/raid1/www/Hosts/bankrupt/TCR_Public/060314.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, March 14, 2006, Vol. 10, No. 62
Headlines
AEARO CO: Receives Tenders & Consents from 8-1/4% Sr. Noteholders
ARGENT SECURITIES: Moody's Rates Class M-10 Certificates at Ba1
ARLINGTON HOSPITALITY: Want Plan-Filing Period Extended to Apr. 29
AUSTIN COMPANY: Wants Aspire Auctions to Sell Artworks & Antiques
AUTONATION INC: Offers to Buy Back Outstanding 9% Senior Notes
BALL CORP: Inks Sr. Notes Underwriting Pact with Four Institutions
BEAR STEARNS: Moody's Places Ba1 Rating on Class M-10 Certificates
BEACON POWER: Miller Wachman Raises Going Concern Doubt
BLOCKBUSTER INC: Earns $18 Million of Net Income in Fourth Quarter
CASE FINANCIAL: December 31 Equity Deficit Widens to $5.19 Million
CHL MORTGAGE: Moody's Places Ba2 Rating on Class M-9 Certificates
CITIZENS COMMUNICATIONS: Earns $202.4 Million for Fiscal Year 2005
COMMUNICATION DYNAMICS: Asks Court to Delay Entry of Final Decree
CONGOLEUM CORP: Court Denies Three Insurers' Request for Examiner
CONGOLEUM CORP: Court Denies Whiteman Osterman's Retention
CONGOLEUM: Gilbert Heintz Has to Turn Over Files to New Counsel
CORNELL TRADING: Gets Court Nod to Conduct Store Closing Sales
CUMULUS MEDIA: Incurs $218.34 Million Net Loss in Fourth Quarter
CUMULUS MEDIA: Buys Back 10.78 Mil. Common Shares for $136.1 Mil.
CYBERCARE INC: Wants Until March 22 to File Chapter 11 Plan
CYBERCARE INC: Court OKs Marshall & Stevens as Valuation Experts
D&K STORES: Taps Clear Thinking as Bankruptcy Plan Administrator
DANA CORP: Gets Court Nod to Pay $79.5 Million to Foreign Vendors
DANA CORP: Honoring & Paying Prepetition Employee Obligations
DANA CORP: Eve-of-Bankruptcy Key Employee Incentive Plan Unveiled
DAVIS PETROLEUM: Court Confirms Plan of Reorganization
DELTA AIR: Wants to Execute DFASS Ventures Duty Free Accord
DELTA AIR: Flight Attendants Balk at Discriminatory Concessions
DELTA AIR: Wants to Walk Away from Pittsburgh Airport Lease
DELTA AIR: Barton Malow Wants Carrier to Decide on Contractor Pact
EDISON INT'L: Fitch Reviewing BB Rating for Possible Upgrade
ENRON CORP: Inks Multi-Mil. Settlement Agreements on Market Claims
ENVIRONMENTAL SYSTEMS: Moody's Lifts Caa1 $90MM Loan Rating to B3
EQUITY ONE: Closes Sale of $125 Mil. of Senior Unsecured Notes
FINANCE AMERICA: Fitch Affirms Class B-2 Loan's Rating at BB
FLYI INC: Wants Exclusive Plan-Filing Period Extended to June 30
FLYI INC: Wants Court Nod on Uniform Liquidation Procedures
FLYI INC: Wants to Hire Starman Brothers as Auctioneer
FOAMEX INT'L: Wants Until June 16 to Make Lease-Related Decisions
FOAMEX INT'L: Taps Assessment Technologies as Tax Consultants
FOAMEX INT'L: Lorro Demands Decision on JK Program Supply Pact
FORD MOTOR: Plante & Moran to Audit Employees' Savings Plans
FREEDOM RINGS: Panel Gets Court Okay to Hire Parente Randolph
FREEDOM RINGS: Wants Confirmation Hearing Scheduled for April 20
GLOBAL EMPIRE: Gets Court OK to Tap Fuqua & Keim as Bankr. Counsel
GOODING'S SUPERMARKETS: Court Approves Akerman as Panel's Counsel
GRAFTECH INT'L: Equity Deficit Widened 4x to $209 Mil. at Dec. 31
HAIGHTS CROSS: Reports Fourth Quarter & Year-End Financial Results
HEALTHSOUTH CORP: Receives $2.55 Billion Senior Secured Financing
HEALTHSOUTH CORP: Completes Sale of $400-Mil. Conv. Pref. Shares
HEALTHSOUTH CORP: Settling ERISA Class Action Suit for $27 Mil.
HEXION SPECIALTY: Incurs $14 Million Net Loss in Fourth Quarter
HORIZON LINES: Posts $18.32 Million Net Loss in 2005 Fiscal Year
INFINITE SOFTWARE: Case Summary & 9 Largest Unsecured Creditors
IXIS REAL ESTATE: Moody's Assigns Ba1 Rating to Class B-4 Certs.
JEAN COUTU: Will Pay $2.7M More Under Credit Facility Amendment
KAISER ALUMINUM: Restates Consulting Agreement with Edward Houff
KAISER ALUMINUM: VP Barneson Cancels 22,802 Shares of Common Stock
KEYSTONE BREWERS: Voluntary Chapter 11 Case Summary
KMART CORP: Court Okays Revised Floorgraphics Confidentiality Pact
KMART CORP: Asks Court to Bar Jeri Fisher's Lift Stay Motion
MAGRUDER COLOR: Files Chap. 11 Reorganization Plan in New Jersey
MASTR ASSET: Moody's Assigns Ba2 Rating to Class M-11 Certificates
MASTR TRUST: Moody's Rates Cert. Classes M-10 & M-11 at Low-B
MON VIEW: Wants Court Nod on David Bradley as Broker
MORTGAGEIT MORTGAGE: Moody's Puts Ba2 Rating on Class 2-B4 Certs.
NOMURA ASSET: Moody's Rates Cert. Classes B-4 & B-5 at Low-B
NORTEL NETWORKS: Plans to Save $200MM Under Transformation Plan
NORTEL NETWORKS: Restatement Delays 2005 Annual Report Filing
NORTEL NETWORKS: Financial Restatement Cues DBRS' Rating Review
NORTHWEST AIR: Has Until May 1 to File Schedules of Assets & Debts
NORTHWEST AIR: GOAA Wants Carrier to Decide on Airport Contract
ORION ENTERPRISES: Case Summary & 20 Largest Unsecured Creditors
PREMIER PROPERTIES: Judge Perkins Confirms Amended Chapter 11 Plan
PRIMEDEX HEALTH: Obtains New $161 Million Senior Secured Loan
PROCARE AUTOMOTIVE: Wants to Hire Steven Sues as Financial Advisor
PROCARE AUTOMOTIVE: Wants to Hire BB&T as Investment Bankers
QUEST TRUST: Moody's Assigns Ba1 Rating to Class M-5 Certificates
RIVERSTONE NETWORKS: Panel Wants Schulte Roth as Lead Counsel
ROUGE INDUSTRIES: Wants to Continue Using Ford's Cash Collateral
RUFUS INC: Wants Until May 18 to Remove State Court Actions
SIGNATURE POINTE: Files Amended Plan Following Extended GE Loan
STELCO INC: Seeks Court Advice on Distribution of Sale Proceeds
TEC FOODS: Exclusive Plan-Filing Period Extended Until May 2
TEC FOODS: Has Until June 1 to Make Lease-Related Decisions
TELOGY INC: Gets Court Okay to Hire Ernst & Young as Auditor
TELOGY INC: Court Gives Nod on Independent Equipment as Appraiser
TOWER AUTOMOTIVE: Court Okays Assumption of Headquarters Leases
TRUMP ENT: Court Says Beneficial Holders Will Receive Distribution
WINDOW ROCK: Court Denies Creditors' Move to Appoint Examiner
WINDOW ROCK: Panel Gets Court OK to Hire Peitzman Weg as Counsel
WINDOW ROCK: Court Gives Nod on FTI's Retention as Panel Advisor
* Large Companies with Insolvent Balance Sheets
*********
AEARO CO: Receives Tenders & Consents from 8-1/4% Sr. Noteholders
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Aearo Company I received tenders and requisite consents from
holders of its outstanding 8-1/4% Senior Subordinated Notes
due 2012.
The cash tender offer and consent solicitation commenced on
Feb. 24, 2006 and expired at 5:00 p.m., New York City time, on
March 9, 2006.
The tender offer and consent solicitation is being conducted in
connection with the previously announced merger of Pacer Merger
Company with and into Aearo Technologies Inc., the ultimate parent
of the Company.
It is expected that the Company will execute as soon as
practicable a supplemental indenture to the indenture governing
the Notes to, among other things, eliminate substantially all of
the restrictive covenants, certain events of default provisions
and certain defeasance provisions in the Indenture. Although the
Supplemental Indenture will be executed as soon as practicable,
the amendments will not become operative until a majority in
aggregate principal amount of the outstanding Notes have been
validly tendered and accepted for purchase pursuant to the terms
of the tender offer and the consent solicitation.
Holders who validly tendered Notes on or prior to the Consent Time
will receive a consent payment of $30 per $1,000 principal amount
of the Notes validly tendered and accepted for purchase, in
addition to the tender offer consideration. Holders who validly
tender their Notes after the Consent Time but before the
expiration of the tender offer will not receive the Consent
Payment, and will receive payment of the tender offer
consideration for Notes accepted for purchase on the applicable
settlement date in accordance with the terms of the Offer
Documents. The tender offer will expire at 8:00 a.m. New York
City time, on March 24, 2006, unless terminated or extended.
Dealer Manager for the tender offer and as the Solicitation Agent
for the consent solicitation is:
Bear, Stearns & Co. Inc.
Telephone (212) 272-5112 (collect)
Toll-Free (877) 696-BEAR
Information Agent is:
D.F. King & Co., Inc.
Telephone (212) 269-5550 (for banks and brokers only)
Toll-Free (888) 644-5854
Copies of the Offer Documents and other related documents may be
obtained from the Information Agent.
The tender offer and consent solicitation are being made solely on
the terms and conditions set forth in the Offer to Purchase and
Consent Solicitation Statement dated Feb. 24, 2006 and the related
Consent and Letter of Transmittal, as the same may be amended from
time to time.
Headquartered in Indianapolis, Indiana, Aearo Company --
http://www.aearo.com/-- is one of the world's leading designers,
manufacturers and marketers of a broad range of personal
protective products and energy-absorbing products, including head
and hearing protection devices, prescription and non-prescription
eyewear, and eye/face protection devices for use in a wide variety
of industrial and household applications.
Aearo Company's 8-1/4% Senior Subordinated Notes due 2012 carry
Moody's Investors Service's B3 rating and Standard & Poor's
B- rating.
ARGENT SECURITIES: Moody's Rates Class M-10 Certificates at Ba1
---------------------------------------------------------------
Moody's Investors Service assigned Aaa rating to the senior
certificates issued by Argent Securities Trust 2006-W2
Asset-Backed Pass-Through Certificates, Series 2006-W2, and
ratings ranging from Aa1 to Ba1 to the subordinate certificates
in the deal.
The securitization is backed by adjustable-rate and fixed rate
subprime mortgage loans originated through Ameriquest's wholesale
division, Argent Mortgage Company using underwriting guidelines
that are slightly less stringent than those used by Ameriquest's
retail channel -- Ameriquest Mortgage Company. The ratings are
based primarily on the credit quality of the loans, and on the
protection from subordination, excess spread,
overcollateralization, and an interest rate swap agreement.
Moody's expects collateral losses to range from 4.70% to 5.20%.
Ameriquest Mortgage Company will act as Master Servicer and AMC
Mortgage Services will act as sub-servicer for the mortgage
collateral.
Ameriquest had previously disclosed discussions with financial
regulatory agencies or attorneys general offices of several
states, regarding lending practices of AMC. ACC Capital Holdings
Corporation, the parent company of Argent and AMC, had recorded a
provision of $325 million in its financial statements with respect
to this matter. ACC has recently announced that it had entered
into a settlement agreement with forty-nine states and District
of Columbia. Under the terms of the settlement agreement, ACC
agreed to pay $295 million toward restitution to borrowers and
$30 million to cover the States' legal costs and other expenses.
In addition, ACC has agreed on behalf of itself, AMC and AMC's
retail affiliates, to supplement several of its business practices
and to submit itself to independent monitoring. The agreement is
not expected to have any material credit implications on
securitizations backed by collateral originated by AMC, Argent or
their affiliates.
The complete rating actions are:
Argent Securities
Trust 2006-W2 Asset-Backed
Pass-Through Certificates, Series 2006-W2
* Class A-1, Assigned Aaa
* Class A-2A, Assigned Aaa
* Class A-2B, Assigned Aaa
* Class A-2C, Assigned Aaa
* Class M-1, Assigned Aa1
* Class M-2, Assigned Aa2
* Class M-3, Assigned Aa3
* Class M-4, Assigned A1
* Class M-5, Assigned A2
* Class M-6, Assigned A3
* Class M-7, Assigned Baa1
* Class M-8, Assigned Baa2
* Class M-9, Assigned Baa3
* Class M-10, Assigned Ba1
ARLINGTON HOSPITALITY: Want Plan-Filing Period Extended to Apr. 29
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Arlington Hospitality, Inc., and its debtor-affiliates ask the
U.S. Bankruptcy Court for the Eastern District of Illinois to
extend, until Apr. 29, 2006, the time within which they have the
exclusive right to file a chapter 11 plan. The Debtors also ask
the Court to extend, until June 29, 2006, the period within which
they alone can solicit acceptances to a plan.
The Debtors tell the Court that with the closing of the sale of
substantially all of their assets to Sunburst Hospitality, the
best manner to wind down the estate is through an orderly plan of
liquidation. The Debtors say that they are in discussions with
various constituents in their chapter 11 cases, including the
Official Committee of Unsecured Creditors, about formulating a
plan of liquidation that would benefit the estates' creditors.
The Debtors relate that they are exploring issues on valuation and
allocation to determine whether and to what extent substantive
consolidation among various related debtor entities is warranted.
The Debtors say that part of the answer will depend on the
resolution of certain claims against the estate. The Debtors tell
the Court that after consulting with the Committee, they concluded
that resolving these issues before filing a plan is appropriate.
The Debtors contend that the short extension will enable them to
facilitate the resolution of the claims resolution issues and
streamline the plan process. The Debtors tell the Court that the
Committee has agreed to the extension.
Headquartered in Arlington Heights, Illinois, Arlington
Hospitality, Inc., and its affiliates develop and construct
limited service hotels and own, operate, manage and sell those
hotels. The Debtors operate 15 AmeriHost Inn Hotels under leases
from PMC Commercial Trust. Arlington Hospitality, Inc., serves as
a guarantor under these leases. Arlington Inns Inc., an
affiliate, filed for bankruptcy protection on June 22, 2005
(Bankr. N.D. Ill. Case No. 05-24749), the Honorable A. Benjamin
Goldgar presiding. Arlington Hospitality and additional debtor-
affiliates filed for chapter 11 protection on Aug. 31, 2005
(Bankr. N.D. Ill. Lead Case No. 05-34885). Catherine L. Steege,
Esq., at Jenner & Block LLP, provides the Debtors with legal
advice and Chanin Capital LLC serves as the company's investment
banker. David W. Wirt, Esq., at Winston & Strawn, represents the
Official Committee of Unsecured Creditors. As of March 31, 2005,
Arlington Hospitality reported $99 million in total assets and
$94 million in total debts.
AUSTIN COMPANY: Wants Aspire Auctions to Sell Artworks & Antiques
-----------------------------------------------------------------
The Austin Company and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Northern District of Ohio for authority
to sell some of their artwork and antiques at an auction pursuant
to Sections 363(b) and 363(f) of the Bankruptcy Code. The Debtors
also ask the Court for permission to retain Aspire Auctions, Inc.,
as their auctioneer.
The Debtors tell the Court that an auction is the best method for
obtaining the highest price for the artwork and antiques.
A list of the Debtors' artwork and antiques to be auctioned off is
available for free at http://ResearchArchives.com/t/s?670
Aspire Auctions will:
a. keep the Auction Items at its location and catalog all of
the Auction Items, including a description and picture of
each item;
b. market the Auction Items through:
i) direct mail or email to approximately 12,000 parties
listed in Aspire's database,
ii) postings on industry websites, including:
* http://www.Askart.com
* http://www.Artnet.com
* http://www.Artprice.com
iii) advertising the grandfather clock in the London-based
publication, Antiques Trade Gazette; and
iv. advertising the grandfather clock and 2 chandeliers in
the Connecticut-based, national publication of Antique
Week;
c. make the Auction Items available to inspection by the
public May 5 through May 11, 2006, 11:00 a.m. to 7:00 p.m.;
d. provide a catered preview party for the public on
May 12, 2006;
e. insure the Auction Items while they are on Aspire's
property;
f. require that all bidders accept all purchased Auction Items
"as is" and agree that the laws of Ohio govern the sale
transaction;
g. accept auction bids, via the Internet, for approximately
one week beginning May 12, 2006, 10:00 a.m.;
h. determine the highest bid.;
i. accept varying forms of payment, including cash, check, and
credit card;
j. 30 days following the Auction, provide the Debtors with the
Auction proceeds via check less expenses and commission;
and
k. be indemnified by the Debtors for any and all claims
related to the actual claimed breach of any of the Debtors'
representations, warranties or covenants.
Cynthia Colling, at Aspire Auctions, tells the Court that the Firm
will collect a 20% commission on the sale price of every Auction
item sold.
Ms. Colling assures the Court that the Firm is "disinterested" as
that term is defined in Section 101(14) of the Bankruptcy Court,
and she can be reached at:
Cynthia Colling
Aspire Auctions, Inc.
12730 Larchmere Boulevard,
Cleveland, Ohio 44120
Tel: (216) 231-5515
Fax: (216) 231-5530
http://www.aspireauctions.com/
Private Sale
The Debtors also ask the Court for permission to sell office
furniture for $50,000 in a private sale to Ancora Capital, Inc.
The Debtors tell the Court that aside from the purchase of the
furniture, Ancora has also agreed assume the lease of their office
premises containing the furniture.
A list of the Debtors' Furniture to be sold to Ancora is available
for free at http://ResearchArchives.com/t/s?671
Headquartered in Cleveland, Ohio, The Austin Company is an
international firm offering a comprehensive portfolio of
in-house architectural, engineering, design-build, construction
management and consulting services. The Company also offers
value-added strategic planning services including site location,
transportation and distribution consulting, and facility and
process audits. The Company and two affiliates filed for
chapter 11 protection on Oct. 14, 2005 (Bankr. N.D. Ohio Lead
Case No. 05-93363). Christine M. Pierpont, Esq., at Squire,
Sanders & Dempsey, LLP, represents the Debtors in their
restructuring efforts. M. Colette Gibbons, Esq., and Victoria E.
Powers, Esq., at Schottenstein Zox & Dunn Co., LPA, represent the
Official Committee of Unsecured Creditors. When the Debtors filed
for protection from their creditors, they estimated assets and
debts between $10 million to $50 million.
AUTONATION INC: Offers to Buy Back Outstanding 9% Senior Notes
--------------------------------------------------------------
AutoNation, Inc. (NYSE: AN), commenced an offer to purchase for
cash any and all of its outstanding 9% senior notes due 2008 in an
aggregate principal amount of $323.5 million. In connection with
the offer, the Company asked holders of the notes to consent to
certain amendments to the indenture for the notes that would
eliminate most of the restrictive covenants and events of default
contained in the indenture.
The consent solicitation will expire at 5:00 p.m., New York City
time, on March 24, 2006, and the offer will expire at 10:00 a.m.,
New York City time, on April 12, 2006, in each case unless
extended by the Company.
To purchase and consent solicitation that will be distributed to
note holders promptly, the total consideration for each $1,000
principal amount of notes validly tendered and accepted for
purchase by AutoNation will be calculated, in accordance with
standard market practice, five business days prior to the
expiration of the offer based upon a fixed spread of 50 basis
points over the bid side yield on the 4.125% U.S. Treasury Note
due Aug. 15, 2008. The foregoing total consideration for the
notes includes a consent payment equal to $30 per $1,000 principal
amount of notes tendered. Holders must validly tender their notes
on or before the Consent Deadline in order to be eligible to
receive the total consideration, which includes the consent
payment. Holders who validly tender their notes after the Consent
Deadline and before the expiration of the offer will only be
eligible to receive an amount equal to the total consideration
minus the consent payment. Additionally, holders whose notes are
purchased pursuant to the offer will receive any accrued but
unpaid interest up to but not including the payment date for the
notes.
Completion of the offer and consent solicitation is subject to the
satisfaction of certain conditions, including, but not limited to,
receipt of valid tenders and consents from at least a majority
in principal amount of outstanding notes and receipt of debt
financing in an amount that, with existing cash, will be
sufficient to purchase the notes tendered in the offer and the
shares tendered in the concurrent cash tender offer to purchase
50 million shares of the Company's common stock at a price of
$23 per share. The offer and consent solicitation may be amended,
extended or, under certain conditions, terminated.
The information agent for the offer and consent solicitation is
Innisfree M&A Incorporated. The depositary for the offer is Wells
Fargo Bank, N.A. The dealer managers for the offer are:
J.P. Morgan Securities, Inc.
Telephone (212) 270-7407
-- and --
Wachovia Securities
Telephone (704) 715-8341
The offer to purchase and consent solicitation statement, letter
of transmittal and consent and related documents will be
distributed to noteholders promptly. Noteholders with questions
or who would like additional copies of the offer documents may
call the information agent:
Innisfree M&A Incorporated
Toll-free (877) 825-8631
Headquartered in Fort Lauderdale, Florida, AutoNation, Inc. --
http://www.autonation.com-- is America's largest automotive
retailer and a component of the Standard and Poor's 500 Index.
AutoNation has approximately 27,000 full-time employees and owns
and operates 346 new vehicle franchises in 17 states.
* * *
As reported in the Troubled Company Reporter on Mar. 09, 2006,
Fitch downgraded AutoNation, Inc.'s ratings:
-- Issuer Default Rating to 'BB+' from 'BBB-'
-- $600 million bank credit facility to 'BB+' from 'BBB-'
-- Senior unsecured notes to 'BB+' from 'BBB-'
Fitch also expects to rate AutoNation's new senior unsecured notes
and Term Loan A 'BB+'. Fitch said the Rating Outlook is Negative.
BALL CORP: Inks Sr. Notes Underwriting Pact with Four Institutions
------------------------------------------------------------------
Ball Corporation signed an underwriting agreement on
March 7, 2006, with:
* Lehman Brothers Inc.,
* Banc of America Securities LLC,
* J.P. Morgan Securities Inc., and
* Deustche Bank Securities Inc.,
as representatives of the several underwriters, for the sale by
the Company of $450 million aggregate principal amount of
6-5/8% senior notes due 2018.
A full-text copy of the Underwriting Agreement is available for
free at http://ResearchArchives.com/t/s?672
As reported in the Troubled Company Reporter on Mar. 10, 2006, the
Company's senior notes mature on March 15, 2018. The Company is
offering the Notes at 99.799% of principal amount. It expects to
get $443,481,806 from the notes after deducting the underwriting
discount, which is 1.25% of principal amount.
A full-text copy of the latest Prospectus on the offer is
available for free at http://ResearchArchives.com/t/s?673
The proceeds from the sale of the notes, together with proceeds
from borrowings under a new term loan facility under the Company's
existing credit agreement, will be used to finance the previously
announced acquisitions of the United States and Argentinean
operations of U.S. Can Corporation and certain North American
plastic bottle operations owned by Alcan Inc., including the
repayment of certain existing debt of U.S. Can and Ball
Corporation and the payment of related fees and expenses.
Network of Financial Institutions
Deutsche Bank AG, New York Branch, an affiliate of Deutsche Bank
Securities Inc., is the administrative agent and collateral agent
under the Company's existing credit facilities.
Banc of America Securities LLC is a co-syndication agent under the
existing credit facilities.
Lehman Commercial Paper Inc., an affiliate of Lehman Brothers
Inc., is a co-documentation agent under the existing credit
facilities.
Deutsche Bank Securities Inc., Banc of America Securities LLC and
J.P. Morgan Securities Inc. act as joint lead arrangers, joint
mandated arrangers and joint book managers for the existing credit
facilities and jointly manage the syndication of the existing
credit facilities, in consultation with Lehman Brothers Inc. and
BNP Paribas Securities Corp.
KeyBank National Association (an affiliate of McDonald Investments
Inc.) is a senior managing agent under the existing credit
facilities.
Each of Deutsche Bank AG, New York Branch, Bank of America, N.A.,
JPMorgan Chase Bank, N.A. (an affiliate of J.P. Morgan Securities
Inc.) and Lehman Commercial Paper Inc., BNP Paribas (an affiliate
of BNP Paribas Securities Corp.) and KeyBank National Association
are lenders under the existing credit facilities.
The Company intends to repay amounts under its revolving credit
facility with a portion of the proceeds from the sale of the notes
and the borrowings under the new term loan facility under its
existing credit agreement. Each of these participating lenders or
their affiliates received a portion of the fees payable in
connection with the establishment of the existing credit
facilities and received fees in connection with the July 22, 2003,
amendments to the Company's prior credit facilities. In addition,
affiliates of Deutsche Bank Securities Inc., J.P. Morgan
Securities Inc. and Lehman Brothers Inc. will be lenders under the
new term loan facility under the Company's existing credit
agreement.
Lehman Brothers Inc. is acting as dealer manager and consent
solicitation agent, for which they will receive a customary fee,
in connection with the tender offers and consent solicitations
commenced by United States Can Company, a wholly-owned subsidiary
of U.S. Can, in connection with the U.S. Can Acquisition.
In connection with the U.S. Can Acquisition, Banc of America
Securities LLC has provided a fairness opinion to Ball
Corporation's board of directors for which Banc of America
Securities LLC will receive customary fees.
J.P. Morgan Securities Inc. acted as financial advisor to Alcan
Inc. in connection with the Alcan Bottles Acquisition.
Headquartered in Broomfield, Colorado, Ball Corporation --
http://www.ball.com/-- is a supplier of high-quality metal and
plastic packaging products and owns Ball Aerospace & Technologies
Corp., which develops sensors, spacecraft, systems and components
for government and commercial customers. Ball reported 2005 sales
of $5.7 billion and the company employs 13,100 people worldwide.
* * *
As reported in the Troubled Company Reporter on Mar. 6, 2006,
Moody's Investors Service assigned ratings to Ball Corporation's
proposed $500 million senior secured term loan D, rated Ba1, and
proposed $450 million senior unsecured notes due 2016-2018, rated
Ba2.
Moody's also affirmed existing ratings, which include Ba1 ratings
on $1.475 billion senior secured credit facilities and
$550 million senior unsecured notes due Dec. 12, 2012. The
ratings outlook is stable. The ratings are subject to review of
final documentation.
As reported in the Troubled Company Reporter on Mar. 2, 2006,
Fitch Ball Corporation (NYSE: BLL) said Ball Corporation's
recently announced acquisitions will not affect the company's
credit ratings based on the currently available information.
Fitch currently rates BLL as:
-- Issuer default rating (IDR) 'BB'
-- Senior secured credit facilities 'BB+'
-- Senior unsecured notes 'BB'
As reported in the Troubled Company Reporter on Feb. 20, 2006,
Standard & Poor's Ratings Services revised its outlook on
Broomfield, Colo.-based Ball Corp. to stable from positive. At
the same time, Standard & Poor's affirmed its ratings, including
its 'BB+' corporate credit rating, on the metal can and plastic
packaging producer. These actions follow the recent announcement
by Ball that it has entered into a definitive agreement to acquire
U.S. Can Corp.'s (B/Watch Dev/--) U.S. and Argentinean operations
for approximately 1.1 million shares of Ball common stock plus the
assumption of $550 million of U.S. Can's debt.
BEAR STEARNS: Moody's Places Ba1 Rating on Class M-10 Certificates
------------------------------------------------------------------
Moody's Investors Service assigned Aaa rating to the senior
certificates issued by Bear Stearns Asset Backed Securities I
Trust 2006-HE2, Asset- Backed Certificates, Series 2006-HE2, and
ratings ranging from Aa1 to Ba1 to the mezzanine certificates in
the deal.
The securitization is backed by adjustable-rate and fixed-rate
subprime mortgage loans acquired by EMC Mortgage Corporation and
originated by Ameriquest Mortgage Company, Town & Country Credit
Corporation, and various other originators, none of which
represent more than 10% of the transaction. The ratings are based
primarily on the credit quality of the loans, and on the
protection from subordination, overcollateralization, and excess
spread. Moody's expects collateral losses to range from 5.45% to
5.95%.
EMC Mortgage Corporation will act as master servicer of the loans.
Moody's has assigned EMC Mortgage Corporation its top servicer
quality rating of SQ1 as a primary servicer of first lien subprime
loans and a rating of SQ2 as a primary servicer of second lien
loans.
The complete rating actions are:
Bear Stearns Asset Backed
Securities I Trust 2006-HE2
Asset-Backed Certificates, Series 2006-HE2
* Class I-A-1, Assigned Aaa
* Class I-A-2, Assigned Aaa
* Class I-A-3, Assigned Aaa
* Class II-A, Assigned Aaa
* Class M-1, Assigned Aa1
* Class M-2, Assigned Aa2
* Class M-3, Assigned Aa3
* Class M-4, Assigned A1
* Class M-5, Assigned A2
* Class M-6, Assigned A3
* Class M-7, Assigned Baa1
* Class M-8, Assigned Baa2
* Class M-9, Assigned Baa3
* Class M-10, Assigned Ba1
BEACON POWER: Miller Wachman Raises Going Concern Doubt
-------------------------------------------------------
Miller Wachman, LLP, in Boston, Massachusetts, raised substantial
doubt about Beacon Power Corporation's ability to continue as a
going concern after auditing the company's amended financial
statements for the year ended Dec. 31, 2004. Miller Wachman
pointed to the company's recurring losses from operations and
negative cash flows.
Restatements
Beacon Power Corporation filed its amended financial reports for
the year ended Dec. 31, 2004, to the Securities and Exchange
Commission on Feb. 21, 2006.
The Company's management determined that its liabilities had been
overstated and additional paid in capital understated due to a
bookkeeping error in recording the Restricted Stock Units. As a
result, the balance sheet and statement of changes in equity have
been restated to correct the error.
Additionally, the Company has reclassified certain cash deposits
securing letters of credit from cash and cash equivalents, as
previously reported, into restricted cash as of Dec. 31, 2003,
and 2002.
Furthermore, the Company determined that the investment in
Evergreen Solar should have been recorded at cost. The Company
had previously recorded its investment in Evergreen as
available-for-sale with the unrealized gain recorded as a separate
component of accumulated other comprehensive income, net of tax.
Financials
Beacon Power incurred a $5,329,960 net loss on $324,694 of
revenues for the year ended Dec. 31, 2004. At Dec. 31, 2004, the
company's balance sheet shows $7,085,586 in total assets,
$1,976,011 in total liabilities, and $5,109,575 in positive
stockholders' equity.
Full-text copies of Beacon Power Corporation's financial
statements for the year ended Dec. 31, 2004, are available at no
charge at http://ResearchArchives.com/t/s?66e
Headquartered in Wilmington, Massachusetts, Beacon Power
Corporation -- http://www.beaconpower.com/-- designs
sustainable energy storage and power conversion solutions that
would provide reliable electric power for the utility, renewable
energy, and distributed generation markets. Beacon's Smart Energy
Matrix is a design concept for a megawatt-level, utility-grade
flywheel-based energy storage solution that would provide
sustainable power quality services for frequency regulation, and
support the demand for reliable, distributed electrical power.
Beacon is a publicly traded company with its research, development
and manufacturing facility in the U.S.
BLOCKBUSTER INC: Earns $18 Million of Net Income in Fourth Quarter
------------------------------------------------------------------
Blockbuster Inc. (NYSE: BBI, BBI.B) disclosed its financial
results for the fourth quarter and full year ended Dec. 31, 2005.
Total revenues for the fourth quarter of 2005 totaled
$1.53 billion as compared with $1.72 billion for the fourth
quarter of 2004. Net income for the fourth quarter of 2005
totaled $18.0 million compared with net income of $2.8 million for
the fourth quarter of 2004. Adjusted net income for the fourth
quarter of 2005 totaled $34.2 million as compared with adjusted
net income of $16.0 million for the fourth quarter of 2004.
"As we end one of the most challenging years for the in-store
rental industry, we are focused more than ever on the overall
profitability of our business," said Blockbuster Chairman and CEO
John Antioco. "With the elimination of extended viewing fees and
the launch of BLOCKBUSTER Online(R) behind us, we enter 2006
confident that the changes we have made to our business model and
the decisive steps we took to achieve greater financial
flexibility and reduce overall costs have better positioned us to
further improve the profitability of our overall business."
Fourth Quarter 2005 Financial Results
Revenues for the fourth quarter of 2005 decreased 11.0% to
$1.53 billion from $1.72 billion for the fourth quarter of 2004.
Total worldwide same-store revenues decreased 10.1% from the
fourth quarter of 2004. Worldwide same-store rental revenues for
the fourth quarter decreased 7.9% primarily due to the elimination
of extended viewing fees, which accounted for over 13.2% of rental
revenues in the fourth quarter of 2004, and a decline in the
overall rental industry. The rental revenues comparison was
further impacted by aggressive promotional and advertising
activity last year, which resulted in a higher revenue
contribution from BLOCKBUSTER Movie Pass(R) during the fourth
quarter of 2004. These decreases were partially offset by an
increase in revenues from BLOCKBUSTER Online resulting from growth
in the subscriber base, which more than doubled to approximately
1.2 million subscribers at the end of 2005. Worldwide same-store
retail revenues for the fourth quarter of 2005 declined 14.5% from
the same period last year reflecting the Company's ongoing efforts
to reduce the number of stores selling deep movie catalog titles
as well as product availability constraints in the third and
fourth quarters of 2005.
Operating income for the fourth quarter of 2005 increased
118.9% to $54.5 million from $24.9 million for the fourth quarter
of 2004. The significant improvement in operating income was
driven by a 21.5% decline in selling, general and administrative
expenses primarily as a result of a cost management strategy and
lower advertising expenses. The reduction in SG&A costs was
partially offset by a 17.0% decrease in gross profit primarily due
to the decline in total revenues. Gross margin for the fourth
quarter declined to 51.8% from 55.6% for the same period last year
as a result of growth in revenues from BLOCKBUSTER Online, which
generates lower gross margin, and higher rental product purchases
to improve availability in stores.
The Company's liquidity position improved during the fourth
quarter of 2005 as net proceeds from the Company's $150.0 million
Series A convertible preferred stock offering were used to reduce
the outstanding balance under its revolving credit facility by
$75.0 million and to alleviate pressure on working capital.
Additionally, the improvement in profitability and cash flows
during the fourth quarter, as compared to earlier in the year,
enabled the Company to further reduce its accounts payable balance
and make additional debt payments. Since November 2005, the
Company's available borrowing capacity under its revolving credit
facility has increased to $239.6 million as of February 28, 2006.
2005 Full Year Financial Results
Revenues for 2005 decreased 3.1% to $5.86 billion from
$6.05 billion for 2004. The decrease in revenues resulted
primarily from the elimination of extended viewing fees, a decline
in the overall rental industry during 2005 and continued
competition from mass-merchant sales of low-priced DVDs.
For the full-year 2005 net loss totaled $588.1 million as compared
with a net loss of $1.25 billion for 2004. Excluding the non-cash
impairment charges and certain other items, adjusted net loss for
the full-year 2005 totaled $52.6 million compared with adjusted
net income of $147.1 million, or $0.81 per diluted share, in 2004.
2006 Business Outlook
The Company continues to focus on improving its profitability,
growing market share and reducing SG&A costs by approximately
$100 million in 2006 from 2005 levels. Blockbuster will realize
these savings through a reduction in both corporate and store
level overhead expenses, lower advertising expenses and
operational savings from the divestiture of certain non-core
assets and store closures. Additionally, capital expenditures
will decrease to approximately $90.0 million in 2006 from
approximately $140.0 million in 2005, primarily due to fewer new
store openings. The Company believes that its "No Late Fees"
program and BLOCKBUSTER Online will have a positive impact on its
domestic same-store rental revenues and enable it to outperform
the domestic rental industry in 2006.
Blockbuster Inc. -- http://www.blockbuster.com/-- is a global
provider of in-home movie and game entertainment, with more than
9,000 stores throughout the Americas, Europe, Asia and Australia.
* * *
As reported in the Troubled Company Reporter on Dec. 27, 2005,
Moody's Investors Service upgraded the speculative grade liquidity
rating of Blockbuster Inc. to SGL-3 from SGL-4 and affirmed the
company's long term debt ratings (corporate family of B3 and
subordinated notes of Caa3) with a negative outlook.
As reported in the Troubled Company Reporter on Nov. 15, 2005,
Standard & Poor's Ratings Services lowered its corporate credit
and bank loan ratings on Blockbuster Inc. to 'B-' from 'B' and the
subordinated note rating to 'CCC' from 'CCC+'. At the same time,
ratings on the company were removed from CreditWatch, where they
were placed with negative implications on August 3, 2005. S&P
said the outlook is negative.
As reported in the Troubled Company Reporter on Aug. 15, 2005,
Fitch downgraded Blockbuster Inc.'s:
-- Issuer default rating (IDR) to 'CCC' from 'B+';
-- Senior secured credit facility to 'CCC' from 'B+' with an
'R4' recovery rating;
-- Senior subordinated notes to 'CC' from 'B-' with an 'R6'
recovery rating.
Fitch said the Rating Outlook remains Negative.
CASE FINANCIAL: December 31 Equity Deficit Widens to $5.19 Million
------------------------------------------------------------------
Case Financial Inc. reported its financial results for the quarter
ended Dec. 31, 2005, and filed a Form 10-QSB with the Securities
and Exchange Commission on March 6, 2006.
For the three months ended Dec. 31, 2005, the Company's net loss
increased to $394,468 from a $379,310 net loss for the same period
in 2004.
For the three months ended Dec. 31, 2005, the Company's total
revenues decreased to $1,125 from total revenues of $35,994 for
the three months ended Dec. 31, 2004.
At Dec. 31, 2005, Case Financial's balance sheet showed $2,043,669
in total assets and $7,236,720 in total liabilities. As of
Dec. 31, 2005, Case Financial's stockholders' deficit widened to
$5,193,051 from a deficit of $4,302,408 at Dec. 31, 2004.
Additionally, the Company reports an accumulated deficit of
$14,424,828 at Dec. 31, 2005.
Going Concern Doubt
Kabani & Company, Inc., expressed substantial doubt about Case
Financial's ability to continue as a going concern after reviewing
its financial statements for the years ended Sept. 30, 2005, and
2004. The auditing firm pointed to Case Financial's net losses
and accumulated deficits for the years ended Sept. 30, 2005, and
2004.
"Case Financial's current cash is not sufficient to sustain its
operations unless it is successful at collecting amounts due and
owing on its existing investment in contracts and loan receivable
portfolios and raising additional capital. Those conditions raise
substantial doubt about the Company's ability to continue as a
going concern," management says in its latest quarterly report.
A full-text copy of Case Financial's Form 10-QSB is available for
free at http://ResearchArchives.com/t/s?66f
Case Financial Inc. provided pre-settlement and post-settlement
litigation funding services to attorneys involved in personal
injury and other contingency litigation, conducted primarily
within the California courts. On Sept. 30, 2005, Case Financial's
Board of Directors approved a resolution to discontinue the
Company's further investment in its Litigation Finance Business
other than the collection or other disposition of the Company's
existing loan and investment portfolio.
CHL MORTGAGE: Moody's Places Ba2 Rating on Class M-9 Certificates
-----------------------------------------------------------------
Moody's Investors Service assigned Aaa rating to the senior
certificates issued by CHL Mortgage Pass-Through Trust 2006-OA4,
and ratings ranging from Aa1 to Ba2 to the subordinate
certificates in the deal.
The certificates are backed by Countrywide Home Loans, Inc.
originated adjustable-rate negative amortization Alt-A mortgage
loans. The ratings are based primarily on the credit quality of
the loans, and on the protection from subordination,
overcollateralization and excess spread. Moody's expects
collateral losses to range from 1.10% to 1.30%.
Countrywide Home Loans Servicing LP will be the master servicer of
the loans. Moody's considers Countrywide Home Loans Servicing LP
a highly capable servicer of Prime/Alt-A loans.
The complete rating actions are:
CHL Mortgage Pass-Through Trust 2006-OA4
* Class A-1, Assigned Aaa
* Class A-2, Assigned Aaa
* Class A-3, Assigned Aaa
* Class A-R, Assigned Aaa
* Class M-1, Assigned Aa1
* Class M-2, Assigned Aa1
* Class M-3, Assigned Aa2
* Class M-4, Assigned Aa3
* Class M-5, Assigned A1
* Class M-6, Assigned A2
* Class M-7, Assigned Baa1
* Class M-8, Assigned Baa3
* Class M-9, Assigned Ba2
CITIZENS COMMUNICATIONS: Earns $202.4 Million for Fiscal Year 2005
------------------------------------------------------------------
Citizens Communications Corporation disclosed its financial
results for the fiscal year ended Dec. 31, 2005, to the Securities
and Exchange Commission on Mar. 2, 2006.
For the full year ended Dec. 31, 2005, the company reported
$202.4 million of net income on $2.162 billion of net revenues
compared to $75.2 million of net income on $2.168 billion of net
revenues in 2004.
For the year ended December 31, 2005, the company used cash flows
from continuing operations, the proceeds from the sale of
non-strategic assets, stock option exercises and cash and cash
equivalents to fund capital expenditures, dividends, interest
payments, debt repayments and stock repurchases. As of
December 31, 2005, the company had cash and cash equivalents
aggregating $265.8 million.
On February 2006, the company entered into a definitive
agreement to sell Electric Lightwave, LLC, for $247.0 million
(including $243.0 million in cash). The company anticipates the
recognition of a pre-tax gain on the sale of ELI of approximately
$130.0 million. ELI had revenues of $159.2 million and operating
income of $18.3 million for the year ended December 31, 2005. At
December 31, 2005, ELI's net assets totaled $123.1 million.
As previously reported, the company expected 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.
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 and ratings:
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
Issuer: Citizens Utilities Trust
* Preferred Stock (EPPICS) - B2
Moody's said the Outlook for both Issuers is 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.
COMMUNICATION DYNAMICS: Asks Court to Delay Entry of Final Decree
-----------------------------------------------------------------
AMJ Advisors LLC, trustee for the CDI Trust asks the U.S.
Bankruptcy Court for the District of Delaware to extend, until
Aug. 31, 2006, the time within which the Trustee may file
objections to claims and to indefinitely delay the entry of the
final decree in the bankruptcy cases of Communication Dynamics,
Inc., and its debtor-affiliates. CDI Trust is the Debtors'
successor-in-interest.
The Trustee, who is responsible for claims administration, has
objected to administrative, secured, and priority claims. The
claims reconciliation process for those types of claims is almost
complete. However, due to the uncertainty regarding the extent to
which there will be distribution to unsecured creditors, the
Trustee's review of those claims has been more limited. Whether
and the extent to which unsecured creditors receive a recovery
depends on the outcome of avoidance actions and the recovery of
certain assets. During the coming months, the Trustee will have a
clearer picture of these issues and, in turn, be able to determine
how much effort to expend in unsecured claims administration.
While the bar date in these cases passes nearly three years ago,
parties occasionally file proofs of claim with the Clerk's office
or the claims agent. The Trustee's access to the Debtors' records
continues to be limited and the Trustee may need to file
additional objections to claims as the Trustee is able to access
more information.
Headquartered in Annville, Pennsylvania, Communication Dynamics,
Inc., is one of the largest multinational suppliers of
infrastructure equipment to the broadband communications industry.
The Company and its debtor-affiliates filed for chapter 11
protection on Sept. 23, 2002 (Bankr. Del. Case No. 02-12753).
Jeffrey M. Schlerf, Esq., and Eric M. Sutty, Esq., at The Bayard
Firm and Scotta E. McFarland, Esq., at Pachulski, Stang, Ziehl,
Young, Jones & Weintraub, P.C. represent the Debtors in their
restructuring efforts. When the Debtors filed for protection from
their creditors, they listed more than $100 million both in
estimated assets and debts. The Court confirmed the Debtors'
chapter 11 plan on Feb. 25, 2004. The Plan took effect on
April 13, 2004.
CONGOLEUM CORP: Court Denies Three Insurers' Request for Examiner
-----------------------------------------------------------------
Three insurers asked the Honorable Kathryn C. Ferguson of the U.S.
Bankruptcy Court for the District of New Jersey to appoint former
Judge John J. Gibbons as a chapter 11 examiner in Congoleum's on-
going chapter 11 proceedings.
The three insurance companies are:
-- Century Indemnity Company, as successor to CCI Insurance
Company, as successor to Insurance Company of North America,
-- ACE American Insurance Company fka CIGNA Insurance Company,
and
-- ACE Property and Casualty Insurance Company fka CIGNA
Property and Casualty Insurance Company.
The insurers wanted Judge Gibbons to investigate the disgorgement
of Gilbert, Heintz & Randolph's fees. The Debtors also wanted
Whiteman Osterman & Hanna, LLP, to investigate the matter. The
insurers argued Judge Gibons is the better choice.
Judge Ferguson denied the insurers' request and also denied the
Debtors' request to retain Whiteman Osterman.
Background
On March 2, 2004, the Bankruptcy Court approved the retention of
Gilbert Heintz & Randolph LLP as the Debtors' special insurance
counsel. On Aug. 24, 2004, the District Court upheld the
Bankruptcy Court's approval order (Civil Action No. 04-1709) after
the bankruptcy court order was appealed.
On Oct. 13, 2005, the Court of Appeals for the Third Circuit
reversed the approval order and disqualified GHR from serving as
counsel to the Debtors account of conflicts of interest and
remanded the matter to the District Court for further proceedings.
Barbara M. Almeida, Esq., Tancred V. Schiavoni, Esq., and Gary
Svirsky, Esq. at O'Melveny & Myers LLP in New York and Martin F.
Siegal, Esq., at Siegal & Napierkowski in Mt. Laurel, New Jersey
represent the three insurers.
The Court didn't explain its ruling in its two-page order.
Headquartered in Mercerville, New Jersey, Congoleum Corporation --
http://www.congoleum.com/-- manufactures and sells resilient
sheet and tile floor covering products with a wide variety of
product features, designs and colors. The Company filed for
chapter 11 protection on December 31, 2003 (Bankr. N.J. Case No.
03-51524) as a means to resolve claims asserted against it related
to the use of asbestos in its products decades ago. Richard L.
Epling, Esq., Robin L. Spear, Esq., and Kerry A. Brennanat, Esq.,
at Pillsbury Winthrop Shaw Pittman LLP represent the Debtors in
their restructuring efforts. Elihu Insulbuch, Esq., at Caplin &
Drysdale, Chartered, represents the Asbestos Claimants' Committee.
R. Scott Williams serves as the Futures Representative, and is
represented by lawyers at Swidler Berlin LLP. When Congoleum
filed for protection from its creditors, it listed $187,126,000 in
total assets and $205,940,000 in total debts.
At Sept. 30, 2005, Congoleum Corporation's balance sheet showed
a $35,614,000 stockholders' deficit compared to a $20,989,000
deficit at Dec. 31, 2004. Congoleum is a 55% owned subsidiary of
American Biltrite Inc. (AMEX: ABL).
CONGOLEUM CORP: Court Denies Whiteman Osterman's Retention
----------------------------------------------------------
Congoleum Corporation and its debtor-affiliates ask the Honorable
Kathryn C. Ferguson of the U.S. Bankruptcy Court for the District
of New Jersey for authority to employ Whiteman Osterman & Hanna,
LLP, as their special counsel.
Judge Ferguson denied the Debtors request. Judge Ferguson didn't
explain her ruling in her two-page order.
Background
On March 2, 2004, the Bankruptcy Court approved the retention of
Gilbert Heintz & Randolph LLP as the Debtors' special insurance
counsel. On Aug. 24, 2004, the District Court upheld the
Bankruptcy Court's approval order (Civil Action No. 04-1709) after
the bankruptcy court order was appealed.
On Oct. 13, 2005, the Court of Appeals for the Third Circuit
reversed the approval order and disqualified GHR from serving as
counsel to the Debtors account of conflicts of interest and
remanded the matter to the District Court for further proceedings.
Whiteman Osterman would have:
(a) conducted an investigation into the facts surrounding:
(1) Gilbert Heintz & Randolph LLP's retention as special
counsel to the Debtors pursuant to Section 327(e) of
the Bankruptcy Code,
(2) the services performed by GHR for the Debtor,
(3) the compensation paid to GHR for those services, and
(4) the circumstances surrounding GHR's disqualification by
the Court of Appeals for the Third Circuit pursuant to
the Opinion;
(b) advised the Debtors, in light of the facts found during the
investigation and the applicable law, concerning the
claims, if any, which they have against GHR as a result of
its disqualification as their counsel on account of
conflicts of interest;
(c) advised the Debtors as to the courses of action available
to address the claims, if any, which the Debtors may have
against GHR; and
(d) to the extent requested to do so by the Debtors, assisted
the Debtors in resolving the claims, if any, the Debtors
may have against GHR through settlement, discussions or
other means.
Former Judge Howard A. Levine, Esq., a senior counsel at Whiteman
Osterman & Hanna, LLP, disclosed that he would have billed
$575 per hour. Other professionals from the Firm would have
billed:
Designation Hourly Rate
----------- -----------
Partners $275 to $400
Associates $175 to $275
Mr. Levine assured the Court that Whiteman Osterman & Hanna, LLP,
does not represent any interests adverse to the Debtors or their
estates with respect to the matters the Firm is supposed to be
employed.
Headquartered in Mercerville, New Jersey, Congoleum Corporation --
http://www.congoleum.com/-- manufactures and sells resilient
sheet and tile floor covering products with a wide variety of
product features, designs and colors. The Company filed for
chapter 11 protection on December 31, 2003 (Bankr. N.J. Case No.
03-51524) as a means to resolve claims asserted against it related
to the use of asbestos in its products decades ago. Richard L.
Epling, Esq., Robin L. Spear, Esq., and Kerry A. Brennanat, Esq.,
at Pillsbury Winthrop Shaw Pittman LLP represent the Debtors in
their restructuring efforts. Elihu Insulbuch, Esq., at Caplin &
Drysdale, Chartered, represents the Asbestos Claimants' Committee.
R. Scott Williams serves as the Futures Representative, and is
represented by lawyers at Swidler Berlin LLP. Michael S. Stamer,
Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official
Committee of Unsecured Bondholders. When Congoleum filed for
protection from its creditors, it listed $187,126,000 in total
assets and $205,940,000 in total debts.
At Sept. 30, 2005, Congoleum Corporation's balance sheet showed
a $35,614,000 stockholders' deficit compared to a $20,989,000
deficit at Dec. 31, 2004. Congoleum is a 55% owned subsidiary of
American Biltrite Inc. (AMEX: ABL).
CONGOLEUM: Gilbert Heintz Has to Turn Over Files to New Counsel
---------------------------------------------------------------
Gilbert Heintz & Randolph LLP asked the Honorable Kathryn C.
Ferguson of the U.S. Bankruptcy Court for the District of New
Jersey for authority to withdraw as Congoleum Corporation and its
debtor-affiliates' special insurance counsel.
Judge Ferguson denied GHR's request as moot because the Bankruptcy
Court's approval of the Debtors' application to employ GHR was
reversed by the United States Court of Appeals for the Third
Circuit on Oct. 13, 2005. GHR's role as counsel to the Debtors'
bankruptcy proceedings was terminated by the Third Circuit Order.
Judge Ferguson also ordered GHR to turn over to Dughi & Hewit P.C.
and Pillsbury Winthrop Shaw Pittman LLP:
(a) the originals of the documents that bear the bates numbers
that correspond to GHR's privilege logs; and
(b) all original and copies of the documents, exhibits and
transcripts that GHR obtained through discovery as part of
its representation of the Debtors and any databases
generated based on information obtained through discovery.
Judge Ferguson also ordered that by March 17, 2006, GHR will serve
to:
-- the Debtors,
-- the Official Committee of Bond holders,
-- Century Indemnity Company,
-- CNA Insurance, and
-- the United States Trustee,
the time entries substantiating the activities engaged in by GHR's
counsel and staff in connection with this matter from the date of
its last fee application through the date of entry of this Order.
Background
On March 2, 2004, the Bankruptcy Court approved the retention of
Gilbert Heintz & Randolph LLP as the Debtors' special insurance
counsel. On Aug. 24, 2004, the District Court upheld the
Bankruptcy Court's approval order (Civil Action No. 04-1709) after
the bankruptcy court order was appealed.
On Oct. 13, 2005, the Court of Appeals for the Third Circuit
reversed the approval order and disqualified GHR from serving as
counsel to the Debtors account of conflicts of interest and
remanded the matter to the District Court for further proceedings.
Headquartered in Mercerville, New Jersey, Congoleum Corporation --
http://www.congoleum.com/-- manufactures and sells resilient
sheet and tile floor covering products with a wide variety of
product features, designs and colors. The Company filed for
chapter 11 protection on December 31, 2003 (Bankr. N.J. Case No.
03-51524) as a means to resolve claims asserted against it related
to the use of asbestos in its products decades ago. Richard L.
Epling, Esq., Robin L. Spear, Esq., and Kerry A. Brennanat, Esq.,
at Pillsbury Winthrop Shaw Pittman LLP represent the Debtors in
their restructuring efforts. Elihu Insulbuch, Esq., at Caplin &
Drysdale, Chartered, represents the Asbestos Claimants' Committee.
R. Scott Williams serves as the Futures Representative, and is
represented by lawyers at Swidler Berlin LLP. Michael S. Stamer,
Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official
Committee of Unsecured Bondholders. When Congoleum filed for
protection from its creditors, it listed $187,126,000 in total
assets and $205,940,000 in total debts.
At Sept. 30, 2005, Congoleum Corporation's balance sheet showed
a $35,614,000 stockholders' deficit compared to a $20,989,000
deficit at Dec. 31, 2004. Congoleum is a 55% owned subsidiary of
American Biltrite Inc. (AMEX: ABL).
CORNELL TRADING: Gets Court Nod to Conduct Store Closing Sales
--------------------------------------------------------------
Cornell Trading, Inc., obtained permission from the U.S.
Bankruptcy Court for the District of Massachusetts to conduct
store closing, or going-out-of-business, sales and may auction the
leases of its stores, Dan McLean, a Burlington Free Press writer,
reports.
Christopher J. Panos, Esq., at Craig & Macauley, P.C., said in an
interview with Mr. McLean, that the Court also approved a four-
month budget for the Debtor, pending final approval at the end of
March.
"Cornell Trading continues to pursue every opportunity to continue
to serve its customers, while attempting to maximize value for
stakeholders in this process," Mr. Panos said.
Craig Fox, vice president of Keen Realty LLC, which has been
selected to market the Debtor's leases, says that 56 April Cornell
stores leases authorized for auction are in premier malls and
desired locations across the country.
Under the court-approved lease auction procedures, Cornell Trading
will designate the specific leases to be sold and the timing of
auctions for those leases, Mr. Panos said.
The four-month spending plan, which can be amended, shows no
revenue from any April Cornell store after May 5. The budget
filed with the court indicates projected sales peaking at $845,000
per week in late March.
The long-range budget, which was approved by Cornell Trading's
lenders, runs through June 30.
According to Mr. McLean, Cornell Trading is scheduled to pay
$150,000 to its attorneys this month. Under the budget, lenders
will receive $2.88 million over five consecutive weeks, starting
in early April.
Headquartered in Williston, Vermont, Cornell Trading, Inc. --
http://www.aprilcornell.com/-- sells women's and children's
apparel including dresses, skirts, blouses, and sleepwear.
Cornell also offers books and housewares like table linens,
placemats and napkins, bedding, and dolls and stuffed animals.
The Company filed for chapter 11 protection on January 4, 2006
(Bankr. D. Mass. Case No. 06-10017). Christopher J. Panos, Esq.,
at Craig & Macauley, P.C., represents the Debtor in its
restructuring efforts. When the Debtor filed for protection from
its creditors, it listed estimated debts and assets between
$10 million to $50 million.
CUMULUS MEDIA: Incurs $218.34 Million Net Loss in Fourth Quarter
----------------------------------------------------------------
Cumulus Media Inc. (NASDAQ: CMLS) reported financial results for
the three and twelve month periods ended December 31, 2005.
Net revenues for the fourth quarter of 2005 decreased $1.5 million
to $82.9 million, a 1.8% decrease from the fourth quarter of 2004,
primarily as a result of a 19.4% decrease in national advertising
revenue, offset by a 3.9% increase in local advertising revenue.
For the quarter, revenue grew in 27 of the Company's 61 markets.
Station operating expenses increased $2.3 million to
$54.3 million, an increase of 4.5% over the fourth quarter of
2004. During the second quarter of 2005, the Company launched
its second station in Houston, Texas (acquired on March 31, 2005).
The increased expenses associated with the new Houston station,
coupled with promotional expenses associated with the launch of
the Company's rock station in Houston, were significant drivers of
the fourth quarter station operating expense increase. Excluding
the effect of expenses attributable to the Houston market, station
operating expenses would have increased by $1.3 million or 2.5%
for the quarter.
Station operating income (defined as operating income before
impairment charges, non cash contract termination costs,
depreciation and amortization, LMA fees, corporate general and
administrative expenses, non-cash stock compensation and
restructuring charges (credits)) was $28.6 million, a decrease of
11.9% from the fourth quarter of 2004, for the reasons discussed
above.
On a pro forma basis, which includes the results of all stations
operated during the period under the terms of local marketing
agreements and gives effect to station acquisitions completed
during the period as if each were consummated at the beginning of
the periods presented and excludes the results of Broadcast
Software International, net revenues for the fourth quarter of
2005 decreased $1.5 million to $82.4 million, a decrease of 1.8%
from the fourth quarter of 2004. In terms of revenue composition,
pro forma local advertising revenues increased approximately 3.9%,
offset by a 19.4% decrease in pro forma national advertising
revenues.
Pro forma station operating expenses increased $2.3 million to
$53.9 million, an increase of 4.5% over the fourth quarter of
2004. This increase was primarily due to:
(1) increased expenses incurred during the period associated
with the launch of the Company's second station in Houston,
Texas;
(2) promotional expenses incurred during the period associated
with the launch of the Company's rock station in Houston;
and
(3) general expense increases associated with operating the
Company's station portfolio.
Excluding the effect of expenses attributable to the Houston,
Texas market during the fourth quarter, pro forma station
operating expenses would have increased by $1.3 million or
2.5% for the fourth quarter.
Pro forma station operating income decreased $3.8 million to
$28.5 million, a decrease of 11.8% from the fourth quarter of
2004.
Corporate general and administrative expenses increased
$0.6 million to $4.9 million, an increase of 13.8% over the fourth
quarter of 2004. This increase was primarily attributable to
increased legal costs incurred in the fourth quarter of 2005.
In connection with the Company's annual impairment evaluation of
intangible assets, which was completed in the fourth quarter, the
Company recorded an impairment charge of $264.1 million in order
to reduce the carrying value of certain broadcast licenses and
goodwill to their respective fair values.
Interest expense increased by $1.4 million or 29.8% to
$6.1 million for the three months ended December 31, 2005, as
compared with $4.7 million in the prior year's period. This
increase was primarily due to a higher average cost of bank debt
and increased levels of bank debt outstanding during the current
quarter, offset by a $0.4 million gain recorded in the current
quarter as a decrease to interest expense related to the
adjustment of the fair value of certain derivative instruments.
For the three months ended December 31, 2005, the Company recorded
an income tax benefit of $34.5 million, as compared with income
tax expense of $6.3 million in the prior year's period. The
income tax benefit in the current period is primarily due to the
reversal of deferred tax liabilities associated with intangible
assets whose carrying value was reduced as a result of the
Company's impairment evaluation.
The Company incurred a $218,348,000 net loss for the fourth
quarter.
Susquehanna Radio Acquisition
On October 31, 2005, the Company disclosed that, together with
three private equity firms, it has formed Cumulus Media Partners,
LLC, which has entered into agreements to acquire the radio
broadcasting business of Susquehanna Pfaltzgraff Co. The
acquisition, which includes 33 radio stations in 8 markets, is
expected to close in the first half of 2006 and is subject to
regulatory approvals, as well as other closing conditions.
Pursuant to a capital contribution agreement, the Company will
contribute its Kansas City, Missouri and Houston, Texas radio
operations and assets to CMP, in exchange for an equity stake
initially valued at approximately 25% of the equity of CMP.
Capital Expenditures, Leverage and Financial Position
Capital expenditures for the three months ended Dec. 31, 2005,
totaled $2.4 million and were comprised approximately of
$1.7 million of maintenance related capital expenditures.
Capital expenditures for the full year of 2005 totaled
$9.3 million and were comprised approximately of $4.8 million of
maintenance related capital expenditures. For 2006, the Company
expects to incur maintenance related capital expenditures and
capital expenditures associated with the implementation of HD
Radio technology radio rollout of approximately $5.0 million.
Leverage, defined under the terms of the Company's credit facility
as total indebtedness divided by trailing 12-month Adjusted
EBITDA as adjusted for certain non-recurring expenses, was 5.7x
at Dec. 31, 2005.
The ratio of net long-term debt to trailing 12-month pro forma
Adjusted EBITDA as of December 31, 2005, is approximately 5.7x.
Outlook
Cumulus expects first quarter 2006 pro forma net revenue to grow
3% versus the prior year's period. For the full year 2006, the
Company expects its pro forma station operating expenses to grow
by approximately 2.5%. However, for the first quarter of 2006,
the Company expects pro forma station operating expenses to grow
more significantly as the Company continues to promote its newly
launched brands in Houston and Kansas City (note that the Company
has agreed to contribute its Houston and Kansas City stations to
CMP in connection with the Susquehanna acquisition, which is
expected to be consummated in the second quarter of 2005).
Further, this table summarizes selected projected financial
results for the first quarter of 2006:
Estimated
Q1 2006
---------
Depreciation and amortization 5,275,000
LMA fees 210,000
Non cash stock compensation 3,500,000
Interest expense 7,790,000
Interest income 100,000
Income tax expense (non cash) 7,200,000
Headquartered in Atlanta, Georgia, Cumulus Media Inc. --
http://www.cumulus.com/-- is the second-largest radio company in
the United States based on station count. Giving effect to the
completion of all pending acquisitions and divestitures, Cumulus
Media Inc., directly and through its investment in Cumulus Media
Partners, will own and operate 343 radio stations in 67 U.S. media
markets. Cumulus Media Inc. shares are traded on the NASDAQ
National Market under the symbol CMLS.
* * *
As reported in the Troubled Company Reporter on Nov. 2, 2005,
Moody's Investors Service affirmed the existing debt ratings and
stable rating outlook of Cumulus Media, Inc. following the
company's announcement of the formation of Cumulus Media Partners,
LLC with a group of private equity sponsors (Bain Capital, The
Blackstone Group and Thomas H. Lee Partners) to acquire the radio
broadcasting division of Susquehanna Pfaltzgraff Co. for
approximately $1.2 billion.
These ratings are affirmed:
(i) a Ba2 on the $400 million senior secured revolving credit
facility due 2012,
(ii) a Ba2 on the $400 million senior secured term loan
facility due 2012, and
(iii) the company's Ba2 Corporate Family rating.
Moody's said the outlook is stable.
CUMULUS MEDIA: Buys Back 10.78 Mil. Common Shares for $136.1 Mil.
-----------------------------------------------------------------
Cumulus Media Inc. completed the repurchase of 8,770,652 shares of
its Class A Common Stock for $110.4 million, at an average
repurchase price per share of $12.57, through December 31, 2005.
As reported in the Troubled Company Reporter on Dec. 12, 2005, the
Company's Board of Directors authorized up to an additional $100
million in repurchases of its shares of Class A Common Stock. In
September 2004, Cumulus had authorized an initial $100 million
stock repurchase program.
Subsequent to December 31, 2005, the Company has repurchased an
additional 2,011,500 shares of its Class A Common Stock for
$25.7 million, at an average repurchase price per share of $12.77.
Cumulatively, the Company has repurchased a total of 10,782,152
shares of its Class A Common Stock for $136.1 million under the
Board authorized programs.
As of February 28, 2006, 59,925,324 shares of common stock were
outstanding.
Headquartered in Atlanta, Georgia, Cumulus Media Inc. --
http://www.cumulus.com/-- is the second-largest radio company in
the United States based on station count. Giving effect to the
completion of all pending acquisitions and divestitures, Cumulus
Media Inc., directly and through its investment in Cumulus Media
Partners, will own and operate 343 radio stations in 67 U.S. media
markets. Cumulus Media Inc. shares are traded on the NASDAQ
National Market under the symbol CMLS.
* * *
As reported in the Troubled Company Reporter on Nov. 2, 2005,
Moody's Investors Service affirmed the existing debt ratings and
stable rating outlook of Cumulus Media, Inc. following the
company's announcement of the formation of Cumulus Media Partners,
LLC with a group of private equity sponsors (Bain Capital, The
Blackstone Group and Thomas H. Lee Partners) to acquire the radio
broadcasting division of Susquehanna Pfaltzgraff Co. for
approximately $1.2 billion.
These ratings are affirmed:
(i) a Ba2 on the $400 million senior secured revolving credit
facility due 2012,
(ii) a Ba2 on the $400 million senior secured term loan
facility due 2012, and
(iii) the company's Ba2 Corporate Family rating.
Moody's said the outlook is stable.
CYBERCARE INC: Wants Until March 22 to File Chapter 11 Plan
-----------------------------------------------------------
Cybercare, Inc., and CyberCare Technologies, Inc., ask the U.S.
Bankruptcy Court for the Middle District of Florida to extend,
until March 22, 2006, the period within which they have the
exclusive right to file a chapter 11 plan of reorganization.
The Debtors tell the Court that Cast-Crete Corporation, their
proposed exit-financing lender and post-confirmation merger
partner, plan to circulate a revised term sheet. The Debtors
contend that until it receives and reviews the revised term sheet,
it will be unable to move forward and finalize a chapter 11 plan.
The Debtors argue that they would prefer to file a consensual plan
rather than file the plan in its current form especially if the
current drafts are inconsistent with the changes requested by
Cast-Crete.
The Debtors did not request an extension of their exclusive period
in which to solicit acceptances of their plan.
Headquartered in Tampa, Florida, CyberCare, Inc., f/k/a Medical
Industries of America, Inc., is a holding company that owns
service businesses, including a physical therapy and
rehabilitation business, a pharmacy business, and a healthcare
technology solutions business. The Company and its debtor-
affiliate, CyberCare Technologies, Inc., filed for chapter 11
protection on Oct. 14, 2005 (Bankr. M.D. Fla. Case No. 05-27268).
Scott A. Stichter, Esq., at Stichter, Riedel, Blain & Prosser
represents the Debtors in their restructuring efforts. When the
Debtors filed for protection from their creditors, they listed
$5,058,955 in assets and $26,987,138 in debts.
CYBERCARE INC: Court OKs Marshall & Stevens as Valuation Experts
----------------------------------------------------------------
Cybercare, Inc., and Cybercare Technologies, Inc., sought and
obtained authority from the U.S. Bankruptcy Court for the Middle
District of Florida to employ Marshall & Stevens as their
appraisal and financial valuation experts.
Marshall & Stevens is expected to appraise and value the Debtor's
assets to:
a) determine the secured status of certain creditors holding
judgment liens and consensual liens against estate property;
and
b) establish the liquidation value of the Debtors' assets to
satisfy the "best interest of creditors" test and to make
proper disclosure to creditors.
The Debtors disclose that they intend to propose a plan that
provides for their merger into Cast-Crete Corporation, a privately
held manufacturing company, with CyberCare being the surviving
entity. To have the proper allocation of the shares of stock of
the surviving entity to the respective interest in the merged
entity, the Debtor relates they need to know the value of their
tangible and intangible assets.
Jerry Monarch, Regional Vice-President of Marshall & Stevens,
tells the Court that the Firm will bill $60,000 for the
engagement. The Firms is asking for a $30,000 retainer.
Mr. Monarch assures the Court that the Firm does not represent or
hold any interest adverse to the Debtors.
Marshall & Stevens -- http://www.marshall-stevens.com/-- is a
national valuation firm established in 1932. Marshall & Stevens
provides appraisal and valuation services to middle-market and
Fortune 1000 companies on a national basis.
Headquartered in Tampa, Florida, CyberCare, Inc., f/k/a Medical
Industries of America, Inc., is a holding company that owns
service businesses, including a physical therapy and
rehabilitation business, a pharmacy business, and a healthcare
technology solutions business. The Company and its debtor-
affiliate, CyberCare Technologies, Inc., filed for chapter 11
protection on Oct. 14, 2005 (Bankr. M.D. Fla. Case No. 05-27268).
Scott A. Stichter, Esq., at Stichter, Riedel, Blain & Prosser
represents the Debtors in their restructuring efforts. When the
Debtors filed for protection from their creditors, they listed
$5,058,955 in assets and $26,987,138 in debts.
D&K STORES: Taps Clear Thinking as Bankruptcy Plan Administrator
----------------------------------------------------------------
D&K Stores, Inc., has appointed Clear Thinking Group, LLC and
Joseph E. Myers, a partner and managing director in the firm, as
plan administrator in its bankruptcy case. The appointment comes
in conjunction with the approval on Feb. 9, 2006, of the Oakhurst,
New Jersey-based company's Chapter 11 Plan of Liquidation.
Under terms of the appointment agreement, Mr. Myers and select
staff from Clear Thinking Group's Creditors Rights Practice will
take all actions consistent with the duties and responsibilities
of the plan administrator. Such actions will include, but not be
limited to, assisting the debtor in meeting obligations set forth
in its Plan of Liquidation. As plan administrator, the firm will
also administer the disbursement of funds contained in a creditors
trust from which D&K Stores will pay its administrative and
general unsecured claims.
About Clear Thinking Group
Clear Thinking Group -- http://www.clearthinkinggrp.com--
provides a wide range of strategic consulting services to retail
companies, consumer product manufacturers/distributors and
industrial companies. The national advisory organization
specializes in assisting small- to mid-sized companies during
times of growth, opportunity, strategic change, acquisition, and
crisis.
About D&K Stores
Headquartered in Eatontown, New Jersey, D & K Stores, Inc., filed
for chapter 11 protection on April 8, 2005 (Bankr. D. N.J. Case
No. 05-21445). Timothy P. Neumann, Esq., at Broege, Neumann,
Fischer & Shaver, LLC, represents the Debtor. When the Debtor
filed for protection from its creditors, it estimated assets and
debts from $10 million to $50 million.
DANA CORP: Gets Court Nod to Pay $79.5 Million to Foreign Vendors
-----------------------------------------------------------------
In light of the size, sophistication and global nature of their
business, Dana Corporation and its debtor-affiliates regularly
transact business with vendors located outside of the United
States and its territories. Many of these foreign businesses
supply goods and services to the Debtors that are crucial to the
Debtors' ongoing U.S. operations, Corinne Ball, Esq., at Jones
Day, in New York, points out.
Some of these Foreign Vendors supply goods or services to the
Debtors that cannot be obtained from other sources or cannot be
obtained from other sources in sufficient quantity or quality or
without significant delays. If these goods are not obtained from
the Foreign Vendors without interruption, Ms. Ball says, the
Debtors likely would not be able to fulfill their obligations to
OEM Customers and other customers.
The Debtors regularly transact business with Foreign Vendors of
this type in Australia, Brazil, Canada, China, Germany, India,
Japan, Mexico, South Africa, Spain, Sweden, Taiwan and elsewhere
in the North America, South America, Europe and Asia.
In light of the potential for serious and potentially irreparable
consequences if the Foreign Vendors do not continue to make
uninterrupted and timely deliveries of goods and services -- and
the lack of any workable enforcement mechanism against these
parties -- the Debtors have determined that payment of the
Foreign Claims is essential to avoid costly disruptions to the
Debtors' operations and ability to timely and adequately fill
customer orders.
The Debtors' management has identified a narrow list of Foreign
Vendors that could cause material business disruptions if the
Debtors do not obtain permission to pay them.
The Debtors have not disclosed and don't intend to publicly
disclose the identity of any Foreign Vendor.
The Debtors, therefore, seek authority from the U.S. Bankruptcy
Court for the Southern District of New York, to pay the
prepetition claims of these Foreign Vendors. The Debtors
estimate that the maximum amount to be paid to Foreign Vendors is
approximately $79,500,000.
Some of the Foreign Vendors that the Debtors seek to pay are
foreign joint ventures in which one or more of the Debtors have
an interest, Ms. Ball relates. Of the total potential Foreign
Claims, the Debtors estimate that the Foreign Claims of these
foreign joint ventures aggregate approximately $63,000,000.
According to Ms. Ball, in most cases, the Debtors have a
minority, non-controlling interest in the joint ventures. Even
where the Debtors have a majority ownership interest, the Debtors
may not be able to control the day-to-day activities of the joint
venture.
The Court authorizes the Debtors to pay the Foreign Claims,
including any foreign tax, import and export fees, customs fees
or duties owed in connection with those claims.
Each recipient of a Foreign Payment will be required, to the
extent applicable to continue to extend normalized trade credit
and provide other business terms on a postpetition basis
(consistent with past practices), including with respect to
credit limits, the pricing of goods and services and the
provision of equivalent levels of service, on terms at least as
favorable as those extended prepetition, or on other terms
acceptable to the Debtors in their business judgment, until the
Debtors emerge from Chapter 11.
If a Foreign Vendor accepts a Foreign Payment and fails to
provide the Debtors with the requisite Trade Terms, then:
(a) any Foreign Payment received by the Foreign Vendor will be
deemed an unauthorized postpetition transfer under Section
549 of the Bankruptcy Code that the Debtors may either:
(i) recover from the Foreign Vendor in cash or goods,
or
(ii) at the Debtors' option, apply against any
outstanding administrative claim held by that
Foreign Vendor; and
(b) upon recovery of any Foreign Payment, the corresponding
prepetition claim of the Foreign Vendor will be reinstated
in the amount recovered by the Debtors, less the Debtors'
reasonable costs to recover those amounts.
Headquartered in Toledo, Ohio, Dana Corporation --
http://www.dana.com/-- designs and manufactures products for
every major vehicle producer in the world, and supplies
drivetrain, chassis, structural, and engine technologies to those
companies. Dana employs 46,000 people in 28 countries. Dana is
focused on being an essential partner to automotive, commercial,
and off-highway vehicle customers, which collectively produce more
than 60 million vehicles annually. Corinne Ball, Esq., and
Richard H. Engman, Esq., at Jones Day, in Manhattan and
Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black,
Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio,
represent the Debtors. Henry S. Miller at Miller Buckfire & Co.,
LLC, serves as the Debtors' financial advisor and investment
banker. Ted Stenger from AlixPartners serves as Dana's Chief
Restructuring Officer. When the Debtors filed for protection
from their creditors, they listed $7.9 billion in assets and
$6.8 billion in liabilities as of Sept. 30, 2005. (Dana
Corporation Bankruptcy News, Issue No. 2; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
DANA CORP: Honoring & Paying Prepetition Employee Obligations
-------------------------------------------------------------
Dana Corporation and its debtor-affiliates currently employ 19,000
full-time and part-time hourly and salaried employees, including
7,200 union employees. The Regular Employees perform a variety of
critical functions for the Debtors' businesses, including
accounting, administration, budgeting and planning, environmental
health and safety, finance, human resources, manufacturing,
operations, product research and development, training and
compliance.
The Debtors employ 50 independent contractors to perform
essential employee functions on a cost-effective basis. The
Debtors employ the Independent Contractors through direct
contractual arrangements with certain individuals or their
personal businesses. The Independent Contractors fall into two
general categories:
(a) Independent Contractors that provide essential support
services to the Debtors at the corporate and
administrative levels; and
(b) Independent Contractors that provide essential operational
support at the Debtors' manufacturing facilities.
The Independent Contractors are generally paid on a per-project
or hourly basis.
Michael J. Burns, chairman of the board, president, chief
executive officer, and chief operating officer of Dana
Corporation, tells the U.S. Bankruptcy Court for the Southern
District of New York, that the continued and uninterrupted
support of the Regular Employees and the Independent Contractors
is essential to the Debtors' ongoing operations and their ability
to reorganize.
The Debtors also rely on other individuals to provide essential
employee services. The Additional Workforce is comprised of:
(a) employees of various temporary agencies that,
collectively, constitutes approximately 6% -- 1,100 -- of
the Debtors' workforce at any given time; and
(b) employees of equipment manufacturers who are on site full-
time at certain of the Debtors' manufacturing facilities
to provide critical repair and maintenance services for
certain of the Debtors' equipment.
The Debtors use majority of the Additional Employees in their
manufacturing operations to provide the Debtors with the
flexibility to decrease or increase their workforce to meet the
Debtors' obligations to their customers on a cost-effective
basis.
According to Mr. Burns, the Debtors also incur costs incident to
prepetition compensation and deductions, including processing
costs and the employer-portion of payroll related taxes, as well
as accrued but unpaid prepetition charges for administration of
benefit programs.
The Debtors, Mr. Burns says, face the risk that their operations
may be severely impaired if they don't timely pay Regular
Employees, Independent Contractors, Third-Party Employers for the
Additional Workforce, and related costs and expenses.
In addition, Mr. Burns continues, bolstering the morale of the
Regular Employees, Independent Contractors and Additional
Employees, and ensuring the uninterrupted availability of their
services will assist the Debtors in:
(a) maintaining a "business as usual" atmosphere and, in turn,
facilitate the Debtors' efforts to emerge from Chapter 11
without significant delay; and
(b) preserving the Debtors' relationships with customers and
vendors, as well as the general public, with which the
Regular Employees and Independent Contractors are the
Debtors' primary interface.
Accordingly, the Debtors sought and obtained the Court's
authority to pay:
(1) prepetition wages, salaries, overtime pay, incentive pay,
contractual compensation, sick pay, vacation pay, holiday
pay and other accrued compensation to Regular Employees
and Independent Contractors;
(2) prepetition business expenses, including travel, lodging,
moving and other relocation expenses and other
reimbursable business expenses to Regular Employees and
Independent Contractors;
(3) prepetition contributions to, and benefits under, the
Regular Employees' benefit plans;
(4) prepetition payroll deductions and withholdings with
respect to Regular Employees;
(5) certain prepetition additional workforce costs; and
(6) all costs and expenses incident to the payments and
contributions.
Estimated Prepetition Compensation
and Prepetition Business Expenses
Aggregate
Item Amount
---- ---------
Wages, Salaries and Contractual Compensation $12,275,623
Earned & Accrued Vacation for Non-Union Employees 6,647,983
Earned & Accrued Vacation for Union Employees 3,005,472
Contractual Compensation for Independent Contractors 200,000
Reimbursable Business Expenses 700,000
-----------
TOTAL: $22,829,079
===========
Estimated Prepetition Deductions
from Employee Paychecks
Aggregate
Item Deductions
---- ----------
401(k) Plans $3,316,376
Benefit Plans 3,270,474
Union Dues 222,515
Miscellaneous Deductions 3,494,037
-----------
TOTAL: $10,303,402
===========
The Debtors estimate that the amount owing to the Third-Party
Employers as of the Petition Date is approximately $2,500,000.
The Debtors estimate that the aggregate amount of Prepetition
Processing Costs accrued but unpaid, as of the Petition Date, was
approximately $15,500,000.
Moreover, the Honorable Judge Burton R. Lifland authorizes and
directs the Debtors' Banks and other financial institutions, when
requested by the Debtors in the Debtors' sole discretion, to
receive, process, honor and pay all checks presented for payment
of, and to honor all funds transfer requests made by the Debtors
related to Prepetition Compensation, Prepetition Business
Expenses, Additional Workforce Costs, Deductions, Withholdings,
Benefits and Prepetition Processing Costs, whether those checks
were presented or funds transfer requests were submitted prior to
or after the Petition Date, provided that funds are available in
the Debtors' accounts to cover those checks and funds transfers.
Headquartered in Toledo, Ohio, Dana Corporation --
http://www.dana.com/-- designs and manufactures products for
every major vehicle producer in the world, and supplies
drivetrain, chassis, structural, and engine technologies to those
companies. Dana employs 46,000 people in 28 countries. Dana is
focused on being an essential partner to automotive, commercial,
and off-highway vehicle customers, which collectively produce more
than 60 million vehicles annually. Corinne Ball, Esq., and
Richard H. Engman, Esq., at Jones Day, in Manhattan and
Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black,
Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio,
represent the Debtors. Henry S. Miller at Miller Buckfire & Co.,
LLC, serves as the Debtors' financial advisor and investment
banker. Ted Stenger from AlixPartners serves as Dana's Chief
Restructuring Officer. When the Debtors filed for protection
from their creditors, they listed $7.9 billion in assets and
$6.8 billion in liabilities as of Sept. 30, 2005. (Dana
Corporation Bankruptcy News, Issue No. 2; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
DANA CORP: Eve-of-Bankruptcy Key Employee Incentive Plan Unveiled
-----------------------------------------------------------------
The Board of Directors of Dana Corporation approved the Dana
Corporation Annual Incentive Plan, which is designed to provide
performance-based incentives to key employees of Dana and its
subsidiaries for 2006 and 2007.
Michael L. DeBacker, Dana's vice president, general counsel and
secretary, discloses that award opportunities under the Plan are
available to three groups of employees:
1. "Critical Leaders" designated by the Compensation Committee
of the Board,
2. "Key Leaders" designated by the Committee, and
3. "Dana Leaders" designated by the Chief Executive Officer.
Among others, the Committee has designated the CEO and two other
executive officers as Critical Leaders and one other executive
officer as a Key Leader.
Mr. DeBacker explains that the award opportunities for all
participants are based on performance measures and goals
established by the Committee for awards at threshold, target and
superior performance levels.
For 2006, all participants have corporate financial performance
goals. Key Leaders and Dana Leaders with product
responsibilities also have product group financial performance
goals.
The amount of the award payments will vary depending on the
extent to which the performance goals are achieved. Payments
under the Plan for achievement at the target performance level
will range from 15% to 200% of the participants' annual base
salaries as of March 1, 2006, depending upon their
responsibilities. At this level, Mr. DeBacker says, the payment
to the CEO will be 200% of his salary and the payments to the
other three executive officers will range from 80% to 120% of
their salaries. Payments at the threshold performance level will
be 50% of the target payouts and payments for superior
performance will be 200% of the target payouts. There will be no
payments to any participants if Dana fails to achieve the
threshold corporate financial performance goal(s) established by
the Committee.
Awards will be calculated and paid semi-annually. Payments for
the first six months will be based on performance in that period
and capped at 100% of the target payout. Payments for the full
year will be based on full-year performance and capped at 200% of
the target payout, less amounts previously paid for six-month
performance, but in no event less than zero. The Committee may
make discretionary adjustments to the full-year payments based on
the achievement of individual management objectives, provided
that such adjustments in the aggregate net to zero. All awards
will be paid in cash, Mr. DeBacker says.
Headquartered in Toledo, Ohio, Dana Corporation --
http://www.dana.com/-- designs and manufactures products for
every major vehicle producer in the world, and supplies
drivetrain, chassis, structural, and engine technologies to those
companies. Dana employs 46,000 people in 28 countries. Dana is
focused on being an essential partner to automotive, commercial,
and off-highway vehicle customers, which collectively produce more
than 60 million vehicles annually. Corinne Ball, Esq., and
Richard H. Engman, Esq., at Jones Day, in Manhattan and
Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black,
Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio,
represent the Debtors. Henry S. Miller at Miller Buckfire & Co.,
LLC, serves as the Debtors' financial advisor and investment
banker. Ted Stenger from AlixPartners serves as Dana's Chief
Restructuring Officer. When the Debtors filed for protection
from their creditors, they listed $7.9 billion in assets and
$6.8 billion in liabilities as of Sept. 30, 2005. (Dana
Corporation Bankruptcy News, Issue No. 2; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
DAVIS PETROLEUM: Court Confirms Plan of Reorganization
------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas
confirms Davis Petroleum Corp.'s plan of reorganization. The
Court's confirmation of Davis's plan clears the way for the
Company's emergence from its Chapter 11 proceeding by the end of
this month.
"We are extremely pleased the Court was able to confirm our plan
of reorganization only three days after we filed our pre-packaged
Chapter 11 case," Gregg Davis, President of Davis, said. "[This]
really is an important milestone for Davis Petroleum. In the next
two weeks we expect to complete our recapitalization and emerge
from Chapter 11 with a strong balance sheet, all creditors paid in
full and ample liquidity to fund new growth initiatives."
On March 8, the Company reached an agreement with a private equity
group, led by Evercore Capital Partners L.P. to recapitalize the
Company. The Group includes Red Mountain Capital Partners and
Sankaty Advisors, an affiliate of Bain Capital.
Terms Of The Agreement
The private equity group and management of the Company will
purchase all of the equity of Davis Petroleum for approximately
$150 million. In addition The Evercore Group expects to commit
significant additional capital into Davis. In order to implement
its recapitalization, Davis Petroleum filed a petition under
Chapter 11 of the Bankruptcy Code together with a Plan of
Reorganization supported by a majority of its shareholders.
In accordance with the plan of reorganization, holders of allowed
general unsecured claims -- primarily pre-petition vendor claims
and similar unsecured claims -- will be paid in full in cash on
March 31, 2006.
"Davis Petroleum has a successful track record in the exploration,
discovery and development of onshore properties as well as more
recent finds in the Gulf of Mexico. We look forward to a close
partnership with The Evercore Group which has provided Davis
Petroleum with the financial flexibility to build on our track
record and continue to grow" Mr. Davis concluded.
About Evercore Partners
Evercore Partners Inc. -- http://www.evercore.com/-- is a
boutique financial advisory and investment firm. Evercore's
advisory business provides its corporate clients with counsel on
mergers, acquisitions, divestitures, restructurings and other
strategic transactions. Evercore's investing business manages
private equity and venture capital for institutional investors.
Evercore's private equity investing arm, Evercore Capital
Partners, has invested in a number of energy companies, including
Michigan Electric Transmission Company, Continental Energy
Services, and Energy Partners. Evercore recently extended its
investing business to create Evercore Asset Management, an
institutional asset management firm. Evercore serves a diverse
set of clients around the world from its offices in New York, Los
Angeles and San Francisco.
About Red Mountain Capital Partners
Red Mountain Capital Partners, headquartered in Los Angeles, is a
private investment firm dedicated to investing in small
capitalization public and private companies with a private equity
approach. Red Mountain acquires strategic or control stakes in
public companies and participates in negotiated private equity
transactions on a selected basis. The firm was established by
Willem Mesdag, a former partner of Goldman, Sachs & Co and the
head of its Los Angeles office.
About Sankaty Advisors
Sankaty Advisors, LLC, the credit affiliate of Bain Capital, LLC,
is one of the nation's leading private managers of high yield debt
obligations. With approximately $12 billion in committed capital
(as of Dec. 30, 2005), Sankaty invests in a wide variety of
securities, including leveraged loans, high-yield bonds, stressed
debt, distressed debt, mezzanine debt, structured products and
equity investments. Through a variety of funds, Sankaty Advisors
has the ability to invest in a company's capital structure at
every level from secured debt to equity, and can also provide
capital to growing companies with unique financing needs.
About Davis Petroleum Corp.
Headquartered in Houston, Texas, Davis Petroleum Corp. --
http://www.davispetroleumcorp.com/-- is an oil and gas
exploration and production company operating in the onshore and
intermediate-deep water Gulf of Mexico, Texas, Louisiana, Oklahoma
and the Rocky Mountain region. The Company filed for chapter 11
protection on March 7, 2006 (Bankr. S.D. Tex. Case No. 06-20152).
Rhett G. Campbell, Esq., Diana Merrill Woodman, Esq., and Matthew
Ray Reed, Esq., at Thompson & Knight LLP, and Nathaniel Peter
Holzer, Esq., at Jordan Hyden Womble Culbreth & Holzer PC,
represent the Debtors. When the Debtors filed for protection from
their creditors, they listed $50 to $100 million in estimated
assets and $50 to $100 million in estimated debts.
DELTA AIR: Wants to Execute DFASS Ventures Duty Free Accord
-----------------------------------------------------------
Delta Air Lines, Inc., asks the U.S. Bankruptcy Court for the
Southern District of New York for permission to perform its
obligations under a Duty Free Services Agreement, dated
Feb. 1, 2006, with DFASS Ventures, LLC.
In the ordinary course of business and as service to its
passengers, Delta has arranged, through the Agreement, to make
duty-free items available for purchase by passengers on certain
flights.
Under the terms of the Agreement, DFASS will provide duty-free
merchandise to Delta for sale aboard specified flights. DFASS
will also provide an in-flight brochure advertising the
Merchandise, handheld computers for use by Delta's flight
attendants to record on-board sales and various ancillary
services required for the sale of Merchandise. The Merchandise
remains the property of DFASS unless and until a passenger
purchases it.
In exchange for allowing the Merchandise to be placed aboard
specified flights, allowing DFASS to be the exclusive supplier of
duty-free goods on those flights, providing certain other
services to DFASS and fulfilling certain other obligations as set
forth in the Agreement, Delta will receive specified signing and
renewal bonuses, a periodic commission based on a percentage of
total sales volume, sales commissions for flight attendant crew
members engaged in sales activities and certain other rights.
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, in New York,
asserts that the performance by Delta of its obligations under
the Agreement is well within the authority granted by Section
363(c)(1) for the Debtors to enter into transactions in the
ordinary course of business.
Mr. Huebner notes that the size of the Agreement is small in
relation to the size of Delta's estate and to Delta's other
contractual arrangements. Further, airline debtors-in-possession
and airlines operating outside of Chapter 11 routinely enter into
and perform obligations under contracts of this size and type.
Headquartered in Atlanta, Georgia, Delta Air Lines --
http://www.delta.com/-- is the world's second-largest airline in
terms of passengers carried and the leading U.S. carrier across
the Atlantic, offering daily flights to 502 destinations in 88
countries on Delta, Song, Delta Shuttle, the Delta Connection
carriers and its worldwide partners. The Company and 18
affiliates filed for chapter 11 protection on Sept. 14, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner,
Esq., at Davis Polk & Wardwell, represents the Debtors in their
restructuring efforts. Timothy R. Coleman at The Blackstone Group
L.P. provides the Debtors with financial advice. Daniel H.
Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss
Hauer & Feld LLP, provide the Official Committee of Unsecured
Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey
Howard & Zukin Capital and James S. Feltman at Mesirow Financial
Consulting, LLC, serve as the Committee's financial advisors. As
of June 30, 2005, the Company's balance sheet showed $21.5 billion
in assets and $28.5 billion in liabilities. (Delta Air Lines
Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
DELTA AIR: Flight Attendants Balk at Discriminatory Concessions
---------------------------------------------------------------
Teamster flight attendants at Delta's Comair distributed fliers at
the Delta Terminal in Cincinnati/Northern Kentucky International
Airport, calling on the company to rescind bankruptcy demands that
slash the average Comair flight attendant salary of $28,000 by
about $10,880.
Headlined, "Delta Loves to Discriminate and It Shows," the
leaflets protest Comair concession demands that would single out
the flight attendant unit, represented by Teamsters Local 513 in
Cincinnati, for deep cuts.
Earlier this week Local 513 mailed strike authorization ballots to
its members in case the contract is struck down and Delta imposes
concessions on the Comair flight attendants. On Feb. 21,
Cincinnati-based Comair, a wholly owned subsidiary of Delta
Airlines, asked the federal bankruptcy court that is handling
Delta's Chapter 11 restructuring to reject Comair's collective
bargaining agreement with its flight attendants so that
concessions could be imposed.
Although other units have been asked to make painful concessions
as well, only the flight attendants are being asked to make cuts
that would put their families below the federal poverty level.
"These cuts will really hurt my family," Karen Terry, a Comair
flight attendant and mother of two, said. "We were already
struggling because Comair raised our health care coverage costs
last year. Families like mine can't weather a one-third cut in
pay and compensation."
Connie Slayback, President of Local 513 said, "We know that we
will have to make sacrifices but we're hoping the bankruptcy judge
will perceive what a disproportionate sacrifice Delta is trying to
wring from this group of working women -- most of them mothers who
help support families."
Founded in 1903, the Teamsters Union represents more than
1.4 million men and women in the United States and Canada.
Headquartered in Atlanta, Georgia, Delta Air Lines --
http://www.delta.com/-- is the world's second-largest airline in
terms of passengers carried and the leading U.S. carrier across
the Atlantic, offering daily flights to 502 destinations in 88
countries on Delta, Song, Delta Shuttle, the Delta Connection
carriers and its worldwide partners. The Company and 18
affiliates filed for chapter 11 protection on Sept. 14, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner,
Esq., at Davis Polk & Wardwell, represents the Debtors in their
restructuring efforts. Timothy R. Coleman at The Blackstone Group
L.P. provides the Debtors with financial advice. Daniel H.
Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss
Hauer & Feld LLP, provide the Official Committee of Unsecured
Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey
Howard & Zukin Capital and James S. Feltman at Mesirow Financial
Consulting, LLC, serve as the Committee's financial advisors. As
of June 30, 2005, the Company's balance sheet showed $21.5 billion
in assets and $28.5 billion in liabilities.
DELTA AIR: Wants to Walk Away from Pittsburgh Airport Lease
-----------------------------------------------------------
Delta Air Lines, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York for
authority to reject their lease with the County of Allegheny
governing their use and occupancy of various airport facilities at
Pittsburgh International Airport, effective Apr. 1, 2006.
The Debtors tell the Court that they and the County of Allegheny
are parties to an Airline-Operating Agreement and Terminal
Building Lease, dated April 26, 1989. The Debtors say that as
part of their ongoing restructuring efforts, they reviewing space
and facilities requirements at airports and, where appropriate,
taking steps to reduce excess airport facilities.
The Debtors have determined that certain leased facilities at the
Pittsburgh Airport are not required for their current operations,
including:
-- Gate 76 and related hold room and ramp areas;
-- certain lower level operations space;
-- a baggage service office;
-- certain ticket counter space; and
-- unfinished club room space.
The Debtors plan to vacate these areas effective April 1, 2006.
Pursuant to Section 554(a) of the Bankruptcy Code, the Debtors
also seek the Court's permission to abandon a millwork located in
the vacated premises, including a gate podium at Gate 76 and
certain other millwork in the vacated baggage service office and
ticket counter space. The Expendable Property is of
inconsequential value and of no benefit to the estates.
Delta intends to enter into a new signatory agreement with
Allegheny to occupy reduced facilities on the effective date of
rejection.
Headquartered in Atlanta, Georgia, Delta Air Lines --
http://www.delta.com/-- is the world's second-largest airline in
terms of passengers carried and the leading U.S. carrier across
the Atlantic, offering daily flights to 502 destinations in 88
countries on Delta, Song, Delta Shuttle, the Delta Connection
carriers and its worldwide partners. The Company and 18
affiliates filed for chapter 11 protection on Sept. 14, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner,
Esq., at Davis Polk & Wardwell, represents the Debtors in their
restructuring efforts. Timothy R. Coleman at The Blackstone Group
L.P. provides the Debtors with financial advice. Daniel H.
Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss
Hauer & Feld LLP, provide the Official Committee of Unsecured
Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey
Howard & Zukin Capital and James S. Feltman at Mesirow Financial
Consulting, LLC, serve as the Committee's financial advisors. As
of June 30, 2005, the Company's balance sheet showed $21.5 billion
in assets and $28.5 billion in liabilities. (Delta Air Lines
Bankruptcy News, Issue No. 23; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
DELTA AIR: Barton Malow Wants Carrier to Decide on Contractor Pact
------------------------------------------------------------------
Barton Malow Company asks the U.S. Bankruptcy Court for the
Southern District of New York to compel Delta Air Lines, Inc., and
its debtor-affiliates to assume or reject their contract.
Barton Malow serves as a general contractor for various projects
for the Debtors, including projects for Delta Air Lines, Inc.'s
Technical Operations Center located at Hartsfield-Jackson
International Airport in Atlanta, Georgia.
Prior to the bankruptcy filing, Barton Malow completed a roofing
project for the TOC. Delta owes at least $4,000 in retention and
an additional $12,000 pursuant to a change order. Barton Malow
may continue to have a contract obligation to resolve any warranty
issues with respect to the roofing project.
As of the Petition Date, Barton Malow was continuing work on a
project identified as "Fortress TOC" which involves construction
of an enhanced access controlled security fence line at the TOC.
In connection with the project, Barton Malow was due to be paid a
$217,591 progress payment on Sept. 30, 2005, for work completed
through August 31, 2005, and another $14,547 progress payment on
October 31, for work completed between September 1 and the
Petition Date. Delta has not paid these amounts, William D.
Matthews, Esq., at Lamberth, Cifelli, Stokes & Stout, P.A., in
Atlanta, Georgia, tells Judge Hardin.
Pursuant to the terms of Delta's "General Conditions" document,
Barton Malow is required to pay its subcontractors only from
amounts paid by Delta under the Fortress TOC Contract.
Thus, Barton Malow was scheduled to pay Subcontractors and
material suppliers out of the amounts that were due to be paid on
Sept. 30 and Oct. 31, 2005, and many subcontractors and
materialmen remain unpaid as a result of Delta's failure to pay
Barton Malow. Subcontractors and materialmen have demanded
payment or guarantees from Barton Malow before they will resume
work on the Fortress TOC project.
Barton Malow, according to Mr. Matthews, has used its best
efforts to ensure that subcontractors and materialmen continue
work on the Fortress TOC project post-bankruptcy.
However, since its bankruptcy filing, Delta has demanded that
Barton Malow continue, not only to provide services, but also to
extend financial accommodations to Delta by paying subcontractors
even though Delta has not paid Barton Malow the funds to be paid
to subcontractors. Delta has threatened litigation and sanctions
should Barton Malow cease to perform on the Fortress TOC project.
Delta indicated it would seek to enforce the automatic stay and
impose sanctions on Barton Malow if postpetition work on the
Fortress TOC project did not continue.
Nevertheless, Delta has not for its part offered to assume the
Fortress TOC contract and has not offered to make payment
necessary for Barton Malow to be able to pay subcontractors.
On Sept. 14, 2005, Delta sought the Court's permission to continue
its existing improvement projects. However, Delta has refused to
exercise its discretion to treat the Fortress TOC project as an
Ordinary Course Improvement Project and has refused to pay the
prepetition amounts owing to Barton Malow.
Barton Malow asserts that Delta should not be permitted to use the
automatic stay to force Barton Malow to continue to extend
burdensome financial accommodations post-bankruptcy. The
Bankruptcy Code does not permit a debtor to force provision of
postpetition financial accommodations under any circumstances, and
certainly does not countenance the high-handed use of threats of
sanctions to impose that result through intimidation.
Barton Malow does not enjoy the luxury of those tactics itself,
Mr. Matthews avers. Barton Malow must continue paying cash to
its employees and contractors while receiving nothing from Delta.
It has no assurances, beyond the apparent present availability of
DIP financing, that it will ever be paid even for its
postpetition services.
If for any reason Delta persuades the Court that it cannot make
up its mind yet with respect to assumption or rejection of the
Barton Malow agreement, then in all equity Barton Malow should
not be required to continue to finance the project in the
meantime, Mr. Matthews asserts. For any extension beyond 10 days
of the time for Delta's decision, Barton Malow seeks the Court's
authorization to cease performing services on the Fortress TOC
Project until Delta either assumes or rejects the agreement.
Headquartered in Atlanta, Georgia, Delta Air Lines --
http://www.delta.com/-- is the world's second-largest airline in
terms of passengers carried and the leading U.S. carrier across
the Atlantic, offering daily flights to 502 destinations in 88
countries on Delta, Song, Delta Shuttle, the Delta Connection
carriers and its worldwide partners. The Company and 18
affiliates filed for chapter 11 protection on Sept. 14, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner,
Esq., at Davis Polk & Wardwell, represents the Debtors in their
restructuring efforts. Timothy R. Coleman at The Blackstone Group
L.P. provides the Debtors with financial advice. Daniel H.
Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss
Hauer & Feld LLP, provide the Official Committee of Unsecured
Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey
Howard & Zukin Capital and James S. Feltman at Mesirow Financial
Consulting, LLC, serve as the Committee's financial advisors. As
of June 30, 2005, the Company's balance sheet showed $21.5 billion
in assets and $28.5 billion in liabilities. (Delta Air Lines
Bankruptcy News, Issue No. 23; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
EDISON INT'L: Fitch Reviewing BB Rating for Possible Upgrade
------------------------------------------------------------
Fitch placed the credit ratings of Edison International (EIX)
and its wholly-owned utility operating subsidiary, Southern
California Edison (SCE) on Rating Watch Positive.
Fitch also listed EIX's unregulated intermediate holding companies
Mission Energy Holding Company (MEHC) and Edison Mission Energy
(EME) and their unregulated generation subsidiary Midwest
Generation Co. (MWG) on Rating Watch Positive. The ratings of
Edison Funding (EF) are not affected by the rating action.
Approximately $8 billion of debt is affected.
The Rating Watch status recognizes:
* rising cash flows;
* debt repayment;
* enhanced liquidity; and
* more favorable operating fundamental
at EIX's core electric utility and merchant power operating
businesses.
SCE's credit metrics continue to recover, are strong for the
current rating category, and benefit from a supportive regulatory
environment in California. The rating action assumes a reasonable
outcome in SCE's pending general rate case. A final order is
expected in April 2006. Although the improvement in unregulated
power supply operating results derives from strongly favorable
cyclical factors, its risk profile is lower due to reduced debt
and a more manageable debt maturity schedule, as it has benefited
from favorable dark spreads.
While EIX is dependent on its subsidiaries to meet its ongoing
obligations, there currently is no debt at the parent company and
ample liquidity. At Dec. 31, 2005, EIX and its subsidiaries had
$2.7 billion of borrowing capacity available under lines of credit
totaling $2.9 billion. EME ended 2005 with cash, cash equivalents
and short-term investments of $1.1 billion. These improvements in
liquidity assuage the primary EIX credit concerns which include
the volatile operating cash flows and still high debt leverage at
its unregulated power supply subsidiary and a pending dispute with
the Internal Revenue Service regarding accounting for certain
leveraged leases.
In the recently filed 2005 10-K, EIX estimated that approximately
$1.48 billion of deferred taxes could be affected. In the longer
term, SCE's dependence on wholesale power markets and related
supply issues including resolution of direct access are ongoing
sources of uncertainty. Fitch expects to resolve the rating watch
status within the next few weeks.
These ratings are placed on Rating Watch Positive:
Edison International:
-- Issuer Default Rating 'BB'
Southern California Edison:
-- Issuer Default Rating 'BBB-'
-- Senior secured 'BBB+'
-- Senior unsecured 'BBB'
-- Preferred 'BBB-'
Mission Energy Holding Co.:
-- Issuer Default Rating 'B'
-- Senior secured 'B-'
-- Recovery Rating (RR) 'RR5'
Edison Mission Energy Co.:
-- Issuer Default Rating 'B'
-- Senior Unsecured 'B'
-- Recovery Rating 'RR4'
Midwest Generation Co.:
-- Issuer Default Rating 'B'
-- Secured T/L (1st Priority Lien) 'BB'
-- Recovery Rating 'RR1'
-- Secured Notes (2nd Priority Lien) 'B+'
-- Recovery Rating 'RR3'
These ratings are unaffected:
Edison Funding:
-- Issuer Default Rating 'BB'
-- Senior unsecured 'BB'
ENRON CORP: Inks Multi-Mil. Settlement Agreements on Market Claims
------------------------------------------------------------------
Enron Corp. reached agreements to settle all civil and contractual
claims between the company, including certain of its subsidiaries,
and three parties:
* Federal Energy Regulatory Commission Trial Staff;
* the City of Santa Clara, California; and
* Valley Electric Association, Inc.
These settlements relate to electricity and natural gas
transactions in the Western United States from 1997-2003, and
resolve all claims between these parties and Enron under
proceedings before the FERC and the Bankruptcy Court for the
Southern District of New York, including claims raised in the
FERC's partnership and gaming proceeding initiated in 2002-03.
"These settlements represent the latest in a series of
achievements aimed at resolving significant claims in Enron's
bankruptcy proceedings," John Ray, President and Chairman of the
Board of Enron, said. "We are pleased that these settlements
enable us to collect additional value for the creditors, and, at
the same time, resolve claims against the estate so that we can
accelerate distributions to all creditors."
Terms of the FERC Trial Staff Settlement
According to the terms of the settlement:
(i) FERC will receive a $400 million penalty claim against
Enron Power Marketing, Inc., an Enron subsidiary, which
is a subordinated claim under Enron's confirmed Chapter
11 Plan of Reorganization, and
(ii) FERC Trial Staff will receive an allowed $5 million
unsecured claim against EPMI, which will be allocated and
assigned to Santa Clara ($4 million portion) and Valley
Electric ($1 million portion), and an allowed unsecured
claim against EPMI up to $10 million in the aggregate,
for the benefit of all non-settling participants in the
partnership and gaming proceeding who are actually
allocated disgorgement amounts by FERC and have a valid
proof of claim against EPMI.
Terms of the Santa Clara Settlement
In the settlement with Santa Clara:
(i) Enron will receive a $36.5 million settlement payment
from Santa Clara related to electricity contracts
terminated in 2002, and
(ii) Santa Clara will receive an allowed unsecured bankruptcy
claim of $4 million against EPMI, which claim is being
assigned to Santa Clara by Trial Staff.
Terms of the Valley Electric Settlement
In the settlement with Valley Electric:
(i) Enron will receive an $8 million settlement payment from
Valley Electric related to electricity contracts
terminated in 2002, and
(ii) Valley Electric will receive an allowed unsecured
bankruptcy claim of $14 million against EPMI, which
includes the $1 million claim assigned to it by Trial
Staff.
Under the Santa Clara and Valley Electric settlements, Enron and
the other parties will dismiss and release all claims and
proceedings against one another, and both Santa Clara and Valley
Electric will be entitled to receive distributions on their
allowed unsecured claims under the Plan.
These settlement agreements follow Enron's recent settlements
concerning the western energy market with the Attorneys General of
California, Oregon and Washington, Pacific Gas & Electric Company,
San Diego Gas & Electric Company, Southern California Edison
Company, and California Department of Water Resources, among other
parties, that closed in November 2005, as well as the settlement
with the Nevada Power Company, Sierra Pacific Power Company, and
Sierra Pacific Resources that closed in January 2006.
Upon the closing of the three settlements announced on
March 10, 2006, Enron will have successfully resolved claims with
all parties in the FERC's partnership and gaming proceeding
against whom Enron has also filed adversary proceedings in the
Bankruptcy Court for the collection of termination payments under
wholesale energy contracts, except for the Public Utility District
No. 1 of Snohomish County, Washington, and Metropolitan Water
District of Southern California.
These three settlements are subject to the approval of the FERC
and the Bankruptcy Court for the Southern District of New York.
Headquartered in Houston, Texas, Enron Corporation filed for
chapter 11 protection on December 2, 2001 (Bankr. S.D.N.Y. Case
No. 01-16033) following controversy over accounting procedures,
which caused Enron's stock price and credit rating to drop
sharply. Judge Gonzalez confirmed the Company's Modified Fifth
Amended Plan on July 15, 2004, and numerous appeals followed. The
Debtors' confirmed chapter 11 Plan took effect on Nov. 17, 2004.
Martin J. Bienenstock, Esq., and Brian S. Rosen, Esq., at Weil,
Gotshal & Manges, LLP, represent the Debtors in their
restructuring efforts. Luc A. Despins, Esq., Matthew Scott Barr,
Esq., and Paul D. Malek, Esq., at Milbank, Tweed, Hadley & McCloy,
LLP, represent the Official Committee of Unsecured Creditors.
ENVIRONMENTAL SYSTEMS: Moody's Lifts Caa1 $90MM Loan Rating to B3
-----------------------------------------------------------------
Moody's Investors Service assigned ratings to the proposed senior
secured first lien Term Loan C of Environmental Systems Products
Holdings Inc.'s and upgraded the existing second lien senior
secured bank loan. The proposed financing is intended to
partially repay the second lien credit facility. Concurrently,
Moody's affirmed existing first lien ratings and the Corporate
Family Rating of B2. These actions acknowledge the company's
continued leadership position in its principal market segments,
certain new business initiatives and the longer-term financing
benefits of the transaction itself.
Moody's took these rating actions:
* Assigned a B2 rating to the proposed $75 million
senior secured first lien Term Loan C due 2009;
* Affirmed the B2 rating on the existing $5 million
senior secured first lien revolving credit facility
due 2008;
* Affirmed the B2 rating on the remaining $71.6 million
senior secured first lien Term Loan B due 2008;
* Upgraded the rating on the remaining $90 million
guaranteed second lien senior secured term loan maturing
in December 2010 to B3 from Caa1;
* Affirmed the B2 Corporate Family Rating;
The ratings outlook is stable.
The proceeds from the proposed $75 million First Lien Term Loan C
will be used to repay about $72 million of the Second Lien Credit
Facility and to pay transaction fees and expenses of about
$3 million. The ratings are contingent upon the receipt of
final documentation in form and substance acceptable to Moody's.
The ratings are constrained by declining revenues in 2004 and
2005; declines in operating margins in 2005; significant pro-forma
financial leverage with debt to EBITDA at 3.7 times 2005 EBITDA;
a weak pro forma balance sheet with goodwill and intangibles
comprising 50% of the company's total assets, and negative
tangible equity of approximately $133.3 million, both at
Dec. 31, 2005. Further, the ratings are constrained by the
company's exposure to environmental regulation and the relatively
short maturity profile of the company's portfolio of centralized
testing contracts. In particular, even though ESP has a good
record of contract renewals, six out of ten major programs mature
in the next two years. The ratings also incorporate the potential
for certain areas attaining EPA emissions standards as has
happened in Dayton, Ohio and Cincinnatti, Ohio and the possibility
that the state could eliminate relevant testing programs.
The ratings are supported by the company's leadership position in
light-duty vehicle emissions testing in the US; expected expansion
in new business areas which leverage ESP's vehicle inspection and
testing competencies; a revenue base with geographic and product
diversity, with approximately 75% of revenues coming from the
higher margin centralized testing services and approximately 25%
of revenues coming from equipment sales in decentralized states;
the good historical renewal rates on the centralized testing
contracts; the company's leading market shares in both centralized
testing and equipment sales; and a predictable cash flow stream
from the centralized testing operations. Further, the ratings are
supported by the expectation of lower financing costs going
forward as a result of the partial retirement of second lien debt.
The stable rating outlook reflects Moody's expectation that ESP
will be successful in renewing its maturing contracts, which are
typically about five years in duration. The company's 2005 pro
forma adjusted free cash flow to debt ratio exceeded 10% and is
expected to remain positive but may come under pressure unless the
company succeeds with certain new business initiatives.
Successful execution on new, related, vehicle testing businesses,
ongoing renewal of the company's testing contracts and sustainable
adjusted cash flow to debt ratios of the order of 10% could lead
to an improvement in ratings outlook. Increases in leverage or
material debt-financed acquisitions may have negative rating
implications. Inability to renew maturing contracts, whether
through competitive pressures or states eliminating testing
programs, may also put negative pressure on ratings.
The ratings on the existing senior secured guaranteed first lien
facilities and the proposed guaranteed first lien Term Loan C form
the preponderance of the capital structure and are rated the same
as the Corporate Family Rating, which is B2. The borrower is the
holding company, Environmental Systems Products Holdings Inc. The
first lien facilities, including the proposed Term Loan C are
guaranteed by ESP and its current direct and indirect
subsidiaries.
The collateral package includes a first priority perfected lien on
substantially all tangible and intangible assets of the company,
excluding the Missouri assets which are pledged as collateral
under master leases. The majority of the pledged assets are
comprised of goodwill and intangibles, property plant and
equipment and assets held under capital leases. The first Lien
Term Loan C will be pari passu with the existing first lien
facilities and will be subject to the same terms and conditions
but will mature one year later in December 2009 rather than
December 2008. The Term Loan C will amortize in equal quarterly
installments equal to 1% a year of the original principal amount
until the third anniversary of the initial funding and the balance
will be payable upon maturity.
The upgrade of the guaranteed second lien senior secured credit
facility to B3 from Caa1 reflects the expectation of minimal
losses in a distressed sale scenario, based on an enterprise value
which incorporates ESPs record of contract renewal. The rating is
one notch below the Corporate Family Rating, reflecting the
effective subordination of the second lien facility to the first
lien facilities. The borrower under the second lien facility is
also the holding company, Environmental Systems Products Holdings
Inc. Because of the substantial level of intangibles in the
capital structure, second lien secured lenders are expected to
have limited recourse in a liquidation scenario.
Environmental Systems Products Holdings Inc., with 2005 revenues
of approximately $241 million, is headquartered in East Granby,
Connecticut. Through its Envirotest Systems Corp., operating
subsidiary, the company operates centralized vehicle emission
testing programs under multi-year contracts entered into with
state, provincial and municipal governments. Through its
Environmental Systems Products, Inc., operating subsidiary, the
company designs, assembles and sells vehicle emission testing
equipment to decentralized facilities. ESP is a privately held
company, of which approximately 68% is controlled by Credit
Suisse.
EQUITY ONE: Closes Sale of $125 Mil. of Senior Unsecured Notes
--------------------------------------------------------------
Equity One, Inc. (NYSE:EQY) closed its previously announced sale
of $125 million principal amount of 6% senior unsecured notes due
Sept. 15, 2016. The notes were priced on Tuesday, March 7, 2006,
at 99.277% with a yield to maturity of 6.094%, representing a
spread at the time of pricing of 1.35% to the February 2016
Treasury note. Net proceeds of the offering were used to repay
existing indebtedness under the Company's unsecured revolving
credit facility.
All securities sold in this offering are rated Baa3 (positive
outlook) by Moody's Investors Service and BBB- (positive outlook)
by Standard & Poor's.
The joint book-running managers are:
* Banc of America Securities, LLC,
* Deutsche Bank Securities Inc. and
* Wachovia Capital Markets, LLC.
The co-managers are:
* BB&T Capital Markets, Inc.,
* Comerica Securities, Inc.,
* Harris Nesbitt Corp.,
* PNC Capital Markets LLC,
* SunTrust Capital Markets, Inc. and
* Wells Fargo Securities, LLC.
The notes were sold under the Company's registration statement
filed on March 6, 2006 with the Securities and Exchange
Commission. The offering of the notes was made only by means of a
prospectus supplement, prospectus and authorized free writing
prospectus which have been filed with, and may be obtained from,
the Securities and Exchange Commission.
Copies of these offering documents relating to the offering may
also be obtained from:
Deutsche Bank Securities Inc.
Attention: High Grade Syndicate Desk
60 Wall Street
New York, NY 10005
Telephone 1-800-503-4611
Headquartered in North Miami Beach, Florida, Equity One Inc. --
http://www.equityone.net/-- is a leading real estate investment
trust that principally acquires, renovates, develops and manages
neighborhood and community shopping centers anchored by national
and regional supermarket chains and other necessity-oriented
retailers such as drug stores or discount retail stores. The
Company's 20.2 million square foot portfolio consists of 195
properties encompassing 128 supermarket-anchored shopping centers,
seven drug store-anchored shopping centers, 49 retail-anchored
shopping centers, six development parcels and five other non-
retail properties, as well as a non-controlling interest in one
unconsolidated joint venture.
* * *
Moody's Investors Service assigned a Ba1 Preferred Stock rating to
Equity One on July 16, 2003.
FINANCE AMERICA: Fitch Affirms Class B-2 Loan's Rating at BB
------------------------------------------------------------
Fitch affirmed these Finance America Mortgage Loan Trust
issues:
Series 2003-1:
-- Class I-A1 at 'AAA'
-- Class II-A2 at 'AAA'
-- Class M-1 at 'AA'
-- Class M-2 at 'A'
-- Class M-3 at 'A-'
-- Class M-4 at 'BBB+'
-- Class M-5 at 'BBB'
-- Class M-6 at 'BBB-'
Series 2004-1:
-- Class I-A1 at 'AAA'
-- Class I-A2 at 'AAA'
-- Class II-A1 at 'AAA'
-- Class II-A2 at 'AAA'
-- Class A-SIO at 'AAA'
-- Class M-1 at 'AAA'
-- Class M-2 at 'AA'
-- Class M-3 at 'AA'
-- Class M-4 at 'AA-'
-- Class M-5 at 'A'
-- Class M-6 at 'A-'
-- Class M-7 at 'BBB+'
-- Class M-8 at 'BBB'
Series 2004-2:
-- Class I-A1 at 'AAA'
-- Class II-A2 at 'AAA'
-- Class II-A3 at 'AAA'
-- Class M-1 at 'AA+'
-- Class M-2 at 'AA+'
-- Class M-3 at 'AA'
-- Class M-4 at 'AA-'
-- Class M-5 at 'A'
-- Class M-6 at 'A-'
-- Class M-7 at 'BBB+'
-- Class M-8 at 'BBB'
-- Class M-9 at 'BBB-'
Series 2004-3:
-- Class I-A1 at 'AAA'
-- Class I-A2 at 'AAA'
-- Class II-A1 at 'AAA'
-- Class M-1 at 'AA+'
-- Class M-2 at 'AA+'
-- Class M-3 at 'AA'
-- Class M-4 at 'AA'
-- Class M-5 at 'A+'
-- Class M-6 at 'A-'
-- Class M-7 at 'A-'
-- Class M-8 at 'BBB+'
-- Class M-9 at 'BBB'
-- Class B-1 at 'BBB-'
-- Class B-2 at 'BB'
All of the mortgage loans in the aforementioned transactions
were either originated or acquired by Finance America, LLC.
The mortgage loans consist of fixed- and adjustable-rate,
fully-amortizing and balloon payment mortgage loans and are
secured by first and second liens, primarily on one- to
four-family residential properties.
The affirmations reflect a satisfactory relationship between
credit enhancement and future loss expectations and affect
approximately $1.09 billion of outstanding certificates. As of
the February 2006 distribution date, the transactions are seasoned
from a range of 15 to 27 months, and the pool factors (current
mortgage loan principal outstanding as a percentage of the initial
pool) range from approximately 23% (series 2003-1) to 59% (series
2004-3). To date, cumulative losses range from 0.14% (series
2004-3) to 0.77% (series 2003-1).
Aurora Loan Services LLC, rated 'RMS1-' for master servicing by
Fitch, is Master Servicer for the series 2004-1 transaction.
Litton Loan Servicing LP, rated 'RPS1' for subprime products, is
the Servicer for series 2003-1, 2004-1 and 2004-3 transactions.
HomeEq Servicing Corporation, rated 'RPS1' for subprime products,
is the Servicer for series 2004-2 transaction.
FLYI INC: Wants Exclusive Plan-Filing Period Extended to June 30
----------------------------------------------------------------
FLYi Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court
for the District of Delaware to extend, until June 30, 2006, the
period within which they alone have the exclusive right to file a
chapter 11 plan. The Debtors also ask the Court to extend, until
Aug. 31, 2006, the exclusive period to solicit acceptances of that
plan.
M. Blake Cleary, Esq., at Young Conaway Stargatt & Taylor LLP, in
Wilmington, Delaware, relates that during the initial phase of
their Chapter 11 cases, the Debtors expended substantial efforts
on the sale and investment proposal process, including:
* refining their business plan;
* meeting with interested parties and facilitating their due
diligence; and
* reviewing the bids that were ultimately received.
The Debtors sought and obtained, shortly after the Debtors'
bankruptcy petition date, a Court order approving procedures to
solicit bids for an investment or sale proposal relating to their
business and assets.
When the Debtors did not receive an acceptable bid that
contemplated the continuation of their operations as a concern,
they implemented their contingency plans for the discontinuation
of scheduled flight operations. The Debtors discontinued their
scheduled flight operations on Jan. 5, 2006.
Since then, the Debtors focused on winding down their affairs and
maximizing the value of their assets. The Debtors are currently
in the process of orderly disposing their remaining assets.
As of Mar. 2, 2006, the Debtors have closed or are in the
process of closing:
a. their concourse lease at Washington-Dulles International
Airport to United Airlines, Inc.;
b. an airbus purchase agreement with AVSA S.A.R.L.; and
c. the sale of:
i. a cabin trainer,
ii. slots at Westchester County Airport, and
iii. certain miscellaneous assets.
The Debtors also spent considerable time and resources returning
the entire fleet of 80 aircraft to their lessors and lenders.
Mr. Cleary contends that the Debtors' Chapter 11 cases have been
complex, requiring the Debtors to pursue a parallel-track during
a 60-day period involving an investment or sale proposal process
and contingency planning. In addition, the Debtors have not yet
had sufficient time to prepare a disclosure statement having
adequate information on which the creditors can make an informed
decision whether to vote on a plan.
Based on their cash on hand and estimated value of their
remaining assets, the Debtors believe that they will be in a
position to confirm and consummate a Chapter 11 plan and
disclosure statement during the second quarter of 2006.
In connection with the plan process, the Debtors will also be
commencing the claims reconciliation process. The general bar
date is March 31, 2006. Once the Bar Date passes, the Debtors
will have a better understanding of the amount and nature of
claims against the Company that will need to be addressed in
their Chapter 11 plan, Mr. Cleary points out.
The requested extension of the Exclusive Periods will not
prejudice the legitimate interests of any creditor, Mr. Cleary
assures the Court. The Debtors are in constant communication
with the Official Committee of Unsecured Creditors and its
professionals.
The Court will convene a hearing on March 20, 2006, to consider
the Debtors' request.
Headquartered in Dulles, Virginia, FLYi, Inc., aka Atlantic Coast
Airlines Holdings, Inc. -- http://www.flyi.com/-- is the parent
of Independence Air Inc., a small airline based at Washington
Dulles International Airport. The Debtor and its six affiliates
filed for chapter 11 protection on Nov. 7, 2005 (Bankr. D. Del.
Case Nos. 05-20011 through 05-20017). Brendan Linehan Shannon,
Esq., M. Blake Cleary, Esq., and Matthew Barry Lunn, Esq., at
Young, Conaway, Stargatt & Taylor, represent the Debtors in their
restructuring efforts. Brett H. Miller, Esq., at Otterbourg,
Steindler, Houston & Rosen, P.C., represents the Official
Committee of Unsecured Creditors. As of Sept. 30, 2005, the
Debtors listed assets totaling $378,500,000 and debts totaling
$455,400,000. (FLYi Bankruptcy News, Issue No. 13; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
FLYI INC: Wants Court Nod on Uniform Liquidation Procedures
-----------------------------------------------------------
FLYi Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court
for the District of Delaware to:
(a) establish uniform liquidation procedures for the sale of
certain of their inventory and equipment through an
auction sale or sales; and
(b) approve the sale of the Auction Assets through the
Liquidation Procedures, free and clear of all liens,
claims, encumbrances and other interests without the need
for further Court hearing.
The Debtors have determined that the most efficient way to
maximize the value of their assets is to retain an auctioneer and
sell the assets at a public auction:
Asset Estimated Value
----- ---------------
Ground Support Equipment $4,700,000 - $6,000,000
Spare Parts Inventory $2,500,000 - $3,300,000
Tooling and Equipment $600,000 - $800,000
Office and Computer Equipment $8,600,000 - $11,050,000
-------------------------
TOTAL $16,400,000 - $21,150,000
=========================
M. Blake Cleary, Esq., at Young Conaway Stargatt & Taylor, LLP,
in Wilmington, Delaware, asserts that the Sale should be
authorized because an auction process will provide a market test
for the price of each of the Auction Assets, ensuring that each
piece of the property will be sold to the highest bidder.
The Debtors chose Starman Brothers Auctions, Inc., as auctioneer
for the Auction Assets. Starman will organize, manage and
conduct the Liquidation Procedures pursuant to which the Auction
Assets will be sold.
Starman will advertise the sale of the Auction Assets in
appropriate trade journals, newspapers, circulars, and other
advertisements and otherwise, displaying and marketing the
Auction Assets to potential bidders.
Starman will then conduct one or more auctions at the Debtors'
facility at Dulles International Airport in Dulles, Virginia, on
or before April 13, 2006, or on another time as agreed upon by
the parties.
The Auction will be conducted without reserve and the Auction
Assets will be sold on the spot to the highest bidder.
Headquartered in Dulles, Virginia, FLYi, Inc., aka Atlantic Coast
Airlines Holdings, Inc. -- http://www.flyi.com/-- is the parent
of Independence Air Inc., a small airline based at Washington
Dulles International Airport. The Debtor and its six affiliates
filed for chapter 11 protection on Nov. 7, 2005 (Bankr. D. Del.
Case Nos. 05-20011 through 05-20017). Brendan Linehan Shannon,
Esq., M. Blake Cleary, Esq., and Matthew Barry Lunn, Esq., at
Young, Conaway, Stargatt & Taylor, represent the Debtors in their
restructuring efforts. Brett H. Miller, Esq., at Otterbourg,
Steindler, Houston & Rosen, P.C., represents the Official
Committee of Unsecured Creditors. As of Sept. 30, 2005, the
Debtors listed assets totaling $378,500,000 and debts totaling
$455,400,000. (FLYi Bankruptcy News, Issue No. 13; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
FLYI INC: Wants to Hire Starman Brothers as Auctioneer
------------------------------------------------------
FLYi Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court
for the District of Delaware for permission to employ Starman
Brothers Auctions, Inc., as their auctioneer.
The Debtors tell the Court that in order to maximize the value of
their assets, they have determined to sell certain Ground Support
Equipment, Spare Parts Inventory, Tooling and Equipment, and
Office and Computer Equipment through an auction sale.
Starman Brothers will:
a. advertise the sale of the Auction Assets in appropriate
trade journals, newspapers, circulars and prepare a catalog
and brochure of the Auction Assets for distribution to
clients on Starman's mailing list for the sale;
b. prepare the Auction Assets by lots, or display the Auction
Assets at the location of the sale in a manner designed to
induce bids for the highest and the best offer;
c. furnish auctioneers to sell the Auction Assets, and employ
other assistance as may be necessary;
d. conduct an auction of the Auction Assets; and
e. make a full and complete accounting for all of the Auction
Assets sold at the auction.
From the gross amount of the proceeds from the sale of the
Auction Assets, the Debtors will pay Starman these commissions:
Buyer's Seller's
Gross Sales Premium Commission
----------- ------- ----------
First $5,000,000 5% 2.5%
$5,000,000 to $6,000,000 5% 3.0%
$6,000,000 to $7,000,000 5% 4.0%
$7,000,000 to $8,000,000 5% 5.0%
$8,000,000 to $9,000,000 5% 6.0%
$9,000,000 to $10,000,000 5% 7.0%
$10,000,000 and above 5% 8.0%
In addition, Starman will seek reimbursement of actual
out-of-pocket expenses associated with the auction, up to an
$80,000 cap. Auction expenses in excess of $80,000 will be
Starman's responsibility.
According to M. Blake Cleary, Esq., at Young Conaway Stargatt &
Taylor, LLP, in Wilmington, Delaware, Starman has guaranteed that
the amount of Gross Sales less the amounts payable to Starman
will equal at least $8,000,000. To the extent the Net Sales are
less than $8,000,000, Starman will pay to the Debtors an amount
equal to that deficiency, up to a maximum amount of $2,000,000.
Starman will post a letter of credit acceptable to the Debtors to
secure that obligation.
Steve Starman, president of Starman Brothers, assures the Court
that the firm does not hold an interest adverse to the Debtors or
their estates. Starman is a "disinterested person" as that term
is defined in Section 101(14) of the Bankruptcy Code.
Headquartered in Dulles, Virginia, FLYi, Inc., aka Atlantic Coast
Airlines Holdings, Inc. -- http://www.flyi.com/-- is the parent
of Independence Air Inc., a small airline based at Washington
Dulles International Airport. The Debtor and its six affiliates
filed for chapter 11 protection on Nov. 7, 2005 (Bankr. D. Del.
Case Nos. 05-20011 through 05-20017). Brendan Linehan Shannon,
Esq., M. Blake Cleary, Esq., and Matthew Barry Lunn, Esq., at
Young, Conaway, Stargatt & Taylor, represent the Debtors in their
restructuring efforts. Brett H. Miller, Esq., at Otterbourg,
Steindler, Houston & Rosen, P.C., represents the Official
Committee of Unsecured Creditors. As of Sept. 30, 2005, the
Debtors listed assets totaling $378,500,000 and debts totaling
$455,400,000. (FLYi Bankruptcy News, Issue No. 13; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
FOAMEX INT'L: Wants Until June 16 to Make Lease-Related Decisions
-----------------------------------------------------------------
Foamex International, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware to further extend
the deadline by which they must assume, assume and assign, or
reject unexpired non-residential real property leases until
June 16, 2006.
Currently, the Debtors are parties to 37 unexpired
non-residential real property leases. The Debtors lease
real property for manufacturing, fabricating and warehousing
their products. The Debtors also utilize certain properties
for corporate administrative functions.
The Debtors have sought and obtained the Court's approval to
reject 11 unexpired leases. However, the Debtors need more time
to determine what to do with their Unexpired Leases, Pauline K.
Morgan, Esq., at Young Conaway Stargatt & Taylor LLP, in
Wilmington, Delaware, says.
The Debtors' current efforts are focused primarily on evaluating
and optimizing their operational efficiencies and negotiating
with their major creditor constituencies to determine if a
consensual plan of reorganization can be reached, Ms. Morgan
tells the Court. "It would be premature for the Debtors to
determine which unexpired leases to assume or reject as of [this
time] given the current and ongoing plan negotiations."
Without an extension, the Debtors may be forced to prematurely
assume the Unexpired Leases, which could lead to unnecessary
administrative claims against their estates if the Leases
ultimately are terminated. Conversely, if the Debtors
precipitously reject the Unexpired Leases, they may forego
significant value in the Unexpired Leases, in addition to
creating large unwarranted rejection damage claims in their
Chapter 11 cases.
Ms. Morgan assures the Court that the Debtors are substantially
current on their postpetition rent obligations under each
Unexpired Lease and they intend to timely perform their
obligations under each the Unexpired Lease. The Court-approved
$320,000,000 postpetition financing will enable the Debtors to
continue to perform timely all of their postpetition obligations
under the Unexpired Leases.
The Court will convene a hearing today, Tuesday, March 14, 2006,
to consider the Debtors' request. By application of Del. Bankr.
LR 9006-2, the deadline is automatically extended until the Court
rules on the Debtors' request.
Headquartered in Linwood, Pa., Foamex International Inc. --
http://www.foamex.com/-- is the world's leading producer of
comfort cushioning for bedding, furniture, carpet cushion and
automotive markets. The Company also manufactures high-
performance polymers for diverse applications in the industrial,
aerospace, defense, electronics and computer industries. The
Company and eight affiliates filed for chapter 11 protection on
Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693).
Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP,
represent the Debtors in their restructuring efforts. Houlihan,
Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the
ad hoc committee of Senior Secured Noteholders. As of July 3,
2005, the Debtors reported $620,826,000 in total assets and
$744,757,000 in total debts. (Foamex International Bankruptcy
News, Issue No. 13; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
FOAMEX INT'L: Taps Assessment Technologies as Tax Consultants
-------------------------------------------------------------
Pursuant to Section 327(a) of the Bankruptcy Code, Foamex
International, Inc., and its debtor-affiliates seek the U.S.
Bankruptcy Court for the District of Delaware's authority to
employ Assessment Technologies, Ltd., as their property tax
consultants.
The Debtors believe that ATL is well qualified to serve as their
property tax consultants, and has the background and expertise to
help them achieve tax savings.
ATL will primarily provide the Debtors consultancy on appealing
tax assessments and challenging tax claims amounts for property
owned or leased by the Debtors, Pauline K. Morgan, Esq., at Young
Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, tells the
Court.
ATL will review assessments and claims for tax year 2006 and all
prior years.
Specifically, ATL will:
(a) review targeted tax assessments on the Debtors' owned or
leased property;
(b) analyze the economic feasibility of attaining reduced
taxes;
(c) represent the Debtors before the appropriate tax assessors
and court authorities to adjust assessments, unclaimed
taxes or claimed tax amounts; and
(d) take reasonable actions to further its plan for
administration, without additional approval requirements.
ATL will deliver preliminary findings as to the equitable nature
of individual property tax assessments and recommend a preferred
method of dealing with each property tax assessment, bill or
claim consistent with the Debtors' position on administering
payments and closing out these liabilities.
The Debtors will pay ATL 40% of all Net Tax Savings they will
receive as a result of ATL's efforts for each tax year. The Net
Tax Savings is the balance of the Tax Savings that remains after
deducting for reimbursement of ATL's expenses.
ATL will be responsible for fronting all reimbursable expenses,
including special property tax counsel legal fee, third party
appraisal fees, travel expenses and any other external costs it
will incur in pursuing Tax Savings.
Because ATL will be compensated on a contingency fee basis rather
than hourly billings, the Debtors ask the Court not to require
ATL to file formal interim fee applications. Rather, the Debtors
ask the Court to permit ATL to simply provide a summary of tax
savings generated.
James Hausman, senior vice president of ATL, assures the Court
that the firm does not represent or hold any interest adverse to
the Debtors' estates or their creditors. ATL is a "disinterested
person", as that term is defined in Section 101(14) of the
Bankruptcy Code.
Headquartered in Linwood, Pa., Foamex International Inc. --
http://www.foamex.com/-- is the world's leading producer of
comfort cushioning for bedding, furniture, carpet cushion and
automotive markets. The Company also manufactures high-
performance polymers for diverse applications in the industrial,
aerospace, defense, electronics and computer industries. The
Company and eight affiliates filed for chapter 11 protection on
Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693).
Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP,
represent the Debtors in their restructuring efforts. Houlihan,
Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the
ad hoc committee of Senior Secured Noteholders. As of July 3,
2005, the Debtors reported $620,826,000 in total assets and
$744,757,000 in total debts. (Foamex International Bankruptcy
News, Issue No. 13; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
FOAMEX INT'L: Lorro Demands Decision on JK Program Supply Pact
--------------------------------------------------------------
Lorro, Inc., was awarded a contract to supply to Collins & Aikman
TJ Program parts to be installed on the DaimlerChrysler Jeep
Wrangler. DaimlerChrysler had awarded the contract to Collins &
Aikman, which in turn awarded the same parts to Lorro to supply.
Lorro in turn selected Foamex International, Inc., to manufacture
the TJ Program parts pursuant to a Supply Agreement dated
February 3, 2003. In exchange, Lorro is obligated to pay for the
TJ Program parts manufactured by Foamex.
The JK Program Contract
In 2005, Lorro was awarded a similar program for the 2007 Jeep
Wrangler. Lorro intended for Foamex to supply the impending JK
Program parts. Lorro then issued purchase orders for Foamex to
acquire specialized tooling necessary to make the JK Program
parts. Pursuant to the terms of the JK Program Tooling Purchase
Orders, Lorro is not obligated to pay Foamex for tooling costs,
until Lorro receives payment from DaimlerChrysler.
Pursuant to the JK Program, Foamex assigned its Tennessee
facility to manufacture the necessary automobile parts for Lorro.
However, in late January 2006, Foamex informed Lorro of a strong
likehood that the Tennessee manufacturing facility would close
pursuant to its Plan of Reorganization.
The information caused reasonable commercial insecurity to Lorro,
Raymond H. Lernisch, Esq., at Adelman Lavine Gold and Levin, PC,
in Wilmington, Delaware, relates. Lorro subsequently terminated
the JK Program and sought an alternate supplier.
However, in late January 2006, Foamex withdrew its statement and
informed Lorro that it is not closing the Tennessee facility.
Foamex Holds TJ Program Parts Hostage
According to Mr. Lernisch, Foamex then refused to supply TJ
Program parts unless their demands are met:
(a) Payment of $145,875, in tooling manufacturing charges for
the JK Program;
(b) Payment of $68,932, in termination charges associated with
the re-sourcing of the JK Program parts;
(c) Retroactive price increase on TJ Program parts commencing
November 1, 2005; and
(d) Cash in advance and price increase terms for future
shipments of the TJ Program parts.
Foamex makes two deliveries a week, and informed Lorro that after
February 28, 2006, it will withhold further deliveries until
Lorro pays all compensation it demanded.
Foamex's failure to supply the TJ Parts will result in the
shutting down of the production line, Mr. Lernisch tells the U.S.
Bankruptcy Court for the District of Delaware. The damages caused
by the shutdown are estimated to be $9,600,000 a day. The damages
will flow down from DaimlerChrysler, to Collins & Aikman, to Lorro
and to Foamex.
Because it would take weeks for Lorro to resource the part, the
potential rejection charge to Foamex International Inc., and its
debtor-affiliates' estate of the Supply Agreement could easily
exceed $50,000,000, Mr. Lernisch adds.
Foamex's Demands are Unreasonable
Mr. Lernisch argues that Foamex does not have the right to
withhold delivery of the TJ Program parts based on Lorro's
non-payment of the tooling charges in the JK Program. As agreed,
Lorro will only pay the tooling charges upon the receipt of the
final payment from DaimlerChrysler. DaimlerChrysler will only
pay Lorro after the tooling has been completed, and after the
part has passed the Production Part Approval Process. As of
March 2, 2006, DaimlerChrysler has not yet paid Lorro.
Lorro is still in the process of reviewing and verifying Foamex's
cancellation charges, Mr. Lernish relates. When finished, Lorro
will make its final decision whether to accept or reject the
cancellation charges.
Nevertheless, since Lorro is not in default of any of the
Purchase Order terms and conditions with respect to the TJ
Program, Foamex does not have the right to stop delivery of the
TJ Program parts based on the outstanding cancellation charges
for the re-sourcing of the JK Program parts, Mr. Lernisch
asserts.
Furthermore, pursuant to the Supply Agreement, Foamex is not
entitled to a price increase without Lorro's agreement, Mr.
Lernisch points out. Foamex's refusal to ship absent a price
increase amounts to an anticipatory breach of contract.
Lorro asks the Court to compel Foamex to decide immediately
whether to assume or reject the Supply Agreement.
Headquartered in Linwood, Pa., Foamex International Inc. --
http://www.foamex.com/-- is the world's leading producer of
comfort cushioning for bedding, furniture, carpet cushion and
automotive markets. The Company also manufactures high-
performance polymers for diverse applications in the industrial,
aerospace, defense, electronics and computer industries. The
Company and eight affiliates filed for chapter 11 protection on
Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693).
Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP,
represent the Debtors in their restructuring efforts. Houlihan,
Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the
ad hoc committee of Senior Secured Noteholders. As of July 3,
2005, the Debtors reported $620,826,000 in total assets and
$744,757,000 in total debts. (Foamex International Bankruptcy
News, Issue No. 13; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
FORD MOTOR: Plante & Moran to Audit Employees' Savings Plans
------------------------------------------------------------
The Ford Motor Company Savings and Stock Investment Plan for
Salaried Employees and the Ford Motor Company Tax-Efficient
Savings Plan for Hourly Employees engaged Plante & Moran, PLLC, as
the independent accountant to audit their financial statements.
PricewaterhouseCoopers LLP, the Plans' prior independent
accountant, has been dismissed as of March 8, 2006. As a result,
Plante & Moran will conduct the audit of the Plans' financial
statements for the year ended December 31, 2005, and year ended
December 31, 2004. The decision to change the independent
accountant was approved by the Audit Committee of Ford Motor
Company's Board of Directors on March 8, 2006.
PwC's will still be the independent registered public accounting
firm of Ford Motor Company and Ford Motor Credit Company.
PwC's reports on the Plans' financial statements for the years
ended December 30, 2004, and December 30, 2003, did not contain an
adverse opinion or a disclaimer of opinion, and were not qualified
or modified as to uncertainty, audit scope, or accounting
principle. During the years ended December 30, 2004, and December
30, 2003, and through March 8, 2006, there were no disagreements
with PwC on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure,
which disagreements, if not resolved to PwC's satisfaction.
Headquartered in Dearborn, Michigan, Ford Motor Company, is the
world's third largest automobile manufacturer. Ford Motor Co.
manufactures and distributes automobiles in 200 markets across six
continents. With more than 324,000 employees worldwide, the
company's core and affiliated automotive brands include Aston
Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and
Volvo. Its automotive-related services include Ford Motor Credit
Company and The Hertz Corporation.
* * *
As reported in the Troubled Company Reporter on Jan. 13, 2006,
Moody's Investors Service lowered the ratings of Ford Motor
Company (Corporate Family and long-term to Ba3 from Ba1). Ford's
SGL-1 Speculative Grade Liquidity rating is affirmed. The rating
outlook for Ford Motor is negative.
As reported in the Troubled Company Reporter on Jan. 9, 2006,
Standard & Poor's Ratings Services lowered its corporate credit
ratings on Ford Motor Co., Ford Motor Credit Co. (Ford Credit),
and all related entities to 'BB-/B-2' from 'BB+/B-1' and removed
them from CreditWatch, where they were placed on Oct. 3, 2005,
with negative implications. The outlook is negative.
Consolidated debt outstanding totaled $141.7 billion at Sept. 30,
2005.
As reported in the Troubled Company Reporter on Dec. 21, 2005,
Fitch Ratings has downgraded the issuer default rating and senior
unsecured debt ratings of Ford Motor Company, Ford Credit Company
and affiliate ratings to 'BB+' from 'BBB-'. The ratings of The
Hertz Corporation and its subsidiaries are not affected by this
action. Ford's Rating Outlook remains Negative.
FREEDOM RINGS: Panel Gets Court Okay to Hire Parente Randolph
-------------------------------------------------------------
The Official Committee of Unsecured Creditors of Freedom Rings,
LLC, sought and obtained authority from the U.S. Bankruptcy Court
for the District of Delaware to employ Parente Randolph, LLC,
as its accountants and financial advisors, nunc pro tunc to
Dec. 8, 2005.
As reported in the Troubled Company Reporter on Jan. 11, 2006,
Parente Randolph is expected to:
(a) assist and advise the Committee in the analysis of the
Debtor's current financial position;
(b) assist and advise the Committee in its analysis of the
Debtor's:
-- business plans,
-- cash flow projections,
-- restructuring programs,
-- selling, general and administrative structure, and
-- other reports or analyses prepared by the Debtor or
its professionals,
in order to assist the Committee in its assessment of the
Debtor's:
-- business viability,
-- the reasonableness of projections and underlying
assumptions, and
-- the impact of market conditions on the Debtor's
forecasted results;
(c) assist and advise the Committee in its analysis of proposed
transactions for which the Debtor seeks Court approval
including:
-- evaluation of competing bids in connection with the
divestiture of corporate assets, DIP financing or use
of cash collateral;
-- assumption or rejection of leases and other executory
contracts; and
-- management compensation and retention and severance
plans;
(d) assist and advise the Committee in its analysis of the
Debtor's internally prepared financial statements and
related documentation, in order to evaluate the Debtor's
performance as compared to its projected results;
(e) attend and advise at meetings or calls with the Committee
and its counsel and representatives of the Debtor and other
parties;
(f) assist and advise the Committee and its counsel in the
development, evaluation and documentation of any plan of
reorganization or strategic transactions;
(g) assist and render expert testimony on behalf of the
Committee;
(h) assist and advise the Committee in its analysis of the
Debtor's hypothetical liquidation analyses under various
scenarios;
(i) assist and advise the Committee in other services
including:
-- other bankruptcy, reorganization and related
litigation support efforts;
-- tax services;
-- valuation assistance;
-- corporate finance or M&A advice; or
-- compensation and benefits consulting; and
(j) provide other services as may be requested.
Howard S. Cohen, CPA, CFE, a principal at the Firm, disclosed that
his Firm's professionals bill:
Designation Hourly Rate
----------- -----------
Principals/Directors $300 - $415
Managers/Senior Associates $175 - $315
Staff $100 - $175
Paraprofessional $80 - $100
Mr. Cohen assures the Court that his Firm is "disinterested " as
that term is defined in Section 101(14) of the Bankruptcy Code.
Headquartered in Winston-Salem, North Carolina, Freedom Rings LLC
is a majority-owned subsidiary and franchisee partner of Krispy
Kreme Doughnuts, Inc., in the Philadelphia region. The Debtor
operates six out of the approximately 360 Krispy Kreme stores and
50 satellites located worldwide. The Company filed for chapter 11
protection on Oct. 16, 2005 (Bankr. D. Del. Case No. 05-14268).
M. Blake Cleary, Esq., Margaret B. Whiteman, Esq., and Matthew
Barry Lunn, Esq., at Young Conaway Stargatt & Taylor, LLP,
represent the Debtor in its restructuring efforts. Bradford J.
Sandler, Esq., and Jonathan M. Stemerman, Esq., at Adelman Lavine
Gold and Levin, PC provide the Official Committee of Unsecured
Creditors with legal advice. When the Debtor filed for protection
from its creditors, it estimated $10 million to $50 million in
assets and debts.
FREEDOM RINGS: Wants Confirmation Hearing Scheduled for April 20
----------------------------------------------------------------
Freedom Rings, LLC, asks the U.S. Bankruptcy Court for the
District of Delaware, to schedule the hearing to confirm its
Chapter 11 Plan of Liquidation on April 20, 2006.
Freedom Ring's Plan, as reported in the Troubled Company Reporter
on Feb. 17, 2006, contemplates the liquidation of Debtor's assets
and distribution of the proceeds to its creditors.
Terms of the Plan
Under the Plan,
1. Administrative Claims,
2. Priority Tax Claims,
3. Fee Claims,
4. Krispy Kreme Doughnut Corp.'s DIP claim, and
5. Other Priority Claims,
are unimpaired and will be paid in full.
At the option of the Debtor and provided that holders of
miscellaneous secured claims don't elect to bifurcate their claims
under Section 1111(b) of the Bankruptcy Code, holders of
miscellaneous secured claims will receive either:
(a) return of the collateral securing the claim;
(b) net proceeds from the disposition of the collateral
securing the claim, without recourse against the Debtor;
or
(c) any treatment agreed between the Debtor and the holder of
the miscellaneous secured claim.
Under the plan, Krispy Kreme, on account of its unsecured claim,
will receive its pro rata share of cash on hand plus proceeds from
the sale of the remaining assets less:
* the aggregate distributions to holders of allowed
administrative claims, allowed DIP claim, allowed fee
claims, allowed priority claims, allowed other priority
claims, and allowed miscellaneous secured claims; and
* payment of plan administrator expenses.
The Debtor tells the Court that if general unsecured claim holders
accept the plan and the confirmation order approves the release,
exculpation and injunctive provisions in the plan, or the
confirmation order is satisfactory to Krispy Kreme, then:
(i) Krispy Kreme's unsecured claim will be allowed and Krispy
Kreme will waive and give up its right to receive the
first $75,000 of the unsecured claims distribution
distributed on account of its unsecured claim. The
$75,000 will be distributed pro rata to general unsecured
claim holders; and
(ii) holders of general unsecured claims will be entitled to
receive, in addition to their pro rata share of the
unsecured claims distribution, their pro rata share of
Krispy Kreme's payment.
However, the Debtor relates, if holders of general unsecured
claims reject the plan or the confirmation order does not approve
the release, exculpation, and injunctive provisions of the plan,
or the confirmation is not satisfactory to Krispy Kreme, then
holders of general unsecured claims will only be entitled to their
pro rata share of the unsecured claims distributions.
Prepetition Lenders Contingent Secured Claims will receive no
distribution under the plan.
Holders of Equity Interests will receive no distribution and all
equity instruments will be cancelled on the effective date.
The Court has scheduled a hearing on Mar. 14, 2006, 10:30 a.m., to
consider the adequacy of the Debtor's Disclosure Statement.
Other Proposed Dates
The Debtor proposes that the Court establish March 14, 2006, as
the record date for determining creditors who may be entitled to
vote on the Plan, and give the unimpaired creditors until
April 10, 2006, at 4:00 pm to vote on the Plan.
For creditors seeking to have a claim temporarily allowed for
purposes of voting on the Plan, the Debtor proposes that they be
required to file a motion no later than March 31, 2006.
Furthermore, the Debtor proposes that any objection, comment or
response to confirmation of the Plan be filed with the Court and
served on the parties on April 13, 2006, at 4:00 pm (Eastern
Time).
Headquartered in Winston-Salem, North Carolina, Freedom Rings LLC
is a majority-owned subsidiary and franchisee partner of Krispy
Kreme Doughnuts, Inc., in the Philadelphia region. The Debtor
operates six out of the approximately 360 Krispy Kreme stores and
50 satellites located worldwide. The Company filed for chapter 11
protection on Oct. 16, 2005 (Bankr. D. Del. Case No. 05-14268).
M. Blake Cleary, Esq., Margaret B. Whiteman, Esq., and Matthew
Barry Lunn, Esq., at Young Conaway Stargatt & Taylor, LLP,
represent the Debtor in its restructuring efforts. Bradford J.
Sandler, Esq., and Jonathan M. Stemerman, Esq., at Adelman Lavine
Gold and Levin, PC provide the Official Committee of Unsecured
Creditors with legal advice. When the Debtor filed for protection
from its creditors, it estimated $10 million to $50 million in
assets and debts.
GLOBAL EMPIRE: Gets Court OK to Tap Fuqua & Keim as Bankr. Counsel
------------------------------------------------------------------
Global Empire Investments and Holdings, LLC sought and obtained
authority from the U.S. Bankruptcy Court for the Southern District
of Texas to employ Fuqua & Keim, LLP as its counsel.
Fuqua & Keim is expected to:
(a) provide the Debtor legal advice with respect to its
powers and duties as a Debtor-in-possession in the
continued operation of its business, and management of
its property;
(b) prepare all pleadings on behalf of the Debtor, as Debtor-
in-possession, which may be necessary herein;
(c) negotiate and submit a potential plan of arrangement
satisfactory to the Debtor, its estate, and the creditors
at large; and
(d) perform all other legal services for the Debtor as a
Debtor-in-possession which may become necessary to these
proceedings herein.
The Debtor discloses that Richard L. Fuqua, Esq., the attorney-in-
charge in this engagement, bills $400 per hour. The Debtor
further discloses that the Firm's other professionals bill:
Professional Hourly Rate
------------ -----------
Partners/Shareholders $300
Associates $125 - $175
Law Clerks $60 - $75
Legal Assistants $60 - $75
To the best of the Debtor's knowledge, Richard L. Fuqua and the
Firm do not represent any interest materially adverse to the
Debtor and is a disinterested person as that term is defined in
Section 101(14) of the Bankruptcy Code.
Headquartered in Houston, Texas, Global Empire Investments &
Holdings, LLC, filed for chapter 11 protection on Dec. 6, 2005
(Bankr. S.D. Tex. Case No. 05-95389). Richard L. Fuqua, II, Esq.,
at Fuqua & Keim, represents the Debtor in its restructuring
efforts. When the Debtor filed for protection from its creditors,
it estimated assets and debts between $10 million to $50 million.
GOODING'S SUPERMARKETS: Court Approves Akerman as Panel's Counsel
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors in Gooding's
Supermarkets, Inc.'s chapter 11 case sought and obtained
permission from the U.S. Bankruptcy Court for the Middle District
of Florida for permission to employ Akerman Senterfitt as its
bankruptcy counsel.
As reported in the Troubled Company Reporter on Feb. 27, 2006,
Akerman Senterfitt is expected to:
1) assist, advise and represent the Committee in its
consultation with the Debtor in relation to the
administration of its chapter 11 case and attend meetings
and negotiate with representatives of the Debtor, secured
creditors and other parties in interest;
2) assist, advise and represent the Committee in analyzing the
Debtor's assets and liabilities, investigate the extent and
validity of liens and review any proposed asset sales or
dispositions;
3) assist and advise the Committee in its examination and
analysis of the conduct of the Debtor's affairs and assist
in the review, analysis and negotiation of any funding or
funding arrangements;
4) assist the Committee in the review, analysis and
negotiation of any plan or plans of reorganization that may
be filed and assist in the review, analysis and negotiation
of the accompanying disclosure statement or statements;
5) take all necessary action to protect and preserve the
Committee's interests, including prosecuting actions on its
behalf, negotiating all litigation in which the Debtor is
involved and reviewing and analyzing all claims filed
against the Debtor's estate;
6) prepare on behalf of the Committee all necessary motions,
applications, answers, order, reports and papers in support
of positions taken by the Committee;
7) appear before the Bankruptcy Courts, the appellate courts
and other courts and protect the Committee's interests
before those courts; and
8) perform all other legal services to the Committee that are
necessary in the Debtors' chapter 11 case.
W. Glenn Jensen, Esq., a shareholder of Akerman Senterfitt, is one
of the lead attorneys from his Firm performing services to the
Committee. Mr. Jensen charges $270 per hour for his services.
Mr. Jensen reports Akerman Senterfitt's professionals bill:
Designation Hourly Rate
----------- -----------
Partners & Counsel $270 - $425
Associates $170 - $230
Paralegals $115 - $155
Akerman Senterfitt assures the Court that it does not represent
any interest materially adverse to the Debtor or its estate and
and is a "disinterested person" as that term is defined in Section
101(14) of the Bankruptcy Code and as modified by Section 1107(b).
Headquartered in Orlando, Florida, Gooding's Supermarkets, Inc.,
dba Gooding's, offers catering services and operates a chain of
supermarkets in Central Florida. The Company filed for chapter 11
protection on Dec. 30, 2005 (Bankr. M.D. Fla. Case No. 05-17769).
R. Scott Shuker, Esq., at Gronek & Latham LLP represents the
Debtor, When the Debtor filed for protection from its creditors,
it estimated assets of $1 million to $10 million and estimated
debts of $10 million to $50 million.
GRAFTECH INT'L: Equity Deficit Widened 4x to $209 Mil. at Dec. 31
-----------------------------------------------------------------
GrafTech International Ltd. (NYSE:GTI) disclosed its financial
results for the fourth quarter and year ended December 31, 2005.
2005 Fourth Quarter Highlights:
-- net sales increased seven percent, to $247 million, versus
the fourth quarter of 2004;
-- gross profit increased approximately 21 percent, to
$68 million or 27.6 percent of net sales, as compared to
$57 million, or 24.4 percent of net sales, in the fourth
quarter of 2004;
-- EBITDA increased 19 percent to $49 million, before
restructuring and impairment charges and other expense,
versus an EBITDA of $41 million, before such items, in the
fourth quarter of 2004;
-- non-cash U.S. deferred tax valuation allowance net increase
of $150 million resulted in a net loss of $148 million as
compared to net income of $9 million in the 2004 fourth
quarter;
-- income before special items was $16 million as compared to
$12 million in the 2004 fourth quarter; and
-- free cash flow before antitrust and restructuring payments
improved $30 million, to a positive $16 million from a
negative $14 million in the 2004 fourth quarter;
2005 Annual Highlights:
-- net sales increased five percent, to $887 million, versus
2004;
-- graphite electrode average sales revenue per metric ton
increased 13 percent, to $2,846, and graphite electrode
volume decreased 9 percent, to 201.3 thousand metric tons;
-- electronic thermal management (ETM) net sales increased
58 percent, to $19 million;
-- gross profit increased approximately 11 percent, to
$232 million or 26.2 percent of net sales, as compared to
$210 million, or 24.7 percent of net sales, in 2004;
-- EBITDA increased 8 percent to $159 million, before
restructuring and impairment charges and other expense,
versus EBITDA of $148 million, before such items and an
antitrust reserve adjustment, for 2004;
-- income before special items was $44 million the same as
2004; and
-- free cash flow before antitrust and restructuring payments
improved $31 million, to a negative $28 million from a
negative $59 million for 2004.
Craig Shular, chief executive officer of GTI, commented, "In 2005,
EAF steel production was virtually flat versus 2004. Although
annual 2005 EAF steel production was lower than originally
expected, graphite electrode customers took their full contracted
volumes for 2005, which resulted in higher customer electrode
inventory levels going into 2006."
Selling, general and administrative and research and development
expenses were $29 million in the 2005 fourth quarter as compared
to $25 million in the 2004 fourth quarter. The increase was
primarily due to a $1 million increase in research and development
expense to support growth in the company's ETM product line,
and a $2 million increase in administrative expense, including
$1 million of expense related to restricted stock granted to GTI
employees during 2005 as part of the company's long term incentive
program. The company expects to recognize about $3.3 million of
restricted stock expense in 2006 related to that grant. The
company realized an increase of $1 million of other administrative
expense.
Other expense, net, was $4 million in the 2005 fourth quarter,
primarily as a result of the negative impact of changes in
currency exchange rates on the company's euro-denominated
inter-company loans.
During the 2005 fourth quarter, GTI recorded a net restructuring
charge of $9 million related to its previously announced
productivity and cost savings program. The company also recorded
a $3 million charge related to the impairment of its long-lived
carbon electrode fixed assets in Columbia, Tennessee. The
company's carbon electrode product line is facing significant
production cost increases and pricing pressure. Given the recent
performance of, and outlook for, its carbon electrode product
line, GTI has been exploring strategic alternatives for this
product line. The company now expects to completely exit these
operations over the next 12 months. GTI expects to record closure
expenses of approximately $2 million in 2006 and $3 million in
2007. 2005 net sales of carbon electrodes were $36 million, with
slightly negative earnings before interest and taxes. GTI has
produced carbon electrodes in Columbia, Tennessee for almost 70
years. Carbon electrodes are used primarily in the production of
silicon metal, which is used in the manufacture of aluminum.
Interest expense was $14 million in the 2005 fourth quarter as
compared to $12 million in the 2004 fourth quarter, primarily due
to higher interest rates and higher average borrowings.
Provision for income tax expense was $166 million in 2005 as
compared to $46 million in 2004. GTI recorded a $150 million net
non-cash charge in the 2005 fourth quarter to increase the
valuation allowance against its U.S. deferred income tax assets.
An increase to the valuation allowance was determined to be
appropriate in accordance with Statement of Financial Accounting
Standards No. 109. This adjustment does not affect the company's
ability to utilize the deferred income tax assets to reduce future
income taxes of its U.S. taxpaying companies and does not impact
any existing financial covenants or any other provisions of GTI's
existing credit or debt agreements. The majority of these tax
assets represent existing and estimated excess foreign tax credits
that have extensive remaining useful lives. Of the existing
excess foreign tax credit carry forwards, none will expire prior
to the end of 2010; specifically, $1 million will expire at the
end of 2010, $17 million in 2011, $37 million in 2012, $2 million
in 2013, $9 million in 2015 and $26 million in 2016 and beyond.
The remaining U.S. deferred tax assets primarily represent
temporary differences or other actual and estimated credits that
ultimately have a life in excess of ten years.
The effective income tax rate in 2005, excluding the adjustment
described and other special charges, was 38 percent. GTI
estimates an effective 2006 book income tax rate of 37 percent
to 40 percent and an effective 2006 cash income tax rate of
32 percent to 35 percent.
Free cash flow before antitrust and restructuring payments was
$16 million in the 2005 fourth quarter, an increase of $31 million
from the 2004 fourth quarter, primarily due to improved cash flow
from operations. The company paid $2 million of restructuring and
$5 million of antitrust related payments in the 2005 fourth
quarter.
As of December 31, 2005, the Company's equity deficit widened
four times to $209,577,000 from a $52,972,000 deficit at
December 31, 2004.
Outlook
Mr. Shular commented on the outlook stating, "GTI expects global
economic conditions to remain relatively stable in 2006, with
global EAF steel production growth of approximately three percent.
On the cost front, significant price increases in petroleum based
raw materials and energy are expected to continue to put pressure
on our costs. To combat these cost pressures, we have secured
firm pricing for 70 to75 percent of our graphite electrode
production costs. We anticipate holding graphite electrode
production cost increases to the 10 to 12 percent range."
Consistent with prior years, GTI expects graphite electrode volume
in the first quarter of 2006 to be the lowest quarter of the year
with anticipated volume of approximately 40 thousand metric tons.
The low volume quarter is due to customers taking full contract
volumes in 2005 fourth quarter at lower 2005 prices, contributing
to a build of their graphite electrode inventories at year end
2005. Graphite electrode volume is expected to recover in the
second quarter of 2006, resulting in graphite electrode sales
volume for the first half of 2006 that is expected to be similar
to the first half of 2005.
For 2006, GTI expects:
-- relatively stable global and regional economic conditions;
-- net sales of graphite electrodes to increase about 15
percent;
-- net sales of ETM products of $30 million;
-- graphite electrode sales volume of about 210 to 215 thousand
metric tons;
-- graphite electrode production cost increase of about 10 to
12 percent;
-- non-graphite electrode gross profit growth of about
$6 million to $8 million;
-- combined selling, general and administrative and research
and development expenses to be about $108 to $110 million;
-- net interest expense to increase to about $58 million, due
to higher average interest rates and higher average
borrowings;
-- the effective book tax rate to be between 37 percent and
40 percent;
-- capital expenditures to be approximately $45 million;
-- depreciation expense of approximately $40 million;
-- restructuring costs to be largely offset by asset sales; and
-- free cash flow before antitrust and restructuring payments
to be about $10 million.
GrafTech International Ltd. -- http://www.graftech.com/-- is one
of the world's largest manufacturers and providers of high quality
synthetic and natural graphite and carbon based products and
technical and research and development services, with customers in
80 countries engaged in the manufacture of steel, aluminum,
silicon metal, automotive products and electronics. Graftech
manufactures graphite electrodes and cathodes, products essential
to the production of electric arc furnace steel and aluminum.
Graftech also manufactures thermal management, fuel cell and other
specialty graphite and carbon products for, and provide services
to, the electronics, power generation, semiconductor,
transportation, petrochemical and other metals markets. Graftech
is the leading manufacturer in all of our major product lines,
with 13 state of the art manufacturing facilities strategically
located on four continents.
HAIGHTS CROSS: Reports Fourth Quarter & Year-End Financial Results
------------------------------------------------------------------
Haights Cross Communications, Inc., reported its financial results
for the fourth quarter and year ended Dec. 31, 2005.
Results for the Fourth Quarter 2005
Revenue for the fourth quarter 2005 was $51.1 million, an increase
of $10.8 million, or 26.8%, from revenue of $40.3 million for the
fourth quarter 2004, reflecting a full quarter of Options
Publishing for 2005 with only December inclusion for 2004, as
Options was acquired in early December 2004. On a proforma basis
for Options Publishing, fourth quarter revenue was up $8.2
million, or 19.1%.
Revenue for the K-12 Supplemental Education segment, reflecting
Sundance/Newbridge business, declined $1.6 million, or 20.7%, to
$6.2 million for the fourth quarter 2005, continuing to reflect as
in previous quarters the affect of significant basal textbook
adoptions in 2005 on school funds available for purchases of
classroom materials, including supplemental education products as
offered by Sundance/Newbridge, as well as increased competition
from basal publishers offering competitive supplemental
educational products.
Chelsea House product line, which was previously reported in K-12
Supplemental Education segment, was sold on Aug. 9, 2005, and is
reported as a discontinued operation for all periods.
Revenue for the Test-prep and Intervention segment increased
$9.6 million to $18.5 million for the fourth quarter 2005,
reflecting a full quarter of Options Publishing for 2005. On a
proforma basis for Options, segment revenue for the fourth quarter
2005 increased $7.0 million, or 60.0%.
Revenue for Triumph Learning and Buckle Down product lines grew
$5.4 million, or 65.3%, to $13.6 million for the fourth quarter
2005, reflecting the anticipated demand for the new NCLB driven
test-prep products. On a proforma basis, revenue for the
company's Options Publishing line increased $1.6 million, or
47.0%, also reflecting the benefits of NCLB in promoting student
proficiency in basic reading and math skills.
Revenue for the Library segment, reflecting the company's Recorded
Books business, declined $500,000 or 3.0%, to $17.8 million for
the fourth quarter 2005, resulting from a decline in sales to the
public library channel of 4.9%, reflecting a softening of product
demand in the channel for the period, as well as certain new
library facility stocking orders, generally much larger than the
company's average library order, which were fulfilled in the
fourth quarter 2004.
Revenue for the Medical Education segment increased $3.4 million,
or 65.3%, to $8.6 million for the fourth quarter 2005. Fourth
quarter 2005 revenue includes results of the company's Scott
Publishing and CMEinfo product lines, both acquired in the second
quarter 2005. Revenue for the existing Oakstone Medical and
Oakstone Wellness product lines increased $700,000 or 13.6%,
reflecting growth in non-subscription sales for both product lines
for the period.
Income from operations for the fourth quarter 2005 increased
$5.1 million to $7.6 million, reflecting the results of Options
Publishing acquired in December 2004, and Scott Publishing and
CMEinfo acquired in the second quarter 2005. On a proforma basis
for Options Publishing, income from operations increased
$5.2 million to $7.6 million for the fourth quarter 2005,
reflecting a 63.6% flow-thru of $8.2 million proforma revenue
growth for the quarter.
EBITDA increased by $6.7 million to $12.7 million for the fourth
quarter 2005, reflecting the favorable performance in income from
operations previously noted. On a proforma basis for Options
Publishing, EBITDA increased $6.3 million, or 99.3%, period over
period.
Capital Expenditures for New Products
For the fourth quarter 2005, HCC invested $5.1 million in
pre-publication costs, compared to $3.5 million during the fourth
quarter 2004, reflecting the inclusion of Options Publishing,
Scott Publishing and CMEinfo, as well as increased investments in
Triumph Learning and Buckle Down businesses. HCC anticipates
pre-publication expenditures of approximately $26.0 million for
fiscal year 2006.
Capital Expenditures for Tangible Fixed Assets
and Leasehold Improvements
For the fourth quarter 2005, HCC invested $1.1 million in property
and equipment, compared to $1.0 million during the fourth quarter
2004. HCC anticipates expenditures of approximately $4.1 million
for the fiscal year 2006.
Results for the Year
Revenue for the year ended Dec. 31, 2005, was $210.5 million, an
increase of $39.6 million, reflecting 2004 acquisitions of Buckle
Down and Options Publishing, and 2005 acquisitions of Scott
Publishing and CMEinfo. On a proforma basis for Buckle Down and
Options Publishing, revenue for the year increased
$18.6 million, or 9.7%.
Revenue for the K-12 Supplemental Education segment declined
$5.4 million, or 11.1%, to $43.1 million for year ended
Dec. 31, 2005.
The last three quarters of 2005 have reflected the affect of
significant basal textbook adoptions in 2005 on school funds
available for classroom materials purchases including
Sundance/Newbridge supplemental education products, as well as
increased competition from basal publishers offering competitive
supplemental educational products.
Revenue for the Test-prep and Intervention segment increased
$30.1 million to $64.5 million for the year ended Dec. 31, 2005,
reflecting the inclusion of the 2004 acquisitions of Buckle Down
and Options Publishing.
On a proforma basis for Buckle Down and Options Publishing,
segment revenue increased $9.1 million, or 16.4%, reflecting
growth in all three product lines; Triumph Learning of 12.9%,
Buckle Down of 35.3%, and Options Publishing of 12.0%.
All three product lines benefited from new 2005 requirements of
the No Child Left Behind act.
Revenue for the Library segment increased $7.7 million, or 11.2%,
to $76.6 million for the year ended Dec. 31, 2005. Revenue growth
was achieved in the public library, school, retail, and consumer
channels, while the travel center channel, representing less than
5% of revenue, reported a decline.
The public library channel, representing approximately 68% of
Recorded Books sales, achieved 12.6% revenue growth for the year,
in spite of the fourth quarter decline mentioned earlier.
Revenue for the Medical Education segment increased $7.1 million,
to $26.3 million for the year ended Dec. 31, 2005, resulting from
the inclusion of newly acquired Scott Publishing and CMEinfo
product lines and from increased demand for the existing Oakstone
Wellness products, while revenue for the existing Oakstone Medical
product line was essentially flat.
Income from operations for the year ended Dec. 31, 2005, increased
$5.4 million to $36.9 million. On a proforma basis for Buckle
Down and Options Publishing, income from operations increased
$1.7 million, or 4.8%, reflecting the $18.6 increase in proforma
revenue and associated gross margin gain for the period, partially
offset by increased investments on sales and marketing
initiatives, increased costs for public company compliance and
HCC's Sarbanes-Oxley compliance effort, and increased amortization
of pre-publication costs.
EBITDA increased by $11.5 million to $55.1 million for the year
ended Dec. 31, 2005. On a proforma basis for Buckle Down and
Options Publishing, EBITDA increased $4.0 million, or 7.8%, as the
proforma revenue and gross margin growth was partially offset by
increased sales and marketing and general and administrative
expenses.
"We are especially pleased with the closing quarter performances
of our Triumph Learning, Buckle Down and Options Publishing
businesses, and look forward to continued growth in these
businesses in 2006," Peter J. Quandt, HCC Chairman and Chief
Executive Officer, said. "Undoubtedly, Sundance/Newbidge
represents our most immediate challenge, as we focus our best
efforts on every aspect of the business, especially product,
sales, and marketing, to improve the performance and outlook of
this business."
Founded in 1997 and based in White Plains, NY, Haights Cross
Communications -- http://www.haightscross.com/-- is a premier
educational and library publisher dedicated to creating the finest
books, audio products, periodicals, software and online services,
serving the following markets: K-12 supplemental education, public
and school library publishing, audio books, and medical continuing
education publishing. Haights Cross companies include:
Sundance/Newbridge Educational Publishing (Northborough, MA),
Options Publishing (Merrimack, NH), Triumph Learning (New York,
NY), Buckle Down Publishing (Iowa City, IA), Oakstone Publishing
(Birmingham, AL), Recorded Books (Prince Frederick, MD), and
Chelsea House Publishers (Northborough, MA).
* * *
Haights Cross Communications, Inc.'s 12-1/2% Senior Discount
Notes due 2011 carry Moody's Investors Service's Ca rating and
Standard & Poor's Ratings Services's CCC rating.
HEALTHSOUTH CORP: Receives $2.55 Billion Senior Secured Financing
-----------------------------------------------------------------
HealthSouth Corporation (OTC Pink Sheets: HLSH) completed its
previously reported plan to prepay substantially all of its
existing indebtedness with proceeds from a series of
recapitalization transactions.
HealthSouth has entered into a credit agreement that provides up
to $2.55 billion of senior secured financing with a consortium of
financial institutions and an interim loan agreement that provides
$1 billion of senior unsecured interim loans. HealthSouth used a
portion of the proceeds of the loans under the senior credit
facility, the proceeds of the interim loans and the proceeds of
$400 million from its previously announced issuance and sale of
400,000 shares of 6.50% Series A Preferred Stock, completed on
March 7, 2006, along with cash on hand, to prepay substantially
all of its existing indebtedness and to pay fees and expenses
related to such prepayment and the recapitalization transactions.
The remainder of the proceeds and availability under the senior
credit facilities are expected to be used for general corporate
purposes. HealthSouth anticipates refinancing the $1 billion
interim loans in the second quarter or third quarter of 2006
through an issuance of debt securities.
"This is another major step in HealthSouth's efforts to put our
past behind us," HealthSouth President and CEO Jay Grinney, said.
"We are very encouraged by the strong support we have received
through this process and believe this capital structure provides
us with the flexibility necessary to manage our debt while
implementing our plans for future growth."
"The new capital structure is a significant step in strengthening
our balance sheet," HealthSouth Chief Financial Officer John
Workman added. "It allows us to better execute on key operational
initiatives, address the changing regulatory environment, take
advantage of the strong capital market conditions, and maximize
pre-payable debt to allow for future de-leveraging."
As part of the recapitalization transactions, HealthSouth
successfully completed its previously announced cash tender offers
and related consent solicitations for $2.03 billion of outstanding
senior notes and $319 million of outstanding senior subordinated
notes. The tender offers expired at 5:00 p.m., New York City
time, on March 9, 2006. As of the Expiration Time, $1,996,842,000
in aggregate principal amount of senior notes, representing 98.4%
of the senior notes, and $288,964,000 in aggregate principal
amount of senior subordinated notes, representing 90.5% of the
senior subordinated notes, were validly tendered for purchase and
not withdrawn, and HealthSouth has accepted such notes for
purchase. The aggregate purchase price, including accrued and
unpaid interest and the consent payment, was approximately
$2,530,331,119.
J.P. Morgan Securities Inc., Citigroup Global Markets Inc., and
Merrill Lynch & Co. were the co-lead arrangers and joint
bookrunners for the $2.55 billion senior secured credit facilities
and Merrill Lynch & Co., Citigroup Global Markets Inc. and J.P.
Morgan Securities Inc. were the co-lead arrangers and joint
bookrunners for the $1 billion interim loans. Deutsche Bank
Securities Inc., Goldman, Sachs & Co., and Wachovia Capital
Markets, LLC were the co-managers for the senior secured credit
facilities and the interim loans.
HealthSouth Corporation -- http://www.healthsouth.com/-- is one
of the nation's largest providers of outpatient surgery,
diagnostic imaging and rehabilitative healthcare services,
operating facilities nationwide.
At Dec. 31, 2004, HealthSouth Corporation's balance sheet showed a
$1,109,420,000 stockholders' deficit, compared to a $963,837,000
deficit at Dec. 31, 2003. HealthSouth has not released its 2005
financial statements.
HEALTHSOUTH CORP: Completes Sale of $400-Mil. Conv. Pref. Shares
----------------------------------------------------------------
HealthSouth Corporation closed its previously announced sale of
400,000 shares of 6.50% Series A Convertible Perpetual Preferred
Stock. The Company, then, filed with the Secretary of State of
the State of Delaware the Certificate of Designations of its
Series A Preferred Stock.
The Company sold $400 million of its convertible perpetual
preferred stock through a private placement to qualified
institutional buyers.
Shares of the preferred stock will be convertible into the
Company's common stock at an initial conversion price of $6.10 per
share. Holders of preferred stock will generally be entitled to
receive dividends at the rate of 6.5% per year, payable quarterly.
The Company expects this transaction to close today, March 7,
2006.
The purpose of the preferred stock issuance is to reduce
The Company's outstanding indebtedness.
Due to the closing, the amount of senior unsecured interim term
loans the Company will be permitted to borrow in connection with
the recapitalization transactions is reduced by $400 million.
The Series A Preferred Stock has an initial liquidation preference
of $1,000 per share of Series A Preferred Stock, which is subject
to accretion.
Holders of Series A Preferred Stock are entitled to receive, when
and if declared by the Company's Board of Directors, cash
dividends at the rate of 6.50% per annum on the accreted
liquidation preference per share, payable quarterly in arrears on
January 15, April 15, July 15 and October 15 of each year,
commencing on July 15, 2006.
If the Company is prohibited by the terms of its credit
facilities, debt indentures or other debt instruments from paying
cash dividends on the Series A Preferred Stock, the Company may
pay dividends in shares of its common stock, or a combination of
cash and shares of its common stock, if the shares of its common
stock delivered as payment are freely transferable by the
recipient (other than by reason of the fact that the recipient is
the Company's affiliate) or if a shelf registration statement
relating to that common stock is effective to permit the resale.
Shares of the Company's common stock delivered as dividends will
be valued at 95% of their market value.
Unpaid dividends will accrete at an annual rate of 8.0% per year
for the relevant dividend period and will be reflected as an
accretion to the liquidation preference of the Series A
Preferred Stock. The Series A Preferred Stock is convertible, at
the option of the holder, at any time into shares of the Company's
common stock at an initial conversion price of $6.10 per share,
which is equal to an approximate conversion rate of approximately
163.9344 shares of common stock per share of Series A Preferred
Stock, subject to specified adjustments. On or after July 20,
2011, the Company may cause the shares of Series A Preferred Stock
to be automatically converted into shares of the Company's common
stock at the conversion rate then in effect if the closing sale
price of the Company's common stock for 20 trading days within a
period of 30 consecutive trading days ending on the trading day
before the date the Company gives the notice of forced conversion
exceeds 150% of the conversion price of the Series A Preferred
Stock.
HealthSouth Corporation -- http://www.healthsouth.com/-- is one
of the nation's largest providers of outpatient surgery,
diagnostic imaging and rehabilitative healthcare services,
operating facilities nationwide.
At Dec. 31, 2004, HealthSouth Corporation's balance sheet showed a
$1,109,420,000 stockholders' deficit, compared to a $963,837,000
deficit at Dec. 31, 2003. HealthSouth has not released its 2005
financial statements.
HEALTHSOUTH CORP: Settling ERISA Class Action Suit for $27 Mil.
---------------------------------------------------------------
HealthSouth Corporation settled a class action lawsuit against it
for alleged violations under the Employee Retirement Income
Security Act (ERISA). The Settlement Agreement signed by the
Company and the plaintiffs supersedes a partial settlement
agreement previously executed on July 25, 2005.
The class action suit was commenced on July 2, 2003, in the U.S.
District Court for the Northern District of Alabama.
The Company and its insurance carriers have agreed, without
admitting or denying the existence or validity of any of the
claims against them, to pay $27 million to the plaintiff class via
the HealthSouth Corporation Employee Stock Benefit Plan. The
Company is contributing $7 million to the Stock Benefit Plan. The
carriers are contributing $20 million. In addition, the Company's
former CFO Michael Martin is contributing $350,000 and the
Company's former CEO Richard Scrushy is contributing $1,500,000
toward the settlement.
The Company will also contribute the first million dollars of its
net recovery, if any, from the $47 million judgment recently
entered against Richard Scrushy in derivative litigation, which is
currently on appeal.
The Settlement is subject to approval by an independent fiduciary
on behalf of the Plan and final approval of the Court.
HealthSouth Corporation -- http://www.healthsouth.com/-- is one
of the nation's largest providers of outpatient surgery,
diagnostic imaging and rehabilitative healthcare services,
operating facilities nationwide.
At Dec. 31, 2004, HealthSouth Corporation's balance sheet showed a
$1,109,420,000 stockholders' deficit, compared to a $963,837,000
deficit at Dec. 31, 2003. HealthSouth has not released its 2005
financial statements.
HEXION SPECIALTY: Incurs $14 Million Net Loss in Fourth Quarter
---------------------------------------------------------------
Hexion Specialty Chemicals Inc. disclosed its results for the
fourth quarter period and fiscal year ended December 31, 2005,
including improved revenues and operating income. Highlights for
the fourth quarter of 2005 include:
-- revenues of $1.2 billion compared to $0.9 billion during the
prior year period, or $1.1 billion on a proforma basis in
the prior year period. On a proforma basis, revenues
increased 9 percent. The proforma period is adjusted for
the April 2005 acquisition of Bakelite;
-- operating income of $42 million, versus operating income of
$41 million in the prior year period. The income for the
quarter included the negative cost impact from Hurricanes
Katrina and Rita totaling $17 million;
-- net loss of $14 million for the quarter, versus a net loss
of $11 million in the prior year period, or a net loss of
$18 million in the prior year period on a proforma basis;
-- proforma Adjusted EBITDA of $603 million for the year ended
December 31, 2005, compared to Proforma Adjusted EBITDA of
$506 million for the year ended December 31, 2004. Proforma
Adjusted EBITDA for the year ended December 31, 2005, has
not been adjusted to include $27 million for the impact of
Hurricanes Katrina and Rita.
The company's net debt (total debt less cash) at the end of the
quarter was $2.2 billion. Hexion's net debt has decreased
approximately $100 million since its formation on May 31, 2005.
"While Hexion was impacted by the dramatic cost volatility for key
raw material feedstocks during the quarter, the company maintained
strong pricing levels and margins," said Craig O. Morrison,
President and CEO. "Throughout the organization, we continue to
pursue synergies by integrating the operations of the merged
companies that created Hexion, while implementing continued cost
reduction programs. We believe that our customers will benefit
from our global scale, expanded product offering and production
efficiencies."
Hexion reported during the fourth quarter 2005 that it had reached
an agreement to acquire the global ink and adhesive resins
business of Akzo Nobel. Closing of the Akzo Nobel transaction is
dependent upon successful completion of normal governmental
reviews and consultations with employee works councils. Hexion
announced in January 2006, it had completed the purchase of the
decorative coatings and adhesives business unit of the Rhodia
Group. In March 2006, Hexion completed the purchase of the global
wax compounds business of Rohm and Haas Company.
"These acquisitions strategically expand our global footprint with
their complimentary businesses," Mr. Morrison said. "We anticipate
growth from our existing product lines and further integration of
these 'bolt-on' acquisitions."
For the year ended December 31, 2005, Hexion Specialty Chemicals
posted total revenue of $4.5 billion. Sales for the period were
up 15 percent on a proforma basis after adjusting for the August
2004 acquisition of Borden Chemical and Resolution Specialty, as
well as the April 2005 Bakelite acquisition. Operating income was
$208 million, and the company incurred a net loss of $87 million.
In addition to the impact of Hurricanes Katrina and Rita noted
below, the net loss included: transaction-related expenses of
$44 million, a $17 million write-off of deferred financing costs,
a $9 million loss from discontinued operations and $16 million of
non-cash inventory purchase accounting adjustments.
Fiscal year costs from Hurricanes Katrina and Rita totaled
$27 million on a pre-tax basis, primarily due to a combination of
higher raw material and logistics costs, which was in line with
the previously announced estimate.
"We are pleased with our overall 2005 results driven by our
ability to provide customers with a broad range of materials,
leading technologies and superior technical support," Mr. Morrison
said.
Based in Columbus, Ohio, Hexion Specialty Chemicals Inc. --
http://hexionchem.com/-- combines the former Borden Chemical,
Bakelite, Resolution Performance Products and Resolution Specialty
Materials companies into the global leader in thermoset resins.
With 86 manufacturing and distribution facilities in 18 countries,
Hexion serves the global wood and industrial markets through a
broad range of thermoset technologies, specialty products and
technical support for customers in a diverse range of applications
and industries. Hexion Specialty Chemicals is owned by an
affiliate of Apollo Management, L.P.
* * *
As reported in the Troubled Company Reporter on May 9, 2005,
Moody's Investors Service assigned a B1 rating to Hexion Specialty
Chemicals Inc.'s new $675 million guaranteed senior secured credit
facilities ($275 million revolver due 2010 & $400 million term
loan due 2011), a Caa3 rating to its $350 million preferred stock,
and a speculative grade liquidity rating of SGL-2.
HORIZON LINES: Posts $18.32 Million Net Loss in 2005 Fiscal Year
----------------------------------------------------------------
Horizon Lines, Inc., reported its financial results for the fiscal
year ended Dec. 25, 2005, to the Securities and Exchange
Commission on March 6, 2006.
For the fiscal year ended Dec. 25, 2005, Horizon Lines reported an
$18,231,000 net loss on $1,096,156,000 in total operating
revenues. This compares to $5,600,000 of net income for the year
ended Dec. 26, 2004, on $980,328,000 in total operating revenues
for the 12 months ended Dec. 24, 2004.
At Dec. 25, 2005, Horizon Lines' balance sheet showed $927,319,000
in total assets and $775,559,000 in total liabilities. The
Company reports a $28,240,000 accumulated deficit as of Dec. 25,
2005.
A full-text copy of Horizon Lines' Form 10-K report is available
for free at http://ResearchArchives.com/t/s?676
Headquartered in Charlotte, North Carolina, Horizon Lines, Inc. --
http://www.horizonlines.com/-- is the U.S.'s leading Jones Act
container shipping and integrated logistics company and is the
ultimate parent company of Horizon Lines Holding Corp., and
Horizon Lines LLC. The Company accounts for approximately 37% of
total U.S. marine container shipments from the continental U.S. to
the three non-contiguous Jones Act markets, Alaska, Hawaii and
Puerto Rico, and to Guam.
* * *
As reported in the Troubled Company Reporter on March 2, 2006,
Standard & Poor's Ratings Services revised its outlook on Horizon
Lines Inc., a cargo shipping company based in Charlotte, North
Carolina, to positive from stable. At the same time, the 'B'
corporate credit rating was affirmed. The outlook revision
reflects Horizon Line's solid operating performance and improving
financial profile.
INFINITE SOFTWARE: Case Summary & 9 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Infinite Software Consulting Corporation
aka Infinite Software of Texas
20445 State Highway 249, Suite 290
Houston, Texas 77070-2623
Bankruptcy Case No.: 06-31018
Type of Business: The Debtor develops software.
See http://infinite-software.com/
Chapter 11 Petition Date: March 13, 2006
Court: Southern District of Texas (Houston)
Judge: Marvin Isgur
Debtor's Counsel: Christopher Donald Johnson, Esq.
Erin E. Jones, Esq.
Diamond McCarthy Taylor Finley & Lee, LLP
909 Fannin, Suite 1500
Houston, Texas 77010
Tel: (713) 330-5100
Fax: (713) 330-5195
Estimated Assets: $50,000 to $100,000
Estimated Debts: $1 Million to $10 Million
Debtor's 9 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
SunGard Energy Systems Lawsuit Unknown
1331 Lamar, Suite 950
Houston, TX 77010
Attn: M. Mandalinci
Duane Morris LLP Legal Fees $285,738
380 Lexington Avenue
New York, NY 10168
Attn: R. Hasday, Esq.
John Gerold Loan From Owner $210,000
10 Ledbury Park Lane
Spring, TX 77379
Beck, Redden & Secrest, LLP Legal Fees $167,608
1221 McKinney, Suite 4500
Houston, TX 77010
Nodruoy Inc. Expert Fees $104,096
275 West 96th Street, Suite 21G
New York, NY 10025
John Gerold, Sr. Loan From Owner $90,000
12719 Wondering Forest Drive
Tomball, TX 77377
Unum Provident Employee Benefit $1,056
ExpertPlan Employee Benefit $500
Capital4 Utility $365
IXIS REAL ESTATE: Moody's Assigns Ba1 Rating to Class B-4 Certs.
----------------------------------------------------------------
Moody's Investors Service assigned Aaa rating to the senior
certificates issued by IXIS Real Estate Capital Trust 2006-HE1,
Mortgage Pass-Through Certificates, Series 2006-HE1, and ratings
ranging from Aa1 to Ba1 to the mezzanine and subordinate
certificates issued in the deal.
The securitization is backed by First NLC Financial Services, LLC,
Chapel Mortgage Corporation, Encore Credit Corp, Lenders Direct
Capital Corp., and various other originators originated
adjustable-rate and fixed-rate subprime mortgage loans acquired by
IXIS Real Estate Capital Inc. The ratings are based primarily on
the credit quality of the loans, and on the protection from
subordination, overcollateralization, excess spread, and an
interest rate swap agreement. Moody's expects collateral losses
to range from 4.55% to 5.05%.
Saxon Mortgage Services, Inc. and Master Financial, Inc. will
service the loans. JP Morgan Chase Bank, N.A. will act as master
servicer. Moody's has assigned Saxon an SQ2 rating as a primary
servicer of subprime 1st lien loans.
The complete rating actions:
IXIS Real Estate Capital Trust 2006-HE1
Mortgage Pass-Through Certificates, Series 2006-HE1
* Class A-1, Assigned Aaa
* Class A-2, Assigned Aaa
* Class A-3, Assigned Aaa
* Class A-4, Assigned Aaa
* Class M-1, Assigned Aa1
* Class M-2, Assigned Aa2
* Class M-3, Assigned Aa3
* Class M-4, Assigned A1
* Class M-5, Assigned A2
* Class M-6, Assigned A3
* Class B-1, Assigned Baa1
* Class B-2, Assigned Baa2
* Class B-3, Assigned Baa3
* Class B-4, Assigned Ba1
JEAN COUTU: Will Pay $2.7M More Under Credit Facility Amendment
---------------------------------------------------------------
The Jean Coutu Group (PJC) Inc. (TSX:PJC.SV.A) amended its senior
secured credit facility maturing in 2011 in order to provide more
flexibility to execute its business plan.
The amended facility requires compliance with certain financial
covenants, which include:
(a) a maximum leverage ratio of 5.25x through Sept. 2, 2006,
decreasing gradually over time to 2.50x as of March 1,
2009 and
(b) a minimum fixed charge coverage ratio of 1.1x, increasing
gradually over time to 1.4x as of May 31, 2010.
As a result of the amendment, the applicable margin on the Term B
loans will increase by 25 basis points. Annualized pre-tax
financing expenses will increase by approximately $2.7 million.
Headquartered in Longueuil, Quebec, The Jean Coutu Group Inc. --
http://www.jeancoutu.com/-- is the fourth largest drugstore chain
in North America and the second largest in both the eastern United
States and Canada. The Company and its combined network of 2,175
corporate and franchised drugstores (under the banners of Brooks
and Eckerd Pharmacy, PJC Jean Coutu, PJC Clinique and PJC Sante
Beaute) employ more than 60,000 people.
The Jean Coutu Group's United States operations employ 46,000
people and comprise 1,853 corporate owned stores located in 18
states of the Northeastern, mid-Atlantic and Southeastern United
States. The Jean Coutu Group's Canadian operations and franchised
drugstores in its network employ over 14,000 people and comprise
322 PJC Jean Coutu franchised stores in Quebec, New Brunswick and
Ontario.
* * *
As reported by the Troubled Company Reporter on Mar. 10, 2006,
Dominion Bond Rating Service changed the trends on the Bank Credit
Facilities, Senior Unsecured Debt, and Senior Subordinated Debt of
The Jean Coutu Group (PJC) Inc., to Negative from Stable.
DBRS rates Jean Coutu's Bank Credit Facilities at B (high); Senior
Unsecured Debt at B; and Senior Subordinated Debt at B (low).
DBRS reviewed Coutu's ratings following the retailer's
announcement that it is seeking amendment of the financial
covenants in its Bank Credit Facilities. This initiative was
precipitated by earnings weakness caused by slower-than-
anticipated progress on sales and earnings in Coutu's U.S.
operations following the acquisition and integration of Eckerd
stores. In addition, inventory remains above optimum levels due
to system-related problems in fall 2005, leading to higher-than-
planned debt balances.
KAISER ALUMINUM: Restates Consulting Agreement with Edward Houff
----------------------------------------------------------------
Edward F. Houff was senior vice president and chief restructuring
officer of Kaiser Aluminum & Chemical Corporation until Aug. 15,
2005, when he was terminated.
Despite Mr. Houff's termination, KACC wanted Mr. Houff to perform
certain services for the company. For this reason, Mr. Houff and
KACC entered into a non-exclusive consulting agreement on
August 16, 2005. Under the Agreement, Mr. Houff agreed to perform
the same services he rendered when he was KACC's CRO.
The Non-Exclusive Consulting Agreement was for the period
August 1, 2005, to February 14, 2006.
In a regulatory filing with the Securities and Exchange
Commission, John M. Donnan, KACC's vice president and general
counsel, disclosed that the Company and Mr. Houff agreed to amend
and restate the Non-Exclusive Consulting Agreement effective
January 13, 2006.
Under the Amended and Restated Non-Exclusive Consulting
Agreement, Mr. Houff will provide services relating to:
(a) regularly scheduled omnibus and special Bankruptcy Court
hearings;
(b) the Disclosure Statement, Plan of Reorganization,
Solicitation, Confirmation hearings;
(c) hearings and appellate work relating to bankruptcy issues,
including stay proceedings;
(d) Pension Benefit Guaranty Corporation Appeal of Distress
Termination;
(e) insurance coverage litigation and settlements;
(f) Trentwood environmental matters and criminal
investigation;
(g) Senior/Sub Note/Gramercy Subordination Litigation and
Liquidating Plan confirmation and appeals, including stay
proceedings;
(h) asbestos and other tort claim resolution and negotiations
on asbestos workers' compensation;
(i) communications with committees and futures
representatives;
(j) C11 communications with the Board;
(k) New Board Search Committee;
(l) environmental reorganization matters;
(m) claims resolution issues;
(n) Monument Select litigation;
(o) testimony and declarations as required to support
particular pleadings; and
(p) other assignments as agreed.
Mr. Donnan further disclosed that from August 1, 2005, through
February 14, 2006, Mr. Houff received payment of a base fee of
$43,200 per month, exclusive of expenses, for 120 hours of
services rendered. Monthly hours worked in excess of 120, up to a
maximum of 200, exclusive of expenses, were paid at $360 per hour.
Kaiser was not charged for any work in excess of 200 hours per
month, exclusive of expenses.
For services performed after February 14, 2006, the Base Fee will
be prorated as:
Monthly No. of Hours
Period Prorated Base Fee to be Performed
------ ----------------- ---------------
02/15/06 - 02/28/06 $22,500 50
03/01/06 - 03/31/06 $33,750 75
04/01/06 - 04/30/06 $22,500 50
A full-text copy of Mr. Houff's Amended and Restated Non-
Exclusive Consulting Agreement is available for free at:
http://ResearchArchives.com/t/s?675
Headquartered in Foothill Ranch, California, Kaiser Aluminum
Corporation -- http://www.kaiseraluminum.com/-- is a leading
producer of fabricated aluminum products for aerospace and high-
strength, general engineering, automotive, and custom industrial
applications. The Company filed for chapter 11 protection on
February 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold
off a number of its commodity businesses during course of its
cases. Corinne Ball, Esq., at Jones Day, represents the Debtors
in their restructuring efforts. On June 30, 2004, the Debtors
listed $1.619 billion in assets and $3.396 billion in debts.
(Kaiser Bankruptcy News, Issue No. 91; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
KAISER ALUMINUM: VP Barneson Cancels 22,802 Shares of Common Stock
------------------------------------------------------------------
In a regulatory filing with the Securities and Exchange
Commission dated February 13, 2006, John Barneson, vice president
and chief administrative officer of Kaiser Aluminum Corp.,
discloses that he voluntary cancelled his 22,802 shares of Kaiser
Aluminum Corp. restricted common stock on February 27, 2004.
Mr. Barneson reports that he now beneficially owns 10,700 shares
of Kaiser common stock.
Headquartered in Foothill Ranch, California, Kaiser Aluminum
Corporation -- http://www.kaiseraluminum.com/-- is a leading
producer of fabricated aluminum products for aerospace and high-
strength, general engineering, automotive, and custom industrial
applications. The Company filed for chapter 11 protection on
February 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold
off a number of its commodity businesses during course of its
cases. Corinne Ball, Esq., at Jones Day, represents the Debtors
in their restructuring efforts. On June 30, 2004, the Debtors
listed $1.619 billion in assets and $3.396 billion in debts.
(Kaiser Bankruptcy News, Issue No. 91; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
KEYSTONE BREWERS: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: Keystone Brewers Holding Co.
3430 Liberty Avenue
Pittsburgh, Pennsylvania 15201
Bankruptcy Case No.: 06-20971
Type of Business: Pittsburgh Brewing Company, Inc., an affiliate
of the Debtor, filed for bankruptcy protection on Dec. 7, 2005
(Bankr. W.D. Pa. Case No. 05-50347)(J. McCullough).
Chapter 11 Petition Date: March 10, 2006
Court: Western District of Pennsylvania (Pittsburgh)
Judge: M. Bruce McCullough
Debtor's Counsel: Robert O. Lampl, Esq.
960 Penn Avenue, Suite 1200
Pittsburgh, Pennsylvania 15222
Tel: 412-392-0330
Fax: 412-392-0335
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
The Debtor did not file a list of its 20 largest unsecured
creditors.
KMART CORP: Court Okays Revised Floorgraphics Confidentiality Pact
------------------------------------------------------------------
Kmart Corporation, FLOORgraphics, Inc., and News America Marketing
In-Store Services, Inc., ask the U.S. Bankruptcy Court for the
Northern District of Illinois to approve a Revised Confidentiality
Agreement and Protective Order regarding FLOORgraphics' claim.
As reported in the Troubled Company Reporter on Sept. 5, 2005, the
Court entered:
(a) a Confidentiality Agreement and Protective Order, dated
March 21, 2002;
(b) an Agreed Order dated January 11, 2005, regarding the
disclosure of documents in connection with:
-- the bankruptcy proceeding involving FLOORgraphics'
claims against Kmart; and
-- the civil action commenced by FLOORgraphics against
News America Marketing In-Store Services, Inc., now
pending in the United States District Court for the
District of New Jersey; and
(c) an order dated May 12, 2005, allowing Kmart's reply brief
in support of its summary judgment motion in the contested
matter to be filed under seal.
The Revised Protective Order reflects some of the changed
circumstances since the entry of the first order in 2002, and
avoids further orders or confusion as to what orders or provisions
of orders still apply.
In anticipation of the continued exchange and use of proprietary
information, the parties wish to restate all prior protective
orders and confidentiality agreements.
Judge Susan Pierson Sonderby approves the parties' Revised
Confidentiality Agreement and Protective Order regarding
FLOORgrahics, Inc.'s claim.
Headquartered in Troy, Michigan, Kmart Corporation (n/k/a KMART
Holding Corporation) -- http://www.bluelight.com/-- operates
approximately 2,114 stores, primarily under the Big Kmart or Kmart
Supercenter format, in all 50 United States, Puerto Rico, the U.S.
Virgin Islands and Guam. The Company filed for chapter 11
protection on January 22, 2002 (Bankr. N.D. Ill. Case No.
02-02474). Kmart emerged from chapter 11 protection on May 6,
2003. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate,
Meagher & Flom, LLP, represented the retailer in its restructuring
efforts. The Company's balance sheet showed $16,287,000,000 in
assets and $10,348,000,000 in debts when it sought chapter 11
protection. Kmart bought Sears, Roebuck & Co., for $11 billion to
create the third-largest U.S. retailer, behind Wal-Mart and
Target, and generate $55 billion in annual revenues. The
waiting period under the Hart-Scott-Rodino Antitrust Improvements
Act expired on Jan. 27, without complaint by the Department of
Justice. (Kmart Bankruptcy News, Issue No. 107; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
KMART CORP: Asks Court to Bar Jeri Fisher's Lift Stay Motion
------------------------------------------------------------
Jeri Lynn Fisher asks the U.S. Bankruptcy Court for the Northern
District of Illinois -- after it amends the July 21, 2003 Order
disallowing and expunging her Claim -- to reinstate her Claim and
lift the automatic stay with respect her lawsuit against Kmart
pending in the Superior Court of Arizona in the County of Navajo.
Ms. Fisher explains that:
(a) the bankruptcy portion of Kmart's case appears to be
closed and there is no longer any reason in existence that
justifies Kmart's need or right for stay under the
appropriate statutes;
(b) Kmart has filed a plan of reorganization, which has been
approved; and
(c) Kmart, by its misconduct, failed to show justification
for the stay by wrongfully refusing to provide her or her
counsel information for either settling her Claim or
allowing the Claim to be adjudicated in a court of law.
Kmart Objects
William J. Barrett, Esq., at Barack Ferrazzano Kirschbaum Perlman
& Nagelberg LLP, in Chicago, Illinois, asserts that Kmart
Corporation provided Jeri Lynn Fisher's counsel with timely and
reasonable notice of its Omnibus Objection.
Ms. Fisher attempted to rebut the presumption of the mailing of
the Objection Notice by submitting affidavits from herself; her
counsel, James Hill; and Mr. Hill's legal assistant and secretary
Sandra Lucas, Mr. Barrett notes.
The allegations and statements contained in those documents are
wholly insufficient to rebut that presumption, Mr. Barrett argues.
The Affidavits from Mr. Hill and Ms. Lucas describe the procedures
that were generally in place at Mr. Hill's law firm to review
documents by mail. However, those Affidavits are devoid of any
evidence of standardized procedures for the handling of incoming
mail by Mr. Hill's office on a consistent basis during the time
periods at issue or on the relevant dates in particular,
Mr. Barrett points out.
Accordingly, Kmart asks the Court to deny Ms. Fisher's request to
reinstate her claim.
Headquartered in Troy, Michigan, Kmart Corporation (n/k/a KMART
Holding Corporation) -- http://www.bluelight.com/-- operates
approximately 2,114 stores, primarily under the Big Kmart or Kmart
Supercenter format, in all 50 United States, Puerto Rico, the U.S.
Virgin Islands and Guam. The Company filed for chapter 11
protection on January 22, 2002 (Bankr. N.D. Ill. Case No.
02-02474). Kmart emerged from chapter 11 protection on May 6,
2003. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate,
Meagher & Flom, LLP, represented the retailer in its restructuring
efforts. The Company's balance sheet showed $16,287,000,000 in
assets and $10,348,000,000 in debts when it sought chapter 11
protection. Kmart bought Sears, Roebuck & Co., for $11 billion to
create the third-largest U.S. retailer, behind Wal-Mart and
Target, and generate $55 billion in annual revenues. The
waiting period under the Hart-Scott-Rodino Antitrust Improvements
Act expired on Jan. 27, without complaint by the Department of
Justice. (Kmart Bankruptcy News, Issue No. 107; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
MAGRUDER COLOR: Files Chap. 11 Reorganization Plan in New Jersey
----------------------------------------------------------------
Magruder Color Company and its debtor-affiliates presented its
chapter 11 plan of reorganization and disclosure statement
explaining that Plan to the U.S. Bankruptcy Court for the District
of New Jersey on Feb. 28, 2006.
Financing
The Debtors obtained a $7.5 million postpetition loan facility
from Wachovia Bank and gained access to cash collateral securing
repayment of junior prepetition secured debts to Beal Bank and the
Weissglass Family.
Sale of Assets
The Debtors successfully sold its operating assets to Pochteca
Color Company, LLC, for $7,200,000 with no adjustments.
The Sale was facilitated by the $3.5 million 1029 Loan from
1029 Newark -- the funding entity formed by members of the
Weissglass family and Pochteca to:
-- pay-off the Wachovia DIP Loan; and
-- to provide the Debtors with additional financing necessary
to maintain business operations.
Treatment of Claims
Under the Plan, Administrative Claims and Priority Tax Claims
will be paid in full cash, without interest.
Beal Bank's secured claim will be paid in full in cash, with
interest at the contract rate, from the proceeds of the sale of
the Debtor and Non-Debtor Real Estate, after payment of:
(i) all costs and expenses associated with pursuing,
conducting, and closing those sales; and
(ii) all environmental remediation costs associated with both
the Debtor and Non-Debtor Real Estate.
Until the Beal Bank Secured Claim is paid in full, Beal Bank will
retain its mortgage liens.
Holders of Class 3 Unsecured Claims will receive a Pro Rata
distribution from:
a) $1.5 million to be paid from the Net Non-Debtor Real
Estate Proceeds after payment in full of the Beal Bank
Secured Claim;
b) 50% of the Net Debtor Real Estate Proceeds; and
c) the Net Avoidance Proceeds.
Holders of Maggyco Interests will retain their ownership interests
in Maggyco. To the extent there is not Available Cash or escrowed
amounts available, Holders of Maggyco Interests will fund the
payment of any real estate taxes, insurance, maintenance and other
costs associated with the Debtor Real Estate until the Debtor Real
Estate is sold.
Holders of Intercompany Claims and Class 6 Dissolved Debtors
Interests will receive no distribution under the Plan.
A full-text copy of the Plan is available for a fee at:
http://www.researcharchives.com/bin/download?id=060313204623
Headquartered in Elizabeth, New Jersey, Magruder Color Company --
http://www.magruder.com/-- and its affiliates manufacture basic
pigment and also supply quality products to the ink, paint, and
plastics industries. The Company and its debtor-affiliates filed
for chapter 11 protection on June 2, 2005 (Bankr. D.N.J. Case No.
05-28342). Bruce D. Buechler, Esq., at Lowenstein Sandler PC
represent the Debtors in their restructuring efforts. When the
Debtors filed protection from their creditors, they estimated
assets and debts of $10 million to $50 million.
MASTR ASSET: Moody's Assigns Ba2 Rating to Class M-11 Certificates
------------------------------------------------------------------
Moody's Investors Service assigned Aaa rating to the senior
certificates issued by MASTR Asset Backed Securities Trust
2006-HE1, and ratings ranging from Aa1 to Ba2 to the subordinate
certificates in this deal.
The securitization is backed by both adjustable-rate and fixed-
rate subprime mortgage loans acquired by UBS Real Estate
Securities Inc. The ratings are based primarily on the credit
quality of the loans, and on the protection from subordination,
overcollateralization, excess spread, two interest rate swap
agreements and a cap contract. Moody's expects collateral losses
to range from 5.63% to 6.13%.
Wells Fargo Bank N.A. will act as servicer and master servicer of
the loans.
The complete rating actions are:
MASTR Asset Backed Securities Trust 2006-HE1
* Class A-1, Assigned Aaa
* Class A-2, Assigned Aaa
* Class A-3, Assigned Aaa
* Class A-4, Assigned Aaa
* Class M-1, Assigned Aa1
* Class M-2, Assigned Aa2
* Class M-3, Assigned Aa3
* Class M-4, Assigned A1
* Class M-5, Assigned A2
* Class M-6, Assigned A3
* Class M-7, Assigned Baa1
* Class M-8, Assigned Baa2
* Class M-9, Assigned Baa3
* Class M-10, Assigned Ba1
* Class M-11, Assigned Ba2
MASTR TRUST: Moody's Rates Cert. Classes M-10 & M-11 at Low-B
-------------------------------------------------------------
Moody's Investors Service assigned Aaa rating to the senior
certificates issued by MASTR Asset Backed Securities Trust
2006-AM1, and ratings ranging from Aa1 to Ba2 to the subordinate
certificates in the deal.
The securitization is backed by Aames Capital Corporation
originated, adjustable-rate and fixed-rate, subprime mortgage
loans acquired by Ocwen Mortgage Asset Trust I. The ratings are
based primarily on the credit quality of the loans, and on the
protection from subordination, excess spread,
overcollateralization, and an interest-rate swap agreement and cap
contract provided by Bear Stearns Financial Products Inc. Moody's
expects collateral losses to range from 5.60% to 6.10%.
Ocwen Loan Servicing LLC will service the loans. Moody's has
assigned Ocwen Loan Servicing LLC its servicer quality rating as a
primary servicer of subprime first-lien loans.
The complete rating actions are:
MASTR Asset Backed Securities Trust,
Mortgage Pass Through Certificates, Series 2006-AM1
* Class A-1, Assigned Aaa
* Class A-2, Assigned Aaa
* Class A-3, Assigned Aaa
* Class A-4, Assigned Aaa
* Class M-1, Assigned Aa1
* Class M-2, Assigned Aa2
* Class M-3, Assigned Aa3
* Class M-4, Assigned A1
* Class M-5, Assigned A2
* Class M-6, Assigned A3
* Class M-7, Assigned Baa1
* Class M-8, Assigned Baa2
* Class M-9, Assigned Baa3
* Class M-10, Assigned Ba1
* Class M-11, Assigned Ba2
MON VIEW: Wants Court Nod on David Bradley as Broker
----------------------------------------------------
Mon View Mining Company asks the U.S. Bankruptcy Court for the
Western District of Pennsylvania for authority to employ David
Bradley, Inc., as its broker.
The Debtor tells the Court that among its assets are:
a) a production plant that has little operational value,
b) a coal Refuse and coal fines on the Debtor's property,
c) gas rights, and
d) timber located on the Debtor's Property.
The Debtor wants David Bradley to market these assets and locate
buyers or find means to sell them.
The Debtor has agreed to pay David Bradley 8% of the sale proceeds
if it sells any of the assets.
The Debtor relates that it has agreed to allow David Bradley to
locate potential buyers of the company's mineral coal rights
although it has not yet committed to selling these rights. The
Debtor says that if David Bradley locates a purchaser for the
mineral coal rights, then it will pay David Bradley on a quantum
meruit basis.
To the best of the Debtor's knowledge, the Firm is "disinterested"
as that term is defined in Section 101(14) of the Bankruptcy Code.
Headquartered in Finleyville, Pennsylvania, Mon View Mining
Company filed for chapter 11 protection on Nov. 22, 2005 (Bankr.
S.D. Pa. Case No. 05-50219). Donald R. Calaiaro, Esq., at
Calaiaro, Corbett & Brungo, P.C., represent the Debtor in its
restructuring efforts. When the Debtor filed for protection from
its creditors, it listed $24,001,883 in assets and $10,545,140 in
debts.
MORTGAGEIT MORTGAGE: Moody's Puts Ba2 Rating on Class 2-B4 Certs.
-----------------------------------------------------------------
Moody's Investors Service assigned Aaa rating to the senior
certificates issued in the MortgageIT Mortgage Loan Trust,
Mortgage Loan Pass-Through Certificates, Series 2006-1
securitization. In addition, Moody's assigned ratings ranging
from Aa2 to Ba2 to several of the subordinate certificates in the
same deal.
The securitization is backed by two mortgage pools. The Group 1
mortgage pool is composed of Alt-A quality first-lien, hybrid
adjustible-rate mortgage loans secured by one- to four-family
residential real properties and individual condominium units.
The Group 2 mortgage pool is composed of Alt-A quality first-lien,
negative amortization mortgage loans secured by one- to four-
family residential real properties and individual condominium
units. Moody's ratings are based on the credit support provided
through a combination of subordination, the shifting interest
structure, and the integrity of the cash flow, as well as GMAC
Mortgage Corporation's capability as a servicer of mortgage loans,
according to Angus Hamilton, a Moody's analyst. Moody's range of
loss expectation for the Group 1 mortgage pool is approximately
0.70% to 0.90%. Moody's range of loss expectation for the Group 2
mortgage pool is approximately 0.90% to 1.10%.
GMAC Mortgage Corporation is the Subservicer and will be
responsible for primary servicing of the mortgage loans. Wells
Fargo Bank, N.A. will act as Master Servicer and Securities
Administrator.
The complete rating action:
MortgageIT Mortgage Loan Trust, Mortgage
Loan Pass-Through Certificates, Series 2006-1
* Class 1-A1, rated Aaa
* Class 1-A2, rated Aaa
* Class 1-X, rated Aaa
* Class A-R, rated Aaa
* Class 1-B1, rated Aa2
* Class 1-B2, rated A2
* Class 1-B3, rated Baa2
* Class 2-A1A, rated Aaa
* Class 2-A1B, rated Aaa
* Class 2-A1C, rated Aaa
* Class 2-X, rated Aaa
* Class 2-X-B, rated Aa2
* Class 2-PO, rated Aaa
* Class 2-PO-B, rated Aa2
* Class 2-B1, rated Aa2
* Class 2-B2, rated A2
* Class 2-B3, rated Baa1
* Class 2-B4, rated Ba2
NOMURA ASSET: Moody's Rates Cert. Classes B-4 & B-5 at Low-B
------------------------------------------------------------
Moody's Investors Service assigned Aaa rating to the senior
certificates issued by Nomura Asset Acceptance Corporation,
Alternative Loan Trust, Series 2006-S1, and ratings ranging from
Aa1 to Ba2 to the subordinate certificates in the deal.
The securitization is backed by Impac Funding Corporation, Opteum
Financial Services, LLC, Indymac Bank, F.S.B., and various other
originators none of which originated more than 8.83% of the
mortgage loans originated second lien fixed-rate loans acquired by
Nomura Credit & Capital, Inc. The ratings are based primarily on
the credit quality of the loans, and on the protection from
subordination, overcollateralization, excess spread, and an
interest rate cap agreement. Moody's expects collateral losses to
range from 6.60% to 7.10%.
GMAC Mortgage Corporation will service the mortgage loans, and
Wells Fargo Bank, N.A. will act as master servicer.
The complete rating actions are:
Nomura Asset Acceptance Corporation,
Alternative Loan Trust, Series 2006-S1
* Class A-1, Assigned Aaa
* Class A-2, Assigned Aaa
* Class A-3, Assigned Aaa
* Class A-IO, Assigned Aaa
* Class M-1, Assigned Aaa
* Class M-2, Assigned Aa1
* Class M-3, Assigned Aa2
* Class M-4, Assigned Aa3
* Class M-5, Assigned A1
* Class M-6, Assigned A2
* Class B-1, Assigned A3
* Class B-2, Assigned Baa2
* Class B-3, Assigned Baa3
* Class B-4, Assigned Ba1
* Class B-5, Assigned Ba2
NORTEL NETWORKS: Plans to Save $200MM Under Transformation Plan
---------------------------------------------------------------
Nortel (NYSE/TSX: NT) provided additional details on its
short-term priorities to build shareholder value that include a
focus on Business Transformation, Integrity Renewal and Growth
Imperatives. Most notably, Nortel is targeting operating margin
expansion in excess of $1.5 billion in 2008, including
$200 million in cost savings from the previously initiated finance
transformation.
"Execution against these priorities will strengthen the foundation
we are laying for a rejuvenated Nortel," Mike Zafirovski, Nortel
president and CEO, said. "We embarked on this marathon in
December 2005 when we initiated the first phase of this plan.
We're making steady progress and our goal is to realize the full
impact of our actions in 2008."
The company's Business Transformation plan is focused on
simplifying Nortel's business, improving quality, reducing direct
and indirect costs, and generating new revenues. It is designed
to address the company's biggest operational challenges and
comprises six key areas:
* Services,
* Supply Chain Effectiveness,
* Revenue Stimulation (including Sales and Pricing),
* R&D Effectiveness,
* General and Administrative Effectiveness, and
* Organization & Workforce Effectiveness.
The Business Transformation teams consist of top-performing
employees specifically chosen to lead and support the efforts.
These activities will be further supported by implementation of
the Six Sigma quality programs and broad employee engagement
initiatives.
With respect to Integrity Renewal, the company remains focused on
effective governance, improving internal controls and ensuring the
integrity of financial information. Nortel is enhancing its
Compliance function to ensure overall, company wide compliance
with applicable laws, regulations and company policies and the
company has also created new leadership values and asked employees
to reconfirm their commitment to ethical behavior in alignment
with the company's Code of Ethical Business Conduct.
"We have an unwavering commitment to be among the top companies in
the world in corporate governance and business and financial
controls," Mr. Zafirovski said.
As part of Nortel's Growth Imperatives, Mr. Zafirovski has set a
goal to pursue market opportunities where the company can achieve
a leadership position and at least 20 percent market share. "We
have a team currently conducting a full review of our R&D
priorities and investment areas," he said.
For example, Nortel has made decisions to significantly increase
investment in the promising areas of IMS, WiMAX, and IPTV,
redirect funding from its services edge router and sell certain
assets of its Blade Server Switch Business Unit. "You can expect
us to continue to share details related to R&D prioritization as
decisions are made over the next 12 months," said Mr. Zafirovski.
"I have found a deep sense of commitment and pride from the Nortel
employees and I am excited by the energy generated for our
business transformation, integrity renewal and growth activities,"
Mr. Zafirovski added. "I also want to thank our employees and
leadership team who have continued to execute with a passionate
customer focus in the face of many challenges over the last
several years."
Headquartered in Ontario, Canada, Nortel Networks Corporation --
http://www.nortel.com/-- is a recognized leader in delivering
communications capabilities that enhance the human experience,
ignite and power global commerce, and secure and protect the
world's most critical information. Serving both service provider
and enterprise customers, Nortel delivers innovative technology
solutions encompassing end-to-end broadband, Voice over IP,
multimedia services and applications, and wireless broadband
designed to help people solve the world's greatest challenges.
Nortel does business in more than 150 countries.
Nortel Network Corp.'s 4-1/4% Senior Notes due 2008 carry Moody's
Investors Service's B3 rating and Standard & Poor's B- rating.
As previously reported in the Troubled Company Reporter on
Feb. 10, 2006, Standard & Poor's affirmed its 'B-' long-term and
'B-2' short-term corporate credit ratings on the company.
NORTEL NETWORKS: Restatement Delays 2005 Annual Report Filing
-------------------------------------------------------------
Nortel (NYSE/TSX: NT) and its principal operating subsidiary,
Nortel Networks Limited (NNL) are delaying the filing with the
U.S. Securities and Exchange Commission of their annual reports on
Form 10-K for the year ended Dec. 31, 2005 and their corresponding
filings under Canadian securities laws, and announced preliminary
unaudited fourth quarter and year 2005 results.
Nortel and NNL will restate their financial results for
2003, 2004 and the first nine months of 2005, and will have
adjustments to periods prior to 2003, primarily due to revenue
incorrectly recognized in prior periods that should have been
deferred to future periods. The restatement adjustments were
identified primarily through an extensive contract review
undertaken as part of remedial efforts to compensate for
previously reported internal control deficiencies and through
discussions with their independent auditors as part of the audit
of the 2005 financial results.
The Company currently expects revisions to its previously reported
2003 and 2004 financial results reflecting negative impacts on
revenue of $157 million and $77 million and on net earnings/loss
of $91 million and $93 million, as well as revisions to its
previously reported 2005 nine month results reflecting negative
impacts on revenue of $162 million and on net earnings/loss of $95
million in the aggregate. With respect to financial results prior
to 2003, the Company currently expects revisions reflecting
negative impacts on revenue of $470 million and on net
earnings/loss of $99 million, in the aggregate.
"Our priority is to have accurate financial information. Although
the need to restate certain financial statements is unfortunate,
it's the right thing to do. This revenue is real - it was
recognized in the wrong periods. The restatements do not affect
the Company's cash position," said Mike Zafirovski, president and
chief executive officer, Nortel. "The extensive contract review
we undertook in 2005 underscores our commitment to ensure a
solid foundation for this Company going forward. Though it will
take time, our unwavering commitment to be among the top companies
in the world in corporate governance and business and financial
controls remains."
Preliminary Unaudited
Fourth Quarter and Year 2005 Results
Revenues were $2.95 billion for the fourth quarter of 2005
compared to $2.59 billion for the fourth quarter of 2004 and
$2.62 billion for the third quarter of 2005. The Company reported
a net loss in the fourth quarter of 2005 of $2.21 billion, ompared
to net earnings of $107 million in the fourth quarter of 2004 and
a net loss of $110 million in the third quarter of 2005.
In 2005, revenues were $10.83 billion compared to $9.75 billion
for the year 2004. Nortel reported a net loss of $2.41 billion
for the year 2005, compared to a net loss of $144 million for the
year 2004.
Credit Facility,
EDC Support Facility & Debt Securities
Since the Company will not be able to file its 2005 Form 10-K by
March 16, 2006, absent a waiver, an event of default will occur
under Nortel's $1.3 billion one-year credit facility. As a result
of this and certain other related breaches, lenders holding
greater than 50% of each tranche under the 2006 Credit Facility
have the right to accelerate such tranche, and lenders holding
greater than 50% of all of the secured loans under the 2006 Credit
Facility have the right to exercise rights against certain
collateral. The entire $1.3 billion under the 2006 Credit
Facility is currently outstanding. Nortel will request a
temporary waiver from the lenders while Nortel completes its
filing obligations. There can be no assurance that Nortel will
receive such a waiver.
In addition, as a result of a cross-default provision and other
related breaches, absent a waiver, Export Development Canada will
have the right to refuse to issue additional support and terminate
its commitments under the $750 million support facility or
require that NNL cash collateralize all existing support. As at
March 8, 2005, there was approximately $161 million of outstanding
support under this facility. NNL will request a temporary waiver
from EDC to permit continued access to the facility while Nortel
completes its filing obligations. There can be no assurance that
NNL will receive such a waiver.
Once the delay in filing the 2005 Form 10-K extends beyond March
31, 2006, the Company and NNL will not be in compliance with their
obligations to deliver their SEC filings to the trustees under
their public debt indentures. The delay in filing the 2005 Form
10-K will not result in an automatic default and acceleration of
such long-term debt. Neither the trustee under any such public
debt indenture nor the holders of at least 25% of the outstanding
principal amount of any series of debt securities issued under the
indentures will have the right to accelerate the maturity of such
debt securities unless the Company or NNL, as the case may be,
fails to file and deliver its 2005 Form 10-K within 90 days after
the above mentioned holders have given notice of such default to
the Company or NNL. In addition, any acceleration of the loans
under the 2006 Credit Facility would result in a cross-default
under the public debt indentures that would give the trustee under
any such public debt indenture or the holders of at least 25% of
the outstanding principal amount of any series of debt securities
issued under the indentures the right to accelerate such series of
debt securities. Approximately $500 million of debt securities of
NNL (or its subsidiaries) and $1.8 billion of convertible
debt securities of the Company (guaranteed by NNL) are currently
outstanding under the indentures.
Headquartered in Ontario, Canada, Nortel Networks Corporation --
http://www.nortel.com/-- is a recognized leader in delivering
communications capabilities that enhance the human experience,
ignite and power global commerce, and secure and protect the
world's most critical information. Serving both service provider
and enterprise customers, Nortel delivers innovative technology
solutions encompassing end-to-end broadband, Voice over IP,
multimedia services and applications, and wireless broadband
designed to help people solve the world's greatest challenges.
Nortel does business in more than 150 countries.
Nortel Network Corp.'s 4-1/4% Senior Notes due 2008 carry Moody's
Investors Service's B3 rating and Standard & Poor's B- rating.
As previously reported in the Troubled Company Reporter on
Feb. 10, 2006, Standard & Poor's affirmed its 'B-' long-term and
'B-2' short-term corporate credit ratings on the company.
NORTEL NETWORKS: Financial Restatement Cues DBRS' Rating Review
---------------------------------------------------------------
Dominion Bond Rating Service placed these ratings of Nortel
Networks Limited, Nortel Networks Corporation, Nortel Networks
Inc., and Nortel Networks Capital Corporation "Under Review with
Negative Implications":
* Nortel Networks Inc.'s Senior Secured Bank Debt
-- Under Review, Negative B
* Nortel Networks Limited's Secured Senior Notes
-- Under Review, Negative B
* Nortel Networks Capital Corp's Senior Unsecured Notes
-- Under Review, Negative B (low)
* Nortel Networks Corporation's Convertible Notes
-- Under Review, Negative B (low)
* Nortel Networks Inc.'s Senior Unsecured Bank Debt
-- Under Review, Negative B (low)
* Nortel Networks Limited's Notes & Long-Term Senior Debt
-- Under Review, Negative B (low)
* Nortel Networks Ltd's Cl. A, Redeemable Preferred Shares
-- Under Review, Negative Pfd-5 (low)
* Nortel Networks Limited's Class A, Non-Cumulative
Redeemable Preferred Shares
-- Under Review, Negative Pfd-5 (low)n
The rating actions is a result of the Company's plan to restate
financial results going back to 2003 that will result in a delay
in the filing of the Company's 2005 10-K beyond March 16, 2006.
DBRS notes that as a result of this delay, an event of default
will occur on March 17, 2006, under the Company's recently
negotiated $850 million Senior Secured Bank Debt and $450 million
Senior Unsecured Bank Debt that also triggers a cross-default in
the Company's $750 million Export Development Canada facility. In
addition, the Company's other public indentures will potentially
breach covenants on April 1, 2006, although these instruments have
a 90-day cure period.
DBRS notes that the Company's accounting restatements are
relatively small in scope, affecting approximately $396 million in
revenues and $279 million in earnings between 2003 and 2005, and
$470 million in revenues and $99 million in earnings relating to
prior periods. Nortel reported today that, based on preliminary
unaudited figures, 2005 revenues were approximately $10.8 billion.
In the interim, Nortel is trying to obtain a waiver from both its
2006 credit facilities and for the EDC facility, while
simultaneously trying to file its 10-K before April 30, 2006.
Given the limited amount of the revenue statement, DBRS believes
there is a reasonable probability of the Company filing its
statements before the end of April 2006 while obtaining waivers
from its lenders, predicated on no other unusual items being
uncovered. Therefore, the Company appears to have a reasonable
probability to resolve the above-mentioned issues within the near
term and could potentially see its long-term ratings being
reinstated to B at the secured level and B (low) at the unsecured
level.
However, DBRS acknowledges that if the Company were to face
unexpected further obstacles that could limit its ability to file
its 2005 statements as intended, or to obtain the necessary
waivers, its liquidity position could face pressure, especially if
both its public noteholders and lenders made notifications to
accelerate repayment. DBRS estimates that Nortel had
approximately pro forma $2.4 billion in cash and nearly $3.9
billion in debt outstanding as of Dec. 31, 2005.
NORTHWEST AIR: Has Until May 1 to File Schedules of Assets & Debts
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
gave Northwest Airlines Corp. and its debtor-affiliates until May
1, 2006, to submit their schedules of assets and liabilities,
statements of financial affairs, statements of executory contracts
and unexpired leases, and schedules of current income and
expenditures.
Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP,
in New York, explains that, while most of the information
necessary to prepare the Statements and Schedules has been or
shortly will be collected, Huron Consulting Group Inc. and the
Debtors are still digesting and converting the information into
the proper format. In addition, they are reviewing the data
collected from various sources and reconciling discrepancies with
the Debtors' books and records, resolving inconsistencies, and
identifying errors and omissions.
The Debtors, according to Mr. Petrick, have devoted significant
time and resources to a number of important matters relating to
their Chapter 11 cases in the last several months. Among other
things, they have been required to devote substantial resources
to the Section 1113 hearings and the continuing negotiations with
unions. These two projects have consumed significant manpower at
all levels of the Debtors' organization.
Northwest Airlines Corporation -- http://www.nwa.com/-- is
the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and
approximately 1,400 daily departures. Northwest is a member of
SkyTeam, an airline alliance that offers customers one of the
world's most extensive global networks. Northwest and its travel
partners serve more than 900 cities in excess of 160 countries on
six continents. The Company and 12 affiliates filed for chapter
11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No.
05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq.,
at Cadwalader, Wickersham & Taft LLP in New York, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in
Washington represent the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, they
listed $14.4 billion in total assets and $17.9 billion in total
debts. (Northwest Airlines Bankruptcy News, Issue No. 21;
Bankruptcy Creditors' Service, Inc., 215/945-7000).
NORTHWEST AIR: GOAA Wants Carrier to Decide on Airport Contract
---------------------------------------------------------------
The Greater Orlando Aviation Authority asks the U.S. Bankruptcy
Court for the Southern District of New York to compel Northwest
Airlines Corp. and its debtor-affiliates to immediately reject or
assume the Airport Lease Agreement.
The GOAA tells the Court that it owns and operates the facilities
at the Orlando International Airport and before the Petition Date,
certain of the Debtors and GOAA entered into the Orlando Airline-
Airport Lease and Use Agreement, dated Apr. 30, 1980, and certain
related agreements.
Richard S. Kanowitz, Esq., at Kronish Lieb Weiner & Hellman LLP,
in New York, relates that, pursuant to the Airport Lease
Agreement, Northwest Airlines, Inc., is entitled to receive a
pro-rata share of credits if operations at the Orlando Airport
generate a net revenue surplus during the Orlando Airport's
fiscal year, which concludes on September 30 of each calendar
year. The Debtor is entitled to $1,313,677 in Credits for fiscal
year 2005.
Since entering into the Airport Lease Agreement, the Debtors have
utilized the Orlando Airport's facilities by:
* causing passenger aircrafts to land and take off from the
Orlando Airport;
* using the Orlando Airport's terminal space;
* using non-terminal space; and
* using Orlando Airport's equipment.
Northwest Airlines owes $419,428 for prepetition use of the
facilities.
GOAA cites three reasons supporting their request:
(1) Without the immediate assumption or rejection of the
Agreement, GOAA cannot effectively plan for the use of its
facilities given the uncertainty of its relationship with
the Debtors. This uncertainty may result in underutilized
facilities and GOAA's inability to make critical capital
planning decisions;
(2) The Agreement is essential for Northwest's continued
operations in Central Florida and, thus, the Debtors'
ultimate reorganization; and
(3) The Debtors have had more than sufficient time to examine
their ongoing operations and to determine whether they
should assume or reject the Agreement.
If the Debtors decide to reject the Agreements, GOAA seeks the
Court's authorization to set off the Credits owed to Northwest
against:
(i) the prepetition debt owed by Northwest; and
(ii) any prepetition rejection damages GOAA will suffer as a
result of the Debtors' breach of the agreement.
In the alternative, GOAA seeks permission to (1) set off the
Credits against the prepetition debt owed by Northwest; and (2)
retain the balance of the Credits as adequate protection to:
(x) protect it against the erosion of the value if the Airport
facilities; and
(y) preserve its prepetition set-off rights against potential
lease rejection damages preserved under Section 553(a) of
the Bankruptcy Code.
Mr. Kanowitz notes that GOAA and Northwest Airlines both have
claims against each other, each is indebted to the other and the
relevant claims between the parties arose prepetition. Moreover,
the parties' claims and debts are valid and enforceable.
Accordingly, GOAA is entitled to exercise its set-off rights.
Northwest Airlines Corporation -- http://www.nwa.com/-- is
the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and
approximately 1,400 daily departures. Northwest is a member of
SkyTeam, an airline alliance that offers customers one of the
world's most extensive global networks. Northwest and its travel
partners serve more than 900 cities in excess of 160 countries on
six continents. The Company and 12 affiliates filed for chapter
11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No.
05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq.,
at Cadwalader, Wickersham & Taft LLP in New York, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in
Washington represent the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, they
listed $14.4 billion in total assets and $17.9 billion in total
debts. (Northwest Airlines Bankruptcy News, Issue No. 21;
Bankruptcy Creditors' Service, Inc., 215/945-7000).
ORION ENTERPRISES: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Orion Enterprises of Virginia, Inc.
aka Orion Capital Corporation
4099 Foxwood Drive, Suite 202
Virginia Beach, Virginia 23462
Bankruptcy Case No.: 06-70302
Type of Business: Charles Everett Bensten, an equity holder
of the Debtor, also filed for bankruptcy
protection on Oct. 11, 2005 (Bankr. W.D. Va.
Case No. 05-76329)(J. St. John).
Chapter 11 Petition Date: March 10, 2006
Court: Eastern District of Virginia (Norfolk)
Judge: Stephen C. St. John
Debtor's Counsel: Scott W. Foley, Esq.
Shapiro Sher Guinot & Sandler
36 South Charles Street, 20th Floor
Baltimore, Maryland 21201-3147
Tel: (410) 385-4234
Fax: (410) 539-7611
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Liberty Mutual Insurance Co. $4,000,000
175 Berkeley Street
Boston, MA 02116
Harleysville Insurance Co. $1,000,000
355 Maple Avenue
Harleysville, PA 19438
BB&T $268,770
P.O. Box 580003
Charlotte, NC 28258
Hampton Roads Mechanical Contractor $91,964
The Travelers $79,433
Macsons Inc. $74,063
Evans Cabinet Corporation $71,426
Arlin Varela $61,160
DAVCON Inc. $53,905
Ocean Drywall, Inc. $52,826
Virginia Sprinkler Company, Inc. $45,987
Honeywell International Inc. $45,952
Tate & Hill, Inc. $45,551
Greenbrief Vinyl & Gutter, Inc. $40,852
Kampsville Building Materials $37,631
Kathleen Enterprises, Inc. $33,921
M.P. Barden & Sons $33,057
Davishar Plumbing $30,384
Griffith Lumber Company, Inc. $30,321
Clay Werks, Ltd. $27,029
PREMIER PROPERTIES: Judge Perkins Confirms Amended Chapter 11 Plan
------------------------------------------------------------------
The Honorable Thomas L. Perkins of the U.S. Bankruptcy Court for
the Central District of Illinois confirmed the Amended Chapter 11
Plan of Reorganization filed by Alan C. Kendall, dba Premier
Properties. Judge Perkins determined that the Plan satisfies the
13 standards for confirmation required under Section 1129(a) of
the Bankruptcy Code.
As reported in the Troubled Company Reporter on Oct. 21, 2005, the
Amended Plan contemplates the liquidation of the Debtors' assets
to pay creditors' claims.
Summary of Treatment of Claims
Impaired Claims
A. Claims secured by senior liens on real estate consist of the
Class S1 Claims and Class S2 Claims of Northwest Bank & Trust
Co.
1) Class S1 Claims, totaling approximately $83,546, are secured
by a first mortgage on the Debtors' Tract 1 property located
in 2100 18th Street, Moline, Illinois. The Debtor will list
Tract 1 with Dick Ryan, who will receive a 4% commission
from the sale of that property, and Class S1 Claims will be
paid with the net proceeds from the sale.
2) Class S2 Claims, totaling approximately $105,000 and secured
by a first mortgage on the Debtors' Tract 2 property located
in 1505 3rd Street, East Moline, Illinois, will be paid in
accordance with the tenor of Northwest Bank's note and
mortgage. Dr. Kendall will cure an approximate $8,000
arrearage from the $105,000 claim within 120 days of the
Plan's Effective Date.
B. Claims secured by junior liens on real estate consist of the
Class JR1 claims of David and Linda Kendall. Class JR1 Claims,
totaling approximately $83,546 are secured by a second mortgage
on the Debtors' Tract 1 property located in 2100 18th Street,
East Moline, Illinois. The Debtors will list Tract 1 with Dick
Ryan who will receive a 4% commission from the sale of that
property, and Class S1 Claims will be paid with the net
proceeds from the sale.
C. Unsecured Claims consist of all unsecured claims, totaling
approximately $16,222,916, will be paid by Dr. Kendall
within one to two years of the Plan's Effective Date.
Unimpaired Claims, the Plan says, consist of so-called True Leases
Claims. The Debtors will assume any leases or executory contracts
it has related to those Claims pursuant to 11 U.S.C. Section
365(a).
A full-text copy of the Amended Plan is available for a fee at:
http://www.researcharchives.com/bin/download?id=051020030232
Headquartered in Moline, Illinois, Alan C. Kendall, dba Premier
Properties, filed for chapter 11 protection on Dec. 9, 2004
(Bankr. C.D. Ill. Case No. 04-85449). Barry M. Barash, Esq., at
Barash & Everett, LLC, represents the Debtors in their
restructuring efforts. When the Debtors filed for protection from
their creditors, they estimated assets between $1 million and
$10 million and debts between $10 million and $50 million.
PRIMEDEX HEALTH: Obtains New $161 Million Senior Secured Loan
-------------------------------------------------------------
Primedex Health Systems, Inc. (OTCBB:PMDX) entered into a new
$161 million senior secured credit facility which it used to
refinance substantially all of its existing indebtedness (except
for $16.1 million of outstanding subordinated debentures and
approximately $5 million of capital lease obligations).
The facility provides for:
* a $15 million five-year revolving credit facility,
* an $86 million term loan due in five years and
* a $60 million second lien term loan due in six years.
The loans are subject to acceleration on Dec. 27, 2007, unless
Primedex has made arrangements to discharge or extend its
outstanding subordinated debentures by that date. The loans are
essentially payable interest only monthly.
"The facility is a transforming financial transaction for our
Company," Mark Stolper, Chief Financial Officer of Primedex, said.
The resulting capital structure greatly increases our liquidity,
and will allow us to use significantly more of the cash that we
generate to grow our business and capitalize on future business
opportunities."
"We are excited to have successfully refinanced our capital
structure," Howard Berger, M.D., Chief Executive Officer of
Primedex, said. "This will allow us to capitalize on the growing
opportunities that we see ahead of us in the diagnostic imaging
industry. This is a dynamic time in our business. It was
important for us to create a financing structure that affords us
more flexibility to grow and optimally manage our business."
The $15 million revolving credit facility was substantially
undrawn at closing. General Electric Capital Corporation was Lead
Arranger and will be Administrative Agent for the credit facility.
Primedex Health Systems, through its RadNet Management subsidiary,
Primedex owns and manages about 55 California facilities that
offer magnetic resonance imaging, ultrasound, mammography,
diagnostic radiology, and similar services. Medical services at
most of these facilities are provided by Beverly Radiology Medical
Group, which is almost wholly owned by Primedex CEO Howard Berger,
who also owns about 30% of Primedex.
* * *
As reported in the Troubled Company Reporter on Jan. 11, 2006,
Moody's Investors Service is withdrawing all of the ratings for
Primedex Health Systems, Inc., the ultimate parent of Radnet
Management, Inc. and other operating entities, and its affiliate
Beverly Radiology Medical Group III, because the previously
proposed financing has been terminated.
Moody's withdraws these ratings:
* the B3 rating on a $10 million revolving credit facility
due 2010 for Radnet and Beverly Radiology Medical Group III;
* the B3 rating on a $125 million first lien term loan due 2010
for Radnet;
* the Caa2 rating on the $45 million second lien term loan
due 2011 for Radnet;
* the B3 corporate family rating for Primedex; and
* the Speculative Grade Liquidity rating of SGL-2.
PROCARE AUTOMOTIVE: Wants to Hire Steven Sues as Financial Advisor
------------------------------------------------------------------
ProCare Automotive Service Solutions, LLC, asks the U.S.
Bankruptcy Court for the Northern District of Ohio, Eastern
Division for permission to employ Steven Sues & Company as its
financial advisor and consultant.
Steven Sues will:
1) assist in the management of the Debtor's financial
functions, including preparing financial statements, monthly
operating reports and complying with the terms of the
Court's DIP Financing order;
2) assist in the management of cash flow, including compliance
with the DIP financing budget, analysis and reporting of
actual receipts and disbursements versus the budget,
preparation of revised and new forecasts, negotiations with
vendors, collection of accounts receivable and other cash
management functions;
3) comply and render oversight of chapter 11 requirements,
including assistance in preparing the Debtor's schedules and
statements of financial affairs, assisting in the management
of the reclamation claims and unsecured claims processes and
assisting in the development and implementation of a plan
of reorganization and disclosure statement;
4) provide testimony at a deposition, hearing, or other similar
forum and assist the Debtor with respect to operational
initiatives, including sales improvement initiatives, cost
control initiatives and other profit improvement
initiatives;
5) assist with the Debtor's sale process for its assets,
including facilitation of the overall process, assist in
negotiations with buyers, review and consult the asset
purchase agreement, bidding procedures and sale motion,
consult with the Debtor's and third party's investment
bankers and counsel and facilitation of potential
purchaser's due diligence;
6) serve as the liaison between the unsecured creditors'
committee, the Debtor's professionals and the secured
noteholders, including assisting in the gathering,
developing and providing information that may be requested
by the creditors' committee;
7) consult and assist the Debtor and its professionals in the
preparing all necessary applications, motions, pleadings,
reports and other legal papers required in connection with
the administration of the Debtor's estate; and
8) perform all other necessary financial advisory services that
are required by the Debtor or its professionals.
Steven G. Sues, a member at Steven Sues, is one of the lead
professionals from his Firm performing services for the Debtor.
Mr. Sues charges $250 per hour for his services. Mr. Sues
discloses that Steven Sues received a $10,000 retainer.
Steven Sues assures the Court that it does not represent any
interest materially adverse to the Debtor and is "disinterested"
as that term is defined in Section 101(14) of the Bankruptcy Code.
Based in Independence, Ohio, ProCare Automotive Service Solutions,
LLC -- http://www.procareauto.com/-- offers maintenance and
repair services to all makes and models of foreign, domestic,
light truck, and commercial-fleet vehicles. ProCare operates
82 retail locations in eight metropolitan areas throughout
three states. The Debtor filed for chapter 11 protection on
March 5, 2006 (Bankr. N.D. Ohio Case No. 06-10605). Alan R.
Lepene, Esq., Jeremy M. Campana, Esq., and Sean A. Gordon, Esq.,
at Thompson Hine LLP, represent the Debtor. The Debtor estimated
its assets and debts at $10 to $50 million when it filed for
bankruptcy protection.
PROCARE AUTOMOTIVE: Wants to Hire BB&T as Investment Bankers
------------------------------------------------------------
ProCare Automotive Service Solutions, LLC, asks the U.S.
Bankruptcy Court for the Northern District of Ohio, Eastern
Division for permission to employ BB&T Capital Markets as its
investment bankers.
BB&T Capital will:
1) review the Debtor's financial plans and business plans and
assist the Debtor's management in analyzing strategies,
valuation ranges and structures for the possible sale of
substantially all of the Debtor's assets;
2) prepare, with the help the Debtor's senior management, a
brief confidential memorandum describing the Debtor and the
proposed terms of the sale transaction, in which that
memorandum will not be made available or used in discussions
with potential purchasing companies until it and its use
has been reviewed for accuracy and approved by the Debtor;
3) develop a systematic contact program for approaching
potential interested parties for the sale transaction and
supervise and coordinate presentations to those interested
parties;
4) analyze, compare and assist in the evaluation of any offers
coming from potential interested parties and advise the
Debtor in all negotiations with those interested parties;
5) manage and coordinate the documentation and closing of the
sale transaction, including advising the Debtor's counsel in
preparing the required agreements and closing documents;
6) participate in the auction of substantially all of the
Debtor 's assets pursuant to Section 363 of the Bankruptcy
Code and attend and provide testimony at court hearings,
depositions or other related proceedings;
7) consult and assist the Debtor and its professionals in
preparing all necessary motions, pleadings, reports and
other legal papers required in connection with the
administration of the Debtor's estate; and
8) render all other necessary investment banking services
that will be required by the Debtor or its professionals.
Rex H. Green, a managing director at BB&T Capital, is one of the
lead professionals of his Firm performing services to the Debtor.
Mr. Green discloses that BB&T Capital will be paid:
-- a $375,000 Sale Transaction Fee plus
-- 2.5% of the aggregate transaction value of the
purchase price greater than $21.5 million
for the sale of substantially all of the Debtor's assets
BB&T Capital assures the Court that it does not represent any
interest materially adverse to the Debtor and is a disinterested
person as that term is defined in Section 101(14) of the
Bankruptcy Code.
Based in Independence, Ohio, ProCare Automotive Service Solutions,
LLC -- http://www.procareauto.com/-- offers maintenance and
repair services to all makes and models of foreign, domestic,
light truck, and commercial-fleet vehicles. ProCare operates 82
retail locations in eight metropolitan areas throughout three
states. The Debtor filed for chapter 11 protection on March 5,
2006 (Bankr. N.D. Ohio Case No. 06-10605). Alan R. Lepene, Esq.,
Jeremy M. Campana, Esq., and Sean A. Gordon, Esq., at Thompson
Hine LLP, represent the Debtor. The Debtor estimated its assets
and debts at $10 to $50 million when it filed for bankruptcy
protection.
QUEST TRUST: Moody's Assigns Ba1 Rating to Class M-5 Certificates
-----------------------------------------------------------------
Moody's Investors Service assigned Aaa rating to the senior
certificates issued by Quest Trust 2006-X1, Asset-Backed
Certificates, Series 2006-X1, and ratings ranging from A3 to Ba1
to the subordinate certificates in the deal.
The securitization is backed by Scratch and Dent, current second
liens, reperforming, small balance, and other mortgage loans,
originated by Ameriquest Mortgage Company or by one of its
subsidiaries or affiliates. The ratings are based primarily on
the credit quality of the loans, and on the protection from
subordination, overcollateralization, and excess interest. Moody's
expects collateral losses to range from 8.95% to 9.45%.
The Aaa rating on the notes is based on the Financial Guaranty
Insurance Company insurance policy. FGIC receives some protection
against losses through a combination of excess spread and
overcollateralization. Based on these features, Moody's concluded
that the risk to FGIC from insuring the notes was "investment
grade."
Ameriquest Mortgage Company will act as master servicer.
Ameriquest had previously disclosed discussions with financial
regulatory agencies or attorneys general offices of several
states, regarding lending practices of AMC. ACC Capital Holdings
Corporation, the parent company of Argent and AMC, had recorded a
provision of $325 million in its financial statements with respect
to this matter. ACC has recently announced that it had entered
into a settlement agreement with forty-nine states and District of
Columbia. Under the terms of the settlement agreement, ACC agreed
to pay $295 million toward restitution to borrowers and $30
million to cover the States' legal costs and other expenses. In
addition, ACC has agreed on behalf of itself, AMC and AMC's retail
affiliates, to supplement several of its business practices and to
submit itself to independent monitoring. The agreement is not
expected to have any material credit implications on
securitizations backed by collateral originated by AMC, Argent or
their affiliates.
The complete rating actions are:
Quest Trust 2006-X1, Asset-Backed
Certificates, Series 2006-X1
* Class A-1, Assigned Aaa
* Class A-2, Assigned Aaa
* Class A-3, Assigned Aaa
* Class M-1, Assigned A3
* Class M-2, Assigned Baa1
* Class M-3, Assigned Baa2
* Class M-4, Assigned Baa3
* Class M-5, Assigned Ba1
RIVERSTONE NETWORKS: Panel Wants Schulte Roth as Lead Counsel
-------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in
Riverstone Networks, Inc., and its debtor-affiliates' bankruptcy
cases asks the Honorable Christopher S. Sontchi of the U.S.
Bankruptcy Court for the District of Delaware for permission to
retain Schulte Roth & Zabel LLP as its lead bankruptcy counsel,
nunc pro tunc to Feb. 17, 2006.
Schulte Roth will:
(a) assist and advise the Committee in its consultations with
the Debtors, other committees, if any, and other parties-
in-interest relative to the overall administration of the
Debtors' estates;
(b) represent the Committee at hearings to be held before the
Court and communicate with the Committee regarding the
matters heard and issues raised, as well as the decisions
and considerations of the Court;
(c) assist and advise the Committee in its examination and
analysis of the Debtors' financial affairs;
(d) review and analyze all applications, orders, operating
reports, schedules and statements of financial affairs
filed or to be filed with the Court by the Debtors or other
interested parties in the Debtors' cases; advise the
Committee as to the necessity and propriety of those
documents and their impact on the rights of unsecured
creditors, and upon the cases generally; and after
consultation with, and approval from, the Committee or its
designees' consent to appropriate orders on its behalf or
otherwise object to them;
(e) assist the Committee in preparing appropriate legal
pleadings and proposed orders as may be required in support
of positions taken by the Committee and preparing witnesses
and reviewing documents relevant to them;
(f) coordinate the receipt and dissemination of information
prepared by and received from the Debtors' attorneys,
accountants, financial advisors or other professionals
retained in the Debtors' cases, as well as information as
may be received from other professionals engaged by the
Committee and other committees;
(g) advise the Committee in connection with the Debtors'
solicitation and filing with the Court of acceptances or
rejections of any proposed plan or plans or reorganization
or liquidation; and
(h) perform all other necessary legal services and provide for,
all other necessary legal advice to, the Committee in the
Debtors' cases.
Jeffrey S. Sabin, Esq., a member at Schulte Roth & Zabel LLP,
discloses that the hourly rates of the Firm's professionals are:
Designation Hourly Rate
----------- -----------
Partners $580 to $800
Special Counsel $550
Associates $225 to $525
Legal Assistants $130 to $265
Mr. Sabin assures the Court that Schulte Roth & Zabel LLP does not
have any connection with, or any adverse interest to the Debtors,
its creditors, or any other party-in-interest.
Objections to Schulte Roth's retention, if any, must be filed by
4:00 p.m. on Mar. 16, 2006. Judge Sontchi will convene a hearing
at 2:30 p.m. on Mar. 23, 2006, to consider the Committee's
request.
With more than 400 attorneys, Schulte Roth & Zabel LLP --
http://www.srz.com/-- is a full-service law firm, which provides
legal advice and representation on these practice areas: business
reorganization, business transactions, employment & employee
benefits, environmental, finance, individual client services,
intellectual property, investment management, litigation, real
estate, structured products & derivatives, and tax.
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.
ROUGE INDUSTRIES: Wants to Continue Using Ford's Cash Collateral
----------------------------------------------------------------
Rouge Industries, Inc., and its debtor-affiliates ask the U.S
Bankruptcy Court for the District Of Delaware to extend, until
June 30, 2006, its authority to use cash collateral securing
repayment of debts to Ford Motor Company.
The Debtors will need approximately $1.8 million to wind down
their estate. The Debtors currently hold approximately
$95.6 million in cash. Most, if not all, of the cash necessary to
prosecute the Ford litigation and a plan of liquidation must come
from the Debtors' remaining sale proceeds.
Ford asserted liens on approximately $92 million of the sale
proceeds as of March 31, 2006. Pursuant to the counterclaims, the
Debtors have objected to Ford's interest in the sale proceeds on
multiple grounds, including, without limitation, equitable
subordination, recharacterization, avoidance and Section 502(d) of
the Bankruptcy Code.
As adequate protection for the prepetition lender, the Debtors
have agreed to provide Ford replacement liens and security
interests to the extent of any diminution in value of its
collateral to the extent that Ford has an interest or a valid
perfected lien in the Secured Property, in all of the Debtors'
presently owned or acquired property and assets, including sale
proceeds, but excluding causes of actions arising under Chapter 5
of the Bankruptcy Code.
Headquartered in Dearborn, Michigan, Rouge Industries, Inc., an
integrated producer of flat-rolled steel, filed for chapter 11
protection on October 23, 2003 (Bankr. D. Del. Case No. 03-13272).
Donna L. Harris, Esq., Robert J. Dehney, Esq., Eric D. Schwartz,
Esq., Gregory W. Werkheiser, Esq., and Alicia B. Davis, Esq., at
Morris, Nichols, Arsht & Tunnell represent the Debtors in their
restructuring efforts. Kurt F. Gwynne, Esq., Claudia Z. Springer,
Esq., and Paul M. Singer, Esq., at Reed Smith LLP, serve as
counsel to the Official Committee of Unsecured Creditors. When
the Debtors filed for protection from their creditors, they listed
$558,131,000 in total assets and $558,131,000 in total debts. On
Dec. 19, 2003, the Court approved the sale of substantially all of
the Debtors' assets to SeverStal N.A. for $285.5 million. The
Asset Sale closed on Jan. 30, 2005.
RUFUS INC: Wants Until May 18 to Remove State Court Actions
-----------------------------------------------------------
Rufus, Inc., asks the U.S. Bankruptcy Court for the District of
Delaware to extend, until May 18, 2006, the period within which it
can remove civil actions commenced in state court to the Del.
District Court pursuant to Bankruptcy Rule 9027(a).
The Debtor argues that the extension will afford it additional
time to make fully informed decisions concerning the removal of
each pending prepetition civil action without forfeiting its
rights under Section 1452 of the Bankruptcy Code.
Headquartered in Meriden, Connecticut, Rufus, Inc., sells dogs,
dog food, supplies and accessories. The Debtor also operates a
chain of six retail stores in the Northeastern United States. The
Company filed for chapter 11 protection on Aug. 10, 2005 (Bankr.
D. Del. Case No. 05-12218). Edward J. Kosmowski, Esq., and Ian S.
Fredericks, Esq., at Young Conaway Stargatt & Taylor, LLP,
represent the Debtor in its bankruptcy proceeding. Frederick B.
Rosner, Esq., at Jaspan Schlesinger Hoffman, represents the
Official Committee of Unsecured Creditors. When the Debtor filed
for protection from its creditors, it listed $1.8 million in total
assets and $12.7 million in total debts.
SIGNATURE POINTE: Files Amended Plan Following Extended GE Loan
---------------------------------------------------------------
Signature Pointe Investors, LP, delivered an Amended Plan of
Reorganization and a Disclosure Statement explaining that Plan
with the U.S. Bankruptcy Court for the Western District of Texas
in Austin on Feb. 27.
The Amendment was made following Court-approval of Signature
Pointe's request to extend its use of cash collateral securing
repayment of its prepetition debt to General Electric Credit
Equities, Inc., until May 31, 2006.
The Cash Collateral, as reported in the Troubled Company Reporter
on Feb. 28, 2006, secures GE's asserted 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.
Under the Modified Plan, if GE accepts the Plan, as full
satisfaction of the GE Claim:
a) GE will acquire the Property for a purchase price of
$15,584,526 -- which equals the unpaid principal balance of
the HUD Note as of the Petition Date, plus accrued unpaid
interest that accrued prior to the Petition Date -- or
other amount mutually agreed to by the parties; and
b) GECE will make $25,000 in cash payments to the Debtor.
If GE does not accept the Plan, the Debtor may object to the
allowance of the GE Claim and may challenge the validity of any
lien or security interest asserted by GE with respect to the
Property; and the Debtor may, no later than one year after the
Effective Date, sell the Property or refinance the Property and
pay the Allowed GE Claim in full in cash.
During the one-year period after the Effective Date, the Debtor
will pay GE monthly payments of principal and interest calculated
based on the non-default rate in the HUD Note and the principal
balance of the HUD Note as of the Effective Date, which will be
calculated to include any interest due under the HUD Note.
If the Debtor is unable to make monthly payments during the year
following the Effective Date, R&B Realty will advance sufficient
funds to the Debtor to make timely payments.
For GE's claims under Class 6 General Unsecured Claims, within 10
days after the Initial Distribution Date, the Debtor will pay each
non-Insider Holder of an Allowed General Unsecured Claim a single
Cash payment, using up to $75,000 of net cash flow from the
Property, in the full amount of the Holder's Allowed Claim, and
any unused portion of that amount will be paid to GE and applied
to the HUD Note.
Alternatively, each Holder of an Allowed General Unsecured Claim
will receive one Cash payment within 12 months after the Initial
Distribution Date. The General Unsecured Claims, aggregating
$2,225,899, holds 52 estimated claims including claims of
Insiders.
As reported in the Troubled Company Reporter on Oct. 31, 2005,
the Debtor's Plan entitles all classes of creditors to receive
full payment of their allowed claims. Since all other senior
classes of claims are paid in full under the Plan, equity
interests holders will retain their interest after the Debtor
exits from bankruptcy protection. The reorganized Debtor intends
to continue its operations and emerge as a viable and financially
stable company.
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.
STELCO INC: Seeks Court Advice on Distribution of Sale Proceeds
---------------------------------------------------------------
Stelco Inc. announces that the Fifty-Fourth Report of the Monitor
in the matter of the Company's Court-supervised restructuring
filed on Monday, March 13, 2006.
A full-text copy of the Report is available at no charge at
http://ResearchArchives.com/t/s?674
The Report deals exclusively with a motion by the Company to be
heard on March 16, 2005. The motion concerns the distribution of
sale proceeds with respect to Stelco's disposition of non-core
assets during its restructuring.
In pursuit of its previously-announced strategy, and as announced
throughout the asset sale process, the Company sold the issued and
outstanding shares of four wholly-owned subsidiaries:
* AltaSteel Ltd.,
* Norambar Inc.,
* Stelfil Lt,e and
* Stelwire Ltd.
The Company also sold the assets of CHT Steel Company Inc.,
Stelpipe Ltd. and Welland Pipe Ltd.
The sale proceeds from those transactions were paid to, and have
been held since then by, the Monitor in trust. The motion seeks a
Court Order authorizing the Monitor to distribute the funds that
can be released on the restructuring plan implementation date to
Stelco or as Stelco may direct. The motion also deals with those
sale proceeds the Monitor is required to hold beyond the plan
implementation date pursuant to any of the above-noted sale
agreements. The Order being sought would authorize the Monitor to
release such sale proceeds in accordance with those agreements
without further Order of the Court.
Stelco, Inc. -- http://www.stelco.ca/-- is a large, diversified
steel producer. Stelco is involved in all major segments of the
steel industry through its integrated steel business, mini-mills,
and manufactured products businesses. The company is currently in
the final stages of a Court-supervised restructuring. This
process is designed to establish the Company as a viable and
competitive producer for the long term. The new Stelco will be
focused on its Ontario-based integrated steel business located in
Hamilton and in Nanticoke. These operations produce high quality
value-added hot rolled, cold rolled, coated sheet and bar
products.
In early 2004, after a thorough financial and strategic review,
Stelco concluded that it faced a serious viability issue. The
Corporation incurred significant operating and cash losses in 2003
and believed that it would have exhausted available sources of
liquidity before the end of 2004 if it did not obtain legal
protection and other benefits provided by a Court-supervised
restructuring process. Accordingly, on Jan. 29, 2004, Stelco and
certain related entities filed for protection under the Companies'
Creditors Arrangement Act.
The Court extended the stay period under Stelco's Court-supervised
restructuring from Dec. 12, 2005, until Mar. 31, 2006.
TEC FOODS: Exclusive Plan-Filing Period Extended Until May 2
------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Michigan
extended, until May 2, 2006, the period within which TEC Foods,
Inc., has the exclusive right to file a chapter 11 plan. The
Court also extended, until June 30, 2006, the period for the
Debtor to solicit acceptances of that plan.
As reported in Troubled Company Reporter on Feb. 16, 2006, the
Debtor said it will use the additional time to complete
negotiations of a global resolution with Wells Fargo Bank, N.A.
and Taco Bell Corporation.
In addition, the extension would allow FL Receivables Trust 2002
to file a proof of claim, which the Debtor believes will trigger
an adjudication of its objection to certain elements of the claim.
The Debtor told the Court that the Chapter 7 Trustee for TEC
Foods of Chicago, Inc., is willing to conduct a sale of TFIC's
intangible assets that are subject to FLRT's security interests.
The Debtor believes that the outcome of the sale, if it occurs
within the short term, would better define the amount of any
deficiency claim and narrow the issues and disputes between the
parties for the benefit of other creditors of the estate in the
context of plan confirmation.
Headquartered in Pontiac, Michigan, TEC Foods, Inc., is a Taco
Bell franchisee. The company filed for chapter 11 protection on
Nov. 3, 2005 (Bankr. E.D. Mich. Case No. 05-89154). Paula A.
Hall, Esq., at Butzel Long, P.C., represents the Debtor in its
restructuring efforts. When the Debtor filed for protection form
its creditors, it estimated assets and debts between $10 million
and $50 million.
TEC FOODS: Has Until June 1 to Make Lease-Related Decisions
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Michigan
extended, until June 1, 2006, the period in which TEC Foods, Inc.,
may assume, assume and assign or reject unexpired nonresidential
real property leases.
The Debtor tells the Court that its leases are among its assets
and are vital to its reorganization. The Debtor says that it will
be unable to intelligently appraise its financial situation and
the potential value of the leases until it reaches a consensus
with Wells Fargo Bank, N.A., and Taco Bell.
The Debtor argues that if its lease-decision period is not
extended, then it will be compelled to forfeit the benefits
associated with the leases and cure any existing defaults on the
leases.
Headquartered in Pontiac, Michigan, TEC Foods, Inc., is a Taco
Bell franchisee. The company filed for chapter 11 protection on
Nov. 3, 2005 (Bankr. E.D. Mich. Case No. 05-89154). Paula A.
Hall, Esq., at Butzel Long, P.C., represents the Debtor in its
restructuring efforts. When the Debtor filed for protection form
its creditors, it estimated assets and debts between $10 million
and $50 million.
TELOGY INC: Gets Court Okay to Hire Ernst & Young as Auditor
------------------------------------------------------------
Telogy, Inc., and e-Cycle, LLC, sought and obtained authority from
the U.S. Bankruptcy Court for the Northern District of California
to retain Ernst & Young LLP as their independent auditors and tax
services providers, nunc pro tunc to November 29, 2005.
As reported in the Troubled Company Reporter on Mar. 1, 2006,
Ernst & Young is expected to:
a) complete the audit and report on the Debtors' financial
statements at December 31, 2004 and for the year then ended;
b) provide tax compliance to prepare the U.S. federal income
tax return, Form 1120S, for the Debtors for the year ended
December 31, 2005 and prepare state and local income and
franchise tax returns;
c) provide Sales and Use Tax Consulting, specifically:
i) assessing the amount of sales and use tax due by the
Debtors for the past three years which is triggered
when property enters Illinois (and Chicago);
ii) preparing and reviewing amended sales and use tax
returns, including computation of potential interest
and penalties;
iii) advising Telogy on advantages and disadvantages of
voluntary disclosure process; and
iv) assisting Telogy in reviewing its lease contracts in
Illinois and provide advice on how best to handle any
amounts collected from lessees related to sales and use
tax; and
d) provide assistance to the Debtors for routine small projects
when certain projects are not covered. Those projects may
include assistance with tax issues, assistance with
transactional issues, or providing assistance to the Debtors
in connection with its dealings with tax authorities.
The Firm is owed $10,500 for prepetition services. As a condition
of its retention, Ernst & Young will waive that claim.
Robyn Dahlin, an Ernst & Young member, disclosed that the Firm's
professionals bills:
a) Audit Services
Professional Hourly Rate
------------ -----------
Partners $416
Senior Managers $388
Managers $270
Seniors $162
Staff $144
b) Business Return Preparation. The Firm's fee for preparing
the federal return will be $28,000 and $35,000 will be
charged for the state and local returns.
c) Routine On-Call Tax Advice/Sales and Use Tax Consulting:
Professional Hourly Rate
------------ -----------
Partners $640
Senior Managers $395
Managers $295
Seniors $225
Staff $150
To the best of the Debtors' knowledge, Ernst & Young does not
represent any interest adverse to them and the estates and is
"disinterested" as that term is defined in Section 101(14) of the
Bankruptcy Code.
Headquartered in Union City, California, Telogy, Inc. --
http://www.tecentral.com/-- rents, sells, leases electronic test
equipment including oscilloscopes, spectrum, network, logic
analyzers, power meters, OTDRs, and optical, from manufacturers
like Tektronix, Rohde & Schwarz. Telogy, Inc., and its
debtor-affiliate, e-Cycle, LLC, filed for chapter 11 protection on
Nov. 29, 2005 (Bankr. N.D. Calif. Case No. 05-49371). Ramon M.
Naguiat, Esq., at Pachulski, Stang, Ziehl, Young Jones & Weintraub
P.C. represents the Debtor in its restructuring efforts. When the
Debtors filed for protection from their creditors, they estimated
assets and debts of more than $100 million.
As reported in the Troubled Company Reporter on Feb. 8, 2006,
Telogy and e-Cycle filed a Joint Plan of Reorganization with the
U.S. Bankruptcy Court for the Northern District of California on
January 23, 2005. The Joint Plan proposes that (x) secured
creditors will own the Reorganized Company; (y) unsecured
creditors will share, pro rata, a $100,000 pot of money; and (z)
subordinated debt holders will receive a small basket of new stock
and warrants.
TELOGY INC: Court Gives Nod on Independent Equipment as Appraiser
-----------------------------------------------------------------
Telogy, Inc., and e-Cycle, LLC, sought and obtained authority from
the U.S. Bankruptcy Court for the Northern District of California
to employ Independent Equipment Company as their appraiser.
As reported in the Troubled Company Reporter on Feb. 17, 2006, IEC
will perform a review appraisal of a portfolio of approximately
17,900 pieces of test and measurement equipment. The Debtors
require an appraisal of the equipment for audit and other
purposes.
The Debtors tell the Court that before they filed for bankruptcy,
IEC provided them with similar equipment appraisals and was paid
about $37,500 for its services. The Debtors clarify that they owe
no amounts to IEC as of the petition date and that IEC has not
been paid any retainer.
IEC will receive a $27,500 flat fee plus reimbursement of actual
and reasonable expenses.
To the best of the Debtors' knowledge, IEC does not represent any
interest adverse to them and the estates and is "disinterested"
under applicable sections of the Bankruptcy Code.
Headquartered in Union City, California, Telogy, Inc. --
http://www.tecentral.com/-- rents, sells, leases electronic test
equipment including oscilloscopes, spectrum, network, logic
analyzers, power meters, OTDRs, and optical, from manufacturers
like Tektronix, Rohde & Schwarz. Telogy, Inc., and its
debtor-affiliate, e-Cycle, LLC, filed for chapter 11 protection on
Nov. 29, 2005 (Bankr. N.D. Calif. Case No. 05-49371). Ramon M.
Naguiat, Esq., at Pachulski, Stang, Ziehl, Young Jones & Weintraub
P.C. represents the Debtor in its restructuring efforts. When the
Debtors filed for protection from their creditors, they estimated
assets and debts of more than $100 million.
As reported in the Troubled Company Reporter on Feb. 8, 2006,
Telogy and e-Cycle filed a Joint Plan of Reorganization with the
U.S. Bankruptcy Court for the Northern District of California on
January 23, 2005. The Joint Plan proposes that (x) secured
creditors will own the Reorganized Company; (y) unsecured
creditors will share, pro rata, a $100,000 pot of money; and (z)
subordinated debt holders will receive a small basket of new stock
and warrants.
TOWER AUTOMOTIVE: Court Okays Assumption of Headquarters Leases
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
gave Tower Automotive, Inc. and its debtor-affiliates authority to
assume two lease agreements with Novi Research Park, SPC, LLC.
The lease agreements are:
(1) A Novi Research Park Phase I Lease Agreement dated
April 21, 1999, for office space located at 27175 Haggerty
Road, Novi, Michigan; and
(2) A lease agreement dated April 19, 2000, for office space
at 27275 Haggerty Road, Suite 680, in Novi, Michigan.
Anup Sathy, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois,
relates that the Premises subject to the Lease Agreements, which
consist of 102,000 useable gross square-feet, serves as
headquarters for the Debtors' global and North American
operations.
Mr. Sathy explains that because of the uncertainty as to the
timing of the Debtors' emergence from Chapter 11, and the
undetermined quantity of space that would be required post-
emergence, the Debtors opted to negotiate an 18-month extension
on the Lease Agreements through August 31, 2007, at a reduced
rental rate of $12 per square foot. Pursuant to the Lease
Agreements, the Debtors are required to pay rent at $102,398 per
month through February 28, 2007. From March 1, 2007, to the
expiration date, the Debtors' rent will be $106,665 per month.
The Debtors also obtained a $150,000 allowance from Novi for
tenant improvements. In addition, the Debtors reduced the total
amount of space leased by 7,376 square-feet.
The Debtors will pay Novi $1,583 on account of all outstanding
prepetition amounts owed under the Lease Agreements.
Headquartered in Grand Rapids, Michigan, Tower Automotive, Inc.
-- http://www.towerautomotive.com/-- is a global designer and
producer of vehicle structural components and assemblies used by
every major automotive original equipment manufacturer, including
BMW, DaimlerChrysler, Fiat, Ford, GM, Honda, Hyundai/Kia, Nissan,
Toyota, Volkswagen and Volvo. Products include body structures
and assemblies, lower vehicle frames and structures, chassis
modules and systems, and suspension components. The Company and
25 of its debtor-affiliates filed voluntary chapter 11 petitions
on Feb. 2, 2005 (Bankr. S.D.N.Y. Case No. 05-10576 through 05-
10601). James H.M. Sprayregen, Esq., Ryan B. Bennett, Esq., Anup
Sathy, Esq., Jason D. Horwitz, Esq., and Ross M. Kwasteniet, Esq.,
at Kirkland & Ellis, LLP, represent the Debtors in their
restructuring efforts. When the Debtors filed for protection from
their creditors, they listed $787,948,000 in total assets and
$1,306,949,000 in total debts. (Tower Automotive Bankruptcy News,
Issue No. 29; Bankruptcy Creditors' Service, Inc., 215/945-7000).
TRUMP ENT: Court Says Beneficial Holders Will Receive Distribution
------------------------------------------------------------------
In a 20-page opinion, Judge Wizmur says she will not enforce the
"Record Date" as established by Trump Entertainment Resorts, Inc.,
fka Trump Hotels & Casino Resorts, Inc., and its debtor-
affiliates' confirmed Chapter 11 Plan. Judge Wizmur denies the
request of a group of shareholders who previously held common
stock in Trump Hotels & Casino Resorts, Inc.
The Shareholders contend that they are the claim holders and
intended beneficiaries under Class 11 of the Debtors' plan. They
seek to compel the Debtors to make a distribution of cash and
warrants to them.
On the other hand, Trump maintains that when the shareholders
sold their shares after the record date and prior to plan
distribution, they transferred their right to receive a
distribution from the estate.
Beneficial Holder vs. Record Holder
According to Judge Wizmur, the Debtors' contention that
distribution under the Plan was only required to be made to the
"record" holders, is not inconsistent with the Former
Shareowners' claim that those distributions were intended for the
"beneficial" holders of the stock. Judge Wizmur points out, and
as the Former Shareowners correctly highlight, the beneficiaries
of Class 11 were intended to be the "beneficial" owners of Old
THCR Common Stock.
The "beneficial" owners, most of whom held their shares not as
record owners, but through financial institutions in "street
name", would have received their distribution through the holder
of record of their shares, the Depository Trust Company. The
Plan envisioned that the Debtors would rely upon the registry of
record holders to determine entitlement to distribution as a
"holder" of the Old THCR Common Stock as of the Record Date. The
distribution would then pass from the record holder to the
beneficial holder who actually purchased the stock.
The Continental Bank and Trust Company as the Disbursing Agent
under the Plan actually made most of the Class 11 distribution to
the DTC as the record holder. DTC, which "registers its shares
on companies' share registers under the name 'Cede & Co.'", is
recognized as "the world's largest securities depository."
DTC serves as a clearinghouse, holding shares on behalf of
various banks, brokers, firms and other funds, which in turn hold
those shares for their participants. This type of ownership is
commonly known as "street name" registration, and is the standard
mechanism for holding public shares of stock. The process serves
to "facilitate securities trading, eliminate paperwork and
preserve the confidentiality of beneficial owners' identities."
In effect, Judge Wizmur notes, the distribution from the Debtors'
disbursing agent to DTC was intended to ultimately reach the
actual beneficial holders. The Debtors' attempt to focus on the
distinction between record holders and beneficial holders to
contend that the Former Shareowners were not entitled to direct
distribution under the Plan because they were not the record
holders of Old THCR Common Stock must fail, Judge Wizmur says.
Surrender of Stock Certificates
Judge Wizmur also notes that the Debtors alternatively contend
that it was only obligated to make distribution to those
shareholders who surrendered their stock certificates. The
Former Shareowners were not entitled to a distribution because
they did not turn over stock certificates.
The Debtors determined that as of March 28, 2005, there were
19,943,877 shares of Old THCR Common Stock held by all holders of
record -- other than shares held by or for Donald J. Trump. The
DTC was listed as the holder of record for 19,691,513 of those
shares. The stock certificates for the DTC shares were held by
DTC's nominee, Cede & Co., and were surrendered to the Debtors'
disbursing agent.
The Debtors' counsel acknowledged that the certificates
representing those shares were surrendered to the disbursing
agent. Thus, Judge Wizmur says, the Debtors' contention in this
regard must also fail because the certificates were surrendered
and distribution occurred under the terms of the Plan.
Plan Provisions vs. Marketplace Requirements
Judge Wizmur points out that as a threshold matter, the Former
Shareowners correctly note that the Plan clearly provides that to
the extent that beneficial owners of Old THCR Common Stock held
stock "as of the New Class A Warrants Record Date", i.e.,
March 28, 2005, they were entitled to receive the distribution
package promised to Class 11 holders under the Plan.
According to Judge Wizmur, the issue is whether the sale by the
Former Shareowners of their Old THCR Common Stock between
March 28, 2005, the Record Date, and May 20, 2005, the Effective
Date, defeated the opportunity of the Former Shareowners to
receive the Plan distribution to which they would have otherwise
been entitled.
The rules of the securities marketplace to which the Former
Shareowners subjected themselves when they determined to sell
their stock are established by the National Association of
Securities Dealers.
NASD is a national securities association registered with the
Securities and Exchange Commission pursuant to Section 15A of the
Securities Exchange Act of 1934, as amended.
The NASD is authorized by the Securities and Exchange Commission
to adopt and administer the Uniform Practice Code, the rules and
regulations governing over-the-counter secondary market securities
transactions.
The UPC governs how distributions by security issuers must be
allocated to the holders of securities. Determinations about the
application of the UPC are delegated to the Market
Integrity/Mutual Funds Division of NASD.
On April 28, 2005, NASD received notice regarding the
distributions to be made pursuant to the Debtors' confirmed
Chapter 11 Plan. On May 23, 2005, DTC notified its participants
of the NASD Advisory and commenced the distribution to its
participants.
"I conclude that the distribution by the debtor to DTC, and by
DTC to its participants under the guidelines promulgated by the
NASD, conforms with the debtor's confirmed Chapter 11 plan as
well as the UPC," Judge Wizmur says.
Judge Wizmur finds that the description of Class 11 claimants as
the "beneficial owners" of Old THCR Common Stock is not
inconsistent with the distribution made to holders of record as
of March 28, 2005. Distributions, for purposes of Class 11, were
tied to the record date of March 28, 2005. Distributions made to
DTC, who held in name only on behalf of participant brokers and
financial institutions, who in turn held shares on behalf of
their customers, the ultimate beneficial holders, were then
subject to NASD rules and advisories.
Judge Wizmur contends that the right to the distribution traveled
with the shares sold to the new purchaser because the Former
Shareowners elected to sell their shares after the record date
but prior to the ex-dividend date.
Judge Wizmur concludes that the manner of distribution by the
Debtors was proper and in conformance with the Record Date and
provisions of the confirmed Chapter 11 Plan.
Headquartered in Atlantic City, New Jersey, Trump Hotels & Casino
Resorts, Inc., nka Trump Entertainment Resorts, Inc. --
http://www.thcrrecap.com/-- through its subsidiaries, owns and
operates four properties and manages one property under the Trump
brand name. The Company and its debtor-affiliates filed for
chapter 11 protection on Nov. 21, 2004 (Bankr. D. N.J. Case No.
04-46898 through 04-46925). Robert A. Klymman, Esq., Mark A.
Broude, Esq., John W. Weiss, Esq., at Latham & Watkins, LLP, and
Charles Stanziale, Jr., Esq., Jeffrey T. Testa, Esq., William N.
Stahl, Esq., at Schwartz, Tobia, Stanziale, Sedita & Campisano,
P.A., represent the Debtors in their successful chapter 11
restructuring. When the Debtors filed for protection from their
creditors, they listed more than $500 million in total assets and
more than $1 billion in total debts. The Court confirmed the
Debtors' Second Amended Plan of Reorganization on Apr. 5, 2005,
and the plan took effect on May 20, 2005. (Trump Hotels
Bankruptcy News, Issue No. 35; Bankruptcy Creditors' Service,
Inc., 215/945-7000).
* * *
As reported in the Troubled Company Reporter on Nov. 10, 2005,
Moody's Investors Service affirmed the ratings of Trump
Entertainment Resorts, Inc. Trump's rating outlook is stable:
-- $200 million senior secured revolver due 2010 -- B2;
-- $150 million senior secured term loan due 2012 -- B2;
-- $150 million senior secured delayed draw term loan due
2012 -- B2;
-- $1.25 billion second lien senior secured notes due 2015 --
Caa1;
-- Speculative grade liquidity rating -- SGL-3; and
-- Corporate family rating -- B3.
WINDOW ROCK: Court Denies Creditors' Move to Appoint Examiner
-------------------------------------------------------------
The Hon. John E. Ryan of the U.S. Bankruptcy Court for the Central
District of California in Santa Ana denied Dr. Gregory S. Cynaumon
and Infinity Advertising, Inc.'s request for an examiner in Window
Rock Enterprises Inc.'s chapter 11 case.
As reported in the Troubled Company Reporter on Dec. 29, 2005, Dr.
Cynaumon's wanted the examiner to:
1) investigate potential preferential transfers, in excess of
$20 million, between Window rock and its insiders and
affiliates;
2) evaluate whether the settlement agreement entered into by
Window Rock and Steve Cheng, its sole equity holder, is in
the best interests of creditors; the settlement proposes to
provide Mr. Cheng and his affiliates general releases in
exchange for $500,000;
3) evaluate whether Window Rock is fulfilling its fiduciary
duty in pursuing confirmation of its First Amended Chapter
11 Plan; and
4) analyze whether the Debtor's Plan, which proposes to pay
unsecured creditors 3.5% of their claims, was proposed in
good faith and maximizes value for the estates' creditors.
As reported in the Troubled Company Reporter on Feb. 1, 2006,
Window Rock opposed the request, asserting that the move is part
of efforts to disrupt the proceedings and force Dr. Cynaumon and
Infinity's demands on the Debtor.
Dr. Cynaumon asserts approximately $15 million in unpaid royalty
fees as the former spokesperson for the Debtor's CortiSlim and
CortiStress product lines. The Debtor, on the other hand, blames
Dr. Cynaumon for conducting deceptive marketing campaigns that
earned the ire of the Federal Trade Commission and ultimately led
the Debtor into bankruptcy.
Headquartered in Brea, California, Window Rock Enterprises Inc.
-- http://windowrock.net/-- manufactures and sells all-natural
dietary and nutritional supplements. The Debtor is also producing
its own TV, radio and print advertising campaigns for nutritional
and dietary supplements and has distribution in over 40,000 Food
Drug Mass Clubs as well as Health and Fitness Channels. The
Company filed for chapter 11 protection on Nov. 23, 2005 (Bankr.
C.D. Calif. Case No. 05-50048). Robert E. Opera, Esq., Winthrop
Couchot, PC, represents the Debtor in its restructuring efforts.
When the Debtor filed for protection from its creditors, it listed
estimated assets of $10 million to $50 million and estimated debts
of more than $100 million.
WINDOW ROCK: Panel Gets Court OK to Hire Peitzman Weg as Counsel
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
approved the application of the Official Committee of Unsecured
Creditors in Window Rock Enterprises, Inc.'s chapter 11 case to
employ Peitzman, Weg & Kempinsky LLP as its counsel.
As reported in the Troubled Company Reporter on Jan. 30, 2006,
Peitzman Weg will:
1) assist, advise and represent the Committee in analyzing the
Debtor's assets and liabilities, investigating the extent
and validity of liens and participating and reviewing
proposed asset sales, any asset dispositions and financing
arrangement or proceedings;
2) assist, advise and represent the Committee in matters
relevant to reviewing and determining the Debtor's rights
and obligations with respect to secured transactions and
unexpired leases and executory contracts;
3) assist, advise and represent the Committee in connection
with any review of management and compensation issues,
analysis of retentions or severance benefits or other
management related issues;
4) assist, advise and represent the Committee in investigating
the acts, conduct, assets, liabilities and financial
condition of the Debtor and its insiders and the operation
of its business;
5) assist, advise and represent the Committee in the
negotiation, formulation and drafting of a plan of
reorganization or liquidation and on issues concerning the
appointment of a conservator, trustee or examiner;
6) assist, advise and represent the Committee in the
evaluation of claims and any litigation matters and in the
Committee's performance of its duties and powers under the
Bankruptcy Code; and
7) perform all other legal services to the Committee that are
necessary in the Debtor's chapter 11 case.
David B. Shemano, Esq., a member of Peitzman Weg, is one of the
lead professionals from the Firm performing services for the
Committee. Mr. Shemano charges $475 per hour for his services.
Mr. Shemano reports the Peitzman Weg's professionals bill:
Professional Designation Hourly Rate
------------ ----------- -----------
Lawrence Peitzman Partner $545
Howard J. Weg Partner $545
Louis E. Kempinsky Partner $545
Scott F. Gautier Partner $425
James P. Menton Partner $425
Arnold Quitter Of Counsel $545
Thomas G. Keleh Of Counsel $515
Designation Hourly Rate
----------- -----------
Associates $275 - $390
Paralegals $175
Peitzman Weg assures the Court that it does not represent any
interest materially adverse to the Debtor and is "disinterested "
as that term is defined in Section 101(14) of the Bankruptcy Code.
Headquartered in Brea, California, Window Rock Enterprises Inc.
-- http://windowrock.net/-- manufactures and sells all-natural
dietary and nutritional supplements. The Debtor is also producing
its own TV, radio and print advertising campaigns for nutritional
and dietary supplements and has distribution in over 40,000 Food
Drug Mass Clubs as well as Health and Fitness Channels. The
Company filed for chapter 11 protection on Nov. 23, 2005 (Bankr.
C.D. Calif. Case No. 05-50048). Robert E. Opera, Esq., Winthrop
Couchot, PC, represents the Debtor in its restructuring efforts.
When the Debtor filed for protection from its creditors, it listed
estimated assets of $10 million to $50 million and estimated debts
of more than $100 million.
WINDOW ROCK: Court Gives Nod on FTI's Retention as Panel Advisor
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
gave the Official Committee of Unsecured Creditors appointed in
Window Rock Enterprises, Inc.'s chapter 11 case permission
To employ FTI Consulting, Inc., as its financial advisors.
As reported in the Troubled Company Reporter on Jan. 31, 2006, FTI
Consulting is expected to:
1) assist the Committee in the review and analysis of
financial related disclosures required by the Court,
including the Schedules of Assets and Liabilities, the
Statement of Financial Affairs and the Monthly Operating
Reports;
2) review and analyze financial information distributed by the
Debtor to creditors and other parties-in-interest,
Including cash flow projections and budgets, cash receipts
and disbursement analyses, analyses of various asset and
liability accounts, business plans, claim analyses and
analyses of transactions;
3) evaluate the Debtor's short-term cash management
procedures, cash flow forecast and overall financial
position and analyze its operations, marketing, product
line and position in the market;
4) research and analyze potential sources of recovery,
including insurance policies, prepetition transfers and
claims against other parties;
5) assist and advise the Committee with respect to the
Debtor's identification of core business assets and
investigate the validity of potential disposition of any
assets;
6) assist the Committee in the valuation of the Debtor's
operations and in reviewing its cost and benefit
evaluations in connection with the affirmation or rejection
of various executory contracts and leases;
7) review and analyze the Debtor's management compensation,
retention and any severance or bonus programs and assess
the prospects for its reorganization or liquidation;
8) attend meetings and assist in discussions with the Debtor,
potential investors, secured lenders, the U.S. Trustee and
other parties-in-interest and assist in the review or
preparation of information and analysis for any chapter 11
plan; and
9) render all other business consulting and financial advisory
services to the Committee that are necessary in the
Debtor's chapter 11 case.
Cynthia Nelson, a senior managing director of FTI Consulting,
reports her firm's professionals bill:
Designation Hourly Rate
----------- -----------
Sr. Managing Directors $595 - $655
Directors and Managing Directors $435 - $590
Associates & Consultants $215 - $405
Administration Staff and Paraprofessionals $95 - $175
FTI Consulting assures the Court that it does not represent any
interest materially adverse to the Debtor and the Committee and is
eligible to represent the Committee under Section 1103(b) of the
Bankruptcy Code.
Headquartered in Brea, California, Window Rock Enterprises Inc.
-- http://windowrock.net/-- manufactures and sells all-natural
dietary and nutritional supplements. The Debtor is also producing
its own TV, radio and print advertising campaigns for nutritional
and dietary supplements and has distribution in over 40,000 Food
Drug Mass Clubs as well as Health and Fitness Channels. The
Company filed for chapter 11 protection on Nov. 23, 2005 (Bankr.
C.D. Calif. Case No. 05-50048). Robert E. Opera, Esq., Winthrop
Couchot, PC, represents the Debtor in its restructuring efforts.
When the Debtor filed for protection from its creditors, it listed
estimated assets of $10 million to $50 million and estimated debts
of more than $100 million.
* Large Companies with Insolvent Balance Sheets
-----------------------------------------------
Total
Shareholders Total Working
Equity Assets Capital
Company Ticker ($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 (19) 576 28
Alliance Imaging AIQ (40) 675 (18)
AMR Corp. AMR (1,478) 29,495 (2,156)
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 (2,414) 9,845 (428)
CCC Information CCCG (95) 112 34
Centennial Comm CYCL (488) 1,511 69
Cenveo Inc CVO (50) 1,080 122
Choice Hotels CHH (167) 265 (57)
Cincinnati Bell CBB (710) 1,863 16
Clorox Co. CLX (528) 3,567 (205)
Columbia Laborat CBRX (15) 15 (3)
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 (511) 456 4
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
Enzon Pharmaceut ENZN (84) 341 (218)
Foster Wheeler FWLT (313) 1,895 (146)
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 (59) 242 122
IMAX Corp IMAX (34) 245 30
Immersion Corp. IMMR (17) 45 29
Incyte Corp. INCY (19) 374 326
Indevus Pharma IDEV (126) 100 65
Intermune Inc. ITMN (30) 194 109
Investools Inc. IED (24) 73 (47)
Koppers Holdings KOP (186) 570 120
Kulicke & Soffa KLIC (3) 440 217
Level 3 Comm. Inc. LVLT (476) 8,277 242
Linn Energy LLC LINE (45) 280 (51)
Lodgenet Entertainment LNET (69) 283 22
Loral Space & Co. LORL (1,101) 1,101 (1,083)
Maxxam Inc. MXM (677) 1,044 114
Maytag Corp. MYG (187) 2,954 150
McDermott Int'l MDR (83) 1,668 230
McMoran Exploration MMR (58) 408 67
NPS Pharm Inc. NPSP (98) 331 234
Nighthawk Radiol NHWK (65) 36 4
Omnova Solutions OMN (13) 355 46
ON Semiconductor ONNN (276) 1,148 202
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 (1,096) 1,044 121
Riviera Holdings RIV (28) 221 6
Rural/Metro Corp. RURL (89) 310 54
Rural Cellular RCCC (652) 1,481 130
Sepracor Inc. SEPR (165) 1,275 879
St. John Knits Inc. SJKI (52) 213 80
Sun Healthcare SUNH (3) 512 (67)
Tivo Inc. TIVO (27) 162 27
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) 835 (38)
Worldspace Inc. WRSP (1,475) 765 249
WR Grace & Co. GRA (559) 3,517 876
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
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Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
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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. Emi Rose
S.R. Parcon, Rizande B. Delos Santos, Cherry Soriano-Baaclo,
Terence Patrick F. Casquejo, Christian Q. Salta, Jason A. Nieva,
Lucilo Pinili, Jr., Tara Marie Martin, Marie Therese V. Profetana,
Shimero Jainga, and Peter A. Chapman, Editors.
Copyright 2006. All rights reserved. ISSN: 1520-9474.
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