liens is
not warranted and clearly an abuse of process, he continues.
The Debtors' asserted equity cushion of at least $100,000,000
obviates any need for priming the existing liens and should
provide the DIP Lender Parties with more than adequate protection
in the event the DIP Lender Parties are granted junior. The
Debtors should be required to prove that there is sufficient
equity in Citicorp's Collateral to justify their request, Mr.
Bender asserts.
D. Creditors Committee
Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, in New York,
tells the Court that the Official Committee of Unsecured
Creditors has negotiated a Settlement and Consent Agreement with
the Debtors concerning DIP Financing, which puts into place
certain requirements, milestones, and covenants relating to,
among other things, the Debtors' use of proceeds of the proposed
replacement financing. The Settlement Agreement will be
delivered to the Court for approval.
In light of the Settlement Agreement, the Creditors Committee
consents to the Debtors' procurement of the replacement
financing, provided that the terms of the new DIP financing are
reasonable and do not unnecessarily prejudice the general
unsecured creditors and other parties-in-interest.
The Creditors Committee notes that the Debtors have not met their
burden under Section 364(d)(1) of the Bankruptcy Code to prime
existing liens. The Committee believes that it is possible that
the Debtors could obtain postpetition financing from a different
lender without the need to prime existing liens.
It is unclear to what extent, if any, that the Debtors have
investigated the validity or avoidability of the liens proposed
to be primed, Mr. Bunin tells Judge Beatty. To the extent these
liens are subject to avoidance, the Debtors' creditors will be
prejudiced if the liens are primed under the GE Capital DIP
Facility because any of these liens avoided for the benefit of
the estates will then be subordinate to the terms granted under
the DIP Facility.
Mr. Bunin also argues that the Debtors' asserted equity cushion
of $100,00,000 obviates any need for priming the existing liens
and would provide the DIP Lender Parties with more than adequate
protection in the event they are granted junior liens.
Moreover, the Creditors Committee seeks clarification that the
benefits of avoidance recoveries will not be impaired and will be
fully preserved for all creditors under Section 551 of the
Bankruptcy Code. The Committee insists that the collateral and
the superpriority administrative claim being granted to the DIP
Lender Parties should not include or be payable from actions or
claims under Chapter 5 of the Bankruptcy Code.
The Creditors Committee has investigated the liens of RCG and
intends to file a complaint to avoid the liens. The Committee
has also investigated the liens of Sun Life Assurance Company of
Canada and Sun Life Assurance Company of Canada, and believes
issues exist with respect to Sun Life's liens. Mr. Bunin asserts
that, to the extent these and any other liens are avoidable for
the benefit of the Debtors' estates, the general unsecured
creditors should not be prejudiced by virtue of a priming lien
granted to the DIP Lender Parties.
The Creditors Committee has not completed its due diligence
regarding the DASNY's prepetition secured claims. As a result,
the Committee objects to the payment of the DASNY's prepetition
secured claims unless and until the Committee concludes that the
claims are fully secured and not subject to challenge.
E. DOH
Neil Benjamin, assistant director, Division of Health Facility
Planning of the Office of Health Systems Management, New York
State Department of Health, tells the Court that under New York
State Law, prior to refinancing existing capital debt, a hospital
is required to submit the refinancing agreements to the DOH for
review and approval. In accordance with Section 1396 of The
Public Health and Welfare Code, a failure to obtain the approval
can result in the DOH not recognizing the debt and the interest
due for purposes of calculating rates or reimbursement paid for
care provided to beneficiaries of the Medicaid program.
The DOH and the Debtors have had ongoing discussions regarding
the proposed GE Capital DIP Facility. The DOH anticipates that
approval will ultimately be given, however, it is still necessary
to resolve certain conditions prior to the approval being
granted.
In the event the conditions are not resolve prior to the hearing
on the GE Capital DIP Facility, the DOH requests that the Final
Order require that the Debtors obtain DOH approval of the DIP
Facility prior to its closing.
F. Aptium
Aptium W. New York, Inc., formerly known as Comprehensive Cancer
Corporation of New York, and the Debtors have exchanged drafts of
a proposed Intercreditor Agreement and an Acknowledgment of the
Control and Implementation Agreements. According to Philip M.
Gassel, Esq., at Epstein Becker & Green, P.C., in Washington,
D.C., Aptium anticipates reaching an accord with the Debtors on
substantially the terms incorporated in the Agreements.
To the extent a consensual resolution has not been reached before
the final hearing on the proposed GE DIP Financing, Aptium
reserves its rights to object to the proposed DIP Financing and
seek adequate protection of its interests.
G. Sun Life
Sun Life Assurance Company of Canada and Sun Life Assurance
Company of Canada (U.S.) do not object to the proposed GE Capital
DIP Facility. However, Sun Life notes that under the RCG
Subordination Agreements, RCG's right to payment of the RCG Claim
is subordinate to Sun Life's right to payment in full of the Sun
Life Claim.
Accordingly, Sun Life reserves all of its legal and equitable
rights, including without limitation, its right to payment of the
Sun Life Claim prior to payment in whole or in part to RCG on
account of the RCG Claim.
H. More Objections
NY Dialysis Services, Inc., asserts that GE Capital's priming
liens impair its set-off rights and secured claims pursuant to
Section 506(a) of the Bankruptcy Code.
Banc America Leasing Corp. and Siemens Medical Solutions USA,
Inc., lease equipment to the Debtors. They argue that GE Capital
should not prime security interests in leased equipment.
Commerce Bank N.A. provided a $35,000,000 DIP Financing facility
to the Debtors. Commerce Bank asserts that the superpriority
claim it has pursuant to the final Commerce DIP financing order
is not subordinate to GE Capital's superpriority claim once HFG
is paid in full.
Primary Care argues that the definitions of Senior Permitted
Liens and Permitted Encumbrances in the GE Capital Credit
Agreement and proposed Order are not consistent to absolutely
preserve PCDC's senior lien position.
Under a "lease-leaseback transaction," the Debtors leased the St.
Dominic Family Health Center to the Dormitory Authority of the
State of New York, which subsequently leased the property to New
York City. The City then subleased the property to Primary Care.
Primary Care said in previous court filings that the Operating
Lease requires the Debtors to provide monthly payments to Primary
Care for $47,244.
DASNY Reserves Right with Respect to GECC Loan
The Dormitory Authority of the State of New York notes that the
GE DIP Motion contemplates a consensual arrangement for an
infusion of cash to the Debtors which will be used to fund the
Debtors' obligations owing to the DASNY, including, but not
limited to, certain mortgage notes which will be applied to the
redemption of certain bond obligations and associated costs --
the DASNY Take-Out.
The Debtors' request also contemplates that the DASNY Take-Out
will be made in conjunction with a contemporaneous release by
DASNY of its liens on the Debtors' real and personal property in
accordance with the terms of a stipulation with regard to
refinancing or prepayment of FHA-Insured Mortgages and Mortgage
Notes and Redemption of Bonds, repayment of DASNY DIP Loan, and
payment of associated costs, which will be filed with the Court.
The DASNY notes that there is currently no intention of the
parties to effectuate a closing of the GE Capital DIP Facility in
any other manner, but for the avoidance of doubt, the DASNY would
be unable to support the GE DIP Motion if this structure were
altered and there was any attempt to have the GE Capital DIP
Facility assume a first lien on the Debtors' real property
without an actual repayment of the Debtors' prepetition
obligation to the DASNY.
Accordingly, to the extent there is any attempt to prejudice the
DASNY's rights or take action inconsistent with that expressed in
the current form of the GE DIP Motion, the DASNY reserves all its
rights and remedies to object and take all necessary actions to
oppose to the Motion.
DASNY Reacts to RCG's Objections
On the DASNY's behalf, Geoffrey T. Raicht, Esq., at Sidley Austin
Brown & Wood LLP, in New York, recounts that each of the West
Village Properties was encumbered by a first mortgage granted to
the DASNY, as required by the Federal Housing Commissioner of the
Department of Housing and Urban Development. Section 24 of the
National Housing Act requires that the DASNY maintain a first
priority security interest in real property that serves as
collateral for FHA insured mortgages.
To accommodate the Debtors' request for additional liquidity and
comply with federal law, the DASNY and the HUD agreed to permit a
release of the DASNY's first priority mortgage interest in the
West Village Properties which would enable the Debtors to grant
Sun Life a first priority mortgage interest in exchange for
desperately needed funding.
In May and June 2005, to allow the Debtors to secure additional
financing from RCG, the DASNY agreed to voluntarily subordinate
its security interest in the West Village Properties to RCG.
Pursuant to the Subordination Agreements, RCG was granted a
security interest in the West Village Properties senior to the
DASNY, but junior to Sun Life's interest.
Mr. Raicht notes that, in the exercise of their business
judgment, the Debtors have determined that it is in their best
interests to use a portion of the loan proceeds to repay the
DASNY's obligations. Only by eliminating the DASNY from their
debt structure can the Debtors hope to realize assets and
restructure their operations with the maximum amount of
flexibility.
However, having been previously burned by advancing $16,000,000
to the Debtors on the eve of their Chapter 11 cases, RCG now
seeks to extract their own form of payback by demanding repayment
of their promissory notes out of the GE Capital DIP Facility
proceeds.
Unfortunately for RCG, it has no legal basis to make this
outlandish demand, Mr. Raicht argues.
The RCG Objection has caused Sun Life to file a reservation of
rights with respect to its own subordination agreement with RCG.
Since Sun Life did not file a copy of its subordination agreement
with RCG, it is not possible to analyze their rights at this
time, Mr. Raicht says. Nonetheless, Sun Life is not entitled to
repayment of its debt ahead of the DASNY from the proceeds of the
GE Capital DIP Facility for the same reasons that RCG is not so
entitled.
Mr. Raicht asserts that the Subordination Agreements do not
provide for repayment of RCG's mortgage notes ahead of the DASNY
but only address the relative priority of their liens on the West
Village Properties.
As cited by RCG, the Subordination Agreements provides that
"[t]he Subordinate Collateral Mortgage is hereby made, and shall
continue to be, subject and subordinate in lien, to the liens,
terms, covenants and conditions of the New Mortgage."
However, Mr. Raicht contends, this provision does not constitute
an intercreditor agreement and simply does not address whether
RCG will be paid in part or in full if the DASNY receives
repayment of its debt from sources other than a liquidation of
the West Village Properties. Certainly, if the West Village
Properties were foreclosed upon, the proceeds of the foreclosure
would be distributed in priority of the holders of valid liens.
This is not the case with respect to the GE Capital Loan, Mr.
Raicht notes. The DASNY is being repaid from the proceeds of the
GE Capital DIP Facility and not from the West Village Properties.
After repayment of the DASNY's Claim, RCG's secured position in
the West Village Properties will remain unaltered, Mr. Raicht
maintains. RCG's mortgage interests are a permitted encumbrance
under the GE Capital DIP Facility and, after payment of the
Debtors' obligations to the DASNY, RCG will retain its current
priority and security interest in the West Village Properties.
The Debtors have estimated that the aggregate value of the
Properties is $124,000,000. Accordingly, based upon the Debtors'
estimates, there is more than an ample adequate protection for
RCG's $16,000,000 claim. Thus, RCG will not suffer any economic
harm if the DASNY debt is repaid from the DIP Facility.
Debtors Respond to Objections
Several parties contacted the Debtors seeking clarification of
certain the terms and provisions of the Debtors DIP Agreement
with GE Capital. Their discrete issues were all satisfactorily
addressed so that they did not file formal objections, Frank A.
Oswald, Esq., at Togut, Segal & Segal LLP, in New York, tells the
Court.
According to Mr. Oswald, only the Creditors Committee is
substantively opposing certain limited provisions of the GE
Capital DIP Facility.
Mr. Oswald says that the Debtors and other stakeholders with an
interest in the form and substance of the Final DIP Order are
unable to accommodate all of the Creditors Committee's requests,
and believe that some of the comments in the Committee's
Objection do not comport with applicable law or customary
practice in the Southern District of New York.
The Debtors meet the requirements under Section 354(d)(1) of the
Bankruptcy Code for obtaining credit secured by a senior or equal
lien of the property of the estate, Mr. Oswald argues.
Mr. Oswald also asserts that the Primed Creditors' security
interests are adequately protected. He notes that the amount of
the Primed Creditors' liens is approximately $20,000,000. On the
other hand, the value of the major real estate securing the
financing is $566,000,000 based on recent appraisals by Cushman &
Wakefield and Diversified Valuation Group. Accordingly, the
Primed Creditors will be oversecured under the GE Capital
facility by a $101,000,000 equity cushion.
In response to the Creditors Committee's allegation that GE
Capital does not need to prime any liens, Mr. Oswald reiterates
that the Creditors Committee is aware that each and every lender
with whom the Debtors negotiated commitment letters required
first priority senior liens on substantially all assets.
Moreover, special restrictions associated with hospitals and
healthcare facilities greatly hamper a lender's ability to
exercise its remedies after a default, particularly the right to
foreclose a lien and sell the property, Mr. Oswald notes. He
adds that GE Capital declined when the Debtors asked it to
consider a smaller collateral package.
Other than the City of New York, no objections have been filed by
parties that the Debtors seek to prime, and the Debtors and GE
Capital have addressed the City's issues by carving out of the
Collateral certain of the City's liens. Several equipment
lessors have contacted the Debtors, and the proposed DIP Order
clarifies that GE Capital is not priming those equipment lessors.
Regarding the Creditors' Committee's exclusions of any proceeds
and recoveries under Section 551 of the Bankruptcy Code to the
collateral and superpriority administrative claim granted to GE
Capital, the Debtors believe that the proper interpretation and
application of Section 551 is premature at this time, as no liens
have been avoided and, in fact, may not be avoided.
Mr. Oswald notes that the proposed Final Order protects the
rights of all parties with respect to the application of Section
551 if a lien is avoided. Moreover, GE Capital also contends
that once a lien is avoided, the benefit the estate receives
under Section 551 is that of an unperfected lien creditor, which
is subordinate to the liens of a postpetition secured DIP lender.
The Creditors Committee insists that the Debtors should not pay
off the DASNY secured loan until the Committee completes its due
diligence and confirms that the DASNY is fully secured with
perfected liens. Mr. Oswald says that all parties understand
that to be the case, inasmuch as the DASNY will not release its
liens until it is provided with a full and unconditional release
and its loans are repaid.
The Debtors presume the Creditors Committee will promptly
conclude its due diligence of the DASNY liens. However, the
Debtors reserve all of their rights should the process not
conclude in a timely manner and the Debtors' ability to obtain
the new financing is adversely affected.
Headquartered in New York, New York, Saint Vincents Catholic
Medical Centers of New York -- http://www.svcmc.org/-- the
largest Catholic healthcare providers in New York State, operate
hospitals, health centers, nursing homes and a home health agency.
The hospital group consists of seven hospitals located throughout
Brooklyn, Queens, Manhattan, and Staten Island, along with four
nursing homes and a home health care agency. The Company and six
of its affiliates filed for chapter 11 protection on July 5, 2005
(Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary
Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will &
Emery, LLP, represent the Debtors in their restructuring efforts.
As of Apr. 30, 2005, the Debtors listed $972 million in total
assets and $1 billion in total debts. (Saint Vincent Bankruptcy
News, Issue No. 17; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
SAINT VINCENTS: Refinancing Mortgage Notes with DIP Facility
------------------------------------------------------------
Saint Vincent's Catholic Medical Centers of New York became
indebted to the Dormitory Authority of the State of New York and
the New York State Medical Care Facilities Finance Agency before
the Petition Date for the purposes of financing and refinancing
health care facilities owned and operated by SVCMC. The
indebtedness is evidenced by mortgage notes.
The Mortgage Notes were funded with proceeds derived from series
of tax-exempt bonds issued by the DASNY and the MCFFA, as
applicable.
SVCMC's payment obligations on the Mortgage Notes are insured by
the Federal Housing Commissioner of the Department of Housing and
Urban Development.
The DASNY also committed to provide a postpetition term loan not
to exceed $6,765,721. To date, the DASNY has lent SVCMC amounts
totaling $5,658,093 under the DASNY DIP Facility.
The Debtors contemplate using the proceeds of the $350,000,000
DIP Facility from General Electric Capital Corporation to
refinance or prepay the FHA-Insured Mortgages and Mortgage Notes
and defease and redeem the Bonds, and repay the DASNY DIP Loan.
The Debtors also seek to pay certain unpaid costs that have been
or will be incurred in connection with the refinancing or
prepayment of the FHA-Insured Mortgage Notes and Mortgages and
redemption and defeasance of the Bonds, and repayment of the
DASNY DIP Loan, including:
(a) the DASNY semi-annual administrative fees for due August
2005 and February 2006 -- pro-rated for anticipated
closing by December 27, 2005;
(b) the DASNY fees payable in connection with the defeasance
of the Bonds;
(c) Bond Trustee fees;
(d) fees payable to counsel for the Bond Trustees;
(e) FHA mortgage insurance premiums due to the HUD;
(f) fees payable to the DASNY's arbitrage consultant; and
(g) postpetition fees and expenses of the DASNY's counsel.
Subsequently, the Debtors, the DASNY and the HUD entered into a
stipulation for the transfer of certain funds.
The HUD agree to direct the trustee under the Depreciation
Reserve Trust Agreements to transfer, first, from the applicable
account of the Depreciation Reserve Fund, the amount which is
necessary, together with other amounts currently held by the
applicable Mortgage Servicer to pay HUD the amount due and owing
in FHA mortgage insurance premiums and, second, remaining amounts
on deposit in the accounts of the Depreciation Reserve Fund,
currently estimated at $38,441,326, from the accounts to the
applicable Bond Trustees as a partial prepayment of the
outstanding principal of the FHA-Insured Mortgage Notes.
SVCMC and the DASNY will direct transfer of the funds to the
applicable Bond Trustee, for the purpose of refinancing or
prepaying the applicable FHA-Insured Mortgage Notes and
Mortgages.
The Debtors will direct transfer to the applicable Bond Trustees
portion of the proceeds advanced under the GE DIP Facility to
enable (i) the FHA-Insured Mortgages and Mortgage Notes to be
refinanced or prepaid and (ii) for the DASNY to cause a
defeasance and redemption of the Bonds in accordance with the
applicable bond resolutions. The amounts must be delivered no
later than December 27, 2005.
Pursuant to the terms of the GE DIP Documents, the Debtors will
transfer to the DASNY $5,658,093 from the proceeds under the GE
DIP Facility to repay the DASNY DIP Loan.
The automatic stay is modified, to the extent necessary, to allow
the DASNY to accelerate the amounts due under the FHA-Insured
Mortgage Notes.
A full-text copy of the Stipulation is available at no charge at:
http://bankrupt.com/misc/SVCMCpactrefinancingnotes.pdf
Headquartered in New York, New York, Saint Vincents Catholic
Medical Centers of New York -- http://www.svcmc.org/-- the
largest Catholic healthcare providers in New York State, operate
hospitals, health centers, nursing homes and a home health agency.
The hospital group consists of seven hospitals located throughout
Brooklyn, Queens, Manhattan, and Staten Island, along with four
nursing homes and a home health care agency. The Company and six
of its affiliates filed for chapter 11 protection on July 5, 2005
(Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary
Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will &
Emery, LLP, represent the Debtors in their restructuring efforts.
As of Apr. 30, 2005, the Debtors listed $972 million in total
assets and $1 billion in total debts. (Saint Vincent Bankruptcy
News, Issue No. 17; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
SAINT VINCENTS: Taps Proskauer Rose as Special Labor Counsel
------------------------------------------------------------
Saint Vincents Catholic Medical Centers of New York and its
debtor-affiliates seek the U.S. Bankruptcy Court for the
Southern District of New York's permission to employ Proskauer
Rose LLP as their special labor counsel, nunc pro tunc to
July 5, 2005.
Pursuant to an agreement letter, dated November 17, 2005,
Proskauer will provide services with respect to issues that may
arise during the Debtors' Chapter 11 cases relating to federal
labor law, including, without limitation, representation of the
Debtors on issues relating to labor relations, collective
bargaining agreements, negotiations, and arbitrations flowing
from discharges and contracts interpretation. Proskauer will
also act as counsel with respect to other labor related issues
as may be requested by the Debtors.
Proskauer will also prepare on the Debtors' behalf any necessary
applications, complaints, answers, declarations, orders,
counterclaims, affidavits, reports, and other legal papers
relating to the Special Labor Counsel Matters and related issues,
and appear before the Court, to the extent required, to protect
the Debtors' interests.
According to Guy Sansone, chief executive officer and chief
restructuring officer of the Debtors, Proskauer is well qualified
and uniquely able to provide the specialized legal advice sought
by the Debtors on a going forward basis.
Proskauer represents employers in connection with a variety of
problems and issues involving employee relations, including, but
not limited to, collective bargaining, reductions-in-force and
other corporate restructurings, development of employment
policies and procedures, negotiation and drafting of employment
agreements, compliance with immigration regulations and
procedures, and wage and hour practices and audits.
Mr. Sansone adds that Proskauer has represented the Debtors on
various issues of labor and employment law since June 2004. At
that time, Proskauer became intimately involved in the collective
bargaining agreement negotiations with the New York State Nurses
Association.
The Debtors propose to pay Proskauer its customary hourly rates
in effect from time to time and reimburse the firm for incurred
expenses.
Proskauer's current hourly rates in its United States offices
are:
Professional Hourly Rate
------------ -----------
Members & Counsel $465 to $750
Associates $230 to $475
Paraprofessionals & Staff $125 to $148
Prior to November 1, 2005, Proskauer's hourly rates in its United
States offices were:
Professional Hourly Rate
------------ -----------
Members & Counsel $465 to $700
Associates $230 to $400
Paraprofessionals & Staff $125 to $148
David H. Diamond, a partner at Proskauer, assures the Court that
the Firm does not hold or represent an interest that is adverse
to the Debtors or the Debtors' estates with respect to the
matters on which Proskauer is to be employed.
Out of an abundance of caution, Mr. Diamond divulges that the
Greater New York Hospital Association has been a long-term client
of Proskauer. Proskauer provides legal advice on corporate,
health care and employment matters as requested. After the SVCMC
bankruptcy filing, two Proskauer partners were consulted with
respect to an existing contract between SVCMC and Greater New
York.
Mr. Diamond explains that Greater New York wanted to know what
its options were in light of the Chapter 11 filing. After
exploring the various options available to Greater New York, Mr.
Diamond assures the Court that no further legal assistance has
been or will be provided.
At the time of the Petition Date, the Debtors owed Proskauer
$150,000 for services provided and expenses accrued. Proskauer
filed a proof of claim for that amount.
No promises have been received by Proskauer or any member,
counsel, or associate as to payment or compensation in connection
with the Debtors' Chapter 11 cases.
Mr. Diamond tells the Court that Proskauer intends to apply to
the Court for allowances of compensation for professional
services rendered in the Debtors' Chapter 11 cases and for
reimbursement of actual and necessary expenses incurred.
Headquartered in New York, New York, Saint Vincents Catholic
Medical Centers of New York -- http://www.svcmc.org/-- the
largest Catholic healthcare providers in New York State, operate
hospitals, health centers, nursing homes and a home health agency.
The hospital group consists of seven hospitals located throughout
Brooklyn, Queens, Manhattan, and Staten Island, along with four
nursing homes and a home health care agency. The Company and six
of its affiliates filed for chapter 11 protection on July 5, 2005
(Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary
Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will &
Emery, LLP, represent the Debtors in their restructuring efforts.
As of Apr. 30, 2005, the Debtors listed $972 million in total
assets and $1 billion in total debts. (Saint Vincent Bankruptcy
News, Issue No. 17; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
SALOMON BROS: Fitch Downgrades Class B-4 Certs. to C from CC
------------------------------------------------------------
Fitch has taken rating actions on these Salomon Brothers Mortgage
Securities VII, Inc., mortgage pass-through certificates:
Series 1997-HUD1
-- Class A affirmed at 'AAA';
-- Class B-1 affirmed at 'AAA';
-- Class B-2 affirmed at 'A+';
-- Class B-3 affirmed at 'BBB';
-- Class B-4 downgraded to 'C' from 'CC'.
Series 1997-HUD2
-- Class A affirmed at 'AAA';
-- Class B-1 affirmed at 'AA+';
-- Class B-2 affirmed at 'A';
-- Class B-3 affirmed at 'BB'.
The transaction is collateralized by 20-30-year fixed-rate
seasoned mortgage loans. Substantially all of the mortgage loans
have defaulted in the past and are reperforming mortgage loans.
The mortgage loans were acquired from the U.S. Department of
Housing and Urban Development. The goal of HUD was to make
mortgage credit readily available to American home buyers,
particularly those with low or moderate income.
The affirmation reflects subordination and deal performance in
line with expectations and affects approximately $90.98 million of
outstanding certificates.
The negative rating action on series 1997-HUD1, class B-4 affects
$5,301,185 of total certificates. The original credit enhancement
of 8.24% for class B-4 provided by classes B-5 through B-6
certificates has been fully depleted. There are 1,093 mortgage
loans remaining. The 90 plus delinquencies represent 15.46% of the
mortgage pool and foreclosures and real estate owned represent
1.67% and 0.61%, respectively.
The mortgage loans are being serviced by Ocwen Financial Corp.
Ocwen, is rated 'RSS2' as special servicer and 'RPS2' for subprime
products by Fitch.
Further information regarding current delinquency, loss, and
credit enhancement statistics is available on the Fitch Ratings
Web site at http://www.fitchratings.com/
SBA COMMS: SBA Senior Finance Obtains $160 Million Credit Facility
------------------------------------------------------------------
SBA Senior Finance II, LLC, a wholly owned subsidiary of SBA
Communications Corporation (Nasdaq: SBAC), has obtained a
$160 million senior secured revolving credit facility. This
facility was provided by a syndicate of lenders.
GE Capital Markets, Inc., is the lead arranger and bookrunner for
the new facility. GE Commercial Finance serves as the
administrative agent, TD Securities (USA) LLC serves as co-lead
arranger and syndication agent, Deutsche Bank Structured Products,
Inc. and Lehman Commercial Paper Inc. serve as co-documentation
agents. The new facility replaces the Company's prior credit
facility which was assigned and became the mortgage loan
underlying the Company's recent $405 million commercial mortgage-
backed securities issuance.
The new facility consists of a $160 million revolving loan which
may be borrowed, repaid and redrawn, subject to compliance with
certain covenants that the Company believes provide substantially
more flexibility to the Company than the prior facility. The new
facility will mature on Dec. 21, 2007. Amounts borrowed under the
facility will accrue interest at LIBOR plus a margin that ranges
from 75 basis points to 200 basis points or at Base Rate plus a
margin that ranges from 12.5 basis points to 100 basis points.
Amounts borrowed under this facility will be secured by a first
lien on substantially all of SBASFII's assets and are guaranteed
by the Company and certain of its other subsidiaries.
"We are pleased to put in place a senior credit facility that will
serve as an additional source of liquidity and provide us with
more flexibility as we continue to grow our Company," commented
Jeffrey A. Stoops, President and Chief Executive Officer of SBA.
Based in Boca Raton, Florida, SBA Communications --
http://www.sbasite.com/-- is a leading independent owner and
operator of wireless communications infrastructure in the United
States. SBA generates revenue from two primary businesses -- site
leasing and site development services. The primary focus of the
Company is the leasing of antenna space on its multi-tenant towers
to a variety of wireless service providers under long-term lease
contracts. Since it was founded in 1989, SBA has participated in
the development of over 25,000 antenna sites in the United States.
* * *
As reported in the Troubled Company Reporter on Oct. 5, 2005,
Moody's Investors Service placed the ratings of SBA Communications
and subsidiaries on review for possible upgrade, as outlined
below. This ratings action is based upon the company's recent
sale of common equity and dedicating the proceeds to the
repurchase of approximately $120 million of debt.
The ratings placed on review are:
SBA Communications Corp.:
* Corporate family rating of B2
* 8.5% Senior Notes due 2012 rated Caa1
* SBA Telecommunications, Inc.
* 9.75% Senior Discount Notes due 2011 rated B3
SBA Senior Finance, Inc.:
* $75 million senior secured revolving credit facility due 2008
rated B1
* $325 million senior secured term loan due 2008 rated B1.
SHOPKO STORES: Extends Tender Offer for Senior Notes to Dec. 28
---------------------------------------------------------------
ShopKo Stores, Inc. (NYSE: SKO) intends to waive certain
conditions to the consummation of its offer to purchase any and
all of the outstanding $100 million principal amount of 9-1/4%
Senior Notes due 2022 at the closing of the merger transaction
with SKO Acquisition Corp. In addition, ShopKo also extended the
expiration date of the Offer.
ShopKo has determined, based on the fact that as of the close of
business on Dec. 20, 2005, holders of 17,253,393 shares of ShopKo
common stock (representing approximately 57.0% of the issued and
outstanding common stock) have returned proxy cards authorizing
the proxies named therein to vote for approval and adoption of the
Merger Agreement with SKO Group Holding Corp. and SKO Acquisition
Corp., and ShopKo's review of the other remaining conditions to
the effectiveness of the Merger, it is likely that the Closing
will occur on Wednesday, Dec. 28, 2005.
Although no assurances that the closing will occur on the date can
be given and proxies that have already been returned in favor of
the merger agreement can be revoked at any time until the vote on
the merger is taken at the special meeting of shareholders
currently scheduled for Dec. 23, 2005, ShopKo said that it intends
to irrevocably waive, on the date that the Merger becomes
effective, the merger condition contained in the Offer and the
condition that no proceeding be pending that questions the
validity or legality of the Offer as it relates solely to the
previously disclosed litigation brought against ShopKo by certain
of the holders of the Notes. ShopKo also said that, following the
waivers and the satisfaction or waiver of the remaining conditions
to the Offer, it intends to purchase all Notes that have been
validly tendered.
The Offer was scheduled to expire last Friday, Dec. 23, 2005, at
9:30 a.m., New York City time. The Offer has been amended to now
expire at 5:00 p.m., New York City time, on Wednesday, Dec. 28,
2005, the anticipated Closing Date, unless further extended by
ShopKo or earlier terminated.
The terms of the Offer and Solicitation are described in the Offer
to Purchase and Consent Solicitation Statement dated June 30,
2005, as amended by the Supplements dated Aug. 10, 2005 and
November 29, 2005. ShopKo reported that on Aug. 15, 2005, that it
had received the requisite consents to amend the indenture
governing the Notes. ShopKo executed the supplemental indenture
on Aug. 16, 2005, eliminating substantially all of the restrictive
covenants and certain events of default in the indenture governing
the Notes. Copies of the Offer to Purchase and Consent
Solicitation Statement may be obtained from Global Bondholder
Services Corporation, the information agent for the Offer, at
(866) 736-2200 (US toll free) or (212) 430-3774 (collect).
ShopKo said it has been informed by the information agent that, as
of 5:00 p.m., New York City time, on Dec. 20, 2005, approximately
$94.2 million in aggregate principal amount of Notes had been
tendered in the Offer. This amount represents approximately 94.2%
of the outstanding principal amount of the Notes.
Banc of America Securities LLC is acting as the sole dealer
manager for the Offer. Questions regarding the Offer may be
directed to Banc of America Securities LLC at (212) 847-5834 or
(888) 292-0070.
ShopKo Stores, Inc. -- http://www.shopko.com/-- is a retailer of
quality goods and services headquartered in Green Bay, Wisconsin,
with stores located throughout the Midwest, Mountain and Pacific
Northwest regions. Retail formats include 140 ShopKo stores,
providing quality name-brand merchandise, great values, pharmacy
and optical services in mid-sized to larger cities; 223 Pamida
stores, 116 of which contain pharmacies, bringing value and
convenience close to home in small, rural communities; and three
ShopKo Express Rx stores, a new and convenient neighborhood
drugstore concept. With more than $3 billion in annual sales,
ShopKo Stores, Inc., is listed on the New York Stock Exchange
under the symbol SKO.
* * *
As reported in the Troubled Company Reporter on Oct. 26, 2005,
Standard & Poor's Ratings Services said its ratings on Shopko
Stores Inc., including the 'BB-' corporate credit rating, remain
on CreditWatch with negative implications, where they were placed
April 8, 2005, based on its leveraged buyout agreement.
SKIN NUVO: Files 1st Amended Plan & Disclosure Statement in Nevada
------------------------------------------------------------------
Skin Nuvo International, LLC, and its debtor-affiliates submitted
to the U.S. Bankruptcy Court for the District of Nevada its
Disclosure Statement explaining their First Amended Joint Plan of
Liquidation.
The Debtors remind the Court that during their chapter 11 case,
they have consummated the sale of substantially all of their
tangible assets. The Debtors say that some the sale proceeds
received have already been used to pay costs of administering
their chapter 11 cases including the costs of maintaining the
Debtors' respective business operations pending such sales. As a
result, the Debtors continue, they will not have any business
operations going forward.
Terms of the Plan
The Plan is a liquidating plan and provides for distributions of
the cash sale proceeds in accordance with the priorities under the
Bankruptcy Code. Under the plan, any remaining assets will also
be liquidated and distributed, as will estate assets, including
avoidance actions and other causes. The plan also appoint Greg
Murray as chief executive officer of the Reorganized Debtor and
will have the authority to take all actins necessary to effectuate
the plan.
Treatment of Claims
Under the Plan, only Allowed Customer Claims are unimpaired.
Allowed Customer Claims, estimated to be $12 million, will be paid
the value of their claims in services to be provided by GRF
Delaware MedSpa Holdings, LLC, which has assumed the obligation to
provide such services.
Allowed Priority Unsecured Claims will:
(i) be paid in one cash payment on the later of:
(1) the effective date (or as soon as reasonably
practicable thereafter) and
(2) 15 business days following the date the Claim is
allowed by Final Order, or
(ii) receive such other less favorable treatment that may
be agreed upon in writing by the Chief Executive Officer
and such holder.
Should the cash be insufficient to pay Allowed Priority Unsecured
Claims in full, the holders of these claims will be paid on a pro
rata basis. If a Buyer has assumed a claim, the holder of the
claim will look solely to the Buyer for payment and will receive
nothing from the Debtors or the estates.
Secured Creditors, except Syneron Inc., will have their collateral
returned. Deficiency in the claims will be treated as an Allowed
General Unsecured Claim.
Syneron will have the Syneron Equipment returned and will be sold
pursuant to the terms of the Sale Order. Syneron will be entitled
to retain the proceeds of the Syneron Sale except that should the
Court determine that Syneron does not hold a valid, enforceable,
nonavoidable lien on one or more pieces of equipment, Syneron must
deliver to the Debtors the proceeds derived from the piece or
pieces of equipment, less the pro rata cost of sale.
Allowed General Unsecured Claims will receive a Pro Rata share of
the Sale Proceeds and Estate Assets. Holder of General Unsecured
Claims having claims of less than $50 will receive nothing under
the plan.
Holders of Allowed Subordinated Claims and Allowed Interests will
receive nothing under the Plan.
Headquartered in Henderson, Nevada, Skin Nuvo International, LLC,
dba Nuvo International, LLC, and dba A&E Aesthetics, LLC --
http://www.nuvointernational.com/-- specializes in offering
progressive anti-aging treatments and top quality products and the
first medical cosmetic company to launch a chain of retail skin
care clinics in shopping malls throughout the United States.
Keith M. Aurzada, Esq., and Sarah Link Schultz, Esq., at Akin Gump
Strauss Hauer & Fled LLP represent the Debtors. The Company and
its debtor-affiliates filed for chapter 11 protection on March 7,
2005 (Bankr. D. Nev. Case No. 05-50463). When the Debtors filed
for protection from their creditors, they estimated assets and
debts of $10 million to $50 million.
SPIEGEL INC: Reorganized Debtors Want Chapter 11 Cases Closed
-------------------------------------------------------------
The Spiegel Creditor Trust and Reorganized Spiegel Inc. and its
debtor-affiliates ask the U.S. Bankruptcy Court for the Southern
District of New York to enter a final decree closing the Chapter
11 cases of these Creditor Trust Debtors and other Reorganized
Debtors:
Debtor Case Number
------ -----------
Newport News, Inc. 03-11539
Spiegel Catalog, Inc. 03-11541
Spiegel Publishing Co. 03-11542
Ultimate Outlet Inc. 03-11543
Spiegel Catalog Services, LLC 03-11544
Spiegel Marketing Corp. 03-11545
Spiegel Management Group, Inc. 03-11546
Eddie Bauer, Inc. 03-11547
Eddie Bauer Diversified Sales, LLC 03-11548
Eddie Bauer International Development, LLC 03-11549
Eddie Bauer Services, LLC 03-11550
Eddie Bauer of Canada, Inc. 03-11551
Newport News Services, LLC 03-11552
New Hampton Realty Corp. 03-11553
Distribution Fulfillment Services Inc. 03-11554
Spiegel Group Teleservices Inc. 03-11555
Spiegel Group Teleservices-Canada Inc. 03-11556
Retailer Financial Products 03-11557
Gemini Credit Services, Inc. 03-11558
The Creditor Trust and the Reorganized Debtors propose to keep
open the case of Spiegel, Inc., the lead Debtor in these
Chapter 11 cases.
As the Creditor Trust and the Reorganized Debtors seek to leave
the primary Debtor case open to address the remaining outstanding
claim matters, there is no need to continue to keep open cases
for the majority of now-dissolved Creditor Trust Debtors, James
L. Garrity Jr., Esq., at Shearman & Sterling LLP, in New York,
points out. Moreover, allowing the Creditor Trust and the
Reorganized Debtors to conclude the Closing Debtors' Chapter 11
cases will allow the estate to save expenses.
Mr. Garrity asserts that the Closing Debtors have satisfied
certain factors that the Court considers in determining whether
the estate has been fully administered:
-- The Closing Debtors' confirmation order has become final;
-- The Plan of Reorganization does not require any deposits;
-- Any property to be transferred under the Plan has been
transferred;
-- The Reorganized Debtors have assumed the business and
management of their properties and the Creditor Trust has
assumed the business and management of the Closing Debtors'
properties;
-- Plan payments have commenced; and
-- As the result of the substantive consolidation, the
Creditor Trust is charged with the resolution of all
claims, motions, contested matters and adversary
proceedings pending in the Closing Debtors' Chapter 11
cases and has done so, and will continue to do so, through
the administration of the Spiegel, Inc. Chapter 11 case.
Mr. Garrity notes that since substantially all distributions have
been made, the Chapter 11 cases are therefore consummated and the
Court is left with only a finite number of claim issues to be
resolved.
Eddie Bauer Holdings, Inc., a non-debtor successor to Spiegel
with respect to certain matters and the parent company of the
Reorganized Debtors, is charged with the resolution of all
Administrative Claims pursuant to the Plan and will continue to
resolve the few remaining Administrative Expense Claims through
the Spiegel, Inc. Chapter 11 case.
Mr. Garrity informs the Court that the Closing Debtors are
current on their payment of the United States Trustee quarterly
fees for the third quarter of 2005 -- or are in the process of
determining the appropriate fee amounts with the U.S. Trustee --
and will be responsible for payment of the U.S. Trustee quarterly
fees for the fourth quarter of 2005 which ends on December 31,
2005. The fees will be paid, along with the other U.S. Trustee
quarterly fees in the Debtors' Chapter 11 cases, when the fourth
quarter fees become due on January 31, 2006.
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 on May 23,
2005. Impaired creditors overwhelmingly voted to accept the Plan.
(Spiegel Bankruptcy News, Issue No. 55; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
SOLUTIA INC: Inquip Files Notice to Perfect Lien on Sauget Asset
----------------------------------------------------------------
On August 20, 2004, the U.S. Bankruptcy Court for the Southern
District of New York approved a Remediation Services Construction
Agreement between Solutia, Inc., Monsanto Company and Inquip
Associates, Inc., and a settlement among the parties, pursuant to
which Inquip's claim for prepetition services rendered under the
July 28, 2003 Remediation Services Construction Contract with
Solutia was allowed for $1,477,626.
On November 24, 2004, Inquip filed Claim No. 5813, asserting
secured status by reason of its lien rights against certain land
in Sauget, Illinois. The lien is evidenced by a Contractor's
Notice and Claim for Lien for $1,463,876, duly filed by Inquip on
April 14, 2004, with the Recorder for St. Clair County, in
Illinois.
To the extent Inquip may be required by law to file an action in
Illinois to perfect the Lien, or to maintain or continue
perfection thereof, Inquip filed a notice with the Court to
constitute perfection, or maintenance or continuation of
perfection, of the Lien pursuant to Section 546(b) of the
Bankruptcy Code.
Headquartered in St. Louis, Missouri, Solutia, Inc. --
http://www.solutia.com/-- with its subsidiaries, make and sell a
variety of high-performance chemical-based materials used in a
broad range of consumer and industrial applications. The Company
filed for chapter 11 protection on December 17, 2003 (Bankr.
S.D.N.Y. Case No. 03-17949). When the Debtors filed for
protection from their creditors, they listed $2,854,000,000 in
assets and $3,223,000,000 in debts. Solutia is represented by
Richard M. Cieri, Esq., at Kirkland & Ellis. (Solutia Bankruptcy
News, Issue No. 51; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
SOUNDVIEW HOME: S&P Junks Rating on Class M-2 Certificates
----------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on the class
M-2 certificates issued by Soundview Home Equity Loan Trust 2001-1
to 'CCC' from 'BB'. Concurrently, ratings on three other classes
from the same transaction are affirmed.
Originally rated 'A', class M-2 is supported by excess spread,
limited amounts of overcollateralization, and subordination of the
defaulted class B. The poor performance of the transaction's
collateral depleted the o/c in 2003 and has continued to erode the
principal balance of the subordinate class B, with minuscule o/c
fluctuations.
The rating on this class was lowered from an investment-grade
category in September 2005, as severe losses began to erode the
level of credit support provided by subordination. Moderate
delinquencies continue to result in losses and have led to actual
and projected credit support levels that no longer support a 'BB'
rating. As of the December 2005 remittance period, monthly net
losses continue to outpace monthly excess interest. The principal
balance of the subordinate class B has been reduced to $294,995.
The reduced balance is due to a $113,683 realized loss. As of the
December 2005 distribution date, cumulative realized losses
totaled $6.38 million, while total delinquencies amounted to
$5.06 million. Serious delinquencies totaled $3.53 million,
representing 27.76% of the current pool balance.
While the mortgage pool has paid down to approximately 12.05% of
its original balance, substantial losses continue to erode
available credit support. Given the high delinquencies and
increasing cumulative net losses, Standard & Poor's will continue
to monitor the transaction accordingly.
The affirmed ratings on the remaining three classes reflect
adequate actual and projected credit support percentages provided
primarily by subordination.
The collateral consists primarily of 30-year, fixed- and
adjustable-rate subprime mortgage loans secured by one- to
four-family residential properties.
Rating Lowered
Soundview Home Equity Loan Trust 2001-1
Rating
Class To From
----- -- ----
M-2 CCC BB
Ratings Affirmed
Soundview Home Equity Loan Trust 2001-1
Class Rating
----- ------
A-IO, A AAA
M-1 AA
SUN HEALTHCARE: Underwriters Exercise of Over-Allotment Option
--------------------------------------------------------------
Sun Healthcare Group, Inc. (NASDAQ: SUNH) reported that on
Dec. 21, 2005, the underwriters of its previously announced public
offering of 6,000,000 shares of common stock have exercised in
full their option to purchase an additional 900,000 shares of
common stock at $6.00 per share to cover over-allotments, for
additional gross proceeds of $5.4 million, before underwriting
discounts and commissions and expenses payable by the Company.
The sale of the initial 6,000,000 shares and the optional 900,000
over-allotment shares is expected to close on Dec. 27, 2005. Sun
intends to use the net proceeds from this offering to repay
amounts outstanding under its revolving credit facility.
UBS Investment Bank acted as the sole book-running manager of this
offering. CIBC World Markets and Jefferies & Company acted as co-
managers.
Sun Healthcare Group, Inc., with executive offices located in
Irvine, California, owns SunBridge Healthcare Corporation and
other affiliated companies that operate long-term and postacute
care facilities in many states. In addition, the Sun Healthcare
Group family of companies provides therapy through SunDance
Rehabilitation Corporation, medical staffing through CareerStaff
Unlimited, Inc., and home care through SunPlus Home Health
Services, Inc.
The Company filed for chapter 11 protection on Oct. 14, 1999
(Bankr. D. Del. Case No. 99-03657). Mark D. Collins, Esq., and
Christina M. Houston, Esq., at Richards, Layton & Finger, P.A.,
represent the Debtor. The Court confirmed the Debtor's chapter 11
Plan on Feb. 6, 2002, and the Plan took effect on Feb. 28, 2002.
At Sept. 30, 2005, Sun Healthcare's balance sheet showed a
$109,509,000 stockholders' deficit, compared to a $123,380,000
deficit at Dec. 31, 2004.
SYNDICATED FOOD: Wants Court Nod to Sell Equity Interests
---------------------------------------------------------
Syndicated Food Service International, Inc., asks the United
States Bankruptcy Court for the Southern District of Indiana,
Indianapolis Division, for authority to sell all of the capital
stock and ownership interests in the Company's three remaining
operating subsidiaries:
-- Beasley Food Service, Inc.,
-- Beasley Transportation, Inc., and
-- Syndicated Bloomington I, LLC.,
as part of its proposed plan.
The Plan proposes bidding procedures to ascertain fare market
value of the Subsidiaries. Any final sale of the Subsidiaries is
subject to the approval of the subsidiaries' secured lender, as
well as the Court. In the event the sale is approved by the Court
the Company would then plan to distribute the proceeds from the
sale to its creditors.
The Court will convene a hearing on Jan. 6, 2005, at 2:30 p.m., to
consider the Debtor's request.
Headquartered in Front Royal, Virginia, Syndicated Food Service
International, Inc., fka Floridino's International Holdings, Inc.,
is a holding company with three operating subsidiaries that
participate in the wholesale foodservice distribution industry.
The company filed for chapter 11 protection on Dec. 14, 2005
(Bankr. S.D. Ind. Case No. 05-33375). David R. Krebs, Esq., at
Hostetler & Kowalik P.C., represents the Debtor in its
restructuring efforts. When the Debtor filed for protection from
its creditors, it listed $9,908,084 in total assets and
$11,182,726 in total debts.
UAL CORP: General Electric Contributes $500-Mil of Exit Facility
----------------------------------------------------------------
The Hon. Eugene R. Wedoff authorized UAL Corporation and its
debtor-affiliates to enter into the Commitment Letter with General
Electric Capital Corporation, which provides for GECC's
underwriting of $500,000,000 of the $3,000,000,000 Exit Facility,
Lynne Marek at Bloomberg News reports.
GE Commercial Aviation Finance will contribute to the
$3,000,000,000 in lending previously promised by JPMorgan
Chase & Co. and Citigroup, Inc., Ms. Marek adds.
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. 108; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
UAL CORP: Wants Until March 1 for Intercompany Tolling Order
------------------------------------------------------------
As previously reported, the U.S. Bankruptcy Court for the Northern
District of Illinois entered an agreed order tolling the
limitations period set forth in Section 546(a)(1)(A) of the
Bankruptcy Code through Dec. 9, 2005, with respect to any
claims, defenses, causes of action, rights to payment, equitable
remedies or legal remedies between the Debtors and any non-debtor
affiliates.
With the Debtors' First Amended Plan of Reorganization currently
set for a confirmation hearing on Jan. 18, 2006, the Debtors
believe it is appropriate to extend the Section 546 Period to
preserve their rights under the Agreed Tolling Order, through the
confirmation hearing and the contemplated effective date of the
Plan.
The Debtors ask the Court extend the Section 546 Period through
and including March 1, 2006, with respect to any Intercompany
Actions.
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. 109; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
US AIRWAYS: Inks $400 Million Agreement to Buy GE GEnx Engines
--------------------------------------------------------------
US Airways has reached agreement with General Electric Company to
purchase GEnx engines for its new order of 20 Airbus A350
aircraft.
US Airways is scheduled to take delivery of its A350s beginning in
2011. The GEnx engine contract with US Airways is valued at more
than $400 million.
"GE has collaborated closely with US Airways as it restructures
and invests in new aircraft," said David Romansky, GE's regional
sales director. "GE has a long history with the airline and looks
forward to supporting this new aircraft fleet."
To date, GE has signed agreements to power a total of 112 A350
aircraft with its fast-selling GEnx engine.
Airbus has established an integrated certification schedule for
the A350, which includes GEnx engine flight-testing in 2009, and
aircraft/engine certification in 2010. GE has a full-time team of
engineers at the Airbus headquarters in Toulouse, France,
collaborating on the A350 program.
The GEnx is based on the highly successful GE90 architecture. It
will succeed GE's CF6 engine family, which is the most reliable
and best-selling engine on wide-body aircraft. It provides
significantly better fuel burn and payload performance than GE's
CF6 engines.
The GEnx engine is the world's only jet engine with a front fan
case and fan blades made of composites, which provide for greater
engine durability, weight reduction and lower operating costs.
The fan blades will utilize GE90 composite technology that has
performed well, with no routine on-wing maintenance required and
no in-service issue for almost a decade. The GEnx will operate
with 18 fan blades (50 percent fewer than the CF6) at noise levels
lower than any large GE commercial engine. The GEnx also features
a new combustor for efficient fuel mixing before ignition,
resulting in significantly lower NOx levels.
The GEnx is part of GE's "ecomagination" product portfolio-GE's
commitment to develop new, cost-effective technologies that
enhance customers' environmental and operating performance.
Headquartered in Arlington, Virginia, US Airways' primary business
activity is the ownership of the common stock of:
* US Airways, Inc.,
* Allegheny Airlines, Inc.,
* Piedmont Airlines, Inc.,
* PSA Airlines, Inc.,
* MidAtlantic Airways, Inc.,
* US Airways Leasing and Sales, Inc.,
* Material Services Company, Inc., and
* Airways Assurance Limited, LLC.
Under a chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.
US Airways and its subsidiaries filed another chapter 11 petition
on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian
P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning,
Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and
Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors
in their restructuring efforts. In the Company's second
bankruptcy filing, it lists $8,805,972,000 in total assets and
$8,702,437,000 in total debts. (US Airways Bankruptcy News, Issue
No. 112; Bankruptcy Creditors' Service, Inc., 215/945-7000)
US AIRWAYS: Plans to Resell 7% Sr. Convertible Notes Due 2020
-------------------------------------------------------------
US Airways Group, Inc. (NYSE: LCC) filed with the Securities and
Exchange Commission a registration statement on Form S-3 covering
the resale of $143,750,000 of its 7% Senior Convertible Notes due
2020 and the shares of common stock issuable upon conversion of
the notes. The notes were issued through a private placement in
September 2005 to qualified institutional buyers pursuant to rule
144A of the Securities Act of 1933, as amended, calling for the
subsequent registration of the notes and the underlying common
stock.
Although a registration statement relating to these securities has
been filed with the SEC, it has not yet become effective. The
notes and the underlying common stock may not be offered, nor may
offers to buy these securities be accepted, prior to the time the
registration statement becomes effective except in a transaction
meeting the requirements of Rule 144A.
Once the registration statement is declared effective, the notes
and common stock issuable upon conversion of the notes may be
offered for resale by the holders listed as selling security
holders in the registration statement. US Airways Group, Inc.
will not receive any proceeds from the resale by any selling
securityholders of the notes or the shares of common stock
issuable upon conversion of the notes. Holders of the notes who
wish to be listed as selling security holders in the registration
statement are required to submit to US Airways Group, Inc., no
later than December 29, 2005 the selling securityholders'
questionnaire provided in connection with the private placement.
Copies of the selling securityholders' questionnaire may be
obtained by contacting US Airways Group, Inc. Investor Relations
at (480) 693-1227. The completed questionnaire must be submitted
to US Airways Group, Inc., Attn: Patricia A. Penwell, 111 West
Rio Salado Parkway, Tempe, AZ 85281, Facsimile: (480) 693-5122.
Skadden's Opinion
Skadden, Arps, Slate, Meagher & Flom LLP, acts as special counsel
to US Airways Group, Inc., in connection with the public
offering.
In a filing with the Securities and Exchange Commission pursuant
to the Securities Act of 1933, Peter C. Krupp, Esq., a partner at
Skadden, relates that the Notes have been duly authorized by US
Airways and are valid and binding obligations of the company,
enforceable against the company in accordance with their terms,
except to the extent that enforcement may be limited by:
(1) bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other similar laws in effect
relating to creditors' rights generally; and
(2) general principles of equity -- regardless of whether
enforceability is considered in a proceeding at law or
in equity.
A full-text copy of the Registration Statement is available at no
charge at http://ResearchArchives.com/t/s?3ea
A full-text copy of Skadden's Opinion is available at no charge
at http://ResearchArchives.com/t/s?3eb
Headquartered in Arlington, Virginia, US Airways' primary business
activity is the ownership of the common stock of:
* US Airways, Inc.,
* Allegheny Airlines, Inc.,
* Piedmont Airlines, Inc.,
* PSA Airlines, Inc.,
* MidAtlantic Airways, Inc.,
* US Airways Leasing and Sales, Inc.,
* Material Services Company, Inc., and
* Airways Assurance Limited, LLC.
Under a chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.
US Airways and its subsidiaries filed another chapter 11 petition
on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian
P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning,
Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and
Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors
in their restructuring efforts. In the Company's second
bankruptcy filing, it lists $8,805,972,000 in total assets and
$8,702,437,000 in total debts. (US Airways Bankruptcy News, Issue
No. 112; Bankruptcy Creditors' Service, Inc., 215/945-7000)
VARIG S.A.: Creditors Approve Restructuring Plan
------------------------------------------------
Creditors of VARIG S.A. accepted the carrier's restructuring plan
at a meeting on December 19, 2005, in Rio de Janeiro, Brazil.
The recovery plan contemplates converting most of VARIG's
$1,760,000,000 debt into company stock in a bankruptcy
reorganization. VARIG also offers BRL100,000,000 in cash and
additional future payments if it emerges from bankruptcy
protection and operates at a profit.
The plan provides for the creation of investment funds and puts
VARIG's entire fleet of 75 planes into operation by the end of
2006.
The creditors' meeting proceeded even as a Brazilian Superior
Court of Justice issued an injunction suspending the December 19
meeting, Bloomberg News reports. The injunction was sought by
VARIG's lawyers Jose Saraiva and Sergio Mazzillo.
Creditors Snub Docas Offer
The creditors rejected a takeover bid by Nelson Tanure's Docas
Investimentos SA.
Docas struck a deal with Fundacao Ruben Berta, VARIG's
controlling shareholder, to take over administration of the
airline company for $112,000,000.
In a statement published in Gazeta Mercantil newspaper on
December 13, 2005, Docas said it would acquire a 67% voting stake
in the foundation's FRB-Par Investimentos SA.
According to Reuters, Docas would pay $100,000,000 for a 25%
stake in Ruben Berta. Docas would pay $12,000,000 to rent
another 42% stake in the foundation for a 10-year period.
The 8th Corporate Court of the District of Rio de Janeiro had
blocked the transaction at the request of Brazilian state
prosecutors to allow creditors time to review and decide on the
deal. The Court held that creditors have a say on the deal
because VARIG is operating under bankruptcy protection.
Bloomberg said analysts have predicted Mr. Tanure is unlikely to
infuse cash necessary for VARIG to recover. Analysts also noted
the Brazilian government, which is among the airline's largest
creditors, appears unwilling to help Mr. Tanure.
Outside Investors Allowed
Details of the investment funds are still being worked out, VARIG
spokesman Paulo Cesar told The Associated Press by telephone.
Companies like TAP Air Portugal SA and U.S. investment fund
MatlinPatterson will be welcome to participate, he said.
Mr. Cesar also told AP that the airline currently operates 57
planes and another 18 will be made fit for flying in 2006.
Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's
largest air carrier and the largest air carrier in Latin America.
VARIG's principal business is the transportation of passengers and
cargo by air on domestic routes within Brazil and on international
routes between Brazil and North and South America, Europe and
Asia. VARIG carries approximately 13 million passengers annually
and employs approximately 11,456 full-time employees, of which
approximately 133 are employed in the United States.
The Company, along with two affiliates, filed for a judicial
reorganization proceeding under the New Bankruptcy and
Restructuring Law of Brazil on June 17, 2005, due to a competitive
landscape, high fuel costs, cash flow deficit, and high operating
leverage. The Debtors may be the first case under the new law,
which took effect on June 9, 2005. Similar to a chapter 11
debtor-in-possession under the U.S. Bankruptcy Code, the Debtors
remain in possession and control of their estate pending the
Judicial Reorganization. Sergio Bermudes, Esq., at Escritorio de
Advocacia Sergio Bermudes, represents the carrier in Brazil.
Each of the Debtors' Boards of Directors authorized Vicente Cervo
as foreign representative. In this capacity, Mr. Cervo filed a
Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case Nos. 05-
14400 and 05-14402). Rick B. Antonoff, Esq., at Pillsbury
Winthrop Shaw Pittman LLP represents Mr. Cervo in the United
States. As of March 31, 2005, the Debtors reported
BRL2,979,309,000 in total assets and BRL9,474,930,000 in total
debts. (VARIG Bankruptcy News, Issue No. 12; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
VARIG S.A.: Remains Under NBRL Protection Until January 8
---------------------------------------------------------
The Eighth Corporate Court of the District of the State Capital
of Rio de Janeiro clarifies that VARIG S.A. will remain in
judicial reorganization, and is not required to obtain creditor
or Brazilian Court approval of a judicial restructuring plan,
until January 8, 2006.
VARIG's representatives to the U.S. Court previously represented
that the judicial recovery period under the New Bankruptcy Law of
Brazil expire December 19, 2005.
The clarification was sought by:
1. APVAR - Associacao de Pilotos da VARIG;
2. ACVAR - Associacao de Comissarios da VARIG;
3. AMVAR - Associacao de Mecanicos de Voo da VARIG;
4. APN - Associacao de Pilotos da NORDESTE; and
5. the Special Committee of the National Union of Airline
Employees.
Jorge Lobo, Esq., in Rio de Janeiro, represents the petitioners
in VARIG's bankruptcy proceedings.
Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's
largest air carrier and the largest air carrier in Latin America.
VARIG's principal business is the transportation of passengers and
cargo by air on domestic routes within Brazil and on international
routes between Brazil and North and South America, Europe and
Asia. VARIG carries approximately 13 million passengers annually
and employs approximately 11,456 full-time employees, of which
approximately 133 are employed in the United States.
The Company, along with two affiliates, filed for a judicial
reorganization proceeding under the New Bankruptcy and
Restructuring Law of Brazil on June 17, 2005, due to a competitive
landscape, high fuel costs, cash flow deficit, and high operating
leverage. The Debtors may be the first case under the new law,
which took effect on June 9, 2005. Similar to a chapter 11
debtor-in-possession under the U.S. Bankruptcy Code, the Debtors
remain in possession and control of their estate pending the
Judicial Reorganization. Sergio Bermudes, Esq., at Escritorio de
Advocacia Sergio Bermudes, represents the carrier in Brazil.
Each of the Debtors' Boards of Directors authorized Vicente Cervo
as foreign representative. In this capacity, Mr. Cervo filed a
Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case Nos. 05-
14400 and 05-14402). Rick B. Antonoff, Esq., at Pillsbury
Winthrop Shaw Pittman LLP represents Mr. Cervo in the United
States. As of March 31, 2005, the Debtors reported
BRL2,979,309,000 in total assets and BRL9,474,930,000 in total
debts. (VARIG Bankruptcy News, Issue No. 13; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
VINCENT SMITH: Section 341(a) Meeting Slated for January 11
-----------------------------------------------------------
The U.S. Trustee for Region 5 will convene a meeting for Vincent
J. & Sheila M. Smith's creditors at 11:00 a.m., on Jan. 11, 2005,
at Suite 501, 833 Chestnut Street in Philadelphia, Pennsylvania.
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 Mohnton, Pennsylvania, Vincent J. & Sheila M.
Smith, filed for bankruptcy protection on Dec. 2, 2005 (Bankr.
E.D. Pa. Case No. 05-29261). Dexter K. Case, Esq., at Case,
Digiamberardino & Lutz, P.C., represents the Debtors in their
restructuring efforts. When the Debtors filed for protection from
their creditors, they listed estimated assets of $1 million to
$10 million and estimated debts of more than $100 million.
VINCENT SMITH: Hires Case DiGiamberardino as Bankruptcy Counsel
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Pennsylvania
gave Vincent J. & Sheila M. Smith permission to employ Case
DiGiamberardino & Lutz, P.C., as their general bankruptcy counsel.
Case DiGiamberardino will:
1) assist and advise the Debtors with legal services with
respect to their powers and duties as debtors in their
bankruptcy cases;
2) prepare on behalf of Debtors, all necessary applications,
answers, orders, reports and other legal papers required by
the Court in their chapter 11 cases;
3) represent the Debtors in any matters involving contests with
secured or unsecured creditors;
4) assist the Debtors in providing the legal services required
to prepare, negotiate and implement the instant proceedings
of their chapter 11 cases; and
5) perform all other legal services for the Debtors which are
appropriate and necessary in their chapter 11 cases.
Dexter K. Case, Esq., a member of Case DiGiamberardino, is one of
the lead attorneys for the Debtors. Mr. Case reports that he and
other counsels from the Firm performing services to the Debtors
will charge $250 per hour.
Documents submitted by the Debtors to the Court for the retention
of Case DiGiamberardino do not show any retainer amount the Firm
will charge the Debtors.
Case DiGiamberardino assures the Court that it does not represent
any interest materially adverse to the Debtors and is a
disinterested person as that term is defined in Section 101(14) of
the Bankruptcy Code.
Headquartered in Mohnton, Pennsylvania, Vincent J. & Sheila M.
Smith, filed for bankrutpcy protection on Dec. 2, 2005 (Bankr.
E.D. Pa. Case No. 05-29261). When the Debtors filed for
protection from their creditors, they listed estimated assets of
$1 million to $10 million and estimated debts of more than $100
million.
WCA WASTE: Waste Systems Increases Line of Credit by $25 Million
----------------------------------------------------------------
WCA Waste Systems, Inc., the primary operating subsidiary of WCA
Waste Corporation (Nasdaq:WCAA), exercised the accordion feature
provision to increase the capacity of the revolving line of credit
under its First Lien Credit Agreement with Wells Fargo Bank,
National Association, as administrative agent, Comerica Bank, as
syndication agent, and the lenders party thereto. As a result,
the available capacity increased by $25 million from $29.4 million
to $54.4 million.
WCA Waste Corporation is an integrated company engaged in the
transportation, processing and disposal of non-hazardous solid
waste. The company's operations consists of nineteen landfills,
twenty-one transfer stations/material recovery facilities and
twenty-three collection operations located throughout Alabama,
Arkansas, Florida, Kansas, Missouri, North Carolina, South
Carolina, Tennessee and Texas. The company's common stock is
traded on the NASDAQ National Market System under the symbol
"WCAA."
* * *
As reported in the Troubled Company Reporter on Dec. 20, 2005, WCA
Waste Corporation (Nasdaq:WCAA) reported on Dec. 16, 2005,
that Moody's' Investors Service upgraded the rating of WCA Waste
Corporation. The upgrade acknowledges WCA Waste Corporation's
continued progress in implementing its acquisition-based strategy,
recent strong relative performance in terms of organic volume and
price increases in excess of industry trends and a favorable
pricing environment across the industry. Moody's took the
following actions:
-- Upgraded to B2 from B3 $100 million guaranteed first lien
credit facility due 2010, including the proposed activation
of the $25 million accordion feature;
-- Upgraded to B2 from B3 $100 million guaranteed first lien
credit facility due 2011;
-- Affirmed the Caa1 rating of $25 million guaranteed second
lien term facility due 2011; and
-- Upgraded to B2 from B3 the Corporate Family Rating.
Concurrently, Moody's assigned a Speculative Grade Liquidity
rating of SGL-2 for WCA Waste Corporation. Moody's said the
ratings outlook is stable.
WCA WASTE: Compensation Panel Accelerates Vesting of Stock Options
------------------------------------------------------------------
On Dec. 21, 2005, the Compensation Committee of WCA Waste
Corporation's Board of Directors accelerated the vesting of all of
the 432,654 outstanding and unvested options previously awarded to
employees and non-employee directors pursuant to the Amended and
Restated 2004 WCA Waste Corporation Incentive Plan effective as of
December 21, 2005.
All of WCA's outstanding options were "out-of-the-money" having a
weighted average exercise price of $9.52 per share. In addition,
on Dec. 21, 2005, the Board of Directors of WCA ratified the
acceleration of the vesting of such options.
Restrictions have been imposed on certain of the shares obtained
through the accelerated vesting process by means of a Resale
Restriction Agreement between WCA and each of its non-employee
directors and executive officers. WCA will also use its best
efforts to enter into a Resale Restriction Agreement with those
other employees of WCA that have an employment agreement. The
restrictions prevent the sale of any shares acquired from the
exercise of an accelerated option prior to the earlier of the
original vesting date of the option or the individual's
termination of employment.
Typically, WCA grants stock options that vest ratably over a
three-year period. WCA has been using a method in its pro forma
footnote disclosure that reflects option compensation expense over
the normal vesting period. After adoption of Statement of
Financial Accounting Standards 123(R), "Share-Based Payment" on
January 1, 2006, compensation expense for options issued prior to
adoption will be calculated using the same method employed in the
prior pro forma footnote disclosure. However, this compensation
expense will be recognized in the income statement.
For options issued subsequent to Jan. 1, 2006, compensation
expense will be recognized in the income statement using the
method prescribed by the new pronouncement. The accelerated
vesting enables WCA to eliminate the need to apply two different
methodologies in calculating compensation expense on a going-
forward basis. In addition, as a result of this action, the
aggregate pre-tax compensation expense that would have been
reflected in WCA's consolidated financial statements in future
fiscal years will be reduced by approximately $1.1 million
(approximately $700,000 and $400,000 in 2006 and 2007,
respectively), or approximately $0.7 million after tax. As a
result of the accelerated vesting, this total amount will instead
be included in the pro forma footnote disclosure in WCA's
consolidated financial statement for the fiscal year ending
Dec. 31, 2005.
WCA Waste Corporation is an integrated company engaged in the
transportation, processing and disposal of non-hazardous solid
waste. The company's operations consists of nineteen landfills,
twenty-one transfer stations/material recovery facilities and
twenty-three collection operations located throughout Alabama,
Arkansas, Florida, Kansas, Missouri, North Carolina, South
Carolina, Tennessee and Texas. The company's common stock is
traded on the NASDAQ National Market System under the symbol
"WCAA."
* * *
As reported in the Troubled Company Reporter on Dec. 20, 2005, WCA
Waste Corporation (Nasdaq:WCAA) reported on Dec. 16, 2005,
that Moody's' Investors Service upgraded the rating of WCA Waste
Corporation. The upgrade acknowledges WCA Waste Corporation's
continued progress in implementing its acquisition-based strategy,
recent strong relative performance in terms of organic volume and
price increases in excess of industry trends and a favorable
pricing environment across the industry. Moody's took the
following actions:
-- Upgraded to B2 from B3 $100 million guaranteed first lien
credit facility due 2010, including the proposed activation
of the $25 million accordion feature;
-- Upgraded to B2 from B3 $100 million guaranteed first lien
credit facility due 2011;
-- Affirmed the Caa1 rating of $25 million guaranteed second
lien term facility due 2011; and
-- Upgraded to B2 from B3 the Corporate Family Rating.
Concurrently, Moody's assigned a Speculative Grade Liquidity
rating of SGL-2 for WCA Waste Corporation. Moody's said the
ratings outlook is stable.
WELLS FARGO: Fitch Rates $3.1 Mil. Class B-4 & B-5 Certs. at Low-B
------------------------------------------------------------------
Wells Fargo mortgage pass-through certificates, series 2005-17,
are rated by Fitch Ratings:
-- $672,118,225 classes I-A-1, I-A-2, II-A-1, II-A-2, A-PO,
and I-A-R 'AAA' senior certificates;
-- $15,029,000 class B-1 'AA';
-- $4,543,000 class B-2 'A';
-- $2,446,000 class B-3 'BBB';
-- $2,097,000 class B-4 'BB';
-- $1,048,000 class B-5 'B'.
The 'AAA' ratings on the senior certificates reflect the 3.85%
subordination provided by the 2.15% class B-1, the 0.65% class
B-2, the 0.35% class B-3, the 0.30% privately offered class B-4,
the 0.15% privately offered class B-5, and the 0.25% privately
offered class B-6. The ratings on the class B-1, B-2, B-3, B-4,
and B-5 certificates are based on their respective subordination.
Class B-6 is not rated by Fitch.
Fitch believes the amount of credit enhancement available will be
sufficient to cover credit losses. The ratings also reflect the
high quality of the underlying collateral, the integrity of the
legal and financial structures, and the primary servicing
capabilities of Wells Fargo Bank, N.A.
The transaction consists of one group of 1695 fully amortizing,
fixed interest rate, first lien mortgage loans, with an original
weighted average term to maturity of approximately 30 years. The
aggregate unpaid principal balance of the pool is $699,032,191 as
of Dec. 1, 2005, and the average principal balance is $412,408.
The weighted average original loan-to-value ratio of the loan pool
is approximately 69.78%; 1.39% of the loans have an OLTV greater
than 80%. The weighted average coupon of the mortgage loans is
5.930%, and the weighted average FICO score is 744. Cash-outs and
rate/term refinance represent 33.46% and 18.57%, respectively.
The states that represent the largest geographic concentration are
California, Virginia, New York, and Maryland. All other states
represent less than 5% of the outstanding balance of the pool.
None of the mortgage loans are 'high cost' loans as defined under
any local, state, or federal laws.
For additional information on Fitch's rating criteria regarding
predatory lending legislation, see the press release 'Fitch
Revises Rating Criteria in Wake of Predatory Lending Legislation,'
dated May 1, 2003, available on the Fitch Ratings web site at
http://www.fitchratings.com/
All of the mortgage loans were generally originated in conformity
with underwriting standards of WFB. WFB sold the loans to Wells
Fargo Asset Securities Corporation, a special purpose corporation,
who deposited the loans into the trust. The trust issued the
certificates in exchange for the mortgage loans. WFB will act as
servicer and custodian, and Wachovia Bank, N.A. will act as
trustee. Elections will be made to treat the trust as a real
estate mortgage investment conduit for federal income tax
purposes.
WELLS FARGO: Fitch Rates $2.7 Mil. Class B-4 & B-5 Certs. at Low-B
------------------------------------------------------------------
Wells Fargo mortgage pass-through certificates, series 2005-16,
are rated by Fitch:
-- $762,217,453 classes A-1 to A-19, A-PO, and A-R 'AAA'
senior certificates;
-- $12,566,000 class B-1 'AA';
-- $4,320,000 class B-2 'A';
-- $2,356,000 class B-3 'BBB';
-- $1,571,000 class B-4 'BB';
-- $1,178,000 class B-5 'B'.
The 'AAA' ratings on the senior certificates reflect the 2.95%
subordination provided by the 1.60% class B-1, the 0.55% class
B-2, the 0.30% class B-3, the 0.20% privately offered class B-4,
the 0.15% privately offered class B-5, and the 0.15% privately
offered class B-6. The ratings on the class B-1, B-2, B-3, B-4,
and B-5 certificates are based on their respective subordination.
Class B-6 is not rated by Fitch.
Fitch believes the amount of credit enhancement available will be
sufficient to cover credit losses. The ratings also reflect the
high quality of the underlying collateral, the integrity of the
legal and financial structures, and the primary servicing
capabilities of Wells Fargo Bank, N.A.
The transaction consists of one group of 1,648 fully amortizing,
fixed interest rate, first lien mortgage loans, with an original
weighted average term to maturity of approximately 30 years. The
aggregate unpaid principal balance of the pool is $785,386,782 as
of Dec. 1, 2005, and the average principal balance is $476,570.
The weighted average original loan-to-value ratio of the loan pool
is approximately 68.73%; 1.66% of the loans have an OLTV greater
than 80%. The weighted average coupon of the mortgage loans is
5.899%, and the weighted average FICO score is 744. Cash-outs and
rate/term refinance represent 33.67% and 19.23%, respectively.
The states that represent the largest geographic concentration are
California, New York, Virginia, Maryland (5.99%), and Minnesota.
All other states represent less than 5% of the outstanding balance
of the pool.
None of the mortgage loans are 'high cost' loans as defined under
any local, state, or federal laws.
For additional information on Fitch's rating criteria regarding
predatory lending legislation, see the press release 'Fitch
Revises Rating Criteria in Wake of Predatory Lending Legislation,'
dated May 1, 2003, available on the Fitch Ratings Web site at
http://www.fitchratings.com/
All of the mortgage loans were generally originated in conformity
with underwriting standards of WFB. WFB sold the loans to Wells
Fargo Asset Securities Corporation, a special purpose corporation,
who deposited the loans into the trust. The trust issued the
certificates in exchange for the mortgage loans. WFB will act as
servicer and custodian, and Wachovia Bank, N.A. will act as
trustee. Elections will be made to treat the trust as two
separate real estate mortgage investment conduits for federal
income tax purposes.
WOLF HOLLOW: S&P Affirms Low-B Ratings on $400 Million Term Loans
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB-' rating and
'1' recovery rating on Wolf Hollow I L.P.'s $290 million first-
lien senior secured term loan and working-capital facilities due
June 2012 and December 2010.
In addition, Standard & Poor's affirmed the company's 'B' rating
and '4' recovery rating on Wolf Hollow's second-lien $110 million
term loan due December 2012. The outlook on the notes is stable.
The action follows Standard & Poor's review of the final loan
structure.
There have been some changes to the loan structure that Standard &
Poor's views as neutral for the credit. The $50 million first-
lien working-capital facility due December 2010 will be broken
into a $24 million unfunded portion due December 2010 and a $26
million funded portion due June 2012. The funded portion will not
be drawn by the project at close, so the project's available
liquidity will still be the same, but the effect is to increase
the cost associated with the $26 million portion by about 160
basis points annually.
Also, due to the terms of the Exelon Corp. purchased-power
agreement, the $6 million of the synthetic LOC facility due June
2012 will be moved to the working-capital facility due December
2010, at an effective increase in cost of about 15 basis points.
In total, annual borrowing costs are projected to increase by
about $425,000. The $110 million second-lien term loan due
December 2012 is unchanged, as are the total amount of the
facilities and available liquidity to the project.
The affirmation also incorporates Standard & Poor's review of
final lending documents.
"The stable outlook on Wolf Hollow reflects the near-term revenue
stream predictability provided by PPAs, and the expected debt
reduction before the merchant period," said Standard & Poor's
credit analyst Scott Taylor. "Credit quality could suffer if the
facility has chronic availability problems, debt reduction does
not occur as rapidly as expected, or spark spreads decline to
historical levels, exacerbating refinancing risk," he continue.
Rating upgrades would require substantial deleveraging and
sustained improvement of market conditions.
* BOND PRICING: For the week of Dec. 19 - Dec. 23, 2005
-------------------------------------------------------
Issuer Coupon Maturity Price
------ ------ -------- -----
Adelphia Comm. 3.250% 05/01/21 2
Adelphia Comm. 6.000% 02/15/06 1
Adelphia Comm. 7.500% 01/15/04 60
Adelphia Comm. 7.750% 01/15/09 58
Adelphia Comm. 7.875% 05/01/09 55
Adelphia Comm. 8.125% 07/15/03 59
Adelphia Comm. 8.375% 02/01/08 59
Adelphia Comm. 9.250% 10/01/02 54
Adelphia Comm. 9.375% 11/15/09 61
Adelphia Comm. 9.500% 02/15/04 55
Adelphia Comm. 9.875% 03/01/05 53
Adelphia Comm. 9.875% 03/01/07 57
Adelphia Comm. 10.250% 11/01/06 57
Adelphia Comm. 10.250% 06/15/11 62
Adelphia Comm. 10.500% 07/15/04 60
Adelphia Comm. 10.875% 10/01/10 60
Aladdin Gaming 13.500% 03/01/10 0
Albertson's Inc. 7.000% 07/21/17 74
Allegiance Tel. 11.750% 02/15/08 23
Allegiance Tel. 12.875% 05/15/08 20
Alt Living Scvs 7.000% 06/01/04 1
Amer & Forgn PWR 5.000% 03/01/30 71
Amer Color Graph 10.000% 06/15/10 69
Amer Plumbing 11.625% 10/15/08 15
American Airline 8.390% 01/02/17 74
American Airline 9.980% 01/02/15 67
American Airline 9.980% 01/02/15 67
American Airline 9.980% 01/02/15 67
American Airline 10.180% 01/02/13 68
American Airline 10.430% 09/15/08 70
American Airline 10.430% 09/15/08 70
American Airline 10.850% 03/15/09 65
AMR Corp. 9.750% 08/15/21 72
AMR Corp. 9.800% 10/01/21 70
AMR Corp. 10.000% 04/15/21 70
AMR Corp. 10.125% 06/01/21 74
AMR Corp. 10.150% 05/15/20 75
AMR Corp. 10.290% 03/08/21 68
AMR Corp. 10.550% 03/12/21 74
Amtran Inc. 9.625% 12/15/05 4
Anchor Glass 11.000% 02/15/13 69
Anker Coal Group 14.250% 09/01/07 0
Antigenics 5.250% 02/01/25 58
Anvil Knitwear 10.875% 03/15/07 55
Apple South Inc. 9.750% 06/01/06 3
Archibald Candy 10.000% 11/01/07 0
Armstrong World 6.350% 08/15/03 74
Armstrong World 6.500% 08/15/05 72
Armstrong World 7.450% 05/15/29 72
Armstrong World 9.000% 06/15/04 73
Asarco Inc. 7.875% 04/15/13 60
Asarco Inc. 8.500% 05/01/25 60
ATA Holdings 12.125% 06/15/10 4
At Home Corp. 4.750% 12/15/06 0
Atlantic Coast 6.000% 02/15/34 3
Atlas Air Inc 8.770% 01/02/11 62
Autocam Corp. 10.875% 06/15/14 70
Bank New England 8.750% 04/01/99 7
Bank New England 9.500% 02/15/96 3
Big V Supermkts 11.000% 02/15/04 0
BTI Telecom Corp 10.500% 09/15/07 52
Budget Group Inc. 9.125% 04/01/06 0
Burlington North 3.200% 01/01/45 60
CD Radio Inc. 8.750% 09/29/09 0
Cell Therapeutic 5.750% 06/15/08 56
Cell Therapeutic 5.750% 06/15/08 51
Cellstar Corp. 12.000% 01/15/07 42
Cendant Corp 4.890% 08/17/06 50
Charter Comm Hld 8.625% 04/01/09 75
Charter Comm Hld 10.000% 05/15/11 55
Charter Comm Hld 11.125% 01/15/11 55
Clark Material 10.750% 11/15/06 0
Collins & Aikman 10.750% 12/31/11 44
Color Tile Inc 10.750% 12/15/01 0
Comcast Corp. 2.000% 10/15/29 40
Compudyne Corp 6.250% 01/15/11 70
Cons Container 10.125% 07/15/09 63
Covad Communication 3.000% 03/15/24 58
CPNL-Dflt12/05 4.000% 12/26/06 10
CPNL-Dflt12/05 4.750% 11/15/23 23
CPNL-Dflt12/05 6.000% 09/30/14 16
CPNL-Dflt12/05 7.625% 04/15/06 35
CPNL-Dflt12/05 7.750% 04/15/09 37
CPNL-Dflt12/05 7.750% 06/01/15 8
CPNL-Dflt12/05 7.875% 04/01/08 33
CPNL-Dflt12/05 8.500% 02/15/11 27
CPNL-Dflt12/05 8.625% 08/15/10 28
CPNL-Dflt12/05 8.750% 07/15/07 37
CPNL-Dflt12/05 10.500% 05/15/06 35
Cray Inc. 3.000% 12/01/24 55
Cray Research 6.125% 02/01/11 25
Curagen Corp. 4.000% 02/15/11 66
Curagen Corp. 4.000% 02/15/11 64
Curative Health 10.750% 05/01/11 61
DAL-DFLT09/05 9.000% 05/15/16 19
Dana Corp 5.850% 01/15/15 70
Dana Corp 7.000% 03/15/28 71
Dana Corp 7.000% 03/01/29 71
Decrane Aircraft 12.000% 09/30/08 51
Delco Remy Intl 9.375% 04/15/12 34
Delco Remy Intl 11.000% 05/01/09 34
Delta Air Lines 2.875% 02/18/24 20
Delta Air Lines 7.541% 10/11/11 62
Delta Air Lines 7.700% 12/15/05 19
Delta Air Lines 7.900% 12/15/09 19
Delta Air Lines 8.000% 06/03/23 20
Delta Air Lines 8.187% 10/11/17 62
Delta Air Lines 8.270% 09/23/07 45
Delta Air Lines 8.300% 12/15/29 20
Delta Air Lines 8.540% 01/02/07 53
Delta Air Lines 8.540% 01/02/07 26
Delta Air Lines 8.540% 01/02/07 29
Delta Air Lines 8.540% 01/02/07 29
Delta Air Lines 9.200% 09/23/14 44
Delta Air Lines 9.250% 12/27/07 19
Delta Air Lines 9.250% 03/15/22 18
Delta Air Lines 9.300% 01/02/10 53
Delta Air Lines 9.300% 01/02/10 40
Delta Air Lines 9.320% 01/02/09 55
Delta Air Lines 9.375% 09/11/07 55
Delta Air Lines 9.450% 02/26/06 54
Delta Air Lines 9.480% 06/05/06 46
Delta Air Lines 9.590% 01/12/17 40
Delta Air Lines 9.750% 05/15/21 19
Delta Air Lines 9.875% 04/30/08 65
Delta Air Lines 10.000% 08/15/08 21
Delta Air Lines 10.000% 05/17/09 62
Delta Air Lines 10.000% 06/01/09 44
Delta Air Lines 10.000% 06/01/10 64
Delta Air Lines 10.000% 06/01/10 68
Delta Air Lines 10.000% 06/01/11 26
Delta Air Lines 10.000% 06/05/11 54
Delta Air Lines 10.000% 06/18/13 58
Delta Air Lines 10.125% 05/15/10 18
Delta Air Lines 10.125% 06/16/10 61
Delta Air Lines 10.375% 02/01/11 20
Delta Air Lines 10.375% 12/15/22 21
Delta Air Lines 10.430% 01/02/11 25
Delta Air Lines 10.430% 01/02/11 41
Delta Air Lines 10.500% 04/30/16 58
Delta Air Lines 10.790% 09/26/13 41
Delta Air Lines 10.790% 03/26/14 41
Delta Air Lines 10.790% 03/26/14 14
Delta Air Lines 10.790% 03/26/14 31
Delphi Auto Syst 6.500% 05/01/09 54
Delphi Auto Syst 7.125% 05/01/29 54
Delphi Corp 6.500% 08/15/13 54
Delphi Trust II 6.197% 11/15/33 28
Duane Reade Inc 9.750% 08/01/11 66
Dura Operating 9.000% 05/01/09 62
Dura Operating 9.000% 05/01/09 57
Duty Free Int'l. 7.000% 01/15/04 4
DVI Inc. 9.875% 02/01/04 13
Empire Gas Corp. 9.000% 12/31/07 0
Epix Medical Inc. 3.000% 06/15/24 61
Exodus Comm. Inc. 11.625% 07/15/10 0
Falcon Products 11.375% 06/15/09 2
Fedders North AM 9.875% 03/01/14 70
Federal-Mogul Co. 7.375% 01/15/06 34
Federal-Mogul Co. 7.500% 01/15/09 34
Federal-Mogul Co. 8.160% 03/06/03 33
Federal-Mogul Co. 8.330% 11/15/01 33
Federal-Mogul Co. 8.370% 11/15/01 31
Federal-Mogul Co. 8.800% 04/15/07 34
Fibermark Inc. 10.750% 04/15/11 74
Finova Group 7.500% 11/15/09 34
FMXIQ-DFLT09/05 13.500% 08/15/05 7
Foamex L.P.-DFLT 9.875% 06/15/07 7
Foamex LP/C-DFLT 10.750% 04/15/09 75
Ford Holdings 9.300% 03/01/30 75
Ford Motor Co. 6.500% 08/01/18 66
Ford Motor Co. 6.625% 02/15/28 65
Ford Motor Co. 7.125% 11/15/25 65
Ford Motor Co. 7.400% 11/01/46 61
Ford Motor Co. 7.500% 08/01/26 69
Ford Motor Co. 7.700% 05/15/97 65
Ford Motor Co. 7.750% 06/15/43 62
Ford Motor Co. 8.900% 01/15/32 69
Ford Motor Co. 8.215% 09/15/21 73
Ford Motor Cred 5.000% 01/20/11 70
Ford Motor Cred 5.000% 02/22/11 71
Ford Motor Cred 5.100% 02/22/11 74
Ford Motor Cred 5.200% 03/21/11 71
Ford Motor Cred 5.200% 03/21/11 71
Ford Motor Cred 5.250% 02/22/11 72
Ford Motor Cred 5.250% 03/21/11 73
Ford Motor Cred 5.250% 03/21/11 73
Ford Motor Cred 5.250% 09/20/11 75
Ford Motor Cred 5.300% 03/21/11 72
Ford Motor Cred 5.300% 04/20/11 72
Ford Motor Cred 5.350% 02/22/11 73
Ford Motor Cred 5.400% 09/20/11 73
Ford Motor Cred 5.400% 10/20/11 73
Ford Motor Cred 5.400% 10/20/11 73
Ford Motor Cred 5.400% 10/20/11 71
Ford Motor Cred 5.450% 06/21/10 74
Ford Motor Cred 5.450% 10/20/11 71
Ford Motor Cred 5.500% 04/20/11 74
Ford Motor Cred 5.500% 09/20/11 74
Ford Motor Cred 5.500% 10/20/11 68
Ford Motor Cred 5.550% 08/22/11 71
Ford Motor Cred 5.550% 09/20/11 71
Ford Motor Cred 5.600% 08/22/11 72
Ford Motor Cred 5.600% 09/20/11 70
Ford Motor Cred 5.600% 11/21/11 73
Ford Motor Cred 5.600% 11/21/11 73
Ford Motor Cred 5.650% 05/20/11 73
Ford Motor Cred 5.650% 11/21/11 72
Ford Motor Cred 5.650% 12/20/11 74
Ford Motor Cred 5.650% 12/20/11 70
Ford Motor Cred 5.650% 01/21/14 67
Ford Motor Cred 5.700% 05/20/11 74
Ford Motor Cred 5.700% 12/20/11 72
Ford Motor Cred 5.700% 01/20/12 72
Ford Motor Cred 5.750% 10/20/10 73
Ford Motor Cred 5.750% 12/20/11 73
Ford Motor Cred 5.750% 01/21/14 66
Ford Motor Cred 5.750% 02/20/14 68
Ford Motor Cred 5.750% 02/20/14 67
Ford Motor Cred 5.850% 07/20/10 74
Ford Motor Cred 5.850% 07/20/11 73
Ford Motor Cred 5.850% 01/20/12 72
Ford Motor Cred 5.900% 07/20/11 73
Ford Motor Cred 5.900% 02/20/14 68
Ford Motor Cred 6.000% 01/21/14 71
Ford Motor Cred 6.000% 03/20/14 71
Ford Motor Cred 6.000% 03/20/14 65
Ford Motor Cred 6.000% 03/20/14 63
Ford Motor Cred 6.000% 03/20/14 72
Ford Motor Cred 6.000% 11/20/14 65
Ford Motor Cred 6.000% 11/20/14 67
Ford Motor Cred 6.000% 11/20/14 66
Ford Motor Cred 6.000% 01/20/15 63
Ford Motor Cred 6.000% 02/20/15 67
Ford Motor Cred 6.050% 06/20/11 72
Ford Motor Cred 6.050% 03/20/12 74
Ford Motor Cred 6.050% 02/20/14 71
Ford Motor Cred 6.050% 03/20/14 68
Ford Motor Cred 6.050% 04/21/14 68
Ford Motor Cred 6.050% 12/22/14 71
Ford Motor Cred 6.050% 12/22/14 68
Ford Motor Cred 6.050% 12/22/14 66
Ford Motor Cred 6.050% 02/20/15 67
Ford Motor Cred 6.100% 06/20/11 74
Ford Motor Cred 6.100% 02/20/15 65
Ford Motor Cred 6.150% 07/20/10 74
Ford Motor Cred 6.150% 05/20/11 75
Ford Motor Cred 6.150% 12/22/14 69
Ford Motor Cred 6.150% 01/20/15 66
Ford Motor Cred 6.200% 05/20/11 74
Ford Motor Cred 6.200% 06/20/11 74
Ford Motor Cred 6.200% 04/21/14 74
Ford Motor Cred 6.200% 03/20/15 71
Ford Motor Cred 6.250% 06/20/11 74
Ford Motor Cred 6.250% 06/20/11 72
Ford Motor Cred 6.250% 02/21/12 74
Ford Motor Cred 6.250% 12/20/13 70
Ford Motor Cred 6.250% 12/20/13 64
Ford Motor Cred 6.250% 04/21/14 71
Ford Motor Cred 6.250% 01/20/15 67
Ford Motor Cred 6.250% 03/20/15 69
Ford Motor Cred 6.300% 05/20/14 70
Ford Motor Cred 6.300% 05/20/14 67
Ford Motor Cred 6.350% 04/21/14 69
Ford Motor Cred 6.500% 12/20/13 65
Ford Motor Cred 6.500% 02/20/15 68
Ford Motor Cred 6.500% 03/20/15 70
Ford Motor Cred 6.520% 03/10/13 72
Ford Motor Cred 6.550% 12/20/13 74
Ford Motor Cred 6.550% 07/21/14 73
Ford Motor Cred 6.600% 10/21/13 72
Ford Motor Cred 6.650% 06/20/14 72
Ford Motor Cred 6.750% 10/21/13 75
Ford Motor Cred 6.750% 06/20/14 73
Ford Motor Cred 6.800% 06/20/13 67
Ford Motor Cred 6.850% 09/20/13 74
Ford Motor Cred 6.850% 06/20/14 71
Ford Motor Cred 6.950% 05/20/14 73
Ford Motor Cred 7.050% 09/20/13 65
Ford Motor Cred 7.100% 09/20/13 75
Ford Motor Cred 7.100% 09/20/13 74
Ford Motor Cred 7.250% 07/20/17 68
Ford Motor Cred 7.250% 07/20/17 65
Ford Motor Cred 7.300% 04/20/15 72
Ford Motor Cred 7.350% 03/20/15 71
Ford Motor Cred 7.350% 09/15/15 67
Ford Motor Cred 7.400% 08/21/17 71
Ford Motor Cred 7.500% 08/20/32 63
Ford Motor Cred 7.550% 09/30/15 68
Ford Motor Cred 7.900% 05/18/15 71
Gateway Inc. 1.500% 12/31/09 73
Gateway Inc. 2.000% 12/31/11 68
General Motors 7.125% 07/15/13 69
General Motors 7.400% 09/01/25 61
General Motors 7.700% 04/15/16 68
General Motors 8.100% 06/15/24 63
General Motors 8.250% 07/15/23 67
General Motors 8.375% 07/15/33 69
General Motors 8.800% 03/01/21 66
General Motors 9.400% 07/15/21 68
General Motors 9.450% 11/01/11 74
GMAC 5.250% 01/15/14 71
GMAC 5.700% 06/15/13 69
GMAC 5.700% 10/15/13 71
GMAC 5.700% 12/15/13 69
GMAC 5.750% 01/15/14 74
GMAC 5.850% 05/15/13 72
GMAC 5.850% 06/15/13 71
GMAC 5.850% 06/15/13 74
GMAC 5.900% 12/15/13 72
GMAC 5.900% 01/15/19 72
GMAC 5.900% 01/15/19 68
GMAC 5.900% 02/15/19 67
GMAC 5.900% 10/15/19 72
GMAC 6.000% 11/15/13 74
GMAC 6.000% 02/15/19 68
GMAC 6.000% 02/15/19 65
GMAC 6.000% 02/15/19 70
GMAC 6.000% 03/15/19 68
GMAC 6.000% 03/15/19 69
GMAC 6.000% 03/15/19 72
GMAC 6.000% 03/15/19 69
GMAC 6.000% 03/15/19 66
GMAC 6.000% 04/15/19 70
GMAC 6.000% 09/15/19 65
GMAC 6.000% 09/15/19 68
GMAC 6.050% 08/15/19 69
GMAC 6.050% 08/15/19 71
GMAC 6.050% 10/15/19 73
GMAC 6.100% 09/15/19 67
GMAC 6.125% 10/15/19 67
GMAC 6.150% 08/15/19 72
GMAC 6.150% 09/15/19 70
GMAC 6.150% 10/15/19 66
GMAC 6.200% 11/15/13 72
GMAC 6.200% 04/15/19 71
GMAC 6.250% 10/15/13 74
GMAC 6.250% 12/15/18 74
GMAC 6.250% 01/15/18 70
GMAC 6.250% 04/15/19 71
GMAC 6.250% 05/15/19 70
GMAC 6.250% 07/15/19 70
GMAC 6.300% 03/15/13 74
GMAC 6.300% 11/15/13 74
GMAC 6.300% 08/15/19 67
GMAC 6.300% 08/15/19 68
GMAC 6.350% 04/15/19 70
GMAC 6.350% 07/15/19 70
GMAC 6.350% 07/15/19 72
GMAC 6.400% 03/15/13 74
GMAC 6.400% 12/15/18 71
GMAC 6.400% 11/15/19 72
GMAC 6.400% 11/15/19 69
GMAC 6.500% 06/15/18 75
GMAC 6.500% 11/15/18 70
GMAC 6.500% 12/15/18 69
GMAC 6.500% 12/15/18 72
GMAC 6.500% 05/15/19 73
GMAC 6.500% 01/15/20 71
GMAC 6.500% 02/15/20 72
GMAC 6.550% 12/15/19 72
GMAC 6.600% 08/15/16 72
GMAC 6.600% 05/15/18 72
GMAC 6.600% 06/15/19 72
GMAC 6.600% 06/15/19 71
GMAC 6.650% 10/15/18 70
GMAC 6.650% 02/15/20 70
GMAC 6.700% 05/15/14 73
GMAC 6.700% 08/15/16 73
GMAC 6.700% 06/15/18 73
GMAC 6.700% 06/15/18 72
GMAC 6.700% 11/15/18 73
GMAC 6.700% 06/15/19 71
GMAC 6.700% 12/15/19 72
GMAC 6.750% 11/15/09 75
GMAC 6.750% 06/15/14 74
GMAC 6.750% 09/15/16 72
GMAC 6.750% 06/15/17 70
GMAC 6.750% 03/15/18 72
GMAC 6.750% 07/15/18 72
GMAC 6.750% 10/15/18 71
GMAC 6.750% 11/15/18 73
GMAC 6.750% 05/15/19 74
GMAC 6.750% 05/15/19 73
GMAC 6.750% 06/15/19 74
GMAC 6.750% 06/15/19 71
GMAC 6.750% 03/15/20 71
GMAC 6.800% 09/15/18 71
GMAC 6.850% 05/15/18 70
GMAC 6.875% 08/15/16 74
GMAC 6.875% 07/15/18 71
GMAC 6.900% 06/15/17 73
GMAC 6.900% 07/15/18 74
GMAC 6.900% 08/15/18 71
GMAC 6.950% 06/15/17 74
GMAC 7.000% 06/15/16 75
GMAC 7.000% 09/15/16 74
GMAC 7.000% 05/15/17 75
GMAC 7.000% 05/15/17 71
GMAC 7.000% 07/15/17 74
GMAC 7.000% 07/15/17 74
GMAC 7.000% 02/15/18 72
GMAC 7.000% 03/15/18 72
GMAC 7.000% 05/15/18 73
GMAC 7.000% 05/15/18 72
GMAC 7.000% 09/15/18 69
GMAC 7.125% 02/15/21 75
GMAC 7.000% 09/15/21 67
GMAC 7.000% 09/15/21 70
GMAC 7.000% 06/15/22 74
GMAC 7.000% 11/15/23 72
GMAC 7.000% 11/15/24 73
GMAC 7.000% 11/15/24 68
GMAC 7.000% 11/15/24 73
GMAC 7.050% 05/15/17 71
GMAC 7.050% 03/15/18 75
GMAC 7.050% 04/15/18 75
GMAC 7.150% 07/15/17 75
GMAC 7.150% 03/15/25 74
GMAC 7.250% 03/15/17 75
GMAC 7.250% 05/15/17 74
GMAC 7.250% 07/15/17 74
GMAC 7.250% 09/15/17 74
GMAC 7.250% 04/15/18 74
GMAC 7.250% 08/15/18 73
GMAC 7.250% 09/15/18 73
GMAC 7.250% 01/15/25 73
GMAC 7.250% 02/15/25 70
GMAC 7.250% 03/15/25 72
GMAC 7.350% 04/15/18 74
GMAC 7.500% 03/15/25 72
Golden Northwest 12.000% 12/15/06 3
Graftech Int'l 1.625% 01/15/24 73
Gulf Mobile Ohio 5.000% 12/01/56 72
Home Interiors 10.125% 06/01/08 73
Human Genome 2.250% 08/15/12 73
Human Genome 2.250% 08/15/12 73
Huntsman Packag 13.000% 06/01/10 18
Inland Fiber 9.625% 11/15/07 51
Integrat Elec SV 9.375% 02/01/09 58
Integrat Elec SV 9.375% 02/01/09 59
Intermet Corp. 9.750% 06/15/09 38
Iridium LLC/CAP 10.875% 07/15/05 27
Iridium LLC/CAP 11.250% 07/15/05 27
Iridium LLC/CAP 13.000% 07/15/05 24
Iridium LLC/CAP 14.000% 07/15/05 27
Isolagen Inc. 3.500% 11/01/24 51
Jacobson's 6.750% 12/15/11 0
Jts Corp. 5.250% 04/29/02 1
Kaiser Aluminum & Chem. 12.750% 02/01/03 4
Kellstrom Inds 5.500% 06/15/03 0
Kellstrom Inds 5.750% 10/15/02 0
Kmart Corp. 8.990% 07/05/10 21
Kmart Corp. 9.350% 01/02/20 30
Kmart Corp. 9.780% 01/05/20 73
Kmart Funding 8.800% 07/01/10 45
Kmart Funding 9.440% 07/01/18 67
Level 3 Comm. Inc. 2.875% 07/15/10 65
Level 3 Comm. Inc. 6.000% 09/15/09 65
Level 3 Comm. Inc. 6.000% 03/15/10 62
Liberty Media 3.750% 02/15/30 55
Liberty Media 4.000% 11/15/29 60
LTV Corp. 8.200% 09/15/07 0
Macsaver Financl 7.400% 02/15/02 4
Macsaver Financl 7.600% 08/01/07 4
Macsaver Financl 7.875% 08/01/03 0
Merisant Co 9.500% 07/15/13 61
MHS Holdings Co 16.875% 09/22/04 0
Motels of Amer 12.000% 04/15/04 66
MRS Fields 9.000% 01/15/11 70
MSX Int'l Inc. 11.375% 01/15/08 65
Muzak LLC 9.875% 03/15/09 61
Natl Steel Corp. 8.375% 08/01/06 0
Nexprise Inc. 6.000% 04/01/07 0
New Orl Grt N RR 5.000% 07/01/32 71
North Atl Trading 9.250% 03/01/12 65
Northern Pacific RY 3.000% 01/01/47 58
Northern Pacific RY 3.000% 01/01/47 58
Northwest Airlines 6.625% 05/15/23 36
Northwest Airlines 7.068% 01/02/16 69
Northwest Airlines 7.248% 01/02/12 18
Northwest Airlines 7.360% 02/01/20 70
Northwest Airlines 7.625% 11/15/23 36
Northwest Airlines 7.875% 03/15/08 36
Northwest Airlines 8.070% 01/02/15 27
Northwest Airlines 8.130% 02/01/14 22
Northwest Airlines 8.304% 09/01/10 73
Northwest Airlines 8.700% 03/15/07 37
Northwest Airlines 8.875% 06/01/06 37
Northwest Airlines 8.970% 01/02/15 17
Northwest Airlines 9.179% 04/01/10 25
Northwest Airlines 9.875% 03/15/07 37
Northwest Airlines 10.000% 02/01/09 36
Northwest Stl & Wir 9.500% 06/15/01 0
NTK Holdings Inc. 10.750% 03/01/14 63
Nutritional Src. 10.125% 08/01/09 70
Oakwood Homes 7.875% 03/01/04 8
Oakwood Homes 8.125% 03/01/09 9
Osu-Dflt10/05 13.375% 10/15/09 0
O'Sullivan Ind. 10.630% 10/01/08 62
Owens-Crng Fiber 8.875% 06/01/02 74
PCA LLC/PCA Fin 11.875 08/01/09 23
Pegasus Satellite 9.625% 10/15/05 22
Pegasus Satellite 12.375% 08/01/06 6
Pegasus Satellite 13.500% 03/01/07 0
Piedmont Aviat 9.900% 11/08/06 0
Piedmont Aviat 10.000% 11/08/12 3
Piedmont Aviat 10.350% 03/28/11 3
Pinnacle Airline 3.250% 02/15/25 71
Pixelworks Inc. 1.750% 05/15/24 66
Pliant Corp. 13.000% 06/01/10 21
Polaroid Corp. 6.750% 01/15/02 0
Polaroid Corp. 11.500% 02/15/06 0
Portola Packagin 8.250% 02/01/12 75
PRG-Schultz Intl 4.750% 11/26/06 66
Primedex Health 11.500% 06/30/08 55
Primus Telecom 3.750% 09/15/10 32
Primus Telecom 5.750% 02/15/07 62
Primus Telecom 8.000% 01/15/14 59
Primus Telecom 12.750% 10/15/09 54
Psinet Inc. 10.000% 02/15/05 0
Psinet Inc. 11.000% 08/01/09 0
Psinet Inc. 11.500% 11/01/08 0
Railworks Corp. 11.500% 04/15/09 0
RDM Sports Group 8.000% 08/15/03 0
Read-Rite Corp. 6.500% 09/01/04 15
Reliance Group Holdings 9.000% 11/15/00 21
Reliance Group Holdings 9.750% 11/15/03 1
Salton Inc. 12.250% 04/15/08 40
SFBC Intl Inc. 2.250% 08/15/24 68
Solectron Corp. 0.500% 02/15/34 75
Specialty PaperB 9.375% 10/15/06 75
Tekni-Plex Inc. 12.750% 06/15/10 53
Toys R Us 7.375% 10/15/18 72
Trans Mfg Oper 11.250% 05/01/09 62
Transtexas Gas 15.000% 03/15/05 1
Tribune Co 2.000% 05/15/29 74
Trism Inc. 12.000% 02/15/05 0
Triton Pcs Inc. 8.750% 11/15/11 73
Triton Pcs Inc. 9.375% 02/01/11 73
Twin Labs Inc. 10.250% 05/15/06 5
United Air Lines 6.831% 09/01/08 74
United Air Lines 7.270% 01/30/13 55
United Air Lines 7.371% 09/01/06 35
United Air Lines 7.762% 10/01/05 58
United Air Lines 7.870% 01/30/19 54
United Air Lines 8.250% 04/26/08 29
United Air Lines 9.000% 12/15/03 18
United Air Lines 9.020% 04/19/12 64
United Air Lines 9.125% 01/15/12 19
United Air Lines 9.200% 03/22/08 52
United Air Lines 9.350% 04/07/16 71
United Air Lines 9.560% 10/19/18 64
United Air Lines 9.750% 08/15/21 20
United Air Lines 10.020% 03/22/14 59
United Air Lines 10.110% 01/05/06 52
United Air Lines 10.125% 03/22/15 58
United Air Lines 10.250% 07/15/21 17
United Air Lines 10.670% 05/01/04 18
United Air Lines 11.210% 05/01/14 21
Univ. Health Services 0.426% 06/23/20 57
Universal Stand 8.250% 02/01/06 4
US Air Inc. 10.250% 01/15/49 24
US Air Inc. 10.250% 01/15/49 1
US Air Inc. 10.250% 01/15/49 7
US Air Inc. 10.250% 01/15/49 25
US Air Inc. 10.550% 01/15/49 24
US Air Inc. 10.610% 06/27/07 0
US Air Inc. 10.680% 06/27/08 3
US Air Inc. 10.700% 01/01/49 26
US Air Inc. 10.700% 01/15/49 3
US Air Inc. 10.700% 01/15/49 25
US Air Inc. 10.800% 01/01/49 4
US Air Inc. 10.800% 01/01/49 28
Venture Hldgs 11.000% 06/01/07 0
Venture Hldgs 12.500% 06/01/07 0
WCI Steel Inc. 10.000% 12/01/04 69
Werner Holdings 10.000% 11/15/07 23
Westpoint Steven 7.875% 06/15/05 0
Westpoint Steven 7.875% 06/15/08 0
Wheeling-Pitt St 5.000% 08/01/11 71
Wheeling-Pitt St 6.000% 08/01/10 71
Winstar Comms 10.000% 03/15/08 0
World Access Inc. 4.500% 10/01/02 4
*********
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 A. Soriano-Baaclo, Marjorie C. Sabijon, Terence
Patrick F. Casquejo, Christian Q. Salta, Jason A. Nieva, Lucilo
Junior M. Pinili, Tara Marie A. Martin and Peter A. Chapman,
Editors.
Copyright 2005. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $675 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same firm
for the term of the initial subscription or balance thereof are
$25 each. For subscription information, contact Christopher Beard
at 240/629-3300.
*** End of Transmission ***