/raid1/www/Hosts/bankrupt/TCR_Public/060105.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, January 5, 2006, Vol. 10, No. 4
Headlines
ALLEGHENY ENERGY: AEP Buys Monongahela Power's Ohio Operations
ANCHOR GLASS: Overview & Summary of Chapter 11 Reorganization Plan
ANCHOR GLASS: Classification & Treatment of Claims Under Plan
APHTON CORP: Receives Non-Compliance Notice from NASDAQ
ARCH COAL: Sells Stock of 3 Units in Central Appalachia to Magnum
ARMSTRONG WORLD: Wants to Continue Cash Retention Program
ASARCO LLC: Avalos Realty Approved as Encycle's Real Estate Broker
ASARCO LLC: 10 Affiliates Have Until Mar. 7 to File Chap. 11 Plans
CD ASSOCIATES: Case Summary & 8 Largest Unsecured Creditors
CHEVY CHASE: Moody's Puts B2 Rating on Class B-5 Sub. Certificates
COUNTERPATH SOLUTIONS: Reports $258,725 Loss in Third Quarter
DANA CORP: Filing of Amended Financials Cues S&P to Remove Watch
DELPHI CORP: Law Debenture Wants Seat on Creditors' Committee
DELPHI CORP: Wants Court to Okay Uniform Lease Renewal Procedures
DLJ COMMERCIAL: Moody's Cuts $2.8 Mil. Class C Certs.' Rating to C
DOW JONES: Appoints Richard F. Zannino as Chief Executive Officer
DSL.NET INC: AMEX to Suspend Trading of Common Stock on January 9
EMPIRE DISTRICT: Fitch Initiates Coverage & Ratings Assignation
FLYI INC: S&P Withdraws D Corporate Credit Rating
FOAMEX INT'L: Gets Court Approval to Assume Amended Bayer Contract
GE COMMERCIAL: Moody's Lowers 2 Class Certificates' Ratings to B1
GLIMCHER REALTY: Forms Joint Venture With Oxford Properties Group
GLIMCHER REALTY: To Acquire Tulsa Promenade for $58.3 Million
GOODING'S SUPERMARKETS: Wants Access to Lenders' Cash Collateral
GOODING'S SUPERMARKETS: Wants to Walk Away from Titusville Lease
GRAY TELEVISION: Completes Spin-Off of Triple Crown Media
HANGAR ONE: Case Summary & 20 Largest Unsecured Creditors
HELLO CORP: Case Summary & 20 Largest Unsecured Creditors
HEMAGEN DIAGNOSTICS: Sept. 30 Balance Sheet Upside-Down by $1 Mil.
INEX PHARMACEUTICALS: Sets Stockholder Meeting to Approve Spin-off
INTERPLAY ENTERTAINMENT: Equity Deficit Falls to $12MM at Sept. 30
INTERSTATE BAKERIES: Amends Terms of DIP Financing with JPMorgan
INTERSTATE BAKERIES: Gets Court Nod on $815K Delray Property Sale
INTERSTATE BAKERIES: Wants Open-Ended Lease Decision Deadline
JAG MEDIA: 13,163,452 Common Shares Registered for Resale
KAISER ALUMINUM: Committee Wants Confirmation Objections Overruled
KAISER ALUMINUM: Court Approves $42.1MM Sherwin Alumina Settlement
MEDICALCV INC: 5% Series A Pref. Shares Convert to Common Stock
MID-STATE: Oneida Files Modified Plan of Reorganization
MIRANT CORP: California DWR Sells Unsecured Claim for $189.4 Mil.
MULTICANAL S.A.: Registers Securities for Restructuring Offers
NORTHWEST AIRLINES: Hires LECG as Interim Expert Consultants
NORTHWEST AIRLINES: Inks Settlement Pact with SIA Engineering
NORTHWEST AIRLINES: Wants to Maintain Ordinary Course Leases
O'SULLIVAN INDUSTRIES: New Claims Bar Date Set for January 30
O'SULLIVAN INDUSTRIES: Rick Walters' Salary Increased to $350,000
OWENS CORNING: Employees to Get Common Shares in Reorganized Co.
OWENS CORNING: Lazard Says Enterprise Value is $4.6B to $5.4B
OWENS CORNING: Plan Earmarks $1.76 Billion for Asbestos Claimants
PAXSON COMMUNICATIONS: Completes $1.13 Billion Refinancing
PEABODY ENERGY: Expansion Cues S&P to Revise Outlook to Positive
PENNSYLVANIA REAL: Acquires Woodland Mall for $117.4 Million
PLIANT CORPORATION: Judge Waltrath Approves All First Day Motions
PLIANT CORP: Bankruptcy Filing Causes S&P's Rating to Tumble to D
PRICE OIL: Can Use Lenders' Cash Collateral on Interim Basis
PRICE OIL: Taps Cahaba Capital & AEA Group as Financial Advisors
PRICE OIL: Wants to Assume Employment Agreement with Donald Wright
QUEBECOR MEDIA: Moody's Lowers CDN$1 Billion Notes' Ratings to B3
RAVEN MOON: Registers 800 Million Common Shares for Distribution
REFCO INC: Files Revised Consolidated List of 99 Largest Creditors
REFCO INC: Wants Until April 10 to File Notices of Removal
REFCO INC: Wants Until May 15 to Make Lease-Related Decisions
RESCARE INC: Arbor E&T Acquires Workforce Services for $165 Mil.
SFBC INTERNATIONAL: Appoints Jeffrey P. McMullen as CEO
SMARTIRE SYSTEMS: Balance Sheet Upside-Down by $8.58M at Oct. 31
STERLING FINANCIAL: Commences Dividend Reinvestment and Sale Plan
STERLING FINANCIAL: Names Donald J. Lukes to Board of Directors
STRUCTURED ASSET: Moody's Rates Class B5 Sub. Certificates at B2
TBYRD ENTERPRISES: Voluntary Chapter 11 Case Summary
TITAN GLOBAL: Wolf & Company Expresses Going Concern Doubt
TRUMP HOTELS: Court OKs World's Fair Site Tax Appeal Pact With BET
UAL CORP: Intercompany Tolling Order Extended Until March 1
URBAN HOTELS: Wants Access to Two Lenders' Cash Collateral
VALE OVERSEAS: Fitch Rates Proposed $300 Million Issuance at BB
VISTEON CORP: Increases 18-Month Secured Term Loan to $350 Million
WINDOW ROCK: Gregory Cynaumon Wants Claim Amount Determined
WINN-DIXIE: Equity Committee Wants an Examiner Appointed
WINN-DIXIE: Has Until Mar. 20 to File Reorganization Plan
WINN-DIXIE: Has Until March 20 to Make Lease Related Decision
WORLDCOM INC: Asks Court to Approve Amended Stipulation with IDR
WORLDCOM INC: Inks Stipulation Resolving T-Netix's $60.1MM Claim
W.R. GRACE: Asbestos PD Committee Wants Exclusivity Terminated
W.R. GRACE: Battles Asbestos PD Committee Over Claims Estimation
* Gardner Carton & Douglas Expands New York City Office
*********
ALLEGHENY ENERGY: AEP Buys Monongahela Power's Ohio Operations
--------------------------------------------------------------
American Electric Power (NYSE: AEP), through its Columbus Southern
Power utility subsidiary, completed the purchase of Monongahela
Power Company's Ohio operations Dec. 31, 2005. Monongahela Power
is a subsidiary of Allegheny Energy (NYSE: AYE).
The purchase price was approximately $46 million, subject to post-
closing adjustments. In addition, CSP will pay Allegheny $10
million associated with the termination of certain litigation.
Through the purchase, AEP acquired 29,000 Monongahela Power
customers in six southeastern Ohio counties and all transmission
and distribution assets located in Ohio serving those customers.
The sale also includes a power purchase agreement under which
Allegheny will provide AEP 100% of its power requirements to serve
the retail load in this area through May 31, 2007.
AEP Ohio provides electricity to 1.4 million customers of major
AEP subsidiaries Columbus Southern Power Company and Ohio Power
Company in Ohio, and Wheeling Power Company in the northern
panhandle of West Virginia. AEP Ohio is based in Gahanna, Ohio,
and is a unit of American Electric Power.
About American Electric Power
American Electric Power owns more than 36,000 megawatts of
generating capacity in the United States and is the nation's
largest electricity generator. AEP is also one of the largest
electric utilities in the United States, with more than 5 million
customers linked to AEP's 11-state electricity transmission and
distribution grid. The company is based in Columbus, Ohio.
About Allegheny Energy
Headquartered in Greensburg, Pa., Allegheny Energy --
http://www.alleghenyenergy.com/-- is an investor-owned utility
consisting of two major businesses. Allegheny Energy Supply owns
and operates electric generating facilities, and Allegheny Power
delivers low-cost, reliable electric service to customers in
Pennsylvania, West Virginia, Maryland, Virginia and Ohio.
* * *
As reported in the Troubled Company Reporter on June 15, 2005,
Moody's Investors Service assigned a Senior Implied rating of Ba1
to Allegheny Energy, Inc. and also assigned a Speculative Grade
Liquidity Rating of SGL-2. This is the first time that Moody's
has assigned both such ratings to AYE. The company's other
ratings, including the Ba2 senior unsecured rating, remain
unaffected.
ANCHOR GLASS: Overview & Summary of Chapter 11 Reorganization Plan
------------------------------------------------------------------
According to Anchor Glass Container Corporation Chief Executive
Officer and Chief Financial Officer Mark S. Burgess, the primary
purposes of Anchor Glass' Plan of Reorganization and Restructuring
are to:
a. reduce its debt service requirements and overall level of
indebtedness;
b. obtain additional financing in the form of a new revolving
credit facility, new term loan, newly issued common stock,
and newly issued warrants; and
c. provide the Debtor with greater liquidity and thereby
increase the likelihood that it will continue to operate as
a viable business enterprise.
The Plan also aims to obtain additional financing in the form of
new loan agreements, newly issued common stock and newly issued
warrants.
New Loan Agreements and New Securities
The Plan contemplates payment in full of the loans under the
Debtor's Senior Secured Postpetition Note Purchase Agreement
dated September 15, 2005, with Wells Fargo Bank, N.A., which
provided for the issuance of $125,000,000 Senior Secured Term
Notes Due 2006.
The Reorganized Debtor will enter into New Loan Agreements on or
before the Effective Date of the Plan to obtain certain of the
funds necessary to repay the Note Purchase Agreement Claims, to
make distributions under the Plan, and to conduct its post-
reorganization business:
1. A $50,000,000 revolving credit facility provided under a
senior secured revolving credit facility agreement; and
2. A $125,000,000 term loan provided under a senior secured
term credit facility agreement.
On the Plan Effective Date, the Reorganized Debtor will issue New
Common Stock and New Warrants, to be distributed pursuant to the
Plan. The issuance of the New Common Stock and the New Warrants
and the borrowings under the New Loan Agreements will be
authorized without the need for any further corporate action.
Corporate Structure of Reorganized Debtor
On the Effective Date, the term of the Debtor's current board of
directors will expire. The initial board of directors of the
reorganized Debtor after the Effective Date will consist of an
undisclosed number of members.
Pursuant to Section 1129(a)(5) of the Bankruptcy Code, the Debtor
will identify the individuals proposed to serve as directors of
Reorganized Anchor Glass and any proposed changes to existing
management at a later date. The board of directors of the
Reorganized Debtor will have the responsibility for the
management, control and operation of the reorganized Debtor on
and after the Effective Date.
The Debtor's current executive officers are:
Name Position
---- --------
Mark S. Burgess CEO and CFO
Peter T. Reno Senior VP, Sales and Procurement
Richard A. Kabaker VP, General Counsel and Secretary
Each officer serves at the discretion of the Board of Directors
or until the first meeting of the Board following the next annual
meeting of the stockholders and until the officer's successor is
chosen and qualified.
Alpha Resolution Trust
On the Effective Date, after consultation with the Official
Committee of Unsecured Creditors, the Debtor will establish an
Alpha Resolution Trust with a banking institution in the State of
Florida and appoint the Alpha Resolution Trustee.
The Alpha Resolution Trustee will:
(a) resolve any pending objections to General Unsecured
Claims and file or otherwise assert any objections
necessary or appropriate to resolve all Class 5 Disputed
Claims;
(b) make any required distribution from the Alpha Resolution
Trust to the Holders of Allowed General Unsecured Claims
in Class 5; and
(c) pay all Alpha Resolution Trust Expenses from the Alpha
Resolution Trust Assets.
Upon being notified of the establishment of the Alpha Resolution
Trust, the Reorganized Debtor's designated disbursing agent will
deliver to the Alpha Resolution Trustee:
-- $8,000,000 in cash; and
-- those funds aggregating $685,000, held in escrow by counsel
for the Official Committee of Unsecured Creditors, which
funds have been deposited by certain utilities under Court-
approved compromises to resolve the Creditors Committee's
objection to those utilities' entitlement to retain funds
paid postpetition for prepetition obligations.
All funds and other property in the Alpha Resolution Trust will
be held in an irrevocable trust for distribution to the Holders
of Allowed Class 5 General Unsecured Claims. Once funds are
deposited into the Alpha Resolution Trust, they will no longer be
property of the Debtor or the Reorganized Debtor or any other
person or entity.
The Alpha Resolution Trust will terminate on the first business
day after the completion of the duties of the Alpha Resolution
Trustee.
Adversary Proceeding Dismissal
The Creditors Committee commenced an adversary proceeding against
The Bank of New York, as Indenture Trustee under an indenture
dated February 7, 2003, pursuant to which Senior Notes were
issued by Anchor Glass. The Adversary Proceeding raised issues
concerning the amount of the Senior Notes Secured Claims and
other issues.
As part of the Plan and the consideration given to the Holders of
Senior Notes Secured Claims and the Holders of General Unsecured
Claims, the Adversary Proceeding is settled and compromised. On
the Effective Date, the Creditors Committee and each Holder of
General Unsecured Claims will dismiss or be deemed to have
dismissed their claims under the Adversary Proceeding, with
prejudice and in their entirety.
Feasibility of the Plan
In connection with confirmation of the Plan, Section 1129(a)(11)
requires that the Bankruptcy Court find that confirmation of the
Plan is not likely to be followed by the liquidation or the need
for further financial reorganization of Anchor Glass. This is
the so-called "feasibility" test.
To support its belief in the feasibility of the Plan, Anchor
Glass, with the assistance of its financial advisors Houlihan
Lokey Howard & Zukin, prepared financial projections for
Reorganized Anchor Glass. The Projections indicate that
Reorganized Anchor Glass should have sufficient cash flow to make
the payments required under the Plan on the Effective Date, repay
and service debt obligations and maintain operations on a going-
forward basis. Accordingly, Anchor Glass believes that the Plan
complies with the standard of Section 1129(a)(11).
The Financial Projections will be filed with the Court at a later
date.
Reorganization Beats Liquidation
The Bankruptcy Code requires that the Bankruptcy Court find that
the Plan is in the best interests of all Holders of Claims and
Interests that are Impaired by the Plan and that have not
accepted the Plan. The "best interests" test, set forth in
Section 1129(a)(7), requires the Court to find either that all
members of an impaired class of claims have accepted the plan or
that the plan will provide a member who has not accepted the plan
with a recovery of property of a value, as of the effective date
of the plan, that is not less than the amount that the Holder
would receive or retain if the debtor were liquidated under
Chapter 7 of the Bankruptcy Code on that date.
Anchor Glass, with the assistance of Houlihan Lokey, prepared a
liquidation analysis to calculate the probable distribution to
members of each impaired class of Holders of claims if Anchor
Glass were liquidated under Chapter 7. The Debtor notes that the
amount of liquidation value available to Holders of Unsecured
Claims against Anchor Glass would be reduced by the claims of
Secured Creditors and by the costs and expenses of liquidation,
as well as by other administrative expenses and costs of both the
Chapter 7 case and the Chapter 11 Case.
Based on the Liquidation Analysis, Anchor Glass believes that
each member of each Class of Impaired Claims and Impaired
Interests will receive at least as much, if not more, under the
Plan as they would receive if Anchor Glass were liquidated. With
respect to Holders of Common Stock Interests, Anchor Glass
believes that each member of those Classes would receive nothing
on account of its Interests in a Chapter 7 liquidation. Because
liquidation would not yield more for the Interest Holders, the
Plan meets the requirements of Section 1 129(a)(7) as to Interest
Holders as well.
The Debtor will file the Liquidation Analysis with the Court at a
later date.
Disclosure Hearing on Jan. 26
Judge Paskay will convene a hearing on January 26, 2006, at 9:00
a.m. in Tampa, Florida, to consider approval of the Disclosure
Statement.
At the hearing, Judge Paskay will determine whether the
Disclosure Statement contains adequate information within the
meaning of Section 1125 of the Bankruptcy Code, to enable a
hypothetical investor typical of holders of claims or interests
of the relevant class to make an informed judgment about the
Plan.
Headquartered in Tampa, Florida, Anchor Glass Container
Corporation is the third-largest manufacturer of glass containers
in the United States. Anchor manufactures a diverse line of flint
(clear), amber, green and other colored glass containers for the
beer, beverage, food, liquor and flavored alcoholic beverage
markets. The Company filed for chapter 11 protection on Aug. 8,
2005 (Bankr. M.D. Fla. Case No. 05-15606). Robert A. Soriano,
Esq., at Carlton Fields PA, represents the Debtor in its
restructuring efforts. When the Debtor filed for protection
from its creditors, it listed $661.5 million in assets and
$666.6 million in debts. (Anchor Glass Bankruptcy News, Issue No.
15; Bankruptcy Creditors' Service, Inc., 215/945-7000)
ANCHOR GLASS: Classification & Treatment of Claims Under Plan
-------------------------------------------------------------
Anchor Glass Container Corporation's Plan of Reorganization
groups claims against and interests in the Debtor into six
classes:
Class Description Estimated Amt. Recovery under the Plan
----- ----------- ------------- -----------------------
N/A Administrative $32,700,000 Each holder will be paid
Claims in accordance with the
terms between the holder
and the Debtor.
N/A Note Purchase $125,000,000 The Claims will be repaid
Agreement and refinanced by the New
Claims Term Loan.
N/A Priority Tax $4,500,000 Holder will receive:
Claims
(a) Cash equal to the
unpaid portion of the
Allowed Priority Tax
Claim;
(b) deferred Cash payments
over a period not
exceeding six years; or
(c) other treatment agreed
upon by the holder and
the Debtor.
1 Other Priority $500,000 Paid in full, in cash.
Claims
Unimpaired, not entitled to
vote. Deemed to have
accepted the Plan.
2 Senior Note $368,302,778 Each holder will receive
Secured Claims its Pro Rata share from the
New Common Stock, less the
New Common Stock used to
satisfy the GE Capital
Allowed Secured Claim,
provided, however, that in
accordance with a Global
Settlement resolving the
issues raised by the
Official Committee of
Unsecured Creditors against
the Senior Notes Indenture
Trustee, each Holder of a
Senior Note Claim -- a
portion of which is a
General Unsecured Claim --
waives its right to its Pro
Rata share of the Alpha
Resolution Trust Assets but
not its right to vote as
the Holder of an Allowed
Class 5 General Unsecured
Claim to the extent of the
Allowed amount of the
Claim.
For Plan purposes only,
Senior Note Claim holders
will be deemed to have
contributed their right to
receive distributions as
General Unsecured Creditors
to the Holders of Allowed
General Unsecured Claims
who are not Holders of
Senior Notes. However,
nothing contained in the
Plan will be deemed to
affect the rights of a
Holder of Senior Notes in
respect of a Claim against
the Debtor arising from
something other than the
Senior Notes.
Impaired, entitled to vote.
3 GE Capital $9,500,000 The claim will be treated
Secured Claim as a Secured Claim to the
extent of the value of the
collateral -- consisting of
equipment at Anchor Glass'
Elmira, New York plant --
securing the Claim.
If the GE Capital Claim
exceeds the value of the
collateral, the excess will
be treated as a General
Unsecured Claim.
The Allowed claim will
receive shares of New
Common Stock equal in
value to the Allowed Amount
of its Secured Claim.
Impaired, entitled to vote.
4 Other Secured $1,000,000 If a Claim exceeds the
value of the collateral
that secures it, the Holder
will have a Secured Claim
equal to the collateral's
value and a General
Unsecured Claim for the
deficiency.
Unimpaired, not entitled to
vote. Deemed to have
accepted the Plan.
5 General $120,000,000 Each holder will be
Unsecured satisfied in full its Pro
Claims Rata Share of its
beneficial interest in the
Alpha Resolution Trust,
funded initially by the
Utility Settlement Proceeds
held in escrow for the
Creditors Committee.
Impaired, entitled to vote.
6 Common Stock All Common Stock interests
Interests will receive the New
Warrants, representing the
right to purchase 5% of the
New Common Stock at an
equity value that
represents a substantial
premium to the equity value
of the Reorganized Debtor.
Impaired, entitled to vote.
Headquartered in Tampa, Florida, Anchor Glass Container
Corporation is the third-largest manufacturer of glass containers
in the United States. Anchor manufactures a diverse line of flint
(clear), amber, green and other colored glass containers for the
beer, beverage, food, liquor and flavored alcoholic beverage
markets. The Company filed for chapter 11 protection on Aug. 8,
2005 (Bankr. M.D. Fla. Case No. 05-15606). Robert A. Soriano,
Esq., at Carlton Fields PA, represents the Debtor in its
restructuring efforts. When the Debtor filed for protection
from its creditors, it listed $661.5 million in assets and
$666.6 million in debts. (Anchor Glass Bankruptcy News, Issue No.
15; Bankruptcy Creditors' Service, Inc., 215/945-7000)
APHTON CORP: Receives Non-Compliance Notice from NASDAQ
-------------------------------------------------------
Aphton Corporation (NASDAQ:APHT), on Dec. 27, 2005, received
notice from NASDAQ Stock Market informing the Company that it
failed to regain compliance by Dec. 20, 2005 with Marketplace Rule
4310(c)(4) requiring the Company to evidence a minimum closing bid
price of $1.00 per share for at least 10 consecutive trading days.
The notice from NASDAQ follows the company's announcement on
Dec. 5, 2005 that the Company is not in compliance with
Marketplace Rule 4310(c)(2)(B), which requires the Company to have
a minimum of $2,500,000 in stockholders' equity or $35,000,000
market value of listed securities or $500,000 of net income from
continuing operations for the most recently completed fiscal year
or two of the three most recently completed fiscal years and was
therefore subject to delisting.
The Company appealed NASDAQ's prior decision to delist the
Company's common stock because of that deficiency to a NASDAQ
Listing Qualifications Panel and a hearing was granted. At the
hearing for the appeal, the Company presented its plan to regain
compliance with Marketplace Rule 4310(c)(2)(B).
In the Dec. 27, 2005 letter, NASDAQ informed the Company that, in
addition to considering the Company's plan to regain compliance
with Marketplace Rule 4310(c)(2)(B), the Panel will consider the
company's plan to remedy the failure to comply with NASDAQ's
minimum bid price requirement in rendering its decision with
regard to the Company's continued listing. The company addressed
both deficiencies at the hearing for the appeal and requested an
exception to evidence compliance with the NASDAQ listing criteria.
The company advised the Panel that it intended to address the bid
price deficiency through the adoption of a reverse stock split.
The proxy statement requesting stockholder approval of the reverse
stock split was mailed to stockholders on Dec. 16, 2005 and the
special meeting of stockholders is scheduled to be held on Jan. 9,
2006. However, there can be no assurance that the Panel will
grant the Company's request for continued listing.
Headquartered in Philadelphia, Pennsylvania, Aphton Corporation
-- http://www.aphton.com/-- is a clinical stage biopharmaceutical
company focused on developing targeted immunotherapies for cancer.
Aphton's products seek to empower the body's own immune system to
fight disease. Through the acquisition of Igeneon AG in March
2005, Aphton acquired late-stage products, IGN101, a cancer
vaccine designed to induce an immune response against EpCAM-
positive tumor cells, and IGN311, a fully humanized antibody
against the Lewis Y antigen. Aphton has strategic alliances with
Xoma for treating gastrointestinal and other gastrin-sensitive
cancers using anti-gastrin monoclonal and other antibodies;
Daiichi Pure Chemicals for the development, manufacturing and
commercialization of gastrin-related diagnostic kits; and
Celltrion Inc. for the development, manufacturing and
commercialization of IGN311. Aphton's most advanced product,
Insegia(TM), targets the hormone gastrin 17 in an attempt to treat
gastrointestinal cancers. Aphton is currently seeking partners
that will support the further development of Insegia.
At Sept. 30, 2005, Aphton Corporation's balance sheet showed a
$12,345,522 stockholders' deficit compared to $20,990,157 of
positive equity at Dec. 31, 2004.
ARCH COAL: Sells Stock of 3 Units in Central Appalachia to Magnum
-----------------------------------------------------------------
Arch Coal, Inc., reported on Jan. 3, 2006, that it sold 100% of
the stock of three subsidiaries and their associated mining
operations and coal reserves in Central Appalachia to Magnum Coal
Company, effective Dec. 31, 2005. Arch had previously announced
plans to contribute these same assets to Magnum in exchange for a
minority interest in Magnum.
"We believe that today's announcement is in the best interests of
the shareholders, customers and employees of both Arch Coal and
Magnum," said Steven F. Leer, Arch Coal's president and chief
executive officer. "The direct sale of these subsidiaries enables
both companies to achieve their ultimate objectives in an
accelerated fashion, while providing greater clarity for the
employees at the affected operations. Through this transaction,
Arch has unlocked the value of some of its Central Appalachian
holdings, sharpened its focus in that region, and strengthened its
balance sheet in preparation for future growth."
Included in the sale is all of the stock of Hobet Mining, Apogee
Coal Company and Catenary Coal Company, which include the Hobet
21, Arch of West Virginia, Samples and Campbells Creek mining
operations. All four operations are located in southern West
Virginia. In total, the four operations employ approximately
1,000 people and produced approximately 9.5 million tons of coal
during the first nine months of 2005.
"The work forces at these operations have made a significant
contribution to the success of Arch Coal over the years," Mr. Leer
said. "We wish them the very best as they embark on this new
endeavor."
Remaining Central Appalachia Reserves
Arch is retaining select reserves and assets in Central
Appalachia, including the Mingo Logan, Lone Mountain, Cumberland
River and Coal-Mac operations. In addition, Arch will retain the
Mountaineer II longwall mine currently under development at the
Mountain Laurel mining complex in Logan County, West Virginia, as
well as the adjacent Spruce surface reserves. Arch has received
the state surface mining permit for the Spruce reserves and is
currently in the process of securing the necessary federal permits
for these reserves, with the objective of developing a surface
mine there once all the necessary permits are in hand. Arch is
retaining a total of 372 million tons of coal reserves in Central
Appalachia.
"This transaction represents Arch's commitment to managing our
portfolio of operations in a way that continuously enhances our
competitiveness and maximizes value for our shareholders," Mr.
Leer said. "We are retaining operations that have significant
future development potential in Central Appalachia, which remains
an important operating region for Arch."
As a result of the sale, Arch expects to record a small net gain
during the fourth quarter of 2005, which includes the write-off of
an estimated $50 million to $60 million of below-market legacy
sales contracts retained in the transaction and a charge of $70
million to $80 million related to previously unrecognized
actuarial liabilities associated with post-retiree healthcare.
The transaction is expected to be accretive to Arch's earnings and
EBITDA in 2006. In addition, the transaction has resulted in a
substantial reduction in Arch's legacy liabilities. Had the
transaction occurred at Sept. 30, 2005, the book liabilities
associated with these operations would have included approximately
$450 million of post-retiree healthcare, workers' compensation and
reclamation obligations, or $520 million to $530 million including
the $70 million to $80 million charge. Arch expects similar
reductions to these liabilities once it closes its books for 2005
and records the impact of this transaction.
Following the completion of the sale, Arch expects its 2006 sales
volume in Central Appalachia to be between 13 million and 14
million tons, excluding brokered tonnage. That total is expected
to increase with the ramping up of the Mountain Laurel complex in
the second half of 2007. In addition, Arch is pursuing internal
growth opportunities in its Western coal basins.
"Even after today's announcement, we expect Arch's 2008 production
across all basins to increase by a net total of 10 million to 15
million tons vs. normalized 2005 production, based solely on
already identified internal growth projects," Mr. Leer said. "At
the same time, the restructuring of our Central Appalachian
operations further strengthens our financial footing as we prepare
for new opportunities that may arise in the marketplace."
St. Louis-based Arch Coal, Inc., is the second largest coal
producer in the United States, with subsidiary operations in West
Virginia, Kentucky, Virginia, Wyoming, Colorado and Utah. Through
these operations, Arch provides the fuel for approximately 7% of
the electricity generated in the United States.
* * *
As reported in the Troubled Company Reporter on Aug. 11, 2005,
Moody's Investors Service affirmed Arch Coal, Inc.'s Ba3 corporate
family rating. All other ratings of Arch Coal Inc., and its
subsidiary, Arch Western Finance LLC, were affirmed. AWF's notes
are guaranteed by its parent, Arch Western Resources, a subsidiary
of Arch Coal. The affirmation follows Arch's announcement of its
intention to contribute four of its central Appalachian mining
operations to a new company, which will also have mining
operations (known as Trout Coal) contributed to it by ArcLight.
The new company will file for an initial public offering and it is
expected that Arch Coal will initially own approximately 37.5% of
this company. The rating outlook for both Arch Coal and AWF is
stable.
These ratings are affirmed:
Arch Coal, Inc.:
* $700 million five-year guaranteed senior secured revolving
credit facility, Ba2
* $145 million of Perpetual Cumulative Convertible Preferred
Stock, B3
* Corporate Family rating, Ba3
Arch Western Finance, LLC:
* $961 million of 6.75% guaranteed senior notes due 2013, Ba3
ARMSTRONG WORLD: Wants to Continue Cash Retention Program
---------------------------------------------------------
As previously reported, Armstrong World Industries, Inc., and its
debtor-affiliates implemented an employee retention program for
senior level executives and managers. The retention program was
developed by Armstrong World's senior management, with the
assistance of the Debtors' financial advisers, Human Capital
Division of Arthur Andersen and Lazard Freres & Co. LLC.
Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in
Wilmington, Delaware, recounts that the Original Employee
Retention Program, in conjunction with AWI's customary incentive
compensation programs, constituted a comprehensive scheme designed
to provide the necessary financial and other security and
incentives to:
-- minimize Key Employee turnover;
-- encourage the Key Employees to remain with AWI;
-- attract highly competent new executives; and
-- motivate all Key Employees to work diligently and
productively to maximize enterprise value throughout
the Debtors' Chapter 11 case and to achieve a successful
conclusion of their bankruptcy.
The Original Employee Retention Program comprises these
components:
(a) annual cash retention payments for certain Key Employees;
(b) a severance benefit plan; and
(c) the assumption of certain change in control agreements and
an employment agreement.
Mr. Collins reminds the U.S. Bankruptcy Court for the District of
Delaware that the Cash Retention Program, in particular, was
designed to address the fact that, as a result of the Chapter 11
filing, the stock-based compensation the Key Employees had
previously received had become worthless and that AWI faced
significant retention issues, increased senior management
attrition, and targeting of its employees by employment
recruiters. The Cash Retention Program served to ensure that
total compensation paid to AWI's Key Employees remained
competitive with other potential employers.
Under the Cash Retention Program, approximately 150 Key Employees
were eligible to receive annual cash retention payments over the
three-year period that ended December 31, 2003.
AWI also maintains customary incentive compensation plans
consisting of an annual incentive plan for key managers and senior
level executives and a long-term cash incentive plan, Mr. Collins
relates.
According to Mr. Collins, the Debtors' delayed emergence has
raised potential issues for certain tax deductions that AWI has
been entitled to take in connection with payments made under the
Incentive Compensation Plans. In August 2005, AWI's board of
directors amended the Incentive Compensation Plans and updated the
criteria used to measure performance under these plans. In light
of the District Court's order delaying the Debtors' emergence from
Chapter 11, it became necessary for AWI to obtain Bankruptcy Court
approval for the performance-based compensation to qualify for
favorable tax treatment going forward. On August 22, 2005, AWI
filed a request seeking approval of the material terms of the
Incentive Compensation Plans, which the Court later approved.
Mr. Collins tells Judge Fitzgerald that the Original Employee
Retention Program was successful. For the three-year period
ending December 31, 2003, AWI had an average annual management
voluntary turnover rate of approximately 4%. Unfortunately,
however, due to circumstances beyond their control, the Debtors
were unable to emerge from Chapter 11, which has created
uncertainty and concern among Key Employees. Because AWI had
expected to emerge from Chapter 11 in December 2003, or shortly
after, it did not seek to adopt a Cash Retention Program for the
2004 calendar year. With the continued uncertainty over the
Debtors' emergence, the Key Employees did not receive cash bonuses
in 2004 as previously provided under the Original Employee
Retention Program. This contributed to AWI experiencing a
dramatic Key Employee voluntary turnover rate of 8% that year --
two times its average turnover rate for the first three years of
its bankruptcy.
In late 2004, once it became probable that AWI would not emerge
from bankruptcy until, at the earliest, late 2005, AWI believed
that a renewed cash retention program for the 2005 calendar year
was necessary to its ability to reduce Key Employee turnover.
Accordingly, in December 2004, the Debtors requested the Court's
approval to continue their Cash Retention Program. Under the 2005
Cash Retention Program, approximately 190 Key Employees will
receive an annual cash retention payment for the one-year period
ending December 31, 2005. Payments will range from 20% to 100% of
base salary depending on the retention risk and the nature of work
performed by the Key Employees. The cost of the 2005 Cash
Retention Program for 2005 was estimated at $8,600,000.
While the 2005 Cash Retention Program helped to alleviate the
employee concerns in 2005, reducing the Key Employee voluntary
turnover rate from 8% in 2004 to approximately 2.6% over the first
nine months of 2005, the 2005 Cash Retention Program is set to
expire. Without a continuation of the program, and with emergence
still unlikely to occur imminently, AWI will return to a similar
environment that existed in 2004, Mr. Collins contends.
Thus, the Debtors seek the Court's authority to continue the Cash
Retention Program through December 31, 2006. AWI says that the
renewed cash retention program will be substantially smaller and
more focused.
Mr. Collins says that the 2006 Cash Retention Program has been
designed with the goal that Key Employees continue to provide
essential management and other necessary services during the
Debtors' Chapter 11 cases and to stem the attrition that would
adversely affect the Debtors' operations.
The same reasons that justified the Original Cash Retention
Program and the 2005 Cash Retention Program justify the
implementation of the 2006 Cash Retention Program, Mr. Collins
says.
The Debtors tell Judge Fitzgerald that their Key Employees are
essential to their reorganization and that they possess the unique
knowledge, skills, experience and customer and supplier
relationships, all of which are vital to the business enterprise
and, in many cases, impossible to replicate. The continued
employment, dedication, motivation and loyalty of the Key
Employees are essential to the maintenance, preservation and
prosperity of AWI and the Debtors' reorganization effort.
Mr. Collins adds that the loss of Key Employees would have adverse
economic effects for AWI. AWI has already expended significant
time and resources in recruiting and training many of the Key
Employees, and this investment would be lost if they were to
depart. Moreover, certain of AWI's Key Employees were involved
with the development of their Reorganization Plan, and their
participation in its implementation or the implementation of any
other plan of reorganization that may be confirmed will be
extremely beneficial. Furthermore, the ability to attract
competent new employees to fill vacated positions is both
difficult and costly. Not only are qualified candidates scarce,
but they too will be reluctant to join a Chapter 11 debtor, Mr.
Collins notes.
According to Mr. Collins, the 2006 Cash Retention Program was
initially approved on October 24, 2005, by the Management
Development and Compensation Committee of the Board of Directors
of Armstrong Holdings, Inc., AWI's indirect parent corporation.
In determining to adopt the 2006 Cash Retention Program, the
Compensation Committee considered, among other things:
* the renewed and obvious need to retain key employees;
* the costs associated with the program implementation and
the costs of similar programs previously offered;
* AWI's operational and financial performance;
* the compensation received by senior management personnel
at other companies;
* the consistency of compensation practices within AWI;
* similar programs implemented in other reorganization
cases; and
* the disruption and costs associated with losing and
having to replace key employees.
Mr. Collins also assures the Court that the Debtors informed each
of the committees in their Chapter 11 cases that they seek
approval of the 2006 Cash Retention Program and provided the
committees with information about and discussed the proposed
modifications from the 2005 Cash Retention Program.
Under the 2006 Cash Retention Program, approximately 60 Key
Employees will be eligible to receive an annual cash retention
payment for the one-year period ending December 31, 2006. The
payments will range from 20% to 100% of the Key Employee's base
salary, depending on the retention risk as well as the nature of
the work performed. Key Employees will be entitled to receive
this payment only if they are still employed with AWI on the
applicable payment date. In the event of death or disability, a
pro rata amount of the payment may be made.
It is contemplated that if a reorganization plan becomes effective
in 2006, the Key Employees will be entitled to receive the full
amount of scheduled payment for 2006, payable in December 2006.
The number of eligible Key Employees and estimated costs related
to the 2006 Cash Retention Program have been decreased
significantly when compared to the 2005 Cash Retention Program and
the Cash Retention Program, Mr. Collins observes. Whereas the
annual cost of the 2005 Cash Retention Program will be
approximately $8,600,000, the 2006 Cash Retention Program is
estimated to cost $3,500,000, which is less than half of the
annual costs associated with the 2005 Cash Retention
Program.
Headquartered in Lancaster, Pennsylvania, Armstrong World
Industries, Inc. -- http://www.armstrong.com/-- the major
operating subsidiary of Armstrong Holdings, Inc., designs,
manufactures and sells interior finishings, most notably floor
coverings and ceiling systems, around the world. The Company and
its debtor-affiliates filed for chapter 11 protection on
December 6, 2000 (Bankr. Del. Case No. 00-04469). Stephen
Karotkin, Esq., at Weil, Gotshal & Manges LLP, and Russell C.
Silberglied, Esq., at Richards, Layton & Finger, P.A., represent
the Debtors in their restructuring efforts. When the Debtors
filed for protection from their creditors, they listed
$4,032,200,000 in total assets and $3,296,900,000 in liabilities.
As of March 31, 2005, the Debtors' balance sheet reflected a
$1.42 billion stockholders' deficit. (Armstrong Bankruptcy
News, Issue No. 85; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
ASARCO LLC: Avalos Realty Approved as Encycle's Real Estate Broker
------------------------------------------------------------------
Michael Boudloche, the Chapter 7 Trustee appointed to oversee the
liquidation of Encycle/Texas, Inc.'s estate, sought and obtained
authority from the U.S. Bankruptcy Court for the Southern District
of Texas, in Corpus Christi, to retain Armando Avalos Realty,
Inc., as his real estate broker.
Encycle's Chapter 7 Trustee said that among the assets that
Encycle has interest in are real property and business personal
property at 5500 River Road, in Corpus Christi, Texas. To manage
the Corpus Christi Property and oversee the environmental
situations at the area, the Trustee has solicited the assistance
of Armando Avalos Realty. In fact, on the Trustee's behalf, the
broker already has examined and evaluated the Property.
Specifically, the Trustee expects Armando Avalos Realty, Inc.,
to:
(a) manage real property;
(b) review documents pertaining to the property;
(c) collect any relevant documents; and
(d) address issues and related testimony concerning
valuations and court appearances.
According to the Encycle Trustee, Armando Avalos Realty has
already represented him on numerous bankruptcy matters and on
limited personal real estate matters in the past.
The broker will be paid $100 per hour of service.
Armando Avalos, President of Armando Avalos Realty, assured the
Court that the firm does not have any adverse interest to the
estate and does not have any connection with any party involved
in the Debtor's bankruptcy. Furthermore, Mr. Avalos attests that
it is a disinterested party within the meaning of Section 101(14)
of the Bankruptcy Code.
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. 13; Bankruptcy Creditors' Service, Inc., 215/945-7000).
ASARCO LLC: 10 Affiliates Have Until Mar. 7 to File Chap. 11 Plans
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas in
Corpus Christi extended ASARCO LLC's 10 affiliate debtors'
deadline to file their chapter 11 plan of reorganization to
March 7, 2006, and solicit acceptances of that Plan to May 6,
2006.
The 10 Affiliate Debtors that filed for bankruptcy on Oct. 13,
2005,
are:
* ASARCO Master, Inc.,
* Bridgeview Management Company, Inc.,
* ASARCO Oil and Gas Company, Inc.,
* Government Gulch Mining Company, Limited,
* ALC, Inc.,
* American Smelting and Refining Company
* AR Mexican Explorations, Inc.,
* AR Sacaton, L.L.C.,
* Salero Ranch, Unit III, Community Association, Inc., and
* Covington Land Company.
As previously reported in the Troubled Company Reporter on
Dec. 15, 2005, the extension requested is the same date as that in
all the other Debtors' cases.
According to Jack L. Kinzie, Esq., at Baker Botts L.L.P., in
Dallas, Texas, setting the expiration of the exclusivity periods
on the same dates for all the Debtors will assist the Debtors in
the efficient management of the case. An extension will permit
the Debtors to file their Plan, seek approval of their disclosure
statement, and seek Plan confirmation in an orderly manner and at
the least expense. The Debtors can also continue their efforts
to settle various cases and controversies with their creditor
constituencies, increasing the potential for early payout of
allowed claims.
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. 13; Bankruptcy Creditors' Service, Inc., 215/945-7000).
CD ASSOCIATES: Case Summary & 8 Largest Unsecured Creditors
-----------------------------------------------------------
Lead Debtor: CD Associates, Ltd.
dba Cobblestone Condominiums
4101 Centurion Way
Addison, Texas 75001
Bankruptcy Case No.: 06-30121
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Mecklenberg/Pineville Associates, L.P. 06-30123
Type of Business: The Debtors are affiliates of Dale Bullough.
Mr. Bullough is a general partner of the Debtors
and he filed for bankruptcy protection on Feb.
7, 2005 (Bankr. N.D. Tex. Case No. 05-31531).
Chapter 11 Petition Date: January 3, 2006
Court: Northern District of Texas (Dallas)
Debtors' Counsel: Eric A. Liepins, Esq.
Eric A. Liepins, P.C.
12770 Coit Road, Suite 1100
Dallas, Texas 75251
Tel: (972) 991-5591
Estimated Assets Estimated Debts
---------------- ---------------
CD Associates, Ltd. Less than $50,000 $1 Million to
$10 Million
Mecklenberg/Pineville $1 Million to $1 Million to
Associates, L.P. $10 Million $10 Million
Consolidated List of Debtors' 8 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Capital Crossing Bank $2,600,000
Attn: Commercial Loans
101 Summer Street
Boston, MA 02110
Madden & Sewell $180,000
1755 Wittington Place, Suite 300
Dallas, TX 75234
BG Construction & Remodelling $85,000
2600 E. Southlake Boulevard, Suite 120350
Southlake, TX 76092
Dale Bullough $10,000
4101 Centurion
Addison, TX 75001
Toombs, Hall & Foster, L.L.P. $9,700
8411 Preston Road
LB 32, Suite 750
Dallas, TX 75225-5524
Sewell & Anderson, LLC $4,556
1755 Wittington Place, Suite 300
Dallas, TX 75234
Kirkpatrick & Lockhart, LLP $4,049
2828 North Harwood Street, Suite 1800
Dallas, TX 752016966
Deloitte & Touche, LLP $700
P.O. Box 840148
Dallas, TX 75284-0148
CHEVY CHASE: Moody's Puts B2 Rating on Class B-5 Sub. Certificates
------------------------------------------------------------------
Moody's Investors Service assigned a Aaa rating to the senior
certificates issued by Chevy Chase Funding LLC, Mortgage-Backed
Certificates, Series 2005-4, and ratings ranging from Aa1 to B2 to
the subordinate certificates in the deal.
The securitization is backed by Chevy Chase Bank, F.S.B.
originated or acquired 100% adjustable-rate loans with a negative
amortization or an interest only payment option. The ratings are
based primarily on:
* the credit quality of the loans;
* the structure of the transaction; and
* the protection from subordination.
Moody's expects collateral losses to range from 0.85% to 0.95%.
Chevy Chase Bank, F.S.B. will service the loans.
The complete rating actions are:
Issuer: Chevy Chase Funding LLC, Mortgage-Backed Certificates,
Series 2005-4
* Class A-1, rated Aaa
* Class A-1I, rated Aaa
* Class A-2, rated Aaa
* Class A-2I, rated Aaa
* Class A-NA, rated Aaa
* Class B-1, rated Aa1
* Class B-1I, rated Aa1
* Class B-1NA, rated Aa1
* Class B-2, rated A1
* Class B-2I, rated A1
* Class B-2NA, rated A1
* Class B-3, rated Baa1
* Class B-4, rated Ba1
* Class B-5, rated B2
* Class IO, rated Aaa
* Class NIO, rated Aaa
The notes are being offered in a privately negotiated transaction
without registration under the 1933 Act. The issuance was
designed to permit resale under Rule 144A.
COUNTERPATH SOLUTIONS: Reports $258,725 Loss in Third Quarter
-------------------------------------------------------------
CounterPath Solutions, Inc., formerly known as Xten Networks,
delivered its quarterly report on Form 10-QSB for the quarter
ending October 31, 2005, to the Securities and Exchange Commission
on December 15, 2005.
The Company reported $258,725 net loss on $1,086,101 of net
revenues for the quarter ending October 31, 2005. At
October 31, 2005, the Company's balance sheet shows $1,873,527 in
total assets and $965,377 in total debts.
Since inception, CounterPath has had negative cash flows from
operations. Its net loss for the six months ended October 31,
2005, was $574,164 compared to the net loss in the same six month
period of 2004, of $409,150.
At of October 31, 2005, the Company has not yet achieved
profitable operations and has generated an accumulated deficit of
$1,604,465 since incorporation. At October 31, 2005, CounterPath
had $920,351 in cash and cash equivalents compared to $1,244,906
at April 30, 2005. This represents a decrease of $324,555, or
26.1%. It had a working capital surplus of $597,684 at
October 31, 2005, compared to a surplus of $1,091,223 at April 30,
2005. This represents a decrease of $493,539 or 45.2%.
Going Concern Doubt
Amisano Hanson Chartered Accountants, of Vancouver, Canada,
expressed substantial doubt about the Company's ability to
continue as a going concern after auditing the Company's financial
statements for the fiscal years ended April 30, 2005, and 2004.
The auditing firm points to the Company's dependence on its
ability to raise capital from stockholders or other sources to
sustain operations or generate profitable operations.
A full-text copy of the regulatory filing is available at no
charge at http://ResearchArchives.com/t/s?41c
Headquartered in Vancouver, B.C., Xten Networks, nka CounterPath
Solutions, Inc. -- http://www.xten.com/-- provides Voice over
Internet Protocol software and related consulting services to
customers in North America, South America, Europe, Asia and other
areas of the world. The Company designs, develops and markets
software, based upon session initiation protocol, which is used to
make or receive phone calls from a computer running the Windows
2000, Windows XP, Mac OS X or Linux operating systems, or a
personal digital assistant running the Windows Mobile Pocket PC
operating system. The Company changed its name to CounterPath
Solutions, Inc., on Sept. 16, 2005 following a merger to its
subsidiary, Ineen Inc.
DANA CORP: Filing of Amended Financials Cues S&P to Remove Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit ratings and all other ratings on Dana Corp. and its wholly
owned subsidiary Dana Credit Corp., and removed the ratings from
CreditWatch, where they were placed with negative implications on
Sept. 15, 2005. The ratings outlook is negative. Consolidated
debt at June 30, 2005, totaled about $2.4 billion.
"Our action followed Dana's filing of amended financial statements
prior to the termination of related waivers on both its bank
credit facility and accounts receivable securitization program,"
said Standard & Poor's credit analyst Daniel R. DiSenso.
The amended financial statements were filed on Dec. 30, 2005. Dana
has not yet filed its third-quarter 2005 statements, but we expect
the company to file such statements in early January 2006, prior
to the late-January cure period for the technical default.
The ratings on the Toledo, Ohio-based automotive supplier reflect
its weak credit profile. Dana's operations have been negatively
affected by difficult industry conditions for light vehicles in
North America. The weakened profile also reflects operational
inefficiencies within Dana's automotive systems and commercial
vehicle groups that will take time to fix. Free cash generation
will be modest at best for the next two years, which means
continued elevated debt levels. Also, Dana will be taking large
write-downs that will result in a much more aggressively leveraged
balance sheet.
The company expects to achieve more than $20 million of annual
savings from a restructuring. It will close two manufacturing
facilities in its automotive systems group, reduce headcount at a
number of non-U.S. manufacturing facilities, and take a number of
steps to balance capacity and to enhance manufacturing
efficiencies at its commercial vehicle operations. Dana also
expects to achieve more than $40 million of annual savings from a
5% salaried workforce reduction and changes to its employee
benefit programs.
Dana's U.S. operations have been unprofitable since 2001, and
given the uncertain earnings outlook, the company will be unable
to maintain its U.S. deferred tax benefits or to record similar
tax benefits in the future. Dana has also announced plans to
divest noncore businesses representing combined annual sales of
about 14% of the firm's 2004 sales.
The decline in demand for midsize and large SUVs could reduce the
potential benefits of Dana's restructuring actions. Very strong
demand for commercial vehicles in North America is expected to
weaken materially in 2007, when stricter and more costly new
emissions standards go into effect. Dana's commercial vehicles
business has not fully benefited from peak demand.
DELPHI CORP: Law Debenture Wants Seat on Creditors' Committee
-------------------------------------------------------------
Law Debenture Trust Company of New York, the successor Indenture
Trustee and Property Trustee for the (i) 8.25% Junior Subordinated
Note Due 2033 and (ii) adjustable Rate Junior Subordinated Note
Due 2033 issued by Delphi Corporation and its debtor-affiliates,
asks the Honorable Robert D. Drain of the U.S. Bankruptcy Court
for the Southern District of New York to appoint it as full,
voting member of the Official Committee of Unsecured Creditors to
represent all holders or beneficiaries of the Subordinated Notes.
Robert Stark, Esq., at Brown Rudnick Berlack Israels LLP, in New
York, informs Judge Drain that the United States Trustee for the
Southern District of New York has refused to appoint Law
Debenture as a member of the Creditors Committee, presumably
acting under the mistaken assumption that the Creditors Committee
is adequately representative of the interests of the Subordinated
Notes. However, no current member of the Creditors Committee
holds a claim of the same nature or purported priority as the
Subordinated Notes, Mr. Stark points out.
The Subordinated Notes were issued by the Debtors pursuant to an
Indenture dated as of October 28, 2003, and are:
* contractually subordinate to $2,000,000,000 in senior notes
issued prepetition by the Debtors, as well as any Delphi
trade debt;
* not guaranteed by any operating Debtors;
* structurally subordinate to the claims of trade creditors of
the operating Debtors; and
* presently held by two Delaware statutory trusts -- Delphi
Trust I and Delphi Trust II.
Law Debenture is obligated to deliver distributions with respect
to the Subordinated Notes to holders of publicly held trust
preferred securities, Mr. Stark states.
Mr. Stark argues that Law Debenture should be appointed as a
Creditors Committee member for seven reasons:
(1) The Creditors Committee, as presently constituted, does
not adequately represent the Subordinated Noteholders
because no current Creditors Committee member represents
the Subordinated Noteholders' interests.
(2) Capital Research and Management Company, the only
remaining Creditors Committee member on whom the U.S.
Trustee is presumably relying on to represent the
Interests of the Subordinated Noteholders by holding
interests in four different Senior Notes and an
undisclosed portion of the Subordinated Notes, is
hopelessly conflicted.
(3) The size and complexity of the Debtors' Chapter 11 cases
mandate that the Subordinated Noteholders have a voice in
Creditors Committee deliberations.
(4) The Creditors Committee has not stated the basis of its
objection to adding Law Debenture to its membership or its
refusal to permit Law Debenture ex-officio membership.
(5) Appointing Law Debenture to the Creditors Committee will
allow all other creditors and Law Debenture to negotiate
and resolve potentially contentious issues without the
attendant cost and delay of litigation.
(6) Adding Law Debenture to the Creditors Committee will not
be overly disruptive since the Debtors' cases are still in
the very early stages.
(7) Failure to appoint Law Debenture to the Creditors
Committee will unfairly prejudice the interests of the
Subordinated Noteholders because Law Debenture will be
forced to monitor and participate in the Debtors' cases
from the "outside," incurring all of the attendant costs
and expenses.
Headquartered in Troy, Michigan, Delphi Corporation --
http://www.delphi.com/-- is the single largest global supplier of
vehicle electronics, transportation components, integrated systems
and modules, and other electronic technology. The Company's
technology and products are present in more than 75 million
vehicles on the road worldwide. The Company filed for chapter 11
protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No.
05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and
Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP,
represent the Debtors in their restructuring efforts. As of
Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530
in total assets and $22,166,280,476 in total debts. (Delphi
Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
DELPHI CORP: Wants Court to Okay Uniform Lease Renewal Procedures
-----------------------------------------------------------------
Delphi Corporation and its debtor-affiliates ask the Honorable
Robert D. Drain of the U.S. Bankruptcy Court for the Southern
District of New York for authority to establish uniform procedures
by which they may enter into or renew existing non-residential
real property leases or subleases without the need for further
Court approval.
The Debtors are parties to approximately 90 Leases. As a part of
their ongoing restructuring efforts, the Debtors are currently
evaluating the Leases to reduce overall occupancy costs and
maximize the efficient utilization of their real property assets.
"The [lease evaluation] process will require renewing certain
leases that are necessary for the Debtors' reorganization,
including Leases that provide for less or differently configured
space, while exiting other Leases that no long fit the Debtors'
needs," Kayalyn A. Marafioti, Esq., at Skadden Arps Slate Meagher
& Flom LLP, in New York, relates.
The Debtors estimate that they will enter into approximately 10
new Leases and renew approximately 10 others annually for the
next two years based on the number of current Leases up for
renewal and the anticipated needs of future projects.
To ensure that all Leases are at or below market rates, the
Debtors' real estate advisor, Jones Lang LaSalle, will conduct a
market valuation for each Lease that will include:
-- an analysis of the Lease obligations;
-- a determination as to whether the terms of the Lease are
standard; and
-- a market assessment of other similarly situated leased
locations.
The Debtors propose uniform procedures, which will expedite the
lease renewal process by eliminating the necessity for a hearing
on the Debtors' undisputed decisions to enter into or renew
Leases, Ms. Marafioti tells the Court.
Lease Renewal Procedures
(a) For a Lease with average lease obligations of $200,000 or
less per annum or Lease obligations of $1,000,000 or less
in the aggregate, the Debtors would be authorized but not
directed to enter into or renew the Lease without further
notice to any notice party or Court approval.
(b) For a Lease with average lease obligations of $200,001 or
more per annum or Lease obligations in excess of
$1,000,000 up to and including $5,000,000 in the
aggregate, the Debtors would give notice of the proposed
Lease to:
(1) the Office of the United States Trustee for the
Southern District of New York;
(2) counsel to the Official Committee of Unsecured
Creditors;
(3) counsel for the agent under the Debtors' prepetition
credit facility; and
(4) counsel for the agent under the Debtors'
postpetition credit facility.
The Lease Notice would include these information:
(1) The proposed Lease to be entered into or renewed;
(2) The identity of the lessor, including a statement
that the proposed lessor is not an "insider," as
defined in Section 101(31) of the Bankruptcy Code;
and
(3) A description of the terms of the proposed Lease.
The Notice Parties would have five business days after
initial receipt of the Lease Notice to object to or
request additional time to evaluate the proposed Lease.
If the Debtors' counsel receives no written objection or
written request for additional time prior to the
expiration of the five day-period, the Debtors would be
authorized to enter into or renew the Lease. If a Notice
Party timely objects to the proposed Lease, the Debtors
and the objecting Notice Party would meet and confer in an
attempt to negotiate a consensual resolution. Should
either party determine that an impasse exists, then the
Debtors would move the Court for authority to enter or
renew the Lease, as the case may be, upon notice to the
objecting party and other parties-in-interest.
(c) For a Lease with lease obligations in excess of $5,000,000
in the aggregate, the Debtors would be authorized to enter
into a Lease only after obtaining Court approval of the
proposed Lease after notice and a hearing.
"The Procedures will provide the Debtors with both flexibility
and a framework in which to enter into and renew Leases, while
still providing for a review of the Leases requiring approval
from [their] treasury department by some of the major
constituents of [their Chapter 11] cases," Ms. Marafioti tells
Judge Drain.
Without a process for entering into or renewing Leases, the
Debtors and their estates would incur added and unnecessary
expenses and delay in entering into Leases for space that is
needed to operate their business, Ms. Marafioti asserts.
Headquartered in Troy, Michigan, Delphi Corporation --
http://www.delphi.com/-- is the single largest global supplier of
vehicle electronics, transportation components, integrated systems
and modules, and other electronic technology. The Company's
technology and products are present in more than 75 million
vehicles on the road worldwide. The Company filed for chapter 11
protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No.
05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and
Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP,
represent the Debtors in their restructuring efforts. As of
Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530
in total assets and $22,166,280,476 in total debts. (Delphi
Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
DLJ COMMERCIAL: Moody's Cuts $2.8 Mil. Class C Certs.' Rating to C
------------------------------------------------------------------
Moody's Investors Service upgraded the ratings of five classes,
affirmed the ratings of six classes and downgraded the ratings of
three classes of DLJ Commercial Mortgage Corp., Commercial
Mortgage Pass-Through Certificates, Series 1999-CG3 as:
* Class A-1A, $35,737,991, Fixed, affirmed at Aaa
* Class A-1B, $509,118,000, Fixed, affirmed at Aaa
* Class S, Notional, affirmed at Aaa
* Class A-1C, $17,716,000, Fixed, affirmed at Aaa
* Class A-2, $25,000,000, Fixed, affirmed at Aaa
* Class A-3, $49,461,000, Fixed, upgraded to Aa1 from A1
* Class A-4, $13,489,000, Fixed, upgraded to Aa2 from A2
* Class A-5, $15,738,000, Fixed, upgraded to A1 from A3
* Class B-1, $17,986,000 WAC, upgraded to A3 from Baa1
* Class B-2, $15,737,000, WAC, upgraded to Baa2 from Baa3
* Class B-4, $13,489,000, Fixed, affirmed at Ba2
* Class B-7, $8,993,000, Fixed, downgraded to Ca from Caa1
* Class B-8, $8,993,000, Fixed, downgraded to C from Caa2
* Class C, $2,837,063, Fixed, downgraded to C from Ca
As of the December 12, 2005 distribution date, the transaction's
aggregate balance has decreased by approximately 13.1% to $781.5
million from $899.3 million at securitization. The Certificates
are collateralized by 148 mortgage loans ranging from less than
1.0% to 6.0% of the pool with the ten largest loans representing
38.9% of the pool. The pool includes two shadow rated loans,
representing 9.5% of the pool, and a conduit component,
representing 90.5% of the pool.
Twenty-four loans, representing 31.2% of the pool, have defeased
and have been replaced with U.S. Government securities. Six of
the top 10 loans have defeased, including:
* 45 Broadway ($46.5 million - 6.0%);
* The Alliance Loan ($36.1 million - 4.6%);
* Westin Resort - Hilton Head Island ($32.7 million - 4.2%);
* Yonkers Shopping Center ($26.1 million - 3.3%);
* Lakes at Palm Beach ($16.0 million - 2.0%); and
* Pensacola Place ($14.5 million - 1.9%) loans.
Eight loans have been liquidated from the pool, resulting in
aggregate realized losses of approximately $12.9 million. Six
loans, representing 2.6% of the pool, are in special servicing.
Moody's has estimated aggregate losses of approximately $6.8
million for the specially serviced loans. Thirty-five loans,
representing 23.1% of the pool, are on the master servicer's
watchlist.
Moody's was provided with full-year 2004 operating results for
94.0% of the pool's performing loans and partial-year 2005
operating results for 87.8% of the performing loans. Moody's loan
to value ratio ("LTV") for the conduit portion, excluding the
defeased loans, is 88.7% compared to 86.9% at Moody's last full
review in December 2004 and compared to 87.7% at securitization.
The upgrade of Classes A-3, A-4, A-5, B-1 and B-2 is due to a high
percentage of defeased loans and increased subordination levels.
The downgrade of Classes B-7, B-8 and C is due to realized and
anticipated losses from the specially serviced loans. Class C has
experienced losses of approximately $1.7 million to date. Non-
rated Class D has been eliminated due to losses.
The largest shadow rated loan is the LaSalle Hotel Portfolio
Loan ($41.7 million - 5.3%), which consists of two cross
collateralized loans secured by hotel properties. The largest
property is the Sheraton Bloomington Hotel (formerly the Radisson
South), a 565-room convention hotel located in Bloomington,
Minnesota. The second property is the Westin City Center Hotel
(formerly Le Meridien Hotel), a 407-room full service hotel
located in Dallas, Texas. The performance of both hotels has been
stable since Moody's last review. Moody's current shadow rating
is Ba2, the same as at last review.
The second shadow rated loan is the Westin Resort Hilton Head
Island Loan ($32.7 million - 4.2%), which has defeased.
The top three non-defeased conduit loans represent 11.6% of the
pool. The largest non-defeased conduit loan is the South Shore
Beach and Tennis Club Loan ($32.9 million - 4.2%), which is
secured by a 450-unit multifamily project located in Alameda,
California. The property has maintained a stable occupancy since
securitization but performance in 2005 declined due to lower rents
and increased expenses. The property is currently 98.2% occupied,
compared to 96.0% at last review. Moody's LTV is 76.5%, compared
to 71.4% at last review.
The second largest non-defeased conduit loan is the Two Penn
Center Plaza Loan ($31.8 million - 4.1%), which is secured by a
500,000 square foot Class B office building located in Center City
Philadelphia. The property is occupied by small and medium sized
tenants with the largest tenant occupying 5.0% of the property.
Current occupancy is 79.0%, compared to 77.0% at last review.
Rents have decreased from $17.00 per square foot at securitization
to $14.50 per square foot currently. The average submarket
Class B office occupancy (Market Street West) was 86.3% as of the
third quarter 2005 with average rents of $16.40 per square foot.
The loan is on the master servicer's watchlist due to low debt
service coverage. Moody's LTV is 96.1%, compared to 89.4% at last
review.
The third largest non-defeased conduit loan is the Atrium Loan
($25.9 million - 3.3%), which is secured by a 162,000 square foot
office building located in San Mateo, California. The property's
performance declined in 2005 due to a drop in occupancy, but as of
November 2005 the property was 90.0% leased compared to 87.0% at
last review. The loan is on the master servicer's watchlist due
to a decline in debt service coverage. Moody's LTV is 90.0%,
compared to 87.1% at last review.
The pool collateral is a mix of:
* U.S. Government securities (31.2%);
* multifamily (22.8%);
* office (16.8%);
* retail (18.4%);
* hotel (7.7%);
* industrial and self storage (2.9%); and
* mixed use (0.2%).
The collateral properties are located in 34 states plus the
District of Columbia. The top five state concentrations are:
* California (16.1%);
* Texas (9.2%);
* Pennsylvania (4.6%);
* Minnesota (4.0%); and
* North Carolina (3.3%).
All of the loans are fixed rate.
DOW JONES: Appoints Richard F. Zannino as Chief Executive Officer
-----------------------------------------------------------------
Dow Jones & Company (NYSE: DJ) reported that its board of
directors has named Richard F. Zannino, 47, chief executive
officer effective Feb. 1, 2006, and has elected Mr. Zannino to the
company's board effective that date.
Mr. Zannino currently is executive vice president and chief
operating officer. As chief executive officer, Mr. Zannino will
oversee all the Company's business units and staff departments and
will report to the Dow Jones board of directors.
Peter R. Kann, 63, the Company's chairman and chief executive
officer since 1991, will continue as chairman until the annual
meeting in 2007, the year in which he reaches the Company's
mandatory retirement age of 65.
Dow Jones also announced that on the basis of improved results at
The Wall Street Journal and in its electronic publishing
businesses, it now expects to exceed prior fourth quarter 2005
earnings guidance when it announces earnings on January 26. The
company now expects to report fourth quarter earnings before
special items (after about 6 cents per share of dilution from
Weekend Edition) to be around 40 cents per share, as compared to
prior guidance in the low to mid 30 cents per share range. Based
on currently anticipated special items in the fourth quarter of
2005, the Company expects reported earnings per share to be in the
high 40 cents per share range, compared with 43 cents per share in
the fourth quarter of 2004.
Mr. Kann, speaking for the Dow Jones board, said: "The appointment
of Rich Zannino to chief executive officer reflects his
exceptional strategic and operational accomplishments at the
Company over the past five years, as well as his commitment to the
Dow Jones core values of quality, integrity and independence. We
are confident that he will lead the Company to great success for
shareholders, customers and employees in the years to come. On
behalf of my fellow directors, I extend to Rich our
congratulations, best wishes, and full support."
Commenting on his appointment, Mr. Zannino said: "As a devoted
long-time user of the Company's products and ardent believer in
our journalistic mission and core values, I'm honored and excited
by this appointment and look forward to serving our shareholders,
readers, other customers, and employees as chief executive
officer. Although I'm not a journalist, I strongly believe that,
for Dow Jones, journalistic excellence and business performance
are mutually reinforcing -- and I am deeply committed to both. I
especially want our employees to know how much I value their
commitment, contribution, teamwork, and passion for what we stand
for - all are essential to our future success."
"I look forward to working together with the board of directors,
my fellow executives, and the many other outstanding people of Dow
Jones as we strive to fulfill our goal of providing the world's
most vital news, information and insight in any form, time or
place to generate the most value for our customers and produce
above-market shareholder returns."
Karen House Retires
Dow Jones also reported that Karen Elliott House, 58, senior vice
president of Dow Jones and publisher of The Wall Street Journal,
will be retiring from the company by mutual agreement after a
distinguished 32-year career. Ms. House will stay on to work with
Mr. Zannino in her current role for a couple of transition months.
"Karen House has done an outstanding job in many news and business
roles over her long and distinguished career, from Pulitzer Prize
winning reporter to publisher of The Wall Street Journal. Her
steadfast leadership during these past few years of significant
change in the publishing business, including the very successful
launch of the Journal's Weekend Edition, is greatly appreciated.
We wish her all the best," said Mr. Zannino.
Mr. Zannino joined Dow Jones in February 2001 as executive vice
president and chief financial officer and was named chief
operating officer in July 2002. As chief operating officer, all
operating units and most staff departments report to Mr. Zannino.
He is a member of the Company's executive and operating
committees. During his tenure, Mr. Zannino has worked closely
with Mr. Kann and other executives to enhance the quality and
value of the Company's offerings, lead significant change in the
face of rapid transformation of the publishing business, and
position the Company for long-term growth in value for
shareholders, customers and employees.
Before joining Dow Jones, Mr. Zannino gained extensive experience
in strategy, business development, finance, customer value-
creation, operations and international business in several
companies and industries. For nearly 20 years, he held senior
finance, strategy and operating positions at Liz Claiborne Inc.,
General Signal Corporation, Saks Holdings, Inc., and Peter Kiewit
Sons', Inc. He holds an undergraduate degree in economics and
finance from Bentley College and an MBA degree from Pace
University.
Dow Jones & Company (NYSE: DJ; dowjones.com) publishes The Wall
Street Journal and its international and online editions, Barron's
and the Far Eastern Economic Review, Dow Jones Newswires, Dow
Jones Indexes, MarketWatch and the Ottaway group of community
media franchises. Dow Jones is co-owner with Reuters Group of
Factiva and with Hearst of SmartMoney. Dow Jones also provides
news content to CNBC and radio stations in the U.S.
* * *
As reported in the Troubled Company Reporter on Oct. 10, 2005,
Fitch Ratings upgrades the bond fund volatility ratings and
affirms the bond fund credit ratings of three of the Dow Jones
CDX.NA.HY.3 trusts. The credit-linked certificates of each trust
enable investors to gain funded nonlevered exposure to the
reference entities of the Dow Jones CDX.NA.HY.3 credit default
swap index of non-investment grade corporations.
The exposure to the index constituents is obtained via credit
default swaps between the trust and 10 major financial
institutions. The obligations of the trust under the credit
default swaps are collateralized via a reverse repurchase
agreement.
Fitch upgrades these volatility ratings of the trusts:
-- Dow Jones CDX.NA.HY.3 Trust 1 December 2009 to 'V3' from
'V4';
-- Dow Jones CDX.NA.HY.3 Trust 2 December 2009 to 'V3' from
'V4';
-- Dow Jones CDX.NA.HY.3 Trust 3 December 2009 to 'V3' from
'V4'.
In addition, Fitch affirms the bond fund credit ratings:
-- Dow Jones CDX.NA.HY.3 Trust 1 December 2009 at 'B+';
-- Dow Jones CDX.NA.HY.3 Trust 2 December 2009 at 'BB';
-- Dow Jones CDX.NA.HY.3 Trust 3 December 2009 at 'B'.
DSL.NET INC: AMEX to Suspend Trading of Common Stock on January 9
-----------------------------------------------------------------
DSL.net, Inc. (AMEX: BIZ) reported on Jan. 3, 2006, that it has
been advised by staff of the American Stock Exchange that it
intends to suspend trading in the company's common stock effective
as of the commencement of AMEX' trading session on Jan. 9, 2006.
AMEX has further notified the Company that AMEX has submitted an
application to the Securities and Exchange Commission to strike
the Company's common stock from listing on AMEX effective as of
the opening of trading on Jan. 10, 2006.
During the period of suspension, the company's common stock is
eligible to be quoted immediately by market makers on The Pink
Sheets, according to that quotation system's staff advice.
Further, the company believes its common stock is eligible for
quotation on the OTC Bulletin Board service, subject to a market
maker establishing a market in the Company's common stock on such
quotation service under applicable OTCBB rules. The company has
been advised by several market makers that they intend to sponsor
quotation of the company's common stock on OTCBB. On or promptly
following suspension of trading on AMEX, the NASDAQ will issue a
new trading symbol for the company's common stock, which the
company will announce upon issuance.
AMEX' decision to suspend trading and pursue delisting is based on
its determination that the Company is not in compliance with
Section 1003(f)(v) of the AMEX Company Guide due to the low
selling price of the Company's common stock, and the company's
decision to not effect a requested reverse stock split to address
such low selling price nor to appeal AMEX' determinations, as
previously reported. The last day of trading of the Company's
common stock on AMEX prior to the suspension going into effect
will be Friday, Jan. 6, 2006.
DSL.net, Inc. -- http://www.dsl.net/-- is a nationwide provider
of broadband communications services to businesses. The Company
combines its own facilities, nationwide network infrastructure and
Internet Service Provider capabilities to provide high-speed
Internet access, private network solutions and value-added
services directly to small- and medium-sized businesses or larger
enterprises looking to connect multiple locations. DSL.net
product offerings include T-1, DS-3 and business-class DSL
services, virtual private networks, frame relay, Web hosting, DNS
management, enhanced e-mail, online data backup and recovery
services, firewalls and nationwide dial-up services, as well as
integrated voice and data offerings in select markets.
As of Sept. 30, 2005, DSL.net Inc.'s balance sheet showed a
stockholders' deficit of $5,233,000, compared to $12,106,000 of
positive equity at Dec. 31, 2004.
EMPIRE DISTRICT: Fitch Initiates Coverage & Ratings Assignation
---------------------------------------------------------------
Fitch Ratings initiated coverage and assigned ratings for the
securities of The Empire District Electric Company (NYSE:EDE).
Greg Knapp, Vice President -- Finance and CFO, stated, "We are
pleased that Fitch has initiated this rating and that it
recognizes the Company as solid investment grade."
In a release issued by Fitch today, the agency announced these
rates:
* Senior Secured Debt at 'BBB+'
* Senior Unsecured Debt at 'BBB'
* Issuer Default Rating (IDR) at 'BBB-'
* Trust Preferred Securities at 'BBB-'
* Short-Term Commercial Paper at 'F2'
The Rating Outlook is Stable.
According to the Fitch release, "The ratings for EDE reflect the
Company's low business risk position as a regulated electric
utility, a stable service territory, and a seemingly improving
regulatory environment in Missouri, where EDE receives
approximately 89 percent of its electric revenues."
The release continued: "The Stable Outlook reflects Fitch's
expectation that EDE will continue to focus primarily on its
regulated electric business. Additionally, Fitch anticipates
that EDE will receive a reasonable outcome in its planned rate
case in 2006, including a mechanism under which it will be able to
recover its fuel and purchased power expense, including the cost
of natural gas."
The Company's securities are also rated investment grade by
Moody's Investor Service and Standard & Poor's Ratings Service.
Based in Joplin, Missouri, The Empire District Electric Company
(NYSE:EDE) is an investor-owned utility providing electric service
to approximately 157,000 customers in southwest Missouri,
southeast Kansas, northeast Oklahoma, and northwest Arkansas. The
Company also provides fiber optic and Internet services, customer
information software services, and has an investment in
close-tolerance, custom manufacturing. Empire provides water
service in three incorporated communities in Missouri.
FLYI INC: S&P Withdraws D Corporate Credit Rating
-------------------------------------------------
Standard & Poor's Ratings Services withdrew its ratings on
bankrupt FLYi Inc., whose airline subsidiary, Independence Air, is
to cease operations on Jan. 5 and liquidate its assets. FLYi and
Independence Air filed for bankruptcy Nov. 7, 2005, and sought,
unsuccessfully, to attract investment needed to reorganize in
Chapter 11.
Ratings affected include the 'D' corporate credit and senior
convertible notes ratings of FLYi and ratings on enhanced
equipment trust certificates originally issued by Atlantic Coast
Airline Inc., the previous name of Independence Air. Aircraft
securing the Atlantic Coast Airline 1997-1 EETC, six Bombardier
CRJ regional jets and eight J41 turboprop regional aircraft, will
be sold, with proceeds to pay down the certificates. Recovery
prospects for the junior 1997-1B and 1997-1C certificates appear
poor, but the 1997-1A certificates should receive substantial, but
not full, recovery. The market for J41's has been weak for years,
and values and lease rates for the 50-seat CRJ have come under
pressure recently due to the bankruptcy filings of Independence
Air (which had already turned back some regional jets to
creditors), Delta Air Lines Inc. (whose regional partners are
collectively the largest operator of CRJ's), and Northwest
Airlines Inc. over the past several months.
FOAMEX INT'L: Gets Court Approval to Assume Amended Bayer Contract
------------------------------------------------------------------
As reported in the Troubled Company Reporter on Dec. 19, 2005,
Foamex International Inc. and its debtor-affiliates sought the
U.S. Bankruptcy Court for the District of Delaware's authority to
assume an executory contract with Bayer and its Deerfield Urethane
affiliate for the purchase and sale of chemicals, dated August 19,
2005, as amended on November 18, 2005.
In the Amended Bayer Contract, Bayer agreed to:
(a) increase the quantities of polyol and TDI that will be
made available to Foamex;
(b) increase Foamex's fixed dollar credit limit to purchase
chemicals;
(c) restore trade terms that are comparable to the original
trade terms before Bayer changed them to "cash-before
delivery"; and
(d) provide Foamex with an eight-week period to cure the
$13,100,000 unpaid prepetition obligation owed by Foamex
to Bayer on account of prepetition chemical purchases.
Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor
LLP, in Wilmington, Delaware, asserts that the increased
availability of polyol and TDI and the increase in the credit
limit will allow Foamex to secure more of the needed chemicals
that it currently can, which, in turn, will better allow Foamex to
meet customer demand for its foam products. The change from
"cash-before-delivery" to normal trade terms will also
significantly improve Foamex's liquidity position, she adds.
Foamex believes it satisfies the cure and adequate assurance
requirements for assumption under Section 365(b)(1). Foamex owes
$13,126,215 to Bayer on account of prepetition purchases. Other
than payment of the amount, which will be paid in eight weekly
payments, there are no other defaults that need to be cured, Ms.
Morgan contends. Bayer has not requested any additional adequate
assurance of Foamex's future performance under the Bayer
Contract.
* * *
The Court grants the Debtors' request. The Court directs Foamex
L.P. to cure its defaults under the Contract by paying Bayer
MaterialScience LLC $13,126,215, in eight weekly payments:
* $2,063,108 per week for the first two weeks; and
* $1,500,000 per week for the remaining six weeks.
The Court makes it clear that there are no other defaults that
must be cured under the Bayer Contract.
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. (Foamex International Bankruptcy
News, Issue No. 9; Bankruptcy Creditors' Service, Inc., 215/945-
7000)
GE COMMERCIAL: Moody's Lowers 2 Class Certificates' Ratings to B1
-----------------------------------------------------------------
Moody's Investors Service downgraded the ratings of four classes
of GE Commercial Mortgage Corporation, Commercial Mortgage Pass-
Through Certificates, Series 2004-C3 as:
* Class SHP-1, $5,074,294, Fixed, downgraded to Ba2 from Baa3
* Class SHP-2, $10,632,555, Fixed, downgraded to Ba3 from Baa3
* Class SHP-3, $3,444,708, Fixed, downgraded to B1 from Ba1
* Class SHP-4, $13,734,658, Fixed, downgraded to B1 from Ba1
On September 1, 2005 Moody's placed Classes SHP-1, SHP-2, SHP-3
and SHP-4 on review for possible downgrade due to concerns
regarding the Hyatt Regency New Orleans Hotel which suffered
substantial damage from Hurricane Katrina. The Hyatt Regency New
Orleans is part of the Strategic Hotel Portfolio Loan, which is
secured by three hotel properties. Moody's had extensive
discussions with the master servicer regarding the current status
of the loan and received performance information for the entire
pool. With the exception of this loan, the pool is generally
performing as expected. The downgrade of Classes SHP-1, SHP-2,
SHP-3 and SHP-4 is due to the downgrade of the shadow rating of
the Strategic Hotel Portfolio Loan.
The Strategic Hotel Portfolio Loan consists of a pooled portion
($49.1 million participation interest -- 3.5%) and a non-pooled
subordinate note ($32.9 million) which is the security for Classes
SHP-1, SHP-2, SHP-3 and SHP-4. The loan is secured by three full-
service hotels containing 2,315 rooms. The collateral properties
include:
* the Hyatt Regency New Orleans (1,184 rooms, 46.0% allocated
loan amount);
* the Hyatt Regency Phoenix (712 rooms, 27.4%); and
* the Hyatt Regency La Jolla (419 rooms, 26.6% balance).
The Hyatt Regency New Orleans is located at 500 Poydras Plaza,
near the French Quarter and the Louisiana Superdome. It suffered
substantial damage due to wind and rain from Hurricane Katrina.
The hotel lost hundreds of room windows and eight atrium windows
but was not flooded. The property has been closed since the
hurricane and is not anticipated to reopen until January 2007.
All costs related to the restoration of the property are expected
to be reimbursed by insurance.
In addition to full property coverage, the property has full
business interruption insurance during the period of restoration
and for the following 12-month period. Although it is expected
that the property will be fully restored from the damage caused by
Hurricane Katrina, the outlook for the recovery of the New Orleans
convention and tourism industry is uncertain at this time.
The performance of the Phoenix and La Jolla properties has been
mixed. The Hyatt Regency Phoenix is located adjacent to the
Phoenix Downtown Civic Plaza Convention Center. Net cash flow for
2004 was 12.5% higher than 2003. The Hyatt Regency La Jolla is
part of a mixed-use development known as the Aventine. Net cash
flow for this property for calendar year 2004 declined
approximately 2.0% from calendar year 2003.
Due to the uncertainty of projecting the overall hotel market
performance for New Orleans as well as the expected performance
for the Hyatt Regency New Orleans, Moody's current analysis
reflects a higher risk profile for this loan than at
securitization. Moody's current shadow ratings for the pooled
loan and the subordinate note are Ba2 and B1 respectively,
compared to Baa2 and Ba1 at securitization.
GLIMCHER REALTY: Forms Joint Venture With Oxford Properties Group
-----------------------------------------------------------------
Glimcher Realty Trust, (NYSE: GRT) formed a joint venture with
Oxford Properties Group, the global real estate platform for the
Ontario (Canada) Municipal Employees Retirement System, to acquire
anchored retail properties in the United States.
The initial acquisition of the Venture was the $170.1 million
purchase of Puente Hills Mall, located in the Los Angeles metro
area. In connection with the acquisition, the Venture assumed an
$88.8 million non-recourse mortgage loan, with the remainder of
the purchase price being funded by the company and contributions
to the Venture from OMERS. The transaction closed on Dec. 29,
2005. The company previously announced that it had entered into a
definitive agreement to acquire the Mall on
Nov. 8, 2005.
The Company owns a 52% interest in the Venture and Oxford owns the
remaining 48% interest. All of the properties to be acquired by
the Venture will be operated by Glimcher under separate management
agreements. Under these agreements, Glimcher will be entitled to
management fees, leasing commissions and other compensation
including an asset management fee and acquisition fees based upon
the purchase price paid for each property. Under the Venture
agreement, Glimcher will be entitled to receive certain promotes
once Oxford earns specified returns on each individual
acquisition. Oxford intends to allocate, subject to final
approval by its Investment Committee, an additional $200 million
in equity towards the purchase of anchored retail properties
through the Venture with Glimcher.
Michael P. Glimcher, President and CEO stated, "I am excited to
announce this Venture with such a highly respected and experienced
real estate partner with a proven track record for success.
Through this relationship, Glimcher will be able to increase its
return on investment, diversify risk and be more competitive in
today's acquisition environment."
"Oxford is pleased with not only this first investment with
Glimcher Realty Trust, but also the opportunity for further
investments with this new strategic partner," said R. Michael
Latimer, President and CEO of Oxford.
About Oxford Properties Group
Headquartered in Toronto, Canada, Oxford Properties Group --
http://www.oxfordproperties.com/-- owns and manages an
approximately $10 billion portfolio of diverse real estate assets.
About OMERS
Ontario (Canada) Municipal Employees Retirement System --
http://www.omers.com/-- is the third largest pension plan in
Canada with assets under management of close to $40 billion.
About Glimcher Realty Trust
Glimcher Realty Trust, a real estate investment trust, is a
recognized leader in the ownership, management, acquisition and
development of enclosed regional and super-regional malls.
Glimcher Realty Trust's common shares are listed on the New York
Stock Exchange under the symbol "GRT." Glimcher Realty Trust's
Series F and Series G preferred shares are listed on the New York
Stock Exchange under the symbols "GRT.F" and "GRT.G,". Glimcher
Realty Trust is a component of the Russell 2000 Index,
representing small cap stocks, and the Russell 3000 Index,
representing the broader market.
* * *
As reported in the Troubled Company Reporter on Sept. 26, 2005,
Standard & Poor's Ratings Services revised its outlook on Glimcher
Realty Trust to stable from negative. At the same time, the 'BB'
corporate credit and 'B' preferred stock ratings are affirmed.
$210 million in outstanding rated preferred stock is affected.
"The outlook revision is supported by a profitable but
comparatively smaller and non-uniform mall portfolio, which
generates stable, predictable cash flow from a diverse and
creditworthy tenant base," said credit analyst Beth Campbell.
"Glimcher management recently increased the company's unencumbered
asset pool, improving financial flexibility. However, the SEC
continues to investigate Glimcher's 2004 auditor change and a
related party transaction. While the outcome of the investigation
remains uncertain, Glimcher did receive a clean current opinion
from its new auditor after a year-end 2004 re-audit of its
financials for the prior three years."
Positive mall operating income growth supports low but fairly
stable debt service coverage measures. The longer-term
competitive position of certain of the company's mall properties
remains weak; however, the majority of Glimcher's operating income
is derived from malls with sales of $300 to $400 per sq. ft.
GLIMCHER REALTY: To Acquire Tulsa Promenade for $58.3 Million
-------------------------------------------------------------
Glimcher Realty Trust, (NYSE: GRT) entered into a definitive
agreement to acquire Tulsa Promenade, located in Tulsa, Oklahoma
for a total consideration of approximately $58.3 million. The
company will not be assuming any debt in connection with the
purchase. The transaction is expected to close in late January,
subject to customary closing conditions. The initial cap rate,
based on income in place after management fees and capital
expenditure reserves, is estimated at 7.3%. The company is
currently discussing a possible investment in Tulsa Promenade with
Oxford Properties Group, the company's recently announced
strategic joint venture partner.
Tulsa Promenade consists of approximately 927,000 square feet of
gross leasable area and is a highly productive retail center
located in a strong and stable trade area. The property is a
newly renovated two-story regional mall anchored by Dillard's,
Foley's and JC Penney and featuring a 12-screen Hollywood Theaters
with stadium seating and approximately 235,000 square feet of
small shop retailers. The mall shop stores are generating sales
per square foot of approximately $305.
Michael P. Glimcher, President & CEO, commented, "We are excited
to announce the next step in our continuing strategy to improve
portfolio quality. Tulsa Promenade is in excellent physical
condition and represents a unique opportunity for us to acquire a
stable regional mall with several realistic upside opportunities."
Glimcher Realty Trust, a real estate investment trust, is a
recognized leader in the ownership, management, acquisition and
development of enclosed regional and super-regional malls.
Glimcher Realty Trust's common shares are listed on the New York
Stock Exchange under the symbol "GRT." Glimcher Realty Trust's
Series F and Series G preferred shares are listed on the New York
Stock Exchange under the symbols "GRT.F" and "GRT.G,". Glimcher
Realty Trust is a component of the Russell 2000 Index,
representing small cap stocks, and the Russell 3000 Index,
representing the broader market.
* * *
As reported in the Troubled Company Reporter on Sept. 26, 2005,
Standard & Poor's Ratings Services revised its outlook on Glimcher
Realty Trust to stable from negative. At the same time, the 'BB'
corporate credit and 'B' preferred stock ratings are affirmed.
$210 million in outstanding rated preferred stock is affected.
"The outlook revision is supported by a profitable but
comparatively smaller and non-uniform mall portfolio, which
generates stable, predictable cash flow from a diverse and
creditworthy tenant base," said credit analyst Beth Campbell.
"Glimcher management recently increased the company's unencumbered
asset pool, improving financial flexibility. However, the SEC
continues to investigate Glimcher's 2004 auditor change and a
related party transaction. While the outcome of the investigation
remains uncertain, Glimcher did receive a clean current opinion
from its new auditor after a year-end 2004 re-audit of its
financials for the prior three years."
Positive mall operating income growth supports low but fairly
stable debt service coverage measures. The longer-term
competitive position of certain of the company's mall properties
remains weak; however, the majority of Glimcher's operating income
is derived from malls with sales of $300 to $400 per sq. ft.
GOODING'S SUPERMARKETS: Wants Access to Lenders' Cash Collateral
----------------------------------------------------------------
Gooding's Supermarkets, Inc., asks the U.S. Bankruptcy Court for
the Middle District of Florida, for authority to use $1,229,724 of
cash collateral securing repayment of prepetition debts owed to
National Commerce Bank, FSB, and Associated Grocers of Florida,
Inc.
The cash collateral, in which National Commerce and Associated
assert an interest, is comprised of funds on hand and funds to be
received from the Debtor's collection of accounts receivable.
R. Scott Shuker, Esq., at Gronek & Latham LLP, tells the Court
that the Debtor owes $235,076 to the Associated Grocers and
$2.7 million to National Commerce.
To provide the lenders with adequate protection against any
diminution in the value of their collateral, the Debtor proposes
to grant them replacement liens having the same validity, extent
and priority as the lenders' prepetition liens.
The Debtor will use National Commerce and Associated Grocers' cash
collateral to continue and maintain operations in accordance with
a proposed 4-week budget through January 27, 2006, a copy of which
is available for free at http://ResearchArchives.com/t/s?41e
Headquartered in Orlando, Florida, Gooding's Supermarkets, Inc.,
operates a chain of supermarkets. The company filed for
chapter 11 protection on Dec. 30, 2005 (Bankr. M.D. Fla. Case No.
05-17769). R. Scott Shuker, Esq., at Gronek & Latham LLP,
represents the Debtor in its restructuring efforts. When the
Debtor filed for protection from its creditors, it estimated $1
million to $10 million in assets and $10 million to $50 million
debts.
GOODING'S SUPERMARKETS: Wants to Walk Away from Titusville Lease
----------------------------------------------------------------
Gooding's Supermarkets, Inc., asks the U.S. Bankruptcy Court for
the Middle District of Florida, for authority to reject an
unexpired real property lease in Titusville, Florida.
The Debtor says that the lease has no value for assignment
purposes. The Debtor does not receive any revenue from that
lease, and has paid rent for almost ten years at nearly $400,000
per year.
The lease is a burden on the Debtor's estate and unnecessary for
an effective organization. Thus, the rejection of the lease will
save the Debtor's estate substantial sums in administrative
expenses each month, including rent, taxes, utility costs,
maintenance, and other charges under the lease.
Headquartered in Orlando, Florida, Gooding's Supermarkets, Inc.,
operates a chain of supermarkets. The company filed for chapter
11 protection on Dec. 30, 2005 (Bankr. M.D. Fla. Case No.
05-17769). R. Scott Shuker, Esq., at Gronek & Latham LLP,
represents the Debtor in its restructuring efforts. When the
Debtor filed for protection from its creditors, it estimated $1
million to $10 million in assets and $10 million to $50 million
debts.
GRAY TELEVISION: Completes Spin-Off of Triple Crown Media
---------------------------------------------------------
Gray Television, Inc. (NYSE: GTN; GTN.A) completed the spin-off of
Triple Crown Media, Inc. (Nasdaq: TCMI) effective Dec. 30, 2005.
Prior to the spin-off, Gray contributed its Newspaper Publishing
and Graylink Wireless businesses to Triple Crown Media. In
connection with the spin-off, Triple Crown Media made a $40
million cash distribution to Gray, which Gray used to reduce its
outstanding indebtedness. Triple Crown Media's common stock is
traded on the Nasdaq National Market under the symbol "TCMI."
In connection with the spin-off, Gray distributed one share of
Triple Crown Media common stock for every ten shares of Gray
common stock, and one share of Triple Crown Media common stock for
every ten shares of Gray Class A common stock held by Gray
shareholders on Dec. 14, 2005.
Triple Crown Media and Bull Run Corporation (OTC: BULL.PK) also
reported on Jan. 3, 2006, that the previously announced merger of
Bull Run into a subsidiary of Triple Crown Media, which was
effective on Dec. 30, 2005, following the approval of Bull Run's
shareholders at a special meeting of shareholders held earlier on
Dec. 30, 2005. As a result of the spin-off and merger, the
current shareholders of Gray own approximately 95% of Triple Crown
Media's outstanding common stock and certain former holders of
Bull Run preferred stock and former holders of Bull Run common
stock hold the remaining 5%.
Robert S. Prather, Jr., President and Chief Operating Officer of
Gray stated, "With the completion of the spin-off, Gray will now
be able to focus its financial and operating resources on its
television broadcasting business, and we believe that in Triple
Crown Media we have created value for the Gray and Bull Run
shareholders."
Thomas J. Stultz, Triple Crown Media's President and CEO, stated,
"We are very pleased to complete the process of the spin-off and
merger so that we can now begin our integration into a new
combined organization. I am excited about the prospects of
combining the revenue from Triple Crown Media's newspaper
publishing business and wireless services businesses with the
growth potential of Host's Collegiate Marketing and Production
Services business and Association Management Services business.
We believe this will be a great combination of businesses that
complement one another and will serve to accelerate the growth in
each of these businesses beyond what they could achieve
independently." Stultz has been President and CEO of Host
Communications since 2004 and was formerly President of Gray's
Newspaper Publishing business.
Triple Crown's $140 Million Credit Facility
Triple Crown Media reported on Jan. 3, 2005, that it has entered
into new credit facilities totaling $140 million. The credit
facilities consist of a 4-year $20 million revolving credit
facility, a 4.5-year $90 million first lien term loan and a 5-year
$30 million second lien term loan. The interest rate is based on
the lender's base rate (generally reflecting the lender's prime
rate) or a London Interbank Offered Rate plus in each case a
specified margin, and for revolving and first lien term loan
advances, the margin is based upon Triple Crown Media's debt
leverage ratio as defined in the agreement. The initial margin
for revolving and first lien term loan advances is 2.25% for base
rate advances and 3.25% for LIBOR advances. The specified margin
for second lien term loan advances is 8.0% for base rate advances
and 9.0% for LIBOR advances.
The credit facility is secured by substantially all of the assets
of Triple Crown Media and its subsidiaries. The agreement
contains certain restrictive provisions which include but are not
limited to, requiring Triple Crown Media to maintain certain
financial ratios and limits upon Triple Crown Media's ability to
incur additional indebtedness, make certain acquisitions or
investments, sell assets or make other restricted payments,
including dividends, as defined in the loan agreement.
Proceeds of the new financing were used to make a $40 million cash
distribution to Gray in connection with the spin-off, refinance
all of the surviving corporation's long-term debt, redeem Bull Run
preferred stock held by non-affiliated parties in connection with
the merger and pay transaction costs.
About Triple Crown Media
Triple Crown Media owns and operates five daily newspapers with
total daily circulation of approximately 120,000 and Sunday
circulation of approximately 160,000, and is a leading provider of
primarily paging and other wireless services in non-major
metropolitan areas in Alabama, Florida and Georgia, where it also
operates 14 retail locations. Triple Crown Media, through its
subsidiary, Host Communications, Inc., is engaged in the
Collegiate Marketing and Production Services business and
Association Management Services business. The Collegiate
Management and Production Services business provides sports
marketing and production services to a number of collegiate
conferences and universities and, through a contract with CBS
Sports, on behalf of the National Collegiate Athletic Association.
The Association Management Services business provides various
associations with services such as member communication,
recruitment and retention, conference planning, Internet web site
management, marketing and administration.
About Gray Television Inc.
Headquartered in Atlanta, Georgia, Gray Television, Inc. is a
television broadcast company. Including the previously announced
pending acquisition of WNDU-TV, South Bend, IN, Gray operates 36
television stations serving 30 markets. Each of the stations are
affiliated with either CBS (17 stations), NBC (10 stations), ABC
(8 stations), or Fox (1 station). In addition, Gray currently
operates seven digital multi-cast television channels in seven of
its existing markets, which are affiliated with either UPN or Fox.
* * *
As reported in the Troubled Company Reporter on Oct. 10, 2005,
Moody's Investors Service assigned Ba2 ratings to Gray Television,
Inc.'s $600 million in new senior secured credit facilities ($100
million revolving credit facility, $150 million senior secured
term loan A, $350 million senior secured term loan B).
Additionally, Moody's affirmed the existing ratings, including the
Ba2 corporate family rating, and changed the outlook to stable.
The proceeds from the transaction will be used to refinance the
company's existing $400 million in senior secured credit
facilities and to finance the acquisition of WSAZ-TV in
Charleston-Huntington, WV from Emmis Communications Corporation
for $186 million in cash.
HANGAR ONE: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Hangar One, Inc.
635 Regional Airport Road
Carrollton, Georgia 30117
Bankruptcy Case No.: 06-10014
Chapter 11 Petition Date: January 3, 2005
Court: Northern District of Georgia (Newnan)
Judge: W. Homer Drake
Debtor's Counsel: William Russell Patterson, Esq.
Ragsdale Beals Hooper & Seigler, LLP
229 Peachtree Street NE, Suite 2400
Atlanta, Georgia 30303-1629
Tel: (404) 588-0500
Total Assets: Less than $50,000
Total Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Maria A. Gregg Business debt $161,836
3310 Ethan Drive
Marietta, GA 30062
Professional Aircraft Business debt $5,000
Accessories
7035 Centerland
Titusville, FL 32780
API-Aerospace Products Business debt $3,968
International
P.O. Box 1000
Department 026
Memphis, TN 38143
National Peening Business debt $3,250
1902 Weining Street
Statesville, NC 28677
Home Depot/GECF Business debt $3,160
P.O. Box 9903
Macon, GA 31297-9903
CSSI, Inc. Business debt $2,511
400 Virginia Avenue SW, Suite 210
Washington, DC 20024
Dinsmore & Shohl, LLP Business debt $2,441
P.O. Box 640635
Cincinnati, OH 45264-0635
ATS-Applied Technical Services Business debt $2,075
1190 Atlanta Industrial Drive
Marietta, GA 30066
McMaster-Carr Supply Co. Business debt $1,753
P.O. Box 7690
Chicago, IL 60680-7690
Zep Manufacturing Company Business debt $1,204
P.O. Box 404628
Atlanta, GA 30384-4628
Aircraft Accessories of Business debt $930
Oklahoma, Inc.
2740 North Sheridan
Tulsa, OK 74115
Airtechnics Business debt $632
P.O. Box 780048
Wichita, KS 67278-0048
Tex-Air Parts, Inc. Business debt $420
3724 North Commerce
Fort Worth, TX 76106
ECAS-East Coast Aviation Business debt $340
Supplies, Inc.
399 East Drive
Melbourne, FL 32904
Cotney Aerospace, Inc. Business debt $340
P.O. Box 429
Helena, AL 35080-0429
Office Max-Boise Office Business debt $277
Solutions
P.O. Box 101705
Atlanta, GA 30392-1705
Fastenal Company, Inc. Business debt $255
P.O. Box 978
Winona, MN 55987-0978
SEARS Logistics Business debt $230
8374 North 4000 East
Manteno, IL 60950
Kelly Aerospace, Inc. Business debt $221
Turbine Rotables
P.O. Box 643269
Cincinnati, OH 45264
Pro Cleaners Business debt $211
106 Folds Drive
Carrollton, GA 30117
HELLO CORP: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Hello Corporation of Pennsylvania
142 Gazebo Park, 4th Floor
Johnstown, Pennsylvania 15901
Bankruptcy Case No.: 06-70001
Chapter 11 Petition Date: January 3, 2006
Court: Western District of Pennsylvania (Johnstown)
Debtor's Counsel: James R. Walsh, Esq.
Spence, Custer, Saylor, Wolfe & Rose, LLC
400 U.S. Bank Building
P.O. Box 280
Johnstown, Pennsylvania 15907-0280
Tel: (814) 536-0735
Fax: (814) 539-1423
Estimated Assets: $0 to $50,000
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
AmeriServ Financial, Inc. Line of credit $500,000
216 Franklin Street
Johnstown, PA 15901
Yankee Candle Company Trade debt $226,808
P.O. Box 31804
Hartford, CT 061501804
Hallmark Marketing Corp. Trade debt $151,575
P.O. Box 419535
Kansas City, MO 641416535
The Boyds Collections, LTD Trade debt $139,597
Hallmark Marketing Corp. Trade debt $125,062
AmeriServ Financial, Inc. Note for business $97,531
Operational expenses
Amscan, Inc. Trade debt $95,934
Hallmark Marketing Corp. Trade debt $95,649
Hallmark Marketing Corp. Trade debt $90,769
Hallmark Marketing Corp. Trade debt $89,832
The Lang Companies Trade debt $89,441
Hallmark Marketing Corp. Trade debt $88,870
Crazy Mountain Imports Trade debt $83,836
Sarris Candies, Inc. Trade debt $83,647
Demdaco Trade debt $79,261
Hallmark Marketing Corp. Trade debt $76,338
Enesco Group Trade debt $51,499
Hallmark Marketing Corp. Trade debt $49,220
Transpac Imports, Inc. Trade debt $48,974
DaySpring Cards Trade debt $48,773
HEMAGEN DIAGNOSTICS: Sept. 30 Balance Sheet Upside-Down by $1 Mil.
------------------------------------------------------------------
Hemagen Diagnostics, Inc. (OTC:HMGN.OB) reported operating results
for the fiscal year ended Sept. 30, 2005. The net loss for the
year ended Sept. 30, 2005 was $1,337,000 compared to a net loss of
$3,599,000.
Operating Loss for the year ended Sept. 30, 2005 was $875,000 as
compared to an Operating Loss of $569,000 in the prior fiscal
year. This increase in operating loss is mainly attributed to
lower gross margins in the current year. After adjusting for non-
cash charges including depreciation, amortization, non-cash
interest, and other non-cash charges, the net loss for the year
ended Sept. 30, 2005 was $820,000 compared to a net loss of
$503,000 for the year ended Sept. 30, 2004.
Revenues for the year ended Sept. 30, 2005 increased 2% to
$7,586,000 compared to $7,471,000 during the prior fiscal year
ended Sept. 30, 2004. Increased revenues for the year reflect
increased sales at the company's Virgo division of autoimmune and
infectious disease of $215,000, $67,000 of increased sales at the
Company's Raichem clinical chemistry division, offset by $167,000
of reduced sales with the company's Analyst Clinical Chemistry
Benchtop Analyzer systems. Analyst product line sales reductions
mainly resulted from lower sales to physician office laboratories
and the distributors that support that market as opposed to the
veterinary market. The increase in the Virgo product line sales
mainly resulted from growth at the Company's 83.7% owned Brazilian
subsidiary.
Gross Margins for fiscal year 2005 were 25% as compared to 29% in
fiscal year 2004. The gross margins for the year decrease 4% in
the current year 2005 as a result of the increased production
costs, and lower overall production levels than in previous years.
In the current fiscal year, higher expenditures for outside
consulting services and their related travel costs, increased
temporary labor expense and facility expense caused the total cost
of sales amount to increase from the previous fiscal year.
At Sept. 30, 2005, Hemagen had:
* $272,000 of cash on hand,
* working capital of $1,683,000 and
* a current ratio of 1.65 to 1.0.
At the prior fiscal year end, the Company had:
* $539,000 of cash on hand,
* working capital of $3,334,000 and
* a current ratio of 3.0 to 1.0.
The fluctuation in the current ratio resulted from a construction
loan for the company's new facility that was purchased in June
2005 of $650,000 that will be converted to permanent long term
financing once the build out is complete and the company's current
borrowings on its traditional line of credit facility the majority
of which were used for the acquisition of the Corporate facility.
During the fiscal year ended Sept. 30, 2005 the Company's cash
decreased by $267,000 as compared to a decrease of $185,000 in the
prior fiscal year. The increase in cash used resulted from cash
used in operations which were $475,000 in the current year as
compared to $165,000 in the prior year as a result of lower
margins in the current year as compared to the prior year. This
increase in cash used was offset by an increase in borrowings in
the current year of the company's line of credit facility. In
addition, the company has a working capital line of credit for up
to $500,000 based on the domestic receivables and inventory of the
company and which provides for interest at the rate of the Prime
Rate plus 3/4%. At Sept. 30, 2005 the Company had $400,000
borrowed on this line of credit.
William P. Hales, President and CEO said, "We are pleased with the
growth in revenues in the current fiscal year which mainly
resulted in the fourth quarter which saw a 20% increase from the
prior year. We are optimistic about fiscal year 2006 revenues and
remain committed to growing the company's revenue base and making
the company more competitive on a global basis. The company is
pursuing several other new distributorships internationally that
will offer new distribution channels for our products. The
company is also making the necessary changes to improve its gross
margin going forward."
Hemagen Diagnostics, Inc., is a biotechnology company that
develops, manufactures, and markets more than 150 FDA-cleared
proprietary medical diagnostic test kits used to aid in the
diagnosis of certain autoimmune and infectious diseases. Hemagen
also manufactures and markets a complete line of Clinical
Chemistry Reagents through its wholly owned subsidiary RAICHEM.
In addition, Hemagen manufactures and sells the Analyst(R) an FDA-
cleared Clinical Chemistry Analyzer used to measure important
constituents in human and animal blood, and the Endochek, a
clinical chemistry analyzer used to measure important constituents
in animal blood. In the United States, the company sells its
products directly to physicians, veterinarians, clinical
laboratories and blood banks and on a private-label basis through
multinational distributors of medical supplies. Internationally,
the Company sells its products primarily through distributors. The
Company sells the Analyst(R) and the Endochek both directly and
through distributors servicing physicians' office laboratories and
veterinarians' offices. Hemagen's products are used in many of
the largest Laboratories, Hospitals, and Blood Banks around the
world. Hemagen sells its products to over 1,000 customers
worldwide. The company focuses on markets that offer significant
growth opportunities. The Company was incorporated in 1985 and
became a public company in 1993.
At Sept. 30, 2005, Hemagen Diagnostics, Inc.'s balance sheet
showed a $1,018,306 stockholders' deficit compared to a $261,962
positive equity at Sept. 30, 2004.
INEX PHARMACEUTICALS: Sets Stockholder Meeting to Approve Spin-off
------------------------------------------------------------------
Inex Pharmaceuticals Corporation (TSX: IEX) filed an information
circular with securities regulators in Canada relating to the
transaction announced on Nov. 17, 2005, to spin-out its Targeted
Immunotherapy technology and products into a new public company.
The shareholder meeting to approve the transaction will take place
Jan. 26, 2006 and the transaction is expected to close March 1,
2006.
Timothy M. Ruane, President and Chief Executive Officer of INEX,
said the reorganization transaction provides the greatest value
forward for all stakeholders. "The two technology platforms at
INEX, Targeted Chemotherapy and Targeted Immunotherapy, are at
very different stages of development and have different funding
and personnel requirements. We believe the two platforms are
worth more to our stakeholders as independent entities than
combined in one company and we encourage shareholders to vote in
favour of the transaction."
Under the transaction, INEX's Targeted Immunotherapy assets and
sufficient cash to support initial operations will be transferred
to a new subsidiary company, Tekmira Pharmaceuticals Corporation.
Tekmira will also assume all of the ongoing financial obligations
associated with the assets acquired from INEX. In consideration
for the transfer of these assets and assumption of the
obligations, INEX will receive 11,640,921 common shares of
Tekmira.
Of the 11,640,921 Tekmira common shares issued to INEX, 9,895,796
common shares will be distributed to shareholders of INEX pro rata
to each holder's shareholding in INEX (0.2566 common shares of
Tekmira per INEX Share). The remaining 1,745,125 common shares of
Tekmira will be held by INEX for issuance to holders of INEX's
convertible notes, if they choose to participate in the
transaction. In addition, INEX will receive an additional
2,720,993 common shares of Tekmira in consideration for an
additional $2.4 million. Therefore, upon completion of the
transaction, INEX shareholders will own 69% of Tekmira and INEX
will own 31% (subject to any distribution to the note holders).
Tekmira will have a total of 14,361,914 common shares outstanding.
The mechanics of the transaction are not expected to change before
close; however, the final share distribution will depend on the
timing of the close and changes in cash, working capital and other
balances between the date hereof and the closing of the
transaction.
Tekmira After the Transaction
Tekmira will commence operations with approximately $5.9 million
in cash and will focus on advancing the Targeted Immunotherapy
technology and its lead product, INX-0167. The Targeted
Immunotherapy technology is based on the encapsulation of
immunostimulatory oligonucleotides (short sequences of DNA)
in liposomes and combines the immunostimulatory properties of
oligonucleotides into a single synthetic particle. Preclinical
studies have demonstrated that INX-0167 enhances the number and
potency of certain immune cells, including natural killer (NK)
cells. The resultant increase in NK cell activity is important
for the enhancement of the potency of monoclonal antibodies
through a mechanism known as antibody-dependent cell mediated
cytotoxicity (ADCC).
Given the focus of Tekmira on advancing INX-0167 and INEX's focus
on partnering its Targeted Chemotherapy products, the majority of
the INEX employees will be transferred to the new company. The
major objectives of Tekmira will be to complete an equity
financing in 2006, complete the preclinical development for INX-
0167 and to file an Investigational New Drug application during
2007 to begin INX-0167 phase 1 trials.
INEX After the Transaction
Following the transaction, INEX will have approximately $4.3
million in cash and will continue its business plan to partner its
Targeted Chemotherapy technology and products, including
Marqibo(TM) (sphingosomal vincristine), INX-0125 (sphingosomal
vinorelbine) and INX-0076 (sphingosomal topotecan). INEX will
retain a small core team of employees to focus on partnering the
Targeted Chemotherapy products and will enter into an agreement
with Tekmira to provide access to support services, personnel,
office space and equipment as required. At INEX's considerably
reduced burn rate, it is estimated that the cash on hand will fund
the company's activities until approximately June 2007. INEX will
continue to meet all of the terms and conditions of the
convertible debt.
Why INEX is Undertaking the Transaction
The transaction will strengthen INEX's financial position and
maximize the value of all of INEX's assets. INEX's Targeted
Chemotherapy and Targeted Immunotherapy technology platforms have
very different development, financial and personnel requirements,
and thus INEX believes they require different business plans that
are best pursued in separate companies.
INEX believes focusing on partnering to maximize the value of the
Targeted Chemotherapy assets represents the company's best
opportunity to generate substantial cash in the near-term. The
company believes it cannot raise capital in the equity markets
given the potential future dilution that may result if its
convertible notes are repaid in shares at maturity in April 2007.
In contrast to the Targeted Chemotherapy platform, the Targeted
Immunotherapy platform is at an early-stage of development. These
Targeted Immunotherapy assets will require substantial cash
investments and a long development cycle and, therefore, if
retained by INEX will represent a cash drain in the near-term. By
transferring its Targeted Immunotherapy assets, and the majority
of operating and employee obligations to a separate company, INEX
will substantially reduce its cash burn rate and increase its
relative cash position. INEX believes a separate, debt-free
company, with no majority shareholder, has a better opportunity to
obtain needed financing to develop the Targeted Immunotherapy
platform to its full potential.
If the proposed transaction does not occur, and based on its
current financial resources, INEX would probably consider a
further restructuring to reduce its cash burn rate and would be
unlikely to pursue the active development of its Targeted
Immunotherapy assets.
Approvals
Implementation of the transaction is subject to the receipt of
certain shareholder and court approvals. INEX has also applied to
the Toronto Stock Exchange for approval of the transaction, which
approval is still pending. If approved by the TSX and following
completion of the transaction, the continued listing of INEX's
common shares will be subject to, as is the case for all companies
listed thereon, meeting the continued listing requirements of the
TSX. To date, INEX has met these requirements, but there can be
no assurance that it will be able to meet these requirements after
completion of the transaction. Certain of these requirements, in
particular, that INEX maintain a minimum market capitalization for
30 consecutive trading days, are out of INEX's control and can be
considered by the TSX at any time after completion of the
transaction. If INEX is not able to continue to meet the
continued listing requirements of the TSX, INEX will need to seek
to list its shares on another stock exchange. There can be no
assurance that such a listing could be obtained.
Inex Pharmaceuticals Corporation -- http://www.inexpharm.com/
-- is a Canadian biopharmaceutical company developing and
commercializing proprietary drugs and drug delivery systems to
improve the treatment of cancer.
* * *
As reported in the Troubled Company Reporter on Dec. 22, 2005,
Inex Pharmaceuticals Corporation received notice on Dec. 20, 2005,
that Stark Trading and Shepherd Investments International Ltd.
filed a petition in the Supreme Court of British Columbia seeking
to have INEX declared bankrupt and that a receiving order be made
in respect of the property of INEX.
Stark is the majority holder of certain promissory notes issued by
Inex International Holdings, a subsidiary of INEX. Other holders
of the notes have not filed a similar petition nor joined in
Stark's petition. The promissory notes are not due until April
2007 and can be repaid in cash or in shares, at INEX's option, at
maturity.
INEX believes that this latest petition brought forward by Stark
is an attempt to block the successful completion of the Plan of
Arrangement announced Nov. 17, 2005. As previously disclosed,
INEX has already asked the Supreme Court of British Columbia to
rule on whether the proposed plan can be completed given the terms
of the Notes. The Supreme Court will hear this plan on Jan. 5 and
Jan. 6, 2006. This hearing will also address Stark's bankruptcy
petition.
Timothy M. Ruane, President and Chief Executive Officer of INEX,
said INEX is continuing with its plan to spin out its Targeted
Immunotherapy assets into a new public company. "This is yet
another attempt by Stark to try and block the completion of our
plan to spin out our Targeted Immunotherapy technology. We
believe this transaction represents the greatest value for all
stakeholders, including the Note holders, and we will continue to
move forward to secure court and shareholder approvals for its
completion."
INTERPLAY ENTERTAINMENT: Equity Deficit Falls to $12MM at Sept. 30
------------------------------------------------------------------
Interplay Entertainment Corp. delivered its quarterly report on
Form 10-Q for the quarterly period ended Sept. 30, 2005, to the
Securities and Exchange Commission on Dec. 28, 2005.
For three months ended September 30, 2005, the company reported a
$3.6 million of net income on $4.3 million of revenues, compared
to a $279,000 net loss on $918,000 of revenues for the same period
of 2004.
A full-text copy of the regulatory filing is available at no
charge at http://researcharchives.com/t/s?41d
Going Concern
Rose, Snyder & Jacobs, expressed substantial doubt about Interplay
Entertainment's ability to continue as a going concern, after it
audited the company's financial statements for the year ended Dec.
31, 2004. The company incurred historical operating losses and
its deficits in stockholders' equity and working capital.
Interplay Entertainment Corp. develops and publishes interactive
entertainment software for both core gamers and the mass market.
At September 30, 2005, the company's balance sheet showed a
stockholder's equity deficit of $12,247,000, compared to a
$17,362,000 deficit at December 31, 2004.
INTERSTATE BAKERIES: Amends Terms of DIP Financing with JPMorgan
----------------------------------------------------------------
In a regulatory filing with the Securities and Exchange
Commission, Interstate Bakeries Corporation and its debtor-
affiliates disclosed that they entered into a Fifth Amendment to
the DIP Agreement with JPMorgan Chase Bank, N.A., as Agent, on
Dec. 27, 2005.
The Parties have amended the DIP Agreement to provide the Debtors
with the flexibility needed to continue to seek a resolution
regarding the status of the American Bakers Association
Retirement Plan as either a multiple employer plan or an
aggregate of single employer plans and the potential impact the
ultimate status of the ABA Pension Plan could have on the
Debtors' financial operations. The Fifth Amendment inserts into
the DIP Agreement express references to the ABA Pension Plan and
limited cushions, which give the Debtors latitude with respect to
the outcome of the inquiry into the proper status of the ABA
Pension Plan.
In addition, the Parties agree to these terms:
(i) The Debtors will not permit cumulative Consolidated EBITDA
during a given monthly fiscal period to be less than
certain specified fixed amounts:
Cumulative
Consolidated
Fiscal Period Ending EBITDA
-------------------- ------------
November 12, 2005 $15,500,000
December 10, 2005 2,500,000
January 7, 2006 (12,500,000)
February 4, 2006 (22,500,000)
March 4, 2006 (28,500,000)
April 1, 2006 (26,500,000)
April 29, 2006 (17,500,000)
June 3, 2006 2,500,000
July 1, 2006 12,500,000
July 29, 2006 23,500,000
August 26, 2006 35,500,000
September 23, 2006 46,500,000
(ii) The Fifth Amendment provides for a period of time that
suspends the requirement that the Debtors comply with the
specific covenant levels of the DIP Agreement, as amended:
(a) Commencing with the fiscal period ending December 10,
2005 and ending with the fiscal period ending June 3,
2006;
(b) The Debtors will not be required to comply with the
covenant levels set forth in the DIP Agreement, as
amended, regarding cumulative Consolidated EBITDA until
the time as Net Total Usage under the DIP Agreement
exceeds $50 million; and
(c) The amendment and restatement of the DIP Agreement is
retroactively effective on November 12, 2005.
Specifically, commencing with the fiscal period ending
December 10, 2005 and ending with the fiscal period ending
June 3, 2006 -- Suspension Period -- the Borrowers will not
be required to comply with the covenant regarding
cumulative Consolidated EBITDA, as calculated as of the end
of each fiscal period, until the difference between the (i)
then Total Usage; and (ii) the aggregate amount of cash
then on deposit in the Letter of Credit Account, exceeds
$50,000,000.
From and after the date the Net Total Usage exceeds
$50,000,000, the Suspension Period will terminate and the
Borrowers will be obligated to comply with the covenant,
both for the then current fiscal period and for all fiscal
periods with respect to which monthly financial statements
are delivered to the Administrative Agent.
In the event Net Total Usage does not exceed $50,000,000 at
any time during the Suspension Period, the Suspension
Period will terminate as of the first day of the fiscal
period ending July 1, 2006, so that the Borrowers will be
required to comply with the covenant with respect to the
calculation of cumulative Consolidated EBITDA as of the end
of the fiscal periods ending July 1, 2006, July 29, 2006,
August 26, 2006 and September 23, 2006.
As of December 30, 2005, Net Total Usage under the DIP Agreement
was approximately $21.8 million.
A full-text copy of the Fifth Amendment is available for free at
http://ResearchArchives.com/t/s?417
Headquartered in Kansas City, Missouri, Interstate Bakeries
Corporation is a wholesale baker and distributor of fresh baked
bread and sweet goods, under various national brand names,
including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R),
Merita(R) and Drake's(R). The Company employs approximately
32,000 in 54 bakeries, more than 1,000 distribution centers and
1,200 thrift stores throughout the U.S.
The Company and seven of its debtor-affiliates filed for chapter
11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No.
04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in
their restructuring efforts. When the Debtors filed for
protection from their creditors, they listed $1,626,425,000 in
total assets and $1,321,713,000 (excluding the $100,000,000 issue
of 6.0% senior subordinated convertible notes due August 15, 2014,
on August 12, 2004) in total debts. (Interstate Bakeries
Bankruptcy News, Issue No. 34; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
INTERSTATE BAKERIES: Gets Court Nod on $815K Delray Property Sale
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Missouri
gave Interstate Bakeries Corporation and its debtor-affiliates
authority to sell their real estate property located at 1515
Congress Avenue in Delray Beach, Florida, to RMS III, L.L.C., for
$815,000, subject to higher or otherwise better offers.
The property includes approximately 1.55 acres of land with a
6,650-square foot building that the Debtors formerly operated as a
depot and thrift store.
Paul M. Hoffman, Esq., at Stinson Morrison Hecker LLP, in Kansas
City, Missouri, informs the Hon. Jerry W. Venters that the Debtors
have been actively and diligently attempting to sell the Delray
Beach Property for five months, with the intention of maximizing
the Property's value in furtherance of a plan of reorganization.
Mr. Hoffman says that the Debtors are winding up the use of the
Delray Beach Property and will conclude their current operations
before the closing of the sale of the Property.
The Debtors, in conjunction with Hilco Industrial, LLC, and Hilco
Real Estate, LLC, have conducted marketing efforts for the
Property. They have determined that the sale agreement proposed
by RMS III represents the best offer for the Delray Beach
Property at this time.
The Sale Agreement provides these terms:
Purchase Price: $815,000
Escrow Deposit: RMS III has already deposited
$81,500 in escrow.
Closing: The Closing will occur within five
business days of Court approval of
the Sale Agreement subject to the
payment of the Purchase Price.
Condition of Property: The Debtors will deliver good and
marketable fee simple title to the
Land and Improvements, free ad
clear of liens, other than
Permitted Exceptions. The
Property is being sold AS-IS,
WHERE-IS, with no representations
or warranties, reasonable wear and
tear and casualty and condemnation
excepted.
The Debtors solicited bids that are higher or otherwise better
than the offer submitted by RMS III.
The Debtors have agreed to provide Bid Protections to RMS III in
the form of a $16,300 termination fee. The Debtors will also pay
reasonable and documented expense reimbursement of up to $50,000
to RMS III.
Headquartered in Kansas City, Missouri, Interstate Bakeries
Corporation is a wholesale baker and distributor of fresh baked
bread and sweet goods, under various national brand names,
including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R),
Merita(R) and Drake's(R). The Company employs approximately
32,000 in 54 bakeries, more than 1,000 distribution centers and
1,200 thrift stores throughout the U.S.
The Company and seven of its debtor-affiliates filed for chapter
11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No.
04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in
their restructuring efforts. When the Debtors filed for
protection from their creditors, they listed $1,626,425,000 in
total assets and $1,321,713,000 (excluding the $100,000,000 issue
of 6.0% senior subordinated convertible notes due August 15, 2014,
on August 12, 2004) in total debts. (Interstate Bakeries
Bankruptcy News, Issue No. 34; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
INTERSTATE BAKERIES: Wants Open-Ended Lease Decision Deadline
-------------------------------------------------------------
Pursuant to Section 365(d)(4) of the Bankruptcy Code and Rule
6006 of the Federal Rules of Bankruptcy Procedure, Interstate
Bakeries Corporation and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Western District of Missouri to extend
the deadline to assume or reject unexpired leases and subleases of
nonresidential real property to:
(a) the effective date of a plan of reorganization; or
(b) March 21, 2007.
J. Eric Ivester, Esq., at Skadden Arps Slate Meagher & Flom LLP,
in Chicago, Illinois, tells the Court that currently, the Debtors
are lessees with respect to approximately 1,000 Real Property
Leases.
The Debtors need more time to determine whether to accept or
reject particular Real Property Leases. According to Mr.
Ivester, if the Section 365(d)(4) period is not extended beyond
March 21, 2006, the Debtors may be compelled, prematurely, to
assume substantial, long-term liabilities under the Real Property
Leases or forfeit benefits associated with some Real Property
Leases to the detriment of the Debtors' ability to operate and
preserve the going-concern value of their business for the
benefit of all creditors and other parties-in-interest.
As previously reported, the Debtors filed:
(i) 18 motions rejecting an aggregate of approximately 293
leases prior to Dec. 29, 2005; and
(ii) a motion requesting authority to reject 46 additional Real
Property Leases.
Mr. Ivester explains that the measure of whether a particular
Real Property Lease will be assumed or rejected will depend, for
the most part, on the outcome of the overall operational
reorganization.
The Debtors are in the second stage of their operational
turnaround -- an exhaustive analysis of each of the Debtors' ten
profit centers on an individual basis, Mr. Ivester says. The
Debtors obtained authority to take actions necessary to
consolidate operations in nine of its profit centers. The
Debtors have rejected leases as a result of those consolidations.
The Debtors are continuing to evaluate its remaining operations.
Headquartered in Kansas City, Missouri, Interstate Bakeries
Corporation is a wholesale baker and distributor of fresh baked
bread and sweet goods, under various national brand names,
including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R),
Merita(R) and Drake's(R). The Company employs approximately
32,000 in 54 bakeries, more than 1,000 distribution centers and
1,200 thrift stores throughout the U.S.
The Company and seven of its debtor-affiliates filed for chapter
11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No.
04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in
their restructuring efforts. When the Debtors filed for
protection from their creditors, they listed $1,626,425,000 in
total assets and $1,321,713,000 (excluding the $100,000,000 issue
of 6.0% senior subordinated convertible notes due August 15, 2014,
on August 12, 2004) in total debts. (Interstate Bakeries
Bankruptcy News, Issue No. 34; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
JAG MEDIA: 13,163,452 Common Shares Registered for Resale
--------------------------------------------------------
JAG Media Holdings, Inc., filed a Registration Statement with the
Securities and Exchange Commission for the resale of up to
13,163,452 shares of its common stock, including:
-- 10,464,913 common shares that Cornell Capital, L.P. may
receive pursuant to an April 9, 2002, equity line purchase
agreement;
-- up to 500,000 shares issuable to the Company's Chairman,
Chief Executive Officer and General Counsel, Thomas J.
Mazzarisi, upon exercise of a stock option;
-- up to 250,000 shares issuable to the Company's President,
Chief Operating Officer, Chief Financial Officer and
Secretary, Stephen J. Schoepfer, upon exercise of a stock
option;
-- 110,000 shares owned by Thomas J. Mazzarisi;
-- 75,000 shares owned by Stephen J. Schoepfer;
-- 1,728,539 shares owned by Bay Point Investment Partners LLC,
which received its shares from the Company in private
placements that closed as of December 10, 2002, and June 19,
2003; and
-- 35,000 shares owned by Kuekenhof Equity Fund L.P., which
received its shares from the Company in a private placement
that closed as of September 25, 2003.
Cornell Capital is an "underwriter" within the meaning of the
Securities Act in connection with the resale of 10,464,913 common
shares.
Equity Line
Under the equity line purchase agreement, the Company is entitled
to periodically cause Cornell Capital to purchase its common
shares. The term of the equity line expires on the earliest to
occur of:
(1) the date on which Cornell Capital will have paid an
aggregate of $10 million for shares under the equity line;
(2) the date the equity line purchase agreement is terminated
in accordance with its terms; or
(3) August 28, 2006.
Cornell Capital originally committed to purchase up to $10 million
of the Company's common shares. As of December 19, 2005, Cornell
Capital had purchased 8,129,540 of the Company's common shares for
$4,035,000.
The Company's common stock is traded on the Pink Sheets under the
symbol "JAGH".
A full-text copy of the Registration Statement is available for
free at http://ResearchArchives.com/t/s?415
Headquartered in Boca Raton, Florida, JAG Media Holdings, Inc., is
a provider of Internet-based equities research and financial
information that offers its subscribers a variety of stock market
research, news, commentary and analysis, including "JAG Notes",
the Company's flagship early morning consolidated research
product. Through the Company's wholly owned subsidiary TComm (UK)
Limited, the Company also provides various video streaming
software solutions for organizations and individuals. The
Company's Web sites are located at http://www.jagnotes.com/and
http://www.tcomm.co.uk/and http://www.tcomm.tv/
As of Oct. 31, 2005, JAG Media's balance sheet showed a
stockholders' deficit of $1,914,593.
KAISER ALUMINUM: Committee Wants Confirmation Objections Overruled
------------------------------------------------------------------
William P. Bowden, Esq., at Ashby and Geddes, Wilmington,
Delaware, on behalf of the Official Committee of Unsecured
Creditors, tells the U.S. Bankruptcy Court for the District of
Delaware that Kaiser Aluminum Corporation and its debtor-
affiliates' Second Amended Plan of Reorganization provides a fair
and equitable treatment to each of the Debtors' Classes of
Creditors and is supported by all of the key creditor
constituencies. It satisfies all applicable requirements of the
Bankruptcy Code and has been overwhelming accepted by all voting
Classes. Accordingly, he says all objections should be overruled
and the Plan should be confirmed at the Confirmation Hearing.
Mr. Bowden notes that one of primary objectives of the Plan was to
settle, compromise or resolve certain Claims and Interests on
terms that were reasonable and in the best interests of the
creditors of these estates. These compromises are imbedded in the
Plan:
(1) Compromises with the Asbestos and other Tort Constituents
On the Effective Date, each of the Funding Vehicle
Trust, the Asbestos PI Trust, the CTPV PI Trust, the
NIHL PI Trust and the Silica PI Trust will be created.
Immediately thereafter, PI Trust Assets will be issued or
transferred to each of the Funding Vehicle Trust, the
Asbestos PI Trust and the Silica PI Trust. The PI Trust
Assets will include 100 shares of common stock of
Reorganized Kaiser Trading, constituting 100% of the
outstanding equity interests of the company, $13,000,000
in cash, and 75% of the KFC Claim against KACC amounting
to $1,106,000,000 that is to be transferred on the
Effective Date to the PI Trusts;
(2) Agreements with Labor Regarding Pension and Retiree
Medical Benefits under the Legacy Liability Agreements
On the Effective Date, Reorganized KAC will contribute to
the Union VEBA Trust and the Retired Salaried Employee
VEBA Trust an aggregate of 13.38 million shares of New
Common Stock representing 75% of KACC's remaining value;
cash in the aggregate equal to the excess of the Initial
Availability Amount above $50,000,000, but in no event
more than $36,000,000 less the aggregate of all amounts
contributed to the Union VEBA Trust and the Retired
Salaried Employee VEBA Trust prior to the Effective Date
other than the $1,000,000 contributed to the Union VEBA
Trust on March 31, 2005; and variable cash contributions;
(3) PBGC Settlement Agreement
The Plan provides that the PBGC will have an Allowed
Canadian Debtor PBGC Claim (Class 4) against each of the
Canadian Debtors and an Allowed General Unsecured Claim
(Class 9) against each of the Debtors other than the
Canadian Debtors for an aggregate of $616,000,000, and the
payment of $11,000,000 in cash on Effective Date as PBGC
administrative claims;
(4) Intercompany Claims Settlement
The ISA addresses the treatment of intercompany claims of
the Debtors that arose prior to and after the Petition
Date.
Mr. Bowden tells the Court that the Plan should be confirmed over
the insurers' objections because:
-- the objections are meritless. The Insurers raised a
number of objections to certain language in the Plan,
arguing that the language impaired their rights. After
negotiations between the Debtors and the Insurers, the
parties reached an agreement regarding modifications to
the Plan. As a result, the Plan now preserves all of the
Insurers' coverage defenses without exception and is
unquestionably insurance neutral; and
-- the Insurers are not creditors in the cases, thus lacking
in standing to object to the Plan and participating in
issues relating to Section 524(2) of the Bankruptcy Code.
Mr. Bowden further asserts that the issue of the assignment of
insurance policies is already well settled because:
(a) Section 1123(a)(5) expressly permits the transfer of
KACC's insurance rights to a Section 524(g) trust under
the Plan, notwithstanding any anti-assignment provisions
in the PI Insurance Policies. Section 1123(a)(5)(B)
provides, "[n]otwithstanding any otherwise applicable
nonbankruptcy law, a plan shall . . . provide adequate
means for the plan's implementation, such as . . .
transfer of all or any part of the property of the estate
to one or more entities, whether organized before or after
the confirmation of the plan."
(b) Section 541 prohibits the enforcement of anti-assignment
clauses in the PI Trust Insurance Policies and under
California Non-bankruptcy Law;
(c) bankruptcy courts routinely approve a debtor's assignment
of insurance policies like in In re Combustion
Engineering, 391 F.3d 190 (3rd Cir. 2005);
(d) the assignment of the PI Trust Insurance Assets is
consistent with the general policy recognized by the Third
Circuit in In re Rickel Home Centers, Inc., 209 F.3d 291,
299 (3rd Cir. 2000), that "[t]he [Bankruptcy] Code
generally favors free assignability as a means to maximize
the value of the debtor's estate and, to that end, allows
the trustee to assign notwithstanding a provision in the
contract or lease, or applicable law, prohibiting,
restricting, or conditioning assignment;" and
(e) the Insurers' preemption argument under Section 1123(a)(5)
was expressly rejected by the Third Circuit in Combustion
Engineering.
On the Insurers' objection to the Plan's failure to satisfy
Section 524(g)(2)(B)(i)(II), Mr. Bowden argues that the Asbestos
PI Trust provides the "evergreen" source of funds. He points out
that substantial contributions will be made to the Asbestos PI
Trust under the Plan. Reorganized KAC will remain a viable
company that will have numerous employees, operate plants in the
United States and Canada, sell a wide variety of aluminum products
and has adequate liquidity. Reorganized Kaiser Trading's
Brooklawn property in Louisiana will generate lease payments and
the property has the potential to appreciate in value. Moreover,
the Reorganizing Debtors have reached settlements, to date, for an
aggregate of more than $350,000,000 with certain insurance
companies regarding coverage for Channeled Personal Injury Claims.
Sherwin Alumina Reserves Right to Object
Sherwin Alumina LP reserves its right to object to confirmation
and to seek continuation of the hearing to confirm the Debtors'
Second Amended Plan of Reorganization, as modified pursuant to its
settlement with the Debtors, is not confirmed by the Court.
William F. Taylor, Esq., at McCarter & English LLP, in
Wilmington, Delaware, says the Unmodified Plan cannot be confirmed
because it was not proposed in good faith. The Unmodified Plan
was proposed with the intent to strip Sherwin's $68,000,000 claim
against Kaiser Bauxite Company of any value. If the Unmodified
Plan were confirmed, Sherwin would be the only unsecured creditor
with a proper claim against any of the Debtors that would receive
nothing in these cases.
As previously reported, Sherwin's settlement with the Debtors
provides that KBC would become a proponent of the Modified Plan
and the Sherwin Claim would be allowed as a prepetition general
unsecured claim for $42,125,000. All unsecured claims against
KBC, including Sherwin's, will be treated in Subclass 9B under the
Plan, and KBC will be substantively consolidated with certain of
the Reorganizing Debtors solely for that purpose. Sherwin would
waive any attempt to challenge the Intercompany Settlement
Agreement or the Plan. The Debtors would modify the Plan to
implement the settlement.
Implementation of the Sherwin Settlement would not alter the
treatment of general unsecured creditors under the Unmodified
Plan, except that there would be a de minimis dilution of
distributions to holders of Subclass 9B claims, Mr. Taylor tells
Judge Fitzgerald.
The Court has approved the Sherwin Settlement. However, because
the implementation of the Settlement would dilute the recoveries
of creditors in Subclass 9B, the Court has directed the Debtors to
solicit votes on the Plan modifications provided under the
Settlement. Subclass 9B creditors have until January 6, 2006, to
cast their votes.
The Debtors have assured Sherwin that the Subclass 9B creditors
will accept the Modified Plan. "Sherwin nonetheless files this
Conditional Objection to protect its interest," Mr. Taylor says.
Headquartered in Foothill Ranch, California, Kaiser Aluminum
Corporation -- http://www.kaiseraluminum.com/-- is a leading
producer of fabricated aluminum products for aerospace and high-
strength, general engineering, automotive, and custom industrial
applications. The Company filed for chapter 11 protection on
February 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold
off a number of its commodity businesses during course of its
cases. Corinne Ball, Esq., at Jones Day, represents the Debtors
in their restructuring efforts. On June 30, 2004, the Debtors
listed $1.619 billion in assets and $3.396 billion in debts.
(Kaiser Bankruptcy News, Issue No. 87; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
KAISER ALUMINUM: Court Approves $42.1MM Sherwin Alumina Settlement
------------------------------------------------------------------
The Honorable Judith Fitzgerald of the U.S. Bankruptcy Court for
the District of Delaware approved Kaiser Aluminum Corporation and
its debtor-affiliates' settlement agreement with Sherwin Alumina
LP. The U.S. Bankruptcy Court for the District of Delaware also
finds that the modifications the Debtors' Second Amended Plan of
Reorganization as provided in the Settlement would not adversary
change the treatment of any creditor under the Plan. The Court
authorizes the Debtors to make the Plan Modifications.
However, the Court notes that implementation of the Settlement
slightly dilutes the recovers of creditors holding Subclass 9B
Claims. As a result, the Court directs the Debtors to solicit
votes on the Plan Modifications from Subclass 9B creditors.
Members of Subclass 9B have until January 6, 2006, to cast their
votes.
As previously reported in the Troubled Company Reporter on
December 5, 2005, Kaiser Bauxite Company, a Kaiser Aluminum
Corporation debtor-affiliate, and Sherwin Alumina LP were parties
to a bauxite purchase agreement dated November 13, 2001. Under
the agreement, Kaiser Bauxite agreed to provide bauxite to Sherwin
Alumina at certain tonnage amounts and minimum prices through
December 31, 2009.
Over the past several weeks, the Debtors, the Official Committee
of Unsecured Creditors and Sherwin Alumina have been negotiating a
resolution of the Sherwin Alumina Claim and the issues raised by
the Sherwin Alumina objection.
The parties agree that:
(a) KBC will become a proponent of the Plan along with the
Reorganizing Debtors;
(b) the Sherwin Alumina claim will be allowed for
$42,125,000 as a general unsecured claim;
(c) all unsecured claims against KBC, including Sherwin
Alumina's, will be treated in Subclass 9B under the Plan
and KBC will be substantively consolidated with certain
of the Reorganizing Debtors solely for that purpose;
(d) Sherwin Alumina will waive any attempt to challenge the
Intercompany Settlement Agreement or the Plan; and
(e) the Plan will be modified to implement the settlement.
In particular:
-- the definitions of the Debtors and the Other Debtors
will be adjusted to reflect the fact that KBC is now
a proponent of the Plan;
-- in connection with confirmation of the Plan, the
Debtors will seek Court approval of the substantive
consolidation of KBC with the Substantively
Consolidated Debtors solely to treat any Unsecured
Claims against KBC as Claims in Subclass 9B for
purposes of distributions to be made under the Plan;
and
-- the Plan will provide that Sherwin Alumina's
Unsecured Claim against KBC is allowed for
$42,125,000 under Subclass 9B.
Headquartered in Foothill Ranch, California, Kaiser Aluminum
Corporation -- http://www.kaiseraluminum.com/-- is a leading
producer of fabricated aluminum products for aerospace and high-
strength, general engineering, automotive, and custom industrial
applications. The Company filed for chapter 11 protection on
February 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold
off a number of its commodity businesses during course of its
cases. Corinne Ball, Esq., at Jones Day, represents the Debtors
in their restructuring efforts. On June 30, 2004, the Debtors
listed $1.619 billion in assets and $3.396 billion in debts.
(Kaiser Bankruptcy News, Issue No. 87; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
MEDICALCV INC: 5% Series A Pref. Shares Convert to Common Stock
--------------------------------------------------------------
MedicalCV, Inc., acquired 5,750 shares of its 5% Series A
Convertible Preferred Stock in consideration of the issuance of
17,692,750 shares of common stock. In particular, the Company
made these common stock distributions to old preferred
shareholders:
Shareholder Shares Issued
----------- -------------
Whitebox Hedged High Yield Partners, L.P. 3,077,000
Whitebox Intermarket Partners, L.P. 2,307,750
Whitebox Convertible Arbitrage Partners, L.P. 1,538,500
Pandora Select Partners, LP 1,538,500
SF Capital Partners Ltd. 9,231,000
Due to this equity issuance coupled with the issuance of
49,202,553 common shares last month, the number of total
outstanding shares of the Company's common stock increased from
11,513,333 prior to the transactions to 78,408,636 following the
transactions.
As reported in the Troubled Company Reporter on Jan. 3, 2006, the
Company acquired 9,238 shares of Preferred Stock in consideration
of its issuance of 28,425,326 shares of common stock to accredited
investors last month.
The Company also received $6,018,188 in gross proceeds in
consideration of its issuance of 20,777,227 shares of common stock
upon exercise of warrants by accredited investors last month.
MedicalCV, Inc., is a cardiothoracic surgery device manufacturer.
Previously, its primary focus was on heart valve disease. It
developed and marketed mechanical heart valves known as the
Omnicarbon 3000 and 4000. In November 2004, after an exhaustive
evaluation of the business, MedicalCV decided to explore options
for exiting the mechanical valve business. The Company intends to
direct its resources to the development and introduction of
products targeting treatment of atrial fibrillation.
* * *
Going Concern Doubt
PricewaterhouseCoopers LLP, after auditing the Company's financial
statements for fiscal years 2004 and 2005, expressed doubt about
the Company's ability to continue as a going concern.
MID-STATE: Oneida Files Modified Plan of Reorganization
-------------------------------------------------------
Oneida Entertainment LLC filed a Modified First Amended Plan of
Reorganization for Mid-State Raceway, Inc., and Mid-State
Development Corporation with the U.S. Bankruptcy Court for the
Northern District of New York on Dec. 12, 2005.
The Oneida Plan
As previously reported in the Troubled Company Reporter, the
Oneida Plan contemplates the full payment of all creditors and a
significant recovery by shareholders.
Allowed priority tax claims will be paid in full.
The modified plan allows for the full payment of allowed general
unsecured claims of both Raceway and Development in cash.
Remaining impaired claims will be treated as follows:
-- Class 3 Secured Claims, which consist of:
* CT Male Associates' $10,832 claim
* Update Roofing's $10,198 claim
* VIP Structures, Inc.'s $804,222 claim
* Wagering Insurance North America, Ltd.'s $20,387 claim,
will receive a cash payment in their allowed claim without
interest unless the Court requires an interest payment or
Oneida Entertainment otherwise agrees; and
-- Equity interests will be cancelled on the Plan's effective
date. They may elect to receive either cash or stock or a
combination of both cash option and stock option.
Plan Funding
Pursuant to the modified plan, Jeffrey Gural, Vernon Downs
Acuqisition, LLC, Southern Tier Acquisition, LLC, or American
Racing & Entertainment LLC committed to provide up to $2.6 million
in postpetition financing, which will be paid in full on the
effective date.
The Debtors also received a Court-approved $675,265 HHA loan from
Southern Tier Acquisition, which will be paid as a DIP loan if the
HHA loan is outstanding on the effective date.
In order to make distributions pursuant to the modified Oneida
Plan, an investment fund managed by Plainfield Asset Management
will provide the Reorganized Debtors with:
(a) a $25.5 million exit financing;
(b) a $13 million of mezzanine loan;
(c) a $13 million equity contribution.
Pursuant to these contributions, the Reorganized Debtors will have
at least $8 million in cash on the effective date after payment of
all claims.
A blacklined copy of the Modified First Amended Plan of
Reorganization dated Dec. 12, 2005, is available for a fee at:
http://www.researcharchives.com/bin/download?id=060104030920
Headquartered in Vernon, New York, Mid-State Raceway, Inc., dba
Vernon Downs -- http://www.vernondowns.com/-- operates a
racetrack, restaurant and gaming resort. The Company and its
debtor-affiliate filed for chapter 11 protection on August 11,
2004 (Bankr. N.D.N.Y. Case No. 04-65746). Lee E. Woodard, Esq.,
at Harris Beach LLP, represents the Debtors in their restructuring
efforts. When the Debtors filed for protection, they listed
estimated debts of $10 million to $50 million but did not disclose
its assets.
MIRANT CORP: California DWR Sells Unsecured Claim for $189.4 Mil.
-----------------------------------------------------------------
The California Department of Water Resources reported on Jan. 3,
2006, that California parties have sold their unsecured claims
against Mirant Americas Energy Marketing for $189.4 million. The
claims were the result of a comprehensive $750 million settlement
for the company's alleged misconduct during the 2000-2001 energy
crisis.
The sale will provide electricity ratepayers with the full value
of the energy settlement plus interest. At the time the
settlement was reached, the unsecured claims were subject to a
discount of at least 50% through Mirant's bankruptcy proceedings.
As part of the overall settlement, which was approved by the
Bankruptcy Court and the Federal Energy Regulatory Commission in
April 2005, DWR and the state's three Investor-Owned Utilities
were given unsecured claims totaling $177.25 million. Of that
total, DWR received unsecured claims totaling $89.75 million while
the IOUs -- Pacific Gas & Electric, Southern California Edison and
San Diego Gas & Electric -- received a combined unsecured claim
for $87.5 million.
The sale of the claims, which was brokered by Credit Suisse First
Boston L.L.C., comes on the heels of another multi-million dollar
savings for ratepayers secured by the Governor Schwarzenegger
Administration with other state and private parties. In December,
the state saved ratepayers nearly $145 million by refinancing a
portion of its power supply revenue bonds. In total, Gov.
Schwarzenegger has guided successful energy settlements totaling
more than $3.2 billion on behalf of electricity ratepayers since
2004.
As in prior settlements, DWR will return its portion of the
settlement to California ratepayers by reducing its next revenue
requirement determination, which is submitted annually to the
California Public Utilities Commission. The revenue requirement
recovers DWR's cost for power it delivers to customers of the
IOUs.
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.
MULTICANAL S.A.: Registers Securities for Restructuring Offers
--------------------------------------------------------------
Multicanal S.A. filed a Registration Statement with the U.S.
Securities and Exchange Commission to allow the resale of these
securities, which will be distributed to U.S. bondholders pursuant
to its extrajudicial restructuring:
Securities Aggregate Amount
---------- ----------------
10-Year Notes $56,500,000
7-Year Notes $85,800,000
Class C shares of common stock $108,720,155
Included in the Registration Statement filed are 124,965,696
Class D shares of common stock. The Company did not provide a
dollar value to the Class D common shares.
The securities being registered are offered in exchange for:
* 9.25% Notes due 2002,
* 10.5% Notes due 2007,
* 13.125% Notes due 2009,
* 10.5% Notes due 2018; and
* Floating Rate Notes due 2003
of Multicanal S.A. pursuant to an acuerdo preventivo extrajudicial
as confirmed by an Argentine court.
These offers are only extended to:
(1) holders of the Company's old notes that did not consent to
the terms of the Company's acuerdo preventivo extrajudicial
and tender their old notes in connection with the Company's
solicitation completed on December 12, 2003; and
(2) U.S. retail holders that tendered old notes for the cash
option on or before December 12, 2003, pursuant to the
terms of our cash option under the Company's acuerdo
preventivo extrajudicial.
Entities eligible to participate in the election offers can elect
among these three options:
-- receiving $1,050 principal amount of the Company's 10-Year
Step-Up Notes with an initial interest rate of 2.5% for each
U.S.$1,000 principal amount of old notes;
-- receiving
(a) $440 principal amount of either:
(i) the Company's 7% 7-Year Notes; or
(ii) the Company's 7-Year Floating Rate Notes; and
(b) 641 Class C shares of common stock, for each $1,000
principal amount of old notes; and
-- receiving a cash payment of $300 for each $1,000 principal
amount of old notes.
A full-text copy of the Registration Statement is available for
free at http://ResearchArchives.com/t/s?416
Multicanal S.A. -- http://www.multicanal.com.ar/-- is an
Argentinean multiple cable systems operator with its principal
operations in Argentina and smaller operations in Uruguay and
Paraguay. Grupo Clarin SA owns Multicanal.
NORTHWEST AIRLINES: Hires LECG as Interim Expert Consultants
------------------------------------------------------------
Northwest Airlines Corp. and its debtor-affiliates sought and
obtained interim approval from the U.S. Bankruptcy Court for the
Southern District of New York to employ LECG, LLC, to provide
expert analysis and testimony in connection with their efforts to
reduce labor costs pursuant to Section 1113 of the Bankruptcy
Code.
The Debtors believe that LECG has a wealth of experience in
providing consulting services to a wide cross-section of
industries, including the airline and transportation industry.
Barry Simon, executive vice president and general counsel for
Northwest Airlines Corporation, explains that LECG will be asked
to analyze the Debtors' costs, economic and competitive positions
in comparison to other airlines. Pursuant to an Engagement
Agreement dated October 27, 2005, LECG will also provide expert
backup support and consultation services in connection with
various aspects of the Debtors' Chapter 11 cases.
The Debtors will pay LECG in accordance with its customary hourly
rates. The professionals expected to work on the Debtors' case
are:
Professional Rate
------------ ----
Daniel Kasper $550
Research Analysts $140 to $170
Associates $135 to $235
Senior Professional Staff $175 to $430
The Debtors will also reimburse the firm for necessary out-of-
pocket expenses.
Daniel M. Kasper, managing director at LECG's office in
Cambridge, Massachusetts, will lead the LECG team in the Debtors'
case.
Mr. Kasper assures the Court that neither LECG nor any member of
its engagement team holds any shares of the Debtors' stock.
Moreover, he attests that LECG is a "disinterested person" as
that term is defined in Section 101(14) of the Bankruptcy Code,
as modified by Section 1107(b).
According to LECG's books and records, during the 90-day period
immediately before the Petition Date, the firm received these
amounts from the Debtors:
* $113,103 on July 11, 2005, as payment for services
rendered;
* $51,642 on August 15, 2005, as payment for services
rendered;
* $3,351 on August 22, 2005, as payment for services
rendered; and
* $150,000 on August 25, 2005, as retainer in connection
with its engagement.
Mr. Kasper discloses that LECG is owed $68,606 for services the
firm has performed on behalf of the Debtors before the Petition
Date. In connection with its first fee application, LECG intends
to seek the Court's approval to apply a portion of the Retainer
towards payment of this amount.
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. 13; Bankruptcy Creditors' Service, Inc., 215/945-7000)
NORTHWEST AIRLINES: Inks Settlement Pact with SIA Engineering
-------------------------------------------------------------
Northwest Airlines Corp. and its debtor-affiliates seek Judge
Allan Gropper's authority to enter into a settlement agreement
with SIA Engineering Company Limited.
Bruce R. Zirinsky, Esq., at Cadwalader, Wickersham & Taft LLP, in
New York, recounts that before the Petition Date, Northwest
Airlines, Inc., and SIA entered into a ground handling agreement,
pursuant to which SIA agreed to, among other things, service
certain aircraft belonging to Northwest Airlines.
On August 16, 1999, a Northwest Airlines aircraft sustained
damages during a servicing by SIA employees.
As a result of the incident, Northwest Airlines brought damage
claims under the Ground Handling Agreement. The Claims are
pending before an arbitrator in the matter styled "In the Matter
of an Arbitration in Singapore under the UNCITRAL Rules Between
Northwest Airlines, Inc. and SIA Engineering Company Pte. Ltd."
A final award on all issues of liability has been entered against
SIA in the Arbitration.
Subsequently, the Debtors and SIA have negotiated the Settlement
Agreement, which provides that:
(a) SIA will pay Northwest $2,091,968 by wire transfer no
later than December 22, 2005;
(b) SIA will pay Associated Aviation Underwriters $3,408,032
by wire transfer no later than December 22, 2005;
(c) SIA will forego any appeal of the Final Award on all
Issues of Liability; and
(d) Northwest will release SIA from claims arising from the
damaged aircraft.
Mr. Zirinsky says that the Settlement Agreement will result in
payment to the estate, and that payment, as determined by
Northwest Airlines in the exercise of its business judgment, will
adequately compensate its estate for the damages sustained.
Specifically, the amount to be paid by SIA under the Settlement
Agreement constitutes the balance of the repair costs to the
aircraft, together with compensation for the loss of use and for
interest, to the extent the amounts are not otherwise covered by
insurance. The Settlement Agreement will also avoid the costs
associated with the continuation of the Arbitration.
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. 13; Bankruptcy Creditors' Service, Inc., 215/945-7000)
NORTHWEST AIRLINES: Wants to Maintain Ordinary Course Leases
------------------------------------------------------------
Northwest Airlines Corp. and its debtor-affiliates routinely lease
and license non-residential real property at various domestic and
foreign airports at which they maintain a presence and at other
locations where their businesses are operated. They are also
parties to certain unexpired leases or licenses under which they
have the right to occupy or use, sublease, or grant third parties
the right to use, various airport facilities as well as other non-
airport facilities.
Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP,
in New York, relates that approximately 550 of these leases are
currently in effect, representing $425,000,000 in rental amounts
payable annually by the Debtors, and $9,000,000 in annual rental
income to them.
In the ordinary course of business, the Debtors modify or extend
their Existing Leases for either a reduced amount of the space
currently subject to the lease, or similar replacement space at
the same airport or other facility for up to the same amount of
space currently leased at the airport or other facility.
Mr. Petrick notes that the modifications are in the ordinary
course, and thus do not require notice and a hearing pursuant to
Section 363(b)(1) of the Bankruptcy Code. However, the Debtors
also anticipate that, throughout the course of their Chapter 11
proceedings, they will need to enter into:
(i) similar leases, licenses or amendments to Existing Leases
that increase the square footage of space to not more than
125% of the space currently leased or licensed under the
Leases; and
(ii) similar leases, subleases or licenses for new space that
cover not more than 75,000 square feet of space.
For Additional Leases covering airport terminal property, the
leases or licenses contain market terms and conditions that are
substantially the same as the terms and conditions applicable to
the leases or licenses entered into by other airlines at the
airport, Mr. Petrick notes.
For the proposed leases of property that exceed 75,000 square
footage, the Debtors will adopt these guidelines:
(a) The Debtors may negotiate and enter into New Leases
regardless of the amount or nature of the lease asserted;
(b) The Debtors will give notice and a copy of each proposed
New Lease to the Official Committee of Unsecured
Creditors;
(c) The Creditors Committee will have 10 business days, after
the notice is sent, to object to or request additional
time to evaluate the proposed lease. If no objection is
received, the Debtors will be authorized to enter into the
proposed New Lease. If the Committee requests for
additional time to evaluate the proposed lease, it has an
additional 10 days to object to the proposed lease, or as
may be agreed between the Debtors and the Committee. The
Debtors may enter into a proposed New Lease on the
Committee's approval;
(d) If the Creditors Committee objects, the Debtors will try
to consensually resolve the objection. If resolved, the
Debtors may enter into the proposed lease. If a
consensual resolution is not achieved, the Debtors will
not proceed with the proposed lease pursuant to the
procedures, but may seek Court approval of the proposed
lease on an expedited notice and a hearing, subject to the
Court's availability; and
(e) The Creditors Committee's approval will not be required
for the routine modification of Ordinary Course Leases.
Accordingly, the Debtors ask Judge Gropper to enter an order:
-- permitting them to continue and initiate all Ordinary
Course Leases in accordance with the Lease Procedures
without further authorization from the Court; and
-- establishing the procedures for initiating entry into the
New Leases.
Mr. Petrick believes that the Lease Procedures will reduce the
estates' administrative burden and increase the distribution to
general creditors. He says that it would also relieve the Court
of the burden of reviewing numerous leases and licenses, which
are considered standard in the industry.
Mr. Petrick further notes that under the terms of certain
Ordinary Course Leases, the Debtors may be required to create,
maintain, increase or decrease a security deposit under certain
circumstances. The Debtors, therefore, also seek the Court's
consent to honor requests to increase or otherwise modify
security deposits, if required by an Ordinary Course Lease, and
to continue honoring any further requests that may be made in the
ordinary course of business.
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. 13; Bankruptcy Creditors' Service, Inc., 215/945-7000)
O'SULLIVAN INDUSTRIES: New Claims Bar Date Set for January 30
-------------------------------------------------------------
As previously reported in the Troubled Company Reporter on January
13, 2005, the U.S. Bankruptcy Court for the Northern District of
Georgia set January 9, 2006, as the deadline for filing proofs of
claim in O'Sullivan Industries Holdings, Inc. and its debtor-
affiliates' Chapter 11 cases.
The Debtors asked the Court to moved the deadline to Jan. 30,
2006.
Gregory D. Ellis, Esq., at Lamberth, Cifelli, Stokes & Stout,
P.A., in Atlanta, Georgia, explains that because of a clerical
error, certain individuals and entities were not served with the
Bar Date Notice or provided with a Proof of Claim Form. Those
parties include certain current and former employees of the
Debtors. Although the Debtors believe that it is highly unlikely
that any of those parties will file a proof of claim, the Debtors
agreed to serve them with the Bar Date Notice and Proof of Claim
Form pursuant to the Bar Date Order, Mr. Ellis relates.
Against this backdrop, the Court extends the deadline for filing
proofs of claim until January 30, 2006.
Headquartered in Roswell, Georgia, O'Sullivan Industries Holdings,
Inc. -- http://www.osullivan.com/-- designs, manufactures, and
distributes ready-to-assemble furniture and related products,
including desks, computer work centers, bookcases, filing
cabinets, home entertainment centers, commercial furniture, garage
storage units, television, audio, and night stands, dressers, and
bedroom pieces. O'Sullivan sells its products primarily to large
retailers including OfficeMax, Lowe's, Wal-Mart, Staples, and
Office Depot. The Company and its subsidiaries filed for chapter
11 protection on October 14, 2005 (Bankr. N.D. Ga. Case No. 05-
83049). On September 30, 2005, the Debtor listed $161,335,000 in
assets and $254,178,000 in debts. (O'Sullivan Bankruptcy News,
Issue No. 8; Bankruptcy Creditors' Service, Inc., 215/945-7000)
O'SULLIVAN INDUSTRIES: Rick Walters' Salary Increased to $350,000
-----------------------------------------------------------------
As reported in the Troubled Company Reporter on Nov. 24, 2005,
O'Sullivan Industries Holdings, Inc., and its debtor-affiliates
hired Rick A. Walters as their executive vice president and chief
financial officer, providing him with $250,000 annual base salary
plus other benefits. Mr. Walters had previously served as vice
president and chief financial officer of Newell Rubbermaid's
Sharpie/Calphalon Group from 2001 to 2004.
In consideration of Mr. Walters' increased responsibilities, on
October 31, 2005, the Debtors' Board of Directors approved an
increase in his annual salary to $350,000 so long as he remains
interim CEO. The remaining terms of Mr. Walters' employment
agreement would remain the same.
In this regard, the Debtors seek the U.S. Bankruptcy Court for the
Northern District of Georgia's authority to pay Mr. Walters a
$350,000 annual salary retroactive to October 31, 2005, for so
long as he serves as their interim CEO.
* * *
The Court approved the Debtors' motion.
Headquartered in Roswell, Georgia, O'Sullivan Industries Holdings,
Inc. -- http://www.osullivan.com/-- designs, manufactures, and
distributes ready-to-assemble furniture and related products,
including desks, computer work centers, bookcases, filing
cabinets, home entertainment centers, commercial furniture, garage
storage units, television, audio, and night stands, dressers, and
bedroom pieces. O'Sullivan sells its products primarily to large
retailers including OfficeMax, Lowe's, Wal-Mart, Staples, and
Office Depot. The Company and its subsidiaries filed for chapter
11 protection on October 14, 2005 (Bankr. N.D. Ga. Case No. 05-
83049). On September 30, 2005, the Debtor listed $161,335,000 in
assets and $254,178,000 in debts. (O'Sullivan Bankruptcy News,
Issue No. 8; Bankruptcy Creditors' Service, Inc., 215/945-7000)
OWENS CORNING: Employees to Get Common Shares in Reorganized Co.
----------------------------------------------------------------
Owens Corning and its debtor-affiliates, the Official Committee
of Asbestos Claimants, and James J. McMonagle, the Legal
Representative for Future Asbestos Claimants -- all of which are
proponents of the Fifth Amended Plan of Reorganization -- have
negotiated the principal terms and conditions of certain incentive
plans to be made available to employees generally and to certain
management employees in connection with the Debtors' emergence
from Chapter 11. The plans include a broad-based Employee
Incentive Program and a Management Incentive Program.
A. Employee Incentive Program
The Plan contemplates that all of the Debtors' full-time employees
and regular part-time employees as of the Effective Date --
excluding any employee who participates in the management
incentive program -- will be eligible to receive a grant of 100
shares of New Common Stock, or appropriate equivalent interest,
upon the Effective Date.
Owens Corning will reserve 1,800,000 shares of New Common Stock
for issuance to the employees -- assuming 18,000 eligible
employees worldwide. The reserved shares represent 1.4% of the
primary number of shares of New Common Stock to be outstanding
immediately after the Effective Date, assuming issuance of
approximately 130,800,000 shares.
B. Management Incentive Program
On the Effective Date, management and designated employees of
Reorganized Owens Corning and the other Reorganized Debtors will
receive benefits provided under certain Management Arrangements.
Owens Corning -- http://www.owenscorning.com/-- manufactures
fiberglass insulation, roofing materials, vinyl windows and
siding, patio doors, rain gutters and downspouts. Headquartered
in Toledo, Ohio, the Company filed for chapter 11 protection on
October 5, 2000 (Bankr. Del. Case. No. 00-03837). Mark S. Chehi,
Esq., at Skadden, Arps, Slate, Meagher & Flom, represents the
Debtors in their restructuring efforts. (Owens Corning Bankruptcy
News, Issue No. 122; Bankruptcy Creditors' Service, Inc., 215/945-
7000)
OWENS CORNING: Lazard Says Enterprise Value is $4.6B to $5.4B
-------------------------------------------------------------
Lazard Freres & Co. LLC, the investment banker and financial
advisor of Owens Corning and its debtor-affiliates, estimates
that, solely for purposes of the Fifth Amended Plan of
Reorganization, the Total Distributable Value of the Reorganized
Debtors ranges from approximately $5,900,000,000 to
$6,700,000,000, with a mid-point estimate of $6,300,000,000, as of
an assumed Effective Date of December 31, 2005.
The estimated Total Distributable Value includes approximately
$200,000,000 associated with the expected utilization of net
operating loss carry forwards created as part of the Plan and
$1,100,000,000 deemed to be Excess Cash.
Lazard calculated the Reorganized Debtors' Enterprise Value to be
between $4,600,000,000 and $5,400,000,000. Lazard estimates the
equity values for the Reorganized Debtors to be between
$2,869,000,000 and $3,669,000,000, with a point estimate of
$3,269,000,000, based on the Enterprise Value, less an assumed
total debt of $1,931,000,000 as of the December 31 Effective
Date, plus the $200,000,000 for the NOLs.
Assuming a distribution of 130,800,000 shares of Reorganized
Owens Corning Common Stock pursuant to the Plan, Lazard
calculated the range of equity values on a per share basis to be
between $21.93 and $28.08 per share -- with a mid-point estimate
of $25.00 per share.
These values do not give effect to the potentially dilutive
impact of any restricted stock or stock options that may be
granted under a management incentive plan. Lazard's estimate of
Enterprise Value does not constitute an opinion as to fairness
from a financial point of view of the consideration to be
received under the Plan or of the terms and provisions of the
Plan.
The Total Distributable Value does not include:
-- amounts under asbestos-related assets available for
distribution on asbestos claims;
-- the approximately $70,000,000 of existing fund debt owned
by Debtor-affiliates that will remain outstanding and
unimpaired; and
-- the aggregate of $45,000,000 of New Owens Corning Common
Stock reserved for insurance to the company's employees as
benefits and incentives upon emergence.
Plan is Feasible
The Debtors' management, with the assistance of Lazard, developed
financial projections of the Debtors' future operations through
fiscal 2008.
The Financial Projections indicate that the Reorganized Debtors
should have sufficient cash flow to pay and service their debt
obligations, including the exit facility, and to fund their
operations as contemplated by their business plan. Accordingly,
the Debtors believe that the Plan complies with the financial
feasibility standard of Section 1129(a)(11) of the Bankruptcy
Code, and that confirmation of the Plan is not likely to be
followed by a liquidation or the need for further financial
reorganization of the Debtors.
The Financial Projections will be filed with the Court at a later
date.
Plan Provides Best Recovery for Creditors
The Debtors believe that the Plan affords holders of Claims the
potential for the greatest realization on the Debtors' assets
and, therefore, is in the best interests of those holders.
The Debtors believe that in a liquidation under Chapter 7, before
claimants receive any distribution, additional administrative
expenses arising from the appointment of a trustee or trustees
and attorneys, accountants and other professionals to assist
trustees would cause a substantial diminution in the value of the
Debtors' Estates. The assets available for distribution to
claimants would be reduced by additional expenses and by claims,
some of which would be entitled to priority, arising by reason of
the liquidation and from the rejection of leases and other
executory contracts in connection with the cessation of
operations and the failure to realize the greater going concern
value of the Debtors' estates.
A liquidation under Chapter 11 might result in larger recoveries
than in a Chapter 7 liquidation. Nevertheless, the Debtors point
out, the delay in distributions could result in lower present
values received and higher administrative costs.
The Debtors, with the assistance of Lazard, have prepared a
liquidation analysis to prove their case. The Liquidation
Analysis will be filed with the Court at a later date.
Owens Corning -- http://www.owenscorning.com/-- manufactures
fiberglass insulation, roofing materials, vinyl windows and
siding, patio doors, rain gutters and downspouts. Headquartered
in Toledo, Ohio, the Company filed for chapter 11 protection on
October 5, 2000 (Bankr. Del. Case. No. 00-03837). Mark S. Chehi,
Esq., at Skadden, Arps, Slate, Meagher & Flom, represents the
Debtors in their restructuring efforts. (Owens Corning Bankruptcy
News, Issue No. 122; Bankruptcy Creditors' Service, Inc., 215/945-
7000)
OWENS CORNING: Plan Earmarks $1.76 Billion for Asbestos Claimants
-----------------------------------------------------------------
The Fifth Amended Plan of Reorganization filed by Owens Corning
and its debtor-affiliates, the Official Committee of Asbestos
Claimants, and James J. McMonagle, the Legal Representative for
Future Asbestos Claimants, are the proponents of the Plan,
contemplates that there will be certain assets available solely
for distribution to Asbestos Personal Injury Claims consisting of:
(a) $1,301,000,000 from the Fibreboard Settlement Trust;
(b) $127,000,000 from the Fibreboard Administrative Escrow
Deposits;
(c) $140,000,000 in value on account of the FB Sub-Account
Settlement Payment;
(d) $109,000,000 from the OC Administrative Escrow Deposits;
and
(e) $80,000,000 from the OC Insurance Escrow.
Trust Distribution Protocol Modified
The Plan Proponents adjusted the Asbestos Personal Injury Trust
Distribution Procedures to address certain objections. The
procedures now provide for individual consideration and
evaluation of any OC Indirect Asbestos PI Trust Claim and FB
Indirect Asbestos PI Trust Claim that fails to meet the
requirements for presumptive validity. The review will determine
whether the indirect claimant can establish under applicable
state law that it has paid a liability or obligation that the
Asbestos Personal Injury Trust would otherwise have to the direct
claimant.
Any unresolved disputes are subject to non-binding arbitration
procedures set forth in the Asbestos Personal Injury Trust
Distribution Procedures and, if not resolved by arbitration,
resolution through litigation in the tort system.
Owens Corning -- http://www.owenscorning.com/-- manufactures
fiberglass insulation, roofing materials, vinyl windows and
siding, patio doors, rain gutters and downspouts. Headquartered
in Toledo, Ohio, the Company filed for chapter 11 protection on
October 5, 2000 (Bankr. Del. Case. No. 00-03837). Mark S. Chehi,
Esq., at Skadden, Arps, Slate, Meagher & Flom, represents the
Debtors in their restructuring efforts. (Owens Corning Bankruptcy
News, Issue No. 122; Bankruptcy Creditors' Service, Inc., 215/945-
7000)
PAXSON COMMUNICATIONS: Completes $1.13 Billion Refinancing
----------------------------------------------------------
Paxson Communications Corporation (AMEX:PAX) successfully
completed its previously announced $1.13 billion debt refinancing,
consisting of a first and second priority secured notes offering
and a term loan facility. The company used the proceeds to
refinance all of its previously outstanding debt securities and to
pay transaction fees and expenses.
"This refinancing is an important first step towards maximizing
the full potential of our unique distribution platform," said
Brandon Burgess, Chief Executive Officer of Paxson. "We have
lowered our cost of debt, eliminated near term liquidity
constraints, extended all repayment maturities until after 2012,
and now have debt covenants with flexibility to manage the
business strategically."
The refinancing increases the Company's flexibility in a variety
of ways, in comparison to the covenants of the prior debt
securities. Subject to certain limitations and conditions, the
new debt covenants give the Company a quarterly election to pay
interest on the second priority notes in either cash or deferred
interest for four years, allow for the possibility of raising an
additional $600 million in subordinated indebtedness, and permit
certain change of control events to occur without triggering
mandatory repayment of the new debt securities.
Citigroup Global Markets Inc., UBS Securities LLC, Bear, Stearns &
Co. Inc., CIBC World Markets Corp. and Goldman, Sachs & Co. were
joint book-running managers for the offering.
Paxson Communications Corporation -- http://www.paxson.com/--
owns and operates the nation's largest broadcast television
station group. Paxson reaches approximately 91 million U.S.
television households via nationwide broadcast television, cable
and satellite distribution systems.
* * *
As reported in the Troubled Company Reporter on Dec. 12, 2005,
Standard & Poor's Ratings Services assigned its 'CCC+' rating to
Paxson Communication Corp.'s proposed $700 million first-lien
secured floating-rate notes. Standard & Poor's also assigned a
'CCC-' rating to Paxson's proposed $435 million second-lien
secured floating-rate notes. Proceeds from the proposed offerings
are expected to be used to refinance existing debt.
The 'CCC+' long-term and 'C' short-term corporate credit ratings
on Paxson were affirmed. The outlook is negative.
The TV broadcaster had approximately $1.1 billion in debt
outstanding at Sept. 30, 2005, pro forma for the proposed
transaction.
PEABODY ENERGY: Expansion Cues S&P to Revise Outlook to Positive
----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Peabody
Energy Corp. to positive from stable. All ratings, including the
'BB' corporate credit rating, were affirmed.
"The outlook revision reflects our belief that strong coal markets
and Peabody's expansion efforts will more than offset cost
pressures and could lead to improved credit metrics," said
Standard & Poor's credit analyst Thomas Watters. "An upgrade
would occur if Peabody is able to achieve and sustain a funds from
operations to adjusted total debt ratio of 20%-25%."
The ratings on St. Louis, Missouri-based Peabody Energy reflect
its aggressive financial leverage, including significant debt-like
liabilities, ongoing cost pressures, and challenges posed by the
inherent risks of coal mining. The ratings also reflect the
company's leading market position, its substantial and diversified
reserve base, and currently favorable coal industry conditions.
Peabody is North America's largest coal producer, with
approximately 227 million tons of coal sold (including 27 million
from its trading and brokerage operations) during 2004, and 9.6
billion tons of reserves.
The company's financial leverage is very aggressive. Adjusting
for onerous, debt-like health care, pension, workers'
compensation, and reclamation liabilities, which totaled $1.8
billion before tax at Dec. 31, 2004, the 12 months ended Sept. 30,
2005, total debt to EBITDA ratio was a very aggressive 6.5x, with
funds from operations to total debt at 16.8%. Total debt is also
adjusted for operating leases, coal reserve payments, and payments
associated with the acquisitions of reserves from the U.S. Bureau
of Land Management in the Powder River Basin. Although we do not
expect meaningful debt reduction in 2006, given the scope of the
company's capital expenditure and share repurchase plans, the debt
to EBITDA ratio should improve as earnings and cash flow improve.
S&P expects Peabody to transact its share repurchase program in a
manner that does not increase leverage.
Peabody sells most of its production under long-term, fixed-price
contracts, reducing exposure to spot market volatility and
ensuring some predictability in its financial performance. These
contracts usually account for over 90% of the company's annual
coal production. With 95 million-105 million tons and 165
million-175 million tons of estimated production unpriced as of
Sept. 30, 2005, for 2007 and 2008 respectively, the continuation
of strong coal markets and higher spot coal prices should bode
well for Peabody in garnering higher realizations for this
unpriced coal that more than offsets ongoing cost increases. This
is especially relevant given the recent price surges in Powder
River Basin spot coal prices. Standard & Poor's has a favorable
outlook for the coal industry because the factors responsible for
the surge in spot coal prices remain in place and likely will
persist throughout 2006-2007.
PENNSYLVANIA REAL: Acquires Woodland Mall for $117.4 Million
------------------------------------------------------------
Pennsylvania Real Estate Investment Trust (NYSE: PEI) reported on
Jan. 3, 2006, that it has acquired Woodland Mall in Grand Rapids,
Michigan from affiliates of Taubman Centers, Inc. (NYSE: TCO) and
Prudential Financial, Inc. (NYSE: PRU) for $177.4 million. PREIT
funded the purchase price with two 90-day promissory notes to the
seller aggregating $94.4 million with an average interest rate of
6.85% and secured by letters of credit, and with $83.0 million
primarily from its unsecured credit facility. PREIT intends to
obtain long term financing on the property before the note
matures.
Woodland Mall is an approximately 1.1 million square foot regional
mall and is anchored by Sears, JCPenney and Marshall Field's. Each
of the anchors owns its land and building. The mall has a 14-
screen Cinemark movie theater that opened in November 2005 and an
adjacent restaurant plaza with one restaurant open and two more
restaurants expected to open in early 2006. The mall currently
has more than 100 in-line tenants, including Ann Taylor, Apple,
Banana Republic, Brookstone, Charlotte Russe, Chico's, Coldwater
Creek, Eddie Bauer, JCrew, Fossil, New York & Co., Starbucks and
Williams-Sonoma.
Ronald Rubin, PREIT's Chairman and CEO, commented, "We are very
excited about the opportunity to add Woodland Mall to our
portfolio. Woodland is a well-located property with a strong
tenant mix that will enhance the quality of our portfolio. The
property will complement our existing assets and help us expand
our geographic footprint."
The occupancy for the 394,000 square feet of in-line mall space
was reported to be approximately 89.4% as of Dec. 31, 2005, and
the mall's sales per square foot were reported to be approximately
$374 for the twelve months ended Oct. 31, 2005. PREIT underwrote
the acquisition to generate an unleveraged return of approximately
7.9% on purchase price based on anticipated operating income for
2006.
Headquartered in Philadelphia, Pennsylvania, Pennsylvania Real
Estate Investment Trust -- http://www.preit.com/-- has a primary
investment focus on retail shopping malls and power centers
(approximately 34.5 million square feet) located in the eastern
United States. Founded in 1960 and one of the first equity REITs
in the U.S., PREIT's portfolio currently consists of 52 properties
in 13 states, including 39 shopping malls, 12 strip and power
centers and one office property.
* * *
As reported in the Troubled Company Reporter on Oct. 18, 2005,
Fitch Ratings has affirmed the preferred stock rating of 'B+' on
Pennsylvania Real Estate Investment Trust. Fitch has also
established an issuer rating of 'BB' for P-REIT and revises its
Outlook to Positive from Stable.
PLIANT CORPORATION: Judge Waltrath Approves All First Day Motions
-----------------------------------------------------------------
The Honorable Mary F. Walrath of the U.S. Bankruptcy Court for the
District of Delaware approved all of the first-day motions that
Pliant Corporation and its debtor-affiliates submitted as part of
their filings for reorganization under Chapter 11 of the United
States Bankruptcy Code. Approval of these motions will help
Pliant continue to operate in the normal course of business during
its financial restructuring.
Judge Walrath's orders include approval of Pliant's request to:
* continue to pay employee salaries and provide benefits
without interruption,
* honor its commitments to its customers, and
* take other actions necessary to run the company with minimal
disruption.
Pliant also received interim approval to access debtor-in-
possession financing provided by GE Commercial Finance and Morgan
Stanley Senior Funding, Inc. This financing will provide Pliant
with additional liquidity and will be available to satisfy
obligations associated with conducting the company's business.
Pliant will seek final authorization to utilize the DIP financing
at a court hearing scheduled for Feb. 2, 2006.
Pliant intends to use the Chapter 11 reorganization process to
complete its previously announced financial restructuring, which
would reduce debt by up to $578 million and annual interest
expense by up to $84 million. The company intends to file a plan
of reorganization to implement the agreed restructuring in the
near term. The holders of more than two-thirds of Pliant's 13%
Senior Subordinated Notes and the holders of a majority of its
preferred and common stock have agreed to support the
restructuring transaction and vote in favor of the plan of
reorganization.
"We are pleased that Judge Walrath has approved all of our first-
day motions, including those related to employee wages and
benefits, customer programs, and our new DIP financing," Harold C.
Bevis, Pliant's President and Chief Executive Officer, said.
"This approval permits the company to maintain normal operations
throughout the Chapter 11 process. We expect to continue to
provide our customers with value-added products, superior service
and leading- edge innovation programs."
Headquartered in Schaumburg, Illinois , Pliant Corporation --
http://www.pliantcorp.com/-- produces value-added film and
flexible packaging products for personal care, medical, food,
industrial and agricultural markets. The Debtor and 10 of its
affiliates filed for chapter 11 protection on Jan. 3, 2006 (Bankr.
D. Del. Lead Case No. 06-10001). Edmon L. Morton, Esq., and
Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor,
represent the Debtors in their restructuring efforts. As of Sept.
30, 2005, the company had $604,275,000 in total assets and
$1,197,438,000 in total debts.
PLIANT CORP: Bankruptcy Filing Causes S&P's Rating to Tumble to D
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on Pliant
Corp., including the corporate credit rating to 'D' from 'CC', and
removed all ratings from CreditWatch with negative implications,
where they were placed on Nov. 23, 2005.
The rating actions follow the company's filing for reorganization
under Chapter 11 of the U.S. Bankruptcy Code on Jan. 3, 2006.
Pliant had about $950 million in total debt outstanding at the
time of filing for Chapter 11.
"The company plans to use the Chapter 11 reorganization process to
complete its previously announced financial restructuring, which
would significantly reduce its onerous debt burden," said Standard
& Poor's credit analyst Liley Mehta.
On Dec. 28, 2005, Pliant entered into support agreements with the
holders of more than two-thirds of its 13% senior subordinated
notes, a majority of its mandatorily redeemable preferred
stockholders and a majority of its common stockholders, all of
whom agreed to support the company's proposed financial
restructuring. Under the terms of this restructuring, holders of
Pliant's $320 million of 13% senior subordinated notes will
receive up to $35 million in new debt in consideration for accrued
interest that was payable on Dec. 1, 2005.
In addition, noteholders will exchange all of their 13% notes for
a combination of 30% of the reorganized company's common stock and
at least $260 million of a newly issued redeemable preferred
stock, which will not be subject to mandatory redemption.
Pliant's $278 million of mandatorily redeemable preferred stock
will be exchanged for a combination of up to $75.5 million of a
new redeemable preferred stock and a yet-to-be determined
percentage of the reorganized company's common stock. Completion
of the restructuring is subject to a number of conditions,
including completion of a plan of reorganization and other
definitive documentation, receipt of formal approval of the plan
of reorganization from at least two-thirds of the 13% senior
subordinated noteholders, and bankruptcy court approval.
The company intends to file a plan of reorganization to implement
the agreed restructuring in the near term. In November 2005, the
company completed a new $140 million revolving credit facility
maturing in May 2007, and in addition, the company has secured a
commitment for about $70 million of DIP financing to fund its
operations during the reorganization process. Pliant's weak
financial performance had deteriorated further owing to additional
raw-material cost increases following Hurricanes Katrina and Rita,
and tightening of trade terms by Pliant's key suppliers
exacerbated liquidity pressures.
With annual revenues of about $1 billion, Schaumburg, Illinois-
based Pliant is a domestic producer of extruded film and flexible-
packaging products for food, personal care, medical, industrial,
and agricultural markets.
PRICE OIL: Can Use Lenders' Cash Collateral on Interim Basis
------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Alabama gave
Price Oil, Inc., and its debtor-affiliates permission, on an
interim basis, to use cash collateral securing repayment of pre-
petition obligations to Colonial Bank. The Court also authorized
the Debtor to provide Colonial Bank with adequate protection.
Pre-Petition Debt, Use of Cash Collateral
& Adequate Protection
Under various pre-petition credit and loan agreements, the Debtors
owe Colonial Bank:
Pre-Petition Agreement Amount Owed
---------------------- -----------
(under two Loan Agreements dated
Feb. 27, 2001, and April 15, 2004) $10,000,000
(under a Credit Agreement dated
Aug. 23, 2005) $13,000,000
-----------
$23,000,000
The Debtors will use Colonial's cash collateral to pay for
employees' salaries, claims of suppliers and utilities and other
costs related to the administration of their estates, and to
preserve the value of their estates. Colonial has consented to
the Debtor's use of the cash collateral.
The cash collateral agreement governing the Debtors' use of the
encumbered fund is available for free at:
http://ResearchArchives.com/t/s?41f
To adequately protect their lender's interest, Colonial Bank is
granted a first-position lien and security interest in all
proceeds of the pre-petition collateral.
The Court will convene a hearing at 10:00 a.m., on Jan. 11, 2006,
to consider the Debtors' request to use the cash collateral on a
final basis.
Headquartered in Niceville, Florida, Price Oil, Inc., supplies
gasoline fuel to convenience store owners and operators throughout
Alabama and the Florida panhandle. The Company also owns,
operates and lease multiple convenience stores. The Debtor and
its affiliates filed for chapter 11 protection on Dec. 22, 2005
(Bankr. M.D. Ala. Case No. 05-34286). M. Leesa Booth, Esq., at
Bradley, Arant, Rose & White LLP represents the Debtors in their
restructuring efforts. When the Debtors filed for protection from
their creditors, they listed estimated assets of $10 million to
$50 million and estimated debts of $50 million to $50 million.
PRICE OIL: Taps Cahaba Capital & AEA Group as Financial Advisors
-----------------------------------------------------------------
Price Oil, Inc., and its debtor-affiliates ask the U.S. Bankruptcy
Court for the Middle District of Alabama for permission to employ
Cahaba Capital Advisors, L.L.C. and the AEA Group, L.L.C., as
their financial and restructuring advisors.
Cahaba Capital is a financial management and restructuring
advisory firm, while AEA is a licensed certified public accounting
firm.
Cahaba Capital and AEA will:
1) assist in preparing the Debtors' cash flow projections,
business, operating and restructuring plans and in analyzing
and evaluating their current business plan;
2) assist in identifying and implementing cost reduction,
operational improvement opportunities and other cash
generation alternatives;
3) assist in evaluating and implementing asset sales and other
restructuring and refinancing alternatives and strategies;
4) assist in preparing plan or plans of reorganization,
disclosure statements and other pleadings and assist in
providing testimony in relation to financial and
restructuring matters; and
5) perform all other financial and restructuring advisory
services to the Debtors in connection with their chapter 11
cases.
Phyliss Turnham Paramore, a member of Cahaba Capital and AEA, is
one of the lead professionals rendering services to the Debtors.
Ms. Paramore charges $290 per hour for her services.
Ms. Paramore reports that Cahaba and AEA will be paid 80% of their
fees and 100% of their expenses upon their submission of detailed
and itemized invoices subject to Court approval.
Cahaba Capital and AEA assure the Court that they do not represent
any interest materially adverse to the Debtors and they are a
disinterested person as that term is defined in Section 101(14) of
the Bankruptcy Code.
Headquartered in Niceville, Florida, Price Oil, Inc., supplies
gasoline fuel to convenience store owners and operators throughout
Alabama and Florida panhandle. The Company also owns, operates
and lease multiple convenience stores. The Debtor and its
affiliates filed for chapter 11 protection on Dec. 22, 2005
(Bankr. M.D. Ala. Case No. 05-34286). When the Debtors filed for
protection from their creditors, they listed estimated assets of
$10 million to $50 million and estimated debts of $50 million to
$50 million.
PRICE OIL: Wants to Assume Employment Agreement with Donald Wright
------------------------------------------------------------------
Price Oil, Inc., and its debtor-affiliates ask the U.S. Bankruptcy
Court for the Middle District of Alabama, Northern Division, to
approve their assumption of an employment agreement with Donald
Wright effective as of Dec. 5, 2005.
The Debtors and their professionals require Wright's assistance in
evaluating, projecting and improving the Debtors' financial
performance.
Employment Agreement
The agreement provides for the employment of Mr. Wright as
controller. Pursuant to the Agreement, the Debtors will pay
Wright $10,000 per month excluding health insurance benefits, or
life insurance benefits. He will, however, be protected by
Price's workers' compensation coverage.
The Debtors tell the Court that Mr. Wright's familiarity with
their books and records will allow him to assist the Debtors and
their professionals in satisfying the reporting requirements of
the Bankruptcy Code.
John P. Whittington, Esq., at Bradley Arant Rose & White LLP,
disclosed that assumption of the agreement is in the best
interests of the Debtors, their estates and their creditors.
Headquartered in Niceville, Florida, Price Oil, Inc., supplies
gasoline fuel to convenience store owners and operators throughout
Alabama and Florida panhandle. The Debtor also owns, operates and
lease multiple convenience stores. The Debtor and five of its
affiliates filed for chapter 11 protection on Dec. 22, 2005
(Bankr. M.D. Ala. Case No. 05-34286). M. Leesa Booth, Esq., at
Bradley, Arant, Rose & White represents the Debtors in their
restructuring efforts. When the Debtor filed for protection from
its creditors, it listed $10 million to $50 million in assets and
debts.
QUEBECOR MEDIA: Moody's Lowers CDN$1 Billion Notes' Ratings to B3
-----------------------------------------------------------------
Moody's Investors Service affirmed the Corporate Family Rating of
Quebecor Media Inc. ("QMI"), all ratings at Videotron Ltee and Sun
Media Corp. Moody's also assigned a B2 Senior Secured rating to
QMI's new CDN$855 million (equivalent) debt issue, assigned a Ba2
senior secured rating to Sun's new CDN$40 million (equivalent)
Term Loan C, and downgraded QMI's existing Senior Unsecured rating
to B3 from B2.
The outlook for all ratings remains stable. The QMI Senior
Unsecured rating has been lowered because the amount of
consolidated debt which ranks ahead of it has been increased
materially.
The Ba3 Corporate Family Rating of Quebecor Media Inc. reflects
Moody's expectation that increases in capital expenditures will be
offset by increasing EBITDA, primarily from double digit growth at
Videotron. Near term expenditures on new printing presses are
likely, in Moody's opinion, to create a cash drain this year, and
weaken several credit metrics for the rating category in 2007 as
well. However, when these metrics are considered in the context
of the company's strong market position in diverse stable/growing
businesses, Moody's believes QMI is appropriately positioned in
its rating category.
The rating is supported by:
1) QMI's good market positions in the Canadian newspaper and
cable sectors, as well as by diversity of cash flows;
2) relatively stable newspaper operating results, even though
likely pressured somewhat over the next few years; and
3) strong cable growth with relatively stable margins.
The rating is constrained by:
1) increasing capital expenditures;
2) much reduced free cash flow in 2005-2006;
3) increasing debt; and
4) formidable telecom competition.
The outlook for the Corporate Family Rating is stable, as Moody's
expects that increased capital expenditures in 2005 and 2006
should produce increased cash flows beginning in 2007 from two
relatively stable businesses with good market positions. Moody's
expects that a number of QMI's credit metrics will be largely
unchanged from the levels that existed at the end of 2004, albeit
after being stressed in 2006. Moody's expects 2007 consolidated
free cash flow to debt (after Moody's standard adjustments) to
approximate 5%, debt/EBITDA to reduce towards 3.5X, retained cash
flow/debt to improve slightly into the mid-teens, and EBITDA-
Capex/Interest coverage to improve modestly to roughly 2X.
The Corporate Family Rating might be upgraded if the cable
telephony and printing press capital expenditures, once completed,
enable QMI to generate additional cash flow and improve
sustainable credit metrics beyond current expectations.
Amongst other metrics, Moody's would expect (EBITDA- capital
expenditures)/interest to exceed 3X, free cash flow/debt to exceed
8%, and retained cash flow/debt to exceed 17% (all on a
sustainable basis) in order to consider an upgrade. These
improved metrics would likely reflect relative competitive success
by Videotron against its telecom competitor, coupled with a
sustainable EBITDA margin by Sun of at least 25% based upon the
improved efficiencies of the new presses.
The Corporate Family Rating might be downgraded if an aggressive
response by Videotron's telecom competitor slows Videotron's
growth into mid-single digits or reduces Videotron's EBITDA margin
into the mid-30% range, or if Sun's margin were to shrink towards
20% due to a continuing move away from newspaper readership and
market share loss in the competitive Toronto region. This would
likely result in sustainable debt/EBITDA in excess of 4.5X, free
cash flow/debt of well less than 5%, and retained cash flow of
about 12% range, especially beyond 2007. Moody's currently
expects QMI's consolidated capital expenditures to exceed Cash
from Operations in 2006, but materially improve by 2007 through a
combination of reduced capital expenditures and stronger EBITDA.
Unless such improvement remains likely to occur, the ratings could
be lowered.
Ratings affected by this action are:
Quebecor Media Inc.:
* Corporate Family Rating, Ba3 (unchanged)
* Senior Secured Bank Debt, B2 (assigned)
* CDN$125 million revolver, due January 2011
* CDN$150 million Term Loan A, final maturity January 2011
* US$500 million Term Loan B, final maturity January 2013
* Senior Unsecured Notes, B3 (lowered from B2):
-- 11.125% due July 2011 CDN$795 million equivalent
* Senior Unsecured Discount Notes, B3 (lowered from B2):
-- 13.75% due July 2011 CDN$385 million equivalent
Videotron Ltee:
* Senior Unsecured Notes, rated Ba3 (unchanged):
-- 6.875% due January 2014 CDN$811 million equivalent
-- 6.375% due December 2015 US$175 million
Sun Media Corporation:
* Senior Secured Revolving Bank Facility, Ba2 (unchanged):
-- Due 2008 CDN$75 million (C$ Nil outstanding)
* Senior Secured Term Loan B, Ba2 (unchanged):
-- Due 2009 US$200 million
* Senior Secured Term Loan C, Ba2 (assigned):
-- Due 2009, CDN$40 million
* Senior Unsecured Notes, Ba3 (unchanged):
-- 7.625% due Feb 2013 CDN$248 million equivalent
Quebecor Media Inc. owns all of Sun Media Corporation, the second-
largest newspaper chain in Canada, and all of Videotron Ltee, the
third-largest cable operator in Canada and the largest in the
Province of Quebec. All of the companies are headquartered in
Montreal, Quebec, Canada.
RAVEN MOON: Registers 800 Million Common Shares for Distribution
----------------------------------------------------------------
Raven Moon Entertainment, Inc., filed a Registration Statement
with the Securities and Exchange Commission to allow the resale of
800 million shares of common stock to be distributed under the
Company's 2005 Equity Amended and Restated Compensation Plan
Each common share is entitled to one vote, either in person or by
proxy, on all matters that may be voted upon at a meeting of the
shareholders, including the election of directors.
The holders of common shares:
(1) have equal, ratable rights to dividends from funds legally
available, when, as and if declared by the Board of
Directors of the Company;
(2) are entitled to share ratably in all of the assets of the
Company available for distribution to holders of Common
Stock upon liquidation, dissolution or winding up of the
Company's affairs;
(3) do not have preemptive or redemption provisions applicable;
and
(4) are entitled to one noncumulative vote per share on all
matters on which shareholders may vote at all shareholder
meetings.
A full-text copy of the 2005 Equity Amended and Restated
Compensation Plan is available for free at
http://ResearchArchives.com/t/s?418
A full-text copy of the Registration Statement is available for
free at http://ResearchArchives.com/t/s?419
Raven Moon Entertainment, Inc. -- http://www.ravenmoon.net/--
develops and produces children's television programs and videos,
CD music. At http://www.ginadskidsclub.com/Raven Moon sells
DVDs, music CDs and plush Cuddle Bug toys. Raven Moon also talks
about music publishing and talent management on its Web site.
At Sept. 30, 2005, the company's balance sheet showed a $1,871,796
stockholders' deficit.
REFCO INC: Files Revised Consolidated List of 99 Largest Creditors
------------------------------------------------------------------
Refco Inc. and its debtor-affiliates delivered to the U.S.
Bankruptcy Court for the Southern District of New York their
revised consolidated list of 99 largest unsecured creditors.
Sally McDonald Henry, Esq., at Skadden, Arps, Slate, Meagher &
Flom LLP in Manhattan says that GTC Bank Inc. of Panama, Guatemala
made an emergency motion to change its nature of relationship with
the Debtors. GTC says it is a customer of Refco Capital Markets,
Ltd.
In a court-approved stipulation, GTC and the Debtors agreed that
its name will not be included in the Debtors' consolidated list of
unsecured creditors.
The Revised Consolidated List of Debtors' 99 Largest Unsecured
Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
VR Global Partners, LP $620,000,000
Avrora Business Park
77 Sadovnicheskayanab Building 1
Moscow, Russia 115035
Attn: Richard Deitz
Wells Fargo Bond Debt $390,000,000
Corporate Trust Services
Mac N9303-120
Sixth & Marquette
Minneapolis, MN 55497
Tel: (612) 316-47727
Attn: Julie J. Becker
Rogers Raw Materials Fund $287,558,736
c/o Beeland Management
141 West Jackson Boulevard
Suite 1340
Chicago, IL 60604
Tel: (312) 264-4375
Bawag International Finance $234,038,383
BAWAG P.S.K.
Fleishmarkt
A-1010 Vienna, Austria
Bancafe International Bank Ltd. $203,996,127
AV Reforma 9-30 Zona 9
Guatemala, Guatemala
Premier Trust Custody $194,163,075
Abraham De Veerstraat 7-A,
Curacao, Netherlands
Antilles
Inter Financial Services Ltd. $138,000,000
Graigmuir Chambers
Roadtown, Tortola
British Virgin Islands
Markwood Investments $135,037,546
Via Lovanio,
#19 00198
Rome, Italy
VR Argentina Recovery Fund $130,000,000
Avrora Business Park
77 Sadovnicheskayanab Building 1
Moscow, Russia 115035
Attn: Richard Deitz
Leuthold Funds Inc. $120,379,039
Leuthold Industrial Metals, LP
100 North 6th Street
Suite 412A
Minneapolis, MN, 55403
Tel: (612) 332-9141
Fax: (612) 332-0797
Attn: David Cragg
Betio Asset Investments, Ltd. $116,357,256
The Law Building
P.O. Box 687
The Valley, Anguilla,
British Virgin Islands
Capital Management Select $109,549,283
Fund Ltd.
Lynford Manor, Lynford Cay
Nassau, Bahamas
Chaco City Investments, Ltd. $100,709,321
The Law Building
P.O. Box 687
The Valley, Anguilla
British Virgin Islands
Cosmorex Ltd. $96,229,324
CP 8057
28080 Madrid, Spain
Tel: +34-607-745-555
Fax: +34-667-706-622
Rabaul Holdings Ltd. $92,830,682
The Law Building
P.O. Box 687
The Valley, Anguilla
British Virgin Islands
Tecka Asset Holdings Ltd. $78,193,026
The Law Building
P.O. Box 687
The Valley, Anguilla
British Virgin Islands
Tuvalu Holding Company, Ltd. $77,579,816
The Law Building
P.O. Box 687
The Valley, Anguilla
British Virgin Islands
Catamarca Asset, Series I, Ltd. $77,571,504
The Law Building
P.O. Box 687
The Valley, Anguilla
British Virgin Islands
Rogers International $75,241,712
Raw Materials
c/o Beeland Management
141 West Jackson Boulevard
Suite 1340
Chicago, IL 60604
Tel: (312) 264-4375
Cargill Related to $67,000,000
P.O. Box 9300 Purchase
Minneapolis, MN 55440-9300 Agreement, not
Tel: (952) 742-7575 yet due and
Fax: (952) 742-7393 payable
Creative Finance Limited $65,111,071
Marcy Building, Purcell Estate
P.O. Box 2416
Road Town, British Virgin Islands
Tel: + 3491-527-9620
RB Securities Limited $62,859,707
54 Brivibas Street
LV-1011
Riga, Latvia
Tel: + 371 702-52-84
Fax: + 371 702-52-26
Banesco Banco Universal C.A. $51,039,302
Panama Branch
AV Samuel Lewis
Torre HSBC Bank, 1st Floor
Panama City, Panama
Banesco International $50,831,139
(Panama) S.A.
AV. Samuel Lewis
Torre HSBC Bank, 1st Floor
Panama City, Panama
Rietumu Banka $50,125,384
JSC Rietumu Banka
Reg. No. 40003074497
VAT No. LV40003074497
54 Brivibas Street
Riga, LV-1011 LATVIA
Tel: +371-7025555
Fax: +371-7025588
Stilton International $46,820,416
Holdings, Trident Chambers
Wickhams Cay
P.O. Box 146,
Road Town, Tortolla
British Virgin Islands
Attn: Julian McPike
Tel: +242-363-1182
RR Investment Company Ltd. $41,815,113
c/o London & Amsterdam
Trust Company
PO Box 10459 APO, 3rd Floor
Century Yard
Cricket Square, Elgin Avenue
Georgetown, Grand Cayman
Cayman Island
Tel: +345-914-7471
Federal Portfolio $36,068,185
AV Venezuela, El Rosal Torre
Cremerca Piso 2, Ofic B2
Caracas, DTTO. Federal
1060 Venezuela
Global Management Worldwide $34,294,491
Trident Corp.
Service Floor 1
Kings Court Bay Street
P.O. Box 3944
Nassau, Bahamas
Josefina Franco Siller $32,440,119
Carretera Mexico-Toluca No. 4000
Col. Cuajimalpa
D.R. 0500 Mexico
SBP-Custody I $30,741,288
PO Box 0267075
Northwest 87 Ave 13 Off 133-C
Miami, FL 33172
Rovida Holding $30,741,288
c/o London & Amsterdam
Trust Company
P.O. Box 10459 APO, 3rd Floor
Century Yard, Cricket Square
Elgin Avenue
Georgetown, Grand Cayman
Cayman Island
Caja De Seguros, S.A. $30,950,115
Fitzroy #957
Capital Federal
Argentina 1414
Filare Limited $28,777,327
Shirley Street
P.O. Box N 3933
Nassau, Bahamas
Attn: Linda Williams
Pioneer Futures, Inc. $25,932,001
One North End Avenue, Suite 1251
New York, NY 10282
Daichi Commodities Co., Ltd. $24,727,015
10-10 Shinsen, Cho
Shibuya-Ku Tokyo, 150-0045
Attn: Mr. Airmura
GS Grinham Portfolio, LLC $24,631,959
c/o GS Hedge Fund Strategies
701 Mt Lucas, CN 850
Princeton, NJ 08542-0850
Tel: (609) 497-5500
Monte Brook Corporate $24,122,000
Associates, Ltd.
The Law Building
P.O. Box 687
The Valley, Anguilla
British Virgin Islands
Winchester Preservation $23,349,765
c/o Joseph D. Freney
Christiana Bank & Trust Co.
3801 Kennett Pike, Suite 200
Greenville, DE 19807
Patton Holdings $22,000,000
Avrora Business Park
77 Sadovnicheskayanab Building 1
Moscow, Russia 115035
Cargill Financial Services Corp. $21,679,435
12700 Whitewater Drive
Minnetonka, MN 55343-9439
Attn: Shawn McMerty
Miura Financial Services $21,521,491
AV. Francisco De Miranda
TORRE LA
PRIMERA PISO 3
CARACAS, VENEZUALA
AQR Absolute Return $19,700,296
c/o Caledonian Bank & Trust Ltd.
P.O. Box 1043 GT
Caledonian House, Grand Cayman
Cayman Islands
Arbat Equity Arbitrage Fund $18,830,655
Trident Corporate Services
1st Floor Kings Court
Bay Street
P.O. Box N3944
Nassau Bahamas, Nassau
Geshoa Fund $17,328,511
Corporate Center
West Bay Road
P.O. Box 31106 SMB
Grand Cayman
North Hills Management, LLC $17,187,504
10 Gracie Square, Suite 126S
New York, NY 10028
Attn: Mark Bloom
Renaissance Securities $16,304,009
(Cyprus) Ltd.
2-4 Arch Makarios 111 Avenue
Capital Center, 9th Floor
1505 Nicosia Cyprus
VR Capital Group Ltd. $16,215,628
Avrora Business Park
77 Sadovnicheskayanab Building 1
Moscow, Russia 115035
Abadi & Co. Securities $15,135,445
375 Park Avenue, Suite 3301
New York, NY 10152
Tel: (212) 319-4135
Reserve Invest(Cypress) Limited $14,186,714
Maximos Plaza
3301 Block 3
3035 Limassol, Cyprus
Peak Partners Offshore $13,865,562
Master Fund Limited
P.O. Box 2199 GT
Grand Pavilion Commercial Center
802 West Bay Road
Grand Cayman, Cayman Islands
Robeco Multi Market SPC-SEG PO $13,806,080
P.O. Box 1093 GT
Grand Cayman, Cayman Islands
Tel: (345) 945-7099
Fax: (345) 945-7100
Attn: Guy Major
BANCO AGRI $13,701,226
BANCO AGRICOLA, S.A, 1RA
CAKKE PTE. Y 67 AV. NORTE
FINAL BLVD CONSTITUCION #100
SAN SALVADOR, ES
Tokyo Forex Financial Inc. $11,689,345
Shinjyuku Oak Tower
35th Floor, 6-8-1
Nishishinjyuku, Shinjyuku-Ku
Tokyo 163-6035 Japan
Birmingham Merchant S.A. $11,601,749
AV. ARGENTINA 4793
PISO 3
CALLAO PERU
Latina De Seguros $11,536,182
Lima Peru
Banco Reformador S.A. $11,235,394
7 Avenida
7-24 Zona 9
Guatemala, Guatemala
NKB Investments Ltd. $11,157,779
199 Arch. Makarios Avenue
Neocleouse House
Limassol
BAC International $10,831,854
Calle 43 QnQuillo De Lauar
Panama, Panama
Sphinx Managed Futures $10,368,186
P.O. Box 2199
Genesis Building, 4th Floor
Grand Cayman, Cayman Islands
Premier Bank International N.V. $9,724,941
Abraham De Veerstraat 7-A
Willemstad Curacao,
Netherlands, Antilles
Geshoa Structured Finance Ltd. $9,510,064
Corporate Centere
West Bax Road
P.O. Box 31106 SMB
Grand Cayman, Cayman Islands
Davos International Bank, Ltd. $9,389,332
Woods Centere
Friars Hill Road, Suite 18A
St John's, Antigua & Barbuda
Russian Investors Securities Ltd. $9,076,430
Commonwealth Trust Ltd
P.O. Box 3321
Road Town
Tortola, Virgin Islands
Rogers International $8,441,532
Raw Materials Fund LP
c/o Beeland Management
141 West Jackson Blvd, Suite 1340
Chicago, IL 60604
Tel: (312) 264-4400
Attn: Allen Goodman
AQR Global Asset Allocation $8,833,968
c/o Caledonian Bank & Trust Ltd.
P.O. Box 1043 GT
Caledonian House, Grand Cayman
Cayman Islands
IDS Managed Futures, LP $7,989,433
c/o CIS Investments Inc
233 South Wacker Dr., Suite 2300
Chicago, IL 60606
Tel: (312) 460-4933
Attn: Ruth Gogerty
TotalBank Curacao N.V $7,576,454
Calle Guaicaipuro Entre
AV Principal
De Las Mercedes
Torre Alizanza Piso 9
El Rosal
Caracas, Venezuela
Uno Valores Ltd. $7,497,412
Av. Fc. De Milanda
Torre Cavendes, Piso 16, 16A
Caracas Venezuela
KPC Corporation $7,445,822
c/o Priore Asset Management
1-1-11 Nihombashi-Ningyo
Chuo-Ku, Tokyo 103 Japan
Fax: 011-813-3639-9406
Attn: Masahiko Ishida
Quantum Partners LDC/Discovery $7,386,849
c/o Soros Fund Mgmt
888 7th Avenue
New York, NY 10106
Banesco Banco Internacional $7,219,704
De Puerto Rico
Avenida Ponce De Leon
No. 165 Oficina 302
Hato Rey, Puerto Rico
Denali Master Fund, LP $7,119,112
c/o Admiral Administration
2 Anchorage Centre, 2nd FL
Grand Cayman, Cayman Islands
Tel: (340) 778-7744
Attn: Scott Ramsey
Peak Partners LP $6,694,485
47 Hulfish Street, Suite 510
Princeton, NJ 08542
Arcadia Hill Inc. $6,374,548
c/o Dorella Investment Inc.
1942 NE 148th Street, Suite 28153
Miami, FL 33181-1137
Prism Limited $6,137,174
c/o Racine Trading Co.
1100 Highridge
Lombard, IL 60148
Attn: Mike Racine
Trans-Europa Translations $6,058,691
ASL House
12-14 DVID Place
St. Helier Jersey, JE24TD
Channel Island, JE
ICIS Trading Inc (Unvolores) $5,968,943
AV Tamanaco Con Calle Moedano
EDIF Atlantic PISO 8 Off-8-A
Caracas, Venezuela
Garden Ring Fund Ltd. $5,943,182
Trident Corporate Services
1st Floor, P.O. Box N3944
Kings Court, Bay Street
Nassau, Bahamas
Tel: (095) 514-0810
Attn: Mike Boudan
SAAD Investments Company Limited $5,716,657
Ugland House, South Church Street
Georgetown, Grand Cayman
Attn: Mike Wetherall
Yutaka Shoji Co. Ltd. $5,641,752
Refco (S) Ptd. Ltd.
8, Shenton Way
#11-02, Temasek Tower
Singapore 068811
Tel: (813) 366-75222
Fax: (813) 366-78239
Colt Global Futures Fund $5,524,101
25 Eden Quay Co
Dublin, Ireland
Attn: Bruce Flippin
Premium Capital Appreciation Fund $5,500,901
P.O. Box 6050
Curacao, Netherlands Antilles
Tel: (571) 312-1177
Fax: (571) 348-4961
New Castle Business Holding Inc. $5,309,260
Torre Banco Continental, Piso 20
Calle 50 Ciudad De Panama
The Everest Fund, LP $5,308,830
1100 North 4th St, Suite 143
Fairfield, IA 52556
Tel: (641) 472-5500
Fax: (641) 472-7320
Attn: Janet Mullen
Quercus FX Fund Class B $5,251,008
Anderson Square Building
3rd Floor, Shedden Road
Georgetown, Grand Cayman
Invesdex Capital Ltd. $5,117,125
P.O. Box HM 1186
Hamilton HM11 Bermuda
Lyxor/Estlander & Ronnlund Fund $5,029,269
Tour Sociate Generale
17 Cours Valny
Paris, La Defence Cedex
92987, France
Fax: 33-1-42-13-01-25
Attn: Raphael Faure
BCO Hipotecario Inv. Turistica $4,902,384
(Fideicomiso Federal Forex)
Torre Cremerca Piso 2
Ofic, B2 El Rosal Caracas 1060
Caracas Venezuela
Attn: Aleg Benarroch
Transcom Bank (Barbados) Ltd. $4,730,827
7A Avenida 7-24, Zona 9
Edificio Banco Reformador 5TO Nivel
Guatemala
Wayland Investment Fund II, LLC $4,568,101
c/o Wayzata Inv Partn LLC
701 East Lake Street, Suite 300
Wayzata, MN 55391
Tel: (952) 345-0716
Attn: Susan Peterson
Multi Credit Bank Inc. $4,505,181
Via Espana #127
Edificio Prospeidad
Panama City, Panama
Alpen Fund Ltd. $4,482,732
VRG 855
PMB 295
208 East 51st Street
New York, NY 10022-6500
Sphinx Special Solutions $4,312,945
[Address Not Provided]
Miroo Ltd. $4,212,818
Palm Chambers #3
P.O. Box 3152 Road Town
British Virgin Islands
TAU 28 Fund Ltd. Roll Up $4,215,406
c/o Merit
Wickhams Cay
P.O. Box 662
Road Town, Tortola
British Virgin Islands
Attn: Fritz Kirdadi
Platinum Capital Fund BV $4,207,113
Pareraweg 45 PO Box 4914
Curacao, Netherlands Antilles
Garden Ring Fund Limited $4,045,473
Trident Corp. Services, 1st Floor
P.O. Box N3944
Kings Court, Bay Street
Nassau, BF
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., and Sally McDonald Henry, 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 to the Bankruptcy Court on the first day
of its chapter 11 cases.
REFCO INC: Wants Until April 10 to File Notices of Removal
----------------------------------------------------------
Section 1452(a) of the Judiciary Code provides that:
"(a) 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 section 1334 of this title."
Rule 9027(a) of the Federal Rules of Bankruptcy Procedure places
time restrictions on the debtor's ability to remove actions:
"(2) Time for filing; civil action initiated before
commencement of the case under the Code. If the claim or
cause of action in a civil action is pending when a case under
the Code is commenced, a notice of removal may be filed only
within the longest of (A) 90 days after the order for relief
in the case under the Code, (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 Code, or
(C) 30 days after a trustee qualifies in a chapter 11
reorganization case but not later than 180 days after the
order for relief."
Bankruptcy Rule 9006(b) provides that the Court can extend time
periods like those imposed by Bankruptcy Rule 9027(a).
As of the Petition Date, Refco Inc., and its debtor-affiliates
were plaintiffs in approximately 23 actions and proceedings in a
variety of state and federal courts throughout the country.
According to Sally McDonald Henry, Esq., at Skadden, Arps, Slate,
Meagher & Flom, LLP, in New York, the Debtors have not yet
reviewed all the Actions to determine whether any Actions should
be removed under Bankruptcy Rule 9027(a) because they have been
focused primarily on stabilizing and maximizing the value of the
wind-down of their businesses.
Accordingly, the Debtors ask the U.S. Bankruptcy Court for the
Southern District of New York to extend the time within which they
may file notices of removal with respect to their pending Actions,
through and including April 10, 2006.
Ms. Henry asserts that an extension will give the Debtors a
sufficient opportunity to assess whether the Actions can and
should be removed, thereby protecting their valuable right to
adjudicate lawsuits under Section 1452.
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. 17; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
REFCO INC: Wants Until May 15 to Make Lease-Related Decisions
-------------------------------------------------------------
Section 365(d)(4) of the Bankruptcy Code provides that:
"(A) Subject to subparagraph (B), an unexpired lease of
nonresidential real property under which the debtor is the
lessee shall be deemed rejected, and the trustee shall
immediately surrender that nonresidential real property to the
lessor, if the trustee does not assume or reject the unexpired
lease by the earlier of (i) the date that is 120 days after
the date of the order for relief; or (ii) the date of the
entry of an order confirming a plan.
(B) (i) The court may extend the period determined under
subparagraph (A), prior to the expiration of the 120-day
period, for 90 days on the motion of the trustee or lessor for
cause."
Pursuant to Section 365(d)(4)(A), the 120-day period during which
Refco Inc., and its debtor-affiliates must assume or reject
unexpired non-residential real property leases will expire on
February 14, 2006.
As of December 28, 2005, the Debtors are lessees under 15
unexpired non-residential real property leases. The Unexpired
Leases are leases that the Debtors used to operate corporate and
sales offices. Sally McDonald Henry, Esq., at Skadden, Arps,
Slate, Meagher & Flom, LLP, in New York, tells the U.S. Bankruptcy
Court for the Southern District of New York that the facilities
and premises leased under the Unexpired Leases were critical
components of the Debtors' business operations and are thus, key
assets of the Debtors' estates.
Since the Petition Date, the Debtors and their subsidiaries have
sold and expect to sell a substantial portion of their assets,
including substantially all of the assets of Refco LLC and other
affiliates. The Debtors contemplate assuming and assigning some
or all of the Unexpired Leases to Man Financial, Inc., pursuant
to the terms of the Court-approved Acquisition Agreement with Man
Financial dated as of November 13, 2005.
Ms. Henry notes that pursuant to the Acquisition Agreement, the
Debtors agreed to continue to maintain the Unexpired Leases for a
period of time after the initial closing to assist in the
transition of the business and to permit Man Financial to conduct
the business uninterrupted while the parties determine which of
the Unexpired Leases will be assumed and assigned under the
Acquisition Agreement.
While the initial closing with respect to the Acquisition
Agreement occurred in late November, the Acquisition Agreement is
not expected to be fully consummated prior to the expiration of
the Debtors' 120-day period to assume or reject leases under
Section 365(d)(4)(A).
The Debtors ask the Court to extend the time to assume or reject
unexpired leases, through and including May 15, 2006, without
prejudice to their right to seek further extensions of that
deadline, upon the consent of affected lessors.
The Debtors further propose that each lessor under an unexpired
lease be afforded the right to request that the Extension Period
be shortened for cause with respect to a particular unexpired
lease. "This ability to request relief from the Extension Period
ensures that no Lessor will be prejudiced by the requested
extension of time," Ms. Henry notes.
Moreover, the Debtors are paying for use of the property at the
applicable lease rates and are continuing to perform their other
obligations under the Unexpired Leases in a timely fashion, Ms.
Henry assures the Court.
Ms. Henry contends that absent the extension, the Debtors may
assume the Unexpired Leases prematurely, thereby elevating
substantial long-term liabilities to administrative claim status.
In the alternative, the Debtors may reject the Unexpired Leases
prematurely, which likely will impair the value of their estates
materially.
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. 17; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
RESCARE INC: Arbor E&T Acquires Workforce Services for $165 Mil.
----------------------------------------------------------------
ResCare, Inc. (NASDAQ/NM:RSCR) reported that its subsidiary, Arbor
E&T, LLC, has completed the purchase of the operating assets and
business of the Workforce Services Group from Affiliated Computer
(NYSE:ACS). The operations are expected to generate annual
revenues of approximately $165 million. The purchase was funded
with existing cash and availability under ResCare's senior credit
facility.
ACS has contracts in 15 states and Washington, D.C. and provides
services to adults who have lost their jobs or face some barrier
to employment. ACS Workforce Services offers job development,
training and placement through federally funded programs
administered by state and local governments and is the largest
private provider of these services in the U.S. These training
services are provided primarily through "one-stop" programs, which
are convenient service sites that enable job seekers and employers
to receive government assistance, employment or training-related
services at a single location.
Ronald G. Geary, ResCare chairman, president and chief executive
officer, said, "The purchase of ACS represents a significant
accomplishment for ResCare. Not only does it expand our base of
services to include the two new states of Idaho and Wisconsin, but
it also makes ResCare the largest private provider of one-stop
services in the country. Being the largest provider in any
industry is a big responsibility, and we look forward to the
challenge and opportunity to continue helping people, on a larger
scale, become productive members of the workforce."
ResCare, Inc. -- http://www.rescare.com/-- founded in 1974,
provides services in 36 states, Washington, D.C., Puerto Rico and
Canada. ResCare is a human service company that provides
residential, therapeutic, job training and educational supports to
people with developmental or other disabilities, to youth with
special needs and to adults who are experiencing barriers to
employment. The Company is based in Louisville, Kentucky.
* * *
As reported in the Troubled Company Reporter on Nov. 7, 2005,
during the company's refinancing, Moody's upgraded ResCare's
corporate rating from B1 to Ba3. Standard and Poor's affirmed the
corporate credit rating of B+, while increasing the outlook from
stable to positive.
SFBC INTERNATIONAL: Appoints Jeffrey P. McMullen as CEO
-------------------------------------------------------
SFBC International, Inc.'s (NASDAQ: SFCC) board of directors has
appointed Jeffrey P. McMullen as chief executive officer replacing
Arnold Hantman, who is retiring. The Board also has accepted the
resignation of Dr. Lisa Krinsky, who served as the company's
president and chairman.
New Chairman
The SFBC Board subsequently elected Jack Levine, who previously
was lead director, as chairman of the board of directors. As a
result of the resignations of Mr. Hantman and Dr. Krinsky from
SFBC's board of directors, SFBC currently has four independent
directors and two management directors. As recently announced,
SFBC is conducting a search for additional directors.
Mr. Levine, chairman of SFBC International, said, "We are
confident we have taken the necessary steps to strengthen the
leadership of the company. We have been very impressed with
Jeff's depth of expertise and his strong management capabilities
that will continue to be supported by an extensive executive
management team. We are confident that Jeff and the team will be
able to deliver long-term growth and value for our shareholders."
Mr. McMullen, chief executive officer of SFBC, said, "We recognize
the challenges facing SFBC's Miami facility, and we believe we
have the management team and structure in place to meet these
challenges and reestablish SFBC's leadership position in the drug
development services industry. I will be supported by an
extensive management team, which will include PharmaNet's 14-
person executive committee as well as Dr. Gregory B. Holmes,
SFBC's executive vice president who has been appointed to the new
position of president of early clinical development and
laboratories; David Natan, chief financial officer of SFBC; and
Marc LeBel, CEO and president of SFBC Anapharm. In 2006, we
anticipate establishing new corporate and middle-management
positions as appropriate for our continued growth. This will
include a corporate compliance specialist. We continue to have
the support of our clients who understand our commitment to
excellence, adherence to regulatory procedures and standards, and
the strength of our employees. I look forward to working with
senior management and our employees as we continue to provide the
best possible services to our clients."
Mr. McMullen is a veteran of the drug development industry, with
more than 30 years of experience in a variety of positions in
several organizations. Mr. McMullen has served as president and
chief executive officer of PharmaNet since prior to the merger
with SFBC and he will continue in that role. Prior to co-founding
PharmaNet in 1996, Mr. McMullen was a member of the senior
management team at Corning Pharmaceutical Services (now Covance)
where he spent 13 years in a range of operational, business
development and sales and marketing roles, including vice
president of Corporate Business Development and Business Unit Head
and director of Clinical Research. Previously, Mr. McMullen held
positions in clinical, regulatory and drug metabolism, including
nine years with Sterling Drug Inc.
Severance Agreements
Acting through a committee of independent directors advised by
independent counsel, SFBC negotiated severance arrangements with
Mr. Hantman and Dr. Krinsky, which were more favorable to the
Company than what these executives would have received under the
terms of their existing employment agreements if they had been
terminated without cause. Under the separation agreements with
the departing executives, the Company will record one-time charges
of approximately $1.8 million for Dr. Krinsky and $2.025 million
for Mr. Hantman, or a total of approximately $3.825 million,
against fourth-quarter earnings in lieu of approximately $2.4
million charges for each individual, or a total of approximately
$4.8 million, if they had received what their employment
agreements provided. Each agreed to 24-month non-compete
agreements in lieu of the 12-month provisions in their employment
agreements and to waive any claim to any additional compensation
of any kind including unvested stock options, restricted stock
units and bonus.
SFBC International, Inc. -- http://www.sfbci.com/-- provides
early and late stage clinical drug development services to branded
pharmaceutical, biotechnology, generic drug and medical device
companies around the world. SFBC has more than 30 offices located
in North America, Europe (including Central and Eastern Europe),
South America, Asia, and Australia. In early clinical development
services, SFBC specializes primarily in the areas of Phase I and
early Phase II clinical trials and bioanalytical laboratory
services, including early clinical pharmacology. SFBC also
provides late stage clinical development services globally that
focus on Phase II through IV clinical trials. SFBC also offers a
range of complementary services, including data management and
biostatistics, central laboratory services, medical and scientific
affairs, regulatory affairs and submissions, and clinical IT
solutions.
* * *
As reported in the Troubled Company Reporter on Dec. 19, 2005,
Standard & Poor's Rating Services revised its rating outlook on
Miami, Florida-based contract research services provider SFBC
International Inc. to stable from positive. Ratings on the
company, including the 'B+' corporate credit rating, were
affirmed.
SMARTIRE SYSTEMS: Balance Sheet Upside-Down by $8.58M at Oct. 31
----------------------------------------------------------------
SmarTire Systems Inc. delivered its quarterly report on
Form 10-QSB for the quarter ending October 31, 2005, to the
Securities and Exchange Commission on December 15, 2005.
Financial Results
The Company reported $18,211,523 net loss on $592,866 of net
revenues for the quarter ending October 31, 2005. At
October 31, 2005, the Company's balance sheet shows $14,807,327 in
total assets and $23,384,963 in total debts.
As of October 31, 2005, the Company's balance sheet showed a
$8,577,636 stockholders deficit compared to a $10,383,957 equity
at October 31, 2004.
As of October 31, 2005, the Company had cash and cash equivalents
and short-term investments of $7,498,890, working capital of
$2,908,820, a current ratio of 1.35.
The Company has incurred losses from operations in each year since
its inception. The $18,211,523 net loss for the three months
ended October 31, 2005, is considerably higher than the $2,383,900
net loss for the three months ended October 31, 2004. Smartire's
cash position, including short-term investments at October 31,
2005 was $7,498,890 as compared to $10,059,763 at July 31, 2005.
Presently, its revenues are not sufficient to meet operating and
capital expenses. Management indicates that operating losses are
likely to continue for the foreseeable future.
Needs $12.5 Million Funding
At October 31, 2005, Company cash and short-term investments were
$7,498,890. The Company may require up to $12.5 million in
financing through the next nine months in order to continue in
business as a going concern because the management projects that
the Company will require call for $3.6 million to $20 million to
fund debt repayment, ongoing operating expenses, working capital
requirements and potential litigation settlement through
July 31, 2006.
Default
As at October 31, 2005, the Company was in arrears on payments of
principal and interest under its 5% convertible debenture issued
on May 20, 2005, in the amount of $125,000 and $36,193 in
principal and interest.
The Company has obtained an extension from the principal holder to
defer all principal and interest payments under this convertible
debenture until this month.
At October 31, 2005, the Company was in violation of certain terms
of its convertible debentures. The principal holder has agreed
that the Company is not in default of these agreements pending the
filing of a new registration statement by January 31, 2006.
Going Concern
KPMG LLP expressed substantial doubt about SmarTire Systems Inc.'s
ability to continue as a going concern after it audited the
Company's financial statements for the fiscal years ended July 31,
2005, and 2004. In an addendum to its audit report, KPMG pointed
to the Company's uncertainty in meeting its current operating and
capital expense requirements.
A full-text copy of the regulatory filing is available at no
charge at http://ResearchArchives.com/t/s?41a
SmarTire Systems Inc. develops and markets technically advanced
tire pressure monitoring systems for the transportation and
automotive industries that monitor tire pressure and tire
temperature. Its TPMSs are designed for improved vehicle safety,
performance, reliability and fuel efficiency. The Company has
three wholly owned subsidiaries: SmarTire Technologies Inc.,
SmarTire USA Inc. and SmarTire Europe Limited.
STERLING FINANCIAL: Commences Dividend Reinvestment and Sale Plan
-----------------------------------------------------------------
Sterling Financial Corporation (Nasdaq: STSA) reported the
commencement of its Dividend Reinvestment and Direct Stock
Purchase and Sale Plan, allowing existing shareholders to increase
their holdings of Sterling common stock by automatically
reinvesting all or a portion of their cash dividends or by making
optional cash contributions to purchase additional shares of
Sterling common stock. The Plan will also provide new investors
an alternative way to make an initial investment in Sterling
common stock. Investors choosing to participate in the Plan
through a broker or other financial intermediary will be
responsible for any fees or other charges incurred in connection
with the services provided by such broker or other financial
intermediary. For brokerage held share participation, investors
should contact their broker or other financial intermediary
directly.
The Plan is being administered by Sterling's transfer agent,
American Stock Transfer & Trust Company, and the offering of
shares under the Plan commenced on January 3, 2006.
A copy of the prospectus may be obtained, when available, from
American Stock Transfer & Trust at the following address:
Sterling Financial Corporation, c/o American Stock Transfer &
Trust Company, 59 Maiden Lane, New York, New York 10038, Attn:
Shareholder Relations Department or by calling American Stock
Transfer & Trust's customer service department toll-free at 1-800-
676-0791. A copy of the prospectus also may be obtained from, and
inquiries to Sterling can be directed to, Sterling's Shareholder
Services department at 509-227-5389.
Sterling Financial Corporation of Spokane, Washington is a bank
holding company, the principal operating subsidiary of which is
Sterling Savings Bank. Sterling Savings Bank is a Washington
State-chartered, federally insured commercial bank, which opened
in April 1983 as a stock savings and loan association. Sterling
Savings Bank, based in Spokane, Washington, has financial service
centers throughout Washington, Oregon, Idaho and Montana. Through
Sterling Saving Bank's wholly owned subsidiaries, Action Mortgage
Company and INTERVEST-Mortgage Investment Company, it operates
loan production offices in Washington, Oregon, Idaho, Montana,
Arizona and California. Sterling Savings Bank's subsidiary Harbor
Financial Services provides non-bank investments, including mutual
funds, variable annuities and tax-deferred annuities and other
investment products through regional representatives throughout
Sterling Savings Bank's branch network.
* * *
As reported in the Troubled Company Reporter on June 22, 2005,
Fitch Ratings has revised the Rating Outlook for Sterling
Financial Corporation and Sterling Savings Bank to Positive from
Stable.
The Outlook change reflects the continued progress that STSA has
made improving both its franchise as well as its balance sheet
structure. Through acquisitions, as well as organic growth, STSA
has created a Pacific Northwest franchise with approximately $7.0
billion in assets and 138 branches in four states. Additionally,
the company has been transforming itself from a thrift to a more
community banking oriented entity and, highlighting this
transformation, has recently applied to change to a Washington
state-chartered commercial bank charter.
An improving level of earnings, strong asset quality, and stable
levels of capitalization are the drivers of Fitch's Outlook
revision. The successful continuation of these trends and the
additional accumulation of capital, specifically tangible common
equity, remains an opportunity for a change in ratings.
These ratings are affirmed by Fitch:
Sterling Financial Corporation
-- Long-term issuer 'BB+';
-- Short-term issuer 'B';
-- Individual rating 'C';
-- Support '5';
-- Outlook to Positive.
Sterling Savings Bank
-- Long-term deposit 'BBB-';
-- Short-term deposit 'F3';
-- Long-term issuer 'BB+';
-- Short-term issuer 'B';
-- Individual 'C';
-- Support '5';
-- Outlook to Positive.
STERLING FINANCIAL: Names Donald J. Lukes to Board of Directors
---------------------------------------------------------------
Sterling Financial Corporation (Nasdaq: STSA) appointed Donald J.
Lukes to its Board of Directors.
Harold B. Gilkey, Chairman and Chief Executive Officer, commented,
"We are pleased that we have such an outstanding industry
executive joining the Board of Directors of Sterling Financial
Corporation. The appointment of Don Lukes is an important step in
Sterling's long-term growth strategy. The Board of Directors will
be further strengthened by Don's new perspectives, his expertise
and his long-time relationship with Sterling, which will allow him
to play a prominent role in the further advancement of Sterling's
regional footprint, market position and product development."
Mr. Lukes joins Sterling's Board of Directors with extensive
experience and an impressive track record of success in corporate,
banking and securities law. Mr. Lukes was a principal at the law
firm of Witherspoon, Kelley, Davenport & Toole, P.S. in Spokane
from 1987 until his retirement in 2005, and represented Sterling
during that time. Prior to that, Mr. Lukes served as General
Counsel and Senior Vice President of Citicorp's mortgage banking
business. Before joining Citicorp, Mr. Lukes was engaged in the
private practice of law, specializing in corporate, banking, and
securities law. Prior to entering the practice of law in 1978,
Mr. Lukes was an officer of a Wall Street bank, where he managed
the bank's owned real estate portfolio, traded loan portfolios,
and originated permanent and construction loans. Mr. Lukes'
appointment to the Board is effective Jan. 3, 2006.
Mr. Lukes received a B.A. from the University of Montana and a
J.D. from St. John's University School of Law in New York. Mr.
Lukes and his wife, Pam, reside in Spokane, Washington, and have
one grown son.
Sterling Financial Corporation of Spokane, Washington is a bank
holding company, the principal operating subsidiary of which is
Sterling Savings Bank. Sterling Savings Bank is a Washington
State-chartered, federally insured commercial bank, which opened
in April 1983 as a stock savings and loan association. Sterling
Savings Bank, based in Spokane, Washington, has financial service
centers throughout Washington, Oregon, Idaho and Montana. Through
Sterling Saving Bank's wholly owned subsidiaries, Action Mortgage
Company and INTERVEST-Mortgage Investment Company, it operates
loan production offices in Washington, Oregon, Idaho, Montana,
Arizona and California. Sterling Savings Bank's subsidiary Harbor
Financial Services provides non-bank investments, including mutual
funds, variable annuities and tax-deferred annuities and other
investment products through regional representatives throughout
Sterling Savings Bank's branch network.
* * *
As reported in the Troubled Company Reporter on June 22, 2005,
Fitch Ratings has revised the Rating Outlook for Sterling
Financial Corporation and Sterling Savings Bank to Positive from
Stable.
The Outlook change reflects the continued progress that STSA has
made improving both its franchise as well as its balance sheet
structure. Through acquisitions, as well as organic growth, STSA
has created a Pacific Northwest franchise with approximately $7.0
billion in assets and 138 branches in four states. Additionally,
the company has been transforming itself from a thrift to a more
community banking oriented entity and, highlighting this
transformation, has recently applied to change to a Washington
state-chartered commercial bank charter.
An improving level of earnings, strong asset quality, and stable
levels of capitalization are the drivers of Fitch's Outlook
revision. The successful continuation of these trends and the
additional accumulation of capital, specifically tangible common
equity, remains an opportunity for a change in ratings.
These ratings are affirmed by Fitch:
Sterling Financial Corporation
-- Long-term issuer 'BB+';
-- Short-term issuer 'B';
-- Individual rating 'C';
-- Support '5';
-- Outlook to Positive.
Sterling Savings Bank
-- Long-term deposit 'BBB-';
-- Short-term deposit 'F3';
-- Long-term issuer 'BB+';
-- Short-term issuer 'B';
-- Individual 'C';
-- Support '5';
-- Outlook to Positive.
STRUCTURED ASSET: Moody's Rates Class B5 Sub. Certificates at B2
----------------------------------------------------------------
Moody's Investors Service assigned Aaa ratings to the senior
certificates issued by Structured Asset Securities Corporation
Mortgage Pass-Through Certificates, Series 2005-RF6, and ratings
ranging from Aa2 to B2 to the subordinate certificates in the
deal. The transaction consists of the securitization of FHA
insured and VA or RHS guaranteed reperforming loans virtually all
of which were repurchased from GNMA pools.
The credit quality of the mortgage loans underlying the
securitization is comparable to that of mortgage loans underlying
subprime securitizations. However, after the FHA, VA and RHS
insurance is applied to the loans, the credit enhancement levels
are comparable to the credit enhancement levels for prime-quality
residential mortgage loan securitizations. The insurance covers a
large percent of any losses incurred as a result of borrower
defaults. Moody's expects collateral losses to range from 0.40%
to 0.50%.
The Federal Housing Administration (FHA) is a federal agency
within the Department of Housing and Urban Development (HUD) whose
mission is to expand opportunities for:
* affordable home ownership,
* rental housing, and
* healthcare facilities.
The Department of Veterans Affairs (VA), formerly known as the
Veterans Administration, is a cabinet-level agency of the federal
government. The Rural Housing Service (RHS), is a part of the
U.S. Department of Agriculture. The rating of this pool is based
on the credit quality of the underlying loans and the insurance
provided by FHA and the guarantee provided by VA and RHS.
Specifically, about 77% of the loans have insurance provided by
FHA, 22% from the VA, and 1% from the RHS. The rating is also
based on the structural and legal integrity of the transaction.
The complete rating actions are:
* Class A, rated Aaa
* Class AIO, rated Aaa
* Class B1, rated Aa2
* Class B2, rated A2
* Class B3, rated Baa2
* Class B4, rated Ba2
* Class B5, rated B2
* Class R, rated Aaa
The notes are being offered in privately negotiated transactions
without registration under the 1933 Act. The issuance was
designed to permit resale under Rule 144A.
TBYRD ENTERPRISES: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: Tbyrd Enterprises, L.L.C.
P.O. Box 9033
College Station, Texas 77842
Bankruptcy Case No.: 06-30078
Chapter 11 Petition Date: January 3, 2006
Court: Southern District of Texas (Houston)
Judge: Marvin Isgur
Debtor's Counsel: Kelly K. McKinnis, Esq.
Law Offices of Kelly McKinnis
612 Nolana Loop, Suite 240
McAllen, Texas 78504
Tel: (956) 686-7039
Fax: (956) 686-8261
- and -
Thomas G. Wayland, Esq.
Law Offices of Thomas G. Wayland
1630 North 10th Street
McAllen, Texas 78501
Tel: (956) 682-3443
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
The Debtor did not file a list of its 20 largest unsecured
creditors.
TITAN GLOBAL: Wolf & Company Expresses Going Concern Doubt
----------------------------------------------------------
Titan Global Holdings, Inc., delivered its annual report on
Form 10-KSB for the year ending August 31, 2005, to the Securities
and Exchange Commission on December 14, 2005.
The Company reported a $5,856,000 net loss on $22,779,000 of net
revenues for the year ending August 31, 2005. At August 31, 2005,
the Company's balance sheet shows $63,376,000 in total assets and
$47,874,000 in total debts.
Wolf & Company, P.C., the Company's auditor, expressed substantial
doubt about the Company's ability to continue as a going concern
pointing to:
-- significant operating losses;
-- high debt levels;
-- defaults on debt covenants; and
-- negative working capital.
The Company's balance sheet shows $36,615,000 of debts maturing in
the next 12 months and less than half that amount -- $14,108,000
-- are current assets available to satisfy those obligations.
At August 31, 2005, the Company was in default under its Credit
agreement with Laurus Master Fund, Ltd., regarding the non-filing
of its Form 10-KSB for the year ended August 31, 2004, as well as
the SB-2 filed on October 14, 2005, not becoming effective within
90 days of the closing of the amendment to the credit agreement.
The Company has classified all Laurus debt as current at
August 31, 2005.
As reported in the Troubled Company Reporter on Nov. 16, 2005, a
Company subsidiary, Oblio Telecom, Inc., received a default notice
from CapitalSource Finance, LLC, relating to Oblio's alleged
failure to meet certain non-monetary representations and covenants
required by Oblio's financing arrangement with Capital Source.
Oblio disputes certain of the alleged defaults.
A full-text copy of the regulatory filing is available at no
charge at http://ResearchArchives.com/t/s?41b
Titan Global Holdings, Inc. -- http://www.titanglobalholdings.com/
-- operates through three divisions -- Oblio Telecom, Inc., Titan
PCB East, Inc. and Titan PCB West, Inc. Oblio is engaged in the
creation, marketing, and distribution of prepaid telephone
products for the wire line and wireless markets and other related
activities. Titan PCB is a printed circuit board manufacturer
providing competitively priced time-sensitive, quality products to
the commercial and military electronics markets. Titan PCB offers
high layer count, fine line production of rigid, rigid-flex and
flex PCBs. Titan PCB targets quick turn and standard delivery
needs from prototype, pre-production through production, using
various standard and advanced materials. Titan PCB combines the
strengths of its design for manufacturing, repetitive quality and
supportive customer service with an extremely cost effective
pricing structure. With this competitive edge, Titan PCB is not
only a reliable resource for all printed circuit board
requirements but also a technical source unmatched in today's PCB
supply chain.
TRUMP HOTELS: Court OKs World's Fair Site Tax Appeal Pact With BET
------------------------------------------------------------------
As previously reported, on Sept. 13, 2005, an auction to sell
the World's Fair Site was held and BET Investments, Inc., emerged
as the successful bidder.
Pursuant to an assignment agreement, BET Investments assigned its
rights under a sale agreement relating to the World's Fair Site
to Boardwalk Florida Enterprises, LLC.
At a sale approval hearing, the counsel for Trump Hotels & Casino
Resorts, Inc., nka Trump Entertainment Resorts, Inc., and its
debtor-affiliates advised the U.S. Bankruptcy Court for the
District of New Jersey about pending tax appeals on the World's
Fair Site. From 1997 to 2005, nine tax appeals related to the
World's Fair Site were filed before the tax court of New Jersey.
The tax appeals, excluding those for 2005, have been consolidated
for discovery and trial.
In a Court-approved stipulation, the Debtors and BET Investments
agreed that:
a. any decrease or increase in the tax assessment for 1997
until 2004 for the World's Fair Site will be the
responsibility, and inure to the benefit, of Trump Plaza
Associates, LLC;
b. with respect to the 2005 tax, any increase or decrease as a
result of the assessment for the World's Fair Site will be
prorated between Trump Plaza Associates and Boardwalk as of
the closing date of the World's Fair Site; and
c. the legal fees and expenses in connection to the 2005 Tax
Appeal will be allocated between Trump Plaza Associates and
Boardwalk, and will be prorated as of the Closing Date.
Headquartered in Atlantic City, New Jersey, Trump Hotels & Casino
Resorts, Inc., nka Trump Entertainment Resorts, Inc. --
http://www.thcrrecap.com/-- through its subsidiaries, owns and
operates four properties and manages one property under the Trump
brand name. The Company and its debtor-affiliates filed for
chapter 11 protection on Nov. 21, 2004 (Bankr. D. N.J. Case No.
04-46898 through 04-46925). Robert A. Klymman, Esq., Mark A.
Broude, Esq., John W. Weiss, Esq., at Latham & Watkins, LLP, and
Charles Stanziale, Jr., Esq., Jeffrey T. Testa, Esq., William N.
Stahl, Esq., at Schwartz, Tobia, Stanziale, Sedita & Campisano,
P.A., represent the Debtors in their successful chapter 11
restructuring. When the Debtors filed for protection from their
creditors, they listed more than $500 million in total assets and
more than $1 billion in total debts. The Court confirmed the
Debtors' Second Amended Plan of Reorganization on Apr. 5, 2005,
and the plan took effect on May 20, 2005. (Trump Hotels
Bankruptcy News, Issue No. 32; Bankruptcy Creditors' Service,
Inc., 215/945-7000).
UAL CORP: Intercompany Tolling Order Extended Until March 1
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois
gave UAL Corporation and its debtor-affiliates an extension of the
Section 546 Period through and including March 1, 2006, with
respect to any Intercompany Actions.
As previously reported, the Court 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.
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. 110; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
URBAN HOTELS: Wants Access to Two Lenders' Cash Collateral
----------------------------------------------------------
Urban Hotels, Inc., dba Lax Plaza Hotel, asks the U.S. Bankruptcy
Court for the Central District of California, Los Angeles
Division, for authority to access cash collateral securing
repayment of its indebtedness to First Credit Bank and AN Capital,
Inc.
First Credit Bank holds a first deed of trust on the Debtor's
hotel on account of a $10 million debt. AN Capital, owed $3.5
million, holds the second priority deed of trust on the hotel.
The Debtor needs the encumbered funds -- approximately $72,000 in
bank accounts and $385,000 of accounts receivable -- to continue
its operations while attempting to secure the highest sale price
for the hotel. Without access to the cash collateral, the Debtor
says that its prospect for a successful reorganization will become
moot.
As adequate protection against the diminution of their security
interests, the Debtor proposes to grant the lenders valid,
perfected and enforceable replacement liens having the same
priority as the prepetition liens.
The Court will hold a hearing at 10:30 a.m. on Jan. 11, 2006, to
consider the Debtor's request.
Headquartered in Culver City, California, Urban Hotels Inc.,
operates Lax Plaza Hotel. The Company filed for chapter 11
protection on Nov. 29, 2005 (Bankr. C.D. Calif. Case No.
05-50140). M. Jonathan Hayes, Esq., of Woodland Hills,
California, represents the Debtor in its restructuring efforts.
When the Debtor filed for protection from its creditors, it listed
$23,000,000 in assets and $20,000,000 in debts.
VALE OVERSEAS: Fitch Rates Proposed $300 Million Issuance at BB
---------------------------------------------------------------
Fitch Ratings has assigned a 'BB' long-term foreign currency
rating to Vale Overseas Limited's proposed $300 million issuance
due 2016. Vale Overseas is a wholly owned subsidiary of Companhia
Vale do Rio Doce, a large diversified mining company located in
Brazil. The notes are unsecured obligations of Vale Overseas and
are unconditionally guaranteed by CVRD. The obligation to
guarantee the notes rank pari passu with all of CVRD's other
unsecured and unsubordinated debt obligations. Fitch expects the
proceeds of this issuance to be used for general corporate
purposes and primarily to pay down $300 million of Vale Overseas'
9.0% guaranteed notes due 2013.
Fitch also maintains the following ratings for CVRD and CVRD
Finance Ltd., a wholly owned subsidiary of CVRD:
-- CVRD foreign currency rating: 'BB', Outlook Positive;
-- CVRD local currency rating: 'BBB' Outlook Stable;
-- CVRD national scale rating: 'AAA(bra)', Outlook Stable;
-- CVRD Finance Ltd.: series 2000-1 and series 2000-3: 'BBB';
-- CVRD Finance Ltd., series 2000-2 and series 2003-1: 'AAA'.
CVRD's ratings are supported by the company's strong financial
profile and dominant global position as the world's largest
producer and exporter of iron ore. The company's leading industry
position is primarily a result of its low-cost production
capabilities, its high-quality iron ore, and an extensive and
integrated transportation system consisting of railways and port
facilities. The fully integrated nature, from mine to port, of
CVRD's operations and the high iron content of its ore, result in
a competitive cost structure that provides significant protection
from price fluctuations in the cyclical metals markets.
CVRD stands to benefit from favorable industry conditions
characterized by a strong price environment for iron ore and a
positive outlook for demand over the near to medium term. CVRD is
the leading producer in the iron ore industry, followed by BHP
Billiton Ltd. and Rio Tinto with operations in Australia.
Consumers of iron ore face an international market dominated by
just a few large rivals that have significant influence in annual
iron ore price negotiations. Iron ore prices rose by about 72% in
2005 and 18% in 2004. These price increases, along with those of
several other commodities, have been driven by the confluence of a
relatively strong global economy and China's surging demand for
raw materials. Due to constraints in mining and logistics and
continued strong demand by China for higher quality imported raw
materials, iron ore prices are expected to remain high in 2006 and
2007 compared with historical levels.
CVRD's strong cash generation has resulted in an improving
financial profile. In the first nine months of 2005, CVRD
generated operating EBITDA of $4.8 billion and had total debt of
US$3.9 billion. CVRD's ratio of total debt-to-operating EBITDA has
declined to 0.6 times (x) as of Sept. 30, 2005, from 2.1x at year-
end 2003, and the ratio of net debt-to-operating EBITDA has
decreased to 0.4x from 1.8x over the same period.
CVRD's foreign currency rating of 'BB', Rating Outlook Positive
exceeds the foreign currency rating and country ceiling of Brazil
by one notch. CVRD's Rating Outlook Positive status mirrors the
Rating Outlook Positive status of the foreign currency rating of
the Federative Republic of Brazil, as CVRD's foreign currency
ratings remain linked to the 'BB-' foreign currency rating of the
sovereign.
CVRD's foreign currency rating reflects the strength of the
company's iron ore exporting business and the associated hard
currency generation. The rating is further supported by the
company's low leverage and strong liquidity position. CVRD's
consolidated cash balance of US$1.2 billion at Sept. 30, 2005,
covers short-term debt by about 1.4x. Existing offshore cash
balances and access to U.S. dollar credit lines help mitigate the
transfer and convertibility risks associated with a 'BB-' rated
sovereign. CVRD's liquidity position is supported by US$750
million in committed credit lines from an international bank
consortium. The company intends to use these short-term
facilities only in times of financial crisis and periods of tight
liquidity. Offshore cash and funds available under committed
credit facilities cover CVRD's annual debt service by about 1.0x.
CVRD, headquartered in Brazil, is the world's largest producer and
exporter of iron ore and pellets, with a share of approximately
32% in the global seaborne iron ore trade of about 600 million
tons. In 2004, consolidated sales totaled 231 million tons and
consisted of 204 million tons of iron ore and 27 million tons of
pellets. In addition to iron ore, CVRD produces nonferrous
minerals and metals, provides logistics services and has strategic
interests in the steel industry.
VISTEON CORP: Increases 18-Month Secured Term Loan to $350 Million
------------------------------------------------------------------
In response to strong market interest, Visteon Corporation (NYSE:
VC) expects to increase the size of its planned 18-month secured
term loan credit facility to $350 million, up from the previously
announced intended amount of up to $300 million.
Visteon announced on Dec. 8, 2005, that it intends to replace an
existing $300 million short-term secured revolving credit
facility, which expired Dec. 15, 2005, with a new 18-month secured
term-loan. The new transaction is expected to close early next
week. Visteon has appointed JPMorgan Securities and Citigroup
Inc. as lead arrangers.
As previously announced, Visteon also intends to seek amendments
to the financial and other covenants contained in its existing
$775 million multi-year revolving credit facility and its $250
million delayed draw term loan, both of which expire in June 2007,
to provide flexibility as the company implements its restructuring
plans.
Visteon Corporation is a leading global automotive supplier that
designs, engineers and manufactures innovative climate, interior,
electronic and lighting products for vehicle manufacturers, and
also provides a range of products and services to aftermarket
customers. With corporate offices in Van Buren Township, Michigan
(U.S.); Shanghai, China; and Kerpen, Germany; the company has more
than 170 facilities in 24 countries and employs approximately
50,000 people.
* * *
As reported in the Troubled Company Reporter on Nov. 25, 2005,
Fitch Ratings has affirmed and removed from Rating Watch Positive
these ratings for Visteon Corporation:
-- Issuer default rating 'B';
-- Senior secured 'BB'; Recovery 'RR-1';
-- Senior unsecured 'B', Recovery 'RR-4'.
The Rating Outlook for Visteon is Negative.
WINDOW ROCK: Gregory Cynaumon Wants Claim Amount Determined
-----------------------------------------------------------
Dr. Gregory S. Cynaumon asks the U.S. Bankruptcy Court for the
Central District of California, Santa Ana Division, to lift the
automatic stay in Window Rock Enterprises, Inc.'s case to allow
the liquidation of his claim against the bankruptcy estate.
Dr. Cynaumon and Window Rock are parties to an arbitration
proceeding concerning an agreement dated June 21, 2003. Dr.
Cynaumon agreed to act as spokesperson for Window Rock's CortiSlim
product line and would receive compensation based on net sales.
Dr. Cynaumon claims that the Debtor owes him $15 million under
that agreement.
Dr. Cynaumon says that the arbitration issue is a non-core
dispute. Based on the Ninth Circuit's law requiring a Bankruptcy
Court to enforce parties' contractual agreement to arbitrate non-
core disputes, the Bankruptcy Court should grant his request, Dr.
Cynaumon states.
Additionally, the parties have been in arbitration for a while and
are ready to proceed with the claim liquidation hearing currently
pending before the arbitrator on Jan. 25-27, 2006. Dr. Cynaumon
relates that the resolution of its claim is important to the plan
process in that it will allow all creditors to gauge their
potential recovery.
Headquartered in Brea, California, Window Rock Enterprises Inc. --
http://windowrock.net/-- manufactures and sells all-natural
dietary and nutritional supplements. The Debtor is also producing
its own TV, radio and print advertising campaigns for nutritional
and dietary supplements and has distribution in over 40,000 Food
Drug Mass Clubs as well as Health and Fitness Channels. The
Company filed for chapter 11 protection on Nov. 23, 2005 (Bankr.
C.D. Calif. Case No. 05-50048). Robert E. Opera, Esq., Winthrop
Couchot, PC represents the Debtor in its restructuring efforts.
When the Debtor filed for protection from its creditors, it listed
estimated assets of $10 million to $50 million and estimated debts
of more than $100 million.
WINN-DIXIE: Equity Committee Wants an Examiner Appointed
--------------------------------------------------------
On Oct. 27, 2005, Winn-Dixie Stores, Inc., and its debtor-
affiliates filed a Proxy Statement with the Securities and
Exchange Commission, pursuant to Section 14(a) of
the Securities Exchange Act of 1934. Through the Proxy
Statement, the Board of Directors of Winn-Dixie Stores, Inc.,
recommended that shareholders vote for:
(i) the re-election of the Class III directors:
-- John E. Anderson,
-- Julia B. North, and
-- Carlton T. Ride; and
(ii) the ratification of KPMG LLP's appointment as independent
public accounting firm for the fiscal year 2006.
However, Karol K. Denniston, Esq., at Paul, Hastings, Janofsky &
Walker LLP, in Atlanta, Georgia, notes, the Proxy Statement
failed to disclose whether any investigation had been conducted
to substantiate the Board of Directors' recommendations.
Winn-Dixie's failure to disclose any investigation supporting its
recommendations to shareholders constitutes a material omission
making the Proxy Statement defective and misleading, Mr.
Denniston says.
Following a review of Winn-Dixie's Form 10-K Report and Proxy
Statement, the Official Committee of Equity Security Holders sent
a letter to the Debtors requesting that the Board of Directors
form an independent committee with independent counsel to
investigate potential prepetition claims that the estate may have
against its prepetition officers and directors, senior management
and possibly other professionals whose actions or failure to act
led to Winn-Dixie's deteriorated financial condition and the
Chapter 11 bankruptcy filings.
The Equity Committee believes that Winn-Dixie may be taking on an
unnecessary obligation without having completed an independent
investigation, as there is no legal requirement to ratify the
appointment of a company's independent auditors. Mr. Denniston
points out that the actions proposed by Winn-Dixie could either
waive possible claims against the Class III Directors and KMPG
without even conducting an investigation or otherwise disclosing
to shareholders that Winn-Dixie has no basis for its
recommendations.
Subsequently, the Equity Committee had requested Winn-Dixie to
delay the proposed actions until the requested independent
investigation could be conducted and completed.
Annual Meeting Postponed
The Equity Committee's counsel pursued discussions with the
Debtors' counsel regarding the postponement of Winn-Dixie's
Annual Meeting because of the need for an investigation. During
these discussions, the Debtors' counsel acknowledged that the
Debtors had not conducted any investigation and that there was no
basis for the recommendations set forth in the Proxy Statement.
As a result of the discussions, Winn-Dixie postponed its Annual
Meeting scheduled for Dec. 8, 2005. Mr. Denniston discloses
that Winn-Dixie also agreed to file a Form 8-K regarding the
postponement.
However, despite the parties' agreement, no Form 8-K has been
field with the SEC, Mr. Denniston says.
The Equity Committee intends to file a letter with the SEC
addressing the deficiencies in the Proxy Statement and advising
the SEC of Winn-Dixie's failure to conduct any investigation or
provide any basis for the Board's recommendation to re-elect the
Class III Directors and ratify KPMG's appointment.
Appointment of Examiner
The Equity Committee asks the U.S. Bankruptcy Court for the Middle
District of Florida to appoint an examiner to conduct an
independent investigation. The examiner will investigate, among
other things:
(a) The decline of Winn-Dixie's financial condition and events
leading up to the Chapter 11 filings;
(b) The Internal Revenue Service audit of fiscal years 2000
through 2002, including, but not limited to, Winn-Dixie's
appeal of the IRS' decisions;
(c) The issuance of dividends from 2000 through 2004 and
whether Winn-Dixie complied with corporate governance
requirements in issuing the dividends;
(d) Winn-Dixie's company-owned life insurance policies and any
IRS investigation of those policies;
(e) Class action lawsuits filed in the United States District
Court for the Middle District of Florida against Winn-
Dixie and certain present and former executive officers
alleging claims under federal securities laws;
(f) Class action lawsuits filed in the United States District
Court for the Middle District of Florida against
Winn-Dixie and certain present and former executive
officers alleging claims under ERISA relating to
Winn-Dixie's Profit Sharing/401(k) plan;
(g) Shareholder demand requesting that a derivative proceeding
be commenced against the Board of Directors and officers
and directors who served from May 6, 2002, through
July 23, 2004, asserting that the parties violated their
fiduciary duties to Winn-Dixie;
(h) Federal grand jury investigation of possible violations of
federal criminal law arising out of activities related to
illegal importation, possession, transportation and sale
of undersized lobsters; and
(i) Any matters identified in any filing made by Winn-Dixie in
the bankruptcy case or with the SEC.
Debtors' Proposed Investigation Is Inappropriate
On Dec 7, 2005, the Debtors' counsel proposed proceeding
with an investigation under Section 607.7401 of the Florida
Statutes Annotated. The Debtors were unwilling to stipulate to
the appointment of an examiner under Section 1104 of the
Bankruptcy Code and expressed their desire to retain additional
professionals to conduct the investigation.
Section 1104 clearly contemplates that if an investigation of any
fraud, dishonesty, incompetence, misconduct, mismanagement, or
irregularity in the management of the affairs of the debtor by
current or former management is necessary either to protect the
interests of creditors, equity security holders, and the estate,
or if the debtor's unsecured debt exceeds $5,000,000, the Court
will order the appointment of an examiner on motion and after
notice and a hearing.
Mr. Denniston asserts that the more appropriate way to proceed is
with the appointment of an examiner. He argues that the Debtors'
proposal, while a step in the right direction, fails to provide
the Debtors' estate the same protections that can be provided by
appointment of an examiner, namely clear bankruptcy court
jurisdiction and supervision of the examiner and the examination
process, including established procedures for dealing with the
disclosure and filing of the examiner's report and implementation
of the findings.
Mr. Denniston also believes that it is important for all
interested parties to receive notice of the issues creating the
need for an independent investigation and the need to appoint an
examiner. Moreover, Mr. Denniston says that the professional
fees for the Debtors exceed $34,000,000 and it is clear that the
process would be better managed by the Court's appointment and
judicial supervision of an examiner.
Neither Winn-Dixie's Board of Directors nor the Debtors'
professionals are sufficiently independent to conduct the
necessary investigation and there is no reason to look to Florida
state law when the Bankruptcy Code provides an appropriate
remedy, Mr. Denniston says.
Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc.
-- http://www.winn-dixie.com/-- is one of the nation's largest
food retailers. The Company operates stores across the
Southeastern United States and in the Bahamas and employs
approximately 90,000 people. The Company, along with 23 of its
U.S. subsidiaries, filed for chapter 11 protection on Feb. 21,
2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14,
2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840).
D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and
Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King &
Spalding LLP, represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they listed $2,235,557,000 in total assets and
$1,870,785,000 in total debts. (Winn-Dixie Bankruptcy News,
Issue No. 30; Bankruptcy Creditors' Service, Inc., 215/945-7000).
WINN-DIXIE: Has Until Mar. 20 to File Reorganization Plan
---------------------------------------------------------
As previously reported in the Troubled Company Reporter on
Dec. 16, 2005, Winn-Dixie Stores, Inc., and its debtor-affiliates
asked the U.S. Bankruptcy Court for the Middle District of Florida
to further extend their exclusive period to propose a plan of
reorganization to and including March 20, 2006, and their
exclusive period to solicit acceptances of that plan to and
including May 22, 2006.
D.J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in
New York, tells Judge Funk that the Debtors have made significant
progress towards reorganization since the bankruptcy filing. The
Debtors want to further extend their Exclusive Periods by 90 days
to afford them the opportunity now to negotiate and propose a
plan of reorganization.
Creditors Committee Objects
The Official Committee of Unsecured Creditors sought to lessen
the extension to 30 days instead of the 90 days requested by the
Debtors. The Creditors Committee asserted that "[a]n extension
longer than 30 days will only divert the parties attention from
the key remaining issue in these cases that will allow the
Debtors to emerge from bankruptcy -- drafting a consensual plan
and filing it as soon as practicable."
Wachovia Bank, National Association, as agent for itself and
certain other postpetition lenders of the Debtors, supported the
Debtors' request for extension. According to Wachovia, this is
not a case where the Debtors abdicated their duties for months on
end only to suddenly appear at the 11th-hour for an extension of
time to finally carry out statutory duties. "There is simply no
reason to interfere now with the Debtors' progress toward
reorganization," Wachovia said.
Court Ruling
Subsequently, the Court overruled the limited objections of the
Creditors Committee and the Equity Committee.
Judge Funk extends the Debtors' exclusive period to file a plan
to March 20, 2006, and their exclusive period to solicit
acceptances of that plan to May 22, 2006.
Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc.
-- http://www.winn-dixie.com/-- is one of the nation's largest
food retailers. The Company operates stores across the
Southeastern United States and in the Bahamas and employs
approximately 90,000 people. The Company, along with 23 of its
U.S. subsidiaries, filed for chapter 11 protection on Feb. 21,
2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14,
2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840).
D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and
Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King &
Spalding LLP, represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they listed $2,235,557,000 in total assets and
$1,870,785,000 in total debts. (Winn-Dixie Bankruptcy News,
Issue No. 30; Bankruptcy Creditors' Service, Inc., 215/945-7000).
WINN-DIXIE: Has Until March 20 to Make Lease Related Decision
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
extended Winn-Dixie Stores, Inc., and its debtor-affiliates' time
to decide whether to assume, assume and assign, or reject their
unexpired leases to March 20, 2006, with certain exemptions.
The Debtors advised the Court that the objections filed by
By-Pass Partnership, Pines-Carter of Florida, Inc., and Sarria
Enterprises, Inc., have been withdrawn. Anthony and Dorothy
Balzebre's objection seeking to compel the Debtors' decision on
the Balzebre Lease is overruled.
Furthermore, the Debtors and the lessor for Store No. 802 in
Morrisville, North Carolina, have agreed to terminate the Store
No. 802 Lease.
In a separate order, Judge Funk directs the Debtors to assume or
reject the Pines-Carter Lease by Dec. 29, 2005.
Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc.
-- http://www.winn-dixie.com/-- is one of the nation's largest
food retailers. The Company operates stores across the
Southeastern United States and in the Bahamas and employs
approximately 90,000 people. The Company, along with 23 of its
U.S. subsidiaries, filed for chapter 11 protection on Feb. 21,
2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14,
2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840).
D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and
Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King &
Spalding LLP, represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they listed $2,235,557,000 in total assets and
$1,870,785,000 in total debts. (Winn-Dixie Bankruptcy News,
Issue No. 30; Bankruptcy Creditors' Service, Inc., 215/945-7000).
WORLDCOM INC: Asks Court to Approve Amended Stipulation with IDR
----------------------------------------------------------------
As reported in the Troubled Company Reporter on October 14, 2005,
WorldCom, Inc., its debtor-affiliates and the Illinois Department
of Revenue resolved, through a Court-approved stipulation, certain
prepetition income tax claims including:
-- Claim No. 34526 for $290,604 against Nova Cellular Co.; and
-- Claim No. 35533 for $6,501,370 against MCI WorldCom Network
Services.
Pursuant to the Stipulation, the Debtors released most of their
income tax refund claims against Illinois but reserved the right
to pursue their claim for an income tax refund which is the
subject of a pending administrative proceeding captioned MCI
Telecommunications Corp. v. Illinois Department of Revenue.
Accordingly, with the U.S. Bankruptcy Court for the Southern
District of New York's consent, the parties agree to settle the
2000 Administrative Refund Proceeding and amend the Stipulation to
provide the mechanism for the settlement of the 2000
Administrative Refund Proceeding.
The Court-approved Amended Stipulation provides that the Debtors:
(a) are allowed a $100,000 credit to be deducted against the
total amount due and payable to the State of Illinois
under the terms of the Stipulation; and
(b) will withdraw with prejudice their refund request and
agree to dismiss with prejudice the 2000 Administrative
Refund Proceeding.
Headquartered in Clinton, Mississippi, WorldCom, Inc., now known
as MCI -- http://www.worldcom.com/-- is a pre-eminent global
communications provider, operating in more than 65 countries and
maintaining one of the most expansive IP networks in the world.
The Company filed for chapter 11 protection on July 21, 2002
(Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, the
Debtors listed $103,803,000,000 in assets and $45,897,000,000 in
debts. The Bankruptcy Court confirmed WorldCom's Plan on
October 31, 2003, and on April 20, 2004, the company formally
emerged from U.S. Chapter 11 protection as MCI, Inc. (WorldCom
Bankruptcy News, Issue No. 110; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
WORLDCOM INC: Inks Stipulation Resolving T-Netix's $60.1MM Claim
----------------------------------------------------------------
On January 21, 2003, T-Netix, Inc. filed a proof of claim against
WorldCom, Inc., and its debtor-affiliates, asserting:
1. $83,135 for invoiced amounts for services that T-Netix
alleged the Debtors owed but never paid -- Claim A;
2. $60,000,000 for alleged infringement of the six patents
which are the subject of an action pending in the United
States District Court for the Eastern District of Texas --
Claim B; and
3. $70,000 for patent license fees that T-Netix alleged the
Debtors owed pursuant to a patent license agreement
originally entered into by MCI Telecommunications
Corporation and Gateway Technologies, Inc. and Intellicall,
Inc., in 1996 -- Claim C.
The Debtors objected to the Claim.
The Debtors asserted that they have assumed the 1996 Patent
License Agreement in accordance with Section 365 of the
Bankruptcy Code and the Plan of Reorganization.
The Parties dispute the correct amount of the cure payment with
respect to the assumption of the 1996 Patent License Agreement.
To settle all claims and disputes, the Parties agree that:
(a) Claim A will be allowed for $83,135 and will be paid in
accordance with the Plan;
(b) T-Netix will dismiss the Texas Action;
(c) The Debtors will make a $35,000 cure payment to T-Netix in
full settlement of Claim C; and
(d) The entirety of the T-Netix Claim is deemed withdrawn.
Headquartered in Clinton, Mississippi, WorldCom, Inc., now known
as MCI -- http://www.worldcom.com/-- is a pre-eminent global
communications provider, operating in more than 65 countries and
maintaining one of the most expansive IP networks in the world.
The Company filed for chapter 11 protection on July 21, 2002
(Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, the
Debtors listed $103,803,000,000 in assets and $45,897,000,000 in
debts. The Bankruptcy Court confirmed WorldCom's Plan on
October 31, 2003, and on April 20, 2004, the company formally
emerged from U.S. Chapter 11 protection as MCI, Inc. (WorldCom
Bankruptcy News, Issue No. 110; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
W.R. GRACE: Asbestos PD Committee Wants Exclusivity Terminated
--------------------------------------------------------------
The Official Committee of Asbestos Property Damage Claimants
appointed in the chapter 11 cases of W.R. Grace & Co. and its
debtor-affiliates asks the U.S. Bankruptcy Court for the District
of Delaware to deny the Debtors' request to further extend:
(a) their exclusive right to file a Plan through and
including the 90th day after a final order is issued in
the estimation hearings; and
(b) their exclusive right to solicit acceptances of the Plan
through and including an additional 60 days thereafter.
The PD Committee says the Debtors' argument supporting the
extension of the Exclusive Periods until after the rulings in
respect of the claims estimation proceedings cannot meet their
burden of establishing "cause" under Section 1121(d) of the
Bankruptcy Code.
Lisa L. Coggins, Esq., at Ferry, Joseph & Pearce, P.A., in
Wilmington, Delaware, notes that after the Estimations are
concluded and regardless of their outcome, the parties will still
be faced with the Debtors' Plan of Reorganization, which cannot
be confirmed as a matter of law. Even if the Debtors are
successful, through the Estimations, in achieving a ruling that
the aggregate amount of asbestos claims does not exceed the
$1,483,000,000 proposed cap in the Plan, the Plan's defects will
still remain, as indicated by the PD Committee's objection to the
Debtors' Disclosure Statement.
Ms. Coggins explains that if the Estimation results produce an
aggregate amount of asbestos claims exceeding the proposed cap,
the PD Committee will then be required to wait to see if the
Debtors wish to modify their Plan, which to date they have not
seen fit to do.
Furthermore, Ms. Coggins contends that the size and complexity of
the Debtors' cases alone do not constitute sufficient "cause,"
because they are not holding up the confirmation process. "What
is holding up the case is the Debtors' continued failure to
comply with applicable bankruptcy law related to the [Plan
confirmation]," Ms. Coggins points out.
The PD Committee also believes that the Debtors will not suffer
any prejudice if their exclusivity ends. The Debtors may
continue on their path or propose another plan of reorganization,
the PD Committee says.
Ms. Coggins asserts that if the Exclusive Periods are extended
for the ninth time, the PD Claimholders will continue to be
powerless to a plan process specifically engineered to deny any
voice to them and to other asbestos creditors.
"Only by eliminating the Exclusive Periods will the [PD
Claimholders] and other creditors of the Debtors be placed on an
equal footing in the plan process, a condition precedent to
exiting those long-standing cases," Ms. Coggins maintains.
Parties Back Up PD Committee's Objection
In separate filings, the Official Committee of Asbestos Personal
Injury Claimants and the Future Claimants Representative, David
T. Austern, echo the same sentiments expressed by the PD
Committee and, therefore, ask Judge Fitzgerald to deny the
Debtors' extension request.
Furthermore, several law entities, consisting of:
* Baron & Budd, P.C.;
* Environmental Litigation Group, P.C.;
* The Law Office of Peter G. Angelos, P.C.;
* Provost & Umphrey, LLP;
* Reaud, Morgan & Quinn, Inc.;
* Silber Pearlman, LLP; and
* SimmonsCooper, LLC,
maintain that the Debtors' request is not warranted and in fact
will only serve to widen the gap among the parties and delay
cooperative efforts toward a consensual plan of reorganization.
Daniel K. Hogan, Esq., at The Hogan Firm, in Wilmington,
Delaware, asserts that "the Debtors and their asbestos creditors
are at loggerheads." He believes that W.R. Grace & Co. wants to
litigate its way through Chapter 11 and seems uninterested in
formulating a consensual Plan.
Mr. Hogan avers that "the purpose of Chapter 11 is
reorganization, not the establishment of a semi-permanent refuge
of protection from creditors."
Moreover, Mr. Hogan contends that the Plan is not confirmable in
its present form because it denies asbestos claimants the right
of the vote required under Section 524(g) of the Bankruptcy Code.
"Unless something is done to set this case back on a constructive
course, several more years will pass without any real progress
made toward a plan of reorganization," Mr. Hogan tells Judge
Fitzgerald.
Therefore, the Objecting Law Firms ask Judge Fitzgerald to deny
the request, or, in the alternative, limit any extension of
exclusivity to 60 days.
The Law Firms also seek for Court appointment of a neutral
individual as plan trustee or examiner to oversee negotiations
towards a consensual plan.
Debtors Respond
James E. O'Neill, Esq., at Pachulski, Stang, Ziehl, Young, Jones
& Weintraub P.C., in Wilmington, Delaware, tells Judge Fitzgerald
that the objections filed are parochial and posturing rather than
being candid with the Court at a critical juncture in the
Debtors' Chapter 11 cases.
Accordingly, the Debtors intend to set out the state of play in
detail and focus on what is needed to complete the challenges
still ahead.
Mr. O'Neill relates that there are still significant obstacles
that have to be addressed before a plan can be confirmed, even
with consensus among the asbestos constituencies. However,
progress tends to be made only when the pressure is there.
Mr. O'Neill adds that the asbestos constituencies complain about
the Debtors' aggressive litigation path. Yet, Mr. O'Neill
explains, it is that aggressive litigation path that has been
critical to progress in the Debtors' cases and is exactly what is
required for the Debtors to continue progress toward completion.
The Debtors, therefore, insist that the Court should stay the
present course of their cases by extending the Exclusive Periods
and by setting the plan process for a status report at the next
omnibus hearing scheduled for March 27, 2006.
Headquartered in Columbia, Maryland, W.R. Grace & Co. --
http://www.grace.com/-- supplies catalysts and silica products,
especially construction chemicals and building materials, and
container products globally. The Company and its debtor-
affiliates filed for chapter 11 protection on April 2, 2001
(Bankr. Del. Case No. 01-01139). James H.M. Sprayregen, Esq., at
Kirkland & Ellis, and Laura Davis Jones, Esq., at Pachulski,
Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the
Debtors in their restructuring efforts. (W.R. Grace Bankruptcy
News, Issue No. 100; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
W.R. GRACE: Battles Asbestos PD Committee Over Claims Estimation
----------------------------------------------------------------
W.R. Grace & Co. and its debtor-affiliates reminds the U.S.
Bankruptcy Court for the District of Delaware that it has already
decided that a Daubert challenge to the property damage claimants'
use of the dust sampling methodology is appropriate for hearing as
a threshold matter in the process to estimate their liabilities to
asbestos property damage claimants. The same issue has been
decided by the bankruptcy court in "In re Armstrong World
Industries, Inc.," which held that a Daubert challenge is
warranted and, indeed, meritorious.
As the Armstrong case demonstrated, dust sampling is uniquely
well suited for a threshold Daubert challenge. The principles of
Daubert are applicable in bankruptcy claims estimation
proceedings to assess the admissibility of scientific and
technical evidence. Bankruptcy courts, pursuant to Rule 702 and
Daubert, have excluded unreliable scientific and medical evidence
in contested proceedings involving the evaluation of bankruptcy
claims. The Armstrong court found that dust sampling is not
reliable or relevant.
In the Debtors' estimation proceedings, as in Armstrong, Ms.
Jones explains that the dust method fails under Daubert because:
(1) The method for collecting samples of dust introduces
uncontrolled variability, the extent of which is
unknown, because of variations in surface texture,
cleaning history, nozzle velocity, and collection
technique, and because the distribution of dust on a
floor surface is non-random.
(2) The "indirect" method specified for analyzing dust
samples alters the material that is collected by shaking
it and subjecting it to ultrasonic waves in an acidic
solution, which introduces a large, but variable, bias
into the reported results.
(3) Even if the dust method accurately reported asbestos
concentrations in settled dust, which it does not -- it
cannot be used to predict the concentration of
respirable asbestos that is, or may be, in the air.
(4) The settled dust method has not won general acceptance
by government regulators or scientists as a measure of
the human exposure hazard posed by asbestos.
Ms. Jones affirms that the Court is not being asked to make those
findings on relevance and reliability. Rather, even a cursory
examination of a list of shortcomings in dust sampling techniques
demonstrates why dust sampling is so well suited for a threshold
Daubert hearing, so that those determinations can be made in
Phase I. The issues have already been briefed and argued in
Armstrong, and many of those issues were also briefed before the
Court in advance of the ZAI hearing in the Debtors' cases.
Furthermore, four experts have already submitted reports on dust
sampling.
With this easily accessible record, Ms. Jones says, the Debtors
believe that the Daubert issue is appropriately addressed early
in Estimation Phase I and will significantly advance the
resolution of the Debtors' Chapter 11 cases.
Ms. Jones points out that Phase I will not be a generalized
examination of air sampling methods and it will certainly not be
a determination of "a quantitative risk model" as posited by
claimants. Rather, Phase I will be narrowly focused on the
single issue of whether dust sampling is a scientific technique
that meets Daubert's strictures that it may be admitted as proof
in a federal bankruptcy court.
Accordingly, the Debtors want the Court to hold a Daubert hearing
on the reliability and relevance of the dust sampling methodology
as part of Phase I of the estimation of asbestos PD claims.
Debtors' Brief on Constructive Notice Issue
James E. O'Neill, Esq., at Pachulski, Stang, Ziehl, Young, Jones
& Weintraub P.C., in Wilmington, Delaware, relates that the Court
has an available array of procedural approaches that it may use
to assess claims. These claims may be disallowed entirely or be
assigned an estimated value of zero using summary judgment or an
evidentiary hearing on the merits. In addition, the Court may
hold hearings on the values of claims that include presentation
of factual evidence pursuant to the Federal Rules of Evidence and
examination of applicable state and federal law.
Mr. O'Neill maintains that the Court should select those
proceedings that will best effectuate the Bankruptcy Code's goals
of efficient and speedy resolution of claims while remaining
within the bounds of the federal rules and state law.
Against this backdrop, the Debtors suggest that a process on the
subject of constructive notice will best serve the principles
embodied in the Bankruptcy Code.
Considering that the Court has already indicated its intention to
address the estimation of property damage claims in successive
places, Mr. O'Neill reminds Judge Fitzgerald that Phase I -- the
claims allowance process -- is to be bifurcated to deal with
Daubert methodology and constructive notice, while Phase II will
consist of merits-based estimation of the asbestos property
damage claims.
Although the details of the procedures in estimating claims have
not yet been determined by the Court, the Debtors suggest a plan
as the most effective way to resolve the PD claims on
constructive notice.
The Constructive Notice Proposal
The Debtors propose that the Court decide the issue of
constructive notice during a Phase I estimation hearing that
would consider only legal and factual issues that will be
relevant to certain claims on a consolidated basis. To simplify
and speed up the process, Mr. O'Neill explains, the Phase I
estimation would consider the issue of when claimants from three
main states -- California, New York and Louisiana -- were
constructively on notice of legal claims relating to asbestos
property damage. Claims from those states make up more than half
of all of the PD claims that have been filed, or around 1,863 out
of 3,155 U.S. claims that have received constructive notice
objections.
Mr. O'Neill says that considering the laws of three states only
will greatly simplify the Court's decision-making with respect to
the applicability and effect of state constructive notice
doctrines. To determine when constructive notice applied with
respect to commercial property owners, the Court will look to the
constructive notice laws and statutes of limitations of the
states from which the claims arise. The states of California,
New York, and Louisiana each have case law governing when a
building owner should have known of a claim arising from on-site
asbestos, and therefore, when the statutes of limitations would
be triggered for those claims.
Moreover, the state-to-state variation in constructive notice law
is limited, which should permit the Court easily to discern the
laws in the three main states in Phase I, as well as determine
the standards for groups of states.
To assist the Court in determining the timing of constructive
notice in the three states, the Debtors and Claimants will file
expert reports describing the state of knowledge surrounding use
of asbestos-containing materials in buildings. The Court will
have the opportunity to examine evidence collected and
synthesized by those experts about the government literature and
regulations that resulted in nationwide awareness of asbestos
issues.
In addition, the parties in February to March 2006, will file
briefs outlining the constructive notice laws and relevant
statutes of limitations in the three States. Mr. O'Neill tells
Judge Fitzgerald that by limiting its legal analysis to three
States, the Court should be able to quickly discern the few legal
standards that will apply to the thousands of claims from those
states.
Mr. O'Neill illustrates that courts in each state have applied a
version of the "discovery rule" to the determination of when the
statute of limitations begins to run with respect to an asbestos-
related "injury" to a building. Specifically, the cause of
action accrues when the party discovers or should have discovered
that they have been injured. The Debtors believe that the Court
will find that claimants had constructive notice of asbestos-
related PD claims since at least 1983. Those claims are now
barred by all statutes of limitations in the States, which the
claims arise.
Court Should Apply Phase I Ruling to Estimate Claims
Assuming that the Court determines in Phase I that, under the
laws of the States, property owners were on constructive notice
of asbestos-related PD claims as of the early 1980s, that ruling
will apply to all claims from those States. The practical effect
of that ruling, Mr. O'Neill states, is that those claims will be
time-barred by state statutes of limitations and the claims will
be disallowed. Thus, by deciding the issue of constructive
notice early on, the Court will be able to adjudicate a large
number of claims with speed and efficiency.
To ensure that the Court has the opportunity to consider all
factors that may affect the value of those claims, however, some
individual claimants may be afforded an opportunity in Phase II
or otherwise through the ongoing claims objection process to show
cause why the Phase I ruling does not apply to the specific
circumstances underlying their claims. The scope of those
individual issues, if any, will become more apparent after
responses to the Debtors' omnibus objection are submitted.
However, it would then be the claimants' burden to overcome the
presumption that they were on constructive notice as of 1983, Mr.
O'Neill says. Should the Court find those exceptions meritorious
after an evidentiary hearing, it could then adjust the estimation
of the value of individual or categories of claims, using
whatever estimation methodology is selected.
"Permitting claimants the opportunity to overcome the presumed
applicability of the Phase I ruling will address any possible
concerns raised by claimants' attorneys about the use of
consolidated Phase I proceedings to decide constructive notice
issues," Mr. O'Neill asserts. "It allows the Court to take into
account unusual factual circumstances that may affect the value
of certain claims."
Mr. O'Neill also contends that overcoming the presumed Phase I
applicability addresses concerns raised by claimants' attorneys
regarding the need to consider events that they argue might toll
the statute of limitations, including alleged fraudulent
concealment or other fraud.
Expansion of Legal Analysis
Furthermore, the Debtors propose that to address the claims from
other states that would not fall automatically within the ambit
of the Phase I ruling, the Court should broaden the scope of its
legal analysis in Phase II and other claims adjudication
processes.
To assist the Court, Mr. O'Neill explains, the Debtors would
provide it with a summary of standards governing constructive
notice, and listing the particular states and cases that employ
each standard. Since the Court will have looked at the laws of
the three States in Phase I, it will already be generally
familiar with those doctrines, and will simply have to assess the
handful of variations applied among the states.
While each standard finds constructive notice on the date that a
claimant should have known of an "injury," Mr. O'Neill points out
that these standards vary somewhat in defining the particular
"injury" that must occur for the claimant to be on notice:
(1) Under the "presence standard," the mere presence of
asbestos in a building is a sufficient injury to trigger
the statute of limitations.
(2) In a similar rule, some states find the date of the
installation of the asbestos-containing material is the
relevant "injury" date.
(3) Some states find that constructive knowledge of alleged
"contamination" starts the statute of limitations clock
ticking.
Mr. O'Neill notes that broadening the Court's legal analysis in
Phase II or other claims adjudication processes to address the
remaining states that have enunciated standards would cover
hundred of other PD claims in other states. However, the Debtors
believe that, regardless of the legal standard that is applied,
constructive notice and statutes of limitations will operate to
bar virtually all PD claims.
PD Committee Wants Constructive Notice Rejected
"[T]he Debtors' Brief flies in the face of fact and applicable
law and [their] 'Constructive Notice' theory should play no role
in the PD Estimation," Theodore J. Tacconelli, Esq., at Ferry,
Joseph & Pearce, P.A., in Wilmington, Delaware, tells the Court.
Mr. Tacconelli asserts that the issue of Constructive Notice
should be rejected because:
(a) the Constructive Notice's date of potential hazard of
asbestos is irrelevant under state law to the
determination of when a cause of action accrued;
(b) differences in state law preclude sweeping generalized
determinations;
(c) state law requires individual determinations in respect
of statutes of limitations; and
(d) the Debtors' "Constructive Notice" proposal would
undermine the due process rights of PD Claimants.
The Official Committee of Asbestos Property Damage Claimants
relates that while it does not dispute that the Debtors have been
promoting the notion of a "Constructive Notice" finding as part
of the estimation of PD Claims, what is proposed in the Debtors'
Brief is hardly the process that the Debtors have been heralding
and provides further evidence that the PD Estimation is a "work
in progress" that is being revealed to the Court and all
participants when and as it suits the Debtors.
Moreover, the PD Committee contends that to adopt any aspect of
the Debtors' proposed "Constructive Notice" estimation procedure
would constitute reversible error. The PD Committee argues that
the Debtors' proposal ignores applicable federal and state law,
which, without exception, establishes that the date on which a PD
claimant can be deemed to have suffered an actionable asbestos PD
damage tort injury is determined based on an individual, case-by-
case factual inquiry.
The PD Committee further contends that the Debtors have been
unable to cite even a single decision -- because there is none --
which supports their attempt to globally determine that thousands
of PD Claims are time-barred without reference to the individual
facts unique to each PD Claim.
Ironically, Mr. Tacconelli states, the law of the three States
curiously chosen by the Debtors as the first group of
jurisdictions illustrates precisely why it is impossible to make
any "Constructive Notice" findings whatsoever.
Mr. Tacconelli maintains that in applying state law, the Court is
constrained to do so literally on a state-by-state basis and not
hypothetically based on some sort of amalgation of various state
laws. That ground rule is inviolate, he points out.
"The fact that the Debtors posit that it would be easier, faster
or more efficient to cobble together a 'virtual' state discovery
rule is but wishful thinking, even in bankruptcy," Mr. Tacconelli
asserts.
Headquartered in Columbia, Maryland, W.R. Grace & Co. --
http://www.grace.com/-- supplies catalysts and silica products,
especially construction chemicals and building materials, and
container products globally. The Company and its debtor-
affiliates filed for chapter 11 protection on April 2, 2001
(Bankr. Del. Case No. 01-01139). James H.M. Sprayregen, Esq., at
Kirkland & Ellis, and Laura Davis Jones, Esq., at Pachulski,
Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the
Debtors in their restructuring efforts. (W.R. Grace Bankruptcy
News, Issue No. 99; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
* Gardner Carton & Douglas Expands New York City Office
-------------------------------------------------------
Gardner Carton & Douglas LLP has expanded its New York presence
with a new midtown Manhattan office that initially will
concentrate on serving the firm's growing corporate trust and
restructuring client base in the city. The firm's Albany office
was opened in 2004 and concentrates on health law. Like its
Albany office, the firm's New York City office will provide
clients with full-service capabilities drawing from its over 230
lawyers in eight core practice areas located throughout the firm's
offices, including its other offices in Chicago, Washington, D.C.,
and Milwaukee.
Stephanie Wickouski & Janice Grubin
Serving as Managing Partner of the New York City office will be
Stephanie Wickouski, Esq., Co-Chair of the firm's Corporate
Restructuring and Financial Institutions Practice Group. Ms.
Wickouski has been a partner with GCD since 2002 and Managing
Partner of its Washington, DC office for the past year. Ms.
Wickouski will be joined by partner Janice Grubin, Esq., former
Chair of the Bankruptcy Practice of Wormser, Kiely, Galef & Jacobs
LLP in New York City. The firm plans to add several other lawyers
in corporate restructuring and other practice areas over the next
several months. With the opening of the new New York City office,
GCD will have nine attorneys based in New York, with 19 attorneys
firm wide licensed to practice in New York.
"Our presence in New York City is a commitment to better serve the
interests and needs of our current clients, create new
opportunities for them and look toward the interests and needs of
prospective clients," says Harold Kaplan, Esq., GCD Chairman and a
member of the New York bar, noting that the New York City office
adds significant momentum to the growth strategy the firm has had
in place over the last two years. "Stephanie and Janice bring
remarkable expertise and highly sought after experience in
corporate restructuring and bankruptcy to clients that could
benefit from and wanted us to have a presence in such an important
financial center," Mr. Kaplan adds. "We already are a major
participant in major cases filed increasingly in New York City.
Our expanded office presence facilitates such representation and
opens great new opportunities for us and, importantly, for our
clients."
In 2004, Ms. Wickouski was recognized as one of the best
bankruptcy lawyers in Washington, D.C. by Washingtonian magazine
and by The Best Lawyers in America. Ms. Wickouski recently has
served or currently serves as counsel to indenture trustees in
several highly visible cases, including Northwest Airlines,
Magellan Health Services, Inc., Loral Space and Communications,
Inc., Petroleum-Geo Services, WHX Corp., and Tower Automotive in
the U.S. Bankruptcy Court for the Southern District of New York.
Ms. Wickouski is the author of Bankruptcy Crimes, the leading
authoritative treatise on the subject of bankruptcy fraud.
Ms. Grubin represents debtors, creditors, trustees, receivers,
examiners and official and unofficial committees in voluntary and
involuntary bankruptcy proceedings and workouts in insurance,
banking, manufacturing, real estate, energy, service and other
industries in local, regional, national and international
jurisdictions. Ms. Grubin also advises clients on acquiring
financially distressed companies, cross border insolvency issues,
out-of-court restructurings and mass tort bankruptcy matters.
A graduate of Reed College and Benjamin N. Cardozo School of Law,
Ms. Grubin clerked for the Hon. Stephen D. Gerling, Chief Judge of
the U.S. Bankruptcy Court for the Northern District of New York.
In the past two years, Ms. Grubin has served as Chapter 11
operating trustee and examiner in multiple cases pending in the
United States Bankruptcy Courts for the Southern and Eastern
Districts of New York. Ms. Grubin also has represented clients in
such cases as Public Service Company of New Hampshire, Colonial
Realty Co., Zale's, R.H. Macy's & Co., Inc., Merry-Go-Round
Enterprises, Inc., Caldor Corporation, Kentile Corporation, Singer
N.V., Service Merchandise, Randall's Island Family Golf Centers,
Inc., Sterling Chemical Corp., The Warnaco Group, Inc., Enron
Corp., Magnesium Corp. of America, NRG Energy, Inc., Petroleum
Geo-Services ASA, Adelphia Communications Corporation and DDi
Corp.
Also joining the New York City office is Daniel Morse, who
recently received his LL.M. in Bankruptcy from St. John's
University School of Law in Jamaica, N.Y. Mr. Morse is also a
graduate of The University of Iowa and The University of Iowa
College of Law and formerly practiced with Mohr, Hackett,
Pederson, Blakley & Randolph P.C. in Phoenix.
The address of GCD's New York City office is:
12 E. 49th Street
New York, New York 10017-1028
Tel: (212) 812-2100
Founded nearly 100 years ago, Gardner Carton & Douglas LLP is a
leading national law firm with offices in Chicago, Washington, DC,
New York City, Milwaukee and Albany. The firm has some 250
lawyers and advisors practicing in corporate law, corporate
restructuring, government relations, health law, HR law (employee
benefits and labor and employment), intellectual property,
litigation and dispute resolution, real estate and environmental
law, and wealth planning and philanthropy. GCD is a member of the
World Law Group, a global consortium of firms in the world's major
commercial cities.
*********
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*********
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 2006. All rights reserved. ISSN: 1520-9474.
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