/raid1/www/Hosts/bankrupt/TCR_Public/060228.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, February 28, 2006, Vol. 10, No. 50
Headlines
AIR CARGO: Wants Exclusive Plan-Filing Period Extended to March 8
ALLIED HOLDINGS: Union Says CEO Pay Cut is Disguised Pay Increase
AMERICAN WOOD: Wants Court to OK Final Decree Closing Ch. 11 Case
ANCHOR GLASS: OCI Chemical Wants Contract Assumption Order Amended
ANCHOR GLASS: Assumes Diageo Glass Supply Agreement
ANCHOR GLASS: U.S. Trustee Objects to Employment of Three OCPs
ARCHON INC: Involuntary Chapter 11 Case Summary
ARMSTRONG WORLD: 4th Amended Plan Scraps Old Equity Distribution
ASARCO LLC: Gov't. Entities Want De Minimis Sale Process Amended
ASARCO LLC: Salt River Wants Five Electric Service Pacts Decided
ASPEON INC: Equity Deficit Tops $8 Million at December 31
ATA AIRLINES: Court Okays Engagement Letter with Tax Advisor KPMG
ATA AIRLINES: Asks Court to Disallow Twelve Proofs of Claim
BANC OF AMERICA: S&P Places Low-B Ratings on Six Cert. Classes
BCI DEVELOPMENT: Asks Court to Dismiss Chapter 11 Case
BLOUNT INT'L: Looks to Raise $450 Mil. from Sale of Common Shares
BRESNAN BROADBAND: S&P Assigns B- Rating to Second Lien Loan
BRESNAN COMM: Moody's Rates Second Lien Bank Facilities at B3
BROOKSTONE INC: Earns $17 Million for Period Ended December 31
C.M. CONTRACTORS: Case Summary & 23 Largest Unsecured Creditors
CALPINE CORPORATION: Closes $2 Billion DIP Financing
CALPINE CORP: Look for Bankruptcy Schedules on April 19
CALPINE CORP: Subsidiaries' CCCA Protection Stretched to April 20
CAPE SYSTEMS: Posts $374,000 Net Loss in Quarter Ended December 31
CDC MORTGAGE: Moody's Cuts Ratings on Four Class Certificates
CENTENNIAL COMMS: Exchange Offer for Senior Notes Expires March 23
CENTURY ALUMINUM: Incurs $148.7 Million Net Loss in Fourth Quarter
CHC INDUSTRIES: Wants Scope of Gardner Wilkes' Services Expanded
CII CARBON: S&P Rates $270 Million Sr. Sec. Bank Facility at B+
CINCINNATI BELL: Resolves ERISA Class Action Suit for $11 Million
CIRCLE-LEX: Case Summary & 19 Largest Unsecured Creditors
CIT GROUP: Delinquent Deals Cue Moody's to Review Low Ratings
CITIZENS COMMS: Earns $76.8 Million. in Fourth Quarter 2005
CMS ENERGY: Incurs $6 Million Net Loss in Fourth Quarter 2005
CREECH FUNERAL: Voluntary Chapter 11 Case Summary
CRESCENT REAL: Earns $14.5 Mil. of Net Income in Fourth Quarter
DANA CORP: Moody's Junks Sr. Notes Rating on Weak Asset Coverage
DANA CORP: Reportedly Hires Miller Buckfire and S&P Junks Ratings
DENBURY RESOURCES: Earns $57.2 Mil. of Net Income in 4th Quarter
DOBSON COMMS: Incurs $27.3 Million Net Loss in Fourth Quarter
ENCOMPASS HOLDINGS: Posts $1MM Net Loss in Quarter Ended Dec. 31
EXPRESS SCRIPTS: Earns $111 Million in Quarter Ended Dec. 31
FIDELITY MUTUAL: Rehabilitation Plan Hearing Set for April 19
FREEDOM 1999-1 CDO: Moody's Junks Ratings on Four Note Classes
FUGASITY CORP: Case Summary & 17 Largest Unsecured Creditors
GENERAL MARITIME: Earns $104.6 Million in Quarter Ended Dec. 31
HANGER ORTHOPEDIC: Moody's Affirms Junk Rating on Preferred Stock
HEATING OIL: Files Plan and Disclosure Statement in Connecticut
HOST MARRIOTT: Earns $74 Million of Net Income in Fourth Quarter
INTEGRATED ELECTRICAL: Can Pay Creditors' Undisputed Claims
INTEGRATED ELECTRICAL: Court Okays Federal DIP Bonding Facility
INTEGRATED ELECTRICAL: Can Obtain SureTec DIP Bonding Facility
INTERCHANGE WAREHOUSE: Case Summary & 12 Unsecured Creditors
INT'L MGT: $150,000 of $150MM Recovered After Receivership Order
ISORAY INC: Continuing Losses Fuel Going Concern Doubts
JOURNAL REGISTER: Moody's Rates $375 Mil. Credit Facility at Ba2
JUSTINE RICE: Case Summary & Largest Unsecured Creditor
KING PHARMACEUTICALS: Inks Drug Supply Deal with Arrow Int'l.
MERRILL LYNCH: Moody's Rates $2.95 Mil. Class L Certs. at (P)B3
MOUNTAIN CHEVROLET: Case Summary & 20 Largest Unsecured Creditors
MUSICLAND HOLDING: Asset Sale Objections Must Be Filed by March 17
MUSICLAND HOLDING: Gets Okay to Use Cash Collateral on Final Basis
NACCO MATERIALS: S&P Rates Proposed $225 Million Term Loan at BB-
NORTHAMPTON GENERATING: Fitch Cuts $153MM Bonds' Ratings to BB-
NORTHWEST AIR: Has Until March 1 to Reach Agreements with Unions
NVF COMPANY: Can Obtain Additional $1 Million of DIP Financing
OMEGA HEALTHCARE: Registers 3MM Common Shares Under Purchase Plan
ON TOP COMMS: Wants Plan-Filing Period Extended to March 26
ON TOP: Taps Patrick Communications as Broker For WRJH Station
PARKWAY HOSPITAL: Taps Arevalo & Berman as Malpractice Counsel
PERFORMANCE TRANSPORTATION: Court OKs Contract Rejection Process
PINNACLE ENTERTAINMENT: Buys President Missouri for $31.5 Million
PRESIDENT CASINO: Sells Capital Stock to Pinnacle for $31.5 Mil.
QUIGLEY COMPANY: Plan Confirmation Hearing Set for May 25
R.H. DONNELLEY: Discloses Fourth Quarter & Full-Year Fin'l Results
RIVERSTONE NETWORKS: U.S. Trustee Appoints Three-Member Committee
RIVERSTONE NETWORKS: Stockholder Wants Chapter 11 Case Dismissed
ROBERTO PERALES: Case Summary & 20 Largest Unsecured Creditors
ROCKWELL TECHNOLOGY: Case Summary & 5 Largest Unsecured Creditors
SALOMON HOME: Moody's Cuts Class M-4 Certificates Rating to B2
SIGNATURE POINTE: Can Use GE's Collateral Until May 31
SIGNATURE POINTE: Set Sights on $19.4 Million Texas Property
SIX FLAGS: Fitch Initiates Coverage by Assigning Low-B Ratings
SOLUTIA INC: Receives Commitment for $825 Million DIP Financing
SOUTH BEACH: Case Summary & 20 Largest Unsecured Creditors
SSA GLOBAL: Estimates $34 Mil. EBITDA in Second Qtr. Ended Jan. 31
STATION CASINO: Moody's Rates New $300MM Sr. Sub. Notes at Ba3
TITANIUM METALS: Inks $175-Mil. Credit Pact with U.S. Bank, et al.
TOYS 'R' US: Fitch Withdraws B Rating on $1 Billion Facility
TRAFFIC.COM INC: Equity Deficit Tops $97.6 Million at December 31
UNION AVENUE: Judge Stern Converts Case to Chapter 7 Liquidation
USG CORP: Classification & Treatment of Claims Under Ch. 11 Plan
VARTEC TELECOM: Wants to Employ "Unidentified" Consulting Expert
WALLET MASTERS: Case Summary & 5 Largest Unsecured Creditors
WORLDCOM INC: Court Approves Missouri Tax Settlement Pacts
WORLDCOM INC: Court Extends Tax Claim Objection Period to March 2
WSNET HOLDINGS: Court Okays Closing of World Satellite's Case
* Large Companies with Insolvent Balance Sheets
*********
AIR CARGO: Wants Exclusive Plan-Filing Period Extended to March 8
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Air Cargo Inc. asks the U.S. Bankruptcy Court for the District of
Maryland to further extend until Mar. 8, 2006, its exclusive
period to file a chapter 11 plan. The Debtor also wants until
May 10, 2006, to solicit acceptances of that plan.
The Debtor cites three reasons to support the extension:
1) The Debtor has entered a crucial stage of its plan
development as the mediation with Air France, the truckers
and other airlines move forward;
2) The Official Committee of Unsecured Creditors has reached a
global settlement with Silicon Valley Bank; and
3) The Debtor has circulated several versions of a draft plan
to key parties and is currently awaiting comments.
The Debtor contends that terminating its exclusive period to file
a chapter 11 plan would have an adverse impact on its ability to
continue to liquidate its assets in an orderly manner and could
possibly undermine the continuing mediation process.
Headquartered in Annapolis, Maryland, Air Cargo, Inc., provided
contract management, freight bill auditing and consolidated
freight invoicing and payment services for wholesale cargo
customers. The Company filed for chapter 11 protection on Dec. 7,
2004 (Bankr. D. Md. Case No. 04-37512). Alan M. Grochal, Esq., at
Tydings & Rosenberg, LLP, represents the Debtor. Carol L. Hoshal,
Esq., Dennis J. Shaffer, Esq., and Stephen B. Gerald, Esq., at
Whiteford, Taylor & Preston, represent the Official Committee of
Unsecured Creditors. When the Debtor filed for protection from
its creditors, it listed total assets of $16,300,000 and total
debts of $17,900,000.
ALLIED HOLDINGS: Union Says CEO Pay Cut is Disguised Pay Increase
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As reported in the Troubled Company Reporter on Feb. 24, 2006,
Allied Holdings, Inc. (Pink Sheets: AHIZQ.PK) disclosed that its
President and Chief Executive Officer, Hugh E. Sawyer, volunteered
to take a 15% cut in his annual salary. The salary reduction will
begin on Mar. 1, 2006.
The Teamsters Union says that this phony "pay cut" is really a
disguised pay increase.
Mr. Sawyer is one of the "key employees" to whom Allied sought
permission from U.S. Bankruptcy Court for the Northern District of
Georgia last fall to pay huge bonuses -- in Sawyer's case, up to
75% of his salary. Allied is the largest employer of Teamster
members in the carhaul industry.
The Teamsters say that Mr. Sawyer's current base annual salary is
$700,000. That calculates out to $367 per hour. So, even with a
15% cut (to an annual amount of $595,000, or $286 per hour),
Sawyer will actually receive a huge windfall after applying his
75% bonus. Mr. Sawyer seems guaranteed well over $1 million in
annual salary. Mr. Sawyer's gambit of claiming that he is
"sharing" the sacrifice with rank-and-file Teamsters is a sham.
Under Sawyer's plan, any pay cuts given to Allied will go directly
to fund Sawyer's huge pay increase. Allied has received Court
approval for over $9 million in bonuses and severance pay for more
than 80 executives and managers.
The Teamsters Union relates that it will never agree that one
penny of rank-and-file wage concessions will ever go to paying
bonuses to executives. The union has demanded, in writing to
Allied Labor Relations Vice President Bob Hutchison, that Allied
rescind management bonus payments before making any demand to
discuss wage concessions.
Mr. Sawyer's announcement of his pay cut does not rescind these
bonuses. The Teamsters and the Carhaul Local Unions stand firm in
defending their contract, the National Master Automobile
Transporters Agreement. The Teamsters say that it will continue
its commitment to preserving wages and benefits, and jobs, in the
automobile and truck transportation industry for the benefit of
Teamster-represented employees and their families.
Headquartered in Decatur, Georgia, Allied Holdings, Inc. --
http://www.alliedholdings.com/-- and its affiliates provide
short-haul services for original equipment manufacturers and
provide logistical services. The Company and 22 of its affiliates
filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga.
Case Nos. 05-12515 through 05-12537). Jeffrey W. Kelley, Esq., at
Troutman Sanders, LLP, represents the Debtors in their
restructuring efforts. Henry S. Miller at Miller Buckfire & Co.,
LLC, serves as the Debtors' financial advisor. Anthony J. Smits,
Esq., at Bingham McCutchen LLP, provides the Official Committee of
Unsecured Creditors with legal advice and Russell A. Belinsky at
Chanin Capital Partners, LLC, provides financial advisory services
to the Committee. When the Debtors filed for protection from
their creditors, they estimated more than $100 million in assets
and debts.
AMERICAN WOOD: Wants Court to OK Final Decree Closing Ch. 11 Case
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American Wood Preservers Institute, Inc., asks the U.S. Bankruptcy
Court for the Eastern District of Virginia to approve its Final
Report for its chapter 11 case and enter a Final Decree closing
its bankruptcy case.
In its Final Report, the Debtor tells the Court that four
requirements for substantial consummation of its confirmed Plan
under 11 U.S.C. Section 1101(2) have been met. These are:
A) Transfer of Property
The Plan proposed no further transfer of property other than
that property which will be disbursed to the creditors under
the Plan. None of the assets of the Debtor were proposed to be
transferred and none have been transferred.
B) Assumption by the Debtor of Management of Property
The Plan provided for the Debtor to stay in control of its
business and continue to operate its business after
confirmation. The Plan did not contemplate any other
individual or business entity taking control or assisting the
Debtor in the management of its business and property. Since
the Plan's effective date, the Debtor has remained in control
and operated its business pursuant to the terms of the Plan.
C) Distributions Under the Plan
In December 2005, the Debtor commenced distribution to all
holders of class 1 claims, the only class of claims to be paid
under the Plan. Those claims have been paid in full.
D) Administrative Costs & Unresolved Matters
All administrative costs have been paid in full and the Debtor
anticipates that there will be no more applications for
administrative expenses. All pending motions, contested
matter, fee applications and adversary proceedings have been
resolved.
Headquartered in Reston, Virginia, American Wood Preservers
Institute, Inc., a national industry trade association
representing the pressure-treated wood industry in the U.S., filed
for chapter 11 protection on Nov. 10, 2004 (Bankr. E.D. Va. Case
No. 04-14669). James Thomas Bacon, Esq., at Allred, Bacon,
Halfhill & Young, represents the Debtor. When the Company filed
for protection from its creditors, it listed more than $50,000 in
estimated assets and more than $100 million in estimated debts.
The Bankruptcy Court confirmed the Debtor's Plan of Reorganization
on Sept. 6, 2005.
ANCHOR GLASS: OCI Chemical Wants Contract Assumption Order Amended
------------------------------------------------------------------
The U.S Bankruptcy Court for the Middle District of Florida
approved the compromise between Anchor Glass Container Corporation
and OCI Chemical Corporation. The compromise provides that:
(a) the Debtor will immediately make an initial cure payment
of $1,309,242 to OCI;
(b) the remaining cure payment of $1,309,242 will be paid in
two equal amounts to OCI;
(c) OCI will have an allowed unsecured claim for $266,398;
(d) once the Debtor has paid all cure amounts, OCI will extend
credit terms to the Debtor; and
(e) the Debtor is entitled to a $840,000 rebate payable at
the end of the term of the OCI Contract.
The Court also authorizes the Debtor to assume the OCI contract.
As reported in the Troubled Company Reporter on Dec. 16, 2006, OCI
asked the Bankruptcy Court to lift the automatic stay so it can
terminate a supply contract with the Debtor.
OCI supplies soda ash to the Debtor pursuant to the supply
contract. The contract provides that if the Debtor is in default
on contract payments, OCI has the option to decline further
performance. On Aug. 9, 2005, OCI informed the Debtor through a
letter that they are declining further performance of the contract
due to the Debtor's numerous and repeated payment defaults.
However, the Debtor asked the Debtor to assume the supply contract
with OCI. The Debtor and OCI have compromised and eventually made
changes to the contract to provide for better terms and payments.
OCI Wants Order Amended
OCI contends that the OCI Contract Assumption Order conflicts with
the terms of the OCI Contract with the Debtor.
In the OCI Contract Assumption Order, the Debtor will be entitled
to a $840,000 rebate, upon full and complete performance of the
OCI Contract.
However, Edmund S. Whitson, III, Esq., at Akerman Senterfitt, in
Tampa, Florida, tells the Court that the OCI Contract provides
that any rebate to the Debtor will be calculated at a rate of
$1.13 per ton up to a maximum of $840,000.
The parties did not intend to modify the OCI Contract with
respect to any rebate provisions, Mr. Whitson clarifies.
Accordingly, OCI asks the Court to amend the Contract Assumption
Order to provide that "any rebate due to the Debtor will be
determined in accordance with the terms of the OCI Contract."
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. Edward J. Peterson, III, Esq., at
Bracewell & Guiliani, represents the Official Committee of
Unsecured Creditors. 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. 19;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
ANCHOR GLASS: Assumes Diageo Glass Supply Agreement
---------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
authorized Anchor Glass Container Corporation to assume and amend
its Glass Supply Agreement with Diageo North America, Inc.
As reported in the Troubled Company Reporter on Feb. 1, 2006,
Diageo and the Debtor are parties to a Glass Supply Agreement,
dated July 1, 2004, where Diageo committed to purchase glass
products from the Debtor through Dec. 31, 2006.
On July 1, 2005, Diageo made a claim against Anchor Glass for
costs and expenses associated with certain defective products that
Anchor Glass supplied to Diageo in April 2005.
Diageo is an important customer, asserts Kathleen S. McLeroy,
Esq., at Carlton Fields PA, in Tampa, Florida.
To date, Anchor Glass has not rejected the Glass Supply Agreement
and continues to supply goods to Diageo.
As part of the reorganization process, the Debtor and Diageo have
agreed to the compromise of the Prepetition Claim and enter into
an amended agreement.
Ms. McLeroy discloses that the Glass Supply Agreement will be
extended until December 21, 2008, with improved economics and
business terms. The Debtor has filed a redacted copy of the
Amended Agreement with the U.S. Bankruptcy Court for the Eastern
District of Michigan to protect confidential, proprietary
information.
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. Edward J. Peterson, III, Esq., at
Bracewell & Guiliani, represents the Official Committee of
Unsecured Creditors. 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. 19;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
ANCHOR GLASS: U.S. Trustee Objects to Employment of Three OCPs
--------------------------------------------------------------
Anchor Glass Container Corporation sought and obtained permission
from the U.S. Bankruptcy Court for the Middle District of Florida
to employ professionals in the ordinary course of its business.
As reported in the Troubled Company Reporter on Nov. 16, 2005, the
Debtor sought to employ:
A. Environmental Lawyers
* Boone, Smith, Davis, Hurst & Dickman, PC
* Doerner Saunders Daniel & Anderson, LLP
* Gray, Plant, Mooty, Mooty & Bennett, PA
* Holland & Knight LLP
* Kilpatrick Stockton LLP
* Plews Shadley Racher & Braun
B. Corporate and Litigation Professionals
* Hinshaw & Culbertson LLP
* Holland & Knight LLP
* Hunton & Williams LLP
* Lang Alton & Horst
* Myers & Russell, PA
* Butler Pappas Weihmuller Katz Craig LLP
C. Energy Lobbyists
* Brubaker & Associates
* Couch White LLP
* Lewis & Kappes, Professional Corporation
* McNees Wallace & Nurick LLC
* Sutherland Asbill & Brennan LLP
* Randall D. Quintell, PC
Among the ordinary course professionals hired, these professionals
asserted prepetition claims against the Debtor:
Firm Prepetition Claim
---- -----------------
Holland & Knight LLP $92,461
Praxis Environmental, Inc. $375,348
Trustee Complains
Given the substantial amount of the prepetition claims, the U.S.
Trustee asks the Debtor to identify the specific nature of the
postpetition services to be provided by the ordinary course
professionals and whether the prepetition obligation is waived.
The U.S. Trustee also asks the Debtor to provide any additional
facts that may be helpful in the evaluation the appropriateness of
the professionals' application.
Ken Salamon, vice president of Praxis Environmental, relates that
Anchor Glass asked his firm to provide environmental, remediation
and engineering services.
Rory C. Ryan, a partner at Holland & Knight LLP, in Orlando,
Florida, tells the Court that the Debtors asked his firm to
provide legal services.
The U.S. Trustee also complains that the affidavit filed by
Cynthia J. Randall of EFI Global, Inc., is unacceptable.
Anchor Glass asked EFI to provide environmental consultancy
services.
In her affidavit, Ms. Randall qualified the accuracy of her
statements because the Debtor did not yet provide certain
information, including a list of shareholders, officers,
directors and employees.
Ms. Randall also reported that Anchor Glass owes EFI $5,015 for
prepetition services.
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. Edward J. Peterson, III, Esq., at
Bracewell & Guiliani, represents the Official Committee of
Unsecured Creditors. 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. 19;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
ARCHON INC: Involuntary Chapter 11 Case Summary
-----------------------------------------------
Alleged Debtor: Archon, Inc.
1200 West San Pedro Street
Gilbert, Arizona 85233
Tel: (480) 892-9291
Involuntary Petition Date: February 24, 2006
Case Number: 06-00425
Chapter: 11
Court: District of Arizona (Phoenix)
Judge: Charles G. Case II
Petitioners' Counsel: Howard C. Meyers, Esq.
Burch & Cracchiolo, P.A.
702 East Osborn, #200
Phoenix, Arizona 85014
Tel: (602) 234-8762
Fax: (602) 234-0341
Petitioners Nature of Claim Claim Amount
----------- --------------- ------------
Pantheon Corporation Unsecured Loan $1,450,000
1200 West San Pedro Street
Gilbert, AZ 85233
Edna Arthur Unsecured Loan $35,000
625 East Palo Verde Street
Gilbert, AZ 85296
Stephen M. Arthur Unsecured Loan $13,000
625 East Palo Verde Street
Gilbert, AZ 85296
ARMSTRONG WORLD: 4th Amended Plan Scraps Old Equity Distribution
----------------------------------------------------------------
Armstrong World Industries, Inc., filed its modified Fourth
Amended Plan of Reorganization on February 21, 2006, in compliance
with District Court Judge Robreno's order.
Apart from technical modifications relating to the schedules of
executory contracts, AWI modified its Fourth Amended Plan to
delete the provisions governing the receipt of "New Warrants" by
Equity Interests holders in Class 12.
The New Warrants, as defined in the previously filed Fourth
Amended Plan, are warrants to purchase AWI's common stock pursuant
to a warrant agreement between Lazard Freres & Co. LLC, and the
financial consultants for the Official Committee of Unsecured
Creditors, the Official Committee of Asbestos Claimants, and Dean
M. Trafelet, as Legal Representative for Future Asbestos Personal
Injury Claimants.
AWI revised the classification and treatment of Equity Interests
in Class 12 to eliminate the distribution of warrants to
shareholders of AWI's parent company, Armstrong Holdings, Inc.
Hence, the Equity Interests holders will be impaired and will not
be entitled to vote on the Modified Plan.
AWI also notes that once all of the conditions precedent to the
Modified Plan's effectiveness have been satisfied or waived:
(a) the certificates previously evidencing ownership of
existing AWI Common Stock will be cancelled and will be
null and void;
(b) holders will no longer have any rights in respect of the
Equity Interests in AWI; and
(c) certificates will not evidence any rights under the
Modified Plan.
AWI believes that the modification is consistent with the recent
decision by the Third Circuit Court of Appeals upholding Judge
Robreno's previous ruling that the issuance of the New Warrants
under the Fourth Amended Plan violated the so-called "absolute
priority rule" of the Bankruptcy Code.
Judge Robreno will preside over the confirmation hearing on the
Modified Plan, which will commence on May 23, 2006.
A full-text copy of AWI's Modified Plan is available at no extra
charge at http://ResearchArchives.com/t/s?5cf
About Armstrong World
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 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. The Debtors
tapped the Feinberg Group for analysis, evaluation, and treatment
of personal injury asbestos claims.
Mark Felger, Esq. and David Carickhoff, Esq., at Cozen and
O'Connor, and Robert Drain, Esq., Andrew Rosenberg, Esq., and
Alexander Rohan, Esq., at Paul, Weiss, Rifkind, Wharton &
Garrison, represent the Official Committee of Unsecured Creditors.
The Creditors Committee tapped Houlihan Lokey for financial and
investment advice. The Official Committee of Asbestos Personal
Injury Claimant hired Ashby & Geddes as counsel.
When the Debtors filed for protection from their creditors, they
listed $4,032,200,000 in total assets and $3,296,900,000 in
liabilities. (Armstrong Bankruptcy News, Issue No. 89; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
ASARCO LLC: Gov't. Entities Want De Minimis Sale Process Amended
----------------------------------------------------------------
As reported in the Troubled Company Reporter on Feb. 7, 2006,
ASARCO LLC and its debtor-affiliates ask the U.S. Bankruptcy Court
for the Southern District of Texas in Corpus Christi for authority
to establish de minimis sale procedures for:
(a) personal property with a purchase price of $100,000 or
less; and
(b) real property with a purchase price of $500,000 or less.
Jack L. Kinzie, Esq., at Baker Botts LLP, in Dallas, Texas,
clarifies that personal property constituting a de minimis asset
excludes Accounts and Inventory as defined in the Oct. 27, 2005
DIP Financing Agreement.
Responses
1. City of El Paso, et al.
The City of El Paso, Nueces County, Harris County, City of
Houston, Houston ISD and City of Pasadena, in Texas, do not
oppose the creation and approval of an expeditious process for
the sale of the assets.
However, Diane W. Sanders, Esq., at Linebarger Goggan Blair &
Sampson LLP, in Austin, Texas, contends that the Debtors fail to
provide that liens will attach to the sale proceeds. Ms. Sanders
notes that a first priority lien attaches to ASARCO LLC's
property on January 1st of each tax year, to secure payment of
all tax, penalty and interest assessed by the Texas Taxing
Jurisdictions.
In addition, the Debtors fail to provide a procedure for paying
priority tax liens that may attach to the property sold. The
Taxing Jurisdictions object to the proposed process to the extent
the taxes are not paid at closing or sufficient sales proceeds
are not escrowed to cover the claims as filed, plus statutory
interest, pending allowance of the Taxing Jurisdictions' claims.
Accordingly, the Texas Taxing Jurisdictions ask the Court to
direct the Debtors to pay the ad valorem property taxes, plus
statutory interest, in full, from the proceeds of the sale at the
closing of the sale, before the payment to other lien creditors.
The Texas Taxing Jurisdictions ask the Court, in the alternative,
to put in escrow amount sufficient to cover their tax claims as
filed, plus statutory interest, pending allowance of the claims.
The Taxing Jurisdictions also want to be notified of all proposed
sales of Texas assets.
2. States of Texas, New Mexico, et al.
The U.S. Government, the states of Texas, New Mexico, Missouri,
Idaho, Colorado, Arizona, Montana, New Jersey, Oklahoma and
Washington, and the California Department of Toxic Substances ask
the Court to amend the sale procedures.
Hal F. Morris, Esq., Attorney for the State of Texas, tells the
Court that the Debtors have already proposed and consummated
sales of certain parcels. The sales, however, does not clarify
its effect to the clean-up liabilities of the sites.
State and federal laws, particularly the Comprehensive
Environmental Response, Compensation, and Liability Act and the
Resource Conservation and Recovery Act, Mr. Morris says, make
clear that purchasers may not acquire property through bankruptcy
cleansed from any obligation to correct environmental violations
on the property. Any purchaser of contaminated property from the
Debtor is not permitted to own or operate property without having
to comply with environmental laws that apply to all owners and
operations of property.
To avoid confusion, and to ensure that potential purchasers are
aware of the need to perform their own due diligence, the States
ask the Court to amend the Procedures Order so that the Order
will not release any purchaser or the Debtors of the
environmental liabilities subject to the property.
In addition, the States also ask the Court to amend the
Procedures Order so that the Order will not restrict any
environmental regulatory authority to pursue all of its rights
and remedies in any court against any entity liable with respect
to the property.
The States also want:
(a) notices provided to the Attorneys General in each state,
the U.S. Department of Justice, and the state and federal
environmental protection agencies, at least 30 days before
the Closing Date;
(b) the sale notice to include a good faith estimate of
environmental clean-up costs. If the environmental clean-
up costs and the proposed purchase price would produce
more than $500,000, the Debtors' proposed sale procedures
should not apply; and
(c) the Debtors to provide copies to interested parties of
all environmental liabilities reports related to the
subject property, and also provide the interested party
with information about the purchaser, including the
purchaser's financial capacity to perform any clean-up
tasks that it will be required to perform after the
purchase.
The proposed sale procedures may not apply to combined sales, the
States assert.
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. Lehman Brothers Inc. provides the
ASARCO with financial advisory services and investment banking
services. Paul M. Singer, Esq., James C. McCarroll, Esq., and
Derek J. Baker, Esq., at Reed Smith LLP give legal advice to
the Official Committee of Unsecured Creditors and David J.
Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee. 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 proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7
Trustee. (ASARCO Bankruptcy News, Issue No. 17; Bankruptcy
Creditors' Service, Inc., 215/945-7000).
ASARCO LLC: Salt River Wants Five Electric Service Pacts Decided
----------------------------------------------------------------
Salt River Project Agricultural Improvement and Power District is
an agricultural improvement district that provides electricity to
residents in and around Phoenix, Arizona, including ASARCO LLC's
mines in the Gila and Pinal counties.
SRP furnishes electricity to ASARCO through five separate
accounts relating to five separate substations. Each of the five
Electric Service Agreements includes a supplemental Interruptible
Rider.
Each Interruptible Rider differs on each site's substation
configurations and electrical load conditions. Generally, the
Interruptible Riders provide rate discounts to ASARCO in exchange
for ASARCO permitting SRP to interrupt electrical service
instantaneously and on 10-minute notice.
Pursuant to an agreed order, the Court granted a $560,000
postpetition security deposit and weekly prepayments to SRP as
security for postpetition electrical services furnished to
ASARCO. Both the deposit and the weekly prepayments may escalate
as ASARCO's electricity usage increases.
SRP asks Judge Schmidt of the U.S. Bankruptcy Court for the
Southern District of Texas in Corpus Christi to compel ASARCO to
immediately assume or reject the Agreements.
Matthew A. Rosenstein, Esq., in Corpus Christi, Texas, reports
that ASARCO is in default of $3,134,436, plus continuing interest
and reasonable attorneys' fees, for its prepetition electrical
usage under the Agreements. SRP has filed a secured proof of
claim.
Mr. Rosenstein also notes that ASARCO has continued to receive
pricing discounts averaging $88,000 per month, even though it has
not yet assumed the Agreements.
Absent the assumption of the five Electric Service Agreements and
their Interruptible Riders, Mr. Rosenstein says SRP will
immediately cause the rates to revert to less favorable rates.
In addition, SRP will have an administrative claim and will seek
payment of $443,166 plus any continuing discounts.
Since the Petition Date through December 2005, ASARCO has paid
$443,116 less than it would have because of the Agreements. SRP
could have charged ASARCO the higher rate it charges other
customers if the Agreements are not in effect, Mr. Rosenstein
points out.
If ASARCO properly utilizes its reasonable business judgment, Mr.
Rosenstein says ASARCO should:
(a) cure the outstanding indebtedness owed to SRP under the
Agreements to eliminate continuing interest charges and
attorneys fees; and
(b) assume the Electric Service Agreements supplemented by the
Interruptible Riders to be able to continue taking
advantage of the favorable electricity rates.
If ASARCO assumes the Agreements, SRP asks the Court to require
ASARCO to immediately cure all existing defaults.
In the alternative, if ASARCO decides to reject the Agreements,
SRP asks the Court:
(a) for permission to immediately commence charging ASARCO the
E-65 rate, without the Interruptible Rider discounts; and
(b) to order ASARCO to pay as an administrative expense the
difference between the applicable E-65 rate and the
discounted Interruptible Rider rate.
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. Lehman Brothers Inc. provides the
ASARCO with financial advisory services and investment banking
services. Paul M. Singer, Esq., James C. McCarroll, Esq., and
Derek J. Baker, Esq., at Reed Smith LLP give legal advice to
the Official Committee of Unsecured Creditors and David J.
Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee. 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 proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7
Trustee. (ASARCO Bankruptcy News, Issue No. 17; Bankruptcy
Creditors' Service, Inc., 215/945-7000).
ASPEON INC: Equity Deficit Tops $8 Million at December 31
---------------------------------------------------------
Aspeon Inc., delivered its financial results for the quarter ended
Dec. 31, 2005, to the Securities and Exchange Commission on Feb.
15, 2006.
Aspeon incurred a $53,485 net loss on zero revenues for the three-
months ended Dec. 31, 2005, compared to zero revenues and profits
for the same period in 2004.
At Dec. 31, 2005, the Company had only $7 in total assets, no
operating business or other source of income, outstanding
liabilities of approximately $8.1 million and an outstanding
lawsuit filed by some of its shareholders. As previously reported
in the Troubled Company Reporter, the Company reported total
assets of $30,000 at Sept. 30, 2005.
Aspeon ceased operations following the termination of its
operating businesses at Dec. 31, 2003, and the transfer of its
assets to the Trustee Frank G. Blundo Jr., PC, for the benefit of
Aspeon and CCI Group, Inc.'s creditors.
A full-text copy of the regulatory filing is available for free
at http://researcharchives.com/t/s?5d3
Going Concern Doubt
Aspeon's independent public accountant, Larry O'Donnell CPA, PC,
in a report dated Oct. 7, 2005, raised substantial doubt about the
Company's ability to continue as a going concern citing:
* significant losses,
* a working capital deficit as of June 30, 2004, and
* no ongoing source of income.
About Aspeon
Aspeon Inc. used to design, manufacture and sell open systems
touch screen point-of-sale computers for the food service and
retail industries. The Company also provided customized,
integrated business application software.
ATA AIRLINES: Court Okays Engagement Letter with Tax Advisor KPMG
-----------------------------------------------------------------
Judge Basil H. Lorch of the U.S. Bankruptcy Court for the Southern
District of Indiana's authorized ATA Airlines, Inc., and its
debtor-affiliates to retain KPMG, LLP, to perform the services set
forth in an engagement letter dated January 11, 2006, which
supersedes the original engagement letter dated January 12, 2005.
The Court approved the Debtor's supplemental application in all
respects.
As reported in the Troubled Company Reporter on Feb. 1, 2006, the
Reorganizing Debtors sought the Court's authority to employ KPMG
LLP, as their tax advisor to perform services set forth in an
engagement letter dated January 11, 2006, which supersedes the
original engagement letter dated January 12, 2005.
The 2006 Engagement Letter reflects:
(i) changes in the rate and discounts agreed upon by the
parties; and
(ii) a clarification of the procedures for the determination of
whether the expertise of one or more KPMG specialty
practice groups may be required in connection with KPMG's
work.
The Debtors expect KPMG to continue to provide:
(a) advice and assistance to the Debtors regarding tax
planning issues, including, but not limited to, assistance
in estimating net operating loss carry forwards,
cancellation of indebtedness income, attribute reduction,
tax treatment of professional fees, federal taxes, and
state and local taxes;
(b) advice and assistance on the tax consequences of proposed
plans of reorganization, including, but not limited to,
assistance in the preparation of Internal Revenue Service
ruling requests regarding the future tax consequences of
alternative reorganization structures;
(c) assistance regarding transaction taxes and state and local
sales and use taxes;
(d) assistance regarding tax matters related to the Debtors'
employee retirement plans;
(e) assistance regarding any existing or future IRS, state
and/or local tax examinations; and
(f) other advisory, advice, research, review, planning or
analysis regarding tax issues as may be requested from
time to time.
Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA
Holdings Corp. -- http://www.ata.com/-- is the nation's 10th
largest passenger carrier (based on revenue passenger miles) and
one of the nation's largest low-fare carriers. ATA has one of the
youngest, most fuel-efficient fleets among the major carriers,
featuring the new Boeing 737-800 and 757-300 aircraft. The
airline operates significant scheduled service from Chicago-
Midway, Hawaii, Indianapolis, New York and San Francisco to over
40 business and vacation destinations. Stock of parent company,
ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. The
Company and its debtor-affiliates filed for chapter 11 protection
on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868
through 04-19874). Terry E. Hall, Esq., at Baker & Daniels,
represents the Debtors in their restructuring efforts. Daniel H.
Golden, Esq., Lisa G. Beckerman, Esq., and John S. Strickland,
Esq., at Akin Gump Strauss Hauer & Feld, LLP, represents the
Official Committee of Unsecured Creditors. When the Debtors filed
for protection from their creditors, they listed $745,159,000 in
total assets and $940,521,000 in total debts. (ATA Airlines
Bankruptcy News, Issue No. 48; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
ATA AIRLINES: Asks Court to Disallow Twelve Proofs of Claim
-----------------------------------------------------------
ATA Airlines, Inc., and its debtor-affiliates object to 12 proofs
of claim filed in their Chapter 11 cases on the grounds that:
(a) the amounts claimed do not match the amounts reflected in
their books and records; or
(b) they are not liable for the Claims.
The Reorganizing Debtors ask the U.S. Bankruptcy Court for the
Southern District of Indiana to disallow the 12 Claims in their
entirety, or to reduce the claim amounts to the amounts shown as
due and owing in their books and records.
A list of the 12 Claims is available at no charge at:
http://bankrupt.com/misc/4th_omnibus_claims.pdf
Responses
(a) Goodrich Corporation
Goodrich Corporation filed Claim Nos. 69 and 1354 against ATA
Airlines, Inc., pursuant to a Wheel and Brake Service and
Purchase Agreement dated June 23, 2000.
In September 2005, Goodrich and ATA Airlines entered into a
settlement agreement to resolve all actual and potential claims
and causes of action arising out of the Purchase Agreement.
Goodrich and ATA Airlines entered into a new Definitive Agreement
according to the terms and conditions contained in the Settlement
Agreement, which was filed with the Court under seal.
Goodrich and ATA Airlines agreed to take certain joint and
individual actions once the Definitive Agreement becomes
effective, including -- on Goodrich's part -- the withdrawal of
its Claims.
Since October 2005, Goodrich has contacted ATA Airlines' counsel
numerous times to arrange for discussions to finalize the
Definitive Agreement. However, ATA Airlines has been
unresponsive.
Goodrich contends that any obligation it has to withdraw its
Claims does not arise until after it has finalized its Definitive
Agreement with ATA Airlines.
Goodrich says the Reorganizing Debtors' objection to its Claims
is, therefore, premature at this time and should be denied.
(b) GOAA
The Greater Orlando Aviation Authority asserts that the
Reorganizing Debtors' assertion that their books and records do
not reflect its Claim is insufficient to overcome the prima facie
validity of its Claim.
The Reorganizing Debtors have the burden of producing sufficient
evidence to rebut the prima facie claim, the GOAA says.
(c) Ameritech
Ameritech Credit Corporation says it is engaged in ongoing
settlement discussions with the Reorganizing Debtors so it cannot
adequately respond to the Reorganizing Debtors' objection.
Ameritech acknowledges that the amount of its claim is not
accurate at this time because Ameritech has received some lease
payments from the Reorganizing Debtors since the Claim was filed.
However, Ameritech still maintains a substantial claim against the
Reorganizing Debtors.
Ameritech and the Reorganizing Debtors are trying to restructure
all of the equipment lease schedules between the parties. To
date, no final agreement has been reached.
(d) Key Equipment Finance
Key Equipment Finance, Inc., notes that the Reorganizing Debtors'
Objection relates to four claims: two against ATA Airlines based
on two unexpired leases of personal property, and two against
ATA Holdings Corp. based on its guaranties of ATA Airlines'
obligations under the Leases:
Filed Revised
Key Claim # Debtor Claim Amount Claim Amount
----------- ------ ------------ ------------
1300 Holdings $1,227,116.53 $687,901.52
1302 Holdings $3,021,693.98 $2,202,475.45
1346 ATA Airlines $1,227,116.53 $687,901.52
1348 ATA Airlines $3,021,693.98 $2,202,475.45
------------- -------------
TOTAL: $8,497,621.02 $5,780,753.94
============= =============
The revised claim amounts account for all postpetition payments
ATA Airlines has made to Key on account of the Key Leases.
According to Key, it cannot directly respond to the Reorganizing
Debtors' claim amounts, as listed in their books and records,
because the Reorganizing Debtors did not include those amounts in
the Objection.
Stipulation Resolving Claim No. 1106
Claim No. 1106 filed by National City Bank of Indiana relates to a
prepetition guaranty by ATA Holdings Corp. of obligations owed to
National City Bank by ATA Airlines under a credit agreement dated
December 19, 2002.
Under the Credit Agreement, National City Bank issued Letters of
Credit at the Debtors' direction and request. The Letter of
Credit Facility is fully secured by cash deposited to accounts
subject to National City Bank's control.
As previously reported, ATA Airlines and ATA Holdings sought and
obtained the Court's authority to obtain postpetition financing
under the Credit Agreement to continue the extension of credit
under the Letter of Credit Facility on a postpetition basis. ATA
Airlines has also executed amendments to the Credit Agreement.
With respect to each amendment to the Credit Agreement, ATA
Holdings has executed a consent and confirmation of its guaranty
of ATA Airline's obligations under the Credit Agreement.
Consequently, the parties stipulate that by virtue of the order
approving the National City Bank Credit Agreement and the loan
documents executed pursuant to Agreement, the liability asserted
in National City Bank's Claim No. 1106 is a postpetition liability
and obligation of ATA Holdings.
Accordingly, National City Bank will not participate or receive
any distribution as a prepetition claimant of ATA Holdings with
respect to Claim No. 1106.
* * *
The Court disallows in their entirety Claim Nos. 276 and 277 filed
by Ronald Callahan, and Claim No. 1102 filed by Horton Hodges.
The Reorganizing Debtors' objection to National City Bank's Claim
No. 1106 is resolved pursuant to the stipulation filed by the
Reorganizing Debtors.
Judge Lorch directs the Reorganizing Debtors and Key Equipment
Finance, Inc., to file a stipulation reflecting the agreement
reached between the parties regarding Claim Nos. 1300, 1302 and
1346.
The Court will consider the Debtors' Objection to these claims at
a later date:
-- Key Equipment's Claim No. 1348;
-- Ameritech's Claim No. 1210;
-- Goodrich's Claim Nos. 1354 and 69; and
-- Greater Orlando Aviation Authority's Claim No. 2052
Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA
Holdings Corp. -- http://www.ata.com/-- is the nation's 10th
largest passenger carrier (based on revenue passenger miles) and
one of the nation's largest low-fare carriers. ATA has one of the
youngest, most fuel-efficient fleets among the major carriers,
featuring the new Boeing 737-800 and 757-300 aircraft. The
airline operates significant scheduled service from Chicago-
Midway, Hawaii, Indianapolis, New York and San Francisco to over
40 business and vacation destinations. Stock of parent company,
ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. The
Company and its debtor-affiliates filed for chapter 11 protection
on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868
through 04-19874). Terry E. Hall, Esq., at Baker & Daniels,
represents the Debtors in their restructuring efforts. Daniel H.
Golden, Esq., Lisa G. Beckerman, Esq., and John S. Strickland,
Esq., at Akin Gump Strauss Hauer & Feld, LLP, represents the
Official Committee of Unsecured Creditors. When the Debtors filed
for protection from their creditors, they listed $745,159,000 in
total assets and $940,521,000 in total debts. (ATA Airlines
Bankruptcy News, Issue No. 48; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
BANC OF AMERICA: S&P Places Low-B Ratings on Six Cert. Classes
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to Banc of America Commercial Mortgage Trust 2006-1's
$2.04 billion commercial mortgage pass-through certificates
series 2006-1.
The preliminary ratings are based on information as of
Feb. 24, 2006. Subsequent information may result in the
assignment of final ratings that differ from the preliminary
ratings.
The preliminary ratings reflect:
* the credit support provided by the subordinate classes of
certificates;
* the liquidity provided by the trustee;
* the economics of the underlying loans; and
* the geographic and property type diversity of the loans.
Class A-1, A-2, A-3, A-4, A-1A, A-M, A-J, XP, B, C, and D are
currently being offered publicly. The remaining classes will be
offered privately. Standard & Poor's analysis determined that, on
a weighted average basis, the pool has a:
* debt service coverage of 1.40x;
* a beginning LTV of 99.1%; and
* an ending LTV of 87.2%.
Preliminary ratings assigned:
Banc of America Commercial Mortgage Trust 2006-1
Class Rating Preliminary Recommended credit
amount ($) support (%)
----- ------ ----------- ------------------
A-1 AAA 81,500,000 30.000
A-2 AAA 84,400,000 30.000
A-3 AAA 155,100,000 30.000
A-4 AAA 621,000,000 30.000
A-1A AAA 355,399,000 30.000
A-M AAA 204,470,000 20.000
A-J AAA 143,129,000 13.000
XP AAA TBD N/A
B AA+ 20,447,000 12.000
C AA 23,003,000 10.875
D AA- 20,447,000 9.875
A-SBFL AAA 133,894,000 30.000
E A 35,782,000 8.125
F A- 20,447,000 7.125
G BBB+ 25,559,000 5.875
H BBB 23,003,000 4.750
J BBB- 28,115,000 3.375
K BB+ 7,667,000 3.000
L BB 10,224,000 2.500
M BB- 7,667,000 2.125
N B+ 2,556,000 2.000
O B 5,112,000 1.750
P B- 7,668,000 1.375
Q NR 28,114,849 0.000
XC* AAA 2,044,703,849 N/A
* Interest-only class with a notional amount.
NR -- Not rated.
TDB -- To be determined.
N/A -- Not applicable.
BCI DEVELOPMENT: Asks Court to Dismiss Chapter 11 Case
------------------------------------------------------
BCI Development, L.P., asks the U.S. Bankruptcy Court for the
District of Maryland to dismiss its chapter 11 proceeding.
Alan M. Grochal, Esq., at Tydings & Rosenberg LLP, reminds the
Court the Debtor's bankruptcy proceeding was initiated in order to
resolve a contract dispute with the Mayor and City Council of
Baltimore, Maryland, in connection with the construction by the
Debtor of the Northern District Police Station.
Mr. Grochal says the Debtor's only asset is the contract
receivable, which was derived from the claim against Baltimore
City. The Debtor's creditors, with the exception of insiders,
have all been paid by the guarantors of each particular debt.
The Debtor believes that it is in its best interest and in the
interest of all remaining insider creditors, for the chapter 11
case to be dismissed.
Headquartered in Lanham, Maryland, BCI Development, L.P., filed
for chapter 11 protection on August 13, 2004 (Bankr. D. Md. Case
No. 04-29041). Alan M. Grochal, Esq., at Tydings & Rosenberg,
LLP, represents the Debtor in its restructuring. When the Debtor
filed for protection from its creditors, it listed assets of
$5,000,000 and $2,883,087 of debts.
BLOUNT INT'L: Looks to Raise $450 Mil. from Sale of Common Shares
-----------------------------------------------------------------
Blount International, Inc., filed a Registration Statement with
the Securities and Exchange Commission to allow the sale of common
shares amounting to $450,000,000, and the resale of common shares
held by these selling shareholders:
Selling Shareholder Common Shares
------------------- -------------
Lehman Brothers Merchant
Banking Partners II, L.P. 8,918,999
Teachers Insurance and
Annuity Association of America 218,104
James S. Osterman 42,624
Kenneth O. Saito 13,846
Richard H. Irving, III 54,645
Lehman Brothers holds 18% of the Company's common stock.
The Company will use net proceeds received from the sale of common
shares for general corporate purposes. It will not receive any
proceeds from the resale of common shares held by the selling
shareholders
The Company's Restated Certificate of Incorporation authorizes the
issuance of up to 100,000,000 common shares par value $.01 per
share. On September 30, 2005, there were 46,819,139 common shares
issued and outstanding. In addition, 2,783,824 shares of stock
were issuable upon exercise of vested options outstanding.
The Company has not paid dividends since 1999 on its common stock.
Its amended and restated credit facilities prohibit it from paying
any dividends. Additionally, the terms of its 8% Senior
Subordinated Notes due 2012 limit its ability to pay dividends.
The Company's common stock is listed on the New York Stock
Exchange under the BLT trading symbol. The Company's common
shares traded between $16 and $17 this month.
A full-text copy of the Registration Statement is available at no
extra charge at http://ResearchArchives.com/t/s?5db
Blount International, Inc. -- http://www.blount.com/-- is a
diversified international company operating in three principal
business segments: Outdoor Products, Industrial and Power
Equipment and Lawnmower. Blount sells its products in more than
100 countries around the world.
As of December 31, 2005, the Company' equity deficit narrowed to
$145,187,000 from a $256,154,000 deficit at December 31, 2004.
Blount and its affiliates are parties to:
-- a revolving credit facility of up to $100.0 million;
-- a $4.9 million Canadian term loan facility;
-- a $265.0 million term B loan facility; and
-- a $50.0 million second collateral institutional loan
facility;
following a series of refinancing transactions executed on
August 9, 2004. Moody's Investor Services assigned its B1 rating
to the loan facilities on June 13, 2005, and Standard & Poor's
Ratings Service put a B+ rating on the loans when it reviewed them
on Aug. 9, 2004.
BRESNAN BROADBAND: S&P Assigns B- Rating to Second Lien Loan
------------------------------------------------------------
Standard & Poor's Ratings Services said assigned its 'B+'
corporate credit rating to Purchase, New York-based Bresnan
Broadband Holdings LLC. The outlook is stable.
In addition, Standard & Poor's assigned ratings to wholly owned
Bresnan Communications LLC's proposed $600 million aggregate
facilities as:
* a 'B+' bank loan rating was assigned to the company's
first-lien term loans and revolving credit facility; and
* a 'B-' rating was assigned to the second-lien term loan.
The recovery rating for the first-lien term loans and revolving
facility is '3', suggesting meaningful recovery (50%-80%) in the
event of a payment default or bankruptcy. The second-lien term
loan is rated two notches below the corporate credit rating, at
'B-', based on the significant amount of priority obligations from
the first-lien term loan and revolving facility. The recovery
rating for the second-lien term loan is '5', suggesting negligible
recovery (0%-25%) in the event of payment default or bankruptcy.
The bank loan rating is based on preliminary documentation subject
to receipt of final information. Pro forma debt is approximately
$476.8 million.
Initial bank proceeds of $476.8 million will be used to refinance
the existing bank credit facility, and redeem approximately $150
million in preferred stock. Bresnan will also have access to a
$150 million, first-lien revolving facility, of which $26.8
million will be drawn upon closing.
"The ratings on Bresnan reflect a highly leveraged financial
profile, including negative discretionary cash flow; below
industry average EBITDA margins; high churn of over 3% per month;
and limited opportunities for cost efficiencies because of small
scale and low system densities," said Standard & Poor's credit
analyst Allyn Arden.
Tempering factors include:
* weak competition for voice and data in its generally low
density markets, primarily from Qwest;
* a fully upgraded plant with two-way capability along with the
revenue potential associated with offering enhanced services;
* the launch of a cable telephony product, which should
contribute to win-backs from the satellite providers;
* moderating basic video subscriber losses; and
* the company's programming purchasing agreement with Comcast.
BRESNAN COMM: Moody's Rates Second Lien Bank Facilities at B3
-------------------------------------------------------------
Moody's Investors Service assigned a B2 corporate family rating to
Bresnan Communications, LLC and assigned B1 and B3 ratings to its
proposed first and second lien bank facilities.
Facilities consist of a $150 million senior secured first lien
revolving credit facility, a $75 million senior secured first lien
term loan A, a $275 million senior secured first lien term loan B,
and a $100 million senior secured second lien term loan.
Bresnan will use proceeds to refinance existing debt and to
repurchase $150 million of sponsor preferred equity. The ratings
reflect high financial risk, less favorable operating metrics than
cable peers, considerable competition from direct broadcast
satellite operators and lack of scale, offset by expectations for
growing cash flow from advanced services, advantages achieved
through Bresnan's relationship with Comcast Corporation, lower
competitive regional Bell operating company risk relative to
peers, and a still meaningful equity cushion even after repayment
of the preferred equity. The ratings outlook is stable, and this
is the first time Moody's has assigned public ratings to Bresnan.
Moody's assigned these ratings:
Issuer: Bresnan Communications LLC
* B2 Corporate Family Rating
* B1 First Lien Bank Facilities
* B3 Second Lien Bank Facilities
* Stable Outlook
The B2 corporate family rating incorporates Bresnan's substantial
financial risk, including debt of approximately 6.8 times EBITDA,
weak coverage of interest and capital expenditures, and no free
cash flow expected for the first two years. Lack of scale, weak
operating metrics relative to incumbent cable peers and
considerable DBS competition also constrain the rating. Potential
for growing cash flow through penetration of advanced services,
the more benign RBOC competitive environment in Bresnan's
footprint relative to incumbent cable peers, the benefits achieved
through Bresnan's relationship with Comcast Corporation and a
meaningful equity cushion, however, support the rating.
Bresnan faces substantial financial risk given its 6.8 times
leverage, and Moody's does not anticipate Bresnan will generate
any free cash flow from operations prior to 2008 due to its high
capital expenditures and cash interest expense. Furthermore,
Bresnan lacks the geographic diversity and potential for greater
advertising revenue of larger cable operators, although its
relationship with Comcast allows the company to purchase
programming at a much lower cost than most cable operators of its
size and Bresnan benefits by sharing Comcast's national ad sales
rep.
Low basic subscriber penetration plays a role in Bresnan's
revenues per homes passed ratio in the low $400 range, somewhat
below most of its high yield incumbent cable operator peers. While
Moody's expects this ratio to improve somewhat as more customers
purchase advanced services such as high speed data, telephony, and
digital video packages, the ratio is unlikely to ever match high
yield cable peers such as Cablevision or Patriot Media, which
currently have ratios in the $700 range.
Bresnan's EBITDA margin of approximately 30% is also considerably
lower than its peers. Moody's attributes a portion of the margin
differential to spending on customer service and marketing which
will likely improve retention and thus views it positively. Some
of the difference, however, results from the inherently less
efficient system economics required by the less densely populated
location of its systems and is unlikely to change. Finally, DBS
operators, well suited to serving customers in Bresnan's
territory, create considerable competitive challenge.
Moody's anticipates, however, that Bresnan's cash flow will rise
with increased penetration of advanced services. The company has
completed the bulk of the upgrade necessary after acquiring the
systems in 2003 and is already offering the triple play bundle in
two thirds of its footprint.
Additionally, Bresnan purchases the majority of its programming
services from a subsidiary of Comcast at Comcast negotiated rates
and thus achieves margin benefits. Moody's considers this
relationship with Comcast unlikely to change due to Comcast's
common equity ownership stake in Bresnan. The less intense RBOC
competition in Bresnan's territory also supports the rating.
Qwest, the RBOC that overlaps with Bresnan, possesses far less
financial flexibility than other RBOCs; Moody's views a
competitive video product from Qwest in Bresnan's territory as
unlikely over the intermediate term.
Furthermore, the geography makes offering digital subscriber lines
to all customers in Bresnan's footprint less economically
attractive for Qwest than in an area with higher population
density, thus inhibiting competition for high speed data
subscribers in Moody's view. Finally, lenders benefit from an
equity cushion of approximately 30% even after the repayment of
preferred stock funded by the proposed transaction.
The stable outlook reflects Moody's expectations that Bresnan's
leverage will decline to the mid to low 6 times range during 2006,
driven by EBITDA growth. The credit facility provides flexibility
for an incremental first lien facility as well as high yield
notes; the current ratings do not incorporate utilization of
either.
Any increase in leverage resulting from such additional debt
issuances would likely pressure ratings down. Continued
shareholder rewards leading to increased leverage would also have
negative ratings implications, as would evidence of inability to
drive penetration of advanced services. The stable outlook and
ratings also assume the Comcast relationship will continue, and
any change causing material margin deterioration could impact
ratings. Bresnan could achieve a B1 rating with leverage below 6
times and breakeven to positive free cash flow from operations.
In addition to leverage in the high 6 times range, Bresnan's weak
coverage creates financial risk. Fixed charge coverage, as
measured by EBITDA less capital expenditures to cash interest,
will likely remain below 1 time throughout 2006, as it has been
over the past several years. Moody's estimates cash interest
coverage in the low 2 times range. The $150 million revolver
provides adequate liquidity, noting that Moody's anticipates the
company will rely on this facility to fund capital expenditures
throughout 2006.
The B1 rating on the first lien facility reflects its senior most
position in the capital structure and security in all assets.
Although the first lien facility comprises approximately 80% of
total debt, the high collateral coverage warrants a rating one
notch higher than the B2 corporate family rating. Moody's
believes the cable systems would retain meaningful collateral
value in distress. Furthermore, both first and second lien
lenders benefit from a fairly significant equity cushion of
approximately 30%. Moody's notched the $100 million second lien
bank debt down to B3 due to its subordination to the first lien
debt.
Bresnan Communications is a broadband communications company
serving almost 300,000 customers across Colorado, Montana,
Wyoming, and Utah.
BROOKSTONE INC: Earns $17 Million for Period Ended December 31
--------------------------------------------------------------
Brookstone, Inc., reported financial results for the fourth
quarter and fiscal year ended Dec. 31, 2005. Results relating to
the Company's Gardeners Eden brand are reflected as discontinued
operations.
The company earned $17,034,000 of net income on $224,527,000 of
net sales for the period from Oct. 4, 2005, to Dec. 31, 2005.
For the thirteen-week period ended Dec. 31, 2005, Brookstone
reported total net sales of $226.1 million, a 2.6% decrease as
compared to the thirteen-week period ending Jan. 1, 2005. Same-
store sales for the thirteen-week period ending Dec. 31, 2005,
decreased 7.6% compared to the thirteen-week period ending Jan. 1,
2005.
For the forty-eight week period ended Dec. 31, 2005, Brookstone
reported total net sales of $440.6 million, a 4.4% decrease as
compared to the forty-eight week period ending Jan. 1, 2005.
Same-store sales for the forty-eight week period ending December
31, 2005 decreased 8% compared to the forty-eight week period
ending Jan. 1, 2005.
"We are encouraged by our results for the month of December, when
same store sales decreased by 5.5% and total sales decreased by
only 0.1% compared with December 2004, Michael Anthony, Brookstone
President and Chief Executive Officer said. "We believe we are
well positioned for 2006. We ended the year with a healthy cash
position of $76.3 million as of Dec. 31, 2005, and no cash
borrowings under our $100 million asset-backed credit facility.
We have a number of new product launches planned, some of which
will be our exclusive launch of certain OSIM healthy lifestyle
products."
In November of 2005, the Company changed its fiscal year end from
the Saturday closest to the end of January to the Saturday closest
to the end of December. As a result of this change, Fiscal 2005
results are for the eleven-month period commencing on Jan. 30,
2005, through Dec. 31, 2005, as compared to the Fiscal 2004
twelve-month period from Feb. 1, 2004, to Jan. 29, 2005. In
addition, due to the change in the fiscal year end, the Company's
fiscal fourth quarter now ends in December, as compared to January
under our previous year end.
The company's presentations through the fourth quarter of 2006
will compare the new quarter end results with the historical
results from the old quarter ends. The company believe these
period-to-period comparisons will be informative given the fact
that the fiscal fourth-quarter periods of 2004 and 2005 will both
encompass the Holiday selling season and year end accounting
adjustments.
On Oct. 4, 2005, Brookstone, Inc., was acquired through a merger
transaction with Brookstone Acquisition Corp., a Delaware
corporation formed by OSIM International Ltd and affiliates of
J.W. Childs Equity Partners III, L.P. and Temasek (Private)
Capital Limited. As a result of the acquisition, Brookstone,
Inc., became a privately held, wholly owned subsidiary of OSIM
Brookstone Holdings, L.P., the general partner of which is OSIM
Brookstone Holdings, Inc., and the majority shareholder of which
is OSIM International Ltd.
On June 29, 2005, the Company announced its plans to sell its
Gardeners Eden business, which currently consists of one Gardeners
Eden store. As a result, commencing with the second quarter of
Fiscal 2005, the Company began reflecting the results of
operations from the Gardeners Eden business as a discontinued
operation.
Brookstone, Inc. -- http://www.brookstone.com/-- is an innovative
product development and specialty lifestyle retail Company that
operates 305 Brookstone Brand stores nationwide and in Puerto
Rico. Typically located in high-traffic regional shopping malls
and airports, the stores feature unique and innovative consumer
products. The Company also operates one store under the Gardeners
Eden Brand, and a Direct Marketing business that includes the
Brookstone and Hard to Find Tools catalogs and an e-commerce Web
site. Brookstone is owned by an investor group consisting of OSIM
International Ltd. and affiliates of J.W. Childs Associates, L.P.
and Temasek Capital (Private) Limited.
* * *
As reported in the Troubled Company Reporter on Sept. 13, 2005,
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to specialty retailer Brookstone Inc. At the same
time, Standard & Poor's assigned a 'B' rating to Brookstone
Company Inc.'s [$185 or $190] million issue of privately placed
12% senior unsecured notes due Oct. 15, 2012. The outlook, S&P
said, is stable. Moody's Investor Services assigned its B3 rating
to those high-yield notes on Sept. 13, 2005.
C.M. CONTRACTORS: Case Summary & 23 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: C.M. Contractors, Inc.
505 South Center Street
P.O. Box 7
Cambridge City, Indiana 47327-0007
Bankruptcy Case No.: 06-00632
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Michael Warren & Nancy Kay Mahoney 06-00629
Type of Business: The Debtor is a contractor of construction
projects. Michael Warren Mahoney is the
president of the company.
Chapter 11 Petition Date: February 24, 2006
Court: Southern District of Indiana (Indianapolis)
Judge: Anthony J. Metz III
Debtors' Counsel: David R. Krebs, Esq.
Hostetler & Kowalik P.C.
101 West Ohio Street, Suite 2100
Indianapolis, Indiana 46204
Tel: (317) 262-1001
Fax: (317) 262-1010
Debtor Total Assets Total Debts
------ ------------ -----------
C.M. Contractors Inc. $1,257,515 $1,300,877
Michael Warren & Nancy Kay Mahoney $1,088,633 $438,500
A. C.M. Contractors' 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Engineered Control System Open Account $81,174
7466 Shadeland Station Way
Indianapolis, IN 46256-3925
Grantham Co., Inc. Open Account $39,743
9099 Technology Drive
Fishers, IN 46038
L.J. Fiesel Co., Inc. Open Account $26,496
P.O. Box 681
12358 Hancock Street
Carmel, IN 46082-0681
Siemens Bldg. Tech., Inc. Open Account $26,280
Tri-Star Insulation Co. Open Account $24,816
Carrier Corporation Open Account $24,131
Hughes Supply, Inc. Open Account $21,409
Habegger Open Account $18,551
Indiana Power Service Open Account $16,000
Colby Equipment Open Account $13,204
Mecar Metal, Inc. Open Account $11,106
Specialty Systems, Inc. Open Account $10,180
Corkin Steel Products Com. Open Account $6,869
All-Phase Electric Supply Co. Open Account $4,624
Lee Supply Open Account $4,178
Automated Controls & Open Account $2,958
Electrical Supply
York International Corp. Open Account $2,473
Faco Piping Specialties Open Account $2,305
Knapp Supply Co., Inc. Open Account $2,164
Harvest Land Co-op, Inc. Open Account $1,790
B. Michael Warren Mahoney's 3 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Old National Bank Line of credit $36,000
11 South Meridian Street
Indianapolis, IN 46204
BankCard Services Credit Card $21,500
P.O. Box 15026
Wilmington, DE 19850-5026
Old National Bank Lawsuit Undetermined
11 South Meridian Street Re: Personal
Indianapolis, IN 46204 guarantee of debts
of C.M. Contractors,
Inc., & M&C Leasing,
LLC
CALPINE CORPORATION: Closes $2 Billion DIP Financing
----------------------------------------------------
Calpine Corporation (OTC Pink Sheets: CPNLQ) reported that it has
received funding for its $2 billion debtor-in-possession credit
facility. The new credit facility will help fund the company's
operations as it works toward emerging from its Chapter 11
restructuring.
Deutsche Bank and Credit Suisse were co-lead arrangers for the new
DIP Facility, which consists of:
-- $1 billion Revolving Credit Facility, priced at LIBOR plus
225 basis points;
-- $400 million First-Priority Term Loan, priced at LIBOR plus
225 basis points; and
-- $600 million Second-Priority Term Loan, priced at LIBOR
plus 400 basis points.
The DIP Facility is secured by liens on all of the unencumbered
assets of the Calpine debtors and junior liens on all of their
encumbered assets, and will remain in place until the earlier of
an effective Plan of Reorganization or Dec. 20, 2007.
"Calpine is making good progress toward emerging from Chapter 11
as a profitable and competitive power company," said Calpine Chief
Executive Officer Robert P. May. "This new $2 billion credit
facility provides Calpine with the needed liquidity to rebuild and
strengthen our company, and assure customers that they can
continue to rely on Calpine for clean, reliable electricity."
Headquartered in San Jose, California, Calpine Corporation --
http://www.calpine.com/-- supplies customers and communities
with electricity from clean, efficient, natural gas-fired and
geothermal power plants. Calpine owns, leases and operates
integrated systems of plants in 21 U.S. states and in three
Canadian provinces. Its customized products and services include
wholesale and retail electricity, gas turbine components and
services, energy management and a wide range of power plant
engineering, construction and maintenance and operational
services. The Company filed for chapter 11 protection on Dec. 20,
2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri,
Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert
G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in
their restructuring efforts. Michael S. Stamer, Esq., at Akin
Gump Strauss Hauer & Feld LLP, represents the Official Committee
of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed
$26,628,755,663 in total assets and $22,535,577,121 in total
liabilities.
CALPINE CORP: Look for Bankruptcy Schedules on April 19
-------------------------------------------------------
Robert G. Burns, Esq., at Kirkland & Ellis LLP, in New York,
told the Bankruptcy Court that the initial 60-day extension of
Calpine Corporation and its debtor-affiliates' deadline to file
their schedules of assets and liabilities and statements of
financial affairs under Rule 1007(c) of the Federal Rules of
Bankruptcy Procedure will not be sufficient due to the nature of
the Debtors' business, limited staff available to perform the
required internal review of the Debtors' business and affairs, and
the press of numerous other matters incident to the commencement
of the cases, including the commencement of additional Chapter 11
cases for certain affiliates.
Mr. Burns says it would be onerous, if not impossible, to
complete the Schedules and Statements within the current
deadline. He explains that the volume of material that must be
compiled and reviewed by the Debtors' limited staff provides
ample cause justifying the additional extension of time to file
the Schedules and Statements.
The Debtors believe they will need an additional 45-day extension
to complete their Schedules and Statements. This would
constitute a 105-day extension of the deadline beyond the 15 days
provided under Bankruptcy Rule 1007(c) to file the Schedules and
Statements.
Accordingly, the Debtors ask the U.S. Bankruptcy Court for the
Southern District of New York to extend their deadline to file the
Schedules and Statements until April 19, 2006.
The Debtors request that the extension be without prejudice to
their right to seek one or more further extensions of the
deadline from the Court, or to seek a waiver of the requirement
for filing certain schedules.
The Schedules and Statements will be filed at least 10 days
before the meeting of creditors pursuant to Section 341 of the
Bankruptcy Code.
The Debtors will work with the U.S. Trustee's office and the
Official Committee of Unsecured Creditors to make available
sufficient data and creditor information to ensure that the
Section 341 meeting will be timely held.
The Court approves the Debtors' request, directing the Debtors to
file their Schedules and Statements by April 19, 2006.
Headquartered in San Jose, California, Calpine Corporation --
http://www.calpine.com/-- supplies customers and communities with
electricity from clean, efficient, natural gas-fired and
geothermal power plants. Calpine owns, leases and operates
integrated systems of plants in 21 U.S. states and in three
Canadian provinces. Its customized products and services include
wholesale and retail electricity, gas turbine components and
services, energy management and a wide range of power plant
engineering, construction and maintenance and operational
services. The Company filed for chapter 11 protection on Dec. 20,
2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri,
Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert
G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in
their restructuring efforts. Michael S. Stamer, Esq., at Akin
Gump Strauss Hauer & Feld LLP, represents the Official Committee
of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed
$26,628,755,663 in total assets and $22,535,577,121 in total
liabilities. (Calpine Bankruptcy News, Issue No. 9; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
CALPINE CORP: Subsidiaries' CCCA Protection Stretched to April 20
-----------------------------------------------------------------
At the request of Calpine's Canadian subsidiaries, Madam Justice
B.E.C. Romaine of the Court of Queen's Bench of Alberta, Judicial
District of Calgary, extends the stay under the Companies'
Creditors Arrangement Act, R.S.C. 1985 c. C-36, to and including
April 20, 2006.
Toby Austin, director and Secretary of Calpine Canada Energy
Limited, contends that an extension of the CCAA stay is necessary
to enable the Applicants and the CCAA Parties to continue their
restructuring efforts with a view to maximizing value for the
benefit of all their stakeholders.
As previously reported, nine Calpine subsidiaries obtained
protection from their creditors under the CCAA pursuant to an
Initial CCAA Order dated December 20, 2005.
The Applicants are:
-- Calpine Canada Energy Limited;
-- Calpine Canada Power Ltd.;
-- Calpine Energy Financial ULC;
-- Calpine Energy Services Canada Ltd.;
-- Calpine Resources Company;
-- Calpine Canada Power Services Ltd.;
-- Calpine Canada Energy Finance II ULC:
-- Calpine Natural Gas Services Limited; and
-- 3094479 Nova Scotia Company
In addition to the Applicants, the Initial CCAA Order provided a
stay of the proceedings against Calpine Energy Services Canada
Partnership, Calpine Canada Natural Gas Partnership and Calpine
Canadian Saltend Limited Partnership -- the CCAA Parties.
Ernst & Young, Inc., was appointed monitor for the Applicants and
the CCAA parties.
Mr. Austin says the Applicants have implemented procedures to
minimize cash outflows and have worked with the Monitor in
preparing cash flow forecasts for the extension period. The
cash flow forecasts demonstrate that the Applicants will have
sufficient cash through the extension period to fund operations.
Discussion with Stakeholders
Neil Narfason, senior vice president of Ernst & Young, Inc.,
reports that the Applicants, CCAA Parties and their advisors have
initiated dialogue with several of their major stakeholders and
their advisors, including the Calpine Power Income Fund, counsel
to the Trustee of ULC2 public bonds, certain bondholder counsel
and Calpine Corporation. The parties discussed issues with
respect to the Initial Order and the development of a framework
to allow the Applicants and the CCAA Parties to move forward in
their restructuring process. Discussion with the stakeholders is
currently in the initial stages.
Review of Contracts
Mr. Narfason also relates that the Applicants and CCAA Parties,
with the assistance of its advisors and the Monitor, are
currently in the process of reviewing and valuating the various
contracts pertaining to their operations. The majority of the
relevant contracts are held by either CCNG or CESCA, as these two
entities effectively manage Calpine Canada's energy trading.
Headquartered in San Jose, California, Calpine Corporation --
http://www.calpine.com/-- supplies customers and communities with
electricity from clean, efficient, natural gas-fired and
geothermal power plants. Calpine owns, leases and operates
integrated systems of plants in 21 U.S. states and in three
Canadian provinces. Its customized products and services include
wholesale and retail electricity, gas turbine components and
services, energy management and a wide range of power plant
engineering, construction and maintenance and operational
services. The Company filed for chapter 11 protection on Dec. 20,
2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri,
Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert
G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in
their restructuring efforts. Michael S. Stamer, Esq., at Akin
Gump Strauss Hauer & Feld LLP, represents the Official Committee
of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed
$26,628,755,663 in total assets and $22,535,577,121 in total
liabilities. (Calpine Bankruptcy News, Issue No. 9; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
CAPE SYSTEMS: Posts $374,000 Net Loss in Quarter Ended December 31
------------------------------------------------------------------
Cape Systems Group, Inc., delivered its financial results for the
quarter ended Dec. 31, 2005, to the Securities and Exchange
Commission on Feb. 16, 2006.
Cape Systems' net loss for the three months ended Dec. 31, 2005,
increased by approximately $297,000 or 385.7% to approximately
$374,000 from a loss of $77,000 for the same period in 2004. The
Company's operating revenue increased 35.4% from approximately
$665,000 in 2005 to approximately $901,000 in 2006.
At Dec. 31, 2005, the Company's balance sheet showed $3,246,000 in
total assets and $27,423,000 in liabilities, resulting in a
stockholders' deficit of $24,177,000. The Company had a
$25,958,000 working capital deficiency at Dec. 31, 2005.
A full-text copy of the regulatory filing is available for free
at http://researcharchives.com/t/s?5d7
Going Concern Doubt
As reported in the Troubled Company Reporter on Feb. 02, 2006,
J.H. Cohn LLP expressed substantial doubt about Cape Systems'
ability to continue as a going concern after it audited the
Company's financial statements for the fiscal years ended Sept.
30, 2005 and 2004. The auditing firm pointed to the Company's
recurring losses and working capital and stockholders'
deficiencies as of Sept. 30, 2005.
About Cape Systems
Cape Systems Group, Inc., provides supply chain management
technologies, including enterprise software systems and
applications, and software integration solutions, that enable its
customers to manage their order, inventory and warehouse
management needs, consultative services, and software and hardware
service and maintenance. The Company serves its clients through
two general product and service lines: enterprise solutions and
service and maintenance for its products and services, including
service and maintenance of software and hardware it resells for
third parties.
CDC MORTGAGE: Moody's Cuts Ratings on Four Class Certificates
-------------------------------------------------------------
Moody's Investors Service downgraded and placed on review for
possible downgrade certain certificates from CDC Mortgage Capital
Trust deals, issued in 2001 and 2002. The transactions, consist
of subprime primarily first-lien adjustable and fixed-rate loans.
All four transactions have multiple originators.
The most subordinate certificate from the CDC Series 2001-HE1 and
2002-HE3 transactions and the two most subordinate certificates
from the 2002-HE2 transaction has been downgraded. Also, the most
subordinate certificate from the 2002-HE1 transaction has been
placed on review for possible downgrade. This is because existing
credit enhancement levels are low given the current projected
losses on the underlying pools. The pool of mortgages has seen
losses in recent months and future loss could cause a more
significant erosion of the overcollateralization. All of the
underlying pools on the four transactions have their
overcollateralization below the 50 bp floor as of the Jan. 25,
2006 reporting date.
Complete rating actions are:
Issuer: CDC Mortgage Capital Trust
Downgrades:
* Series 2001-HE1; Class B, downgraded to B3 from Baa3
* Series 2002-HE2; Class B-1, downgraded to Ba2 from Baa2
* Series 2002-HE2; Class B-2, downgraded to B2 from Baa3
* Series 2002-HE3; Class B-2, downgraded to B1 from Baa3
Review for Downgrade:
* Series 2002-HE1; Class B, current rating Baa3, under
review for possible downgrade
CENTENNIAL COMMS: Exchange Offer for Senior Notes Expires March 23
------------------------------------------------------------------
Centennial Communications set March 23, 2006, 5:00 p.m., New York
City, as the deadline for holders of its Senior Floating Rate
Notes and Senior Notes to exchange it for registered bonds.
The Company offers to exchange $350 million aggregate principal
amount of Senior Floating Rate Notes due 2013 CUSIPS 15133VAD1
and U12968AC3 for registered bonds (CUSIP 15133VAE92) of the
same aggregate principal amount and with the same terms of the
old notes.
The Company also offers to exchange $200 million aggregate
principal amount of 10% Senior Notes due 2013 CUSIPS 15133VAF6
and U13968AD1 with registered bonds (CUSIP 15133VA41) of the
same aggregate principal amount and with the same terms of the
old notes.
The terms of each series of Exchange Bonds are substantially
identical to those of the applicable series of outstanding
Restricted Bonds, except that the transfer restrictions,
registration rights and additional interest provisions relating
to the Restricted Bonds do not apply to the Exchange Bonds.
The Company will not receive any proceeds from the exchange
offers. There is no established trading market for the Exchange
Bonds, although the Restricted Bonds currently trade on the
Portal Market, Centennial says.
Restricted Bonds tendered in the exchange offers must be in
denominations of principal amount of $2,000 and any integral
multiple of $1,000.
The Notes are senior unsecured indebtedness of the Company
ranking pari passu with all of the Company's other existing and
future unsubordinated obligations. The Notes are effectively
junior to the Company's secured obligations to the extent of the
value of the Company's assets securing the obligations.
After giving effect to the exchange offer as if each had
occurred on November 30, 2005:
-- there would have been $550.0 million outstanding under the
senior credit facility and $60.6 million outstanding of
capitalized leases and tower obligations, all of which was
secured indebtedness;
-- there would have been $500.0 million outstanding under the
2013 Senior Notes, $325.0 million outstanding under the
2014 Senior Notes and $550.0 million outstanding under the
Restricted Bonds, all of which was senior unsecured
indebtedness;
-- there would have been $145.0 million outstanding under the
2008 Senior Subordinated Notes, all of which was
subordinated indebtedness; and
-- Centennial's Subsidiaries would have had total
Indebtedness and other liabilities of approximately $2.4
billion, including Indebtedness on which Centennial is a
co-obligor, all of which would be effectively senior to
the Notes.
A full-text copy of Centennial's Prospectus Supplement is
available at no charge at http://ResearchArchives.com/t/s?5d2
Based in Wall, N.J., Centennial Communications, (NASDAQ: CYCL)
-- http://www.centennialwireless.com/-- is a leading provider
of regional wireless and integrated communications services in
the United States and the Caribbean with approximately 1.3
million wireless subscribers and 326,400 access lines and
equivalents. The U.S. business owns and operates wireless
networks in the Midwest and Southeast covering parts of six
states. Centennial's Caribbean business owns and operates
wireless networks in Puerto Rico, the Dominican Republic and the
U.S. Virgin Islands and provides facilities-based integrated
voice, data and Internet solutions. Welsh, Carson, Anderson &
Stowe and an affiliate of the Blackstone Group are controlling
shareholders of Centennial.
At Nov. 30, 2005, Centennial Communications' balance sheet
showed a $490,868,000 stockholders' deficit, compared to a
$518,432,000 deficit at May 31, 2005.
CENTURY ALUMINUM: Incurs $148.7 Million Net Loss in Fourth Quarter
------------------------------------------------------------------
Century Aluminum Company (NASDAQ: CENX) reported a $148.7 million
net loss for the fourth quarter of 2005. Reported fourth quarter
results were negatively impacted by an after-tax charge of
$164.6 million for mark-to-market adjustments on forward contracts
(which will settle during the period 2006-2015) that do not
qualify for cash flow hedge accounting.
In the second quarter of 2005, the company changed from the
last-in first-out (LIFO) inventory valuation method to the first-
in first-out (FIFO) method. Financial statements for periods
prior to the second quarter of 2005 have been restated to reflect
this change. Financial and operating results for 2004 include
Nordural from the April 27, 2004, acquisition date.
In the fourth quarter of 2004, the company reported net income of
$24.6 million. Before restatement, the company reported net
income of $20.9 million.
Highlights of 2005 included:
-- Primary aluminum shipments increased to a record 615,842
metric tones;
-- Revenues increased seven percent from the prior year to a
record $1.13 billion;
-- Net cash provided by operating activities was a record
$135 million, up over 27 percent from 2004;
-- Operating income of $127 million was the second highest in
the company's history;
-- Fourth quarter results were impacted by energy costs and
severe weather;
-- Nordural expansion continued on schedule and on budget;
-- Record production at Ravenswood; and
-- Hawesville operations back at full capacity, record
production in December.
For 2005, Century reported a net loss of $116.3 million. Total
year results include an after-tax charge of $198.2 million for
mark-to-market adjustments on forward contracts (which will
settle during the period 2006-2015) that do not qualify for cash
flow hedge accounting. In 2004, restated net income totaled
$33.5 million after preferred dividends ($28.0 million after
preferred dividends, before restatement).
Sales for the fourth quarter of 2005 were $292.9 million compared
with $290.6 million for the fourth quarter of 2004. Shipments of
primary aluminum for the 2005 fourth quarter were 156,014 metric
tonnes, compared with 157,264 metric tonnes shipped in the year-
ago quarter.
Sales for 2005 were $1.13 billion compared with $1.06 billion for
2004, and total 2005 primary aluminum shipments of 615,842 metric
tonnes compared with 597,864 metric tonnes shipped in 2004.
"Century performed well during the fourth quarter," said president
and chief executive officer Logan W. Kruger. "Metal prices were
robust and all of our plants operated at high levels, including
Hawesville, which regained its normal operating efficiency.
Unusually high energy costs and severe weather, however, increased
our costs for the quarter.
"Overall, 2005 was a year of record production, revenue and cash
flow from operations for Century. The Nordural expansion, which
began its initial production on February 15, is continuing to
proceed on budget for a scheduled completion in the fourth quarter
of 2006. Looking ahead, we see attractive opportunities to build
a larger, more diversified and more cost-competitive company."
Century Aluminum Co. presently owns 615,000 metric tonnes per year
(mtpy) of primary aluminum capacity. The company owns and
operates:
* a 244,000 mtpy plant at Hawesville, Kentucky;
* a 170,000 mtpy plant at Ravenswood, West Virginia; and
* a 90,000 mtpy plant at Grundartangi, Iceland that is being
expanded to 220,000 mtpy.
The company also owns a 49.67-percent interest in a 222,000 mtpy
reduction plant at Mt. Holly, South Carolina. ALCOA Inc. owns the
remainder of the plant and is the operating partner. With the
completion of the Grundartangi expansion, Century's total capacity
will stand at 745,000 mtpy by the fourth quarter of 2006. Century
also holds a 50-percent share of the 1.25 million mtpy Gramercy
Alumina refinery in Gramercy, Louisiana and related bauxite assets
in Jamaica. Century's corporate offices are located in Monterey,
California.
* * *
As reported in the Troubled Company Reporter on Dec. 7, 2004,
Moody's Investors Service assigned a B1 rating to Century Aluminum
Company's $175 million senior unsecured convertible notes due
2024, and affirmed its Ba3 rating on Century's $100 million senior
secured revolving credit facility.
As reported in the Troubled Company Reporter on Nov. 9, 2004,
Standard & Poor's Ratings Services raised its rating on Century
Aluminum Company's $150 million 1.75% convertible notes due 2024
to 'BB-' from 'B' and removed it from CreditWatch. At the same
time, Standard & Poor's affirmed its 'BB-' corporate credit rating
on the Monterey, California-based company.
CHC INDUSTRIES: Wants Scope of Gardner Wilkes' Services Expanded
----------------------------------------------------------------
CHC Industries, Inc., asks the U.S. Bankruptcy Court for the
Middle District of Florida for permission to expand the scope of
Gardner Wilkes Shaheen's retention.
The Debtor is currently litigating certain objections to claims,
including an objection to a claim filed by Wire Lab Company/Omni
Technical Products, Inc. The Debtor wants Gardner Wilkes to
continue representing the company in litigation involving the
objection to Wire Lab's claim.
Gardner Wilkes Retention
As reported in the Troubled Company Reporter on Feb. 9, 2006, the
Court approved the Debtor's request to retain the Firm as special
litigation counsel to:
a) investigate and pursue claims and causes of actions related
to the sale of the Debtor's corporate headquarters located
in Palm Harbor, Florida, including examination of the
parties involved in the sale of the Palm Harbor building;
b) assist the Debtor in preparing for mediation involving
Ispat, including reviewing of claims against Ispat and
defenses to claims being asserted by Ispat; and
c) assist the Debtor in analyzing claims which it may have
against any third parties and assist the Debtor in preparing
to defenses to claims which may be available to the Debtor.
Richard Wilkes, a Member at Gardner Wilkes, reported the Firm's
professionals bill:
Designation Hourly Rate
----------- -----------
Partners $200 - $350
Associates $150 - $190
Paralegals $105
Headquartered in Palm Harbor, Florida and formerly known as
Cleaners Hanger Company, CHC Industries, Inc., manufactures and
distributes steel wire coat hangers. The Company filed for
chapter 11 protection on October 6, 2003 (Bankr. M.D. Fla. Case
No. 03-20775). Scott A. Stichter, Esq., at Stichter, Riedel,
Blain & Prosser, PA, represent the Debtor in its restructuring
efforts. When the Company filed for protection from its
creditors, it listed $25,000,000 in total assets and $20,000,000
in total debts.
Chapter 11 Plan Update
CHC Industries filed its Second Amended Plan of Reorganization in
March 2005. The Court approved the adequacy of a Second Amended
Disclosure Statement explaining the Amended Plan on Nov. 29, 2005,
and scheduled a hearing on Jan. 30, 2006, to consider confirmation
of that plan. The Debtors submitted its Third Amended Plan of
Reorganization on Jan. 19, 2006, but no amended disclosure
statement. On Jan. 20, 2006, the Pension Benefit Guaranty
Corporation filed an objection to the confirmation of the Debtor's
Third Amended Plan. The U.S. Trustee also filed an objection on
Jan. 20, 2006, objecting to the plan's release and exculpation
provisions.
Nothing on the Clerk's docket sheet indicates whether creditors
voted to accept or reject the plan, nor is there any indication
that the confirmation hearing occurred. The Clerk's docket shows
show that the Debtor's exclusive period to solicit acceptances of
a chapter 11 plan expired on May 31, 2005.
CII CARBON: S&P Rates $270 Million Sr. Sec. Bank Facility at B+
---------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit and senior secured ratings on CII Carbon LLC and removed
them from CreditWatch, where they were placed with negative
implications on Sept 2, 2005, following Hurricane Katrina. The
outlook is stable.
"The rating action reflects our belief that the issues and
concerns surrounding the company following hurricanes Katrina and
Rita, have been largely alleviated," said Standard & Poor's credit
analyst Dominick D'Ascoli. "Specifically, we are no longer
concerned about the liquidity needed to rebuild inventories and
repair of the company's energy operations at the Chalmette, La.,
facility. Also, we are now comfortable that there will be enough
high-quality coke inventory to sustain production until the
Alliance refinery of ConocoPhillips, resumes supplies to CII
Carbon, as it expects to do in March 2006."
Hurricane damage had idled the refinery of ConocoPhillips Co.
(A-/Stable/--).
Standard & Poor's rates CII Carbon's $270 million senior secured
bank facility 'B+', the same as the corporate credit rating, with
a recovery rating of '3', indicating an expectation of substantial
recovery of principal (50%-80%) in the event of a payment default
or bankruptcy.
"We expect the company to continue benefiting from its good market
position in a niche industry and its long-term customer and
supplier relationships," Mr. D'Ascoli said. "We could revise the
outlook to negative if aluminum production declines significantly
or if there is new calcined petroleum coke capacity that results
in a decrease in prices. We are unlikely to revise the outlook to
positive given the CII's business profile and the risks the
company faces."
CINCINNATI BELL: Resolves ERISA Class Action Suit for $11 Million
-----------------------------------------------------------------
Cincinnati Bell Inc. inked a settlement agreement to resolve a
class action lawsuit against it in the United States District
Court for the Southern District of Ohio. The action was a
consolidation of five previously filed lawsuits.
The litigation asserted claims arising under the Employee
Retirement Income Security Act of 1974, as amended, against the
Company, certain of its officers and directors and the Company's
Employees' Benefit Committee.
Christopher J. Wilson, the Company's Vice President and General
Counsel, asserts that there has been no finding or admission of
any wrongdoing by any of the defendants in the lawsuit. The
defendants entered into the settlement agreement to avoid
protracted and costly litigation.
Under the Agreement, defendants are obligated to pay $11 million,
which will be paid by their insurers, to a fund to settle the
claims of class members in exchange for a release from the
lawsuit.
The U.S. District Court has yet to approve the settlement. A
full-text copy of the Settlement Agreement is available at no
additional charge at http://ResearchArchives.com/t/s?5d6
The Plaintiffs are represented by:
Joe R. Whatley, Jr., Esq.
Glen M. Connor, Esq.
Whatley Drake, LLC
Post Office Box 10647
Birmingham, Alabama 35202-0647
Telephone (205) 328-9576
Fax (205) 328-9669
Willie Briscoe, Esq.
Provost Umphrey, LLP
3232 McKinney Ave., Suite 700
Dallas, Texas 75204
Telephone 214-744-3000
Fax 214-744-3015
James D. Baskin, Esq.
The Baskin Law Firm
300 West 6th Street, Suite 1950
Austin, Texas 78701
Telephone 512-381-6300
Fax 512-322-9280
David A. Futscher, Esq.
Parry Deering Futscher & Sparks
411 Garrard Street, Box 2618
Covington, Kentucky 41012
Telephone 859-291-9000
Fax 859-291-9300
Ann Lugbill, Esq.
2406 Auburn Avenue
Cincinnati, Ohio 45219
Telephone (513) 784-1280
Fax (513) 784-1449
The Defendants are represented by:
William J. Kilberg, Esq.
Paul Blankenstein, Esq.
Gibson, Dunn & Crutcher LLP
1050 Connecticut Avenue, N.W.
Washington, DC 20036-5306
Douglas Edward Hart, Esq.
Frost Brown Todd LLC
2200 PNC Center
201 E. 5th Street
Cincinnati, OH 45202-4182
Telephone 513-651-6800
Fax 513-651-6981
Cincinnati Bell, Inc. (NYSE: CBB) -- http://cincinnatibell.com/--
is parent to one of the nation's most respected and best
performing local exchange and wireless providers with a legacy of
unparalleled customer service excellence. Cincinnati Bell
provides a wide range of telecommunications products and services
to residential and business customers in Ohio, Kentucky and
Indiana. Cincinnati Bell is headquartered in Cincinnati, Ohio.
As of December 31, 2005, the Company's equity deficit widened to
$737.7 million from a $624.5 million deficit at December 31, 2004.
CIRCLE-LEX: Case Summary & 19 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Circle-Lex Post No. 6583,
Veterans of Foreign Wars of the United States,
Incorporated
7868 Lake Drive
Lino Lakes, Minnesota 55014
Bankruptcy Case No.: 06-40247
Type of Business: The Debtor is a non-profit organization that
provides community service programs, special
projects, and raises money for World War II
memorials. See http://www.vfw.org/
Chapter 11 Petition Date: February 27, 2006
Court: District of Minnesota (Minneapolis)
Judge: Dennis D. O'Brien
Debtor's Counsel: Kenneth Corey-Edstrom, Esq.
Larkin Hoffman Daly and Lingren, Ltd.
1500 Wells Fargo Plaza
7900 Xerxes Avenue South
Bloomington, Minnesota 55431-1194
Tel: (952) 835-3800
Fax: (952) 896-333
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 19 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Swanson, Dale G. Professional Fees $6,986
407 West Broadway Avenue
Forest Lake, MN 55025
Bass Gambling Supplies, Inc. Trade Debt $6,645
8455 Center Drive
Spring Lake Park, MN 55432
Henry Hubbard Cleaning Service Trade Debt $1,375
1025 Center Circle Northeast
Fridley, MN 55432
AmeriPride Linen & Trade Debt $1,029
Dish Network Trade Debt $837
Image Printing & Graphics Trade Debt $754
GCS Service Equipment, Inc. Trade Debt $561
Rivard Electric Trade Debt $290
Press Publications Advertising $285
Burco International Trade Debt $259
All American Marketing Advertising $258
Northland Fire & Security Trade Debt $209
Adventure Products $182
USA Security Trade Debt $180
Huesman, Charl-Ann $164
Quill Office Supply Trade Debt $141
Viking Office Trade Debt $111
Lumination Lighting Inc. Trade Debt $107
Merchant Services Trade Debt $95
Will Muyun & Sons $47
CIT GROUP: Delinquent Deals Cue Moody's to Review Low Ratings
-------------------------------------------------------------
Moody's Investors Service placed under review for possible
downgrade the ratings of three tranches relating to the 1998-A and
1999-A Recreational Vehicles Trust securitizations originated by
CIT Group.
Complete rating action:
* CIT RV Trust 1998-A
-- $6,060,865, 6.70% Certificates, rated B2, under review
for possible downgrade.
* CIT RV Trust 1999-A
-- $28,500,000, 6.44% Class B Notes, rated Ba2, under review
for possible downgrade.
-- $11,515,205, 7.21% Certificates, rated Caa1, under review
for possible downgrade.
High loss level increases risk to investors.
Moody's previously downgraded the ratings of these tranches in
December 2004. The current rating review has been initiated due
to the higher than expected losses and continued delinquencies
across each of the CIT RV transactions. As a result of the
losses, the transactions are undercollateralized by approximately
$405,057 and $4,856,705, respectively, and the certificates are
accruing interest shortfalls. In addition, the remaining loans in
repossession inventory are expected to result in additional losses
in future months. Moody's review will consider future loss
expectations, recovery rates, and general market conditions.
Headquartered in Livingston, New Jersey, CIT Group Inc., is one of
the largest commercial finance companies in the US, providing
vendor, equipment, commercial, factoring, consumer, and structured
financing to a wide range of businesses. It has a long-term
senior unsecured rating of A2 and a short-term rating of Prime-1
from Moody's.
CITIZENS COMMS: Earns $76.8 Million. in Fourth Quarter 2005
-----------------------------------------------------------
Citizens Communications Corporation (NYSE:CZN) reported that for
the fourth quarter of 2005, it had:
-- revenues of $556.1 million;
-- operating income of $173.2 million; and
-- net income of $76.8 million.
Fourth quarter 2005 revenue from the company's Frontier operations
increased 2.7 percent to $513.7 million from $500.4 million in the
fourth quarter of 2004. The increase is due primarily to growth
in data and enhanced service revenues and higher access service
revenues (which includes subsidy payments we receive from federal
and state agencies). Data service revenues increased 30.3 percent
compared to the fourth quarter of 2004 and high margin enhanced
service revenues increased 3.0 percent from the fourth quarter of
2004. During the fourth quarter of 2005, the Company recognized
approximately $10.0 million of additional Universal Service Fund
(USF) subsidy revenue because of a missed filing deadline with the
USF during the third quarter of 2005.
The company added 21,200 high-speed internet customers during
the quarter and had 311,400 high-speed data subscribers at
December 31, 2005. The number of the company's high-speed
internet subscribers has increased by more than 99,000 or
46.7 percent from a year ago.
Frontier operating income for the fourth quarter of 2005 was
$165.0 million and operating income margin was 32.1 percent,
compared to $138.0 million and 27.6 percent in the fourth quarter
of 2004. Capital expenditures for the Frontier operations were
$90.0 million for the fourth quarter of 2005.
Free cash flow was $123.9 million during the fourth quarter and
increased 9.2 percent to $545.2 million for the full year. The
company's dividend represents a payout of 62.1 percent of 2005
free cash flow.
During the fourth quarter, the company bought 6,119,000 shares of
its common stock at a total cost of $78.0 million and completed
its $250.0 million authorized share repurchase program. Under
this program, the company repurchased a total of 18,775,000 shares
of common stock.
The company's Board of Directors has authorized new share
repurchase and debt retirement programs. Under the new programs,
up to $300.0 million of common stock may be repurchased over the
next 12 months and up to $150.0 million of debt may be retired
prior to maturity over the next 12 months. The new stock
repurchase program, in combination with the 2005 program, will
result in the retirement of almost 13 percent of the company's
common stock. The new debt retirement program is in addition to
the previously announced repayment of $228.0 million of debt that
matures in 2006 and $49.0 million of debt that will be repaid in
2007. The combination of the previously announced debt repayments
and the new debt retirement program total $427.0 million of debt
that may be repaid during 2006 and 2007 and will result in a
reduction of 11 percent of the company's debt.
The company expects to receive approximately $64.6 million in cash
upon the liquidation of the Rural Telephone Bank during the second
quarter of 2006. In addition, the previously announced sale of
Electric Lightwave, LLC (ELI) for $247.0 million (including
$243.0 million in cash) is expected to close during the third
quarter of 2006.
The company expects to produce during 2006 between $500.0 million
and $525.0 million of free cash flow assuming that the sale of ELI
closes during the third quarter of 2006. This estimate of free
cash flow does not take into account the effect of the new debt
retirement program.
The company's next regular quarterly cash dividend of $0.25 per
share will be paid on March 31, 2006 to shareholders of record on
March 9, 2006. The company expects that dividends paid to
stockholders in 2006 will be treated as dividends for federal
income tax purposes. Shareholders are encouraged to consult with
their tax advisors.
Citizens Communications Corporation is a telecommunications
company headquartered in Stamford, Connecticut.
* * *
As reported in the Troubled Company Reporter on Feb. 10, 2006,
Moody's said that Citizens Communications' announced sale of
Electric Lightwave to Integra Telecom, for $247 million, does not
significantly alter Citizens' credit profile. With this
announcement, Moody's expects the company to receive between $220
million and $230 million in after-tax cash proceeds from the sale,
in the third quarter 2006. Moody's believes that given the recent
history of Citizens' stock buy-back programs, the company is
likely to use the bulk of the additional cash to buy back stock,
and still repay the scheduled $228 million of maturing debt out of
operating cash flow.
These ratings remain:
Issuer: Citizens Communications Company
* Corporate family rating --Ba3
* Senior unsecured revolving credit facility --Ba3
* Senior unsecured notes, debentures, bonds -- Ba3
* Multiple seniority shelf -- (P)Ba3 / (P)B2
Outlook Stable
Issuer: Citizens Utilities Trust
* Preferred Stock (EPPICS) - B2
Outlook Stable
As reported in the Troubled Company Reporter on Sept. 29, 2005,
Fitch Ratings affirmed the 'BB' rating on Citizens Communications
Company's senior unsecured debt securities and the 'BB-' rating on
Citizens Utilities Trust's 5% company-obligated mandatorily
redeemable convertible preferred securities due 2036. Fitch said
Citizens' Rating Outlook is Stable.
As reported in the Troubled Company Reporter on Sept. 2, 2005,
Standard & Poor's Ratings Services affirmed its ratings on
Stamford, Connecticut-based Citizens Communications Co., including
the 'BB+' corporate credit rating. S&P said the outlook is
negative.
CMS ENERGY: Incurs $6 Million Net Loss in Fourth Quarter 2005
-------------------------------------------------------------
CMS Energy Co. (NYSE: CMS) reported a $94 million net loss for
2005, compared to reported a $110 million net income for 2004.
CMS Energy's adjusted 2005 net income, which excludes impairment
charges and other items, was $295 million up from $149 million for
2004. Adjusted 2005 net income without the overall positive
impact of "mark-to-market" accounting was $204 million compared to
$154 million for 2004.
The 2005 reported results include a third-quarter after-tax
impairment charge of $385 million related to CMS Energy's
ownership interest in the Midland Cogeneration Venture (MCV). The
non-cash charge resulted from the impact of sustained high natural
gas prices on MCV's production costs. The 2005 reported results
also include a fourth-quarter charge of $26 million because of
revised estimates to complete environmental remediation work
associated with the Company's former investment with the Bay
Harbor project in northwest Michigan.
For the fourth quarter of 2005, CMS Energy announced a reported
net loss of $6 million compared to reported net income of
$47 million, or $0.24 per share, for the same period in 2004. The
2005 quarterly results include an expected reversal of $40 million
in previous mark-to-market gains on long-term natural gas
contracts and financial hedges.
Adjusted net income for the fourth quarter of 2005 was $1 million
down from $39 million for the fourth quarter of 2004. Adjusted
fourth quarter net income, without mark-to-market impacts, was
$41 million compared to $48 million for the fourth quarter of
2004.
CMS Energy said its adjusted 2006 earnings guidance, without mark-
to-market impacts, is about $1 per share. The Company anticipates
its 2006 reported earnings are likely to be substantially lower
than its adjusted earnings because of the expected reversal of
mark-to-market gains and losses from potential asset sales. CMS
Energy isn't providing specific reported earnings guidance because
of the uncertainties associated with those factors.
"The non-cash MCV impairment charge overshadows the fact that
Consumers Energy and CMS Enterprises turned in strong operational
performances in 2005. For example, the utility met record
customer demand for electricity in Michigan last summer.
Meanwhile, the operational performance of our key CMS Enterprises
assets was world-class," said David Joos, president and chief
executive officer of CMS Energy.
CMS Energy Co. is an integrated energy company, which has as its
primary business operations an electric and natural gas utility,
natural gas pipeline systems, and independent power generation.
* * *
As reported in the Troubled Company Reporter on Feb. 2, 2006,
Standard & Poor's Ratings Services affirmed its 'BB' long-term
corporate credit ratings on public utility holding company, CMS
Energy Corp., and its regulated utility subsidiary, Consumers
Energy Co., and removed the ratings from CreditWatch with negative
implications.
Standard & Poor's also affirmed its 'B-1' short-term corporate
credit rating on CMS and removed the rating from CreditWatch with
negative implications.
S&P said the outlook is stable.
As reported in the Troubled Company Reporter on Dec. 12, 2005,
Fitch Ratings has assigned a rating of 'BB-' to CMS Energy Corp.'s
$125 million issuance of 6.875% senior unsecured notes, due
Dec. 15, 2015. Proceeds from the sale will be used to pay down
one of the company's pre-pay gas supply contracts and for general
corporate purposes. Fitch said the Rating Outlook for CMS is
Stable.
CREECH FUNERAL: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: Creech Funeral Home, Inc.
112 South 21st Street
P.O. Box 877
Middlesboro, Kentucky 40965
Tel: (606) 248-4700
Bankruptcy Case No.: 06-60058
Type of Business: The Debtor operates a funeral home.
Chapter 11 Petition Date: February 24, 2006
Court: Eastern District of Kentucky (London)
Debtor's Counsel: W. Thomas Bunch, Sr., Esq.
Bunch & Brock
271 West Short Street, Suite 805
P.O. Box 2086
Lexington, Kentucky 40588-2086
Tel: (859) 254-5522
Fax: (859) 233-1434
Estimated Assets: Unknown
Estimated Debts: $500,000 to $1 Million
The Debtor did not file a list of its 20 Largest Unsecured
Creditors.
CRESCENT REAL: Earns $14.5 Mil. of Net Income in Fourth Quarter
---------------------------------------------------------------
Crescent Real Estate Equities Company (NYSE:CEI) disclosed its
results for the fourth quarter of 2005. Net income available to
common shareholders for the three months ended December 31, 2005,
was $14.5 million. These compare to net income available to
common shareholders of $202.1 million for the three months ended
December 31, 2004. Net income available to common shareholders
for the year ended December 31, 2005, was $63.3 million. These
compare to net income available to common shareholders of
$141.1 million for the year ended December 31, 2004.
The decrease in net income from 2004 to 2005 is primarily the
result of a $266 million gain recorded in the fourth quarter 2004
that was generated from the sale of joint-venture interests in
certain of Crescent's existing office assets.
Funds from operations available to common shareholders -- diluted,
as adjusted to exclude impairment charges and debt extinguishment
charges related to the sale of real estate assets was
$61.5 million and equivalent unit, for the three months ended
December 31, 2005, compared to $53.5 million for the three months
ended December 31, 2004. FFO, as adjusted, for the year ended
December 31, 2005, was $146.1 million compared to $143.2 million
for the year ended December 31, 2004.
Crescent provides this calculation of FFO, as adjusted, because
management utilizes it in making operating decisions and assessing
performance, and to assist investors in assessing Crescent's
operating performance. Funds from operations available to common
shareholders -- diluted, calculated in accordance with the NAREIT
definition was $60.5 million for the three months ended
December 31, 2005, compared to $11.9 million for the three months
ended December 31, 2004.
FFO, for the year ended December 31, 2005, was $144.3 million
compared to $95.7 million for the year ended December 31, 2004.
According to John C. Goff, vice chairman and chief executive
officer, "2005 can best be characterized as simply 'our strategy
in action.' We achieved a 17.9% total return for our shareholders
this year, exceeding the NAREIT All Equity Index of 12.2%. We
continue to focus on our office investment management business and
are seeing improved results from strengthening occupancy levels in
our office markets. The quarter was highlighted by the sale of 5
Houston Center, a record per-square-foot sale in Houston, which
illustrates the potential value of the promote structure in our
joint-venture partnerships. This sale resulted in FFO of
approximately $27 million, of which almost $14 million was from
our promoted interest, and a 47% internal rate of return to
Crescent. Overall, the partnership recorded a $68 million gain,
while holding 5 Houston Center for a little more than three
years."
On January 13, 2006, Crescent disclosed that its Board of Trust
Managers had declared cash dividends of $0.375 per share for its
Common Shares, $0.421875 per share for its Series A Convertible
Preferred Shares, and $0.59375 per share for its Series B
Redeemable Preferred Shares. The dividends were payable
February 15, 2006, to shareholders of record on January 31, 2006.
Crescent Real Estate Equities Company (NYSE:CEI) --
http://www.crescent.com/-- is one of the largest publicly held
real estate investment trusts in the nation. Through its
subsidiaries and joint ventures, Crescent owns and manages a
portfolio of more than 70 premier office buildings totaling more
than 29 million square feet primarily located in the Southwestern
United States, with major concentrations in Dallas, Houston,
Austin, Denver, Miami and Las Vegas. In addition, Crescent has
investments in world-class resorts and spas and upscale
residential developments.
* * *
As reported in the Troubled Company Reporter on July 2, 2004,
Standard & Poor's Ratings Services lowered its corporate credit
ratings on Crescent Real Estate Equities Co. and its operating
partnership, Crescent Real Estate Equities L.P., to 'BB-' from
'BB'. In addition, the rating on the company's senior unsecured
notes is lowered to 'B' from 'B+', and the rating on the company's
preferred stock is lowered to 'B-' from 'B'. S&P revised its
outlook to stable from negative.
DANA CORP: Moody's Junks Sr. Notes Rating on Weak Asset Coverage
----------------------------------------------------------------
Moody's Investors Service lowered the ratings of Dana Corporation
-- Corporate Family to B3 from B1; senior unsecured to Caa1 from
B1; and Dana Credit Corporation -- senior unsecured to Caa1 from
B1.
The downgrade of the Corporate Family Rating to B3 reflects the
prospects for continued weakness in the company's operating
performance and credit metrics resulting from the ongoing erosion
in the automotive supply sector. Moody's believes that this
weakness is highlighted by the recent decision by the company's
board of directors to postpone a decision on the payment of a cash
dividend.
The rating action also incorporates the increasing uncertainty
surrounding the company's liquidity and near-term financial
profile based on the company's need to renegotiate its $400
million revolving credit facility and $275 million accounts
receivable facility. In addition, the company is encountering
challenges in finalizing its fourth quarter and year-end 2005
financial statements, and has announced a SEC investigation with
respect to matters related to the company's restatement of 2004
and first-half 2005 financial statements. Moody's also noted
published reports, as of yet unconfirmed by Dana, that the company
has retained the services of a restructuring advisor.
The downgrade of Dana's senior unsecured notes to Caa1 reflects
the continued erosion of the company financial strength as well as
the diminished level of asset coverage available to the unsecured
creditors due to the granting of security to the revolving credit
facility.
Moody's review is focusing on Dana's ability to stem the erosion
in its operating performance despite the possibility of lower
production levels and continued price-downs by its domestic OEM
customers, to maintain adequate liquidity through a successful
renegotiation of its credit and receivable sale facilities, and to
file its year-end financial statements in a timely manner.
Dana's liquidity rating remains at the SGL-4 level reflecting the
weakness in the company's ability to generate cash from operations
and its need to renegotiate its credit facilities.
Dana Corporation, headquartered in Toledo, Ohio, is a global
leader in the engineering, manufacture and distribution of
products and services for the automotive, engine, heavy truck,
off-highway, industrial and leasing markets. Dana Credit
Corporation is a wholly owned leasing and finance subsidiary of
Dana Corporation which is in the process of being liquidated. Dana
had annual sales of approximately $9.1 billion in 2004 and employs
46,000 people in 28 countries.
DANA CORP: Reportedly Hires Miller Buckfire and S&P Junks Ratings
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Dana Corp. to 'CCC+' and placed the ratings on
CreditWatch with developing implications. At the same time, the
counterparty credit rating on wholly owned subsidiary Dana
Credit Corp. was also lowered and placed on CreditWatch with
developing implications.
The downgrade and CreditWatch listing on Toledo, Ohio-based Dana
reflects Standard & Poor's concerns that, according to published
reports, the company has hired a restructuring firm. On Friday,
Feb. 24, Karen Lundegaard and Dennis K. Berman reported in The
Wall Street Journal that Data is working with Miller Buckfire &
Co., citing unnamed people familiar with the matter. Dana has not
commented on these reports.
"Standard & Poor's will evaluate the implications of this reported
move, as well as the company's progress in completing a crucial
new bank deal," said Standard & Poor's credit analyst Daniel R.
DiSenso. "If it appears that there has been an adverse shift in
management's financial strategies, specifically that they entail a
financial restructuring, the ratings could be lowered further
despite the company's seemingly adequate near-term liquidity."
Alternatively, the company could be upgraded, possibly to the 'B'
category, if it completes its new bank deal and if its near-term
operating prospects appear reasonable.
The company's free cash generation will be negative for 2005 and
most likely in 2006, which means debt levels will remain elevated.
At Sept. 30, 2005 (the last date for which figures were
available), Dana had $892 million available, including $707
million in cash and cash equivalents and $185 million in
availability under its bank lines and accounts receivable
securitization program. However, $120 million of Dana's cash is
in pledged accounts, and the company has a $268 million note
payable to Dana Credit Corp. (DCC) that must be repaid for DCC to
meet its $275 million debt maturity in August 2007. DCC continues
to let its portfolio run off in an orderly manner.
DENBURY RESOURCES: Earns $57.2 Mil. of Net Income in 4th Quarter
----------------------------------------------------------------
Denbury Resources Inc. (NYSE symbol: DNR) disclosed its fourth
quarter and 2005 financial and operating results. The Company
posted earnings for the full year 2005 of $166.5 million
approximately double 2004 net income of $82.4 million the increase
primarily due to higher commodity prices. Fourth quarter 2005 net
income was $57.2 million more than two-and-one-half times fourth
quarter 2004 net income of $22.5 million.
Adjusted cash flow from operations (cash flow from operations
before changes in assets and liabilities, a non-GAAP measure) for
the fourth quarter of 2005 was $104.7 million, more than double
fourth quarter 2004 adjusted cash flow from operations of
$48.5 million. Net cash flow provided by operations, the GAAP
measure, totaled $129.7 million during the fourth quarter of 2005,
as compared to $17.7 million during the fourth quarter of 2004.
The difference between the respective adjusted cash flow from
operations and cash flow from operations is primarily due to
increases or decreases in accounts payables and accrued
liabilities during the quarter.
Review of Financial Results
Denbury's fourth quarter 2005 production averaged 20,808 Bbls/d
and 65.0 MMcf/d, or 31,649 BOE/d, a 16% increase over third
quarter 2005 production levels, both of which were negatively
impacted by the two hurricanes, and a 9% increase over fourth
quarter 2004 production levels. Production from the Company's
tertiary recovery operations set another quarterly record in the
fourth quarter of 2005, averaging 9,939 BOE/d, a 12% increase over
third quarter 2005 levels, and a 37% increase over the fourth
quarter of 2004 average of 7,242 BOE/d. Production from the
Barnett Shale averaged 18.3 MMcfe/d (3,048 BOE/d) during the
fourth quarter of 2005, more than a threefold increase over the
5.8 MMcfe/d (962 BOE/d) average production during the fourth
quarter of 2004. Production in Louisiana reversed its downward
trend as a result of recent drilling successes there, averaging
6,992 BOE/d, a 35% increase over third quarter of 2005 levels and
just slightly less than the average production in the fourth
quarter of 2004. Production during the fourth quarter of 2005 was
66% oil, on trend with prior quarters since the sale of Denbury's
offshore properties in July 2004.
Total revenues in the fourth quarter of 2005 increased
$86.4 million (95%), as compared to revenues in the fourth quarter
of 2004, primarily as a result of higher commodity prices, but
also assisted by lower hedging payments and higher production
levels. In the fourth quarter of 2005, NYMEX oil prices averaged
approximately $60.00 per Bbl, and natural gas NYMEX prices
averaged approximately $12.85 per Mcf, as compared to NYMEX
averages of approximately $48.35 per Bbl and $7.25 per Mcf in the
fourth quarter of 2004. Denbury's weighted average net price
received per BOE was $17.50 higher per BOE (excluding hedges) in
the fourth quarter of 2005 than in the comparable period of 2004.
Hedge payments also decreased significantly, paying out $7.70 less
per BOE on hedges during the 2005 quarterly period than made a
year earlier, increasing the net realized revenue price per BOE
between the respective fourth quarters by $25.20 per BOE.
Oil price differentials (Denbury's net oil price received as
compared to NYMEX prices) deteriorated during the last half of
2004 and remained substantial during 2005, principally because the
price of heavy, sour crude produced primarily in the Company's
East Mississippi properties dropped significantly relative to
NYMEX prices. The Company's average NYMEX differential was
$6.17 per Bbl during the fourth quarter of 2005, only slightly
better than the average of $6.48 per Bbl during the fourth quarter
of 2004. For the full year periods, the average oil price
differential was $6.33 per Bbl during 2005 as compared to
$4.94 per Bbl during 2004.
The Company incurred more expenses in every category during the
fourth quarter of 2005, as compared to the fourth quarter of 2004,
partially offsetting the significantly higher revenue. Lease
operating expenses increased $12.6 million (62%) on a gross basis
as a result of general cost inflation in the industry, an
increasing emphasis on tertiary operations, increasing lease
payments for certain of our tertiary operating facilities, and
higher workover costs. On a per BOE basis, operating costs
increased to $11.28 per BOE, a 48% increase over the $7.60 per BOE
during the fourth quarter of 2004. Higher commodity prices
translated into higher energy and fuel costs in the Company's
tertiary operations and into higher royalty costs for CO2 (most of
which correlate with oil prices), contributing to the higher
operating costs. Production taxes and marketing expenses also
increased primarily as a result of higher commodity prices.
General and administrative expenses increased $0.8 million (12%)
between the fourth quarter of 2004 and 2005, averaging $2.44 per
BOE in the fourth quarter of 2005, up slightly from $2.38 per BOE
in the comparable quarter of 2004. The increase is primarily
related to additional personnel added during 2005 and general cost
inflation, coupled with continued high costs related to the
Sarbanes-Oxley Act and incremental costs related to the Company's
new software system.
Depletion, depreciation and amortization expenses increased
$7.3 million (34%) in the fourth quarter of 2005 as compared to
DD&A in the prior year fourth quarter. The DD&A rate in the
fourth quarter of 2005 was $9.80 per BOE, up from the $7.98 per
BOE rate in the prior year fourth quarter. DD&A expense on a per
BOE basis increased primarily due to rising costs in the industry
for both 2005 expenditures and upward revisions of future
development costs.
During the fourth quarter of 2005, the Company paid out
$10.1 million on its hedges, offset in-part by non-cash income of
$9.2 million for fair market value adjustments associated with
these hedges. Additionally, the Company recognized non-cash
expense of $9.4 million for fair value adjustments for hedges put
in place during the fourth quarter of 2005. Comparatively, in
the fourth quarter of 2004, the Company made hedge payments of
$29.8 million, offset in-part by non-cash income associated with
fair value adjustments of $7.1 million.
2006 Outlook
Denbury's 2006 development and exploration budget (excluding
acquisitions) is currently set at just under $500 million.
Approximately 50% of the 2006 capital budget is related to
tertiary operations, approximately 25% to the Barnett Shale area,
with the balance split almost equally between the Company's other
operating areas. The Company still anticipates that its average
daily production for 2006 will be approximately 37,000 BOE/d,
including approximately 2,000 BOE/d from the recent acquisition.
This production target represents a 24% increase in production
over the Company's 2005 production levels, or a 17% increase if
you exclude the production contributed from the recent
acquisition. Production from the Company's tertiary operations is
expected to increase from a 2005 average of 9,215 BOE/d to a
projected 2006 average of approximately 13,000 BOE/d, a 40%
increase.
Gareth Roberts, Chief Executive Officer, said: "2005 was another
year of outstanding results for Denbury. During the year we:
(1) increased our additional proven CO2 reserves by 74%, to 4.6
Tcf as of December 31, 2005;
(2) completed most of our Free State CO2 pipeline from Jackson
Dome to East Mississippi, with which we plan to start our
first East Mississippi CO2 injections next month;
(3) increased our CO2 tertiary oil production by 37% fourth
quarter 2004 to fourth quarter 2005;
(4) purchased five additional oil fields that are part of
future phases of our tertiary operations;
(5) expanded our horizontal well drilling in the Barnett Shale
with plans to further accelerate that program during 2006;
and
(6) replaced 313% of our 2005 production, increasing our proven
reserves by 18% year-end over year-end, almost all from
organic internal growth. All of these factors, combined
with high commodity prices, helped our stock reach new
highs during 2005 and early 2006."
"Our decision to focus on tertiary operations continues to be a
winning strategy and the backbone of our Company. Tertiary oil
production continues to grow and we added over 12.5 million
barrels of proved tertiary oil reserves this past year, and we
expect our growth in tertiary oil production and reserves to
continue. We are enthusiastic about the inventory of assets we
have compiled, having added tertiary opportunities for Phases III,
IV and beyond. We expect to grow our tertiary oil production
approximately 40% during 2006 and our total corporate production
by approximately 24%, predominately from internal organic growth.
Our future continues to look bright."
Denbury Resources, Inc. -- http://www.denbury.com/-- is a growing
independent oil and gas company. The Company is the largest oil
and natural gas operator in Mississippi, owns the largest reserves
of CO2 used for tertiary oil recovery east of the Mississippi
River, and holds key operating acreage in the onshore Louisiana
and Texas Barnett Shale areas. The Company increases the value of
acquired properties in its core areas through a combination of
exploitation drilling and proven engineering extraction practices.
* * *
As reported in the Troubled Company Reporter on Nov. 8, 2005,
Standard & Poor's Rating Services raised its corporate credit
rating on independent oil and gas exploration and production
company Denbury Resources Inc. to 'BB' from 'BB-'. S&P said the
outlook is stable.
DOBSON COMMS: Incurs $27.3 Million Net Loss in Fourth Quarter
-------------------------------------------------------------
Dobson Communications Corporation (Nasdaq: DCEL) reported a
$27.3 million net loss applicable to common shareholders for the
fourth quarter ended December 31, 2005. The net loss applicable
to common shareholders included a $21.7 million loss from
extinguishment of debt, a $4.5 million loss on redemption and
repurchases of mandatorily redeemable preferred stock, and an
income tax benefit of $16.2 million.
For the fourth quarter of 2004, Dobson reported a $13.9 million
net loss applicable to common shareholders. The 2004 fourth
quarter net loss applicable to common shareholders included a
$34.7 million gain from extinguishment of debt and income tax
expense of $16.8 million.
Fourth quarter 2005 results were an improvement over those for the
same period last year, absent the 2004 gain on extinguishment of
debt and the 2005 losses on extinguishment of debt and mandatorily
redeemable preferred stock.
Total revenue was $294.2 million for the fourth quarter of 2005,
an increase of 11.1 percent over total revenue of $264.9 million
for the same period last year.
Fourth quarter 2005 roaming revenue of $63.4 million was 19.1%
higher than roaming revenue of $53.3 million for the fourth
quarter of 2004. Roaming revenue accounted for 21.5 percent of
total revenue for the fourth quarter of 2005, compared with 20.1
percent of revenue in the same period of the prior year.
Dobson reported EBITDA of $95.7 million for the fourth quarter of
2005, an increase of 9.9 percent over EBITDA of $87.0 million for
the fourth quarter of 2004.
Operating income for the fourth quarter of 2005 was $45.8 million,
an increase of 28.1 percent over operating income of $35.8 million
for the fourth quarter of 2004.
Dobson's 2005 quarterly results reflect the acquisition of the
wireless assets of RFB Cellular, Inc., in late December 2004 and
Pennsylvania 4 Rural Service Area in September 2005. Their
combined impact in the fourth quarter of 2005 was a $1.5 million
operating loss.
Operating Trends
Dobson reported that its total average service revenue per unit
(ARPU) was $46.10 for the fourth quarter of 2005, compared with
$42.17 for the fourth quarter of 2004. ARPU includes revenue from
postpaid, prepaid and reseller customers, as well as ETC (Eligible
Telecommunications Carrier) payments.
Average customer usage per month was 642 minutes of use (MOUs) for
the fourth quarter of 2005, compared with 509 MOUs for the fourth
quarter of 2004.
Roaming MOUs on the Dobson network were 584 million for the fourth
quarter of 2005, an increase of 46 percent on a "same-store" basis
over the fourth quarter of 2004. GSM roaming accounted for
approximately 91 percent of all roaming MOUs in the fourth
quarter.
Dobson reported approximately 122,600 total gross subscriber
additions for the fourth quarter of 2005, postpaid customer churn
of 2.62 percent, and a net subscriber reduction of 22,500. For
the fourth quarter of 2004, the Company reported approximately
112,300 gross additions, postpaid churn of 2.35 percent, and a net
subscriber reduction of 25,600.
The Company had approximately 1,543,400 subscribers as of
December 31, 2005, with approximately 1,040,300 of these
customers, or 67.4 percent, on GSM calling plans. During the
fourth quarter of 2005, approximately 84,200 of the Company's TDMA
subscribers migrated to GSM calling plans.
Capital expenditures were approximately $32.6 million in the
fourth quarter of 2005, bringing the Company's total 2005 capital
expenditures to $145.9 million. The Company built 64 cell sites
during the fourth quarter of 2005, bringing its total cell sites
built for the year to 202.
Dobson ended 2005 with $196.5 million in cash and cash
equivalents, $4.5 million in restricted investments; $2.5 billion
in long-term debt; and $168.5 million in preferred stock. In
January 2006 the Company announced that it had called for
redemption all its outstanding shares of 12-1/4% and 13% Senior
Exchangeable Preferred Stock. The redemption date is March 1,
2006. As of December 31, 2005, the outstanding liquidation
preference of the 12-1/4% Senior Exchangeable Preferred Stock was
$5 million, and the outstanding liquidation preference of the 13%
Senior Exchangeable Preferred Stock was $28 million. The
outstanding liquidation preferences for the Preferred Stock do not
reflect accrued dividends and redemption premiums.
Outlook for 2006
Dobson expects that its 2006 operating results will be highlighted
by increased gross subscriber additions and continued improvement
in customer churn. These anticipated trends, along with higher
ARPU and improved operating efficiencies, are expected to produce
continued growth in EBITDA and free cash flow for the year.
The Company anticipates that 2006 total revenue will grow in a
range of 3 percent to 4 percent over 2005 total revenue.
Dobson expects flat to minimal growth in roaming revenue in 2006,
compared to the prior year.
The Company anticipates that "other revenue" will decline in
2006, primarily reflecting the effect in 2005 of approximately
$4 million in pre-2005 settlement payments by AT&T Wireless,
recognizing the settlement of claims for prior periods.
Dobson has incorporated into its 2006 guidance approximately
$7 million to $8 million in costs related to the expensing of
stock options, consistent with SFAS No. 123(R). The new rule was
required to be adopted January 1, 2006, and thus does not apply to
2005 results.
In terms of its subscriber base, in 2006 Dobson expects to
increase gross subscriber additions by 10 percent to 12 percent
compared with 2005, and to continue reducing churn. On a net
basis, the Company expects to see a slight reduction in
subscribers in the first half of 2006 and positive net additions
in the second half of 2006, producing between 10,000 and 20,000
net subscriber additions as a whole for the year.
The Company expects to report 2006 EBITDA in a range of
$435 million to $445 million. Dobson has budgeted approximately
$155 million for expected 2006 capital expenditures. After
interest, dividends and changes in working capital, Dobson expects
to report free cash flow in a range of $40 million to $50 million
for 2006.
Dobson Communications Corp. -- http://www.dobson.net/-- is a
leading provider of wireless phone services to rural markets in
the United States. Headquartered in Oklahoma City, the Company
owns wireless operations in 16 states.
Dobson Communications Corp.' 8-7/8% Senior Notes due 2013 carry
Moody's Investors Service's Caa2 rating and Standard & Poor's CCC
rating.
ENCOMPASS HOLDINGS: Posts $1MM Net Loss in Quarter Ended Dec. 31
----------------------------------------------------------------
Encompass Holdings, Inc., fka Nova Communications Ltd, delivered
its financial results for the quarter ended Dec. 31, 2005, to the
Securities and Exchange Commission on Feb. 14, 2006.
Encompass incurred a $1,092,287 net loss on $1,196,958 of revenue
for the three months ended Dec. 31, 2005, compared to a $1,800,101
net loss on zero revenues for the same period in 2004.
The Company's balance sheet at Dec. 31, 2005, showed $11,271,460
in total assets and $8,059,102. The Company had accumulated
deficit of $29,672,083 at the end of 2005.
During the six months ended Dec. 31, 2005, Encompass was unable to
continue its research & development efforts until additional debt
& equity financing was obtained. On Nov. 29, 2005, the Company
entered into a Security Purchase Agreement where it obtained
financing for up to $2,500,000. Also the Company received
$1,000,000 under the agreement to continue its research and
development activities.
A full-text copy of the regulatory filing is available for free
at http://researcharchives.com/t/s?5d5
Going Concern Doubt
Timothy L. Steers, CPA, LLC, expressed substantial doubt about
Nova's ability to continue as a going concern after it audited the
Company's financial statements for the fiscal years ended June 30,
2005 and 2004. The auditing firm points to the Company's
significant operating losses and working capital deficit.
About Encompass
Encompass Holdings, Inc., fka Nova Communications Ltd., is looking
for companies that share a potential for growth and a need for
capital. The company owns Aqua Xtremes, which makes a jet-powered
surfboard. In May 2005 it acquired Nacio Systems, a provider of
outsourced information technology services for corporate
customers.
EXPRESS SCRIPTS: Earns $111 Million in Quarter Ended Dec. 31
------------------------------------------------------------
Express Scripts, Inc. (Nasdaq: ESRX) reported record fourth
quarter net income of $111 million.
For the year, the Company reported record net income of
$400 million compared to $278 million for 2004.
The Company generated record cash flow from operations of
$262 million in the fourth quarter compared to $193 million for
the same period last year. For the year, cash flow from
operations also set a record at $793 million, compared to $496
million for 2004.
"We enjoyed an outstanding year in 2005, building a solid
foundation for growth in 2006 and beyond," George Paz, president
and chief executive officer stated. "Our value-added, fully-
integrated pharmacy benefit management services will continue to
help our clients better manage their drug spend. Our formulary
strategy reinforces our business model, which is built around
alignment of interests with plan sponsors and their patients, and
is based on reducing drug spend while never compromising health
outcomes."
Strong Fourth Quarter Operating Results
Revenues for the fourth quarter of 2005 were $4.6 billion, an 18%
increase over the fourth quarter of 2004. This increase mainly
reflects the acquisition of Priority Healthcare on Oct. 14, 2005,
increased utilization of prescription drugs and drug price
inflation. Increased use of lower-cost generic drugs (over 55% of
total prescriptions in the fourth quarter compared to 52% for the
same period last year) and increased member co-payments to retail
network pharmacies, which the Company does not record as revenue,
partially offset these increases.
Retail network claims processed in the fourth quarter were
111 million, an increase of 3% over the 108 million processed last
year. Home delivery prescriptions increased 4% to a record
10.3 million during the quarter from 9.9 million last year.
CuraScript's specialty pharmacy and distribution
revenues increased 330% to $862 million in the fourth quarter from
$201 million last year reflecting the acquisition of Priority, and
CuraScript's continued success in capturing an increased share of
the specialty drug spend in the Express Scripts' book of business.
Total adjusted claims were 144 million, a 4% increase over last
year.
Gross profit for the fourth quarter increased 38% to a record
$364 million from $263 million last year. The increase reflects
increased management of specialty drugs including the addition of
Priority, lower retail and home delivery drug purchasing costs,
higher generic utilization, and the growth in home delivery and
retail prescriptions. Gross profit per adjusted claim set a
record at $2.54, a 34% increase over $1.90 for the same
quarter last year.
Selling, general and administrative expenses for the quarter were
$169 million compared to $128 million last year. The increase in
SG&A expenses is primarily due to the Priority acquisition, higher
management incentive compensation, which is based on corporate
financial results, and expenses incurred in preparing for Medicare
Part D. These increases were partially offset by a $12 million
charge recorded last year to reserve for unsecured borrowings by
the Pharmacy Care Alliance under a line of credit with the
Company.
Operating income for the quarter increased 45% to a record
$195 million from $135 million for the fourth quarter of 2004,
while EBITDA increased 42% to a record $220 million from
$155 million last year. EBITDA per adjusted claim also set a
record at $1.53, a 37% increase over $1.12 in the fourth quarter
of 2004.
The Company recorded a charge of $4 million ($2 million net of
tax) in the fourth quarter to write-off deferred financing
fees due to the refinancing of the Company's credit facility in
conjunction with the acquisition of Priority Healthcare.
Full-Year 2005 Review
Revenues for 2005 were $16.3 billion, up 8% over 2004. Network
pharmacy claims processed were 437 million, a 10% increase over
2004, while home delivery prescriptions increased to 40.2 million,
a 5% increase over 2004. CuraScript's specialty pharmacy and
distribution revenues increased 151% to $1.6 billion in 2005 from
$645 million in 2004. Total adjusted claims for 2005 were
563 million, up 9% over last year.
Gross profit for 2005 increased 28% to $1,199 million, from
$938 million on an adjusted basis in 2004, while gross profit per
adjusted claim increased 18% to $2.13 from $1.81. Operating
income increased 25% to $643 million from $512 million on an
adjusted basis last year. EBITDA increased 25% to $727 million
from $582 million on an adjusted basis last year, and on a per
adjusted claim basis, EBITDA was $1.29, a 14% increase over 2004.
In addition to the fourth quarter charge of $4 million to write-
off deferred financing fees, the Company recorded non-recurring
non-cash tax-related benefits of $14 million earlier in the year.
In 2004, the Company recorded charges of $16 million for the early
retirement of debt and $25 million to increase reserves for legal
defense costs, in addition to a contract termination payment
received of $6 million.
2006 Earnings Guidance
Express Scripts expects that its financial performance will
continue to benefit from growth in generic utilization and home
delivery, including specialty pharmacy, lower retail and home
delivery drug purchasing costs, increased productivity and other
cost management initiatives, and capital structure improvements.
Headquartered in St. Louis, Missouri, Express Scripts, Inc. --
http://www.express-scripts.com/-- provides integrated PBM
services to over 50 million members, including network-pharmacy
claims processing, home delivery services, benefit-design
consultation, drug-utilization review, formulary management,
disease management, and medical- and drug-data analysis services.
The Company also distributes a full range of injectable and
infusion biopharmaceutical products directly to patients or their
physicians, and provides extensive cost-management and patient-
care services. Express Scripts serves thousands of client groups,
including managed-care organizations, insurance carriers,
employers, third-party administrators, public sector, and union-
sponsored benefit plans.
* * *
Moody's Investors Services assigned a Ba1 rating to Express
Scripts, Inc.'s Long Term Corporate Family Rating on Jan. 7, 2002.
On Dec. 19, 2005, Moody's said the outlook is positive.
FIDELITY MUTUAL: Rehabilitation Plan Hearing Set for April 19
-------------------------------------------------------------
The Commonwealth Court of Pennsylvania will convene a hearing at
10:00 a.m., on April 19, 2006, to consider approval of the Fourth
Amended Plan for the rehabilitation of The Fidelity Mutual Life
Insurance Company.
The Plan, submitted on Oct. 25, 2005, contemplates the transfer,
to a qualified bidder, of 100% of the Company through a stock
transaction or 100% of the Company's insurance business through a
reinsurance assumption transaction, pursuant to the terms of a
competitive bidding process.
Contracts will be endorsed to non-participating, non-voting
status, and policyholder dividends will be replaced by non-
guaranteed element credits. Contract values, benefits and
guarantees will not be changed.
Persons who are mutual members as of Aug. 31, 2001, will receive
distributions in exchange for their mutual member interests.
A copy of the Plan is available for free at https://www.fmlic.com/
or by written request to:
The Fidelity Mutual Life Insurance Company, In Rehabilitation
Attn: Plan Copies
250 King of Prussia Road
Radnor, Pennsylvania 19087-5295
Objections to the Plan must be submitted to the Commonwealth Court
by April 5, 2006. Copies of the objection must be mailed to:
Office of the Prothonotary
Commonwealth Court of Pennsylvania
South Office Building, 6th Floor
Harrisburg, Pennsylvania 17120
and
Counsel for the Rehabilitator
Attn: Thomas A. Leonard, Esq.
Obermayer Rebmann Maxwell & Hippel LLP
1617 JFK Blvd., 19th Floor
Philadelphia 19103-1895
The ongoing rehabilitation of The Fidelity Mutual Life Insurance
Company -- https://www.fmlic.com/ -- involves the largest
insolvency of an insurance company in Pennsylvania. Fidelity has
more than $1 billion in assets. Adelman, Lavine Gold and Levin --
http://www.adelmanlaw.com/-- represents Fidelity's Policyholders'
Committee.
FREEDOM 1999-1 CDO: Moody's Junks Ratings on Four Note Classes
--------------------------------------------------------------
Moody's Investors Service took rating actions on five classes of
Notes issued by Freedom 1999-1 CDO, Ltd:
* the U.S. $240,000,000 Class I Senior Secured Floating Rate
Notes Due 2011 have been upgraded from Ba1 on watch for
possible upgrade to Baa3;
* the U.S. $10,000,000 Class IIA Senior Secured Floating Rate
Notes Due 2011 and the U.S. $24,000,000 Class IIB Senior
Secured Fixed Rate Notes Due 2011 have been downgraded from
Caa2 on watch for possible downgrade to Ca; and
* the U.S. $10,000,000 Class IIIA Mezzanine Secured Floating
Rate Notes Due 2011 and the U.S. $30,000,000 Class IIIB
Mezzanine Secured Fixed Rate Notes Due 2011 have been
downgraded from Ca to C.
According to Moody's, its rating action results primarily from
improvements in the par coverage for Class I Notes and
deterioration in the par coverage for Class IIA, Class IIB, Class
IIIA, and Class IIIB Notes.
The transaction closed on November 17th, 1999.
Issuer: Freedom 1999-1 CDO, Ltd. (formerly CIGNA 1999-1)
Rating Action: Upgrade
Class Description: U.S. $240,000,000 Class I Senior Secured
Floating Rate Notes due 2011
Prior Rating: Ba1 (On Watch for Upgrade)
Current Rating: Baa3
Rating Action: Downgrade
Class Description: U.S. $10,000,000 Class IIA Senior
Secured Floating Rate Notes due 2011 and U.S.
$24,000,000 Class IIB Senior Secured Fixed Rate Notes
Due 2011
Prior Rating Class IIA: Caa2 (On Watch for Downgrade)
Current Rating Class IIA: Ca
Prior Rating Class IIB: Caa2 (On Watch for Downgrade)
Current Rating Class IIB: Ca
Class Description: U.S. $10,000,000 Class IIIA Mezzanine
Secured Floating Rate Notes due 2011 and U.S.
$30,000,000 Class IIIB Mezzanine Secured Fixed Rate
Notes Due 2011
Prior Rating Class IIIA: Ca
Current Rating Class IIIA: C
Prior Rating Class IIIB: Ca
Current Rating Class IIIB: C
FUGASITY CORP: Case Summary & 17 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Fugasity Corporation
5301 Longley Lane, H-115
Reno, Nevada 89511
Bankruptcy Case No.: 06-50070
Type of Business: The Debtor provides flow control technology
and other technological solutions for the
semiconductor industry.
Chapter 11 Petition Date: February 24, 2006
Court: District of Nevada (Reno)
Judge: Gregg W. Zive
Debtor's Counsel: Stephen R. Harris, Esq.
Belding, Harris & Petroni, Ltd.
417 West Plumb Lane
Reno, Nevada 89509
Tel: (775) 786-7600
Fax: (775) 786-7764
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $500,000 to $1 Million
Debtor's 17 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Ormsbee, Edward Bridge Note $125,371
High Desert Investments
P.O. Box 847
Dorris, CA 96023
Dale R. Siens, Ria P.C. Goods/Services $47,254
1236 Shadow Lane
Klamath Falls, OR 97601
Mott Metallurgical Corp. Goods/Services $36,416
84 Spring Lane
Farmington, CT 06032-3159
Cal-Bay Systems Goods/Services $32,553
Turpin, Jack Bridge Note $24,984
Sewell, Frederick D. Bridge Note $24,977
Haynes & Boone, LLP Goods/Services $24,818
Wilson Sonsini Goods/Services $23,710
Goodrich & Rosati
W3 Corporation Goods/Services $19,620
Pat Fraiser Goods/Services $17,390
Dale C. Kinzler Trust Bridge Note $9,221
Kinzler, Stephen L., Cust. Bridge Note $9,221
William W. White Goods/Services $6,521
Dettmer, Edward Ray Bridge Note $6,244
Flow Techno Service Goods/Services $5,074
Waters, MD William J. Bridge Note $4,995
Railey, Bruce J. Bridge Note $4,995
GENERAL MARITIME: Earns $104.6 Million in Quarter Ended Dec. 31
---------------------------------------------------------------
General Maritime Corporation (NYSE: GMR) reported its financial
results for the three months and full year ended Dec. 31, 2005.
2005 Fourth Quarter
The Company had net income of $104.6 million for the three months
ended Dec. 31, 2005, compared to net income of $140.5 million for
the three months ended Dec. 31, 2004. The decrease in net income
was the result of lower spot charter rates during the fourth
quarter of 2005 relative to the prior year period as well as a
smaller fleet.
"2005 was both a significant and transforming year for General
Maritime, Peter C. Georgiopoulos, Chairman, Chief Executive
Officer and President, stated. "In addition to posting strong
financial results during a comparatively softer rate environment,
we took decisive and significant steps that have redefined General
Maritime in terms of its fleet profile and capital structure. At
the same time, we unlocked value for shareholders by declaring a
cumulative dividend of $4.86 per share and implementing a share
repurchase program. General Maritime enters 2006 with a
significantly strengthened balance sheet, positioning the Company
to continue to serve shareholders well in both the near-term and
long-term."
Net voyage revenue, which is gross voyage revenue minus voyage
expenses unique to a specific voyage (including port, canal and
fuel costs), decreased 40.8% to $120.8 million for the three
months ended Dec. 31, 2005, compared to $203.9 million for the
three months ended Dec. 31, 2004. EBITDA for the three months
ended Dec. 31, 2005, was $129.8 million compared to
$173.0 million for the three months ended Dec. 31, 2004. Net cash
provided by operating activities was $59.8 million for the three
months ended Dec. 31, 2005, compared to $132.2 million for the
prior year period. As of Dec. 31, 2005, the Company's net debt-
to-book capitalization was reduced to 3.8% from 33.1% as of
Dec. 31, 2004. After giving effect to the recent sale of the
Company's nine OBO Aframax vessels, the Company expects to be
substantially debt free with over a billion dollars of liquidity.
The average daily time charter equivalent for vessels on spot
charters decreased by 37.2% to $42,252 for the three months ended
Dec. 31, 2005, compared to $67,325 for the prior year period. The
Company's double-hulled spot Aframax vessels earned $46,236 and
the Company's double hulled spot Suezmax vessels earned $59,478
for the quarter ended Dec. 31, 2005.
Total vessel operating expenses, which are direct vessel operating
expenses and general and administrative expenses, remained
relatively flat at $31.5 million for the three months ended
Dec. 31, 2005 compared to $31.1 million for the three months ended
Dec. 31, 2004.
During the same periods, the average size of General Maritime's
fleet decreased 9.9% to 38.8 vessels from 43.1 vessels in the
prior year period. Daily direct vessel operating expenses
remained relatively flat decreasing 0.3% to $6,033 per
vessel day during the fourth quarter of 2005, from $6,051 per
vessel day during the same period in 2004.
On a twelve-month basis, daily direct vessel operating expenses
fell 5.9% from the prior year period. This decrease can be
attributed to the timing of certain purchases, maintenance and
repair costs, and the realization of savings from certain cost
cutting initiatives the Company instituted during 2005. General
and administrative costs increased during the comparative periods
due to an increase in payroll expenses associated with the
Company's offices in New York, Greece and Portugal, professional
fees, and travel expenses as well as a non-cash expense associated
with restricted stock granted to our executives and employees.
Full Year 2005
Net income was $212.4 million for the full year ended Dec. 31,
2005, compared to $315.1 million for the full year ended Dec. 31,
2004. Net voyage revenues decreased 26.2% to $430.7 million for
the full year ended Dec. 31, 2005, compared to $583.3 million
for the full year ended Dec. 31, 2004. EBITDA was $338.6 million
for the full year ended Dec. 31, 2005, compared to $453.8 million
for the full year ended Dec. 31, 2004. Net cash provided by
operating activities was $251.8 million for the full year ended
Dec. 31, 2005, compared to $363.2 million for the prior year
period. TCE rates obtained by the Company's fleet decreased 18.8%
to $30,605 per day for the full year ended Dec. 31, 2005, from
$37,678 for the prior year period.
Daily direct vessel operating expenses for the year ended Dec. 31,
2005, decreased 5.9% to $5,661 compared to $6,015 million for the
year ago period. General and administrative expenses increased
40.0% to $44.0 million for the year ended Dec. 31, 2005, from
$31.4 million for the year ago period.
"The opportunistic vessel sales that General Maritime has entered
into in 2005 and during February 2006 have enabled the Company to
monetize the value of non-core assets and further modernize our
fleet. In addition to realizing both a sizeable book gain and
return on our initial investment, with the vessel sales General
Maritime's fleet becomes 100 percent double-hull and its average
age is significantly reduced. Including the recent OBO sales and
the new buildings that will be delivered between March of 2006 and
2008, General Maritime has successfully reduced the average age of
its fleet to seven and a half years," Mr. Georgiopoulos continued.
General Maritime Corporation's Fleet
As of Feb. 21, 2005, General Maritime Corporation's fleet was
comprised of 30 wholly owned tankers, consisting of 19 Aframax and
seven Suezmax tankers and four new building Suezmax contracts,
with a total carrying capacity of approximately 3.5 million
deadweight tons, or dwt. The average age of the Company's fleet
as of Dec. 31, 2005, by dwt, excluding the new building contracts,
was 10.9 years compared to 11.9 years as of Dec. 31, 2004. The
average age of the Company's Aframax tankers was 12.2 years and
the average age of the Company's Suezmax tankers was 9.4 years.
After giving effect to the disposition of the Company's nine OBO
Aframax vessels, the Company's fleet will be comprised of 21
wholly owned tankers consisting of 10 Aframax and seven Suezmax
tankers and four new building Suezmax contracts, with an average
age of 7.5 years.
Currently, eight of General Maritime Corporation's Aframax tankers
and seven of its Suezmax tankers are operating on the spot market.
42% of the Company's fleet, consisting of 11 Aframax tankers, is
currently under time charter contracts, compared to 26% of the
fleet under time charter contracts as of Dec. 31, 2004.
The Company's primary area of operation is the Atlantic basin.
The Company also currently has vessels employed in the Black Sea
and Far East to take advantage of market opportunities and to
position vessels in anticipation of drydockings.
Fourth Quarter 2005 Dividend Announcement
On Feb. 21, 2006, the Company's Board of Directors declared a 2005
quarterly dividend of $2.00 per share payable on or about Mar. 17,
2006, to shareholders of record as of March 3, 2006. The dividend
amount was determined in accordance with the Company's policy of
paying an amount equal to EBITDA less reserves for fleet renewal
and maintenance.
On Feb. 21, 2006, the Company's Board of Directors established a
revised $14.5 million fleet maintenance and renewal reserve
relating to fourth quarter 2005. This reserve reflects the
current size of the Company's fleet while maintaining the $7.5
million quarterly drydock reserve as for 2005.
In addition, in determining the quarterly dividend for fourth
quarter 2005 the Company's Board of Directors excluded the
following items for the quarter:
-- loss with respect to its forward freight agreements,
-- the costs incurred in connection with its Senior Notes
consent solicitation and tender offer, and
-- the Company's gain for the quarter on its sale of vessels.
The Company has declared aggregate dividends of $4.86 per
share for the full year of 2005.
The Company policy remains to declare quarterly dividends to
shareholders in April, July, October and February of each year
based on its EBITDA after net interest expense and reserves for
dry docking and fleet renewal, as established by the Board of
Directors. For 2006, the Board has established a reserve of
$44 million annually or $11 per quarter, reflecting a $28 million
fleet maintenance and renewal reserve and a $16 million dry
docking reserve.
Sale of Nine OBO Aframax Vessels
On Feb. 10, 2006, the Company reported that it had agreed to sell
nine OBO Aframax tankers en bloc to Tanker Pacific for
$247.5 million. The Company expects to realize a net gain of
$16.6 million from the sale. The Company intends to utilize the
proceeds to pay down debt, for corporate purposes, which may
include share repurchases, and for any future acquisitions that
the Company may consider. Deliveries of the nine vessels are
expected to be concluded by July 2006.
Share Repurchase
On Feb. 21, 2006, the Company's Board of Directors approved an
additional $200 million repurchase of the Company's common stock
under the share repurchase program. Since October 2005, when the
share repurchase program was instituted, the Company has
repurchased 5.1 million shares at an average price of $36.92.
On Jan. 4, 2006, the Company announced it had entered into an
agreement to repurchase 4,176,756 of its common shares from
Oaktree Capital's OCM Principal Opportunities Fund, L.P., in a
privately negotiated transaction at $37.00 per share for a total
purchase price of $154,539,972. The price per share was agreed to
after the close of the market on Jan. 3, 2006, and represented a
discount of 2.4% to the closing price of the Company's common
stock on that date.
The Board will periodically review the program. Share repurchases
will be made from time to time for cash in open market
transactions at prevailing market prices or in privately
negotiated transactions. The timing and amount of purchases under
the program will be determined by management based upon market
conditions and other factors. Purchases may be made pursuant to a
program adopted under Rule 10b5-1 under the Securities Exchange
Act. The program does not require the Company to purchase any
specific number or amount of shares and may be suspended or
reinstated at any time in the Company's discretion and without
notice. Repurchases will be subject to the restrictions under the
Company's existing credit facility.
Tendered Senior Notes
On Jan. 17, 2006, the Company reported that it had completed its
tender offer and consent solicitation for any and all of its
outstanding 10% Senior Notes due 2013. The tender offer for the
Notes expired on Jan. 17, 2006, and was subject to the terms and
conditions set forth in the Company's Offer to Purchase for Cash
and Solicitation of Consents, dated Dec. 15, 2005.
On Dec. 30, 2005, General Maritime Corporation accepted for
purchase and paid for $226,460,000 principal amount of Notes
tendered prior to the expiration of the Company's consent
solicitation on Dec. 29, 2005, representing approximately 99.99%
of the total principal amount of Notes outstanding. Holders who
validly tendered Notes prior to the Consent Time received total
consideration per $1,000.00 principal amount of Notes tendered
of $1,151.12, which amount included a consent payment of $30.00,
plus accrued and unpaid interest on the Notes tendered up to, but
not including, the payment date.
"General Maritime has significant financial flexibility to
continue to enter into value-creating transactions for
shareholders. In accomplishing this critical goal, we will
continue to draw upon our past success and actively seek
acquisition opportunities to once again grow our fleet and expand
our industry leadership. Complementing this focus, we will
continue to return value to shareholders through our dividend
policy while looking to take advantage of the Board's $200 million
increase in our share repurchase program," Mr. Georgiopoulos
concluded.
Headquartered in New York City, General Maritime Corporation --
http://www.generalmaritimecorp.com/-- provides international
seaborne crude oil transportation services principally within the
Atlantic basin, which includes ports in the Caribbean, South and
Central America, the United States, West Africa, the
Mediterranean, Europe and the North Sea. The Company also
currently operates tankers in other regions including the Black
Sea and Far East. General Maritime Corporation currently owns and
operates a fleet of 30 tankers -- 19 Aframax, 7 Suezmax tankers
and 4 Suezmax newbuilding contracts -- with a carrying capacity of
approximately 3.5 million dwt. After giving effect to the
disposition of the Company's nine OBO Aframax vessels the
Company's fleet will be comprised of 21 wholly owned tankers
consisting of 10 Aframax and 7 Suezmax tankers and 4 newbuilding
Suezmax contracts -- with a carrying capacity of approximately 2.6
million dwt.
* * *
As reported in the Troubled Company Reporter on May 13, 2005,
Standard & Poor's Ratings Services affirmed its ratings, including
the 'BB' corporate credit rating, on General Maritime Corp. and
removed all ratings from CreditWatch, where they were placed with
negative implications on Jan. 27, 2005. The rating outlook is
stable. The January CreditWatch placement followed General
Maritime's announcement of a new dividend policy, under which
shareholders would receive a significant proportion of the
company's cash flow.
HANGER ORTHOPEDIC: Moody's Affirms Junk Rating on Preferred Stock
-----------------------------------------------------------------
Moody's Investors Service assigned a rating of B2 to the amended
senior secured revolving credit facility of Hanger Orthopedic
Group, Inc., due in 2009, affirmed the senior secured term loan
'B' rating at B2, affirmed the senior unsecured notes at B3 and
the redeemable preferred stock at Caa2. Concurrently, Moody's has
withdrawn the rating of B2 on the senior secured revolving credit
facility due 2007 and has downgraded the Corporate Family rating
from B2 to B3. These rating actions have been taken to reflect
the recent, material amendments made to the company's senior
secured revolving credit agreement as well as the concomitant
covenant amendments made to the term loan 'B' facility.
The amendment of the revolving credit facility extended the
maturity of the facility from February 2007 to September 2009 and
reduced the availability from $100 million to $75 million. In
addition, several financial covenants were modified in both the
revolving credit facility and the term loan 'B' facility,
including the senior secured and total leverage ratios as well as
interest coverage, fixed charge coverage, and amounts permitted
for capital expenditures and acquisitions.
Moody's assigned this rating:
* B2 rating to the $75 million senior secured revolver due
2009
Moody's affirmed these ratings:
* B2 rating on the $150 million senior secured term loan 'B'
due 2009;
* B3 rating on the $200 million 10.375% Senior Notes due 2009;
* Caa2 rating on the $60 million 10% redeemable preferred
stock;
Moody's downgraded the Corporate Family rating to B3 from B2
* The outlook is stable
This rating has been withdrawn:
* $100 million senior secured revolver due 2007, rated B2
The downgrade to the Corporate Family rating reflects the
company's recent, modest revenue growth trends, high leverage,
weak free cash flow, the company's material reliance on government
reimbursements and the discounting of national payors relative to
Medicare reimbursement rates, continued pricing pressure from
large commercial payors, and a competitive operating environment.
As noted, weak or negative top-line growth is a major ratings
driver. Patient care services, which represent roughly 92% of
revenues, have grown modestly over the past several years. "Same-
store" patient care services grew by roughly 5% during the 2000 to
2002 timeframe with such growth slowing to 1.6% in 2003 and
declining by 1.7% in 2004. For the nine months ended
Sept. 30, 2005, same-store sales were up by only 0.1%. The
company has experienced double-digit growth in its distribution
business, conducted through its subsidiary, Southern Prosthetic
Supply, Inc., but this operation accounts for only 8% of total
revenues.
Due to several years of weak profitability, Hanger's leverage has
risen by a material amount over the last several years. The ratio
of adjusted debt to EBITDA has increased from 5.8 times at the end
of fiscal 2003 to 6.3 times at the end of 2004, and stands at
roughly 6.3 times as of Sept. 30, 2005. Moreover, free cash flow
to adjusted debt during the same timeframe has declined from 8.8%
to 6.8% with this relationship further compressing to 5.3% for the
last twelve months ended Sept. 30, 2005. It is Moody's
expectation that the free cash flow to adjusted debt ratio will
continue to be weak for the foreseeable future due to the combined
effect of negligible revenue growth coupled with significant,
ongoing debt service requirements.
As noted, Hanger also evidences an unfavorable payor mix as a
combination of Medicare, Medicaid and the U.S. Veterans
Administration provided approximately 44% of 2004 net sales.
Legislation enacted in November 2003 froze Medicare reimbursement
levels for all orthopedic and prosthetic services at current
levels for all of calendar years 2004, 2005 and 2006, thereby
pressuring company gross margins. However, the percentage of the
population covered by Medicare is expected to grow as the U.S.
population ages and Medicare reimbursements are generally expected
to be increased commencing in 2007.
Third party reimbursements in the O & P business are nevertheless
at or below Medicare reimbursement rates. Reimbursements from
certain third-party payors are indexed to Medicare with national
payor contracts generally being negotiated at a discount to
Medicare reimbursement rates. Poor top-line growth, coupled with
significant reimbursement risk forces Hanger to rely on purchasing
and other efficiency programs to slow margin erosion.
Regardless of positive long-term growth fundamentals, the current
environment for O & P operators remains challenging due to the on-
going freeze on Medicare reimbursements. In addition, cost-
conscious third-party payors, cash-strapped state Medicaid
programs as well as benefit design changes have led to a reduction
in discretionary patient visits.
Moody's concerns with respect to these issues are compounded by
the number of other challenges that have arisen at the company
during the past two years, including billing discrepancies at the
West Hempstead center and the accounting error related to
uncollectible receivables that was uncovered. A class action suit
was subsequently lodged against management in June 2004 with
respect to the alleged improper billing. The U.S. Attorney's
Office has subpoenaed billing records for various locations and
the SEC commenced an informal inquiry into the matter. It is
Moody's understanding that motions have been filed to dismiss the
charges.
Factors partially mitigating these concerns include the company's
dominant market position as Hanger is the largest owner and
operator of orthotic and prosthetic patient-care in the U.S. with
a market share just under 25% and with the next largest competitor
maintaining less than a 2% market share. A second strength is the
scope of the company's operations with over 600 patient-care
centers in 44 states and the District of Columbia.
Such scale potentially affords Hanger with several comparative
advantages, among which are sound geographic dispersion of
operations, the ability to obtain greater purchasing discounts,
national contracting capability with national and regional managed
care providers, access to new technology and the ability to
utilize shared fabrication facilities among clusters of centers.
The company's in-house and third-party distribution capabilities
that are conducted through its wholly owned subsidiary, Southern
Prosthetic Supply, Inc., also provides greater purchasing power
with manufacturers and freight providers, facilitates optimal raw
materials carry, provides ready access to prefabricated and
finished O & P products, expands the company's reach to a non-
Hanger client base, and enables the firm to co-market and share
product development initiatives with suppliers.
Long-term demographics and industry growth trends are also a
positive and include an aging U.S. population, growing physical
health consciousness, increased efforts on the part of managed
care providers to reduce spiraling healthcare costs and advanced
technologies that have hastened the replacement of older O & P
devices. Moody's also continues to take into consideration the
potential for significant incremental sales and EBITDA growth in
2006 related to the company's Linkia subsidiary.
An additional strength recognized by Moody's is Hanger's ability
to rapidly develop and incorporate technological advances into the
fitting and fabrication of O & P devices through its centers. An
example of this is the development of the Insignia system, which
provides a computer-scanned image in lieu of a plaster casting of
a patient's residual limb to provide a better fit and faster
turnaround for the patient. The company has also developed the
WalkAide, its first Innovative Neurotronics, Inc. product, which
is designed to enable stroke victims as well as other patients
suffering with 'drop-foot' to walk again through the application
of neuromusclular stimulation. The challenge that Hanger
nevertheless faces is bringing new products such as WalkAide to
commercial fruition.
The stable outlook reflects Moody's expectation that the company
will maintain a ratio of adjusted free cash flow to adjusted debt
at roughly 3% together with evidence of stabilization in top-line
revenue growth in the near to medium term, metrics that will
enable it to remain comfortably within the parameters of a B3
rating.
If Hanger is unsuccessful in obtaining material incremental Linkia
revenues beyond the Cigna contract that became effective in
October, 2005 and if other sales initiatives such as WalkAide and
Total Care fail to generate improved same store growth, Moody's
may consider further downgrading the company's ratings. Moody's
notes that the company has been reasonably successful in achieving
expense reductions during the past two years, which has served to
partially offset the difficulties in obtaining material top-line
growth. Such measures, however, can only temporarily offset
volume and pricing pressures and thus may not prevent a downgrade.
The ratings could be upgraded if the company is successful in
reversing same store sales trends, by signing additional Linkia
contracts or by achieving commercial success with its new WalkAide
product. An upgrade would also be considered if Hanger achieves
incremental expense reductions, and demonstrates that it can
materially reduce leverage as measured by free cash flow coverage
of debt for a sustained period. Moody's decision to change
Hanger's rating will depend in large measure on whether the
company achieves and sustains its free cash flow targets. That, in
turn, will depend on whether top-line growth and the fundamentals
for the industry improve.
Hanger Orthopedic Group, Inc., headquartered in Bethesda,
Maryland, is the leading provider of orthotic and prosthetic
patient-care services. The company owns and operates 618 patient
care centers in 44 states including the District of Columbia. For
the twelve months ended Sept. 30, 2005, the company recognized
revenue of approximately $575 million.
HEATING OIL: Files Plan and Disclosure Statement in Connecticut
---------------------------------------------------------------
Heating Oil Partners, L.P., and heating Oil PArtners G.P., Inc.,
unveiled to the U.S. Bankruptcy Court for the District of
Connecticut a Disclosure Statement explaining their Joint Plan of
Reorganization.
"I am pleased for the employees, customers, lenders, and vendors
of Heating Oil Partners," said Michael Buenzow, a senior managing
director of FTI Palladium Partners (NYSE: FCN), who is currently
serving as Chief Restructuring Officer of Heating Oil Partners.
"In a relatively short period of time, we have made major strides
towards completion of the reorganization process. We are in the
process of securing new long-term financing, significantly
reducing our debt, operating costs and interest expense. We are
happy for all of our employees and their families. As a result of
working together with our customers, vendors and creditors, we
have solidified the long-term viability of the company and have
preserved approximately 1,000 jobs".
If approved by the Court, the Plan will provide for:
* a new senior credit facility,
* the conversion of all of the Company's pre-petition secured
debt of approximately $119 million to equity,
* the payment of all administrative claims in full, and
* a distribution of up to $525,000 to the unsecured creditors
of the Company.
"We currently anticipate that the Company will emerge from the
Chapter 11 reorganization process within the next 90 days" said
the Company's attorney James Berman, of Zeisler & Zeisler, PC.
The Company indicated that, given the level of secured debt, the
Plan does not provide any recovery to existing shareholders and
all existing shares and other equity interests of the Company and
the G.P. will be effectively cancelled under the Plan. As a
result, there will be no value available for distribution to the
creditors of Holdings or the unitholders of the Fund, and the
Fund's direct subsidiary, Holdings, will be placed into bankruptcy
proceedings in Canada.
"We are excited about the Company's future," said Michael Anton,
CEO of Heating Oil Partners. "The continued dedication of our
employees combined with the cooperation and support displayed by
our creditors and vendors are meaningful votes of confidence as
Heating Oil Partners continues to move toward emergence form
Chapter 11. Over the past several months, we have created a
platform from which we can better serve our customers, provide a
stable work environment for our employees, meet our future
financial obligations and return to profitability."
The Company will continue to focus on its four core business
lines:
* Residential Heating Oil,
* Commercial Heating Oil,
* Service and Installation, and
* Fleet Fueling.
Overview of the Plan
The Debtors proposes to implement the Plan through:
a. Substantive Consolidation;
b. Cancellation of Existing Securities and Agreements;
c. New Working Capital Facility; and
d. New Membership Interests, New Holdings Common Stock and New
Option Interests.
Treatment of Claims
Under the Plan, Administrative Expenses, totaling approximately
$62.4 million will be paid in full and in cash.
Priority Tax Claims, totaling approximately $3.6 million, at the
sole option of the Debtors, will be either
(a) paid in full and in cash on the effective date or
(b) paid in full and in cash in equal semi-annual installments
over a period not exceeding six years from the date of
assessment, with interest at the applicable rate or other
amount determined by the Court.
Holders of Secured Claims will receive their pro-rata share of the
New Holdings Common Stock and their pro-rata share of the New
Option Interests. The disclosure statement does not estimate how
much holders of secured claims will recover.
Other Secured Claims will either be:
(a) reinstated,
(b) paid in full and in cash together with any postpetition
interest,
(c) satisfied by the surrender of the collateral securing such
Allowed Claim, or
(d) rendered unimpaired in accordance with Section 1124 of
the Bankruptcy Code.
The Debtors tell the Court that holders of Other Secured Claims
will recover 100% of their claims.
General Unsecured Claims, except to the extent that a holder of an
Allowed General Unsecured Claim agrees to a less favorable
treatment, will receive:
(a) their pro-rate share of the $425,000 distribution amount;
plus
(b) their pro-rate share of the $100,000 release based amount,
in the event that:
(i) the holder of the Allowed General Unsecured Claim
elects the release provided in the Plan, or
(ii) the Court approves the release section the Plan.
The Debtor estimates that General Unsecured Claims will recover
$12.6% of their claims without the release amount or 15.56% if the
release amount is included.
Old Equity Interests will receive no distribution and will be
cancelled.
Headquartered in Darien, Connecticut, Heating Oil Partners, L.P.
-- http://www.hopheat.com/-- is one of the largest residential
heating oil distributors in the United States, serving
approximately 150,000 customers in the Northeastern United States.
The Company's primary business is the distribution of heating oil
and other refined liquid petroleum products to residential and
commercial customers. The Company and its subsidiaries filed for
chapter 11 protection on Sept. 26, 2005 (Bankr. D. Conn. Case No.
05-51271) and filed for recognition of the chapter 11 proceedings
under the Companies' Creditors Arrangement Act (Canada). Craig I.
Lifland, Esq., and James Berman, Esq., at Zeisler and Zeisler,
represent the Debtors in their restructuring efforts. Jeffrey D.
Prol, Esq., at Lowenstein Sandler PC, represents the Official
Committee of Unsecured Creditors. When the
Debtors filed for protection from their creditors, they listed
$127,278,000 in total assets and $155,033,000 in total debts.
HOST MARRIOTT: Earns $74 Million of Net Income in Fourth Quarter
----------------------------------------------------------------
Host Marriott Corporation (NYSE: HMT) disclosed its results of
operations for the fourth quarter and for the year ended
December 31, 2005. Fourth quarter and full year results include:
-- Total revenue increased 9.7% to $1,272 million for the
fourth quarter and 8.6% to $3,881 million for full year
2005;
-- Net income increased $13 million to $74 million for the
fourth quarter and increased from a loss of $.01 million for
full year 2004 to net income of $166 million for full year
2005.
For the fourth quarter and full year 2005, net income
includes net gains of $7 million and $21 million from these
transactions:
* the sale of a significant interest in a joint venture;
* gains on hotel dispositions; and
* costs associated with the refinancing of senior notes and
the redemption of preferred stock.
By comparison, for the fourth quarter and full year 2004,
net income (loss) includes a net gain of $30 million and a
net loss of $12 million associated with similar transactions
in 2004.
-- Adjusted EBITDA, which is Earnings before Interest Expense,
Income Taxes, Depreciation, Amortization and other items,
increased 16.9% to $312 million for the fourth quarter and
16.2% to $918 million for full year 2005. (Adjusted EBITDA
has been reduced by $2 million and $6 million for the fourth
quarter and full year 2005, respectively, and $1 million for
both the fourth quarter and full year 2004 for distributions
to minority interest partners of Host Marriott, L.P.)
Operating Results
Comparable hotel RevPAR for the fourth quarter of 2005 increased
10.3% and comparable hotel adjusted operating profit margin
increased 155 basis points. The fourth quarter increases in
comparable hotel RevPAR and comparable hotel adjusted operating
profit margin were driven by a 7.7% increase in average room rate
and a 1.7 percentage point increase in occupancy. Full year 2005
comparable hotel RevPAR increased 9.5%, while comparable hotel
adjusted operating profit margin increased 170 basis points, both
of which exceeded the high end of the Company's guidance. The
full year 2005 RevPAR growth was driven by an increase in average
room rates of 7.6% and an increase in occupancy of 1.2 percentage
points.
Christopher J. Nassetta, president and chief executive officer,
stated, "We finished 2005 with an outstanding fourth quarter, as
strong RevPAR and margin growth drove significant increases in
Adjusted EBITDA and FFO per diluted share, which exceeded the high
end of our guidance by $.04." Mr. Nassetta added, "We expect that
the favorable supply and demand environment in the industry will
continue to drive further improvement in our operating results in
2006."
Balance Sheet
As of December 31, 2005, the Company had $184 million of cash and
cash equivalents. Since December 31, 2004, the Company's total
debt has been reduced by approximately $444 million primarily as a
result of the redemption or conversion of substantially all of the
Convertible Subordinated Debentures, which was completed in the
first quarter of 2006. The Company currently has $575 million of
availability under its credit facility.
W. Edward Walter, executive vice president, chief financial
officer, stated, "As a result of the conversion or redemption of
substantially all of our QUIPs, we have reduced our debt by
approximately $492 million, as well as annual interest costs by
approximately $32 million. Despite the increase in shares, we
believe this change should contribute to an increase in the common
dividend to stockholders, while not becoming dilutive to FFO per
share or earnings per share based on our 2006 forecast."
Acquisitions and Dispositions
In 2006, the Company has sold, or has, subject to customary
closing conditions, signed contracts to sell five properties:
-- the Swissotel The Drake, New York;
-- the Fort Lauderdale Marina Marriott;
-- the Albany Marriott;
-- the Marriott at Research Triangle Park; and
-- the Chicago Marriott Deerfield Suites
for expected total proceeds of approximately $700 million and a
total estimated gain in excess of $380 million. The proceeds from
the sales will be used to partially fund the acquisition of
38 properties from Starwood Hotels & Resorts Worldwide, Inc., and
for other corporate purposes.
James F. Risoleo, executive vice president, chief investment
officer, stated, "We are thrilled with the sales prices of all of
our recent and expected dispositions, especially the Swissotel The
Drake, New York and the Fort Lauderdale Marina Marriott. We will
continue to take advantage of the current strong environment to
recycle capital. We also continue to have a strong pipeline of
potential acquisition candidates in urban and resort destinations
both in North America and Europe that we believe are consistent
with our strategy."
2006 Outlook
The Company expects comparable hotel RevPAR for first quarter and
full year 2006 to increase approximately 7.0% to 9.0% and 7.0% to
10.0%. For full year 2006, the Company also expects its operating
profit margins under GAAP to increase approximately 210 basis
points to 270 basis points and its comparable hotel adjusted
operating profit margins to increase approximately 140 basis
points to 175 basis points. Based upon this guidance and the
assumption that the Starwood acquisition of 38 hotels (including
entering into a joint venture for the six European assets in which
the Company expects to retain approximately 25% of the equity
interests) will be substantially completed in early April, the
Company estimates that for 2006:
-- earnings per diluted share should be approximately $.99 to
$1.01 for the first quarter and $1.44 to $1.54 for the full
year;
-- net income should be approximately $379 million to
$387 million for the first quarter and $724 million to
$774 million for the full year;
-- Adjusted EBITDA should be approximately $1,225 million to
$1,270 million for the full year, both of which have been
reduced by approximately $10 million for distributions to
minority interest partners of Host Marriott, L.P.;
-- FFO per diluted share should be approximately $.23 to $.25
for the first quarter and $1.44 to $1.54 for the full year
(including a charge of approximately $7 million, or
approximately $.01 per diluted share, for the full year,
related to costs associated with debt or perpetual preferred
stock expected to be refinanced or prepaid in 2006); and
-- common dividend will modestly increase throughout the year.
Mr. Nassetta also stated, "We believe that the trends for 2006 and
beyond remain very positive. We are convinced that the Starwood
portfolio complements our existing properties and will be
accretive to the short- and long-term value of the Company. We
believe that the strategic positioning of our portfolio both in
terms of premium brands and international and domestic markets
will result in meaningful growth in RevPAR, earnings and
dividends. As we move forward in 2006 under our new name, Host
Hotels & Resorts, we will continue to aggressively pursue our
mission of being the premier hospitality real estate company and
maximizing shareholder returns."
Host Marriott -- http://www.hostmarriott.com/-- is a Fortune 500
lodging real estate company that owns or holds controlling
interests in upscale and luxury hotel properties primarily
operated under premium brands, such as Marriott(R), Ritz-
Carlton(R), Hyatt(R), Four Seasons(R), Fairmont(R), Hilton(R) and
Westin(R).
* * *
As reported in the Troubled Company Reporter on Nov. 21, 2005,
Moody's Investors Service affirmed the ratings of Host Marriott's
senior unsecured debt of Ba2, with a positive outlook. The
ratings affirmation follows the announcement by Host Marriott that
it has agreed to acquire 38 luxury and upper upscale hotels from
Starwood Hotels and Resorts for approximately $4 billion. Moody's
expects Host Marriott will issue approximately $2.3 billion of
common equity to Starwood stockholders, and assume $700 million in
debt, with the balance to be funded with cash provided by, perhaps
initially, a bridge facility.
INTEGRATED ELECTRICAL: Can Pay Creditors' Undisputed Claims
-----------------------------------------------------------
Integrated Electrical Services, Inc., and its debtor-affiliates
sought and obtained permission from the U.S. Bankruptcy Court for
the Northern District of Texas to pay the prepetition fixed,
liquidated, and undisputed claims of the suppliers of materials,
equipment, goods, and services with whom they continue to do
business.
The Debtors estimate that, as of the Petition Date, the aggregate
amount of outstanding Undisputed Trade Vendor Claims is
approximately $52,000,000.
Sanford R. Edlein, Integrated Electrical Services, Inc.'s chief
restructuring officer, explains that the nature of the Debtors'
businesses require them to obtain certain necessary equipment,
goods, and services from third-party trade vendors and
subcontractors and to provide those goods and services to their
customers. The Debtors frequently provide these services to
their customers under long-term contracts that require progress
payments upon the completion of particular phases or subsets of
the entire project. If the Debtors do not honor their
obligations to current customers due to the inability to get the
necessary goods and services, the Debtors' customers will replace
them, or alternatively, certain unpaid trade vendors will place
mechanics' and materialmen's liens on the Debtors' current
projects, assert claims against surety bonds, and contractually
withhold payments due to the Debtors.
Thus, the Debtors seek the Court's authority to pay the
Undisputed Trade Vendor Claims in the ordinary course of their
businesses, including the re-issuance of checks to those
creditors, as appropriate.
Corporate Card & Central Billings Programs
The Debtors maintain several credit cards and billing accounts
that are used company-wide to purchase goods and services and to
otherwise aid them in the efficient operation of their business.
The Debtors generally remained current on their payments to the
Credit Accounts prior to the Petition Date. Without the use of
the Credit Accounts, the Debtors would be forced to pay cash in
advance for large numbers of purchases, placing unnecessary
financial and administrative burdens on their estates.
Accordingly, the Debtors ask the Court for permission to pay all
prepetition amounts outstanding under the Credit Accounts in the
ordinary course of business, and to continue the use of those
programs postpetition.
Goods in Transit
In an abundance of caution, and to preserve the confidence of
certain trade vendors, the Debtors seek the Court's authority to
pay for certain materials and goods provided after the Petition
Date pursuant to orders placed prior to the Petition Date. In
short, the Debtors seek to pay postpetition claims in the
ordinary course of business that would otherwise be entitled to
administrative expense priority.
The Debtors believe that undisputed obligations to trade vendors
arising from Outstanding Orders aggregate approximately
$9,000,000 to $11,000,000.
Pursuant to Section 503(b)(1)(A) of the Bankruptcy Code, all
obligations that arise in connection with the postpetition
delivery of materials, including materials ordered prepetition,
are administrative expense priority claims that the Debtors are
authorized to pay pursuant to Sections 363(c)(1), 1107, and 1108
of the Bankruptcy Code.
Headquartered in Houston, Texas, Integrated Electrical Services,
Inc. -- http://www.ielectric.com/and http://www.ies-co.com/-- is
an electrical and communications service provider with national
roll-out capabilities across the U.S. Integrated Electrical
Services offers seamless solutions and project delivery of
electrical and low-voltage services, including communications,
network, and security solutions.
The Company provides everything from system design, installation,
and testing to long-term service and maintenance on a wide array
of projects. With approximately 140 locations nationwide, the
Company is prepared to seamlessly manage and deliver all your
electrical, security, and communication requirements. The Debtor
and 132 of its affiliates filed for chapter 11 protection on
Feb. 14, 2006 (Bankr. N.D. Tex. Lead Case No. 06-30602). Daniel
C. Stewart, Esq., and Michaela C. Crocker, Esq., at Vinson &
Elkins, L.L.P., represent the Debtors in their restructuring
efforts. As of Dec. 31, 2005, Integrated Electrical reported
assets totaling $400,827,000 and debts totaling $385,540,000.
(Integrated Electrical Bankruptcy News, Issue No. 2; Bankruptcy
Creditors' Service, Inc. 215/945-7000)
INTEGRATED ELECTRICAL: Court Okays Federal DIP Bonding Facility
---------------------------------------------------------------
According to Sanford R. Edlein, Integrated Electrical Services,
Inc.'s chief restructuring officer, the continued viability of
Integrated Electrical Services, Inc., and its debtor-affiliates
businesses depends entirely upon IES' ability to attract and
complete various construction-related projects.
The Debtors' ability to procure and then perform under
construction contracts is, in turn, dependent, in certain
situations, on their ability to secure payment, performance and
other bonds for the benefit of their customers, including project
owners and general contractors, Mr. Edlein explains.
Governing statutes and regulations often require payment and
performance bonds in connection with projects being constructed
on behalf of governmental or quasi-governmental entities, and
approximately 15% of the Debtors' existing projects are bonded.
Moreover, Mr. Edlein continues, because the Debtors' current
financial situation is now widely known in the construction
industry, more of the Debtors' customers are requesting bonds on
new projects. Accordingly, the Debtors must be able to procure
new payment, performance and other bonds if they are to secure
all of the new construction contracts that are necessary to their
ability to preserve the value of the estates.
Sureties issue bonds required by the Debtors. The Debtors'
primary surety is Federal Insurance Company. As of January 31,
2006, Federal-issued outstanding bonds for work that is currently
in process aggregated approximately $57,000,000.
"The availability of surety credit is often a critical inducement
to a project owner's willingness to enter into a contract, as it
removes a number of financial risks to which the owner might
otherwise be exposed to in the absence of the bond," Mr. Edlein
says.
Despite the reallocation of risk to the surety resulting from the
issuance of a bond, a bond is not the equivalent of an insurance
policy, Mr. Edlein notes. "Instead, where the surety incurs a
loss, it is entitled to recover the full amount of that loss from
the principal. A surety's right to indemnity is a well-
established principal of common law. This right to indemnity is
typically memorialized in an indemnity agreement between the
surety and the principal."
The Debtors and Federal are parties to an Underwriting,
Continuing Indemnity and Security Agreement dated January 14,
2005. Pursuant to the Federal Indemnity Agreement, the Debtors
have agreed to jointly and severally indemnify Federal from any
loss, cost, damage, or expense that it may incur by reason of its
execution of any bonds on the Debtors' behalf.
Mr. Edlein tells the U.S. Bankruptcy Court for the Northern
District of Texas that none of the Debtors has ever defaulted on a
bonded contract and thus created a situation where a surety has
had to pay or perform under its bond.
Nevertheless, due to concerns relating to the Debtors' balance
sheet, the Debtors' customers have increasingly requested bonds
for both new projects and for existing projects that have been
unbonded. Mr. Edlein relates that many of these customers have
also threatened to terminate the Debtors from existing projects
if their requests are not satisfied. In an effort to minimize
its potential loss exposure, Federal has likewise increased its
collateral requirements on existing bonded projects in order to
secure requests for new bonding capacity. Given these more
stringent bonding requirements, the Debtors have been able to
obtain limited new bid and performance bonds in the period
preceding the Petition Date.
As of January 31, 2006, Federal had $57,000,000 in bonds
outstanding that were secured by letters of credit totaling
$14,997,955 and restricted cash collateral of $18,113,078 in
addition to Federal's liens on the underlying Bonded Contracts
and related collateral.
The Debtors and Federal have negotiated an agreement under which
Federal has agreed to provide postpetition bonding capacity
totaling $48,000,000.
Federal DIP Bonding Facility
Pursuant to the Federal DIP Surety Agreement, Federal has agreed
to extend aggregate bonding capacity to the Debtors, provided
that:
(a) not more than $12,000,000 in new bonds are issued per
month,
(b) the issuance of bid bonds will not be an obligation to
issue final bonds, and forfeiture of a bid bond
constitutes a Surety Loss, and
(c) no single bond will be issued with a penal sum in excess
of $3,000,000 or with respect to a contract completion
date of more than 18 months from commencement of work.
Federal's obligation to issue new bonds will be discretionary and
will be subject to Federal's receipt of additional collateral in
the form of restricted cash collateral or an irrevocable letter
of credit from the DIP Lender for $6,000,000, in installments of
$1,500,000 per month, to secure all of the Debtors' obligations
to Federal.
Federal will provide surety credit and consent to the use of its
Cash Collateral in the absence of a "Surety Loss" or occurrence
of an event of default under the Federal DIP Bonding Facility.
If the Debtors do not emerge from their Chapter 11 Cases within
120 days from the Petition Date, the Federal DIP Bonding Facility
will expire.
In return, the Debtors are required to:
-- obtain entry of an order approving the Federal DIP Bonding
Facility, which order must:
(a) approve a Federal DIP Bonding Facility; and
(b) contain a finding that Federal's rights in the
collateral securing the Debtors' obligations are
preserved;
-- assume the Indemnity Agreements and all related agreements
and all Bonded Contracts under which the Pre-Petition
Bonded Obligations arise pursuant to Section 365 of the
Bankruptcy Code; and
-- pay Federal a $500,000 fee.
* * *
The Court permits the Debtors, on an interim basis, to obtain
surety credit in the form of surety bonds from Federal.
A full-text copy of the Term Sheet for Surety Support is available
for free at http://ResearchArchives.com/t/s?5de
The Hon. Barbara J. Houser of the Bankruptcy Court for the
Northern District of Texas finds that the DIP Bonding Facility is
a financial accommodation made by Federal to the Debtors in good
faith.
Judge Houser also approves the Debtors' assumption of the Surety
Agreements and of all contracts as to which Federal issued bonds
at the Debtors' request and in reliance on one or more of the
Surety Agreements assumed by the Debtors.
The Court finds that Federal has perfected first priority liens
and security interests in cash collateral that secures all of
Debtors' obligations under the assumed Surety Agreements and the
DIP Bonding Facility that are not subject to surcharge or
assessment under Section 506(c) of the Bankruptcy Code.
Objections to the DIP Bonding Facility must be filed by March 8,
2006. The final hearing on the Debtors' request is March 10,
2006, at 9:00 a.m.
Headquartered in Houston, Texas, Integrated Electrical Services,
Inc. -- http://www.ielectric.com/and http://www.ies-co.com/-- is
an electrical and communications service provider with national
roll-out capabilities across the U.S. Integrated Electrical
Services offers seamless solutions and project delivery of
electrical and low-voltage services, including communications,
network, and security solutions.
The Company provides everything from system design, installation,
and testing to long-term service and maintenance on a wide array
of projects. With approximately 140 locations nationwide, the
Company is prepared to seamlessly manage and deliver all your
electrical, security, and communication requirements. The Debtor
and 132 of its affiliates filed for chapter 11 protection on
Feb. 14, 2006 (Bankr. N.D. Tex. Lead Case No. 06-30602). Daniel
C. Stewart, Esq., and Michaela C. Crocker, Esq., at Vinson &
Elkins, L.L.P., represent the Debtors in their restructuring
efforts. As of Dec. 31, 2005, Integrated Electrical reported
assets totaling $400,827,000 and debts totaling $385,540,000.
(Integrated Electrical Bankruptcy News, Issue No. 2; Bankruptcy
Creditors' Service, Inc. 215/945-7000)
INTEGRATED ELECTRICAL: Can Obtain SureTec DIP Bonding Facility
--------------------------------------------------------------
As previously reported, Integrated Electrical Services, Inc., and
its debtor-affiliates sought and obtained permission from the U.S.
Bankruptcy Court for the Northern District of Texas, on an interim
basis, to obtain surety credit in the form of surety bonds from
Federal Insurance Company
The Debtors entered into a $48,000,000 debtor-in-possession
bonding facility with Federal Insurance Company. The Debtors are
concerned that the Federal DIP Bonding Facility, alone, may not be
sufficient to meet their needs.
Thus, the Debtors seek the Court's authority to enter into a
debtor-in-possession bonding facility with SureTec Insurance
Company to supplement the bonding capacity that the Debtors will
have available under the Federal DIP Bonding Facility. SureTec
is one of the Debtors' principal sureties.
As of February 13, 2006, outstanding bonds issued by SureTec for
work that is currently in process aggregated approximately
$2,700,000. The bonds are secured by a letter of credit totaling
$1,500,000 in addition to SureTec's liens on underlying Bonded
Contracts and related collateral.
Under the Debtors' surety arrangements with SureTec, Integrated
Electrical Services, Inc., executed a General Agreement of
Indemnity dated September 21, 2005. As each bond was issued on
behalf of a subsidiary of IES, that IES Subsidiary executed a
rider to the GAI. Pursuant to the GAI and each Rider, the
Debtors have agreed to jointly and severally indemnify SureTec or
any co-surety from any loss, cost, damage, or expense that they
may incur by reason of its execution of any bonds on the Debtors'
behalf.
All bonds that are issued by SureTec are subject to a Funds
Disbursement Services Agreement between the principal IES
Subsidiary on the bond and an affiliate of SureTec, SureTec
Information Systems, Inc. Under each FDS Agreement, as
proceeds from the bonded job are received, they are deposited
into a SISCO account. These funds are then disbursed from the
account to pay for job-related costs. These funds are (i) not
available to the Debtors for use for any other purpose and (ii)
are not part of the collateral under the prepetition credit
facility or the proposed DIP Facility with the Debtors. Once all
third-party bills and bonded obligations are paid with respect to
the particular SureTec-bonded project, any funds remaining in the
SISCO account are released to the Debtors.
According to Sanford R. Edlein, Integrated Electrical Services,
Inc.'s chief restructuring officer, SureTec has agreed to provide
up to $10,000,000 in postpetition bonding capacity.
SureTec DIP Bonding Facility
Under the SureTec DIP Bonding Facility, SureTec has agreed to
extend aggregate bonding capacity to the Debtors, provided that:
(a) the issuance of bid bonds will not be an obligation to
issue final bonds, and forfeiture of a bid bond
constitutes a surety loss payable by the Debtor,
(b) no single bond will be issued with a penal sum in excess
of $2,500,000 nor with respect to a contract completion
date of more than 18 months from commencement of work, and
(c) all receipts relating to SureTec Bonded Contracts will be
delivered to SureTec's fund disbursing agent, SISCO, for
disbursement in accordance with separate FDS Agreements
entered into and to be entered into between SISCO, IES,
and the IES Subsidiary that is the principal on the
particular bond.
SureTec's obligation to issue new bonds will be discretionary,
and aggregate bonding in excess of $5,000,000 will be subject to
SureTec's receipt of additional collateral in the form an
additional irrevocable letter of credit from Bank of America,
N.A., totaling $1,500,000 to secure all of the Debtors'
obligations to SureTec. SureTec will provide surety credit in
the absence of a "Surety Loss" or occurrence of an event of
default under the SureTec Indemnity Agreements. If the Debtors
do not emerge from their Chapter 11 Cases by June 2006, the
SureTec DIP Bonding Facility may, at the option of SureTec,
expire.
In exchange, SureTec has required the Debtors to:
-- obtain a Court order approving the SureTec DIP Bonding
Facility, and finding that SureTec's rights in the
collateral securing the Debtors' obligations arising under
bonds are preserved without the necessity of filing
postpetition financing statements or security agreements;
-- assume the SureTec Indemnity Agreements, all Bonded
Contracts and related contracts, including all FDS
Agreements, under which the Pre-Petition Bonded Obligations
arise pursuant to Section 365 of the Bankruptcy Code; and
-- pay SureTec a $25,000 fee.
The Debtors submit that approval of the SureTec DIP Bonding
Facility is essential to their ability to gain access to the
bonding capacity, which is critical to their businesses. Without
the ability to access the SureTec DIP Bonding Facility, the
Debtors' ability to attract new customers during the pendency of
their Chapter 11 Cases will be negatively affected.
* * *
The Hon. Barbara J. Houser of the Bankruptcy Court for the
Northern District of Texas grants the Debtors' request on an
interim basis. The Debtors are authorized, pursuant to Section
364 of the Bankruptcy Code, to obtain surety credit in the form of
surety bonds issued by SureTec; provided however, without the
prior written approval of Bank of America, N.A., the Debtors will
not obtain bonding capacity in an amount greater than or any terms
different than the bonding arrangement outlined in a consent
letter dated October 14, 2005, from BofA to Integrated Electrical
Services, Inc.
The last day to file objections to the Debtors' SureTec DIP
Bonding Motion is March 8, 2006 at 5:00 p.m.
The Court will convene a final hearing on the Motion on March 10,
2006, at 9:00 a.m.
Headquartered in Houston, Texas, Integrated Electrical Services,
Inc. -- http://www.ielectric.com/and http://www.ies-co.com/-- is
an electrical and communications service provider with national
roll-out capabilities across the U.S. Integrated Electrical
Services offers seamless solutions and project delivery of
electrical and low-voltage services, including communications,
network, and security solutions.
The Company provides everything from system design, installation,
and testing to long-term service and maintenance on a wide array
of projects. With approximately 140 locations nationwide, the
Company is prepared to seamlessly manage and deliver all your
electrical, security, and communication requirements. The Debtor
and 132 of its affiliates filed for chapter 11 protection on
Feb. 14, 2006 (Bankr. N.D. Tex. Lead Case No. 06-30602). Daniel
C. Stewart, Esq., and Michaela C. Crocker, Esq., at Vinson &
Elkins, L.L.P., represent the Debtors in their restructuring
efforts. As of Dec. 31, 2005, Integrated Electrical reported
assets totaling $400,827,000 and debts totaling $385,540,000.
(Integrated Electrical Bankruptcy News, Issue No. 2; Bankruptcy
Creditors' Service, Inc. 215/945-7000)
INTERCHANGE WAREHOUSE: Case Summary & 12 Unsecured Creditors
------------------------------------------------------------
Debtor: Interchange Warehouse Investors I
dba Interchange Center Warehouse
c/o Bauer & Associates, Inc.
4821 South Sheridan, Suite 201
Tulsa, Oklahoma 74145
Bankruptcy Case No.: 06-10170
Chapter 11 Petition Date: February 25, 2006
Court: Northern District of Oklahoma (Tulsa)
Judge: Terrence L. Michael
Debtor's Counsel: Chad J. Kutmas, Esq.
Doerner, Saunders, Daniel & Anderson, L.L.P.
320 South Boston, Suite 500
Tulsa, Oklahoma 74103
Tel: (918) 582-1211
Fax: (918) 591-5360
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 12 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Dennis Semler, Tulsa County Treasurer $4,970
County Administration Building, 3rd Floor
Tulsa, OK 74103
Atkinson, Haskins, et al. $2,500
525 South Main Street, Suite 1500
Tulsa, OK 74103
Interchange Owners' Association $2,280
10828 East Newton Street
Tulsa, OK 74116
Bauer & Associates, Inc. $1,200
AEP/Public Service Company of Oklahoma $952
Honeywell $625
ABS Heat & Air $560
Stanfield & O'Dell $500
AEP/Public Service Company of Oklahoma $433
City of Tulsa Utilities $391
Turner Roofing & Sheet Metal $165
Tulsa Construction Management Unknown
INT'L MGT: $150,000 of $150MM Recovered After Receivership Order
----------------------------------------------------------------
The Honorable T. Jackson Bedford of the Superior Court of Fulton
County of the State of Georgia placed International Management
Associates, LLC, and its affiliates under receivership following
several allegations of fraud and forgery.
These investors filed a civil action for receivership after they
found out about the International Management Entities'
unauthorized investment strategies in direct contravention to
documents governing their funds:
* Stephen Atwater,
* Letha L. Atwater,
* Atwater Family Partnership, Ltd.,
* Stephen D. Atwater Jr. Irrevocable Trust,
* Paris Detron Atwater Irrevocable Trust,
* Diandre Tarell Atwater Irrevocable Trust,
* Malaysia Chantel Atwater Irrevocable Trust,
* CJT96 Holdings, Inc.,
* Clyde Simmons,
* Terrell Lamar Davis Trust,
* Terrell Lamar Davis,
* Roderick Smith,
* Ray Crockett,
* Crockett 39 Family Partners, Ltd.,
* Blaine Bishop, and
* Al F. Smith.
Additionally, the International Management Entities refused to
refund the Investors their current account balances despite
repeated withdrawal requests in December 2005. In January this
year, "forged" checks were allegedly issued to the Investors by
the International Management Entities.
Receivership Order
In the February 17, 2006, order, Judge Bedford appointed William
F. Perkins as the Company's receiver. Judge Bedford directed Mr.
Perkins to take possession of and manage the assets of:
* International Management,
* International Management Associates Platinum Group, LLC,
* International Management Associates Emerald Group, LLC,
* Platinum II Fund, LP,
* International Management Associates Advisory Group, LLC,
* Grey Crest Partners, LLC,
* Certainty Capital Management, LLC,
and all other investment funds managed by International Management
Associates, LLC, including:
* Taurus Fund, Growth and Income Fund; and
* Sunset Fund.
The International Management Entities are temporarily restrained
from disposing of or divesting any of their assets without Court
approval.
Judge Bedford also directs the Sheriff of Cobb County to
immediately seize and deliver to the Receiver all personal
passports, computers, personal digital devices, cellular
telephones, facsimile machines and records relating to the
International Management Entities, held by:
* Kirk S. Wright,
* Nelson Keith Bond, and
* Fitz N. Harper, Jr.
Mr. Wright can't be located, The Wall Street Journal reports.
Judge Bedford directs International Management Associates LLC to
deposit $2,561,208 with the Court. The amount represents disputed
funds under certain accounts and will be held in escrow until
resolution of the disputes.
Crumbs
Since the order was issued, the Receiver and the County Sheriff
have recovered about $150,000 of the allegedly $150 million
invested with the International Management Entities, The Wall
Street Journal reports.
A full-text copy of the Receivership Order is available at no
additional charge at http://ResearchArchives.com/t/s?5dd
International Management Associates, LLC, is an Atlanta-based
private investment advisory firm formed to provide investment
management services to mutual funds, hedge funds, pension plans,
endowments, foundations and high net worth individuals.
ISORAY INC: Continuing Losses Fuel Going Concern Doubts
-------------------------------------------------------
IsoRay, Inc., formerly known as Century Park Pictures Corporation
delivered its financial reports for the first fiscal quarter ended
Dec. 31, 2005, to the Securities and Exchange Commission.
IsoRay incurred $1,979,224 net loss on $486,247 of sales for the
three months ended Dec. 31, 2005. At Dec. 31, 2005, IsoRay's
balance sheet shows $3,863,009 in total assets, $2,507,613 in
total liabilities, and $1,355,396 in total shareholders' equity.
Going Concern Doubt
IsoRay's management indicates there's doubt about the company's
ability to continue as a going concern. Management points to the
company's heavy cash expenditures and lack of additional
financing. S. W. Hatfield, CPA, in Dallas, Texas, expressed
substantial doubt about IsoRay, Inc.'s ability to continue as a
going concern after auditing the financial statements for the
years ended June 30, 2005, Sept. 30, 2004, and 2003. Hatfield
pointed to IsoRay's lack of operations and lack of additional
financing.
A full-text copy of IsoRay, Inc.'s financial report for the first
fiscal quarter ended Dec. 31, 2005, is available at no charge
http://ResearchArchives.com/t/s?5d4
IsoRay, Inc., formerly known as Century Park Pictures Corporation
has no operations, assets or liabilities since its fiscal year
ended September 30, 1999 through June 30, 2005. The company
merged with IsoRay Medical, Inc., on May 27, 2005, and the merger
closed on July 28, 2005. As a result of the merger, the company
changed its name to IsoRay, Inc. IsoRay Medical sells IsoRay
131Cs brachytherapy seed for the treatment of prostate cancer.
JOURNAL REGISTER: Moody's Rates $375 Mil. Credit Facility at Ba2
----------------------------------------------------------------
Moody's Investors Service has assigned a Ba2 rating to Journal
Register Company's $1.0 billion senior secured credit facilities.
In addition, Moody's has changed the rating outlook to negative
from stable.
Ratings assigned:
* $375 million senior secured revolving credit facility, due
2012 -- Ba2
* $625 million senior secured term loan A, due 2012 -- Ba2
Rating affirmed:
* Corporate Family rating -- Ba2
Ratings withdrawn:
* $425 million senior secured revolving credit facility, due
2011 -- Ba2
* $275 million senior secured term loan A, due 2011 -- Ba2
* $350 million senior secured term loan B, due 2012 -- Ba2
The rating outlook is changed to negative from stable.
The ratings reflect Journal Register's heavy debt burden, its high
financial leverage and the acquisitiveness of its management team.
Ratings are supported by the company's positive free cash flow
generation, its focus on suburban and community newspaper
publishing, the economies derived from its clustered operations,
and the geographic diversification and loyalty of its readership.
Many of Journal Register's publications enjoy a highly defensible
local market share, with little or no direct competition.
The change in rating outlook to negative reflects the decline in
Journal Register's total advertising and subscriber revenues, its
questionable ability to revitalize top-line performance, and
concern that ongoing stock repurchases will delay the reduction of
leverage below 5.0 times debt to EBITDA in the near-term. Moody's
estimates that Journal Register's debt stood at 5.5 times EBITDA
at the end of December 2005. After adjusting for leases and
pension obligations, year end 2005 leverage is calculated at 5.6
times debt to EBITDA.
Journal Register reported a 3% decrease in advertising revenues
and a 1.3% decrease in circulation revenues for the quarter ended
Dec. 31, 2005. In light of this recent performance, Moody's
questions management's expectations for 3-4% growth in 2006
newspaper revenues.
The suburban and small city newspaper business is characterized by
significant barriers to entry, loyal readership and a low
dependence upon volatile national advertising spending. In line
with industry trends, Journal Register's largely suburban
newspapers have experienced secular declines in circulation, and
cyclical pressure on advertising spending. Nevertheless, Journal
Register's publications face a relatively lower level of direct
competition and depend less on national advertising than their
large city peers.
Pro-forma for the refinancing of its senior secured credit
facilities, Moody's estimates that the company can count upon
approximately $245-$250 million in undrawn availability under its
revolving credit facility at Dec. 25, 2005, representing a
relatively good liquidity profile. In Moody's view, the company's
liquidity faces potential compression from further acquisition
activity and incremental share repurchases.
Proceeds from the senior secured bank credit facility were used to
refinance existing debt. Lenders receive an upstream guarantee of
all significant operating subsidiaries, which is secured by a
pledge of operating subsidiary company stock and a security
interest in the assets of Journal Register and its subsidiaries.
Financial covenants include a total leverage covenant, currently
standing at 6.25x with step-downs, and an interest coverage
covenant, which will remain at 2.0:1 throughout the term of the
facility.
Journal Register's current financial profile places pressure on
the tolerance of its Ba2 Corporate Family rating. Even a modest
worsening of leverage could result in a downgrade. An upgrade
would not be possible unless the company demonstrated a
significant reduction in debt resulting in leverage below 4.5
times.
Journal Register Company is a leading newspaper publisher, based
in Trenton, New Jersey. The company recorded sales of $557
million in fiscal 2005.
JUSTINE RICE: Case Summary & Largest Unsecured Creditor
-------------------------------------------------------
Debtor: Justine Lorraine Rice
W. Anthony Rice
17466 Luna De Miel
Rancho Santa Fe, California 92067
Bankruptcy Case No.: 06-00318
Chapter 11 Petition Date: February 27, 2006
Court: Southern District of California (San Diego)
Judge: James W. Meyers
Debtors' Counsel: Bruce A. Wilson, Esq.
2031 Fort Stockton Drive
San Diego, California 92103
Tel: (619) 497-0627
Fax: (619) 497-0628
Total Assets: $2,857,755
Total Debts: $1,829,098
Debtors' Largest Unsecured Creditor:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Casa Bella Realty Legal Claim $15,000
550 West C. Street, Suite 1900 (Settled on
San Diego, CA 92101 January 2006)
KING PHARMACEUTICALS: Inks Drug Supply Deal with Arrow Int'l.
-------------------------------------------------------------
King Pharmaceuticals, Inc. (NYSE:KG) entered into a collaboration
with Arrow International Limited and certain of its affiliates to
commercialize novel formulations of ALTACE(R)(ramipril).
Under a series of agreements, Arrow granted King rights to certain
current and future New Drug Applications regarding novel
formulations of ALTACE(R) and intellectual property, including
patent rights and technology licenses relating to these novel
formulations. Under certain conditions, Arrow will be responsible
for the manufacture and supply of new formulations of ALTACE(R)
for King.
Additionally, King has granted Cobalt Pharmaceuticals, Inc. a non-
exclusive right to enter into the U.S. ramipril market with a
generic capsule formulation of ramipril, which would be supplied
by King. Cobalt is an affiliate of Arrow, but is not a party to
the collaboration.
Steve Andrzejewski, Chief Commercial Officer of King, stated,
"With this transaction, we believe we have added to our
development pipeline promising potential line extensions for
ALTACE(R), our leading branded ACE Inhibitor. Importantly, we
believe this transaction enhances the long-term value of our
ALTACE franchise and is consistent with our strategy to maximize
the potential of our existing portfolio of products."
Pursuant to the agreements, King made an upfront payment to Arrow
of $35 million. Arrow will also receive payments from King of $50
million based on the timing of certain events and could receive an
additional $25 million based on the occurrence of certain
conditions. Additionally, Arrow will earn fees for the manufacture
and supply of new formulations.
About King Pharmaceuticals
Headquartered in Bristol, Tennessee, King Pharmaceuticals --
http://www.kingpharm.com/-- is a vertically integrated branded
pharmaceutical company. King, an S&P 500 Index company, seeks to
capitalize on opportunities in the pharmaceutical industry through
the development, including through in-licensing arrangements and
acquisitions, of novel branded prescription pharmaceutical
products in attractive markets and the strategic acquisition of
branded products that can benefit from focused promotion and
marketing and product life-cycle management.
At Sept. 30, 2005, King Pharmaceuticals' balance sheet showed $3
billion in total assets and $1 billion in total liabilities.
As reported in the Troubled Company Reporter on Oct. 4, 2005,
Standard & Poor's Ratings Services affirmed its ratings on King
Pharmaceuticals Inc., including the 'BB' corporate credit rating,
and removed them from CreditWatch, where they were placed with
negative implications on Feb. 28, 2005. The CreditWatch listing
followed the cancellation of King Pharmaceuticals' potential
acquisition by Mylan Laboratories Inc. The rating outlook is
negative.
MERRILL LYNCH: Moody's Rates $2.95 Mil. Class L Certs. at (P)B3
---------------------------------------------------------------
Moody's Investors Service assigned these provisional ratings to
certificates issued by Merrill Lynch Financial Assets Inc.
Commercial Mortgage Pass-Through Certificates, Series 2006-Canada
18:
* (P) Aaa to the $60.0 million Class A-1 Certificates due
November 2022;
* (P) Aaa to the $192.0 million Class A-2 Certificates due
November 2022;
* (P) Aaa to the $269.50 million Class A-3 Certificates due
November 2022;
* (P) Aa2 to the $14.1 million Class B Certificates due
November 2022;
* (P) A2 to the $12.50 million Class C Certificates due
November 2022;
* (P) Baa2 to the $16.30 million Class D Certificates due
November 2022;
* (P) Baa3 to the $3.69 million Class E Certificates due
November 2022;
* (P) Ba1 to the $4.43 million Class F Certificates due
November 2022;
* (P) Ba2 to the $2.95 million Class G Certificates due
November 2022;
* (P) Ba3 to the $1.48 million Class H Certificates due
November 2022;
* (P) B1 to the $1.48 million Class J Certificates due
November 2022;
* (P) B2 to the $1.48 million Class K Certificates due
November 2022;
* (P) B3 to the $2.95 million Class L Certificates due
November 2022;
* (P) Aaa to the Class XP-1 Certificates due November 2022;
* (P) Aaa to the Class XP-2 Certificates due November 2022;
and
* (P) Aaa to the $590.20 million Class XC Certificates due
November 2022.
The ratings on the Certificates are based on the quality of the
underlying collateral -- a pool of multifamily and commercial
loans located in Canada. The ratings on the Certificates are also
based on the credit enhancement furnished by the subordinate
tranches and on the structural and legal integrity of the
transaction.
The pool's strengths include its high percentage of less risky
asset classes, recourse on 52.1% of the pool, the diversity of the
collateral and the creditor friendly legal environment in Canada.
Moody's concerns include the concentration of the pool, where the
top ten loans account for 44.0% of the total pool balance and the
existence of subordinated debt on 24.7% of the pool. Moody's
beginning loan-to-value ratio was 91.8% on a weighted average
basis.
MOUNTAIN CHEVROLET: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Mountain Chevrolet Buick, Inc.
415 East 6th Street
P.O. Box 180
East Liverpool, Ohio 43920
Bankruptcy Case No.: 06-40187
Type of Business: The Debtor sells cars and car accessories.
Chapter 11 Petition Date: February 27, 2006
Court: Northern District of Ohio (Youngstown)
Judge: Kay Woods
Debtor's Counsel: Richard G. Zellers, Esq.
Luckhart, Mumaw, Zellers & Robinson
3810 Starrs Centre Drive
Canfield, Ohio 44406
Tel: (330) 702-0780
Estimated Assets: $0 to $50,000
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Floyd & Cleo Cline $480,000
399 Howland-Wilson Road Northeast
Warren, OH 44484
Floyd & kimberly Cline $200,000
491 Howland-Wilson Road Northeast
Warren, OH 44484
Carl Calhoun $180,000
6780 Nelson Mosier
Leavittsburgh, OH 44430
Jerry Satterfield $138,000
Barb & Harland Wolfe $90,000
Gary R. Coleman $25,000
William R. McHenry $25,000
Beaver County Times $18,536
Froggy 104.3 $11,175
Anthem BCBS $10,858
BP $9,990
North Central Tire $6,704
API $6,476
AutoSoft International $3,212
Advance Auto Parts $2,985
Automotive Distributors $2,955
The Review $2,931
Cintas Corporation $2,805
BDC in a Box $2,800
Bowe Bell and Howell $2,277
MUSICLAND HOLDING: Asset Sale Objections Must Be Filed by March 17
------------------------------------------------------------------
Musicland Holding Corp. and its debtor-affiliates have talked to
industry participants and private equity funds regarding a sale
transaction, James H.M. Sprayregen, Esq., at Kirkland & Ellis
LLP, in New York, relates.
According to Mr. Sprayregen, the Debtors also considered pursuing
a stand-alone plan of reorganization, but determined that that
course of action would not be the best strategy to maximize
recoveries for their creditors. Moreover, the Debtors believe
that a stand-alone reorganization plan would be difficult to
confirm because some of their key constituencies won't support a
reorganization plan.
The Debtors determined that a sale of substantially all of their
assets is in the best interests of their estates and their
creditors, customers, associates and other stakeholders after a
thorough analysis of all of these factors, industry trends, and
other considerations.
The Stalking Horse Offer
The Debtors seek to conduct an auction for substantially all of
its assets with Trans World Entertainment Corporation as their
stalking horse. TWEC, which is a public-traded company with a
healthy balance sheet, is one of the Debtors' principal
competitors.
The basic contours of the business deal between the Debtors and
TWEC are:
(i) TWEC has agreed, if not outbid at the auction, to purchase
substantially all of the Debtors' assets for approximately
$104,160,000, free and clear of liens and claims except as
specifically provided for in their asset purchase
agreement, executed on February 17, 2006; and
(ii) TWEC has, in turn, partnered with a joint venture
comprised of Hilco and Gordon Brothers Retail Partners,
LLC, for an arrangement by which Hilco and Gordon Bros.
will conduct inventory liquidation sales at certain of the
Debtors' stores.
The purchase price is payable in this manner:
-- TWEC will pay Musicland a $10,000,000 deposit, which will
be held in a segregated, interest bearing account with
interest to accrue for the benefit of TWEC, as soon as the
Court approves the Bidding Procedures.
-- TWEC will pay Musicland $68,120,000 (less interest accrued
on the Deposit) and will post letters of credit for the
balance of $26,040,000 at the Closing.
-- TWEC will pay Musicland the $26,040,000 balance, plus or
minus adjustments, after the final reconciliation of the
Inventory Taking.
The Debtors expect to enter into a definitive agency agreement
with Hilco and Gordon Bros. in the near future, as required by the
APA.
The APA contemplates that at the closing of the sale, TWEC will
designate about 80% of the Debtors' remaining stores as "TWEC
Stores," and will continue to operate those stores during some or
all of what the APA denominates as the "Designation Period."
TWEC will be responsible for the "Carrying Costs" of the TWEC
Stores during the Designation Period.
The Assumed Liabilities include:
* cure claims -- $4,200,000
* gift certificates and store credits -- $11,700,000
* 50% of any transfer fees -- $1,000,000
* accrued vacation for transferred employees -- $869,000
* field bonuses for transferred employees -- $350,000
Prior to the end of the Designation Period, TWEC will instruct the
Debtors to assume and assign the leases of at least 250 TWEC
Stores to TWEC, and TWEC will continue to run those stores. The
Debtors will be free to reject the leases of TWEC Stores that they
are not directed to assume and assign.
TWEC will select about 20% of the Debtors' stores at the closing
of the sale as "GOB Stores." While the consideration the Debtors
receive for allowing Hilco and Gordon Bros. to conduct sales on
the GOB Stores is enumerated in the APA and will be paid to the
Debtors by TWEC, the other terms of the conduct of the sales in
the GOB Stores will be addressed in the Agency Agreement.
A full-text copy of the Asset Purchase Agreement is available for
free at http://bankrupt.com/misc/musicland_twecpuchaseagreement
Schedules and exhibits to the APA and the executed Agency
Agreement will be filed and noticed as soon as practicable.
The Debtors believes that TWEC's proposal offered the best
opportunity to initiate a sale process that will maximize creditor
recoveries (both in terms of purchase price and in terms of
cutting-off operational losses), and comply with the covenants in
their postpetition financing arrangement. The Debtors have and
will continue marketing their assets and business in an effort to
solicit further interest from both strategic acquirers and
financial buyers and investors.
Thus, by this motion, the Debtors ask the Court to:
(a) authorize and schedule an auction for the sale of their
assets to TWEC or another bidder or bidders determined to
have submitted the Winning Bid or Bids, free and clear of
all liens, claims, encumbrances and interests;
(b) approve procedures for the submission of higher and better
offers for any or all of the Assets;
(c) approve bid protections; and
(d) approve the Sale Notice and Publication Notice.
Auction & Bidding Procedures
The Debtors propose to conduct an Auction on March 21, 2006, at
11:00 a.m., prevailing Eastern Time, at the offices of the
Debtors' counsel:
Kirkland & Ellis LLP
Citigroup Center
153 East 53rd Street
New York, New York
At the Auction, only parties submitting written bids in compliance
with the Bidding Procedures may bid against TWEC's offer. The
highest or best bid, as chosen by the Debtors in their business
judgment, will be submitted to the Court for approval at the
hearing to approve the sale of the Assets. If there is no
Qualified Bid other than the Bid submitted by TWEC, no Auction
will be held.
If TWEC is the Winning Bidder, the Debtors ask the Court to
schedule a hearing on the Sale Motion on March 22, 2006, at 10:00
a.m., prevailing Eastern Time.
In the event that TWEC is not the Winning Bidder, the Debtors may
ask the Court to schedule a hearing on the Sale Motion on March
29, 2006, in order to accommodate service of and responses to the
Second Notice.
A full-text copy of the Bidding Procedures is available for free
at http://bankrupt.com/misc/musicland_twecbiddingprocedures.pdf
To induce TWEC to expend the time, energy and resources necessary
to submit a stalking horse bid, the Debtors have agreed to provide
certain bid protections provided to TWEC, including a $3,124,800
break-up fee -- 3% of the $104,160,000 cash portion of the
purchase price.
The Break-Up Fee would be payable upon the announcement of a
stand-alone chapter 11 plan, the withdrawal of the Sale Motion, or
the consummation of a sale transaction with another party.
The Debtors have also agreed to provide reimbursement of the
reasonable expenses TWEC has and will incur in connection with
serving as the stalking horse bidder, up to a $500,000. The
Expense Reimbursement, if any, would enjoy the same priority as
the Break-Up Fee.
In no event is TWEC entitled to both the Break-Up Fee and Expense
Reimbursement, Mr. Sprayregen says.
Other protections, including minimum overbid amounts, were also
negotiated with TWEC.
The Debtors propose to give notice of the Bidding Procedures, the
Bidding Procedures Order, the Auction and the proposed Sale to
parties-in-interest. The Debtors will also publish the notice in
The Wall Street Journal (National Edition) and an appropriate
trade publication.
The Debtors will serve on all counterparties a notice that the
Debtors may assume and assign that party's unexpired lease or
executory contract to TWEC. That Notice will include the cure
amount necessary to assume each unexpired lease.
Objections to the Sale must be filed and served no later than
4:00 p.m., prevailing Eastern Time on March 17, 2006, on:
(a) The Office of the United States Trustee
for the Southern District of New York
33 Whitehall Street, 21st Floor
New York, New York
Attn: Deirdre A. Martini
(b) counsel for the Company
Kirkland & Ellis LLP
200 East Randolph Drive
Chicago, Illinois 60601-6636
Attn: James Stempel, Esq., and Jonathan Friedland, Esq.
with a copy to:
Curtis, Mallet-Provost, Colt & Mosle LLP
101 Park Avenue
New York, New York 10178
Attn: Steven J. Riesman
(c) counsel for TWEC
Skadden, Arps, Slate, Meagher & Flom, LLP
333 West Wacker Drive, Chicago, Illinois 60606-1285
Attn: Timothy R. Pohl
(d) counsel for the Unofficial Committee of Secured Trade
Creditors
Morgan Lewis & Bockius LLP
1701 Market Street
Philadelphia, Pennsylvania 19103-2921
Attn: Michael A. Bloom, Esq.
-- and --
Morgan Lewis & Bockius LLP
101 Park Avenue
New York, New York 10178
Attn: Richard S. Toder, Esq.
(e) counsel for the Official Committee of Unsecured Creditors
Hahn & Hessen LLP
488 Madison Avenue
New York, New York 10022
Attn: Mark S. Indelicato, Esq.
(f) counsel for the Senior Secured Lenders
Otterbourg, Steindler, Houston & Rosen, P.C.
230 Park Avenue
New York, New York 10169
Attn: Andrew M. Kramer, Esq.
Headquartered in New York, New York, Musicland Holding Corp., is a
specialty retailer of music, movies and entertainment-related
products. The Debtor and 14 of its affiliates filed for chapter
11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No.
06-10064). James H.M. Sprayregen, Esq., at Kirkland & Ellis,
represents the Debtors in their restructuring efforts. Mark T.
Power, Esq., at Hahn & Hessen LLP, represents the Official
Committee of Unsecured Creditors. When the Debtors filed for
protection from their creditors, they estimated more than $100
million in assets and debts. (Musicland Bankruptcy News, Issue
No. 6; Bankruptcy Creditors' Service, Inc., 215/945-7000)
MUSICLAND HOLDING: Gets Okay to Use Cash Collateral on Final Basis
------------------------------------------------------------------
Judge Stuart M. Bernstein of the U.S. Bankruptcy Court for the
Northern District of Georgia approved Musicland Group Inc. and its
debtor-affiliates' request to use the Cash Collateral on an final
basis.
According to Craig Wassenaar, chief financial officer of
Musicland Holding Corp., the Debtors required the use of the Cash
Collateral to, among other things, pay present operating expenses,
including payroll, and to pay vendors on a going-forward basis to
ensure a continued supply of materials essential to the Debtors'
continued viability.
The Debtors will limit their use of cash collateral to amounts
specified in a 12-Week Budget. A full-text copy of Musicland's
week-by-week Cash Flow Forecast through March 31, 2006, is
available at no charge at http://ResearchArchives.com/t/s?476
Headquartered in New York, New York, Musicland Holding Corp., is a
specialty retailer of music, movies and entertainment-related
products. The Debtor and 14 of its affiliates filed for chapter
11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No.
06-10064). James H.M. Sprayregen, Esq., at Kirkland & Ellis,
represents the Debtors in their restructuring efforts. Mark T.
Power, Esq., at Hahn & Hessen LLP, represents the Official
Committee of Unsecured Creditors. When the Debtors filed for
protection from their creditors, they estimated more than $100
million in assets and debts. (Musicland Bankruptcy News, Issue
No. 6; Bankruptcy Creditors' Service, Inc., 215/945-7000)
NACCO MATERIALS: S&P Rates Proposed $225 Million Term Loan at BB-
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on NMHG
Holding Co. (NMHG), including the 'BB-' corporate credit rating.
The outlook is stable.
At the same time, Standard & Poor's assigned a 'BB-' rating and
'3' recovery rating to the proposed $225 million seven-year term
loan of NACCO Materials Handling Group Inc., a wholly owned
subsidiary of NMHG. The recovery rating indicates the 50%-80%
recovery prospects in the event of a default scenario.
At Sept. 30, 2005, NMHG, a Portland, Oregon-based forklift truck
manufacturer, had approximately $469 million of total debt
outstanding (which includes about $130 million of off-balance-
sheet operating leases).
The term loan is rated the same as the corporate credit rating.
The loan is secured by a first-priority perfected mortgage, lien,
and security interest in all of NMHG's domestic real estate,
equipment, fixtures, and improvements. It is also secured by a
second-priority lien on collateral (primarily current assets and a
pledge of stock) used for NMHG's $135 million asset-based
revolving credit facility. The rights of both lending parties are
set forth in an intercreditor agreement. The term loan will have
1% amortization for the first five years after funding, with 47.5%
amortization in years six and seven. The loan is subject to
financial covenants similar to those found under the terms of the
revolving credit facility, including:
* a maximum leverage ratio;
* a minimum fixed-charge covenant test; and
* a maximum capital expenditure test.
Standard & Poor's used its enterprise value analysis to measure
recovery prospects for secured lenders, given its belief that they
would likely achieve a more robust recovery of principal through a
sale of the NMHG enterprise rather than a liquidation. Using the
enterprise value methodology, Standard & Poor's projected
hypothetical EBITDA scenarios to simulate a default and then
multiplied those cash flow levels by representative cash flow
multiples for an industrial manufacturer. These multiples were
capped at 6x EBITDA. Standard & Poor's default scenarios
contemplated a cyclical downturn with intense pricing pressures,
leading to an approximate 40% decline in the company's EBITDA
(compared with actual and forecast EBITDA in the 2000-2006
period). The resulting valuation matrix was then compared with a
fully utilized revolving bank facility, with the excess value
supporting the term loan lenders. Based on these results,
Standard & Poor's expects that secured lenders would achieve
recovery prospects in the 50%-80% range.
"The speculative-grade ratings reflect NMHG's aggressive financial
risk profile, fair liquidity, and weak business risk profile
assessment, with leading positions within cyclical and volatile
markets," said Standard & Poor's credit analyst Joel Levington.
NMHG competes in the global forklift truck market, which is
characterized as:
* moderate in size;
* somewhat consolidated; and
* moderately capital intensive.
Over the business cycle, the industry grows at GDP-like rates.
Larger forklift manufacturers such as NMHG are gaining market
share from vendor consolidation, which offers them national
account opportunities. However, the industry is both cyclical and
volatile; currently, demand is solid for lift trucks, following
weakness in the 2000-2002 period, although Standard & Poor's
expects growth rates to decelerate in the near term.
NORTHAMPTON GENERATING: Fitch Cuts $153MM Bonds' Ratings to BB-
---------------------------------------------------------------
Fitch Ratings downgraded the rating on Northampton Generating Co.,
L.P.'s $153 million senior tax-exempt series 1994 A resource
recovery revenue bonds due 2019 to 'BB-' from 'BBB-' and removed
it from Rating Watch Negative.
Going forward, debt service coverage ratios are projected to
occasionally reach breakeven levels over the remaining term of the
series A bonds, and rely on deferment of subordinated expenses to
avoid falling below 1.00 times. Technical performance has been
strong, but operating margins continue to be lower than originally
projected due to higher operating expenses and lower energy
pricing. In addition, Fitch affirms the 'BBB-' rating of the $25
million ($100,000 outstanding) senior taxable convertible series
1994 B bonds due Jan. 1, 2007.
Northampton consists of a 112-megawatt (net) coal-fired qualifying
facility in Northampton County, Pennsylvania, that supplies energy
to Metropolitan Edison Co. and steam to Newstech PA, LP.
Cogentrix Energy, Inc. indirectly owns approximately 99.9% of
Northampton, which is organized as a limited partnership.
Subsidiaries of Cogentrix manage the partnership and perform
operations and maintenance at the facility. The debt was issued
by the Pennsylvania Economic Development Financing Authority, and
the proceeds loaned to Northampton.
NORTHWEST AIR: Has Until March 1 to Reach Agreements with Unions
----------------------------------------------------------------
The Honorable Allan L. Gropper of the U.S. Bankruptcy Court for
the Southern District of New York extended, until Mar. 1, 2006,
Northwest Airlines Inc. and its debtor-affiliates Section 1113(c)
period regarding its labor agreements with the Air Line Pilots
Association and the Professional Flight Attendants Association.
The three parties agreed to an additional extension during a
conference with Judge Gropper. Northwest and the two unions told
the Judge Gropper that they have continued to make progress on
negotiating new contracts.
Northwest said that while it appreciates Judge Gropper giving the
parties additional time to continue to reach consensual
agreements, achieving the needed labor cost savings as soon as
possible is critical to the success of Northwest Airlines, which
is losing $3 million to $4 million dollars per day. The airline
has reached agreements or has a contract out for member
ratification with four of its other unions.
The trial on Northwest's Sections 1113(c) and 1114 motions began
in bankruptcy court on Jan. 17, 2006 and was adjourned on Feb. 3,
2006. On Feb. 16, Judge Gropper gave the parties an extension so
that negotiations could continue.
The parties have been negotiating new contracts since shortly
after Northwest declared bankruptcy on Sept. 14, 2005.
As part of its ongoing restructuring efforts, Northwest Airlines
is seeking $2.5 billion in overall savings in order to return the
company to profitability on a sustained basis. To achieve these
savings, Northwest is committed to realizing competitive labor and
non-labor costs, restructuring its balance sheet, achieving market
rates for its aircraft and optimizing business practices.
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.
NVF COMPANY: Can Obtain Additional $1 Million of DIP Financing
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware gave NVF
Company and its debtor-affiliate, Parsons Paper Company, Inc.,
permission on a final basis to:
a) obtain additional postpetition financing pursuant to the
Second Amendment of the DIP Term Credit and Guaranty
Agreement dated June 20, 2005; and
b) grant adequate protection to the Estate of Victor Posner in
its capacity as the Debtor's prepetition lender.
Additional DIP Financing & Adequate Protection
The Court authorizes the Debtors to enter into the Second
Amendment to the DIP Credit Agreement and obtain DIP financing of
up to $1 million from the Estate of Victor Posner, above the
amount authorized by the Court's DIP Financing order dated Aug.
26, 2005.
The Debtors will use the proceeds of the additional DIP Loan for
the orderly continuation of their business operations, to maintain
business relationships with their vendors, suppliers and
customers, to make payroll expenses and capital expenditures and
satisfy other working capital and operational needs.
The Debtors' final use of the DIP financing will be in compliance
with the terms of the Court's Final Order, the Second Amendment to
the DIP Credit Agreement and a six-month Budget from January 2006
up to June 2006.
A full-text copy of the six-month Budget is available for free at
http://bankrupt.com/misc/NVFCompanyFinalDIPLoanBudget.pdf
The Court orders that if there are still remaining funds under the
DIP Credit Agreement that the Debtors seek to borrow after June
20, 2006, and if the Debtors seek to use the DIP Lender's cash
collateral after June 20, 2006, the Debtors will be permitted to
do so only after the Court's order or the written consent of the
DIP Lender and the Unsecured Creditors Committee.
To adequately protect its interest, the Estate of Victor Posner is
granted:
1) a superpriority claim pursuant Section 507(b) of the
Bankruptcy Code equivalent to any diminution of value of the
prepetition collateral subsequent to the Petition Date; and
2) a replacement lien on the Debtors' postpetition assets
equivalent to the value of the prepetition collateral
subsequent to the Petition Date.
Headquartered in Yorklyn, Del., NVF Company -- http://www.nvf.com/
-- manufactures thermoset composites (glass, Kevlar), vulcanized
fiber, custom containers, circuitry materials, custom fabrication,
and welding products. The Company along with its wholly owned
subsidiary, Parsons Paper Company, Inc., filed for chapter 11
protection on June 20, 2005 (Bankr. D. Del. Case Nos. 05-11727 and
05-11728). Rebecca L. Booth, Esq., at Richards, Layton & Finger,
P.A., represents the Debtors in their restructuring efforts.
Michael B. Schaedle, Esq., Raymond M. Patella, Esq., and
Jason W. Staib, Esq., at Blank Rome LLP, represent the Official
Committee of Unsecured Creditors. When the Debtors filed for
protection from their creditors, they listed estimated assets
between $10 million to $50 million and estimated debts of more
than $100 million.
OMEGA HEALTHCARE: Registers 3MM Common Shares Under Purchase Plan
-----------------------------------------------------------------
Omega HealthCare Investors, Inc., filed a Registration Statement
with the Securities and Exchange Commission to allow the resale
of 3,000,000 shares of common stock issuable under the Company's
Dividend Reinvestment and Common Stock Purchase Plan.
The Company reported that the shares are valued at $38,610,000 at
$12.87 per share. The Company's common stock is listed on the New
York Stock Exchange under the symbol "OHI." The Company's common
shares traded between $12.61 and $13.07 this month.
The Plan is being administered by Computershare Trust Company,
N.A. To enroll in the Plan, a participant must complete and
return an Enrollment Authorization Form to the administrator.
Some of the significant features of the Plan include:
-- an existing stockholder may purchase additional shares of
common stock by automatically reinvesting all or any part of
the cash dividends paid on the common shares he or she
holds. There is no minimum or maximum limitation on the
amount of dividends the shareholder may reinvest in the
Plan;
-- an existing stockholder may purchase additional common
shares by making optional cash purchases of between $50 and
$6,250 in any calendar month, for an annual maximum of
$75,000. Optional cash purchases of common shares in excess
of this maximum may only be made pursuant to a written
request for waiver and with the Company's prior written
consent;
-- investors who are currently not shareholders may make an
initial cash purchase of common shares of at least $250 with
a maximum of $6,250. Initial optional cash purchases of
common shares in excess of this maximum may only be made
pursuant to a written request for waiver and with the
Company's prior written consent;
-- the Company may sell newly issued shares directly to the
administrator or instruct the administrator to purchase
shares in the open market or privately negotiated
transactions, or elect a combination of these alternatives;
-- common shares can be bought without brokerage fees,
commissions or charges. The Company will bear the expenses
for open market purchases;
-- the purchase price for newly issued common shares purchased
directly from the Company will be the market price less a
discount ranging from 0% to 5%, determined from time to time
by the Company in accordance with the terms of the Plan.
This discount applies to either optional cash purchases or
reinvested dividends. However, no discount will be
available for common shares purchased in the open market or
in privately negotiated transactions;
-- beneficial owners (stockholders whose shares of our common
stock are registered in a name other than his or her name;
for example, in the name of a broker, bank or nominee) may
participate in the Plan by instructing their brokers, banks
or nominees to reinvest dividends and make optional cash
purchases on their behalf;
-- investors make automatic monthly investments by authorizing
monthly automatic deductions from a designated U.S. bank
account. Investors may make automatic deductions for as
little as $50 per month, after the initial investment, but
in no case for more than $6,250 per month;
Participation in the Plan is entirely voluntary, and plan
participants may terminate their involvement at any time. Once
enrolled, Plan Participants' involvement in the Plan will continue
unless affirmatively withdrawn from the Plan. Plan Participants
may also change their dividend election at any time. Those
holders of common shares who do not wish to participate in the
Plan will continue to receive cash dividends in the usual manner.
A full-text copy of the Registration Statement is available at no
extra charge at http://ResearchArchives.com/t/s?5dc
Headquartered in Timonium, Maryland, Omega HealthCare Investors,
Inc. -- http://www.omegahealthcare.com/-- is a real estate
investment trust investing in and providing financing to the
long-term care industry. At September 30, 2005, the Company owned
or held mortgages on 216 skilled nursing and assisted living
facilities with approximately 22,407 beds located in 28 states and
operated by 38 third-party healthcare operating companies.
* * *
As reported in the Troubled Company Reporter on Feb. 1, 2006,
Standard & Poor's Ratings Services raised its corporate credit
rating on Omega Healthcare Investors Inc. to 'BB' from 'BB-'.
In addition, ratings are raised on the company's senior unsecured
debt and preferred stock, impacting $603.5 million in securities.
S&P said the outlook is stable.
As reported in the Troubled Company Reporter on Jan. 24, 2006,
Moody's Investors Service raised the ratings of Omega Healthcare
Investors, Inc. (senior unsecured debt to Ba3, from B1). Moody's
said the rating outlook is stable.
ON TOP COMMS: Wants Plan-Filing Period Extended to March 26
-----------------------------------------------------------
Top Communications, LLC, and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Maryland, Greenbelt Division,
to extend until March 26, 2006, their exclusive right to file a
chapter 11 plan. The Debtors also want their plan solicitation
period extended until May 25, 2006.
The Debtors give the Court three reasons supporting the extension:
a) the size and complexity of their chapter 11 cases;
b) existence of an unresolved contingency; and
c) progress made in the Debtors' bankruptcy cases.
Kerry Hopkins, Esq., at Miles & Stockbridge P.C., says that
several issues surrounding the Debtors' New Orleans operations
must still be resolved by the Federal Communications Commission in
order to facilitate a reorganization or sale of these assets.
According to Ms. Hopkins, the Debtors have assumed several leases
and negotiated amendments to several others during the initial
exclusivity period.
Headquartered in Lanham, Maryland, On Top Communications, LLC, and
its affiliates acquire, own and operate FM radio stations located
in the Southeastern United States. The Company and its debtor-
affiliates filed for chapter 11 protection on July 29, 2005
(Bankr. D. Md. Case No. 05-27037). Thomas L. Lackey, Esq., of
Bowie, Maryland, represents the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they estimated assets and debts of $10 million to
$50 million.
ON TOP: Taps Patrick Communications as Broker For WRJH Station
--------------------------------------------------------------
On Top Communications, LLC, and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Maryland for permission to
employ Patrick Communications, LLC, as their broker for a limited
engagement, nunc pro tunc, to Jan. 23, 2006.
Patrick Communications is being hired for the limited purpose of
brokering the sale of FM radio station WRJH in Jackson, Miss., to
Inner City Broadcasting or its designee.
Susan K. Patrick, a member of Patrick Communications, reports that
her Firm will be paid commission equal to 3% of the purchase price
paid by Inner City for the radio Station. Payment of the
commission to Patrick Communications will be contingent upon the
closing of the sale of the radio station.
Patrick Communications assures the Court that it does not
represent any interest materially adverse to the Debtors and the
Firm is a disinterested person.
Headquartered in Lanham, Maryland, On Top Communications, LLC, and
its affiliates acquire, own and operate FM radio stations located
in the Southeastern United States. The Company and its debtor-
affiliates filed for chapter 11 protection on July 29, 2005
(Bankr. D. Md. Case No. 05-27037). Thomas L. Lackey, Esq., of
Bowie, Maryland, represents the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they estimated assets and debts of $10 million to
$50 million.
PARKWAY HOSPITAL: Taps Arevalo & Berman as Malpractice Counsel
--------------------------------------------------------------
The Parkway Hospital, Inc., asks the U.S. Bankruptcy Court
for the Southern District of New York for permission to employ
Arevalo & Berman as its medical malpractice counsel and risk
management consultants, nunc pro tunc to July 1, 2005.
The Debtor tells the Court that Arevalo & Berman has had
significant experience and knowledge in providing medical
malpractice defense and risk management consulting services.
On July 20, 2005, the Court approved Arevalo & Berman's retention
in the Debtor's chapter 11 case as an Ordinary Course
Professional. Arevalo & Berman billed fees and expenses in excess
of the amounts allowed under the Court's OCP order. Thus the
Debtor is now formally retaining the Firm pursuant to Sections 327
and 328 of the Bankruptcy Code, nunc pro tunc to July 1, 2005.
Arevalo & Berman will:
1) monitor and defend existing and future medical malpractice
claims against the Debtor;
2) advise the Debtor in all necessary aspects regarding medical
malpractice claims against the Debtor and in medical
malpractice liability and risk management;
3) assist the Debtor and its bankruptcy counsel in the
bankruptcy claims process regarding medical malpractice
claims; and
4) perform all other medical malpractice legal services and
risk management consultancy services to the Debtor that are
necessary in its chapter 11 case.
Peter Berman, Esq., a partner at Arevalo & Berman, is one of the
lead professionals from the Firm rendering services to the Debtor.
Mr. Berman reports that partners from Arevalo & Berman performing
services for the Debtor will charge from $150 to $175 per hour.
Arevalo & Berman assures the Court that it does not represent any
interest materially adverse to the Debtor's estate and its
creditors and is a "disinterested person" as that term is defined
in Section 101(14) of the Bankruptcy Code.
The Parkway Hospital, Inc., operates a 251-bed proprietary, acute
care community hospital located in Forest Hills, New York. The
Company filed for chapter 11 protection on July 1, 2005 (Bankr.
S.D.N.Y. Case No. 05-14876). Timothy W. Walsh, Esq., at DLA Piper
Rudnick Gray Cary US LLP, represents the Debtor in its
restructuring efforts. When the Debtor filed for protection from
its creditors, it listed $28,859,000 in total assets and
$47,566,000 in total debts.
PERFORMANCE TRANSPORTATION: Court OKs Contract Rejection Process
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of New York
approved Performance Transportation Services, Inc.'s request to
approve an expedited procedure for the rejection of executory
contracts and unexpired leases of personal and non-residential
real property and the abandonment of the Debtors' property.
As reported in the Troubled Company Reporter on Feb. 16, 2006, the
Debtors are parties to numerous executory contracts and unexpired
leases. Without the Rejection Procedures, the Debtors will
inevitably suffer delays and excess administrative costs, Garry M.
Graber, Esq., at Hodgson Russ LLP, in Buffalo, New York contended.
Establishing the Rejection Procedures would afford parties-in-
interest the opportunity to appear and be heard with respect to
the rejection of the leases and contracts and the corresponding
abandonment of property, added Mr. Graber.
Rejection Procedures
The Debtors will file and serve a rejection notice, advising
parties-in-interest of the Debtors' intent to reject the specified
executory contract, lease, sublease or interest, as well as the
deadlines and procedures for filing objections to the Notice. The
Service Parties consist of:
a) the U.S. Trustee;
b) counsel to the Debtors' prepetition secured lenders;
c) counsel to the Debtors' postpetition secured lenders;
d) counsel to any official committee appointed during the
course of the Debtors' Chapter 11 cases;
e) the contract counterparty or landlord affected by the
Notice; and
f) any other parties-in-interest to the executory contract or
lease, including subtenants, if any, sought to be rejected
by the Debtors.
If a party-in-interest objects to the proposed rejection, it must
file with the U.S. Bankruptcy Court for the Western District of
New York and serve a written objection not later than 14 days
after the Debtors serve the rejection notice to:
* Kirkland & Ellis LLP,
* Hodgson Russ LLP, and
* the Service Parties.
If there are no objections, the rejection of a particular lease
or contract will become effective on the rejection date without
further notice, hearing or Court order.
If the Debtors have deposited amounts with a lessor or contract
counterparty as a security deposit or other arrangement, the
lessor or contract counterparty may not set-off or otherwise use
the deposit without prior Court authority.
Counter-parties and lessors will be required to file a rejection
claim on the later of the claims bar date established in the
Debtors' Chapter 11 cases, if any, and 30 days after the Rejection
Date.
Abandonment Procedures
With respect to personal property at any of the premises subject
to a rejection notice, the Debtors will remove the property before
the objection deadline.
If the Debtors determine that the value of the property at a
particular location is de minimis compared to the costs of
removing the asset, the Debtors will generally describe the
property in the Notice and, absent an objection, the property will
be deemed abandoned as is, where is, effective as of the rejection
date of the unexpired lease.
Abandonment of the property will permit the Debtors to exit
certain markets efficiently and without incurring additional,
unnecessary administrative expenses. The Debtors believe that any
sales, which may be consummated after the removal of the property,
may be offset by the additional carrying costs of the rejected
leases or the costs of removing the property.
Committee Wants Huron to Review
Proposed Rejections and Abandonment
The Official Committee of Unsecured Creditors generally supports
the Debtors' request, William F. Savino, Esq., at Damon & Morey
LLP, in Buffalo, New York, says.
However, the Committee proposes that any rejections or
abandonment, other than those related to employment matters, must
be limited to those made in consultation with and after approval
by Huron Consulting Group, the Committee's financial advisors.
Headquartered in Wayne, Michigan, Performance Transportation
Services, Inc. -- http://www.pts-inc.biz/-- is the second largest
transporter of new automobiles, sport-utility vehicles and light
trucks in North America. The Company provides transit stability,
cargo damage elimination and proactive customer relations that are
second to none in the finished vehicle market segment. The
company's chapter 11 case is administered jointly under Leaseway
Motorcar Transport Company.
Headquartered in Niagara Falls, New York, Leaseway Motorcar
Transport Company Debtor and 13 affiliates filed for chapter 11
protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Case No. 06-00107).
Garry M. Graber, Esq., at Hodgson Russ LLP represent the Debtors
in their restructuring efforts. When the Debtors filed for
protection from their creditors, they estimated assets between $10
million and $50 million and more than $100 million in debts.
(Performance Bankruptcy News, Issue No. 4; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
PINNACLE ENTERTAINMENT: Buys President Missouri for $31.5 Million
-----------------------------------------------------------------
Pinnacle Entertainment (NYSE: PNK) entered into an agreement with
President Casinos, Inc. to purchase all of the outstanding capital
stock of President Riverboat Casino-Missouri, Inc., dba President
Casino St. Louis Riverfront, for approximately $31.5 million.
This purchase agreement will be submitted to the U.S. Bankruptcy
Court for the Eastern District of Missouri and is subject to a
potential overbid by third-parties, as well as approval by the
Missouri Gaming Commission. The agreement calls for a bankruptcy
auction to occur by May 16, 2006.
About President Casinos Inc.
Headquartered in St. Louis, Missouri, President Casinos Inc. --
http://www.presidentcasino.com/-- currently owns and operates a
dockside gaming casino in St. Louis, Missouri through its wholly
owned subsidiary, President Missouri. The Debtor filed for
chapter 11 protection on June 20, 2002 (Bankr. S.D. Miss. Case No.
02-53055). On July 11, 2002, substantially all of Debtor's other
operating subsidiaries filed for chapter 11 protection in the same
Court. The Honorable Judge Edward Gaines ordered the transfer of
President Casino's chapter 11 cases from Mississippi to Missouri.
The case was reopened on Nov. 5, 2002 (Bankr. E.D. Mo. Case No.
02-53005). Brian Wade Hockett, Esq., at Hockett Thompson Coburn
LLP, represents the Debtors in their restructuring efforts. David
A. Warfield, Esq., at Blackwell Sanders Peper Martin LLP,
represents the Official Committee of Unsecured Creditors. The
Company's balance sheet at Nov. 30, 2005 showed assets totaling
$66,292,000 and debts totaling $75,531,000.
About Pinnacle Entertainment
Pinnacle Entertainment owns and operates casinos in Nevada,
Louisiana, Indiana and Argentina, owns a hotel in Missouri,
receives lease income from two card club casinos in the Los
Angeles metropolitan area, has been licensed to operate a small
casino in the Bahamas, and owns a casino site and has significant
insurance claims related to a hurricane-damaged casino previously
operated in Biloxi, Mississippi. Pinnacle opened a major casino
resort in Lake Charles, Louisiana in May 2005 and a new
replacement casino in Neuquen, Argentina in July 2005. Pinnacle
also has two casino development projects in the St. Louis,
Missouri area. The development projects are dependent upon final
approval by the Missouri Gaming Commission.
* * *
As reported in the Troubled Company Reporter on Jan 13, 2006,
Moody's Investors Service revised Pinnacle Entertainment Inc.'s
ratings outlook to positive from stable based on the company's
recent announcement that it plans to offer 6 million shares of its
common stock, with an option granted to the underwriters for an
additional 900,000 shares. Estimated net proceeds from the
offering are expected to be about $163 million. Pinnacle's B2
corporate family rating, B1 bank loan rating and Caa1 senior
subordinated debt rating were affirmed.
PRESIDENT CASINO: Sells Capital Stock to Pinnacle for $31.5 Mil.
----------------------------------------------------------------
Pinnacle Entertainment (NYSE: PNK) entered into an agreement with
President Casinos, Inc. to purchase all of the outstanding capital
stock of President Riverboat Casino-Missouri, Inc., dba President
Casino St. Louis Riverfront, for approximately $31.5 million.
This purchase agreement will be submitted to the U.S. Bankruptcy
Court for the Eastern District of Missouri and is subject to a
potential overbid by third-parties, as well as approval by the
Missouri Gaming Commission. The agreement calls for a bankruptcy
auction to occur by May 16, 2006.
About Pinnacle Entertainment
Pinnacle Entertainment owns and operates casinos in Nevada,
Louisiana, Indiana and Argentina, owns a hotel in Missouri,
receives lease income from two card club casinos in the Los
Angeles metropolitan area, has been licensed to operate a small
casino in the Bahamas, and owns a casino site and has significant
insurance claims related to a hurricane-damaged casino previously
operated in Biloxi, Mississippi. Pinnacle opened a major casino
resort in Lake Charles, Louisiana in May 2005 and a new
replacement casino in Neuquen, Argentina in July 2005. Pinnacle
also has two casino development projects in the St. Louis,
Missouri area. The development projects are dependent upon final
approval by the Missouri Gaming Commission.
About President Casinos Inc.
Headquartered in St. Louis, Missouri, President Casinos Inc. --
http://www.presidentcasino.com/-- currently owns and operates a
dockside gaming casino in St. Louis, Missouri through its wholly
owned subsidiary, President Missouri. The Debtor filed for
chapter 11 protection on June 20, 2002 (Bankr. S.D. Miss. Case No.
02-53055). On July 11, 2002, substantially all of Debtor's other
operating subsidiaries filed for chapter 11 protection in the same
Court. The Honorable Judge Edward Gaines ordered the transfer of
President Casino's chapter 11 cases from Mississippi to Missouri.
The case was reopened on Nov. 5, 2002 (Bankr. E.D. Mo. Case No.
02-53005). Brian Wade Hockett, Esq., at Hockett Thompson Coburn
LLP, represents the Debtors in their restructuring efforts. David
A. Warfield, Esq., at Blackwell Sanders Peper Martin LLP,
represents the Official Committee of Unsecured Creditors. The
Company's balance sheet at Nov. 30, 2005 showed assets totaling
$66,292,000 and debts totaling $75,531,000.
QUIGLEY COMPANY: Plan Confirmation Hearing Set for May 25
---------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approved the Fourth Amended Disclosure Statement explaining
Quigley Company, Inc.'s Third Amended Plan of Reorganization on
Jan. 23, 2006.
With a court-approved Disclosure Statement in hand, the Debtor can
now solicit acceptances of the Plan from its creditors. Ballots
accepting or rejecting the Plan must be submitted to Trumbull
Group, LLC, by 5:00 p.m., on March 31, 2006.
A hearing to consider confirmation of the Plan will be held before
the Hon. Stuart M. Bernstein at 11:00 a.m., on May 25, 2006.
Objections to the confirmation of the Plan must be filed with the
Bankruptcy Court by 5:00 p.m., on April 25, 2006. Copies of the
objection must be served by first class mail on:
Debtor's Counsel:
Schulte Roth & Zabel LLP
Attn: Michel L. Cooks, Esq.
Lawrence V. Gelber, Esq.
919 Third Avenue
New York City 10022
Office of the U.S. Trustee:
Attn: Tracy Hope Davis, Esq.
33 Whitehall Street, 21st Floor
New York City 10004
Counsel to the Official Committee of Unsecured Creditors:
Caplin & Drysdale, Chartered
Attn: Peter Van N. Lockwood, Esq.
Ronald Reinsel, Esq.
One Thomas Circle, NW
Washington DC 20005
Caplin & Drysdale, Chartered
Attn: Elihu Inselbuchm Esq.
399 Park Avenue
New York City 10022
Counsel to Pfizer:
Cadwalader, Wickersham & Taft LLP
Attn: Bruce R. Zirinsky, Esq.
John H. Bae, Esq.
One World Financial Center
New York City 10281
Counsel to Future Demand Holders' Representative:
Togut, Segal & Segal LLP
Attn: Scott E. Ratner, Esq.
One Penn Plaza, Suite 3335
New York City 10119
Headquartered in Manhattan, Quigley Company, Inc., is a subsidiary
of Pfizer, Inc., which used to produce and market a broad range of
refractories and related products to customers in the iron, steel,
glass and other industries. The Company filed for chapter 11
protection on Sept. 3, 2004 (Bankr. S.D.N.Y. Case No. 04-15739) to
resolve legacy asbestos-related liability. When the Debtor filed
for protection from its creditors, it listed $155,187,000 in total
assets and $141,933,000 in total debts. Michael L. Cook, Esq.,
Lawrence V. Gelber, Esq., and Jessica L. Fainman, Esq., at Schulte
Roth & Zabel LLP, represent the Company in its restructuring
efforts. Albert Togut, Esq., at Togut Segal & Segal serves as the
Futures Representative. Elihu Inselbuchm Esq., at Caplin &
Drysdale, Chartered, represents the Official Committee of
Unsecured Creditors.
R.H. DONNELLEY: Discloses Fourth Quarter & Full-Year Fin'l Results
------------------------------------------------------------------
R.H. Donnelley Corporation (NYSE: RHD) reported full year 2005
cash flow from operations of $392.1 million compared to
$335.0 million in the prior year (which excluded tax refunds of
$71.3 million). Dex Media, Inc., generated full year 2005 cash
flow from operations of $570.4 million compared to $491.4 million
in the prior year.
As reported in the Troubled Company Reporter on Feb. 9, 2006, R.H.
Donnelley completed its acquisition of Dex Media.
"Both companies entered 2005 with a tremendous amount of
opportunity and we certainly capitalized in a number of areas,
most notably, finalizing our plans to acquire Dex Media," said
David C. Swanson, R.H. Donnelley Chief Executive Officer. "We
look forward to making significant progress with respect to
integration activities related to Dex Media in 2006. We will also
continue initiatives to drive operational improvement in our core
business, increase leadership in online search and generate
superior value for our shareowners, advertisers and consumers."
George Burnett, R.H. Donnelley Chairman and former Chief Executive
Officer of Dex Media, said, "Dex Media consistently delivered on
its commitments in 2005. It was a year of operational momentum
for us, in which we successfully innovated both in print and
online. We are pleased to move into a new era with R.H. Donnelley
from a position of strength and increased momentum."
Full Year 2005
R.H. Donnelley
RHD's full year 2005 net revenue was $956.6 million compared to
$603.1 million in the prior year. Operating expenses, including
depreciation and amortization, were $581.4 million compared to
$389.4 million in the prior year. Operating income for the full
year was $375.2 million versus $291.7 million in the prior year.
Net interest expense in full year 2005 was $264.5 million compared
to $175.5 million in 2004. Loss available to common shareholders
for the full year was $288.9 million reflecting $11.7 million in
preferred stock dividends, a $133.7 million loss on repurchase of
preferred stock and $211.0 million in preferred stock fair value
adjustments. This compares to income available to common
shareholders of $48.5 million or $1.15 per diluted share in the
prior year.
Dex Media
Dex Media's full year 2005 revenue was $1,658.4 million compared
to $1,602.9 million in the prior year. Operating expenses,
including depreciation and amortization, were $1,134.4 million
compared to $1,180.3 million in the prior year. Operating income
for the full year was $524.0 million versus $422.6 million in
the prior year. Net interest expense in full year 2005 was
$445.7 million compared to $504.8 million in 2004. Net income for
the full year was $46.8 million or $0.31 per diluted share
compared to net loss of $50.8 million or $0.39 per diluted share
in the prior year.
Cash Flow and Debt
R.H. Donnelley
For the full year, RHD generated cash flow from operations of
$392.1 million. Free cash flow (cash flow from operations less
$31.6 million of capital expenditures and software investment)
for the year was $360.5 million. In aggregate, RHD repaid
$348.5 million of debt during the full year. As of December 31,
2005, net debt outstanding was $3,071.0 million.
Dex Media
For the full year, Dex Media generated cash flow from operations
of $570.4 million. Free cash flow (cash flow from operations less
$37.2 million of capital expenditures and software investment)
for the year was $533.2 million. In aggregate, Dex Media repaid
$483.1 million of debt during 2005 and paid $54.1 million of
cash dividends to common shareholders during the year. As of
December 31, 2005, net debt outstanding was $5,290.0 million.
Fourth Quarter 2005
R.H. Donnelley
RHD's combined publication sales for the fourth quarter 2005 were
$293.5 million, up 0.3 percent from $292.8 million the prior
period. RHD's publication sales represent the total billable
value of advertising in directories that were published in
the period. Net revenue in the fourth quarter of 2005 was
$261.1 million. Adjusted EBITDA in the fourth quarter of 2005 was
$142.7 million, while cash flow from operations in the quarter was
$77.7 million. GAAP net income for the fourth quarter 2005 was
$12.6 million.
Dex Media
Dex Media's publication sales in the fourth quarter of 2005
were $411.0 million, up 2.0 percent in the quarter compared to
$403.0 million in the fourth quarter of 2004. Dex publication
sales represent the total billable value of advertising in
directories that were published during the period, together with
all other revenue, including Internet and direct marketing
products, sold during the period. Dex's fourth quarter 2005
revenue was $414.0 million. Adjusted EBITDA in the fourth quarter
of 2005 was $230.4 million, while cash flow from operations in the
quarter was $154.7 million. Net loss for the fourth quarter of
2005 was $2.7 million.
Outlook
R.H. Donnelley is providing guidance on a consolidated basis for
2006 adjusted to exclude the effects of purchase accounting and
assuming the Dex transaction closed on January 1. Pro forma
advertising sales are expected to be approximately $2.7 billion in
full year 2006. Advertising sales represent the total billable
value of print and online products in the period in which the
billing commences. Adjusted pro forma EBITDA margin excluding FAS
123 expense is expected to be approximately 53 to 54 percent for
the full year, reflecting the first year of combined operations
following the acquisition of Dex Media and the costs necessary to
achieve synergies.
RHD expects to generate more than $700 million of free cash flow
after $75 million of capital expenditures during 2006. Weighted
average fully diluted shares outstanding during 2006 are expected
to be approximately 73 million.
R.H. Donnelley -- http://www.rhd.com/-- is a Yellow Pages
publisher and local online search company. RHD publishes
directories with total distribution of approximately 28 million
serving approximately 260,000 local and national advertisers in 19
states. RHD publishes directories under the Sprint Yellow
Pages(R) brand in 18 states with total distribution of
approximately 18 million serving approximately 160,000 local and
national advertisers, with major markets including Las Vegas,
Nevada, and Orlando and Fort Myers, Florida. In addition, RHD
publishes directories under the SBC Yellow Pages brand in Illinois
and Northwest Indiana with total distribution of approximately 10
million serving approximately 100,000 local and national
advertisers. RHD also offers online city guides and search
websites in its major Sprint Yellow Pages markets under the Best
Red Yellow Pages(R) brand at http://www.bestredyp.com/and in the
Chicago area at http://www.chicagolandyp.com/
* * *
As reported in the Troubled Company Reporter on Feb. 2, 2006,
Standard & Poor's Ratings Services lowered its ratings on R.H.
Donnelley Corp. and its operating subsidiary Donnelley (R.H.),
Inc., including its corporate credit rating to 'BB-' from 'BB', as
expected, following the company's announcement that the company
has completed its acquisition of Dex Media Inc.
In addition, all ratings on RHD and RHD Inc. were removed from
CreditWatch with negative implications.
Furthermore, Standard & Poor's affirmed bank loan rating on RHD
Inc. and all ratings on the Dex family of companies, including the
corporate credit rating of 'BB-'. S&P said the outlook is stable.
As reported in the Troubled Company Reporter on Jan. 13, 2006,
Fitch Ratings has initiated rating coverage on R.H. Donnelley
Corp. by assigning a 'B+' Issuer Default Rating and a 'CCC+'
rating to RHD's senior unsecured notes.
Fitch has also assigned specific issue ratings to R.H. Donnelley
Inc. and has revised ratings on Dex Media Inc. and its wholly
owned subsidiaries, Dex Media West and Dex Media East. All Dex
ratings are removed from Rating Watch Negative where they were
placed Oct. 3, 2005.
The 'B+' IDR applies to each of the five issuing entities. The
rating action affects approximately $8.5 billion of debt
outstanding at Sept. 30, 2005. Fitch said the Rating Outlook is
Stable.
As reported in the Troubled Company Reporter on Jan. 12, 2006,
Moody's Investors Service affirmed R.H. Donnelley Corporation's B1
Corporate Family rating and assigned a Caa1 rating to its proposed
$2.142 billion senior unsecured notes. The rating action follows
the company's announcement that it has revised the structure of
the debt that it plans to issue in connection with its proposed
acquisition of Dex Media Inc.
Moody's took these rating actions:
Ratings Assigned:
R.H. Donnelley Corporation:
* Proposed $332 million (in gross proceeds) 6.875% series A-1
senior discount notes, due 2013-- Caa1
R.H. Donnelley Finance Corporation III:
* Proposed $600 million (in gross proceeds) 6.875% series A-2
senior discount notes, due 2013 -- Caa1
* Proposed $1,210 million Series A-3 senior unsecured notes,
due 2016 -- Caa1
Ratings Withdrawn:
R.H. Donnelley Corporation:
* Proposed $1,842 million senior unsecured notes -- Caa1
Dex Media, Inc.:
* Proposed $250 million 7% add-on senior unsecured notes
-- B3
Ratings Affirmed:
R.H. Donnelley Corporation:
* Corporate Family rating -- B1
* $300 million 6.875% senior unsecured notes, due 2013
-- Caa1
R.H. Donnelley Inc.:
* $175 million senior secured revolving credit facility,
due 2009 -- Ba3
* Proposed $350 million add-on senior secured term loan D-1,
due 2011 -- Ba3
* $544 million senior secured term loan A, due 2009 -- Ba3
* $1,433 million senior secured term loan D, due 2011 -- Ba3
* $325 million 8.875% senior notes, due 2010 -- Ba3 (will be
withdrawn at closing)
* $600 million 10.875% senior subordinated notes, due 2012
-- B2
Dex Media Inc.:
* Corporate Family rating -- Ba3 (will be withdrawn at
closing)
* $570 million 9% senior discount notes, due 2013 -- B3
* $500 million 8% senior unsecured notes, due 2013 -- B3
Dex Media East LLC:
* $100 million senior secured revolving credit facility,
due 2008 -- Ba2
* $364 million senior secured term loan A, due 2008 -- Ba2
* $452 million senior secured term loan B, due 2009 -- Ba2
* $450 million 9.875% senior unsecured notes, due 2009 -- Ba3
* $341 million senior subordinated notes, due 2012 -- B1
Dex Media West LLC:
* $453 million add-on senior secured term loan B-1 (reduced
from $503 million), due 2010 -- Ba2
* $100 million senior secured revolving credit facility,
due 2009 -- Ba2
* $392 million senior secured term loan A, due 2009 -- Ba2
* $917 million senior secured term loan B, due 2010 -- Ba2
* $385 million senior unsecured notes, due 2010 -- B1
* $300 million senior unsecured notes, due 2011-- B1 (will be
withdrawn at closing)
* $762 million 9.875% senior subordinated notes, due 2013
-- B2
R.H. Donnelley Corporation's speculative grade liquidity rating is
affirmed at SGL-1. However, Moody's expects to withdraw this
rating at closing and assign a new speculative grade liquidity
rating to the surviving entity.
Moody's said the rating outlook is stable.
RIVERSTONE NETWORKS: U.S. Trustee Appoints Three-Member Committee
-----------------------------------------------------------------
The U.S. Trustee for Region 3 appointed three creditors to serve
on the Official Committee of Unsecured Creditors in Riverstone
Networks, Inc. and its debtor-affiliates' chapter 11 cases:
1. U.S. Bank, N.A.
Attn: Sandra Spivey
2300 West Sahara, Suite 200,
Las Vegas, Nevada 89102
Tel: (702) 386-7053
Fax: (702) 362-4128
2. Highbridge Capital Management, LLC
Attn: Noah Greenhill
9 West 57th Street, 27th Floor,
New York, New York, 10019
Tel: (212) 287-4900
Fax: (212) 287-4915
3. Mackay Shields LLC
Attn: Jordan Teramo
9 West 57th Street, 33rd Floor,
New York, New York 10019
Tel: (212) 230-3918
Fax: (212) 754-9187
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtors'
expense. They may investigate the Debtors' business and financial
affairs. Importantly, official committees serve as fiduciaries to
the general population of creditors they represent. Those
committees will also attempt to negotiate the terms of a
consensual chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest. If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management with
an independent trustee. If the Committee concludes reorganization
of the Debtors is impossible, the Committee will urge the
Bankruptcy Court to convert the Chapter 11 cases to a liquidation
proceeding.
Headquartered in Santa Clara, California, Riverstone Networks,
Inc. -- http://www.riverstonenet.com/-- provides carrier Ethernet
infrastructure solutions for business and residential
communications services. The company and four of its affiliates
filed for chapter 11 protection on Feb. 7, 2006 (Bankr. D. Del.
Case Nos. 06-10110 through 06-10114). Edmon L. Morton, Esq., and
Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP,
represent the Debtors in their restructuring efforts. As of
Dec. 24, 2005, the Debtors reported assets totaling $98,341,134
and debts totaling $130,071,947.
RIVERSTONE NETWORKS: Stockholder Wants Chapter 11 Case Dismissed
----------------------------------------------------------------
Charles L. Grimes asks the U.S. Bankruptcy Court for the District
of Delaware to dismiss the chapter 11 cases involving Riverstone
Networks, Inc., and its debtor-affiliates. Mr. Grimes is one of
the largest stockholder of Riverstone Networks.
Mr. Grimes tells the Court that on the same day the Debtors inked
an agreement with Lucent Technologies to sell its assets, the
Debtors filed chapter 11 petitions, citing for the need to conduct
the sale of their business under Section 363 of the Bankruptcy
Code.
Mr. Grimes contends that the case should be dismissed because it
was filed in bad faith. Mr. Grimes reminds the Court that the
Debtors pointed to three factors motivating their chapter 11
filing:
1. managerial distraction,
2. decline in market share and cash on hand, and
3. it is a condition of the agreement with Lucent.
Mr. Grimes says these reasons don't hold water. Mr. Grimes argues
that:
a. The Debtors allegations that the Securities and Exchange
Commission investigation, earning restatement review and
de-listing of the Riverstone's stock caused significant
distraction can hardly be grounds for the filing of a
chapter 11 petition since they occurred some time ago.
b. The Debtors have not shown they were suffering financial
distress at the time of the filing of the petition. Mr.
Grimes says loss of money or experiencing a downward spiral
is not sufficient to establish financial distress.
Mr. Grimes relates that the Debtors have not identified any
value that would be preserved in the bankruptcy, which
would otherwise be lost.
c. While selling assets under Section 363 of the Bankruptcy
Code constitutes a valid reorganization purpose because
it allows a purchaser to buy the assets free and clear of
liens, Mr. Mr. Grimes contends that in these particular
chapter 11 cases, not only is there virtually no secured
debt, but there are no liens for the purchaser to be
concerned about. At the same, all creditors will be paid
in full.
Headquartered in Santa Clara, California, Riverstone Networks,
Inc. -- http://www.riverstonenet.com/-- provides carrier Ethernet
infrastructure solutions for business and residential
communications services. The company and four of its affiliates
filed for chapter 11 protection on Feb. 7, 2006 (Bankr. D. Del.
Case Nos. 06-10110 through 06-10114). Edmon L. Morton, Esq., and
Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP,
represent the Debtors in their restructuring efforts. As of
Dec. 24, 2005, the Debtors reported assets totaling $98,341,134
and debts totaling $130,071,947.
ROBERTO PERALES: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Roberto Perales, Jr.
dba Mi Casa es Su Casa
RR 5 Box 1132
Donna, Texas 78537
Bankruptcy Case No.: 06-70075
Type of Business: The Debtor builds and sells houses.
Chapter 11 Petition Date: February 24, 2006
Court: Southern District of Texas (McAllen)
Judge: Richard S. Schmidt
Debtor's Counsel: John Ventura, Esq.
Law Offices of John Ventura, P.C.
4900 North 10th Street
Northtowne Centre, Suite E-2
McAllen, Texas 78504
Tel: (956) 630-2822
Fax: (956) 631-0742
Total Assets: $1,522,530
Total Debts: $2,060,068
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
J. W. Dyer Esquire Law suit $1,000,000
3700 North 10th Street,
Suite 105
McAllen, TX 78501
Citibank Revolving account $12,164
P.O. Box 6241
Sioux Falls, SD 57117
Amex Revolving account $9,282
Po Box 297871
Fort Lauderdale, FL 33329
GMAC Automobile $8,011
Discover Fin Revolving account $5,536
Law Offices of John Ventura, Attorney fees $5,000
P.C.
First Community Cred U Revolving account $3,158
First Community Cred U Revolving account $3,143
Discover Fin Revolving account $1,223
National Credit System Revolving account $1,115
Citibank USA Revolving account $989
Portfolio Recoveries Revolving account $149
Citi Revolving account $1
TX AG Child support $0
Ricardo A. Garcia For notice only $0
Gte Southwest Inc. Revolving account $0
First USA Bank B For notice only $0
Foleys For notice only $0
First USA Bank Na For notice only $0
First USA Bank Na For notice only $0
ROCKWELL TECHNOLOGY: Case Summary & 5 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: The Rockwell Technology Group, Inc.
612 Ruddiman Drive
North Muskegon, Michigan 49445
Bankruptcy Case No.: 06-00611
Chapter 11 Petition Date: February 22, 2006
Court: Western District of Michigan (Grand Rapids)
Judge: Jo Ann C. Stevenson
Debtor's Counsel: Robert F. Wardrop, II, Esq.
Wardrop & Wardrop, P.C.
300 Ottawa Avenue Northwest, Suite 150
Grand Rapids, Michigan 49503
Tel: (616) 459-1225
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $100,000 to $500,000
Debtor's 5 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Internal Revenue Service Payroll tax $157,254
678 Front Street Northwest
Insolvency Section
Grand Rapids, MI 49504
Macatawa Bank Business line of $126,000
10717 Paw Paw Drive credit
Holland, MI 49424
Sachnoff & Weaver Legal fees $90,000
10 South Wacker Drive
Chicago, IL 60606
Michigan Dept. of Treasury 2004 payroll tax $7,388
Treasury Building
430 West Allegan
Lansing, MI 48922
City of Grand Rapids Payroll tax $5,100
300 Monroe Avenue Northwest
Grand Rapids, MI 49503
SALOMON HOME: Moody's Cuts Class M-4 Certificates Rating to B2
--------------------------------------------------------------
Moody's Investors Service downgraded two certificates and upgraded
one certificate from two transactions originated by WMC Mortgage
Corporation in 2002. The securitizations are backed by subprime
mortgage loans.
The two subordinate certificates issued by Salomon Home Equity
Loan Trust have been downgraded because existing credit
enhancement levels may be low given the current projected losses
on the underlying pools due to the current pipeline of seriously
delinquent loans. The collateral has taken losses causing gradual
erosion of the overcollateralization. As of Jan. 25, 2006 there
was approximately $1 million of overcollateralization compared to
a required floor of about $1,237,000.
The Class M-1 certificate issued by GSAMP Trust 2002-HE has been
upgraded based on the substantial build-up in credit support. The
projected pipeline losses are not expected to significantly affect
the credit support for these certificates. The seasoning of the
loans and low pool factor reduce loss volatility.
Issuer: Salomon Home Equity Loan Trust
Downgrades:
* Series 2002-WMC1; Class M-3, downgraded to B1 from Baa1
* Series 2002-WMC1; Class M-4, downgraded to B2 from Baa2
Issuer: GSAMP Trust
Upgrade:
* Series 2002-HE; Class M-1, upgraded to Aaa from Aa2
SIGNATURE POINTE: Can Use GE's Collateral Until May 31
------------------------------------------------------
The Hon. Frank R. Monroe of the U.S. Bankruptcy Court for the
Western District of Texas in Austin extended, until May 31, 2006,
Signature Pointe Investors, LP's authority to use cash collateral
securing repayment of its prepetition debt to General Electric
Credit Equities, Inc.
GE asserts a lien and security interest on the Debtor's primary
asset, an apartment complex known as the Oakwood Austin in Travis
County, Texas, as successor-in-interest to Malone Mortgage Company
America, Ltd. The Debtor borrowed approximately $14.5 million
from Malone in July 1998.
The Debtor wants access to GE's Cash Collateral to meet payroll,
tax, maintenance and insurance expenses. The Debtor will use cash
collateral according to a monthly budget. A copy of this budget
is available for free at http://researcharchives.com/t/s?5d9
The Bankruptcy Court allows the Debtor to exceed any expense line
item on the budget by $1,000 provided that the aggregate excess
does not exceed $10,000 for each month.
Each month, the Debtor is required to remit to GE any cash
collateral remaining after the budgeted expenses are deducted.
Payment of the excess funds will be applied to reduce GE's claims.
To adequately protect GE's interests on the Cash Collateral, the
Debtor grants GE a replacement lien and security interest in all
of its prepetition and postpetition assets. GE is also granted a
replacement lien on any leases or occupancy agreements for the
apartments signed after July 1, 2005.
Headquartered in Los Angeles, California, Signature Pointe
Investors, L.P. operates an apartment as an Oakwood franchisee in
Austin, Texas. The Company filed for chapter 11 protection on
July 1, 2005 (Bankr. W.D. Tex. Case No. 05-13819). Patrick J.
Neligan, Jr., Esq. at Neligan Tarpley Andrews & Foley LLP
represents the Debtor. When the Company filed for protection from
its creditors, it listed $10 million to $50 million in estimated
assets and debts.
SIGNATURE POINTE: Set Sights on $19.4 Million Texas Property
------------------------------------------------------------
The Hon. Frank R. Monroe of the U.S. Bankruptcy Court for the
Western District of Texas in Austin allowed Signature Pointe
Investors, LP, to sign a Qualified Exchange Accommodation
Agreement with Laurel Russett Holdings SPP, LLC, and Virginia
Properties, LLC.
The accommodation agreement allows the Debtor to acquire a 35%
interest in a property known as 8185 Scenic Meadow Drive, located
in Laurel Maryland in exchange for its 284-unit residential
apartment complex, known as the Oakwood Austin, located in Travis
County, Texas. Laurel Russett intends to buy the Scenic Meadow
property for $19.4 million. The transaction is part of a tax
deferred "like-kind" exchange under Section 1031 of the Internal
Revenue Code proposed by the Debtor.
Judge Monroe stressed that the acquisition of the interest under
the accommodation agreement will only be consummated if either:
a) the Debtor and General Electric Credit Equities, Inc.,
reaches an agreement transferring the Debtor's primary
asset, the Oakwood apartments, to GE; or
b) the Debtor pays GE the full amount of its claim;
GE asserts a lien and security interest on the Debtor's assets as
successor-in-interest to Malone Mortgage Company America, Ltd.
The Debtor borrowed approximately $14.5 million from Malone in
July 1998.
A copy of the 12-page accommodation agreement is available for a
fee at
http://www.researcharchives.com/bin/download?id=060227204838
Headquartered in Los Angeles, California, Signature Pointe
Investors, L.P., operates a 284-unit apartment complex in Austin,
Texas. The Debtor filed for chapter 11 protection on July 1, 2005
(Bankr. W.D. Tex. Case No. 05-13819). Patrick J. Neligan, Jr.,
Esq., at Neligan Andrews Bryson Foley LLP represents the Debtor in
its restructuring efforts. When the Debtor filed for protection
from its creditors, it estimated $10 million to $50 million in
assets and debts.
SIX FLAGS: Fitch Initiates Coverage by Assigning Low-B Ratings
--------------------------------------------------------------
Fitch Ratings initiated rating coverage of Six Flags, Inc. as:
Six Flags Theme Parks, Inc.:
-- Issuer default rating 'B-'
-- Bank credit facility 'BB-/RR1'
Six Flags, Inc.:
-- Issuer default rating 'B-'
-- Senior unsecured notes 'CCC+/RR5'
-- Preferred stock 'CCC-/RR6'
The Rating Outlook is Stable. Approximately $2.4 billion of
outstanding debt is covered by these actions. This includes
$287.5 million of preferred stock stated at liquidation value and
treated as debt.
The 'B-' IDR reflects the company's pressured credit metrics and
weak operating performance. While financial commitments are
currently being met, the rating indicates that significant credit
risk is present with a limited margin of safety remaining and
capacity for continued payment is contingent upon a sustained,
favorable business and economic environment. This becomes a
larger issue given the seasonality of the company's operations.
Coverage ratios have been pressured with interest coverage of
1.9x, and operating EBITDA to the sum of interest expense and
capital expenditures of approximately 1.0x, for the last 12 months
(LTM) ended Sept. 30, 2005. In addition, LTM cash from operations
is less than 0.8x capital expenditures, which Fitch considers
extremely weak given the capital intensive nature of the business.
Six Flags' leverage in the LTM, as defined by debt to operating
EBITDA and FFO adjusted leverage, was 7.0x and 7.3x, respectively.
Positively, the ratings reflect the company's leading position as
the largest regional theme park operator, with:
* strong brand awareness;
* broad geographic presence;
* solid competitive position due to the high barriers to entry
and market leadership; and
* significant real estate ownership underlying many of its
30 parks.
Fitch recognizes that with the successful consent solicitation of
Red Zone (12% owner), a significant portion of the management team
has been replaced which could eventually improve bondholder
protection if stated operational changes prove to be effective.
New management has indicated a commitment to deleverage Six Flags'
balance sheet.
In addition, the company has mentioned plans to:
* sell some assets;
* cut outlays for new rides;
* focus aggressively on the family market;
* increase marketing partnerships; and
* improve margins.
Successful execution of new management's stated strategy will be a
major consideration in any future positive ratings momentum.
However the significant equity ownership positions of larger hedge
funds, over 40%, could have a negative impact on bondholders as it
relates to influencing fiscal policy and shareholder initiatives.
Operating margins have been steadily declining until recently,
while the company's direct competitor, Cedar Fair, has been able
to maintain higher margins. Over the past few years, attendance
trends have been declining for the most part. In 2004, attendance
for the year declined by 3%, partially offset by a 2% increase in
per capita spending.
However, for the nine months ended Sept. 30, 2005, comparable
period-over-period attendance improved 6%, with a 4% increase in
per capita spending. EBITDA has also increased significantly by
15% through the first nine months of 2005, while operating margins
have improved by almost 2%, with improved attendance and higher
per capita spending at its parks. It remains to be seen if this
is only short term, or whether Six Flags can continue to show
operational improvements evidenced in the last nine months.
Six Flags' business is also highly seasonal with more than 85% of
attendance and corresponding revenue at its parks occurring in the
second and third calendar quarters of each year. By comparison,
many of its expenses for maintenance and costs of adding new
attractions are incurred when the parks are closed in the mid to
late autumn and winter months. Since the majority of Six Flags'
cash flows occur in the summer months, they are vulnerable to:
* weather,
* natural disasters,
* security threats, and
* other local conditions during such months.
Lower attendance resulting from any such events could have a
significantly negative impact on Six Flags' operations.
As of Sept. 30, 2005, Six Flags had a liquidity position of about
$475 million, consisting of $359 million in revolving loans
available to be drawn and $116 million of available cash. In
addition, the company's near-term debt maturities are minimal
until 2008. However, Six Flags is required to repay all of its
outstanding term loan, currently $647 million, on Dec. 31, 2008,
if its preferred stock is outstanding at that time. The company
has high interest expense and capital requirements, with LTM capex
at over $160 million.
Although Six Flags currently has adequate liquidity to meet its
near-term maturities and capital requirements, the company will
have increasing difficulty to sustain its current capital
structure without sustained operational improvements.
The company owns significant real estate of over 6,000 acres
underlying many of its parks, which could provide an additional
cushion. It has three parks up for sale currently, one in Houston
and two in Oklahoma City. The Houston property appears to be very
valuable. It is estimated that proceeds from the sale of this
approximately 100 acre property could be between $70 million -
$100 million. However, Fitch believes that many of its other
properties may not be as valuable. As part of new management's
strategic plan, Six Flags has also hired The Staubach Co. of
Dallas to conduct a full assessment of the company's substantial
real estate assets.
The Recovery Ratings and notching in the debt structure reflect
Fitch's recovery expectations under a scenario in which distressed
enterprise value is allocated to the various debt classes. The
recovery ratings for the bank credit facility ('RR1', reflecting
expected 91%-100% recovery) benefit from substantial enterprise
value, as well as borrowing limitations due to maintenance
covenants. The senior unsecured notes ('RR5', reflecting expected
recovery of 11%-30%) reflect below-average recovery prospects in a
distressed case due to structural and effective subordination with
respect to bank debt. The preferred stock ('RR6', reflecting
expected recovery of 0%-10%) reflects poor recovery prospects in a
distressed case.
SOLUTIA INC: Receives Commitment for $825 Million DIP Financing
---------------------------------------------------------------
Solutia Inc. (OTC Bulletin Board: SOLUQ) received a fully
underwritten commitment for $825 million of debtor-in-possession
financing, maturing March 31, 2007. This represents a $300
million increase and more than a nine-month extension over
Solutia's current DIP financing.
The increased availability under the DIP financing provides
Solutia with additional liquidity for operations and the ability
to fund mandatory pension payments that come due in 2006. The DIP
financing can be repaid by Solutia at any time without prepayment
penalties. Citigroup is acting as lead arranger.
"As we announced [last week], the filing of our Plan of
Reorganization has taken Solutia one very significant step closer
to emergence from Chapter 11," said Jeffry N. Quinn, president and
CEO, Solutia Inc. "While we ultimately may not need the extension
to our DIP financing, it provides us with the flexibility we need
to achieve the optimal resolution to our Chapter 11 case."
This amendment requires the approval of the U.S. Bankruptcy Court
for the Southern District of New York, which Solutia expects to
receive in mid-March.
Headquartered in St. Louis, Missouri, Solutia, Inc. --
http://www.solutia.com/-- with its subsidiaries, make and sell a
variety of high-performance chemical-based materials used in a
broad range of consumer and industrial applications. The Company
filed for chapter 11 protection on December 17, 2003 (Bankr.
S.D.N.Y. Case No. 03-17949). When the Debtors filed for
protection from their creditors, they listed $2,854,000,000 in
assets and $3,223,000,000 in debts. Solutia is represented by
Richard M. Cieri, Esq., at Kirkland & Ellis. Daniel H. Golden,
Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin
Gump Strauss Hauer & Feld LLP represent the Official Committee of
Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey
Howard & Zukin Capital provides the Creditors' Committee with
financial advice.
SOUTH BEACH: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: South Beach Community Hospital, LLC
630 Alton Road
Miami Beach, Florida 33139
Tel: (305) 672-2100
Bankruptcy Case No.: 06-10634
Type of Business: The Debtor provides healthcare services to
the elderly and the indigent in the Miami
Beach area. See http://www.sbchmc.com
Chapter 11 Petition Date: February 27, 2006
Court: Southern District of Florida (Miami)
Judge: Laurel M. Isicoff
Debtor's Counsel: Paul L. Orshan, Esq.
Duane Morris LLP
200 South Biscayne Boulevard #3400
Miami, Florida 33131
Tel: (305) 960-2200
Fax: (305) 960-2201
Estimated Assets: Less than $50,000
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Regions Bank $2,161,000
2800 Ponce de Leon Boulevard
9th Floor
Miami, FL 33134
South Beach Heights $1,100,000
2930 Biscayne Boulevard
Miami Beach, FL 33140
Premium Assignment $401,024
P.O. Box 3066
Tallahassee, FL 32315
OIG/DOJ $236,100
William Zubkoff $175,000
630 Alton Road
Miami Beach, FL 33139
FPL $161,306
General Mail Facility
Miami, FL 33188
A.H.C.A. $154,058
Med Caf, $125,110
Ira S. Barton $100,000
City of Miami Beach $86,808
First Coast Options, Inc. $80,818
Superior Pharmacy Group $71,125
Argent Healthcare Financial $69,100
Associated Industries $66,000
Akerman & Senterfit $61,113
Mercy Hospital Lab $60,000
Biotektronic $52,636
Gold Coast Linen $46,401
Biotronik $37,600
A4 Health Systems, Inc. $27,672
SSA GLOBAL: Estimates $34 Mil. EBITDA in Second Qtr. Ended Jan. 31
------------------------------------------------------------------
SSA Global(TM) (Nasdaq: SSAG) reported preliminary financial
results for the second quarter ended Jan. 31, 2006. The Company
will announce its complete second quarter fiscal 2006 results on
March 9, 2006.
"SSA Global continues to execute against its long term strategy of
acquiring market share and developing customer share. Our year
over year license growth is evidence of solid progress coupled
with solid operational performance across the business," Mike
Greenough, chairman, president and CEO of SSA Global said.
The Company estimates that preliminary financial results for the
three months ended Jan. 31, 2006, are:
Revenue Estimates:
-- License revenue of $57 million;
-- Support revenue of $91 million;
-- Service and other revenue of $40 million; and
-- Total revenue of $188 million.
Preliminary license revenue for the three months ended Jan. 31,
2006, represents an increase of 12% compared to actual results for
the three months ended Jan. 31, 2005. Of this, organic growth was
7% measured on an equivalent basis to last year including foreign
exchange equalization and normalized for the Epiphany acquisition
completed on Sept. 29, 2005.
Preliminary support revenue for the three months ended Jan. 31,
2006, represents an increase of 5% compared to actual results for
the three months ended Jan. 31, 2005. On an equivalent basis,
normalized for the Epiphany acquisition and foreign exchange
equalization, support revenues were roughly flat between periods.
Preliminary service and other revenue for the three months ended
Jan. 31, 2006, was flat compared to actual results for the three
months ended Jan. 31, 2005. On an equivalent basis, normalized
for the Epiphany acquisition and foreign exchange equalization,
service and other revenue was down 6% between periods primarily
due to a decrease in hardware revenue.
Earnings, Cash Flow and Balance Sheet Estimates:
-- Earnings before interest, taxes, depreciation and
amortization (EBITDA) of $34 million;
-- Cash flow from operations of $48 million;
-- Cash and cash equivalents of $136 million; up $46 million
from last quarter; and
-- Deferred revenue of $263 million; up $56 million from last
quarter.
The difference between EBITDA and cash flow from operations
consists of:
-- cash paid for interest of approximately $3 million, and
-- a working capital benefit of approximately $17 million.
The preliminary financial information for the three months ended
Jan. 31, 2006, is not final and is subject to further review. The
Company's actual financial performance could differ from these
estimates and any such difference could be significant. The
Company and its independent public accounting firm are currently
completing their quarterly review procedures for the three months
ended Jan. 31, 2006.
Headquartered in Chicago, Illinois, SSA Global(TM) (Nasdaq: SSAG)
-- http://www.ssaglobal.com/-- is a leading provider of extended
ERP solutions for manufacturing, distribution, retail, services
and public organizations worldwide. In addition to core ERP
applications, SSA Global offers a full range of integrated
extension solutions including corporate performance management,
customer relationship management, product lifecycle management,
supply chain management and supplier relationship management.
SSA Global has over 50 locations worldwide and its product
offerings are used by approximately 13,000 active customers in
over 90 countries. SSA Global(TM) is the corporate brand for
product lines and subsidiaries of SSA Global Technologies, Inc.
SSA Global, SSA Global Technologies and SSA GT are trademarks of
SSA Global Technologies, Inc. Other products mentioned in this
document are registered, trademarked or service marked by their
respective owners.
* * *
As reported in the Troubled Company Reporter on Aug. 1, 2005,
Standard & Poor's Ratings Services assigned its 'BB-' corporate
credit rating to Chicago, Illinois-based SSA Global Technologies
Inc. At the same time, Standard & Poor's assigned its 'BB-'
rating, with a recovery rating of '3', to SSA Global's proposed
$225 million senior secured bank facility, which will consist of a
$25 million revolving credit facility due 2010 and a $200 million
term loan due 2011. The bank loan rating, which is the same as
the corporate credit rating, along with the recovery rating,
reflect our expectation of meaningful recovery of principal by
creditors in the event of a payment default or bankruptcy. The
proceeds from this facility will be used to refinance existing
debt, and to add cash to the balance sheet. The outlook is
negative.
STATION CASINO: Moody's Rates New $300MM Sr. Sub. Notes at Ba3
--------------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to Station
Casinos, Inc.'s new $300 million senior subordinated notes due
2018. Net proceeds from the new offering will be used to repay a
portion of the outstanding borrowings under the company's $2
billion secured revolving credit facility. Like Station's
existing senior subordinated notes, the new notes will not be
guaranteed by the company's subsidiaries. Moody's also affirmed
the company's Ba1 corporate family rating, Ba2 senior note rating,
Ba3 senior subordinated note rating, and SGL-2 speculative grade
liquidity rating. The ratings outlook is stable.
Station's ratings consider that it continues to benefit from the
rapidly growing Las Vegas area, and that the company has been
highly effective at using debt to further develop its asset
profile, market leadership position, and competitive advantage in
the Las Vegas locals market. The ratings also acknowledge
Station's successful development track record, relatively low
borrowing costs, significant annual discretionary cash flow, and
favorable risk/reward profile of planned development projects that
are expected to have a significant positive impact on revenue and
cash flow growth.
The stable ratings outlook does anticipate temporary increases in
leverage during peak development periods as well as some near-term
negative impact to earnings that is likely to result from
construction disruption. However, ratings could be negatively
impacted by share repurchase activity to the extent it affects the
company's ability and willingness to maintain debt/EBITDA over the
longer-term at or near 4.0x, a key consideration behind Moody's
Aug. 24, 2005 ratings upgrade.
Since Oct. 1, 2005, Station repurchased approximately 3.4 million
shares of common stock valued at about $230 million. The company
is authorized to repurchase a considerable amount of additional
shares with an estimated current value of over $450 million.
Significant further utilization of this program could result in a
downgrade.
Station's SGL-2 speculative grade liquidity rating indicates good
liquidity and is based on Moody's expectation that internally
generated cash flow combined with existing cash balances and
availability under the company's bank credit facility will be
sufficient to meet capital spending and debt service requirements
over the next twelve months. Station's SGL-2 also acknowledges
that the company has a considerable amount of land held for
development that could be sold in the event the company wants or
needs to raise cash.
Station Casinos, Inc., owns and operates fourteen hotel/casinos in
the Las Vegas locals market including a 50% interest in both
Barley's Casino & Brewing Company and Green Valley Ranch Station
Casino, and a 6.7% interest in the Palms Casino Resort. In
addition, Station manages the Thunder Valley Casino for the United
Auburn Indian Community in California. Net revenue for the latest
twelve month period ended Dec. 31, 2005 was about $1.1 billion.
TITANIUM METALS: Inks $175-Mil. Credit Pact with U.S. Bank, et al.
------------------------------------------------------------------
Titanium Metals Corporation entered into a credit agreement with:
* U.S. Bank National Association as agent;
* Harris N.A., as lender;
* JP Morgan Chase Bank, N.A., as lender;
* The CIT Group/Business Credit, Inc., as lender; and
* Wachovia Bank, National Association, as lender.
Under the Credit Agreement, the Company may borrow up to
$175 million on a revolving basis, subject to a formula-determined
borrowing base if the outstanding borrowings exceed 60% of the
aggregate amount of the loan commitments or the Company's leverage
ratio is greater than 2.00 to 1.00.
Interest on the outstanding amounts accrues at rates that will
vary during the term of the Credit Agreement based on either:
-- the U.S. Bank base rate (which is the greater of U.S. Bank's
prime rate and the Federal Funds rate plus 0.5%); or
-- LIBOR plus an amount that ranging from 0.875% to 1.625%
based upon the ratio of the Company's total funded debt
(minus cash and cash equivalents) to the earnings before
interest, taxes, depreciation and amortization (EBITDA).
TIMET generally is permitted to select which interest rate
methodology to apply to borrowings unless a default occurs under
the Credit Agreement. The Credit Agreement terminates on
February 17, 2011.
The Company's obligations under the Credit Agreement are secured
by a first priority pledge of certain of the Company's assets, and
were guaranteed by certain of the Company's domestic subsidiaries.
Wachovia Bank Agreement Terminated
Contemporaneously with entering into the new Credit Agreement with
U.S. Bank, the Company terminated its Loan and Security Agreement
with Wachovia Bank, National Association as successor by merger to
Congress Financial Corporation. Under the Prior Loan Agreement,
the borrowers could borrow up to $125 million on a revolving
basis, subject to a formula-determined borrowing base. Interest
on the outstanding borrowings generally accrued at Wachovia'
published base rate or LIBOR plus an amount based upon the excess
borrowing availability. The Prior Loan Agreement terminated on
February 25, 2006. The obligations of TIMET were secured by
substantially all of the assets of TIMET and certain of its
domestic subsidiaries.
A full-text copy of the Credit Agreement is available at no extra
charge at http://ResearchArchives.com/t/s?5d8
Headquartered in Denver, Colorado, Titanium Metals Corporation --
http://www.timet.com/-- is a worldwide producer of titanium metal
products.
* * *
As reported in the Troubled Company Reporter on Mar. 18, 2005,
Standard & Poor's Ratings Services raised its corporate credit
rating on Denver, Colorado-based Titanium Metals Corp., to 'B+'
from 'B'. Standard & Poor's also raised its preferred stock
rating to 'CCC+' from 'CCC'. S&P says the outlook is stable.
TOYS 'R' US: Fitch Withdraws B Rating on $1 Billion Facility
------------------------------------------------------------
Fitch Ratings withdrew its 'B/RR3' ratings of Toys 'R' Us (UK)
Limited's approximately $1 billion secured bridge facility, which
has been repaid. Toys 'R' Us (UK) Limited is an indirect
subsidiary of Toys 'R' Us, Inc.
TRAFFIC.COM INC: Equity Deficit Tops $97.6 Million at December 31
-----------------------------------------------------------------
Traffic.com, Inc. (NASDAQ: TRFC), delivered its financial results
for the fiscal year and fourth quarter ended December 31, 2005, to
the Securities and Exchange Commission on Feb. 21, 2006.
Robert N. Verratti, the company's chief executive officer said,
"We continued to make excellent progress through the end of 2005,
particularly in regard to geographic coverage expansion with an
increase over the last twelve months from 24 to 35 metropolitan
areas, as well as with the launch of our cross-platform
advertising initiatives. Also during 2005, the addition of
valuable customers such as Motorola, Viacom, The Weather Channel,
and Comcast continues to strengthen our position as a leading
franchise in the traffic category."
Annual revenues increased from $42.4 million in 2004 to $43.3
million for the year ended December 31, 2005. Fourth quarter
revenues for 2005 were $11.2 million, compared with $11.4 million
in the fourth quarter of the previous year.
More importantly, significant progress was made in growing traffic
data service revenues. Revenue in this category was up 47.7% for
the year, from $3.0 million to $4.4 million. Fourth quarter
revenues for 2005 were $1.4 million, compared with $1.1 million in
the fourth quarter the previous year. The Company expects traffic
data revenue to continue to grow in amount and as a percentage of
revenues as automobile manufacturers, Web portals, wireless
providers, and others consider traffic content a compelling
addition to current service offerings.
Consistent with the growth strategy for the Company's business
model, higher margin owned inventory revenue, included in
advertising revenue, generated from multi-year radio and
television station contracts increased 9.1% from $30.3 million in
2004 to $33.0 million in 2005. However, 2004 revenues include
$5.6 million from a customer contract that the Company elected not
to renew in 2005 due to unacceptable terms proposed by that
customer. In the fourth quarter of 2005, owned inventory revenue
was $8.2 million versus $8.3 million in the fourth quarter of
2004, which included revenues of $1.3 million from the unrenewed
contract.
The company reported $8.2 million net loss for fourth quarter
ended Dec. 31, 2005, compared to $2.8 million net loss for the
same period in 2004. For the full year ended Dec. 31, 2006, the
company had $43.1 million net loss, compared to $16 million net
loss, for the same period in 2004.
Verratti added, "We are confident in our expanded business model
though it is in its early stages, particularly our Interactive
Media business segment. We believe our customer and partner
relationships, as well as our technology delivered across multiple
platforms, will continue to gain value."
As of December 31, 2005, the Company's balance sheet showed
$54,978,000 in total assets and total liabilities of $152,655,000,
resulting in a stockholders deficit of $97,677,000.
Headquartered in Wayne, Pennsylvania, Traffic.com --
http://www.traffic.com/-- is a leading provider of accurate,
real-time traffic information in the United States, based on the
quality of its traffic data and the extent of its geographic
coverage. Traffic.com offers detailed traffic information,
including specific needs, travel times and delay times. A
sophisticated traffic information management system allows
Traffic.com to process information in real time and deliver
customized reports to large numbers of radio, television,
Internet, wireless and in-vehicle navigation system users.
Traffic.com provides traffic information for 35 of the largest
metropolitan areas in the United States, in such cities as Boston,
Chicago, Houston, Los Angeles, New York, Philadelphia, San Diego
and San Francisco. Traffic.com's data services customers include
the Weather Channel(R), Motorola's VIAMOTO(TM) Solutions, XM
Satellite Radio and XM NavTraffic for the Acura RL and Cadillac
CTS.
UNION AVENUE: Judge Stern Converts Case to Chapter 7 Liquidation
----------------------------------------------------------------
The Hon. Morris Stern of the U.S. Bankruptcy Court for the
District of New Jersey converted the chapter 11 case of Union
Avenue Auto Body, Inc., to a chapter 7 liquidation proceeding.
As reported in the Troubled Company Reporter on Nov 8, 2005, Kelly
Beaudin Stapleton, the U.S. Trustee for Region 3, asked the Court
to convert the case citing the Debtor's inability to reorganize
and its continuing losses.
Ms. Stapleton learned at a status conference in April 2005 that:
a) the Debtor had received termination notices from its
insurance companies and that all of the Debtor's insurance
policies had been cancelled for lack of payment;
b) the Debtor does not have the funds to pay insurance
premiums owed;
c) the Debtor was delinquent in the payment of employee
withholding taxes totaling approximately $20,000; and
d) the Debtor's business operations have shut down.
In addition, Ms. Stapleton told the Bankruptcy Court that the
Debtor has unpaid post-petition debts of $102,864 as of March 2005
and is delinquent in the payment of quarterly fees totaling
approximately $1,250.
Ms. Stapleton argued a conversion would open the way for the
appointment of an independent trustee who would liquidate any
assets and investigate any avoidance actions that might lead to a
distribution to creditors.
Chapter 7 Trustee
The U.S. Trustee has appointed Jay Lubetkin, Esq., to serves as
the chapter 7 trustee in the Debtor's chapter 7 liquidation
proceedings.
Headquartered in East Rutherford, New Jersey, Union Avenue Auto
Body, Inc. filed for chapter 11 protection on December 29, 2004
(Bankr. D. N.J. Case No. 04-50195). Daniel J Yablonsky, Esq., at
Yablonsky & Associates, represented the Debtor in its chapter 11
proceedings. When the Company filed for protection from its
creditors, it estimated assets and debts between $1 million and
$10 million.
USG CORP: Classification & Treatment of Claims Under Ch. 11 Plan
----------------------------------------------------------------
USG Corporation and its debtor-affiliates' Plan of Reorganization
groups claims against and equity interests in the Debtors into 12
classes. The Debtors believe that the classification of claims
and equity interests under the Plan is appropriate and consistent
with applicable law.
Class Description Recovery Under the Plan
----- ----------- -----------------------
N/A Administrative Paid in full, in Cash
Claims
N/A Priority Tax Paid in full, in cash
Claims
N/A Reclamation Any Allowed Claims relating to the
Claims provision of goods to the Debtors
before the Petition Date will be
treated and paid as Class 6 Claims.
1 Priority Claims Each holder of an Allowed Claim will
Receive cash equal to the Allowed
Claim plus postpetition interest.
Unimpaired
Estimated claim amount: $14,000
Estimated recovery: 100%
2 Secured Claims Each holder will receive treatment in
either:
Option A: Allowed Claims will be paid
in full, in cash, plus postpetition
interest on an Allowed Claim, unless
the holder agrees to less favorable
treatment.
Option B: Claims with respect to
which the applicable Debtor elects
will be reinstated.
Unimpaired
Estimated claim amount: $2,200
Estimated recovery: 100%
3 Credit Claims allowed for $471,009,479
Facilities in the aggregate. On the Effective
Claims Date, each holder will receive cash
equal to its pro-rata share plus
postpetition interest. The Debtors
will also pay fees and charges
arising under the applicable Credit
Facilities. Any letter of credit
outstanding as of the Effective Date
will be cash collateralized,
refinanced, canceled or replaced on
or after the Effective Date.
Unimpaired
Estimated claim amount: $471,009,479
Estimated recovery: 100%
4 Senior Note Claims allowed for $289,250,578 in the
Claims aggregate. On the Effective Date,
each holder will receive cash equal to
its pro-rata share and postpetition
interest on that Allowed Claim. In
lieu of any claim for substantial
contribution by or on behalf of the
Senior Note Indenture Trustee, the
Debtors will pay cash equal to the
reasonable and documented fees and
expenses to the extent payable under
the Senior Note Indentures.
Unimpaired
Estimated claim amount: $289,250,578
Estimated recovery: 100%
5 Industrial Each holder will receive treatment
Revenue Bond in accordance with these options:
Claims
Option A: Allowed Claims will be
paid in full and in cash
plus Postpetition Interest
on an Allowed Claim, unless
the holder agrees to less
favorable treatment.
Option B: Claims will be Reinstated.
In lieu of any claim for substantial
contribution by or on behalf of the
Industrial Revenue Bond Indenture
Trustees, the Debtors will pay to
any Industrial Revenue Bond Indenture
Trustee cash in an amount equal to
the reasonable and documented fees
and expenses of Industrial Revenue
Bond Indenture Trustees.
Unimpaired
Estimated recovery: 100%
6 General
Unsecured Claims Each holder will be paid in full, in
cash plus postpetition interest,
unless the holder agrees to less
favorable treatment.
Unimpaired
Estimated claim amount: $115,000,000
Estimated recovery: 100%
7 Asbestos Personal All claims will be channeled to the
Injury Claims Asbestos Personal Injury Trust, which
will be funded pursuant to the Plan.
All PI Claims will be determined and
paid pursuant to the Asbestos
Personal Injury Trust Agreement and
Asbestos PI Trust Distribution
Procedures. Pursuant to Section
524(g) of the Bankruptcy Code, the
Plan and Confirmation Order will
permanently and forever stay,
restrain and enjoin any entity from
taking any actions against any
protected party for the purpose of
collecting, recovering or receiving
payment of, on or with respect to
any Asbestos PI Claim.
Impaired
Estimated claim amount: N/A
8 Asbestos Property Each holder will be paid in full, in
Damage Claims cash, plus postpetititon interest on
An Allowed Claim. All PD Claims will
be liquidated or otherwise resolved
pursuant to the Plan.
Unimpaired
Estimated recovery: 100%
9 Environmental Claims will be reinstated.
Claims
Unimpaired
Estimated recovery: 100%
10 Intercompany Claims will be reinstated.
Claims
Unimpaired
Estimated recovery: 100%
11 Stock Interests Interests will be reinstated.
of Subsidiary
Debtors Unimpaired
Estimated recovery: N/A
12 Stock Interests Interests will be reinstated and
of USG retained.
Unimpaired
Estimated recovery: N/A
A schedule of the Industrial Revenue Bonds is available at no
additional charge at http://ResearchArchives.com/t/s?5ce
Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger, in
Wilmington, Delaware, tells Judge Fitzgerald that the Asbestos
Personal Injury Demands are not classified, as they are not
claims for purposes of the Bankruptcy Code. The aggregate
consideration payable to Class 7 Asbestos Personal Injury Claims,
however, will be shared in the Asbestos Personal Injury Trust
among Asbestos PI Claims and Asbestos Personal Injury Demands
pursuant to the terms of the Asbestos Personal Injury Trust
Distribution Procedures.
For purposes of computations of Claim amounts, administrative and
other expenses and similar computational purposes, the Effective
Date is assumed to occur on June 30, 2006, the end of the
Debtors' second calendar quarter for calendar year 2006. There
can be no assurance, however, if or when the Effective Date will
actually occur.
About USG Corp
Headquartered in Chicago, Illinois, USG Corporation --
http://www.usg.com/-- through its subsidiaries, is a leading
manufacturer and distributor of building materials producing a
wide range of products for use in new residential, new
nonresidential and repair and remodel construction, as well as
products used in certain industrial processes.
The Company filed for chapter 11 protection on June 25, 2001
(Bankr. Del. Case No. 01-02094). David G. Heiman, Esq., Gus
Kallergis, Esq., Brad B. Erens, Esq., Michelle M. Harner, Esq.,
Mark A. Cody, Esq., and Daniel B. Prieto, Esq., at Jones Day
represent the Debtors in their restructuring efforts.
Lewis Kruger, Esq., Kenneth Pasquale, Esq., and Denise Wildes,
Esq., represent the Official Committee of Unsecured Creditors.
Elihu Inselbuch, Esq., and peter Van N. Lockwood, Esq., at Caplin
& Drysdale, Chartered, represent the Official Committee of
Asbestos Personal Injury Claimants. Martin J. Bienenstock, Esq.,
Judy G. Z. Liu, Esq., Ralph I. Miller, Esq., and David A.
Hickerson, Esq., at Weil Gotshal & Manges LLP represent the
Statutory Committee of Equity Security Holders. Dean M. Trafelet
is the Future Claimants Representative. Michael J. Crames, Esq.,
and Andrew A. Kress, Esq., at Kaye Scholer, LLP, represent the
Future Claimants Representative. Scott Baena, Esq., and Jay
Sakalo, Esq., at Bilzen Sumberg Baena Price & Axelrod LLP,
represent the Asbestos Property Damage Claimants Committee.
When the Debtors filed for protection from their creditors, they
listed $3,252,000,000 in assets and $2,739,000,000 in debts. (USG
Bankruptcy News, Issue No. 104; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
VARTEC TELECOM: Wants to Employ "Unidentified" Consulting Expert
----------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in Vartec
Telecom, Inc., and its debtor-affiliates' chapter 11 proceedings
ask the U.S. Bankruptcy Court for the Northern District of Texas
for authority to employ a consulting expert in its lawsuit against
the Rural Telephone Finance Cooperative.
The Committee reminds the Court that on June 10, 2005, it
initiated Official Committee of Unsecured of VarTec Telecom, Inc.
et al., v. Rural Telephone Finance Cooperative, Adv. Pro. No.
05-03514. The Committee wants to employ a consulting expert in
order to properly develop and present its case.
The Committee tells the Court that because the consulting expert
will be participating in active litigation, it can't disclose the
identity of the expert. The Committee says that when the time
comes that the consulting expert will testify as an expert
witness, then and only then, the Committee will disclose the
consulting expert's identity. This, the Committee says, would be
in response to appropriate discovery requests in the adversary
proceeding.
The Committee however tells the Court that if the Court so
desires, they will disclose the consulting expert's identity to
the Court in camera.
The Committee discloses that the consulting expert's professionals
charge:
Designation Hourly Rate
----------- -----------
Shareholders $305 - $345
CPA's $230
Staff Accountants $150 - $190
Clerical & Bookkeepers $50 - $110
The Committee says that it will not ask for payment or
reimbursement of the expenses or fees of the consulting expert
from the estate. Rather, if the Committee is successful with its
adversary proceeding or obtains a settlement, then the consulting
expert will be paid using the proceeds of the successful
prosecution or settlement.
Headquartered in Dallas, Texas, Vartec Telecom Inc. --
http://www.vartec.com/-- provides local and long distance service
and is considered a pioneer in promoting 10-10 calling
plans. The Company and its affiliates filed for chapter 11
protection on November 1, 2004 (Bankr. N.D. Tex. Case No. 04-
81694. Daniel C. Stewart, Esq., William L. Wallander, Esq.,
and Richard H. London, Esq., at Vinson & Elkins, represent the
Debtors in their restructuring efforts. J. Michael Sutherland,
Esq., and Stephen A. Goodwin, Esq., at Carrington Coleman Sloman &
Blumenthal, represent the Official Committee of Unsecured
Creditors. When the Company filed for protection from its
creditors, it listed more than $100 million in assets and debts.
WALLET MASTERS: Case Summary & 5 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Wallet Masters, LLC
100 Potosi Road
Dayton, Nevada 89403
Bankruptcy Case No.: 06-50074
Type of Business: Daniel W. Shulte, an equity holder of Wallet
Masters, filed for chapter 7 liquidation on
Sept. 30, 2005 (Bankr. D. Nev. Case No.
05-53392).
Robert W. Kral, also an equity holder of the
company, filed for chapter 7 liquidation on
Oct. 14, 2005 (Bankr. D. Nev. Case No.
05-54616).
Messrs. Shulte & Kral each has a 33.3%
ownership interest in Wallet Masters.
Chapter 11 Petition Date: February 27, 2006
Court: District of Nevada (Reno)
Debtor's Counsel: Alan R. Smith, Esq.
505 Ridge Street
Reno, Nevada 89501
Tel: (775) 786-4579
Total Assets: $4,100,000
Total Debts: $2,894,586
Debtor's 5 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Lyon County Treasurer Real Property Tax $24,583
27 South Main
Yerington, NV 89447
Bullis & Co. Accounting Fees $1
206 South Division Street
Carson City, NV 89703-4283
Crandall, Swenson & Gleason Accounting Fees $1
1110 North Five Mile Road
Boise, ID 83713
Edward Lord Management Fees $1
Network Realty, Inc.
1595 South Virginia Street
Reno, NV 89502
Sierra Pacific Power Company Utility Bills Unknown
P.O. Box 10100
Reno, NV 89520
WORLDCOM INC: Court Approves Missouri Tax Settlement Pacts
----------------------------------------------------------
As reported in the Troubled Company Reporter on Dec. 30, 2006, the
Missouri Department of Economic Development filed Claim No. 29581,
asserting $1,485,269 in debt arising from WorldCom, Inc., and its
debtor-affiliates' failure to employ and retain employees in the
State of Missouri for the time period required under agreements
for which the Debtors obtained favorable prepetition tax benefits.
Claim No. 29581 is secured in part by bank deposit accounts
totaling $215,950 as of October 12, 2005, according to Mark S.
Carder, Esq., at Stinson Morrison Hecker, LLP, in Kansas City,
Missouri.
The Missouri Development Finance Board filed Claim No. 29580,
asserting $1,018,500 in debt arising from the Debtors' failure to
employ and retain employees in the State of Missouri for the time
period required by agreements for which the Debtors obtained
certain favorable prepetition tax benefits. Claim No. 29580 is
secured in part by bank deposit accounts totaling $629,786, as of
October 12, 2005.
The Debtors objected to Claim No. 29581, contending that the
Missouri Department of Revenue owe them $1,500,000 from the
overpayment of sales taxes during certain prepetition tax periods.
Accordingly, the Parties engaged in settlement negotiations
concerning the two claims as well as the collateral securing the
claims and mutual claims for setoff by all parties and other
governmental agencies of the State of Missouri.
* * *
The U.S. Bankruptcy Court for the Southern District of New York
approved the Debtors' Settlements with the Missouri Entities.
Upon receipt of the Set Off Funds, Claim No. 29580 and Claim No.
29581 will be expunged.
The Court directs the Missouri Department of Revenue to pay the
$1,500,000 Tax Overpayment to the Missouri Development Finance
Board and the Missouri Department of Economic Development.
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. 113; Bankruptcy Creditors' Service, Inc., 215/945-7000)
WORLDCOM INC: Court Extends Tax Claim Objection Period to March 2
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approved the request of WorldCom, Inc., and its debtor-affiliates
to further extend the Remaining Tax Claim Objection Deadline to
March 2, 2006.
A list of the 46 remaining tax claims is available for free at
http://bankrupt.com/misc/WorldCom_46RemainingTaxClaims.pdf
As reported in the Troubled Company Reporter on Jan. 25, 2006,
Marc E. Albert, Esq., at Stinson Morrison Hecker, LLP, in
Washington, D.C., asserted that extending the Remaining Tax Claim
Objection Deadline is necessary to:
-- determine whether the Remaining Tax Claims were timely
filed;
-- identify whether the Remaining Tax Claims duplicate or
amend other claims;
-- determine how the Remaining Tax Claims were calculated; and
-- identify the defenses, if any, of the Debtors to those
claims.
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. 113; Bankruptcy Creditors' Service, Inc., 215/945-7000)
WSNET HOLDINGS: Court Okays Closing of World Satellite's Case
-------------------------------------------------------------
The Hon. Larry E. Kelly of the U.S. Bankruptcy Court for the
Western District of Texas approved World Satellite Network, Inc.'s
request for a final decree closing its chapter 11 case. Judge
Kelly entered the Final Decree on Feb. 10, 2006.
World Satellite Network is a subsidiary of WSNet Holdings, Inc.,
which also filed for chapter 11 protection. The two companies'
chapter 11 cases were consolidated under Case No. 02-14228. The
Court confirmed the Debtors' Plan of Liquidation on July 8, 2005,
and the Plan took effect on July 13, 2005.
World Satellite tells the Court that other than a few unclaimed
checks payable to Class 2 general unsecured creditors, the initial
distribution to those creditors under the Plan has been completed.
All claims have been resolved and no claim objections remain
outstanding or unresolved in World Satellite's case. Therefore,
World Satellite's chapter 11 case is fully administered pursuant
to 11 U.S.C. Section 350.
Judge Kelly rules that:
1) WSNet Holdings' chapter 11 case under Case No. 02-14229 is
still active and pending, all persons who filed a notice of
appearance in the consolidated case should be notified that
they must re-file their notices of appearance in WSNet
Holdings' case in order to continue receiving notices
regarding matters in that case; and
2) no later than 10 days after the entry of his order closing
World Satellite's case, the counsel for the chapter 11
Trustee appointed in Holdings' case must file an amended
matrix in, In re: WSNet Holdings, Inc., Case No. 02-14229,
listing only parties in interest in that case.
Headquartered in Austin, Texas, WSNet Holdings, Inc., through its
subsidiary World Satellite Network, Inc., provided satellite TV to
cable companies. Franchise and independent cable companies
throughout the country contracted with WSNet to provide the
programming, which they later distributed to individual customers.
The Company offered nearly 200 channels of programming and served
more than 750,000 customers. WSNet Holdings and World Satellite
filed for chapter 11 protection on Oct. 21, 2002 (Bankr. W.D. Tex.
Case No. 02-14228). J. Maxwell Tucker, Esq., and Jeff Carruth,
Esq., at Winstead, Sechrest & Minick, P.C., represent the Debtors.
The Bankruptcy Court confirmed the Debtors' Plan of Liquidation on
July 8, 2005, and the Plan took effect on July 13, 2005.
* Large Companies with Insolvent Balance Sheets
-----------------------------------------------
Total
Shareholders Total Working
Equity Assets Capital
Company Ticker ($MM) ($MM) ($MM)
------- ------ ------------ ------- --------
Abraxas Petro ABP (27) 120 (4)
Accentia Biophar ABPI (9) 39 (19)
AFC Enterprises AFCE (44) 216 53
Alaska Comm Sys ALSK (9) 589 49
Alliance Imaging AIQ (43) 643 42
AMR Corp. AMR (729) 29,436 (1,882)
Atherogenics Inc. AGIX (98) 213 190
Bally Total Fitn BFT (1,463) 486 (442)
Biomarin Pharmac BMRN (77) 195 (29)
Blount International BLT (145) 455 112
CableVision System CVC (2,486) 10,204 (1,881)
CCC Information CCCG (95) 112 34
Centennial Comm CYCL (488) 1,511 69
Cenveo Inc CVO (12) 1,146 127
Choice Hotels CHH (167) 265 (57)
Cincinnati Bell CBB (710) 1,863 16
Clorox Co. CLX (528) 3,567 (205)
Columbia Laborat CBRX (13) 17 10
Compass Minerals CMP (79) 750 195
Crown Holdings I CCK (236) 6,545 (98)
Crown Media HL CRWN (64) 1,250 (125)
Deluxe Corp DLX (82) 1,426 (277)
Denny's Corporation DENN (265) 513 (84)
Domino's Pizza DPZ (553) 414 3
DOV Pharmaceutic DOVP (3) 116 94
Echostar Comm DISH (785) 7,533 321
Emeritus Corp. ESC (134) 713 (62)
Encysive Pharm ENCY (11) 147 102
Foster Wheeler FWLT (375) 1,936 (186)
Gencorp Inc. GY (73) 1,057 9
Graftech International GTI (13) 1,026 283
Guilford Pharm GLFD (20) 136 60
Hercules Inc. HPC (13) 2,548 330
Hollinger Int'l HLR (177) 1,001 (396)
I2 Technologies ITWO (71) 202 (34)
ICOS Corp ICOS (67) 232 141
IMAX Corp IMAX (34) 245 30
Immersion Corp. IMMR (15) 46 29
Indevus Pharma IDEV (126) 100 65
Intermune Inc. ITMN (30) 194 109
Investools Inc. IED (20) 64 (46)
Koppers Holdings KOP (186) 570 120
Kulicke & Soffa KLIC (3) 440 217
Level 3 Comm. Inc. LVLT (632) 7,580 502
Ligand Pharm LGND (96) 306 (99)
Lodgenet Entertainment LNET (69) 283 22
Maxxam Inc. MXM (677) 1,044 114
Maytag Corp. MYG (187) 2,954 150
McDermott Int'l MDR (53) 1,627 244
McMoran Exploration MMR (58) 408 67
NPS Pharm Inc. NPSP (98) 331 234
Omnova Solutions OMN (13) 355 46
ON Semiconductor ONNN (276) 1,148 228
Quality Distribu QLTY (26) 377 20
Quest Res. Corp. QRES (73) 247 (61)
Qwest Communication Q (3,217) 21,497 (1,071)
RH Donnelley RHD (292) 3,877 (79)
Revlon Inc. REV (1,169) 980 86
Riviera Holdings RIV (28) 221 6
Rural/Metro Corp. RURL (89) 310 54
Rural Cellular RCCC (651) 1,431 130
Sepracor Inc. SEPR (165) 1,275 879
St. John Knits Inc. SJKI (52) 213 80
Tivo Inc. TIVO (9) 163 36
USG Corp. USG (302) 6,142 1,579
Unigene Labs Inc. UGNE (15) 14 (9)
Unisys Corp UIS (33) 4,029 339
Vector Group Ltd. VGR (38) 536 168
Vertrue Inc. VTRU (30) 446 (82)
Visteon Corp. VC (1,430) 8,823 404
Weight Watchers WTW (81) 836 (43)
Worldspace Inc. WRSP (1,475) 765 249
WR Grace & Co. GRA (559) 3,517 876
XM Satellite XMSR (189) 2,223 356
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
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Each Friday's edition of the TCR includes a review about a book of
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Monthly Operating Reports are summarized in every Saturday edition
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For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA. Marie Therese V. Profetana, Shimero Jainga, Emi Rose S.R.
Parcon, Rizande B. Delos Santos, Cherry A. Soriano-Baaclo, 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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*** End of Transmission ***