/raid1/www/Hosts/bankrupt/TCR_Public/060316.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, March 16, 2006, Vol. 10, No. 64
Headlines
1301 CP AUSTIN: Asks Court to Dismiss Chapter 11 Case
ACTIVANT SOLUTIONS: Investment Firms Inks Pact to Buy Business
ADELPHIA COMMS: Proposes Confirmation-Related Discovery Protocol
ADELPHIA COMMS: Court Adjourns Confirmation Hearing to April 24
ADELPHIA COMMS: Noteholders Want Postpetition Interest Computed
ADVANSTAR COMMS: Incurs $8.9 Million Net Loss in Fiscal Year 2005
AIRWAY INDUSTRIES: Wants to Hire Duane Morris as Bankr. Counsel
AIRWAY INDUSTRIES: Wants to Hire Ansel Schwartz as IP Counsel
AKSYS LTD: Dec. 31 Balance Sheet Upside-Down by $2.6 Million
ALASKA AIRLINES: Will Spend $750M for Boeing 737 Fleet Transition
ALLSERVE SYSTEMS: A. Atkins Hired as Chapter 7 Trustee's Appraiser
AQUILA INC: Posts $127.8 Million Net Loss in Fourth Quarter
ARTEMIS INTERNATIONAL: Inks $27-Million Merger Deal with Versata
ARVINMERITOR INC: Prices Tender Offers for $450 Mil. of its Notes
ASARCO LLC: Wants Court to Approve Amendments on LLC Agreement
BATTERY PARK: Moody's Lifts Junked $9M Class 3 Notes' Rating to B3
BIO SOLUTIONS: Cash Flow Problems Prompt Going Concern Doubt
BLOUNT INT'L: Negotiating for Better Terms on Sr. Loan Facility
BLUEGREEN CORP: Earns $6.9 Million of Net Income in Fourth Quarter
BOYDS COLLECTION: Files Joint Plan of Reorganization
CHC HELICOPTER: Executive Chairman Mulls Potential Takeover
CIRCUS & ELDORADO: Tighter Liquidity Prompts Moody's B2 Ratings
COLUMBUS LOAN: Moody's Lifts Rating on $11.5M Class C Notes to Ba1
COOPER COMPANIES: Earns $18.4 Mil. in First Quarter ended Jan. 31
CSFB MORTGAGE: S&P's Class D-B-5 Rating Tumbles to D After Losses
DANA CORP: Gets Court Approval to Employ Jones Day as Counsel
DANA CORP: Hires Ted Stenger as Chief Restructuring Officer
DANA CORP: Taps Kenneth Hiltz as Chief Financial Officer
DELTA AIR: In Talks with Lenders to Amend DIP Credit Facility
DOMINO'S PIZZA: Repurchases 5.6 Mil. Common Shares for $145 Mil.
EAGLEPICHER INC: Court Approves Disclosure Statement
ELEC COMMS: Registers 9.6 Million Shares for Resale for $4.3 Mil.
EMERALD COVE: Case Summary & 17 Largest Unsecured Creditors
ENTERGY NEW ORLEANS: Plaintiffs Want Classes in Lawsuits Certified
GENERAL MOTORS: Aozora Bank to Fund Part of Cerberus' GMAC Bid
GRUPO TMM: Receives Contingent Payment from Kansas City Southern
GSAA TRUST: Moody's Places Ba2 Rating on Class B-4 Certificates
HEADLINERS ENTERTAINMENT: Posts $5.1 Mil. Net Loss in 3rd Qtr.
INSMED INCO: Recurring Losses Prompt Going Concern Doubt from E&Y
ITEC ENVIRONMENTAL: Engages Knight Capital as Financial Advisor
J.L. FRENCH: Taps Deloitte & Touche as Independent Auditors
KANSAS CITY SOUTHERN: Delivers Contingent Payment to Grupo TMM
KIRTIE REGAN: Case Summary & 20 Largest Unsecured Creditors
KMART CORP: Withdraws Objection to Premier's Multi-Million Claim
KMART CORP: Court Lifts Injunction to Let Judi Davis Pursue Claims
LBI MEDIA: Plans to Refinance New $260 Mil. Senior Secured Loans
LEAP WIRELESS: Lenders Waive Default Under $710-Mil. Sr. Facility
LEAP WIRELESS: Purchasing 13 Spectrum Licenses for $31.8 Million
LEVITZ HOME: Wants Court to Approve Islip Tax Settlement Offer
LEVITZ HOME: Wants Court to Validate 15 Reclamation Claims
LEVITZ HOME: Wants to Hire Walker Truesdell as Wind-Down Officer
LG.PHILIPS: Case Summary & 29 Largest Unsecured Creditors
LION CITY: Voluntary Chapter 11 Case Summary
LOS PORTALES: Case Summary & 10 Largest Unsecured Creditors
MAGNITUDE INFORMATION: Losses Spur Auditor's Going Concern Doubt
MERRILL LYNCH: DBRS Places B Ratings on Three Certificate Classes
MUSICLAND HOLDING: Final Sale Hearing Scheduled for March 22
NATIONAL BEEF: S&P Places B- Senior Unsecured Ratings Under Review
NCI BUILDING: Earns $12.9 Million in First Quarter Ended Jan. 29
NELLSON NUTRACEUTICAL: Taps PricewaterhouseCoopers as Tax Advisor
QUANTA SERVICES: Moody's Holds $150 Mil. Term Loan Rating at Ba3
O'SULLIVAN IND: Files Supplements to 2nd Amended Chapter 11 Plan
O'SULLIVAN IND: Debbie's Staffing Balks at Plan Confirmation
OCA INC: Voluntary Chapter 11 Case Summary
OLD HOLLAND: Case Summary & 2 Largest Unsecured Creditors
OPTEUM MORTGAGE: Good Credit Support Cues S&P to Hold Ratings
PINNACLE ENTERTAINMENT: Aztar Merger Cues S&P's Positive Watch
POPULAR ABS: S&P Affirms Ratings Due to Good Credit Support
RAPIDPAY LLC: Case Summary & 20 Largest Unsecured Creditors
RAVEN MOON: Registers 600MM Common Shares Under Compensation Plan
RELIANT ENERGY: Weak Finances Prompt Moody's Ratings Downgrade
REPUBLIC STORAGE: Case Summary & 21 Largest Unsecured Creditors
RIDDELL BELL: High Debt Leverage Cues S&P to Hold B+ Corp. Rating
RIM SEMICONDUCTOR: Gets $6 Million in Private Conv. Debt Placement
SASKATCHEWAN WHEAT: DBRS Holds B Rating on Sr. Subordinated Notes
TELEVIDEO INC: Case Summary & 8 Largest Unsecured Creditors
TELOGY INC: Hires Alvarez & Marsal as Financial Advisor
TEC Foods: Gets Court Okay to Hire UHY LLP as Tax Accountants
TXU CORP: Appoints Mike Childers as CEO of Generation Development
UNION CARBIDE: Moody's Lifts B1 Sr. Unsecured Debt Rating to Ba2
URBAN HOTELS: Wants to Sell Assets to EBUS for $23 Million
URBAN HOTELS: Judge Ahart Sets April 14 as Plan-Filing Deadline
W.R. GRACE: Judge Fitzgerald Names Sam Pointer as Plan Mediator
WCI STEEL: Gets Consensual Resolution on Plan of Reorganization
WESTPOINT STEVENS: Court Asks Parties How to Dispose Sale Proceeds
WHITCO COMPANY: Case Summary & 17 Largest Unsecured Creditors
WILLIAMS CONTROLS: Board Approves One-For-Six Reverse Stock Split
WINN-DIXIE: R2 Resigns, Creditors' Committee Now Has Six Members
* Fried Frank Taps John Duffy as Counsel Resident in Washington
*********
1301 CP AUSTIN: Asks Court to Dismiss Chapter 11 Case
-----------------------------------------------------
1301 CP Austin, Ltd., asks the U.S. Bankruptcy Court for the
Western District of Texas, to dismiss its Chapter 11 case because
there are no remaining assets to be distributed to its creditors.
The Debtor tells the Court that its only asset, a tract of real
property and an apartment building located at 1301 Crossing Place,
in Austin, Texas, was lost in foreclosure. In November 2005, the
Debtor reminds the Court, LSF5 US Loan Pool II, LLC, the Debtor's
secured creditor, obtained relief from the automatic stay to
foreclose on a $31 million Mortgage Note. The Lender told the
Court that the Property is valued at less than $20 million.
The Debtor says no further restructuring is necessary and no
purpose will be served by the continuation of the chapter 11 case.
In a statement filed with the Court on March 13, Richard W.
Simmons, the United States Trustee for Region 7 relates that it
does not object to the dismissal of the Debtor's case as long as
it pays all due quarterly fees to the U.S. Trustee before the
Court enters an order of dismissal.
About 1301 CP Austin
Headquartered in West Palm Beach, Florida, 1301 CP Austin, Ltd.
-- http://www.thecrossingplace.com/ -- owns and operates several
apartments located in Texas and Michigan. The Company filed for
chapter 11 protection on May 12, 2005 (Bankr. W.D. Tex. Case No.
05-12719). Stephen A. Roberts, Esq., and Duane Brescia, Esq.,
at Strasburger & Price, LLP, represent the Debtor. When the
Debtor filed for protection from its creditors, it estimated
assets and debts of $10 million to $50 million.
ACTIVANT SOLUTIONS: Investment Firms Inks Pact to Buy Business
--------------------------------------------------------------
Activant Solutions Inc. signed a definitive agreement to be
acquired by funds affiliated with private equity investment firm
Hellman & Friedman LLC and private equity investment firm Thomas
Cressey Equity Partners. The firms will acquire Activant
Solutions Holdings Inc. and all its subsidiaries from investment
funds affiliated with HM Capital Partners LLC, which have approved
the transaction.
"Over the past year, Activant has been on a steady and fast-paced
climb in the market through organic growth and acquisitions," said
Larry Jones, CEO of Activant Solutions. "While we have looked at
a number of strategic options to best position the company for the
future, we believe we have found the right partners in Hellman &
Friedman and Thoma Cressey to continue the company's success."
David Tunnell, managing director of Hellman & Friedman, said, "We
are very impressed with Activant's market leading position,
vertical market expertise, and strong management team. Activant
exemplifies the type of company in which we like to invest. We
look forward to supporting the company in continuing to build upon
its foundation of high-quality customer relationships and strong
business franchise."
"We believe there are significant opportunities to continue and
even accelerate Activant's growth trajectory by working in
partnership with management to execute on its established business
plan," said Orlando Bravo, managing partner of Thoma Cressey
Equity Partners.
The transaction is subject to customary regulatory approvals, as
well as satisfaction of other customary closing conditions, and is
expected to close during Activant's third fiscal quarter ending
June 30, 2006. Activant's existing indebtedness will be
refinanced in connection with the transaction.
About Hellman & Friedman
Hellman & Friedman LLC -- http://www.hf.com/-- is a San
Francisco-based private equity investment firm with additional
offices in New York and London. Since its founding in 1984,
the Firm has raised and through its affiliated funds managed over
$8 billion of committed capital. The Firm's strategy is to invest
in superior business franchises and to be a value-added partner to
management in select industries including financial services,
media, professional services, energy, and information services and
software. The Firm is one of the leading private equity firms in
vertical market software businesses. Hellman & Friedman has
invested in several of these businesses, including Blackbaud
(BLKB), Mitchell International, Inc., and Vertafore, Inc.
About Thoma Cressey Equity Partners
Thoma Cressey Equity Partners -- http://www.thomacressey.com/--
is a leading private equity investment firm that has been
providing equity and strategic support to experienced management
teams building growing companies for more than 25 years. In the
software industry, Thoma Cressey has amassed a portfolio of
software earnings in excess of $150 million. Thoma Cressey's
investment focus is on companies in the software, healthcare,
business services and consumer products industries. Thoma Cressey
currently manages approximately $2 billion of equity capital.
About Activant Solutions
Activant Solutions Inc. -- http://www.activant.com/-- is a
technology provider of business management solutions serving small
and medium-sized retail and wholesale distribution businesses in
three primary vertical markets: hardlines and lumber; wholesale
distribution; and the automotive parts aftermarket. Founded in
1972, Activant provides customers with tailored proprietary
software, professional services, content, supply chain
connectivity, and analytics. More than 30,000 customer locations
use an Activant solution to manage their day-to-day operations.
Headquartered in Texas, Activant has operations in California,
Colorado, Connecticut, Illinois, New Jersey, Pennsylvania, South
Carolina, Utah, Canada, France, Ireland, and the United Kingdom.
* * *
As reported in the Troubled Company Reporter on Sept. 29, 2005,
Moody's Investors Service downgraded the corporate family rating
of Activant Solutions Inc. to B2 from B1 while confirming ratings
of B2 on existing outstanding debt. Concurrently, Moody's
confirmed a B2 rating to Activant's incremental debt of
$140 million senior unsecured notes due 2010, issued to finance
its acquisition of Prophet 21, Inc., and assigned Caa1 rating to a
$40 million PIK notes issued by Activant Solutions Holdings Inc.
Moody's said the ratings outlook is stable.
As reported in the Troubled Company Reporter on Sept. 28, 2005,
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit and senior unsecured debt ratings on Austin, Texas-based
Activant Solutions Inc. At the same time, Standard & Poor's
assigned its 'B+' debt rating to the $140 million senior unsecured
floating rate notes, which have essentially the same terms as the
floating rate notes, and its 'B-' debt rating to the $40 million
senior PIK notes, which is an obligation of Activant Solutions
Holdings Inc., and will be structurally subordinated to all
indebtedness of Activant Solutions Inc. S&P said the outlook is
now negative.
ADELPHIA COMMS: Proposes Confirmation-Related Discovery Protocol
----------------------------------------------------------------
Adelphia Communications Corporation and its debtor-affiliates
propose uniform procedures to facilitate discovery requests that
may be made in connection with the objections filed by various
parties-in-interest to the confirmation of their Plan of
Reorganization:
A. Designation of the Debtors' Confirmation Hearing Witnesses
1. On or before April 7, 2006, the ACOM Debtors will publish a
list of the witnesses that they anticipate to present at
the Confirmation Hearing. Regardless of the witness'
designation on the Debtors' Confirmation Witness List, the
ACOM Debtors will not be:
-- required to present the person during the Confirmation
Hearing; or
-- precluded from offering witnesses at the Confirmation
Hearing that do not appear on their Confirmation Witness
List, including for the purpose of responding to any
objections to confirmation that may be interposed or in
rebuttal to testimony offered or adduced in opposition
to the confirmation of the Plan;
2. For purposes of the Confirmation Hearing, the Debtors may
present the testimony of any designated person by direct
examination, a proffer of that person's testimony, use of
deposition testimony, or the submission of that person's
declaration.
3. In the event the Debtors intend to introduce the testimony
by the submission of one or more declarations, the
declarations will be filed with the Court and served on
each of the parties that filed written objections to
confirmation of the Plan no later than two business days
before the commencement of the Confirmation Hearing and be
available for cross-examination.
B. Discovery of the Debtors
1. Any party who timely filed and served a Confirmation
Objection before the Objection Deadline applicable to it
will be entitled to seek discovery of the ACOM Debtors
regarding the Plan Confirmation.
2. Otherwise, the party will not be permitted to seek
discovery provided that it will not inhibit the rights of
any Objector to prosecute its objection during the
Confirmation Hearing to attend, but not participate, in any
confirmation depositions.
C. Establishment of the ACOM Debtors' Document Depository
1. All Confirmation Document Requests will be served on the
ACOM Debtors no later than 4:00 p.m., prevailing New York
time, on March 13, 2006, and must be accompanied by a
certification, executed by counsel for the Objector,
stating the relationship of each request contained in the
Confirmation Document Request to the objection interposed.
2. By 4:00 p.m., prevailing New York time, on April 3, 2006,
the Debtors will serve their responses and objections to
all timely Confirmation Document Requests and will certify
to all Objectors that all non-objectionable and
non-privileged documents responsive to the Confirmation
Document Requests have been uploaded into a certain Merrill
Database, a virtual documentary depository that the ACOM
Debtors established pursuant to an Order in Aid dated
August 4, 2005.
D. Additional Discovery of the Debtors
1. April 7, 2006, at 4:00 p.m., prevailing New York time, is
the Objectors' deadline to serve on the ACOM Debtors
notices for depositions on oral examinations pursuant to
Rule 30 of the Federal Rules of Civil Procedure.
E. Designation of Witnesses and Discovery of Eligible Objectors
and Other Parties
1. The Objector's Witness List will be filed and served by
April 7, 2006.
F. Pre-Confirmation Hearing Conference
A pre-confirmation hearing conference will be conducted on
April 21, 2006, at 10:00 a.m., prevailing New York time, to
discuss:
-- motions in limine;
-- the presentation of testimony in support and in opposition
to confirmation of the Plan;
-- the number of witnesses to be presented including the
persons on the Debtors' Witness List as may have been
revised;
-- the estimated time for presentation of any witnesses'
testimony; and
-- the pre-admission of exhibits to be offered at the
Confirmation Hearing.
About Adelphia Communications
Headquartered in Coudersport, Pa., Adelphia Communications
Corporation (OTC: ADELQ) is the fifth-largest cable television
company in the country. Adelphia serves customers in 30 states
and Puerto Rico, and offers analog and digital video services,
high-speed Internet access and other advanced services over its
broadband networks. The Company and its more than 200 affiliates
filed for Chapter 11 protection in the Southern District of New
York on June 25, 2002. Those cases are jointly administered under
case number 02-41729. Willkie Farr & Gallagher represents the
ACOM Debtors. Kasowitz, Benson, Torres & Friedman, LLP, and Klee,
Tuchin, Bogdanoff & Stern LLP represent the Official Committee of
Unsecured Creditors. (Adelphia Bankruptcy News, Issue No. 124;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
ADELPHIA COMMS: Court Adjourns Confirmation Hearing to April 24
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
adjourns the hearing to consider confirmation of the Fourth
Amended Plan of Reorganization of Adelphia Communications
Corporation and its debtor-affiliates to April 24, 2006, at
9:45 a.m., prevailing New York time.
The Court also extends the deadline for the submission of ballots
and master ballots to accept or reject ACOM's Plan to April 6,
2006, at 4:00 p.m., prevailing New York time.
A full-text copy of the Fourth Amended Disclosure Statement is
available for free at http://ResearchArchives.com/t/s?31b
A full-text copy of the Fourth Amended Plan of Reorganization is
available for free at http://ResearchArchives.com/t/s?31a
About Adelphia Communications
Headquartered in Coudersport, Pa., Adelphia Communications
Corporation (OTC: ADELQ) is the fifth-largest cable television
company in the country. Adelphia serves customers in 30 states
and Puerto Rico, and offers analog and digital video services,
high-speed Internet access and other advanced services over its
broadband networks. The Company and its more than 200 affiliates
filed for Chapter 11 protection in the Southern District of New
York on June 25, 2002. Those cases are jointly administered under
case number 02-41729. Willkie Farr & Gallagher represents the
ACOM Debtors. Kasowitz, Benson, Torres & Friedman, LLP, and Klee,
Tuchin, Bogdanoff & Stern LLP represent the Official Committee of
Unsecured Creditors. (Adelphia Bankruptcy News, Issue No. 124;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
ADELPHIA COMMS: Noteholders Want Postpetition Interest Computed
---------------------------------------------------------------
Wilmington Trust Company, as indenture trustee, and Silver Point
Capital Fund, LP, Silver Point Capital Offshore Fund, Ltd.,
Redwood Master Fund, Ltd. and Goldman Sachs & Co., jointly ask
Judge Robert Gerber of the U.S. Bankruptcy Court for the Southern
District of New York to enter an order in aid of confirmation
under Section 8.14 of the Plan:
-- granting all Olympus Noteholders the default contract rate
of postpetition interest on the Olympus Notes; and
-- computing all the postpetition interest on a compound
basis.
The Fourth Amended Disclosure Statement and Fourth Amended Joint
Plan of Reorganization of Adelphia Communications Corporation and
its debtor-affiliates provide for postpetition interest on the
Olympus Notes to be calculated based on the "contract rate," but
specify that the rate will be the non-default rate in the
indenture and computed on a simple interest basis unless the Court
determines otherwise.
David E. Retter, Esq., at Kelley Drye & Warren LLP, in New York,
representing Wilmington Trust Company, and Robert J. Rosenberg,
Esq., at Latham & Watkins LLP, in New York, representing the
Olympus Noteholders, argue that the improper application of the
contract rate ignores the plain terms of the Indenture requiring:
-- payment of interest at the default rate, a 1% increase from
the non-default rate; and
-- computation of interest on a compound basis.
According to Messrs. Retter and Rosenberg, the provisions are
enforceable under controlling New York law and no justification
exists for ignoring them in connection with the Plan's treatment
of the Olympus Notes.
Messrs. Retter and Rosenberg assure the Court that granting the
request would not harm any other creditor of the Olympus Debtors
or in any way jeopardize the viability of the Plan. Rather, it
would merely give the Olympus Noteholders the full benefit of
their bargain with the Olympus Debtors.
About Adelphia Communications
Headquartered in Coudersport, Pa., Adelphia Communications
Corporation (OTC: ADELQ) is the fifth-largest cable television
company in the country. Adelphia serves customers in 30 states
and Puerto Rico, and offers analog and digital video services,
high-speed Internet access and other advanced services over its
broadband networks. The Company and its more than 200 affiliates
filed for Chapter 11 protection in the Southern District of New
York on June 25, 2002. Those cases are jointly administered under
case number 02-41729. Willkie Farr & Gallagher represents the
ACOM Debtors. Kasowitz, Benson, Torres & Friedman, LLP, and Klee,
Tuchin, Bogdanoff & Stern LLP represent the Official Committee of
Unsecured Creditors. (Adelphia Bankruptcy News, Issue No. 124;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
ADVANSTAR COMMS: Incurs $8.9 Million Net Loss in Fiscal Year 2005
-----------------------------------------------------------------
Advanstar Communications Inc. disclosed its operational results
for the fourth quarter and full year ended December 31, 2005.
The company's operational results for 2005 reflect the launch of
several growth initiatives and the implementation of a corporate
and portfolio restructuring which began in the first half of the
year.
Joe Loggia, President and CEO of Advanstar said, "2005 was an
exciting year for Advanstar. We successfully completed a major
transaction to dispose of non-core assets and operations. This
move solidified our strategy of focusing on key industry sectors
where we can leverage our leading market positions, in depth
customer relationships and experienced teams for continued growth.
The transaction also enabled us to substantially reduce our debt.
"We completed five strategic acquisitions in the fashion and
powersports sectors which, combined with ongoing investments in
our properties and new initiatives, are helping to accelerate our
growth. Our performance in the fourth quarter reinforced the
effectiveness of our strategy.
"Our commitment to delivering quality products that meet our
customers' needs enabled us to achieve solid revenue gains for
both the fourth quarter and the year. In addition, our
substantial improvement in operating income is testament to our
ability to drive operating efficiencies and generate cost savings
through our restructuring activities. We remain focused on the
key elements of our business strategy and believe the
accomplishments in the past year provide a strong foundation for
2006 and beyond."
Fourth Quarter Results
Revenue increased 12% to $56.7 million from $50.7 million for the
same quarter last year. The strong revenue performance was led by
15% growth in shows and conferences and a 9% increase in
publishing. Operating income from continuing operations improved
56% to a loss of $3.7 million from a loss of $8.3 million in the
fourth quarter of 2004. The 2005 results include a restructuring
charge of $1.7 million related to vacating leased office space and
workforce reduction severance costs.
EBITDA in the fourth quarter grew 79% to $5.7 million from
$3.2 million in 2004 driven by strong revenue growth and cost
savings resulting from restructuring activities implemented in the
second and third quarters. Fourth quarter EBITDA was impacted by
a restructuring charge of $1.7 million related to vacating leased
office space and workforce reduction severance costs.
Cash provided by operations was $12.9 million in the fourth
quarter compared to $6.5 million in the same period last year due
to the improved operating results and increased cash from working
capital, driven in part by higher customer pre-payments for shows.
Net loss was $18.3 million, a 38% improvement from a net loss of
$29.6 million in the fourth quarter of 2004. This improvement is
due in part to reduced interest expense due to repayment of a
portion of long-term debt in June of 2005. Funding of this effort
employed proceeds from the sale of certain of its tradeshows,
publications and direct marketing products to Questex Media Group.
Net income (loss) in the fourth quarter of 2005 and 2004 include,
as discontinued operations, operating results of assets sold and
discontinued and related gain or loss recorded on the sales, net
of tax.
Full Year 2005 Results
Revenue increased 7% to $288.9 million from $270.4 million in
2004. The increase is due to 14% growth in shows and conferences
as well as 24% growth in marketing services/other, which primarily
reflects increases in internet revenue. Publishing revenue was
$148.2 million, essentially even with $148.4 million reported in
2004. Operating income from continuing operations increased 34%
to $36.8 million from $27.5 million in 2004. The 2005 results
include a restructuring charge of $4.8 million related to vacated
leased office space and workforce reduction severance costs.
EBITDA grew 6% to $74.5 million from $70.1 million in 2004 driven
by the solid revenue growth and cost savings resulting from
restructuring activities implemented in the second and third
quarters. EBITDA was impacted by restructuring charges of
$4.8 million related to vacating leased office space and workforce
reduction severance costs.
Cash provided by operations was $8.9 million in 2005 compared to
$18.3 million in 2004. Operating cash flow in 2005 was
significantly impacted by costs related to the extinguishment of a
portion of the Company's debt, severance payments associated with
restructuring activities, and the reduction in cash flow
attributable to the assets sold to Questex.
Net income was $8.6 million compared to a net loss of
$51.2 million in 2004. Net income in 2005 includes income from
discontinued operations of $38.5 million consisting of operating
income of $2.9 million, a pre-tax gain of $52.5 million on the
sold assets and an offsetting $16.9 million tax charge. Net
income in 2005 also includes a favorable impact of $4.6 million in
the cumulative effect of accounting changes related to the
consolidation of Advanstar.com operating results into Advanstar.
These items are partially offset by $12.6 million related to the
tender and extinguishment of a portion of the Company's debt in
the second quarter of 2005. Net income in 2004 also includes
operating results of assets sold and discontinued in 2005 and
2004, and the related net gain recorded on the sales, net of tax.
Discontinued Operations
Advanstar completed a significant strategic realignment and
refocusing of its portfolio through the sale of its non-core
assets in a series of transactions between 2004 and 2005. In 2004
the Company sold its art industry portfolio, Post business
magazine, French joint venture, and German tradeshow business for
an aggregate of $24.4 million in cash. In May 2005, Advanstar
sold its tradeshows, publications and direct marketing products in
the information technology, travel, beauty, home entertainment and
portfolio sectors to Questex Media Group for $173.8 million. Also
during 2005, Advanstar closed its East Coast Fashion event and
sold its Arenacross Championship Series event for approximately
$0.2 million.
Income from discontinued operations for 2005 and 2004 includes
the results of the operations, gains on sale, or impairment of
goodwill for assets sold or discontinued during 2004 and 2005.
The results included in discontinued operations are not included
in reported revenue, contribution margin or EBITDA.
About Advanstar Communications
Advanstar Communications Inc. -- http://www.advanstar.com/-- is
a leading worldwide media company providing integrated marketing
solutions for the Fashion, Life Sciences and Powersports
industries. Advanstar serves business professionals and consumers
in these industries with its portfolio of 87 events, 58
publications and directories, 125 electronic publications and Web
sites, as well as educational and direct marketing products and
services. Market leading brands and a commitment to delivering
innovative, quality products and services enables Advanstar to
"Connect Our Customers With Theirs." Advanstar has roughly 1,000
employees and currently operates from multiple offices in North
America and Europe.
* * *
As reported in the Troubled Company Reporter on Dec. 15, 2005,
Standard & Poor's Ratings Services' ratings on Advanstar
Communications Inc., including the 'B-' corporate credit rating,
remain on CreditWatch with negative implications following
Advanstar's announcement that it is no longer selling the company.
As reported in the Troubled Company Reporter on Sept. 19, 2005,
Standard & Poor's Ratings Services lowered its corporate credit
and subordinated debt ratings on Advanstar Communications Inc. to
'B-' from 'B', and 'CCC' from 'CCC+', respectively, based on
increased concern over the company's ability to service the
pending rise in its consolidated cash interest payments.
At the same time, Standard & Poor's affirmed its 'B+' first-lien
senior secured bank loan rating, and raised its second-lien senior
secured debt rating to 'B' from 'B-'.
AIRWAY INDUSTRIES: Wants to Hire Duane Morris as Bankr. Counsel
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Pennsylvania
gave Airway Industries, Inc., dba Atlantic Luggage Company,
permission to employ Duane Morris LLP as its general bankruptcy
counsel, nunc pro tunc to Jan. 20, 2006.
Duane Morris will:
1) advise the Debtor with respect to its powers and duties as a
debtor-in-possession in the continued operation of its
business and management of its assets;
2) take all necessary action to protect and preserve the
Debtor's estate, including prosecuting actions on the
Debtor's behalf, defending any actions commenced against the
Debtor, negotiating all litigation in which the Debtor is
involved and objecting to claims filed against the Debtor's
estate;
3) prepare on the Debtor's behalf all necessary motions,
answers, orders, reports and other legal papers in
connection with the administration of the Debtor's estate;
4) advise the Debtor in connection with the formulation and
implementation of a plan of reorganization; and
5) perform all other legal services to the Debtor that are
necessary in its chapter 11 case.
Joel M. Walker, Esq., a partner at Duane Morris, is one of the
lead attorneys to perform services to the Debtor. Mr. Walker
charges $490 per hour for his services.
Mr. Walker reports Duane Morris' professionals bill:
Professional Designation Hourly Rate
------------ ----------- -----------
Jeffrey W. Spear Partner $460
Ryan James Associate $300
Bankruptcy Court records don't show if Duane Morris received a
retainer for its retention as the Debtors' bankruptcy counsel
Duane Morris 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.
About Airway Industries
Headquartered in Ellwood City, Pennsylvania, Airway Industries,
Inc. -- http://www.atlanticluggage.com/-- manufactures suitcases,
garment bags, briefcases and other travel products and
accessories. The Company filed for chapter 11 protection on
Jan. 20, 2006 (Bankr. W.D. Pa. Case No. 06-20224). When the
Debtor filed for protection from its creditors, it listed
estimated assets and debts of $10 million to $50 million.
AIRWAY INDUSTRIES: Wants to Hire Ansel Schwartz as IP Counsel
-------------------------------------------------------------
Airway Industries, Inc., dba Atlantic Luggage Company, asks the
U.S. Bankruptcy Court for the Western District of Pennsylvania
permission to employ Ansel M. Schwartz, Esq., as its special
intellectual property counsel, nunc pro tunc to Jan. 20, 2006.
The Debtor tells the Court that Mr. Schwartz will not duplicate
the services of its general bankruptcy counsel, Duane Morris LLP,
and will only represent the Debtor on its intellectual property
matters.
Mr. Schwartz will:
1) prepare and prosecute patent applications, including
responses to office actions, in the United States and in
foreign countries;
2) respond to inquiries, if any, regarding infringement of
patents or trademarks and licensing of any intellectual
property;
3) respond to questions concerning the Debtor's intellectual
property in connection with a proposed sale of the Debtor's
assets; and
4) perform all other necessary legal services to the Debtor in
connection with its intellectual property matters.
Mr. Schwartz charges $265 per hour for his services.
Mr. Schwartz assures the Court that he does not represent any
interest materially adverse to the Debtor, its creditors and other
parties in interest pursuant to Section 327(a) of the Bankruptcy
Code.
The Court will convene a hearing at 9:30 a.m., on March 24, 2006,
to consider the Debtor's request.
About Airway Industries
Headquartered in Ellwood City, Pennsylvania, Airway Industries,
Inc. -- http://www.atlanticluggage.com/-- manufactures suitcases,
garment bags, briefcases and other travel products and
accessories. The Company filed for chapter 11 protection on Jan.
20, 2006 (Bankr. W.D. Pa. Case No. 06-20224). Joel M. Walker,
Esq., at Duane Morris LLP represents the Debtor in its
restructuring efforts. When the Debtor filed for protection from
its creditors, it listed estimated assets and debts of $10 million
to $50 million.
AKSYS LTD: Dec. 31 Balance Sheet Upside-Down by $2.6 Million
------------------------------------------------------------
Aksys, Ltd. (Nasdaq: AKSY), disclosed preliminary financial
results for the fourth quarter and year ended Dec. 31, 2005.
"2005 proved to be a learning year for Aksys. We accomplished a
number of key objectives, which included establishing market
trials with several national dialysis center chains, working out
the logistical issues of installing and servicing the PHD units
and recruiting patients. We have learned a lot from our
accomplishments and look forward to the opportunities and
challenges that lie ahead in 2006," commented Bill Dow, President
and Chief Executive Officer of Aksys, Ltd.
For the fourth fiscal quarter of 2005, Aksys expects to report
revenues of $827,000 compared to revenues of $654,000 for the
fourth quarter of 2004. The Company expects to report a net loss
for the fourth quarter of 2005 of $6,735,000 compared to a net
loss of $7,881,000 for the fourth quarter of 2004.
For the year ended Dec. 31, 2005, Aksys expects to report revenues
of $2,669,000, compared to revenues of $2,416,000 for the year
ended Dec. 31, 2004. The Company expects to report a net loss for
the full year of $33,504,000 compared with a net loss of
$27,683,000 for the prior year.
The Company's unaudited balance sheet at Dec. 31, 2005, showed
$19,850,000 in total assets and $22,461,000 in total liabilities,
resulting in a stockholders' deficit of $2,611,000.
"During the fourth quarter, we implemented a number of initiatives
in an effort to execute a more focused strategy that we believe
will allow Aksys to operate more efficiently and cost effectively.
As a result of these changes, we have reduced monthly spending by
25% and will continue to evaluate opportunities for further
reductions going forward," said Larry Birch, Senior Vice President
and Chief Financial Officer of Aksys, Ltd. "We ended the year
with $535,000 in cash and an investment receivable of $7.2
million, for which cash was received on Jan. 3, 2006, and have
sufficient cash resources to support Aksys' efforts into May of
2006. We are pursuing a number of opportunities for short-term
financing, which would provide immediate equity or debt capital."
Outlook
Mr. Dow continued, "We will increasingly focus our service, sales
and marketing resources on our target markets, and will continue
to focus on the development of a lower cost, higher performance
Personal Hemodialysis System in conjunction with Dean Kamen's firm
DEKA Research & Development. As we proceed into the year, we look
forward to continuing to see progress in our target markets, while
providing patients with the gold standard in hemodialysis
treatments. We have carefully analyzed the financial impact of
our market initiatives and are positioning ourselves to improve
performance in each of our areas of geographic focus."
About Aksys
Aksys, Ltd. -- http://www.aksys.com/produces hemodialysis
products, providing services for patients suffering from kidney
failure. The Company's lead product, the PHD(R) System, is a
currently available, advanced technology hemodialysis system
designed to improve clinical outcomes of patients and reduce
mortality, morbidity and the associated high cost of patient care.
ALASKA AIRLINES: Will Spend $750M for Boeing 737 Fleet Transition
-----------------------------------------------------------------
Alaska Airlines reported that the Alaska Air Group Board of
Directors has authorized a plan to transition the airline to a
fleet of all-Boeing 737 aircraft by the end of 2008. The board's
action will accelerate the retirement of the airline's MD-80
fleet.
To accomplish the transition, Alaska now anticipates taking
delivery of 39 737-800s between 2006 and 2008, including the two
aircraft that have already been delivered in 2006. In addition to
these airplanes, Alaska has firm commitments for 13 aircraft,
options for 24 and purchase rights for 27 in 2009 and beyond.
"This decision represents a major milestone in our transformation
and moves us significantly along the path toward becoming an
undisputed leader in our industry. Having a common fleet and
growing with next-generation, fuel- efficient Boeing 737s will
make a major difference in our operating costs, fleet reliability
and the onboard experience for our customers," said Bill Ayer,
Alaska's chairman and chief executive officer. "This move
represents a significant upfront investment and will continue our
momentum toward sustained profitability, growth and long-term job
security and career opportunities for our employees."
The plan to retire the airline's 26 MD-80 aircraft by the end of
2008 will require an investment of approximately $750 million. It
is expected to save more than $115 million per year in operating
expenses once the transition is complete, primarily by lowering
costs for fuel, maintenance, training and crew scheduling.
"This level of investment requires that we continue our
transformation and keep delivering on our cost goals and profit
objectives," Mr. Ayer said. "Our employees are a crucial part of
that equation, and we need to continue working together to provide
optimum value for our customers."
The acceleration of the conversion plan, when combined with
the purchase of new aircraft, will expand Alaska's fleet to
114 aircraft from 110 at the start of 2006, and is expected to
increase available seat miles (ASMs or the number of seats
available per mile flown) by 18% by the end of 2008. With an
average fleet age of eight years following the transition, Alaska
will have one of the youngest fleets in the industry.
The new agreement with Boeing and a December 2005 equity offering
that raised $200 million were key elements in accelerating the
fleet changeover. The equity offering strengthened Alaska's
balance sheet, helping to offset the charge to equity associated
with the early retirement of the MD-80 fleet.
Expected Exit Costs and Impairment Charges
The airline expects to record a non-cash impairment charge during
the first quarter of 2006 associated with its 15 owned MD-80
aircraft to reduce their carrying value to fair market value.
Although the amount of the special charge has not been finalized,
the airline expects it to be between $130 million and $150 million
before tax (or between $80 million and $95 million after tax).
Alaska Airlines also has 11 leased MD-80 aircraft. The airline is
unable to determine the amount or timing of future charges
associated with its leased MD-80 aircraft, but expects the total
of these charges also to be in the range of $130 million to $150
million before tax (or between $80 million and $95 million after
tax). These charges will be recognized in future periods as the
disposition plans are finalized.
Combined, the airline expects total special charges to its income
statement to be between $160 million and $190 million after tax.
Alaska Airlines and its sister carrier, Horizon Air, together
serve more than 80 cities in Alaska, the Lower 48, Canada and
Mexico.
Seattle-based Alaska Air Group -- http://www.alaskaair.com/-- is
the parent company of Alaska Airlines and Horizon Air Industries.
The company and its sister carrier, Horizon Air, together serve 80
cities in Alaska, the Lower 48, Canada and Mexico.
Alaska Airlines Inc.'s 9.5% Equipment Trust Certificates due 2012
carry Standard & Poor's BB rating.
ALLSERVE SYSTEMS: A. Atkins Hired as Chapter 7 Trustee's Appraiser
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey gave
Charles A. Stanziale, Jr., the chapter 7 trustee of Allserve
Systems Corp., permission to employ A. Atkins Appraisal Corp. as
his appraiser.
Mr. Stanziale selected Atkins Appraisal because of its experience
appraising personal property and equipment used in business
operations.
Alan Atkins, a member of Atkins Appraisal, will bill the Debtor
$200 per hour for his work. Mr. Atkins discloses the Firm's
professionals bill:
Professional Hourly Rate
------------ -----------
Senior Appraiser $175
Staff Member $100
To the best of the Trustee's knowledge, the Firm does not
represent an adverse interest to the estate and is "disinterested"
as that term is defined under Section 101(14) of the Bankruptcy
Code.
About Allserve Systems
Headquartered in North Brunswick, New Jersey, Allserve Systems
Corp. is an outsourcing company for the IT industry. The Debtor
filed for chapter 11 protection on November 18, 2005 (Bankr. D.
N.J. Case No. 05-60401). Barry W. Frost, Esq., at Teich Groh
represents the Debtor. The Court converted the Debtor's chapter
11 case into a chapter 7 liquidation proceeding. Kelly Beaudin
Stapleton, the U.S. Trustee for Region 3, named Charles A.
Stanziale, Jr., Esq., at McElroy, Deutsch, Mulvaney & Carpenter,
as the chapter 7 Trustee to liquidate Allserve Systems Corp.'s
estate. When the Debtor filed for protection from its creditors,
it estimated assets between 10 million to $50 million and debts
between $50 million to $100 million.
AQUILA INC: Posts $127.8 Million Net Loss in Fourth Quarter
-----------------------------------------------------------
Aquila, Inc. (NYSE:ILA) reported its financial results for the
fourth quarter and full year ended Dec. 31, 2005.
The company incurred a $127.8 million net loss on $397.7 million
sales for the three months ended Dec. 31, 2006. For the full
year of 2005, the company incurred a $230 million net loss on
$1,314.2 million.
Annual sales were $1.3 billion in 2005 versus $971 million in
2004. Earnings before interest, taxes, depreciation and
amortization for the continuing and discontinued electric and gas
utility businesses were $326.1 million in 2005, a $40.6 million
increase over 2004 levels.
"Although significant losses were incurred in our merchant and
corporate activities, our utility business continues to show
steady improvement," Richard C. Green, Aquila chairman and chief
executive officer said.
"We continue to execute the final stages of our repositioning
strategies aimed at regaining financial strength. Although these
decisions have been tremendously difficult for our organization,
the closing of our utility asset sales this year for a combined
base price of almost $900 million will be a significant milestone
on our path to greater financial stability."
Aquila made significant progress toward achieving its
repositioning plan in 2005 and the first two months of 2006.
Highlights
-- Signing agreements to sell its Kansas electric operations
and its Michigan, Minnesota and Missouri gas operations to
three buyers for a total base purchase price of
$896.7 million;
-- Settling rate cases related to its Kansas gas and electric
utility operations, its Missouri electric and steam
operations, and its Iowa gas utility operations;
-- Completing an exchange offer that converted approximately
98.9 percent of its Premium Income Equity Security units
into Aquila common stock earlier than the mandatory
conversion date of Sept. 15, 2007, which reduced
interest expense;
-- Entering into secured and unsecured revolving credit
and letter of credit facilities with a total capacity of
$480 million to fund its peak working capital requirements,
as well as a five-year, $300 million credit agreement to
support Aquila's investment in the Iatan 2 generating plant
and its share of certain environmental improvements required
at Iatan 1;
-- Continuing to exit merchant obligations and sell merchant
assets, including the Batesville tolling contract, the
PacifiCorp stream flow contract, the company's 4.5%
ownership interest in ICE, and the Red Lake gas storage
development project;
-- Entering into agreements to sell the Goose Creek and
Raccoon Creek merchant peaking plants to AmerenUE for a
total purchase price of $175 million; and
-- Entering into an agreement to sell its communications
business, Everest Connections, for a base purchase price
of $85.7 million.
Aquila expects to continue this progress in 2006 by closing the
four utility asset sales, the two merchant peaking plant sales,
and the Everest Connections sale; improving utility operational
efficiency; and using sales proceeds to pay down debt and
long-term liabilities and generally improve the company's credit
profile.
Fourth Quarter 2005 Results
For the fourth quarter of 2005, the company reported a loss of
$127.8 million compared to a loss of $81 million in the fourth
quarter of 2004.
Sales in the fourth quarter of 2005 totaled $397.7 million,
compared to sales of $272 million during the same period in 2004.
The primary factor impacting fourth quarter 2005 results was
the $159.5 million impairment of the Illinois peaking
facilities mentioned above; fourth quarter 2004 results included
$55.9 million in losses related to the termination of a long-term
gas supply contract and $19.5 million in impairments on three
natural gas combustion turbines and the Red Lake gas storage
development project.
Overall Utility Performance
Due to the pending utility asset sales, Aquila reports the results
of its Kansas electric utility and its Michigan, Minnesota, and
Missouri natural gas utilities as discontinued operations. Aquila
will continue to manage these businesses through the transition to
the acquiring companies.
Aquila's electric and natural gas utilities reported EBITDA of
$326.1 million in 2005, compared to $285.5 million in 2004. The
improvement in the 2005 utility performance is primarily
attributed to the favorable impact of weather on the electric
utilities, growth in the number of electric and gas customers
served, and rate increases resulting from agreements reached in
various rate cases. These rate changes served to offset increased
labor and compensation costs experienced in 2005.
The continuing electric utility operations in Missouri and
Colorado and the continuing natural gas utility operations in
Iowa, Kansas, Nebraska and Colorado reported 2005 EBITDA of
$181.3 million, compared to $165.2 million in 2004.
Electric Utilities EBITDA was $147.7 million in 2005, up
from $130.3 million a year earlier. Gas Utilities EBITDA was
$33.6 million in 2005, down slightly from $34.9 million in 2004.
Electric Utilities
Sales from electric operations were $684.7 million in 2005, up
from $594.9 million a year earlier. Gross profit was $329
million, up from $298.8 million in 2004.
The improvement in gross profit was primarily due to the favorable
impacts of weather, growth in the number of customers served, and
rate increases resulting from Missouri and Colorado rate cases
settled in 2004.
Operating expenses increased $15.2 million over 2004 levels
primarily due to employee wage adjustments that keep them
competitive with peer companies, the cost of improvements to the
company's pension plans, rising medical benefit costs, and
maintenance expenses associated with storm-related outages in
2005.
Gas Utilities
Sales from natural gas operations were $631.1 million in 2005,
up from $529 million a year earlier. Gross profit was
$164.3 million, up from $159.9 million in 2004.
The increase in gross profit was due to a Kansas rate change
effective in June 2005, an interim rate increase in Iowa effective
in May 2005, and growth in the number of customers served as
compared to 2004.
Operating expenses increased $7.2 million over 2004 due to the
employee wage adjustments, pension plan enhancements, and rising
medical benefit costs discussed above.
Discontinued Utility Operations
The four held-for-sale utility businesses reported EBITDA of
$144.8 million in 2005, which was a $24.5 million increase over
earnings of $120.3 million reported in 2004.
Significant factors bolstering 2005 performance include property
tax settlements in Michigan and Minnesota, lower property taxes in
all states held for sale, the favorable impacts of weather on
Kansas electric operations, growth in the number of customers
served, and rate increases resulting from the settlement of Kansas
electric and Missouri gas rate cases.
Merchant Services
Merchant Services, which is conducted through the company's Aquila
Merchant Services, Inc., subsidiary, reported a loss before
interest, taxes, depreciation and amortization of $22.6 million in
2005, compared to a loss of $416.7 million in 2004.
Gross loss was $42.8 million in 2005, compared to a gross loss of
$208.9 million a year earlier.
The improvement in this year's loss is primarily related to a
reduction in losses associated with the wind-down of this
business.
Included in the 2004 loss were $185.5 million of net losses on
sale of assets and other charges, including a loss on the
termination of four long-term gas contracts, a loss on the
transfer of Aquila Merchant's equity interest in the Aries power
project and termination of the related tolling obligation, and an
impairment charge on the Red Lake gas storage project investment.
These charges were offset by small gains related to the sale of
Aquila Merchant's equity method investments in independent power
plants, the sale of the Marchwood development project in the
United Kingdom, a distribution from BAF Energy, and a reserve
reduction for the anticipated settlement of Aquila Merchant's
outstanding liabilities to Enron.
Net gain on sale of assets and other charges in 2005 consists
of pretax gains of $16.3 million on the termination of the
Batesville tolling agreement and related forward sale contract,
$9.3 million on the sale of Aquila Merchant's investment in ICE,
and $6.2 million on the sale of the Red Lake gas storage
development project.
These improvements were offset in part by decreased operating
expenses from 2004 of $18.1 million primarily due to:
-- the refund of approximately $7.2 million of value-added
taxes previously incurred by Aquila Merchant's European
trading business,
-- a $7.1 million reduction in the allowance for bad debts,
-- reduced surety payments due to the settlement of four
long-term gas contracts in 2004, and
-- reduced staffing needed to manage the remaining trading
positions and non-regulated power generation assets.
These cost reductions were offset in part by the provision of a
$9 million reserve in 2005 related to certain price reporting
litigation.
Restructuring charges increased $5.9 million in 2005 compared to
2004 primarily due to the termination of most of the remaining
leases associated with Aquila Merchant's former headquarters.
Discontinued Operations
Discontinued Operations reported EBITDA of $.7 million in 2005,
compared to $247.3 million in 2004. Included in discontinued
operations are:
-- Aquila's Kansas electric and Michigan, Minnesota, and
Missouri gas utility operations;
-- the Goose Creek and Raccoon Creek merchant peaking plants in
Illinois;
-- Everest Connections; and
-- the independent power plants and Canadian utility businesses
sold in 2004.
Liquidity
The most significant activity impacting Aquila's working capital
is the purchase of natural gas for its gas utility customers.
During the winter heating season, higher natural gas consumption
and higher natural gas prices such as those experienced in 2005
result in significantly higher working capital requirements.
Aquila uses a combination of revolving credit and letter of credit
facilities and cash on hand to meet these peak requirements. The
company currently has total capacity under such facilities of
approximately $590 million, and had borrowed or issued letters of
credit against that capacity in the amount of $162.9 million at
Dec. 31, 2005.
About Aquila
Based in Kansas City, Missouri, Aquila, Inc. --
http://www.aquila.com/-- operates electricity and natural
gas transmission and distribution utilities serving customers
in Colorado, Iowa, Kansas, Michigan, Minnesota, Missouri and
Nebraska. The company also owns and operates power generation
assets. At Dec. 31, 2005, Aquila had total assets of
$4.6 billion.
* * *
As reported in the Troubled Company Reporter on Nov. 21, 2005,
Standard & Poor's Ratings Services raised its rating on
diversified energy company Aquila Inc.'s (B-/Watch Pos/B-3)
$300 million five-year secured credit facility to 'B+' from 'B'.
All of the ratings on Aquila remain on CreditWatch with positive
implications, where they were placed Sept. 22, 2005.
ARTEMIS INTERNATIONAL: Inks $27-Million Merger Deal with Versata
----------------------------------------------------------------
Artemis International Solutions Corporation (OTC Bulletin Board:
AMSI) entered into a merger agreement with a wholly owned
subsidiary of Trilogy, Inc., in a transaction valued at
approximately $27 million. The agreement provides for the payment
of $1.60 per share to holders of Artemis' common stock and
$2.20 per share to the holders of Series A Preferred Stock of
Artemis, which represents their liquidation value. On completion
of the merger, Artemis will become part of Trilogy's recently
announced Versata group, a leading provider of business rules,
configuration and pricing management systems. The transaction is
subject to the approval of the stockholders of Artemis, with a
meeting expected to be held in May.
Artemis's successful solutions and global positioning are expected
to become powerful additions to Versata's offering. Artemis has
led the way in the development of Enterprise Portfolio, Project
and Resource management software products on a worldwide basis
since 1976. It also believes it has successfully positioned
itself to take advantage of the convergence of the fast growing
Product Life Cycle Management and Product Portfolio Management
markets -- a class of software applications used by all type
of manufacturing companies, from automotive to high-tech and
consumer goods.
"With our presence in 44 countries and up to 80% of our revenues
derived from outside the United States, Artemis International
Solutions will provide an expanded global platform for Versata,
primarily in Europe and secondarily in Asia," Patrick Ternier,
president and CEO of Artemis said. "Our product suite will
position Versata in one of the fastest growing enterprise
application markets, and will bring diversity and added power to
Versata's high-value enterprise software offerings. We look
forward to joining Versata's team of excellent people and
products."
"Versata welcomes the bold global vision Artemis can bring to our
enterprise solutions," Randall Jacops, General Manager of Versata,
said. "Artemis' excellent product and project management
solutions will dovetail perfectly not only with our current
product offerings, but also our extended strategy to provide a
strong environment of value and success for our customers."
Trilogy reported the transfer of its enterprise software business
to the Versata group, which will operate as a separate business
unit-enabling Trilogy to focus exclusively on its strategic, high
growth Internet Value Services business.
About Versata
Versata -- http://www.versata.com/-- provides solutions for
automating and simplifying the building, maintenance and ongoing
evolution of large, complex, data-intensive enterprise
applications. The Versata solution effectively and efficiently
replaces time-intensive hand-coding efforts with simple, intuitive
business rules and graphical process flow specifications.
About Artemis
Based in Newport Beach, Calif., Artemis International Solutions
Corporation -- http://www.aisc.com/-- one of the world's leading
providers of investment planning and control solutions that help
organizations execute strategy through effective portfolio and
project management. Artemis has refined 30 years experience into
a suite of solutions and packaged consulting services that address
the specific needs of both industry and public sector including,
New Product Development, IT management, program management, fleet
and asset management, outage management and detailed project
management. With a global network covering 44 countries, Artemis
is helping thousands of organizations to improve their business
performance through better alignment of strategy, investment
planning and project execution.
As of Sept. 30, 2005, Artemis International's equity deficit
widened to $9,579,000 from a $5,805,000 deficit at Dec. 31, 2004.
ARVINMERITOR INC: Prices Tender Offers for $450 Mil. of its Notes
-----------------------------------------------------------------
ArvinMeritor, Inc. (NYSE:ARM), reported the reference yield for
each series of notes subject to its previously reported cash
tender offers for up to $450 million in aggregate principal amount
of its:
* 6.625% notes due 2007,
* 6.75% notes due 2008,
* 7.125% notes due 2009 and
* 6.8% notes due 2009.
The reference yield represents the yield to maturity corresponding
to the bid side price of the applicable reference U.S. Treasury
security for such series of Notes, as measured at 2 p.m. ET on
March 13, 2006. The specific pricing data is:
Fixed
Principal Acceptance Spread U.S.
Amount Priority (Basis Treasury
Note Issue Outstanding Level Points) Reference
---------- ----------- ---------- ------- ---------
ArvinMeritor 6.625%
Notes due 2007 $200,000,000 1 87.5 3.625% due
June 30,
2007
ArvinMeritor 6.75%
Notes due 2008 $100,000,000 2 125 3.375% due
Feb. 15,
2008
ArvinMeritor 7.125%
Notes due 2009 $91,400,000 3 200 2.625% due
March 15,
2009
ArvinMeritor 6.80%
Notes due 2009 $302,000,000 4 200 4.5% due
Feb. 15,
2009
Total Early
Reference Consider- Tender Tender Offer
Note Issue Yield (%) ation* Payment* Consideration*
---------- --------- --------- -------- --------------
ArvinMeritor 6.625%
Notes due 2007 4.849% $1,010.31 $15.00 $995.31
ArvinMeritor 6.75%
Notes due 2008 4.800% $1,012.75 $30.00 $982.75
ArvinMeritor 7.125%
Notes due 2009 4.790% $1,008.82 $30.00 $978.82
ArvinMeritor 6.80%
Notes due 2009 4.800% $999.90 $30.00 $969.90
* Per $1,000 principal amount of Notes accepted for purchase
Accordingly, the Total Consideration payable for each $1,000
principal amount of Notes validly tendered pursuant to each of
the offers and not validly withdrawn prior to 5 p.m. ET on
March 13, 2006, that are accepted for purchase in the offers will
be the amount for such Notes. Holders who tender after 5 p.m. ET
on the Early Tender Date and on or before 11:59 p.m. ET on
March 27, 2006, will receive the Tender Offer Consideration for
their Notes that are accepted for purchase in the offers, which is
equal to the Total Consideration for each Note minus the Early
Tender Payment for that Note. Notes tendered pursuant to the
offers may no longer be withdrawn. Holders of Notes accepted for
purchase in the offers will also be paid any accrued and unpaid
interest from and including the last interest payment date
applicable to the Notes to, but not including, the settlement
date. The settlement date is expected to be March 28, 2006, which
is one day after the Expiration Date, or promptly thereafter.
ArvinMeritor increased to $600 million the maximum aggregate
principal amount of Notes that may be purchased in the
offers. To the extent the aggregate principal amount of Notes
tendered exceeds this increased cap, ArvinMeritor will accept
Notes for purchase in the manner described in ArvinMeritor's offer
to purchase dated Feb. 28, 2006.
As of the Early Tender Date, ArvinMeritor had received tenders of
Notes, which are:
* approximately $192,722,000 of the 6.625% Notes due 2007,
representing approximately 96.36% of the outstanding
principal amount of such Notes;
* approximately $95,237,000 of the 6.75% Notes due 2008,
representing approximately 95.24% of the outstanding
principal amount of such Notes;
* approximately $83,188,000 of the 7.125% Notes due 2009,
representing approximately 91.02% of the outstanding
principal amount of such Notes; and
* approximately $271,423,000 of the 6.8% Notes due 2009,
representing approximately 89.88% of the outstanding
principal amount of such Notes.
UBS Investment Bank, J.P. Morgan Securities Inc., Lehman Brothers
Inc., and Citigroup Corporate & Investment Banking are the dealer
managers for the offers. Global Bondholder Services Corp. is the
information agent and the depositary.
The offers are made only by the offer to purchase dated Feb. 28,
2006, and the information in this news release is qualified by
reference to the offer to purchase. Persons with questions
regarding the offers should contact:
UBS Investment Bank
Liability Management Group
Telephone (203) 719-4210 (collect)
Toll-Free (888) 722-9555 ext. 4210
Requests for documents should be directed to:
Global Bondholder Services Corp.
Telephone (866) 540-1500 or (212) 430-3774 (collect)
* * *
As reported in the Troubled Company Reporter on Mar. 3, 2006,
Fitch Ratings assigned an indicative rating of 'BB+' to
ArvinMeritor's announced $200 million offering of convertible
senior unsecured notes maturing in 2026. The company expects to
use proceeds from the offering, together with cash and proceeds
from the recent sale of Purolator, to fund purchases of up to
$450 million of the company's outstanding debt, pursuant to its
pending tender offer. The Outlook is Stable.
The indicative rating is supported by Fitch's view that the
offering will enable the company to push significant maturities
past 2007, while cash-on-hand will enable the company to reduce
total debt. This combination better positions ArvinMeritor going
into 2007 when a 35% to 40% downturn in the North American
commercial vehicle industry, one of the company's primary markets,
is anticipated to occur. In addition, Fitch expects ArvinMeritor
to benefit from already completed restructuring actions,
contributing to estimated positive free cash flow of $120 million
to $170 million in fiscal 2006.
ASARCO LLC: Wants Court to Approve Amendments on LLC Agreement
--------------------------------------------------------------
On Dec. 15, 2005, the U.S. Bankruptcy Court for the Southern
District of Texas in Corpus Christi approved a stipulation
regarding corporate governance, which settled the Creditors
Committees' Motions to appoint an independent third party to
manage ASARCO LLC's business affairs and to discharge ASARCO's
duties under the Bankruptcy Code.
Generally, the Stipulation provided for:
(1) the appointment of Douglas E. McAllister as ASARCO's chief
executive offer;
(2) the appointment of two independent directors, H. Malcolm
Lovett, Jr., Edward R. Caine to ASARCO' Board of
Directors; and
(3) the implementation of controls and amendments to ASARCO's
Limited Liability Company Agreement so as to assure the
independence of ASARCO's Board from the interests of
Americas Mining Corporation and Grupo Mexico, ASARCO's
indirect parent companies.
The ASARCO Board has identified additional amendments to the LLC
Agreement that are necessary and warranted, but which may not be
implemented without Court approval.
Among amendments to the LLC Agreement are:
(a) Members of the Board of Directors may not be represented
by proxy for quorum and voting purposes;
(b) The timing of the payment of the Directors' compensation
and limit in the expenses for which directors are entitled
to be reimbursed for attendance at each board meeting are
clarified;
(c) The Board of Directors is required to determine the
successor when there is a vacancy in the office of chief
executive officer, rather than an automatic shift down the
chain of command;
(d) The Secretary's duties will include the preparation of
agendas for board meetings with input from the Board; and
(e) Indemnification to the Directors will be permissive rather
than mandatory.
A full-text copy of the Amended LLC Agreement is available for
free at http://ResearchArchives.com/t/s?697
ASARCO has also reached agreement with the Directors and Mr.
McAllister on the form of indemnity agreement authorized under
the Stipulation.
A full-text copy of the form of the Indemnity Agreement is
available for free at http://ResearchArchives.com/t/s?698
Accordingly, ASARCO asks the Court to approve the amendments to
the LLC Agreement and the form of the Indemnity Agreement.
About Asarco
Headquartered in Tucson, Arizona, ASARCO LLC --
http://www.asarco.com/-- is an integrated copper mining,
smelting and refining company. Grupo Mexico S.A. de C.V. is
ASARCO's ultimate parent. The Company filed for chapter 11
protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207).
James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A.
Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter
Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq.,
at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor
in its restructuring efforts. Lehman Brothers Inc. provides the
ASARCO with financial advisory services and investment banking
services. Paul M. Singer, Esq., James C. McCarroll, Esq., and
Derek J. Baker, Esq., at Reed Smith LLP give legal advice to
the Official Committee of Unsecured Creditors and David J.
Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee. When the Debtor filed for protection
from its creditors, it listed $600 million in total assets and
$1 billion in total debts.
The Debtor has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521
through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO
Pipe Company, Inc., Cement Asbestos Products Company, Lake
Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about
their asbestos-driven chapter 11 filings have appeared in the
Troubled Company Reporter since Apr. 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-
21346) also filed for chapter 11 protection, and ASARCO has asked
that the three subsidiary cases be jointly administered with its
chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was
converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7
Trustee. (ASARCO Bankruptcy News, Issue No. 18; Bankruptcy
Creditors' Service, Inc., 215/945-7000).
BATTERY PARK: Moody's Lifts Junked $9M Class 3 Notes' Rating to B3
------------------------------------------------------------------
Moody's Investors Service upgraded its ratings of these classes of
notes issued by Battery Park CDO, Limited, a collateralized bond
obligation issuer:
* The $15,000,000 Class II-A Senior Secured
Floating Rate Notes
Prior Rating: A3, on watch for possible upgrade
Current Rating: Aa1
* The $21,000,000 Class II-B Senior Secured
Floating Rate Notes
Prior Rating: A3, on watch for possible upgrade
Current Rating: Aa1
* The $9,000,000 Class III Mezzanine Secured Fixed Rate Notes
Prior Rating: Caa2, on watch for possible upgrade
Current Rating: B3
Moody's noted that the transaction has experienced increased
levels of overcollateralization due to the reduction in the
outstanding amount of the most senior liabilities.
BIO SOLUTIONS: Cash Flow Problems Prompt Going Concern Doubt
------------------------------------------------------------
Baum & Company, P.A., expressed substantial doubt about Bio
Solutions Manufacturing, Inc.'s ability to continue as a going
concern after reviewing the Company's financial statements for the
years ended October 31, 2005 and 2004. The auditing firm pointed
to Bio Solutions' difficulty in generating sufficient cash flow to
meet its capital requirements and sustain operations.
Bio Solutions says that its future is dependent upon its ability
to obtain additional equity or debt financing and upon future
successful development and marketing of its products. "Management
is pursuing various sources of equity and debt financing. But
while the Company plans to pursue additional financing, there can
be no assurances that the Company will be able to secure adequate
financing or obtain financing on terms beneficial to the Company,"
management says in its latest annual report.
2005 Financials
For the fiscal year ended Oct. 31, 2005, Bio Solutions' incurred a
$1,024,683 net loss on $206,085 of total revenues. That compares
to a $656,551 net loss on $191,372 of total revenues for the year
ended Oct. 31, 2004.
At Oct. 31, 2005, Bio Solutions' balance sheet showed $423,430 in
total assets and $1,256,383 in total liabilities. The Company
reports a $2,233,506 accumulated deficit as of Oct. 31, 2005.
A full-text copy of Bio Solutions' annual report on Form 10-KSB is
available for free at http://ResearchArchives.com/t/s?68d
About Bio Solutions
Headquartered in Hattiesburg, Mississippi, Bio Solutions
Manufacturing, Inc., is a technology provider of biological
solutions to industries that desire environmentally-friendly forms
of waste remediation. The Company is the parent of Bio Solutions
Production, Inc. The Company's products have a combination of
microbes and enzymes specifically selected, adapted and mixed in
laboratories. Those microbes have been designed to digest animal
and plant tissues, proteins and cellulose. The formulation of the
products has been developed to digest the waste products
effectively and in an environmentally safe and responsible manner.
As of Oct. 31, 2005, Bio Solutions had an $832,953 stockholders'
equity deficit.
BLOUNT INT'L: Negotiating for Better Terms on Sr. Loan Facility
---------------------------------------------------------------
Blount International, Inc., has begun negotiations with its
lenders to amend certain aspects of its senior credit facility.
The amendments, if approved, among other things, will reduce the
Company's interest rate on the amounts applicable under the senior
credit facility and amend certain financial and other covenants.
The amendments will reduce the overall amount available to be
borrowed under the credit facility through a reduction in the
size of the term loan and an increase in the size of the revolver.
The amendments are expected to be completed and approved by
March 31, 2006.
As of December 31, 2005, the U.S. term loan requires quarterly
payments of $0.6 million, with a final payment of $217.1 million
due on the maturity date and the Canadian term loan requires
quarterly payments of $12,000, with a final payment of
$4.4 million due on the maturity date. As of December 31, 2005,
the weighted average interest rate on outstanding debt was 7.63%.
The credit facility provides for term loan interest rate margins
to vary based on the Company's credit facility leverage ratio.
The credit facility leverage ratio is defined as the ratio of
total outstanding debt under the credit facility (including
outstanding letters of credit) to adjusted earnings before
interest, taxes, depreciation and amortization. Interest rates
also change based upon changes in LIBOR or prime rates.
The Company and all of its domestic subsidiaries guarantee
obligations under the senior credit facilities. The obligations
under the senior credit facilities are collateralized by a first
priority security interest in substantially all of the Company's
assets
The Company's total debt at December 31, 2005, was $407.7 million.
Outstanding debt as of December 31, 2005, consisted of term loans
of $232.7 million and 8-7/8% senior subordinated notes of
$175.0 million.
The Company's management said in the Company's 2005 Annual Report
that the Company's debt continues to be significant, and future
debt service payments continue to represent substantial
obligations. This degree of leverage may adversely affect its
operations and could have important consequences.
About Blount International
Blount International, Inc. -- http://www.blount.com/-- is a
diversified international company operating in three principal
business segments: Outdoor Products, Industrial and Power
Equipment and Lawnmower. Blount sells its products in more than
100 countries around the world.
As of December 31, 2005, the Company' equity deficit narrowed to
$145,187,000 from a $256,154,000 deficit at December 31, 2004.
Blount and its affiliates are parties to:
-- a revolving credit facility of up to $100.0 million;
-- a $4.9 million Canadian term loan facility;
-- a $265.0 million term B loan facility; and
-- a $50.0 million second collateral institutional loan
facility;
following a series of refinancing transactions executed on
August 9, 2004. Moody's Investor Services assigned its B1 rating
to the loan facilities on June 13, 2005, and Standard & Poor's
Ratings Service put a B+ rating on the loans when it reviewed them
on Aug. 9, 2004.
BLUEGREEN CORP: Earns $6.9 Million of Net Income in Fourth Quarter
------------------------------------------------------------------
Bluegreen Corporation (NYSE: BXG - News) reported its financial
results for the fourth quarter and year ended December 31, 2005.
George F. Donovan, President and CEO of Bluegreen Corporation,
commented, "2005 was a year of great success for Bluegreen(R),
highlighted by record Resorts sales, record total operating
revenues, and record net income. Resorts sales increased in each
quarter of 2005. We commenced sales at four new Resort sales
offices last year, increased our owner base by 14% to more than
153,000, and benefited from our critical mass, favorable
demographic trends, and increasing acceptance of the Bluegreen
Vacation Club(R). We also completed a $203.8 million
securitization of vacation ownership receivables, the largest such
transaction in our history. We believe that the successful
completion of this offering reflects the liquidity of Bluegreen's
vacation ownership receivables and the quality of our operations
and prospects. Sales in the Communities segment, as expected,
declined during the second half 2005, negatively impacting our
overall operating results for that same period. As previously
announced, this decline was the result of lower available
inventory due to the high level of sales generated during 2004 and
the first half of 2005. We are proud, however, that Bluegreen
Communities maintained a leading position in the direct-to-
consumer sales of residential home sites. We commenced sales at
three new residential properties during 2005, with sales at a
fourth new property beginning in January 2006."
New Bluegreen Golf Community
Mr. Donovan continued, "In the first quarter of 2006, we acquired
a 1,579-acre parcel of land in Grayson County, Texas, located in
the Metroplex and within one hour of Dallas, Texas. This
Bluegreen Golf Community substantially increases our land
inventory and expands Bluegreen's presence in one of the nation's
most vibrant major metropolitan areas. The community will offer
1/4- to 1-acre homesites. The first phase of the development is
expected to begin in March 2006 with sales expected to commence in
the fourth quarter of 2006. Amenities are planned to include an
18-hole, championship style golf course, owner's clubhouse, and
swim and tennis center. We currently believe that this community
will generate total estimated life-of-project sales of
approximately $168.2 million over an anticipated 7-year sell out
period, based on our assessment of current estimated retail prices
and the expected number of homesites to be offered."
Consolidated Results
Total sales in the fourth quarter of 2005 were $120.3 million as
compared to $126.0 million in the same period last year. Higher
Resorts sales during 2005 were offset by lower sales in the
Communities segment. For 2005, total sales rose 9.5% to a record
$550.3 million from $502.4 million in 2004, driven primarily by
the higher Resorts sales.
Net income for the fourth quarter of 2005 was $6.9 million on
approximately 31.2 million weighted average common and common
equivalent shares outstanding, compared to restated net income of
$6.8 million on approximately 30.9 million shares outstanding for
the fourth quarter of 2004. Net income for the fourth quarter of
2004 was restated from $6.3 million as a result of the previously
announced correction of the accounting treatment for certain of
Bluegreen's receivable sale transactions pursuant to Statement of
Financial Accounting Standards No. 140, "Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of
Liabilities" ("SFAS 140"). Net income for 2005 was $46.6 million
on approximately 31.2 million shares outstanding, compared to
restated net income of $42.6 million on approximately 30.7 million
shares outstanding. Net income for 2004 was restated from $36.5
million as a result of the previously announced SFAS 140
restatement.
Bluegreen Resorts
Resorts sales in the fourth quarter of 2005 increased 8.7% to a
fourth quarter record $81.2 million from $74.7 million in the same
period last year. Higher sales were due primarily to same-resort
sales increases at many of Bluegreen's sales offices, most notably
the Bluegreen Wilderness Club at Big Cedar(TM) located in
Ridgedale, Mo. Several of Bluegreen's resorts and offsite sales
offices also reported significant sales increases during the
fourth quarter of 2005, including The Fountains Resort in Orlando,
Fla., Harbour Lights(TM) in Myrtle Beach, S.C., Shore Crest
Vacation Villas(TM) in North Myrtle Beach, S.C., Mountain Run at
Boyne(TM) in Boyne Falls, Mich., and the Company's Dallas, TX
offsite sales office. New sales sites in Atlanta, GA, King of
Prussia, Pa., and The Suites at Hershey(TM) (Hershey, Pa.) also
contributed to higher sales. Resort sales for 2005 increased by
15.3% to $358.2 million from $310.6 million in 2004.
Resorts cost of sales in the fourth quarter of 2005 declined to
23.8% of sales from 24.7% in the same period last year. This
decrease reflects a favorable product mix, primarily due to the
additional construction of units and increased sales of vacation
ownership interests in The Fountains Resort, which has a
relatively low associated product cost. Although higher than the
previous quarters in 2005, Resorts cost of sales during the fourth
quarter of 2005 fell within the anticipated range of 23% to 25%.
Bluegreen expects that, due to its product pricing strategy,
Resorts cost of sales will continue to remain within that range in
2006 despite rising construction costs and the increased cost of
acquisitions resulting from higher real estate prices. Resorts
cost of sales for the year declined to 21.6% from 23.8% in 2004.
Bluegreen Communities
Communities sales in the fourth quarter of 2005 declined to $39.1
million from $51.3 million in the fourth quarter of 2004, the
result of the sell-out of four communities during or prior to the
fourth quarter of 2005. The Company noted that, despite this
decline, as of December 31, 2005, approximately $30.7 million and
$12.4 million of Communities sales and profits, respectively, were
deferred under the percentage-of-completion method of accounting.
It is expected that these amounts will be recognized in future
periods ratably with the development of the communities.
Communities sales for the year increased slightly to $192.1
million from $191.8 million in 2004.
During 2005, Bluegreen commenced sales at three new Texas
communities -- SugarTree on the Brazos (in January), Saddle Creek
Ranch (in April), and The Settlement at Patriot Ranch (in August
2005) -- and commenced sales at a fourth community -- Havenwood at
Hunter's Crossing -- in January 2006.
Communities cost of sales in the fourth quarter of 2005 declined
to 55.1% of sales from 57.3% in the fourth quarter of 2004, due to
the mix of homesites sold in each period and the Company's
constant attention to homesite pricing in each of its markets.
Communities cost of sales declined to 52.2% of sales in 2005 from
55.1% in 2004.
Other Financial Information
Total positive net interest spread (interest income less interest
expense) rose to $5.5 million in the fourth quarter of 2005 as
compared to $4.0 million (restated) in the fourth quarter of 2004.
Total positive net interest spread for 2005 increased to $20.3
million from $17.5 million (restated) last year. Interest income
increased primarily as a result of a higher average vacation
ownership notes receivable balance during the 2005 quarter as
compared to the 2004 quarter, while interest expense declined
primarily as a result of lower average debt outstanding.
Gain on sales of receivables increased 87.2% to $9.2 million in
the fourth quarter of 2005 from $4.9 million (restated) in the
comparable prior year period. Bluegreen sold vacation ownership
receivables with an aggregate principal balance of $81.2 million
during the fourth quarter of 2005 as compared to $43.4 million in
the 2004 fourth quarter. Gain on sale of notes receivable for
2005 was $25.2 million as compared to $26.0 million (restated) in
2004.
Bluegreen's balance sheet at December 30, 2005 reflected
unrestricted cash of $66.4 million, a book value of $10.33 per
share, and a near record low debt-to-equity ratio of 0.67:1.
Mr. Donovan stated, "Looking forward to 2006, as previously
announced, the application of new accounting pronouncements and
the accounting impact of anticipated changes in the structure of
certain of our financing facilities will impact Bluegreen's 2006
operating results primarily by shifting revenues and earnings from
early in the year to later in the year. While required by
generally accepted accounting principles, these changes are not
expected to impact the underlying financial strength of the
Company.
Adoption of AICPA Statement of Position 04-2
Effective January 1, 2006, Bluegreen was required to adopt the
American Institute of Certified Public Accountants' Statement of
Position 04-2, "Accounting for Real Estate Time-sharing
Transactions", which changes the rules for many aspects of
timeshare accounting, including revenue recognition, inventory
costing and incidental operations. The Company currently
estimates that the adoption of the SOP will result in a one-time,
non-cash, cumulative effect of change in accounting principle
charge in the first quarter of 2006. This charge had been
estimated to be $2.5 million to $4.0 million; however the actual
cumulative effect adjustment will not be determined until the
Company finalizes its first quarter financial results. Therefore,
this estimate remains subject to change. This charge will consist
primarily of deferred Resorts sales, which are the result of
providing buyers with certain purchase incentives and the
treatment of the Company's Sampler Program. The Sampler Program
gives purchasers an opportunity to utilize the Company's vacation
ownership product through a one-year allotment of Bluegreen
Vacation Club points. In the event the Sampler purchaser
subsequently purchases a vacation ownership interest from us, a
portion of the amount paid for their Sampler Package is credited
toward the down payment on this subsequent purchase. Under the
SOP, the credit given will result in the deferral of such sales
until the minimum down payment amounts are received from the
purchaser, typically through their required mortgage payments.
Deferrals under the SOP are expected to be ongoing, with deferred
Resorts sales being recognized in subsequent quarters once the
required down payment amount is received.
SFAS 140 Treatment of Warehouse Purchase Facilities
The Company has historically sold vacation ownership receivables
to financial institutions through warehouse purchase facilities to
monetize the receivables while accumulating enough receivables for
a future term securitization transaction. Bluegreen currently
intends to structure future warehouse purchase facilities so that
sales of vacation ownership receivables through these facilities
will be accounted for as on-balance sheet borrowings rather than
as off-balance sheet sales. Therefore, the Company will not
recognize a gain on the sales of receivables sold through the
warehouse purchase facilities until such receivables are included
in a properly structured term securitization transaction. The
company expect this may impact future quarterly earnings patterns
as compared to comparable prior periods.
Headquartered in Boca Raton, Florida, Bluegreen Corporation
(NYSE:BXG) -- http://www.bluegreenonline.com/-- is a leading
provider of Colorful Places to Live and Play(R). Bluegreen
Resorts' flexible points-based vacation ownership system provides
approximately 150,000 owners access to over 40 resorts and an
exchange network of over 3,700 resorts and other vacation
experiences such as cruises. Bluegreen Communities has sold
over 49,000 planned residential and golf community homesites in
32 states since 1985. Founded in 1966, Bluegreen employs
approximately 4,900 associates. In 2005, Bluegreen ranked No.
57 on Forbes' list of The 200 Best Small Companies and No. 48 on
FORTUNE'S list of America's 100 Fastest Growing Companies.
Bluegreen Corp.'s 10-1/2 Senior Secured Notes due 2008 carry
Moody's Investors Service's B3 rating and Standard & Poor's
single-B rating.
BOYDS COLLECTION: Files Joint Plan of Reorganization
----------------------------------------------------
The Boyds Collection, Ltd., filed a proposed Joint Plan of
Reorganization on March 14, 2006, as part of its reorganization
under Chapter 11 of the U.S. Bankruptcy Code.
Boyds said the proposed Plan has the support of both its largest
secured lender and the Official Committee of Unsecured Creditors
in its chapter 11 cases.
Boyds asked the Court to approve solicitation procedures relating
to the proposed Plan and accompanying Disclosure Statement. If
the solicitation procedures and the Disclosure Statement are
approved, Boyds will begin soliciting votes for or against the
proposed Plan from its creditors and equity interest holders.
A summary of the terms of the proposed Plan are:
1) Holders of Senior Secured Claims will receive for their
claims of approximately $57.7 million: senior secured
promissory notes in the aggregate principal amount of
$30 million, to be due in five years following the Effective
Date; and New Common Stock representing approximately 48.5%
of the New Common Stock issued on the Effective Date.
2) If the Class of holders of Qualifying Noteholder Claims vote
to accept the Plan, then each holder of an Allowed
Qualifying Noteholder Claim shall receive Cash in the amount
of 22% of the Allowed amount of such Allowed Qualifying
Noteholder Claim, to be paid, if at all, on the date upon
which a Future Transaction is consummated; plus its Pro Rata
Share of 5% of the New Common Stock, plus its Pro Rata Share
of 50% of the Reallocated Shares.
If the Class of holders of Qualifying Noteholder Claims
votes to reject the Plan, then each holder of an Allowed
Qualifying Noteholder Claim shall receive its Pro Rata Share
of 5% of the New Common Stock, plus its Pro Rata Share of
50% of the Reallocated Shares.
3) If the Class of holders of Non-Qualifying Noteholder Claims
vote to accept the Plan, then each holder of an Allowed
Non-Qualifying Noteholder Claim shall receive Cash in the
amount of 24% of the Allowed amount of such Allowed
Non-Qualifying Noteholder Claim to be paid, if at all, on
the date upon which a Future Transaction is consummated.
If the Class of holders of Non-Qualifying Noteholder Claims
votes to reject the Plan, then each holder of an Allowed
Non-Qualifying Noteholder Claim shall receive Cash in the
amount of 2% of the Allowed amount of such Allowed
Non-Qualifying Noteholder Claim, to be paid, if at all, on
the date upon which a Future Transaction is consummated.
4) Each holder of an Allowed General Unsecured Claim or Claims
will receive Cash equal to 28% of its Allowed General
Unsecured Claim or Claims, if the Class accepts the Plan.
If the Class of holders of General Unsecured Claims votes to
reject the Plan, then each holder of an Allowed General
Unsecured Claim shall receive Cash in the amount of 4% of
the Allowed amount of such Allowed General Unsecured Claim,
to be paid on the earlier of:
(a) the date upon which a Future Transaction is consummated;
and
(b) the first Business Day that is at least 18 months after
the Effective Date.
5) Secured Claims other than those of the Senior Secured Claims
will be treated either as agreed by the parties or in a
manner that reinstates the Secured Claim or provides for
payment to the creditor equal to the value of such
creditor's collateral.
6) Each holder of an Allowed Other Priority Claim shall
receive, on account of and in full and complete settlement,
release and discharge of such Allowed Other Priority Claim,
(a) Cash equal to the amount of such Allowed Other Priority
Claim or
(b) such other treatment as to which the Reorganized Debtors
and such holder shall have agreed upon in writing in an
amount sufficient to render such Allowed Priority Claim
not Impaired under section 1124 of the Bankruptcy Code,
to be paid on the latest of
* the Effective Date (or as soon thereafter as is
reasonably practicable),
* five Business Days after the
Allowance Date for such Other Priority Claim, or
* the date on which the Debtors and the holder of such
Allowed Other Priority Claim otherwise agree.
7) Allowed Priority Tax Claims will either be paid, at the sole
option of the Debtors,
(a) on the latter of
* the Effective Date (or as soon thereafter as is
reasonably practicable),
* five Business Days after the Allowance Date with
respect to such Allowed Priority Tax Claim;
(b) beginning the first anniversary following the Effective
Date, Cash payments to be made in equal annual
installments, with the final installment being payable
no later than the sixth anniversary of the date of the
assessment of such Allowed Priority Tax Claim, in an
aggregate amount equal to such Allowed Priority Tax
Claim, together with interest on the unpaid balance of
such claim calculated from the Effective Date through
the date of payment at the Applicable Rate; or
(c) such other treatment agreed to by the holder of such
Allowed Priority Tax Claim and the Debtors.
8) Each holder of an equity interest in Boyds of over 200
shares will receive its pro rata share of 46.5% of the
equity of Reorganized Boyds.
9) Each holder of an equity interest in Boyds of less than 200
shares will receive $0.15 per share held by such holder.
10) The Company is also negotiating with one of its Senior
Lenders to provide a new $11 million revolver with a
$4 million seasonal over-advance option that supports
letters of credit and would provide Boyds with access to
additional capital to fund post-reorganization operations.
During the chapter 11 cases, Boyds has made changes within the
Company, designed to streamline the organization, rationalize
inventory, and stabilize its business.
"The filing of the proposed plan of reorganization, and the
support given to it by the Senior Secured Creditors and the
Official Committee of Unsecured Creditors, is very positive news
for all of Boyds' employees, customers and vendors. It will
reduce the Company's debt balance by approximately $60 million and
will permit Boyds to emerge from chapter 11 as a financially
stronger, more efficient company," said Jan Murley, Chief
Executive Officer and Director. "Since we filed for Bankruptcy,
the dedication and hard work of our employees has been critical to
our success, and is a strong indication of how well positioned we
are to successfully move forward," Murley added.
In connection with the development of the proposed Plan, Boyds has
been represented by Houlihan Lokey Howard & Zukin Capital, Inc. as
financial advisors and Kirkland & Ellis LLP as legal advisors.
The Official Committee of Unsecured Creditors have been
represented by as FTI Consulting as financial advisors and by Paul
Weiss Rifkand, Wharton and Garrison LLP as legal advisors.
About Boyds Collection
Headquartered in McSherrystown, Pennsylvania, The Boyds
Collection, Ltd. -- http://www.boydsstuff.com/-- designs and
manufactures unique, whimsical and "Folksy with Attitude(SM)"
gifts and collectibles, known for their high quality and
affordable pricing. The Company and its debtor-affiliates filed
for chapter 11 protection on Oct. 16, 2005 (Bankr. Md. Lead Case
No. 05-43793). Matthew A. Cantor, Esq., at Kirkland & Ellis LLP
represents the Debtors in their restructuring efforts. As of
June 30, 2005, Boyds reported $66.9 million in total assets and
$101.7 million in total debts.
CHC HELICOPTER: Executive Chairman Mulls Potential Takeover
-----------------------------------------------------------
Mr. Craig L. Dobbin, the controlling shareholder and Executive
Chairman of CHC Helicopter Corporation, filed an amended Schedule
13D with the Securities and Exchange Commission describing
preliminary discussions he's had with two unaffiliated private
equity firms regarding a potential acquisition of CHC.
As disclosed in the filing, CHC has received a presentation
concerning the potential transaction. Mr. Dobbin is evaluating
the feasibility of the transaction on the following non-binding
terms:
a) a price per Class A Subordinate Voting Share and Class B
Multiple Voting Share in the range of CDN$30 to $32.50;
b) an equity interest of Mr. Dobbin in the newly formed
acquisition vehicle of approximately 14% through a
combination of common equity and options;
c) minority board representation rights and minority
protective provisions for Mr. Dobbin;
d) pre-emptive rights for Mr. Dobbin (including tag-along
rights and piggyback/demand registration rights); and
e) entry by Mr. Dobbin into a voting agreement in favor of
the proposed transaction in the event that definitive
agreements are executed.
Mr. Dobbin has granted the private equity firms an exclusivity
period that expires on April 30, 2006 to evaluate the proposed
transaction and has agreed in his capacity as a shareholder that
he and his affiliates (other than CHC and its subsidiaries) will
not, until July 31, 2006, enter into or support any alternative
transaction.
The 13D also discloses that if any alternative transaction is
proposed during such period, Mr. Dobbin and his affiliates (other
than CHC and its subsidiaries) will vote their shares against any
The Board of Directors of CHC has established a special committee
of independent directors to consider any potential transaction
that may result from the matters disclosed in the 13D. The
Special Committee has retained independent legal and financial
advisors.
At this time, neither CHC nor, to its knowledge, any other party,
is legally obligated to engage in any transaction on the terms
noted above or on any other terms, and no assurance can be given
that any transaction will be undertaken. The Special Committee
will review any proposed transaction.
A full-text copy of the Schedule 13D is available at no charge at
http://ResearchArchives.com/t/s?69a
About CHC Helicopter
CHC Helicopter Corporation -- http://www.chc.ca/-- is the world's
largest provider of helicopter services to the global offshore oil
and gas industry, with aircraft operating in more than 30
countries worldwide.
* * *
As reported in the Troubled Company Reporter on Mar. 17, 2005,
Moody's Investors Service assigned a B2 rating to CHC Helicopter
Corporation's proposed US$100 million senior subordinated note
add-on to the existing 7.375% senior subordinated notes issue
while affirming the Ba3 senior implied rating. Moody's changed
the outlook to stable from positive to accommodate the company's
growth leverage back to historical levels and that is considered
full for the Ba3 senior implied rating and no longer supportive of
a positive outlook. Moody's noted that the increased debt beyond
what was utilized for the strategic Schreiner acquisition has
funded the company's aircraft fleet expansion and growth of its
repair and overhaul business.
CIRCUS & ELDORADO: Tighter Liquidity Prompts Moody's B2 Ratings
---------------------------------------------------------------
Moody's Investor's Service downgraded the Corporate Family rating
of Circus & Eldorado Joint Venture to B2 from B1 and downgraded
the rating on its senior secured mortgage notes due 2012 to B2
from B1; the ratings outlook is stable.
The ratings change follows lower liquidity from lost revolver
access. Moreover, unfavorable trends in the key ratings factors
of leverage, coverage and margin, due to competition from Northern
California operators, specifically Thunder Valley, contributed to
the ratings change decision.
For the twelve-month period ended Sept. 30, 2005, the Company's
debt to EBITDA was 4.8 times, which is higher than the historical
level of approximately 4.0 times. Moody's notes that credit
measures in the twelve-month period ended Sept. 30, 2005, were
exacerbated by revenues lost to bad weather and the lack of a
bowling tournament; the annual bowling tournament that occurs two
out of every three years in Reno, drives higher occupancy rates
and higher gaming revenues for the Company. Pursuant to Moody's
Global Gaming Rating Methodology, the B2 rating more properly
reflects the Company's credit measures relative to the universe of
rated gaming issuers in terms of size, profitability and
diversification.
The Company currently does not have access to its March 2007
$10 million, first-lien revolving credit facility, though
availability could return during 2006 if performance enables
compliance with the maximum permitted debt to EBITDA test, as
defined, which declines to 4.75 times from 5.0 times on
March 31, 2006. Internal cash flows should approximately cover
all needs over the next 12 months, while cash on hand was
$29 million at Sept. 30, 2005, mitigating the risk of a liquidity
shortfall.
The stable ratings outlook reflects the Company's established
position in the Reno, Nevada market. Moody's notes that positive
demographic trends bode well for growth of the Reno gaming market,
though as a leisure and convention-focused property located in the
Downtown section, the Company's performance mostly depends on
visitation, rather than local, traffic. Downtown properties may,
over time, lose market share as properties expand and become
developed in other sections of Reno. Nevertheless, growth of the
Reno market should help Reno's ability to attract future
convention business. Additionally, the ratings and outlook
reflect the Company's low regulatory risk exposure from operating
in Nevada.
The ratings could go up if the Company were to:
1) lower its debt to EBITDA ratio to around 4.0 times with
corresponding improvement in cash flow leverage measures,
and it appeared likely that this leverage level could be
maintained over the intermediate term; and
2) the Company obtained a source of long-term committed
liquidity to absorb unexpected internal cash flow
shortfalls.
The ratings could go down if evidence of weaker competitiveness
surfaced that threatened the Company's ability to generate
sufficient cash flow to meet its obligations. Specifically, if
EBIT to interest were to fall to approximately 1.0 times and
appeared unlikely to meaningfully improve to above 1.0 times, the
ratings would likely be downgraded. As of Sept. 30, 2005, the
Company's last-twelve month EBIT to interest ratio was 1.2 times.
Additionally, if the Company were to not possess a reasonable
level of total liquidity due to absence of revolver access or lack
of significant cash on hand, the ratings would be likely lower.
Circus & Eldorado Joint Venture is a 50/50 joint venture between
MGM Mirage and Eldorado Resorts LLC, owner of the Silver Legacy
Resort Casino a nineteenth century silver mining themed hotel-
casino and entertainment complex in Reno, Nevada. Revenues for
the twelve month period ending Sept. 30, 2005, were $146 million.
COLUMBUS LOAN: Moody's Lifts Rating on $11.5M Class C Notes to Ba1
------------------------------------------------------------------
Moody's Investors Service upgraded its ratings on these classes of
notes issued by Columbus Loan Funding Ltd., a collateralized loan
obligation issuer:
* The $27,500,000 Class A-II Floating Rate Senior Subordinate
Notes Due October 12, 2012
Prior Rating: Aa2, on watch for possible upgrade
Current Rating: Aaa
* The $10,000,000 Class A-III Floating Rate Senior Subordinate
Notes due October 12, 2012
Prior Rating: A2, on watch for possible upgrade
Current Rating: Aaa
* The $41,750,000 Class B Floating Rate Senior Subordinate
Notes due October 12, 2012
Prior Rating: Baa2, on watch for possible upgrade
Current Rating: Aa3
* The $11,500,000 Class C Floating Rate Senior Subordinate
Notes due October 12, 2012
Prior Rating: Ba3, on watch for possible upgrade
Current Rating: Ba1
The rating actions reflect the delevering of the transaction and
the corresponding increases in the levels of overcollateralization
for the notes, according to Moody's.
COOPER COMPANIES: Earns $18.4 Mil. in First Quarter ended Jan. 31
-----------------------------------------------------------------
The Cooper Companies, Inc. (NYSE:COO) reported its financial
results for the fiscal first quarter ended Jan. 31, 2006.
On Jan. 6, 2005, Cooper completed the acquisition of Ocular
Sciences, Inc., and Ocular's results are included from that date
forward.
The company earned $18,476,000 of net income on $205,739,000 of
net sales for the three months ended Jan. 31, 2006.
Change in Accounting for Stock Options
The Company has adopted the new accounting requirements for
expensing stock options in accordance with Statement of Financial
Accounting Standards No.123 (revised 2004), "Share-Based Payment"
(SFAS 123R) using the modified prospective method.
Therefore, prior periods have not been restated and are not
comparable. These new accounting requirements reduced first
quarter results by $4.9 million or 9 cents per share. Guidance
for fiscal 2006 includes 25 cents for stock option expense, 10
cents more than previous guidance because ten year historical
vesting data and higher volatility assumptions were used. The
first quarter stock option expense will be greater than subsequent
quarters because the 2006 directors' annual options are amortized
over four months.
First Quarter Fiscal 2006
Revenue and Expense Summary
Cooper's first quarter revenue of $205.7 million was 45% above
last year's first quarter in constant currency, 39% as reported.
Gross margin, before nonrecurring acquisition and restructuring
costs, was 63%, 1% below last year's first quarter as unfavorable
currency adjustments flow through the cost of goods sold.
Including nonrecurring acquisition and restructuring costs, gross
margin was also 63% compared with 62% in the prior year's quarter.
Selling, general and administrative expense, including
$4.8 million for stock option expense, grew 40% and was 41% of
revenue, the same as in last year's first quarter. SG&A before
stock option expense was 39% of sales.
Corporate expenses increased to $8.6 million, or 123% over the
first quarter of 2005. These include $3.4 million of stock option
expenses, increased costs to comply with corporate governance
requirements and support a larger company, an audit cost overrun
of $1.3 million for the fiscal 2005 financial and controls audits
and continuing costs to maintain Cooper's global trading
arrangement.
First quarter fiscal 2006 research and development expense was
$5.9 million, more than double the first quarter of 2005, which
included only one month of R&D costs from the acquisition.
CVI's activities include programs to develop two-week disposable
and continuous wear silicone hydrogel lenses, a disposable
multifocal toric lens and a daily wear lens incorporating the
Proclear(R) lens material.
Operating income before nonrecurring acquisition and restructuring
costs grew 20%, 36% excluding the effect of stock option expense,
and was 17% of revenue, 20% excluding the effect of stock option
expense, versus 20% in last year's first quarter.
With nonrecurring acquisition and restructuring costs included,
operating income was 16% of revenue.
Interest expense grew 131% over the first quarter of 2005 as a
result of debt incurred associated with the Ocular acquisition.
Other expenses of $5.2 million include $800 thousand of foreign
exchange losses and a $4.1 million write-off of deferred financing
costs associated with amending the syndicated bank credit
agreement in December 2005.
The effective tax rate for the quarter was 11%, 12% excluding
nonrecurring items, compared with 21% for the first quarter of
2005.
Compared with the first quarter of 2005, the number of shares
used to calculate diluted earnings per share increased 21% to
47.6 million shares, primarily due to the shares issued in the
Ocular transaction.
Balance Sheet and Cash Flow Highlights
-- Capital expenditures were $46 million in the quarter,
primarily to expand manufacturing capacity and to continue
the rollout of new information systems in selected
locations; and
-- Depreciation and amortization was $14.2 million for the
quarter.
"Our objective is to move aggressively to develop manufacturing
capacity for our new silicone hydrogel lenses and to expand and/or
convert capacity to the Gen II manufacturing platform for both
single-use and our two-week and monthly PC technology-based high
volume products," Robert S. Weiss, executive vice president
and chief operating officer said.
"Our ongoing conversion to Gen II is key to achieving the
substantial manufacturing savings we've projected from the Ocular
acquisition," he noted.
Cooper expects capital expenditures in fiscal 2006 of about
$150 million to $160 million, about 70% for expanded manufacturing
capacity, about 20% for Gen II conversion and about 10% for
information technology.
Cooper expects to exit fiscal 2006 with the manufacturing capacity
to sell $40 million in silicone hydrogel lenses during fiscal
2007, more than 5x the anticipated fiscal 2006 capacity, and to
continue to increase silicone hydrogel capacity during fiscal
2007.
Adequate manufacturing capacity to meet anticipated demand for
existing single-use lenses and Biomedics XC(TM) is expected
to be in place over the next twelve months.
Amended Credit Agreement
During the first quarter Cooper amended its $750 million credit
facility. This reduced the cost of borrowing by approximately
$2 million annually. As a result, Cooper wrote off $4.1 million
of deferred costs related to the previous facility in the first
quarter.
CooperVision Business Details
According to independent market research data, the worldwide soft
contact lens market grew 10% in calendar 2005 to $4.6 billion --
8% in constant currency.
The soft contact lens market in United States grew about 8% to
$1.6 billion, while revenue in countries outside the United States
grew about 11% to $3 billion.
Toric lenses, the largest specialty product category, grew
approximately 15% to about $685 million, while the daily
disposable segment grew about 13% to approximately $1.3 billion.
Multifocal lenses grew 19% to $143 million.
The Americas region, approximately $1.8 billion or 40% of the
world market, grew approximately 9%. Japan and the Pacific Rim
countries, approximately $1.5 billion or 31% of the world market,
grew approximately 17%. Europe, about $1.3 billion or 29% of the
market, grew about 5%.
Silicone Hydrogel Market Update
According to independent market research data, worldwide silicone
hydrogel lens revenue grew 95% during 2005 to $662 million, about
14% of the soft contact lens market.
The market share for silicone hydrogel lenses stabilized at 16% of
soft contact lens revenue in both the third and fourth quarters of
calendar 2005.
About two-thirds of the silicone hydrogel revenue is generated in
the United States. During calendar 2005, silicone hydrogel lenses
accounted for 26% of soft contact lens revenue in the U.S.; 27% in
the third quarter and 28% in the fourth quarter.
According to Health Product Research estimates, silicone hydrogel
lenses accounted for 27% of total patient visits to contact lens
practitioners in the United States during the fourth quarter of
calendar 2005 compared with 25% in the third quarter.
Silicone hydrogel lenses accounted for 34% of new patient visits
in the third quarter and 35% of new visits in the fourth quarter.
CooperVision Worldwide Revenue Highlights
* CVI's worldwide revenue of $175.6 million grew 45% over last
year's first quarter -- 52% in constant currency;
* CVI's core product lines -- specialty lenses (toric,
cosmetic, multifocal, and PC Technology and silicone hydrogel
spherical lenses) plus single-use lenses -- grew 44% in the
first quarter and accounted for 63% of its soft lens
business;
* Sales of toric lenses, which correct astigmatism, increased
32% in the first quarter and accounted for 34% of CVI's soft
contact lens revenue. All disposable toric products grew
33% in the quarter and now represent about 80% of CVI's
worldwide toric sales;
* Single-use lenses had sales of about $20.7 million during the
quarter, up 256% for the same period in 2005;
* In the Americas region, which accounts for 48% of CVI's
contact lens business, revenue grew 37% -- 36% in constant
currency;
* European lens revenue, about 36% of CVI's contact lens
business, grew 31% -- 44% in constant currency; and
* Asia-Pacific revenue grew to $28.3 million from
$12.8 million, and now represents 16% of CVI's contact lens
business.
CooperVision Strategies
While posting an 8% revenue gain worldwide during fiscal 2005, CVI
lost market share in the two-week spherical lens market in the
United States. New product introductions during calendar 2006 are
aimed at growing revenue and regaining market share momentum.
Recent new product introductions were:
-- In December 2005, CVI launched Biofinity(TM) a second
generation monthly silicone hydrogel spherical lens in
Europe and plans to introduce it in the United States in the
second half of calendar 2006;
-- In January, CVI introduced Biomedics XC(TM), a two-week
aspheric lens featuring PC Technology. This product is
positioned against first generation two-week disposable
silicone hydrogel spheres as a superior product with overall
patient comfort preference in daily wear. It will soon be
available as a house brand for customers in the optical
chain market, who have been unable to offer a CVI two-week
sphere until now, and enables practitioners to offer a new
two-week contact lens that is different from silicone
hydrogel products; and
-- In January, an improved Biomedics(R) single-use spherical
lens was launched worldwide.
These products accounted for about $1 million in revenue in the
first quarter of fiscal 2006.
CooperSurgical Business Details
During the first quarter, revenue at CSI, Cooper's women's
healthcare medical device business, grew 14% to $30.1 million
compared with $26.5 million in the first quarter of fiscal 2005.
CSI's organic revenue grew approximately 6% over last year's first
quarter.
CSI's operating margin was 18% for the quarter, up from 13% in the
first quarter of 2005, reflecting operating efficiencies derived
from 2005 restructuring activities.
In November 2005, CSI acquired NeoSurg Technologies, Inc., a
manufacturer of reusable and disposable trocar access systems used
in laparoscopic surgery, and Inlet Medical, Inc., a manufacturer
of trocar closure systems and pelvic floor reconstruction
procedure kits. These purchases advance CSI's expansion within
the hospital segment of women's healthcare.
Inlet revenue was approximately $2.7 million in the first quarter,
and the Company expects to launch its NeoSurg products in the
second half of fiscal 2006.
About Cooper Companies
The Cooper Companies, Inc. -- http://www.coopercos.com/--
manufactures and markets specialty healthcare products through its
CooperVision and CooperSurgical units. Corporate offices are in
Lake Forest and Pleasanton, Calif.
CooperVision -- http://www.coopervision.com/-- manufactures and
markets contact lenses and ophthalmic surgery products.
Headquartered in Lake Forest, Calif., it manufactures in
Albuquerque, N.M., Juana Diaz, Puerto Rico, Norfolk, Va.,
Rochester, N.Y., Adelaide, Australia, Hamble and Hampshire
England, Ligny-en-Barrios, France, Madrid, Spain and Toronto.
CooperSurgical -- http://www.coopersurgical.com/-- manufactures
and markets diagnostic products, surgical instruments and
accessories to the women's healthcare market. With headquarters
and manufacturing facilities in Trumbull, Conn., it also
manufactures in Pasadena, Calif., North Normandy, Ill., Fort
Atkinson, Wis., Montreal and Berlin.
Proclear(R) and Biomedics(R) are registered trademarks and
Biomedics XC(TM) and Biofinity(TM) are trademarks of The Cooper
Companies, Inc., and its subsidiaries or affiliates.
* * *
As reported in the Troubled Company Reporter on Dec. 16, 2005,
Standard & Poor's Ratings Services assigned its 'BB' bank loan
rating, which is at the same level as the corporate credit rating
on the company, to Cooper Companies Inc.'s $750 million senior
secured credit facility. A recovery rating of '3' also was
assigned to the loan.
Existing ratings on the company, including the 'BB' corporate
credit rating, were affirmed. S&P said the outlook is stable.
CSFB MORTGAGE: S&P's Class D-B-5 Rating Tumbles to D After Losses
-----------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on two
classes of mortgage-backed pass-through certificates from CSFB
Mortgage-Backed Trust 2002-34.
At the same time, the rating on class D-B-5 is lowered to 'D' from
'B-' and the 'BB' rating of class D-B-4 is placed on CreditWatch
with negative implications.
In addition, 595 ratings from 20 CSFB Mortgage-Backed Trust
series, including series 2002-34, are affirmed.
The upgrades of classes D-B-1 and D-B-2 from series 2002-34 are
due to the significant paydown of the principal balance of the
collateral group and the shifting interest structure of the
transaction.
These two classes have projected credit support percentages that
are more than 2x required credit support for the raised ratings.
The rating on class D-B-5 from series 2002-34 is lowered to 'D'
from 'B-' because losses have completely eroded the class' credit
support.
The rating on class D-B-4 (above class D-B-5) is placed on
CreditWatch negative in response to the recent losses incurred by
the collateral group.
Losses averaged approximately $115,000 during the past 12 months.
As of the February 2006 remittance period, cumulative realized
losses were about 0.57% and total delinquencies were approximately
18.94%.
Standard & Poor's will continue to closely monitor the performance
of series 2002-34. If future losses decline significantly, the
rating on class D-B-4 will be affirmed and removed from
CreditWatch negative.
Conversely, if the collateral group continues to incur losses at
the same rate, the rating will be lowered.
The affirmed ratings reflect adequate actual and projected credit
support percentages. As of the February 2006 remittance period,
total delinquencies ranged from 0.00% (for seven transactions) to
16.39% (the D-B loan group from series 2003-1).
Cumulative realized losses ranged from 0.00% (11 transactions)
to 0.70% (the D-B loan group from series 2003-1).
The collateral for these transactions consists of 15- or 30-year,
fixed- or adjustable-rate first lien mortgage loans secured by
residential properties. Credit support is provided by
subordination, except for four transactions, which have
overcollateralization and excess spread as additional
credit support.
Ratings Raised
CSFB Mortgage-Backed Trust
Mortgage-Backed Pass-Through Certificates
Rating
Series Class To From
------ ----- -- ----
2002-34 D-B-1 AAA AA
2002-34 D-B-2 AA A-
Rating Lowered
CSFB Mortgage-Backed Trust
Mortgage-Backed Pass-Through Certificates
Rating
Series Class To From
------ ----- -- ----
2002-34 D-B-5 D B-
Rating Placed On CreditWatch Negative
CSFB Mortgage-Backed Trust
Mortgage-Backed Pass-Through Certificates
Rating
Series Class To From
------ ----- -- ----
2002-34 D-B-4 BB/Watch Neg BB
Ratings Affirmed
CSFB Mortgage-Backed Trust
Mortgage-backed pass-through certificates
Series Class Rating
------ ----- ------
2002-34 I-A-1, I-X, I-P, II-A-1, II-A-2, II-A-3 AAA
2002-34 II-A-4, II-A-5, II-P, III-A-2, III-A-4 AAA
2002-34 III-A-6, III-A-8, III-A-9, III-A-13 AAA
2002-34 III-A-14, III-P, IV-X, IV-A-1, IV-P AAA
2002-34 C-B-1 AAA
2002-34 C-B-2 AA+
2002-34 C-B-3 AA-
2002-34 C-B-4 BBB+
2002-34 D-B-3 BBB-
2002-34 C-B-5 BB
2003-1 I-A-1, I-X, I-P, II-A-1, II-A-2, II-A-3 AAA
2003-1 II-A-4, II-A-5, II-P, D-B-1, III-A-2 AAA
2003-1 III-A-3, III-A-4, III-A-6, III-A-7 AAA
2003-1 III-A-8, A-X, III-P, III-B-1 AAA
2003-1 III-B-2 AA+
2003-1 D-B-2 AA
2003-1 III-B-3 AA-
2003-1 III-B-4 A-
2003-1 III-B-5 BB
2003-1 D-B-5 CCC
2003-7 I-A-2, I-A-3, I-A-4, I-A-21, I-A-23 AAA
2003-7 I-A-24, I-A-25, I-A-26, I-A-27, I-A-28 AAA
2003-7 I-X, I-P, I-B-1 AAA
2003-7 I-B-2 AA
2003-7 I-B-3 A
2003-7 I-B-4 BBB
2003-7 I-B-5 BB-
2003-11 I-A-2, I-A-3, I-A-4, I-A-5, I-A-6 AAA
2003-11 I-A-25, I-A-26, I-A-27, I-A-28, I-A-29 AAA
2003-11 I-A-30, I-A-31, I-A-32, I-A-33, I-A-34 AAA
2003-11 I-A-35, I-A-36, I-A-37, I-A-38, I-A-39 AAA
2003-11 I-A-40, I-X, I-P AAA
2003-11 I-B-1 AA+
2003-11 I-B-2 A
2003-11 I-B-3 BBB
2003-11 I-B-4 BB+
2003-11 I-B-5 B
2003-25 I-A-1, I-A-2, I-A-3, I-A-4, I-A-5, I-A-6 AAA
2003-25 I-A-7, I-A-8, I-A-9, I-A-10, I-A-11, I-X AAA
2003-25 II-X, I-P, II-P, II-A-1 AAA
2003-25 C-B-1 AA
2003-25 C-B-2 A
2003-25 C-B-3 BBB-
2003-25 C-B-4 BB
2003-25 C-B-5 B-
2003-29 I-A-1, II-A-1, II-A-2, II-A-3, II-A-4 AAA
2003-29 III-A-1, IV-A-1, V-A-1, VII-A-1, VIII-A-1 AAA
2003-29 IV-A-1, V-A-1, VI-A-1, VII-A-1, VIII-A-1 AAA
2003-29 D-P-1, D-P-2, D-P-3, D-X-1, D-X-2, D-X-3 AAA
2003-29 D-B-1 AA
2003-29 D-B-2 A
2003-29 D-B-3 BBB
2003-29 D-B-4 BBB-
2003-29 D-B-5 BB-
2003-29 D-B-6 B-
2004-1 I-A-1, I-A-2, I-A-3, II-A-1, II-A-2 AAA
2004-1 III-A-1, IV-A-1, V-A-1, I-P, D-P-I AAA
2004-1 D-P-2, I-X, D-X-1, D-X-2 AAA
2004-1 D-B-1 AA
2004-1 D-B-2 A+
2004-1 D-B-3 BBB+
2004-1 D-B-4 BB
2004-1 D-B-5 B-
2004-3 I-A-1, I-A-2, I-A-3, I-A-4, I-A-5, I-A-6 AAA
2004-3 I-A-7, I-A-8, I-A-9, I-A-10, I-X, A-P AAA
2004-3 II-A-1, II-P, II-X, III-A-1, III-A-2 AAA
2004-3 III-A-3, III-A-4, III-A-5, III-X AAA
2004-3 IV-A-1, IV-P, IV-X AAA
2004-3 C-B-1, D-B-1 AA
2004-3 C-B-2, D-B-2 A
2004-3 C-B-3, D-B-3 BBB
2004-3 C-B-4 BB
2004-3 D-B-4 BB-
2004-3 C-B-5 B
2004-3 D-B-5 B-
2004-5 I-A-1, I-A-2, I-A-3, I-A-4, I-A-5, I-A-6 AAA
2004-5 I-A-7, I-A-8, I-A-9, I-A-10, I-A-11 AAA
2004-5 I-A-12, I-A-13, IV-A-1, I-X, IV-X, I-P AAA
2004-5 A-P, II-A-1, III-A-1, V-A-1, V-A-2 AAA
2004-5 A-X, V-P AAA
2004-5 D-B-1, C-B-1 AA
2004-5 D-B-2, C-B-2 A
2004-5 D-B-3, D-B-3 BBB
2004-5 D-B-4, C-B-4 BB
2004-5 D-B-5, C-B-5 B
2004-6 I-A-1, I-A-2, I-A-3, I-A-4, I-A-5, I-A-6 AAA
2004-6 I-A-7, I-A-8, I-A-9, IV-A-4, IV-A-5 AAA
2004-6 IV-A-9, IV-A-10, IV-A-11, IV-A-12 AAA
2004-6 IV-A-13, A-X, A-P, II-A-1, II-A-2 AAA
2004-6 III-A-1, III-A-2, V-A-1, C-X, C-P AAA
2004-6 C-B-1, B-1 AA
2004-6 C-B-2, B-2 A
2004-6 C-B-3, B-3 BBB
2004-6 C-B-4, B-4 BB
2004-6 C-B-5, B-5 B
2004-7 I-A-1, I-A-2, I-A-3, I-A-4, I-A-5, I-A-6 AAA
2004-7 III-A-1, III-A-2, III-A-3, IV-A-1 AAA
2004-7 VI-A-1, A-X, C-X, A-P, C-P, II-A-1 AAA
2004-7 II-A-2, II-A-3, II-A-4, II-A-5, II-A-6 AAA
2004-7 II-A-7, V-A-1 AAA
2004-7 C-B-1, D-B-1 AA
2004-7 C-B-2, D-B-2 A
2004-7 C-B-3, D-B-3 BBB
2004-7 C-B-4 BB
2004-7 D-B-4 BB-
2004-7 C-B-5 B
2004-7 D-B-5 B-
2004-8 I-A-1, I-A-2, I-A-3, I-A-4, I-A-5, I-A-6 AAA
2004-8 I-A-7, I-A-8, I-A-9, VIII-A-1, VIII-A-2 AAA
2004-8 VIII-A-3, VIII-A-4, VIII-A-5, VIII-A-6 AAA
2004-8 VIII-A-7, A-P, A-X, II-A-1, IV-A-1 AAA
2004-8 IV-A-2, IV-A-3, IV-A-4, IV-A-5, IV-A-6 AAA
2004-8 IV-A-7, IV-A-8, IV-X, D-X, V-A-1, V-A-2 AAA
2004-8 VII-A-1, D-P, III-A-1, III-A-2, III-A-3 AAA
2004-8 III-A-4, III-A-5, VI-A-1, VI-X AAA
2004-8 D-B-1, B-1 AA
2004-8 D-B-2, B-2 A
2004-8 D-B-3, B-3 BBB
2004-8 B-4 BB
2004-8 D-B-4 BB-
2004-8 C-B-5, B-5 B
2004-8 D-B-5 B-
2004-IND1 M BBB
2004-IND1 B BB
2004-AA1 A-1, A-2, A-3, A-4, A-5, A-6, A-7 AAA
2004-AA1 A-IO-1, A-IO-2, M-1, M-2, M-3 AAA
2004-AA1 M-4 AA+
2004-AA1 M-5 AA
2004-AA1 M-6 AA-
2004-AA1 M-7 A
2004-AA1 M-8 A-
2004-AA1 B-1 BBB+
2004-AA1 B-2 BBB
2005-1 I-A-1, I-A-2, I-A-3, I-A-4, I-A-5, I-A-6 AAA
2005-1 I-A-7, I-A-8, I-A-9, I-A-10, I-A-11 AAA
2005-1 I-A-12, I-A-13, I-A-14, I-A-15, I-A-16 AAA
2005-1 I-A-17, I-A-18, I-A-19, I-A-20, I-A-21 AAA
2005-1 I-A-22, I-A-23, I-A-24, I-A-25, I-A-26 AAA
2005-1 I-A-27, I-A-28, I-A-29, III-A-1, III-A-2 AAA
2005-1 III-A-3, III-A-4, III-A-5, III-A-6 AAA
2005-1 A-X, A-P, II-A-1, II-A-2, II-A-3, II-A-4 AAA
2005-1 II-A-5, II-A-6, II-X AAA
2005-1 D-B-1 AA
2005-1 D-B-2 A
2005-1 D-B-3 BBB+
2005-1 D-B-4 BBB
2005-1 D-B-5 BB
2005-1 C-B-5 B
2005-1 D-B-5 B-
2005-4 I-A-1, I-X, PP, A-P, III-A-1, III-A-2 AAA
2005-4 III-A-3, III-A-4, III-A-5, III-A-6 AAA
2005-4 III-A-7, III-A-8, III-A-10 AAA
2005-4 III-A-11, III-A-12, III-A-13, III-A-14 AAA
2005-4 III-A-15, III-A-16, III-A-17, III-A-18 AAA
2005-4 III-A-19, III-A-20, III-A-21, III-A-22 AAA
2005-4 III-A-23, III-A-24, III-A-25, III-X AAA
2005-4 II-A-1, II-A-2, II-A-3, II-A-4, II-A-5 AAA
2005-4 II-A-6, II-A-7, II-A-8, II-A-9, II-X AAA
2005-4 C-B-1, D-B-1 AA
2005-4 C-B-2, D-B-2 A
2005-4 C-B-3, D-B-3 BBB
2005-4 D-B-4 BB+
2005-4 C-B-4 BB
2005-4 D-B-5 BB-
2005-4 C-B-5, D-B-6 B
2005-5 I-A-1, II-A-1, II-A-2, II-A-3, II-A-4 AAA
2005-5 II-A-5, II-A-6, II-A-7, II-A-8, II-A-9 AAA
2005-5 II-A-10, II-A-11, II-A-12, II-A-13 AAA
2005-5 II-A-14, II-A-15, II-A-16, VI-A-1 AAA
2005-5 VI-A-2, VI-A-3, VI-A-4, VII-A-1, III-A-1 AAA
2005-5 III-A-2, III-A-3, III-A-4, III-A-5 AAA
2005-5 III-A-6, III-A-7, IV-A-1, IV-A-2, V-A-1 AAA
2005-5 PP, C-P, D-P, C-X, D-X, II-X AAA
2005-5 C-B-1 AA
2005-5 C-B-2 A
2005-5 D-B-1 AA-
2005-5 D-B-2 A-
2005-5 C-B-3, D-B-3 BBB-
2005-5 C-B-4, D-B-4 BB
2005-5 C-B-5, D-B-5 B
2005-6 I-A-1, I-A-2, I-A-3, I-A-4, II-A-1 AAA
2005-6 II-A-2, II-A-3, II-A-4, II-A-5, II-A-6 AAA
2005-6 II-A-7, II-A-8, III-A-9, III-A-1 AAA
2005-6 IV-A-1, VIII-A-1, A-X, C-X, D-X, A-P, PP AAA
2005-6 V-A-1, V-A-2, V-A-3, V-A-4, VI-A-1 AAA
2005-6 VI-A-2, IX-A-1 AAA
2005-6 I-M-1, C-B-1, D-B-1 AA
2005-6 I-M-2, C-B-2, D-B-2 A
2005-6 I-M-3 BBB+
2005-6 C-B-3, D-B-3 BBB
2005-6 I-M-4 BBB-
2005-6 C-B-4, D-B-4 BB
2005-6 C-B-5 B
2005-6 D-B-5 B-
2005-AGE1 A-1, A-2, A-3, A-4, A-5, P AAA
2005-AGE1 M-1, M-2 AA+
2005-AGE1 M-3, M-4 AA
2005-AGE1 M-5 A+
2005-AGE1 M-6 A
2005-AGE1 B-1 A-
2005-AGE1 B-2 BBB+
2005-AGE1 B-3, B-4 BBB
2005-FIX1 A-1, A-2, A-3, A-4, A-5 AAA
2005-FIX1 M-1 AA+
2005-FIX1 M-2, M-3 AA
2005-FIX1 M-4 AA-
2005-FIX1 M-5 A+
2005-FIX1 M-6 A
2005-FIX1 M-7 A-
2005-FIX1 B-1 BBB
2005-FIX1 B-2 BBB-
DANA CORP: Gets Court Approval to Employ Jones Day as Counsel
-------------------------------------------------------------
Pursuant to Sections 327(a) and 329(a) of the Bankruptcy Code,
Dana Corporation and its debtor-affiliates sought and obtained
permission on an interim basis, from the U.S. Bankruptcy Court for
the Southern District of New York to employ Jones Day as their
counsel, nunc pro tunc to the Debtors' bankruptcy petition date.
Jones Day is one of the largest law firms in the world, with a
natural and international practice, and has substantial
experience in virtually all aspects of the law that may arise in
the Debtors' Chapter 11 cases, including bankruptcy, corporate,
employee benefits, environmental, finance, intellectual property,
labor and employment, litigation, mergers and acquisitions, real
estate, securities and tax expertise.
Jones Day's Business Restructuring and Reorganization practice
group consists of approximately 100 attorneys. The firm's
restructuring lawyers have played significant roles in several
billion-dollar Chapter 11 cases.
Jones Day has represented some of the Debtors on a wide variety
of matters for the past 30 years. The firm assisted the Debtors
with their restructuring efforts and their preparations to
commence their Chapter 11 cases. Thus, Jones Day has developed a
substantial knowledge regarding the Debtors.
As counsel, Jones Day will:
(a) advise the Debtors of their rights, powers and duties as
debtors and debtors-in-possession continuing to operate
and manage their businesses and properties under Chapter
11 of the Bankruptcy Code;
(b) prepare on the Debtors' behalf all necessary and
appropriate applications, motions, proposed orders, other
pleadings, notices, schedules and other documents, and
reviewing all financial and other reports to be filed in
their Chapter 11 cases;
(c) advise the Debtors concerning, and preparing responses to,
applications, motions, other pleadings, notices and other
papers that may be filed by other parties in their Chapter
11 cases;
(d) advise the Debtors with respect to, and assisting in the
negotiation and documentation of, financing arrangements
and related transactions;
(e) review the nature and validity of any liens asserted
against the Debtors' property and advising the Debtors
concerning the enforceability of those liens;
(f) advise the Debtors regarding their ability to initiate
actions to collect and recover property for the benefit of
their estates;
(g) advise and assist the Debtors in connection with any
potential property dispositions;
(h) advise the Debtors concerning executory contract and
unexpired lease assumptions, assignments and rejections
and lease restructurings and recharacterizations;
(i) advise the Debtors in connection with the formulation,
negotiation and promulgation of a plan or plans of
reorganization, and related transactional documents;
(j) assist the Debtors in reviewing, estimating and resolving
claims asserted against the Debtors' estates;
(k) commence and conduct litigation necessary and appropriate
to assert rights held by the Debtors, protect assets of
the Debtors' Chapter 11 estates or otherwise further the
goal of completing the Debtors' successful reorganization;
(l) provide non-bankruptcy services for the Debtors to the
extent requested by the Debtors; and
(m) perform all other necessary and appropriate legal services
in connection with the Debtors' Chapter 11 cases.
Jones Day will bill the Debtors based on its professionals'
hourly rates. The professionals expected to spend significant
time on the Debtors' Chapter 11 cases and their hourly rates are:
Name Location Position Billing Rate
---- -------- -------- ------------
Corinne Ball New York Partner $825
Brett P. Barragate Cleveland Partner $400
Robert L. Cunningham New York Partner $725
Jeffrey B. Ellman Atlanta Partner $625
Richard H. Engman New York Partner $575
Heather Lennox Cleveland Partner $625
Erica M. Ryland New York Partner $650
Ross S. Barr New York Associate $330
Brett J. Berlin Atlanta Associate $355
Carl E. Black Cleveland Associate $405
Eric R. Goodman Cleveland Associate $210
Robbin Rahman Atlanta Associate $280
Veerle N. Roovers New York Associate $430
Ryan T. Routh Cleveland Associate $380
Thomas A. Wilson Cleveland Associate $230
Mary E. Hemann Cleveland Associate $145
On February 17, 2006, the Debtors provided Jones Day with a
$750,000 advance payment to establish a retainer to pay for legal
services. The Debtors replenished and maintained the Initial
Deposit through the provision of subsequent deposits:
Date of Amount of
Replenishing Replenishing
Deposits Deposits
------------ ------------
February 23, 2006 $521,967
February 28, 2006 $779,016
March 2, 2006 $1,007,533
As of the Petition Date, $750,000 of the Retainer remained
unapplied.
The Debtors also made payments to Jones Day aggregating $661,455
during the period January 1, 2005, through the Petition Date.
The firm will seek reimbursement of actual and necessary out-of-
pocket expenses. It intends to maintain detailed,
contemporaneous time records and apply to the Court for payment
of compensation and reimbursement of expenses.
Ms. Ball discloses that Jones Day has performed and will continue
to perform services for certain non-debtor Dana Companies. The
firm intends to bill these entities separately.
Ms. Ball assures the Court that Jones Day has no connection with
the Debtors, their affiliates, their creditors, the United States
Trustee for the Southern District of New York, any person
employed in the U.S. Trustee's office, or any other party with an
actual or potential interest in the Debtors' Chapter 11 cases.
Jones Day is not a creditor, equity security holder or insider of
the Debtors. None of Jones Day's partners or associates is, or
was within two years of the Petition Date, a director, officer or
employee of the Debtors. Jones Day neither holds nor represents
an interest adverse to the Debtors, their estates or any class of
creditors or equity security holders. Accordingly, Ms. Ball
asserts, Jones Day is a "disinterested person" as defined in
Section 101(14) of the Bankruptcy Code and as required by Section
327(a) of the Bankruptcy Code.
Ms. Ball disclosed to the Court that some creditors and other
parties-in-interest currently employ or have formerly employed
Jones Day in matters unrelated to the Debtors or their Chapter 11
cases. A copy of that Schedule is available for free at
http://ResearchArchives.com/t/s?690
About Dana Corp
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. 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: Hires Ted Stenger as Chief Restructuring Officer
-----------------------------------------------------------
Dana Corporation named Ted Stenger as Chief Restructuring Officer
for the company. Mr. Stenger will report directly to Dana
Chairman and CEO Mike Burns in this role.
"Ted brings to Dana more than 20 years of experience
assisting major corporations in addressing significant financial
and operational challenges," Mr. Burns said. "Ted's primary
responsibilities will include communicating with our creditors
during our reorganization, as well as many other key elements of
the Chapter 11 process. He will also work closely with our senior
management team as we develop our reorganization plan to emerge
from Chapter 11 as a strong company and a vigorous competitor in
the automotive industry."
Mr. Stenger most recently served as Chief Restructuring
Officer at Fleming Companies, a leading supplier of consumer
packaged goods. His previous restructuring assignments have
included service as Treasurer at Kmart Corporation, a discount
retailer; restructuring advisor to Allied Holdings, an automotive
transportation and logistics provider; financial advisor to Fruit
of the Loom, an international basic apparel company; and
restructuring advisor at FINOVA Group, a commercial financial
services company.
Mr. Stenger is a Managing Director of AlixPartners, a
financial advisory firm specializing in performance improvement
and corporate turnarounds. He is co-leader of the firm's
turnaround and restructuring practice. Prior to joining
AlixPartners, he was in the Corporate Finance Group of Ernst &
Young.
About Dana Corp
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. 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: Taps Kenneth Hiltz as Chief Financial Officer
--------------------------------------------------------
Dana Corporation named Kenneth A. Hiltz as Chief Financial
Officer for the company. Mr. Hiltz will report to Dana Chairman
and CEO Mike Burns in this role with direct responsibility for
leading the advancement of Dana's global financial organization.
"Ken possesses a strong leadership background in corporate
turnarounds, restructurings, and reorganizations that will
benefit Dana as we work to position our company for greater
financial health and operational growth," Mr. Burns said. Among
Ken's chief strengths is his ability to lead the analysis,
planning, and implementation of restructuring strategies."
Mr. Hiltz's financial experience spans more than three
decades in a wide variety of industries, including heavy
manufacturing and automotive, contracting, distribution,
retailing, and numerous service businesses. He is also a Managing
Director of AlixPartners, a financial advisory firm specializing
in performance improvement and corporate turnarounds. His
financial leadership background includes having served as CFO at
Foster Wheeler Ltd., a global provider of engineering services and
products, which restructured its debt out of court. Mr. Hiltz has
also provided financial leadership in successful reorganizations
as Chief Restructuring Officer and CFO of Hayes Lemmerz
International, Inc., a leading global supplier of automotive and
commercial highway wheels, brakes, powertrain, suspension,
structural, and other lightweight components; and CFO of Joy
Global, Inc. (formerly Harnischfeger Industries, Inc.), a global
manufacturer of mining equipment.
A Certified Management Accountant and CPA, Mr. Hiltz holds
business degrees from Xavier University and the University of
Detroit and is an alumnus of the Advanced Management Program at
Harvard Business School.
About Dana Corp
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)
DELTA AIR: In Talks with Lenders to Amend DIP Credit Facility
-------------------------------------------------------------
Delta Air Lines (Other OTC:DALRQ) initiated negotiations with the
lenders of its $1.9 billion debtor-in-possession credit facility
to amend certain aspects of that facility. The amendments, if
approved, among other things, will reduce Delta's interest rate on
the three term loans making up this facility and enable Delta to
complete amendments to unrelated financing agreements.
"We are pursuing every opportunity to reduce our costs in order
to give Delta the best chance to successfully restructure," said
Edward H. Bastian, Delta's executive vice president and chief
financial officer. "Reducing our interest expense through
amending the DIP financing agreements would contribute to the
$3 billion in annual cost savings and revenue enhancements in
our business plan."
GE Commercial Finance as the Administrative Agent for the DIP
credit facility will manage the amendment process. The U.S.
Bankruptcy Court for the Southern District of New York granted
final approval for this facility in October 2005. Delta also
received final court approval in October 2005 for $300 million in
secured post-petition financing provided by American Express
Travel Related Services Company, Inc.
The amendments to the DIP credit facility will also enable Delta
to consummate amendments to certain unrelated financing
arrangements with GE Commercial Finance. In particular, the
proposed amendment to the DIP Credit Agreement will permit Delta
to grant additional liens to GE with respect to the unrelated
financing arrangements and with respect to Delta's current and
future lease obligations to GE under certain leases of regional
jets. The Bankruptcy Court authorized Delta to execute the
amendments to the unrelated financing agreements by entry of an
Order dated February 8, 2006. The amendments to the DIP Credit
Agreement to enable the amendments of the unrelated financing
arrangements with GE are subject to American Express agreeing to
make comparable amendments in the financing agreements between it
and Delta.
About Delta Air
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.
DOMINO'S PIZZA: Repurchases 5.6 Mil. Common Shares for $145 Mil.
----------------------------------------------------------------
Domino's Pizza, Inc. (NYSE: DPZ), repurchased and retired
approximately 5.6 million shares of its common stock from
investment funds associated with Bain Capital, LLC, for
$145 million, or $25.78 per share, reducing Bain's ownership of
the Company's common stock from 34% to 28%. The shares purchased
in this private transaction will not decrease the Company's
publicly available shares. The price per share in this private
transaction was based on a negotiated discount between Domino's
and Bain. Domino's management estimates that the transaction will
increase its 2006 earnings per share by approximately 6 cents for
the remainder of the year.
"This repurchase transaction, coupled with our recently-announced
dividend increase, clearly demonstrates our commitment to
shareholder value creation through effective deployment of our
free cash flow," David A. Brandon, Chairman and Chief Executive
Officer of Domino's Pizza, commented. "We remain confident in our
business model which has continued to generate significant
cash flow. This provides us the flexibility to invest in our
business, de-lever when appropriate and return capital to our
shareholders through a combination of dividends and share
repurchases."
The Company financed this repurchase using $45 million of its cash
on hand and $100 million of term loan borrowings. The Company
amended its credit agreement to allow for the additional borrowing
and to increase its share repurchase basket. There was no change
to the interest rate or the expiration of the credit facility.
The Company's total debt after the repurchase transaction was
$802.6 million with a leverage ratio of 3.35x. Prior to
this transaction, Domino's had reduced its total leverage ratio
approximately 44% in the last 2-1/2 years.
In January, the Company voluntarily prepaid $35 million in senior
credit facility borrowings to cover its cash sweep debt repayment
requirement for calendar year 2006.
The private repurchase of shares was reviewed and approved by a
fully-independent committee of the Board of Directors. The credit
agreement amendment was reviewed and unanimously approved by the
Board of Directors.
About Domino's Pizza
Founded in 1960, Domino's Pizza -- http://www.dominos.com/-- is
the recognized world leader in pizza delivery. Domino's is listed
on the NYSE under the symbol "DPZ." Through its primarily
franchised system, Domino's operates a network of 7,945 franchised
and Company-owned stores in the United States and more than
50 countries. The Domino's Pizza(R) brand, named a Megabrand by
Advertising Age magazine, had global retail sales of more than
$4.6 billion in 2004, comprised of nearly $3.2 billion
domestically and more than $1.4 billion internationally. Domino's
Pizza was named "Chain of the Year" by Pizza Today magazine, the
leading publication of the pizza industry and is the "Official
Pizza of NASCAR(R)."
As of January 1, 2006, Domino's Pizza, Inc.'s balance sheet showed
a $549,900,000 stockholders' deficit, compared to a $549,880,000
deficit at Jan. 2, 2005.
EAGLEPICHER INC: Court Approves Disclosure Statement
----------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Ohio
approved the disclosure statement explaining the chapter 11 plan
of reorganization of EaglePicher Inc., and its debtor affiliates.
The Court determined that the Disclosure Statement contains
adequate information -- the right amount of the right kind of
information to allow the creditors to have an informed decision
about the plan -- as required under Section 1125 of the Bankruptcy
Code.
The Debtors can now solicit acceptances for the plan.
The plan, as reported in the Troubled Company Reporter on
Jan. 30, 2006, provides for the transfer of substantially all of
the Debtors' assets to newly formed companies. Consideration for
the transferred assets will be paid to each debtor in amounts
equal to the value of the assets transferred by that debtor.
Under the plan, unsecured creditors of each debtor will receive
their pro rata share of that value available for unsecured
creditors after satisfaction of all secured and priority claims.
Holders of the Company's 9.75% Senior Notes will receive their
distributions in the form of all of the common stock in the new
holding company. All other general unsecured creditors of each
debtor will receive their distributions at their option either in
the form of cash payments over time or a single discounted cash
payment. The Disclosure Statement projects recoveries of 2.8% to
45% to the Debtors' unsecured creditor constituencies.
The plan has the full support of EaglePicher's Official Committee
of Unsecured Creditors.
A hearing confirming the Plan will be held on April 19, 2006, at
10:00 a.m., in Cincinnati.
April 7, 2006, is the deadline for creditors to return their
Ballots.
Confirmation objections, if any, must be filed by April 7, 2006.
About EaglePicher
Headquartered in Phoenix, Arizona, EaglePicher Incorporated
-- http://www.eaglepicher.com/-- is a diversified manufacturer
and marketer of innovative advanced technology and industrial
products for space, defense, automotive, filtration,
pharmaceutical, environmental and commercial applications
worldwide. The company along with its affiliates and parent
company, EaglePicher Holdings, Inc., filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Ohio Case No. 05-12601).
Stephen D. Lerner, Esq., at Squire, Sanders & Dempsey L.L.P,
represents the Debtors in their restructuring efforts. Houlihan
Lokey Howard & Zukin is the Debtors financial advisor. When the
Debtors filed for protection from their creditors, they listed
$535 million in consolidated assets and $730 in consolidated
debts.
ELEC COMMS: Registers 9.6 Million Shares for Resale for $4.3 Mil.
-----------------------------------------------------------------
eLEC Communications Corp. filed a registration statement with the
Securities and Exchange Commission to allow the resale of
9,617,320 shares of common stock for $4,327,796.
Of the stock registered, 8,951,057 shares are issuable on the
conversion of the company's promissory notes, and the payment of
the principal amount of and interest on these notes to, or the
exercise of outstanding warrants by, Laurus Master Fund, Ltd.
Of the stock registered, 666,263 shares of common stock are
issuable upon the exercise of the company's warrants by the
selling shareholders.
Proceeds
The company will not receive any proceeds from the sale of the
shares of its common stock by the selling shareholders.
The company will receive a maximum of:
-- $168,393 from the proceeds of the exercise of the 15-year
warrants of 1,683,928 shares of common stock;
-- $650,793 from the proceeds of the exercise of the seven-year
warrants of 793,650 shares of common stock;
-- $320,000 from the proceeds of the exercise of the four-year
warrants of 516,263 shares of common stock; and
-- $94,500 from the proceeds of the exercise of the three-year
warrants of 150,000 shares of common stock.
The selling shareholders are:
Selling Shareholder Number of Shares Offered
------------------- ------------------------
Laurus Master Fund, Ltd. 8,951,057
TT Capital, LLC 423,328
W. Todd Coffin 63,492
Ted Flomenhaft 63,492
David Harris 15,571
Russell Newton 43,841
Bruce Ryan 43,841
Jeffrey Silverman 12,699
The warrants will expire on Feb. 8, 2009, and are exercisable at
$0.63 per share, subject to certain anti-dilution adjustments.
The company's shares of common stock are traded at OTC Bulletin
Board under the symbol "ELEC." Those shares are traded between
$0.42 to $0.50 per share this month.
A full-text copy of eLEC Communications' Registration Statement is
available for free at http://ResearchArchives.com/t/s?68f
About eLEC Communications
eLEC Communications Corp. -- http://www.elec.net/-- is a
Competitive Local Exchange Carrier that offers local and long
distance calling plans to small business and residential
customers. The Company sells under the names of New Rochelle
Telephone and eLEC Communications, and the Company delivers
telephone services.
* * *
Going Concern Doubt
As reported in the Troubled Company Reporter on Mar. 7, 2006,
Nussbaum Yates & Wolpow, PC, expressed substantial doubt about
eLEC Communications Corp.'s ability to continue as a going concern
after it audited the Company's financial statements for the fiscal
years ended Nov. 30, 2005 and 2004. The auditing firm pointed to
the Company's recurring losses from operations.
EMERALD COVE: Case Summary & 17 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Emerald Cove Villas LLC
2933 West State Road 434, Suite 101
Longwood, Florida 32779
Bankruptcy Case No.: 06-00456
Chapter 11 Petition Date: March 14, 2006
Court: Middle District of Florida (Orlando)
Judge: Arthur B. Briskman
Debtor's Counsel: Raymond J. Rotella, Esq.
Kosto & Rotella, P.A.
619 East Washington Street
Orlando, Florida 32801
Tel: (407) 425-3456
Fax: (407) 423-5498
Total Assets: $26,603,000
Total Debts: $8,166,757
Debtor's 17 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Royall Construction Project Contractor $1,460,768
2933 West Street 434, Suite 101
Longwood, FL 32779
Wayne Automatic Fire Subcontractor $64,313
11326 District Avenue West
Jacksonville, FL 32256
Northbay Interior-Exterior Subcontractor $41,492
3433 New Church Road
Southport, FL 32409
Flatiron Capital Finance Insurance $27,125
Johnson Pleaden Services $27,000
National Construction Rental Temp Fence $17,408
Mactec Engineering Services $8,660
Blue Water Security Night Time Security $4,813
United Rentals North America Equipment Rental $4,320
Rental Service Corp. Forklift Rental $3,316
Service Construction Supply Subcontractor $3,265
American Civil Engineering Services $2,835
Southern Game Plots $800
Gulf Glo Banners & Signs Signs $437
Beach Printing Blue Prints $304
Knology $139
Emerald Beach Resorts LLC Unknown
ENTERGY NEW ORLEANS: Plaintiffs Want Classes in Lawsuits Certified
------------------------------------------------------------------
As previously reported, the Gordon Plaintiffs -- The Reverend C.
S. Gordon, Jr., on behalf of New Zion Baptist Church; J. Michael
Malec; Darryl Malek-Wiley; Willie Webb, Jr.; and Maison St.
Charles, L.L.C., d/b/a Quality Inn Maison St. Charles -- filed
two actions, one with the Council of the City of New Orleans, and
another in the Civil District Court for the Parish of Orleans,
against Entergy New Orleans, Inc., and other Entergy entities.
The Gordon Suit asserts restitution of ascertainable losses of
money and damages for violations of Louisiana antitrust laws
arising from ENOI's manipulation and abuse of its fuel adjustment
charges.
The Lowenburg Plaintiffs -- Thomas P. Lowenburg, Martin Adamo,
Vern K. Baxter, Philip D. Carter, Bernard Gordon, Leonard Levine,
Ivory S. Madison, Donetta Dunn Miller, and Maison St. Charles,
L.L.C. d/b/a Quality Inn Maison St. Charles -- also filed a class
action against ENOI and the Council for the City of New Orleans,
seeking various remedies for ENOI's overcharges in base rates
billed to ratepayers since 1975 in violation of the allowable 2%
rate of return on rate base established in 1922 by the Commission
Council of the City of New Orleans.
The Gordon and Lowenburg Plaintiffs jointly ask the U.S.
Bankruptcy Court for the Eastern District of Louisiana to:
(a) certify the classes of ENOI's customers who have claims
for declaratory and injunctive relief, for restitution of
ascertainable losses of money, including refund of
overcharges, and damages as the result of payments of
overcharges for electricity sold by, or electric service
provided by, provided by ENOI; and
(b) designate representatives of the classes, appoint
counsel to represent the classes, and authorize
appropriate notice to be provided to the class members.
The Classes
The Gordon Class is defined as:
All persons wholly within New Orleans, Louisiana, who have
incurred or paid overcharges for electricity services to ENOI
at the time when ENOI charged for fuel adjustment costs and
other purported costs without the City Council of New Orleans'
approval.
Members of the Gordon Class include ratepayers who received
distribution of $11,310,072 in 2004 as credits from ENOI, as a
result of the proceedings brought by the Gordon Plaintiffs.
The Lowenburg Class is defined as:
All persons within New Orleans, Louisiana, who have incurred
or paid overcharges for electricity, gas and transit services
to ENOI at the time when ENOI charged unlawful fares, rates
and charges in excess of those which would have yielded not
more than 7.5% per annum allowable return rate.
Court Should Certify Classes
Michael H. Piper, Esq., at Steffes, Vingiello & McKenzie, LLC, in
Baton Rouge, Louisiana, tells the Court that it is rightful to
certify the Classes because they satisfy the requirements --
numerosity, typicality, commonality and adequacy of
representation -- of Rule 23 of the Federal Rules of Civil
Procedure.
As required by Rule 23, each proposed class should be numerous
that joinder of all members is impracticable. Mr. Piper points
out that each of the Gordon and Lowenburg Classes are estimated
to include more than 180,000 residential and commercial customers
members.
Rule 23 also requires the proposed classes to have common
questions of law and fact.
As to the Gordon Class, the common issues of law or fact include,
but are not limited to:
(a) whether ENOI failed to obtain full review and approval by
the City Council of any and all purported costs included
in its fuel adjustment clauses, and if so, whether all
those charges should be refunded to ratepayers;
(b) whether ENOI included in its fuel adjustment clauses any
items or amounts other than direct fuel and generation-
dependent costs actually incurred, and if so, whether all
those charges should be refunded to ratepayers;
(c) alternatively, if any of the direct fuel and generation-
dependent costs actually incurred and passed through to
ratepayers by ENOI in its fuel adjustment clauses are not
automatically disallowed for failure to obtain review and
approval by the City Council, then whether in any event
those costs were not prudently incurred, produced unjust
or unreasonable rates, or were otherwise improperly
included in the fuel adjustment clauses, and if so,
whether all those charges should be refunded to
ratepayers;
(d) whether defendants ENOI, ESI, and EPI, and their parent,
defendant Entergy, manipulated rate charged to plaintiffs
and the class members by inflating the purported costs of
electric power passed through to the customers by way of
the fuel adjustment clauses;
(e) whether defendant ENOI intentionally or negligently failed
to procure readily available supplies of electric power
from non-affiliates at prices which were substantially
below the prices actually paid by ENOI to its affiliates
for electric power purchased and included in ENOI's fuel
adjustment clause filings;
(f) whether defendant ENOI intentionally or negligently failed
to procure readily available supplies of electric power
from non-affiliates at prices which were substantially
below the costs of power generated by ENOI at its
generation facilities and included in ENOI's fuel
adjustment clause filings;
(g) with respect to defendant ENOI's overcharges (including
all fuel costs passed through to ratepayers by way of the
fuel adjustment clauses without City Council approval, and
all items and amounts included for costs that were not
prudently incurred or that would not have produced just
and reasonable rates), whether defendants ENOI, ESI and/or
Entergy manipulated rates charged to plaintiffs and the
class members by inflating the purported costs passed
through to the customers by way of the fuel adjustment
clauses, as a result of either the failure to obtain City
Council approval of the inclusion of items or amounts
other than direct fuel and generation-dependent costs
actually incurred;
(h) whether defendants unlawfully and/or wrongfully fixed
prices, abused their monopoly market power, unreasonably
restrained trade, and/or engaged in unlawful price
discrimination in the delivery and sale of electric power
to plaintiffs and the class, and/or have agreed, combined,
or conspired to do so, and/or attempted to do so, in
violation of the Louisiana antitrust laws and other laws
as alleged;
(i) whether defendants breached the ordinances, resolutions,
rules, orders, or policies of the City Council, to the
direct and proximate injury of plaintiffs and the class;
(j) whether defendants fraudulently, negligently, or
intentionally misrepresented, or suppressed, concealed,
and/or omitted to disclose information material to the
rates and charges for electric power and service provided
to plaintiffs and the class, and/or committed other fault,
error, or negligence;
(k) whether defendants breached their contractual or quasi-
contractual obligations, and/or fiduciary duties to
plaintiffs and the class and/or have been unjustly
enriched at the expense of and to the detriment of
plaintiffs and the class;
(l) whether restitution of overcharges, and an award of
damages, treble damages, and injunctive and declaratory
relief are available to the ratepayers;
(m) the acts of defendants in furtherance of the alleged
illegal and/or unlawful conduct; and,
(n) the period of time over which the unlawful and wrongful
acts and omissions occurred.
As to the Lowenburg Class, the common issues of law or fact
include, but are not limited to:
(a) Whether, as a matter of law, the 7.5% per annum allowable
rate of return in the Franchise Ordinances has the force
of law, remains in effect, and has not been lawfully
amended by any subsequent resolutions, orders, or other
action of the City Council;
(b) Whether, as a matter of law, the rate base is determined
by Section 1 of the Settlement Ordinance;
(c) Whether, as a matter of fact, ENOI has charged and
collected fares, rates, and charges in excess of those
which would have yielded not more than the 7.5% per annum
allowable rate of return in compliance with the Franchise
Ordinances;
(d) Whether, as a matter of law, the filed rate doctrine
requires ENOI to disgorge and refund to its ratepayers all
fares, rates, and charges collected by it in excess of
those lawfully established and applicable under the
Franchise Ordinances; and
(e) Whether declaratory and injunctive relief, refund of
overcharges, and/or damages are available to the
ratepayers.
In addition, Rule 23 requires that the claims of the
representative parties are typical of the claims of the class.
Both the Gordon and Lowenburg Plaintiffs are residential and
commercial ratepayers who are members of the Classes and have
claims typical of the ratepayers in each Class. The issues
regarding overcharging of the ratepayers by ENOI through
excessive and unlawful fuel adjustment charges and base rate
yields of more than the 7.5% per annum allowable rate of return
do not present individual issues and defenses that might
otherwise destroy typicality, Mr. Piper argues.
Furthermore, the proposed Classes satisfy the requirement that
the representative parties will fairly and adequately protect the
interests of the class.
Mr. Piper relates that the Gordon and Lowenburg Plaintiffs are
not receiving any premium for their service as class
representatives, and that they have no interest in outcomes of
the claims that are at odds with the interest of the Classes they
seek to represent.
Mr. Piper adds that counsel for both the Gordon and Lowenburg
Plaintiffs are well qualified to represent the Classes. The
Plaintiffs' counsel are intimately familiar with the factual and
legal issues involved in the matter, having conducted extensive
discovery. The counsel have litigated the Gordon Suit and the
Lowenburg Suit for many years.
The common questions of law or fact among the class members
predominate over any questions affecting only individual members.
Mr. Piper maintains that a class action is superior to all other
available methods for the fair and efficient adjudication of the
controversy.
The Plaintiffs also ask the Court to designate them as
representatives of their Classes. The Plaintiffs are ratepayers,
customers of ENOI, and are members of the Classes. They have
diligently advanced the interests of the Classes for nearly seven
years, from the filing of the first lawsuit in Louisiana state
court in 1998, Mr. Piper points out.
Counsel for the Plaintiffs should also be appointed as counsel
for the Classes. These lawyers conducted extensive discovery and
participated in the lengthy litigation and administrative
proceedings, and they have the greatest familiarity with the
claims of the Class members. Claimants' counsel are also
experienced class-action attorneys who will be able to fairly and
adequately protect the interests of the Classes.
Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc.
-- http://www.entergy-neworleans.com/-- is a wholly owned
subsidiary of Entergy Corporation. Entergy New Orleans provides
electric and natural gas service to approximately 190,000 electric
and 147,000 gas customers within the city of New Orleans. Entergy
New Orleans is the smallest of Entergy Corporation's five utility
companies and represents about 7% of the consolidated revenues and
3% of its consolidated earnings in 2004. Neither Entergy
Corporation nor any of Entergy's other utility and non-utility
subsidiaries were included in Entergy New Orleans' bankruptcy
filing. Entergy New Orleans filed for chapter 11 protection on
Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697). Elizabeth J.
Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker,
Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the
Debtor in its restructuring efforts. When the Debtor filed for
protection from its creditors, it listed total assets of
$703,197,000 and total debts of $610,421,000. (Entergy New
Orleans Bankruptcy News, Issue No. 12; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
GENERAL MOTORS: Aozora Bank to Fund Part of Cerberus' GMAC Bid
--------------------------------------------------------------
Aozora Bank Ltd. of Japan may provide $1 billion to support
Cerberus Capital Management LP's $11 billion bid to buy a majority
stake in General Motors Acceptance Corp, Reuters reports.
Cerberus holds a majority stake in Aozora.
According to Reuters, Aozora may call on smaller financial
institutions in Japan to raise part of the cash it intends to
invest in GMAC.
Norinchukin, another Japanese bank, had been previously identified
as a probable investor in Cerberus move to purchase GMAC. As
reported in the Troubled Company Reporter on Mar. 10, 2006,
Norinchukin proposes to invest $1 billion in GMAC.
General Motors plans to sell part of GMAC to raise its credit
rating and obtain access to cheaper financing. The GMAC sale is
also part of a larger restructuring program aimed at disposing of
the automaker's non-core assets.
About General Motors Corp.
General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- the
world's largest automaker, has been the global industry sales
leader since 1931. Founded in 1908, GM today employs about
317,000 people around the world. It has manufacturing operations
in 32 countries and its vehicles are sold in 200 countries.
As reported in the Troubled Company Reporter on March 3, 2006,
Fitch Ratings downgraded GM's Issuer Default Rating to 'B' from
'B+'. Fitch has also assigned an 'RR4' Recovery Rating to GM's
senior unsecured debt, indicating average recovery prospects
(30-50%) for this class of creditors in the event of a bankruptcy
filing. GMAC's 'BB' rating remains on Rating Watch Evolving by
Fitch pending further developments in GM's intent to sell a
controlling interest in GMAC.
As reported in the Troubled Company Reporter on Feb. 22, 2006,
Moody's Investors Service lowered the Corporate Family Rating and
senior unsecured rating of General Motors Corporation to
B2 with a Negative Outlook from B1 subject to Review for a
Downgrade.
GRUPO TMM: Receives Contingent Payment from Kansas City Southern
----------------------------------------------------------------
In accordance with the terms of the Amended and Restated
Acquisition Agreement between Kansas City Southern (KCS) (NYSE:
KSU), Grupo TMM, S.A. and certain of their subsidiaries dated
Dec. 15, 2004, KCS paid to Grupo TMM the contingent payment due
upon final resolution of Kansas City Southern de Mexico, S.A. de
C.V.'s value added tax refund claim and the dispute with the
Mexican government over the purchase of the Government's remaining
ownership of KCSM.
In accordance with the terms of the Acquisition Agreement, the
Sept. 12, 2005, settlement between the Mexican government, KCS,
KCSM and Grupo TMM of the VAT Claim and Put is deemed to be final
if no appeal or other claim is brought within 180 days following
the settlement date. As no such claim or appeal has been brought,
the final resolution of the VAT Claim and Put occurred, and KCS
accordingly paid Grupo TMM $35 million in cash and issued to Grupo
TMM shares valued at $35 million. KCS also deposited into escrow
a note payable to Grupo TMM in the amount of $40 million. The
Note is subject to reduction in accordance with the terms of the
Acquisition Agreement and an Escrow Agreement, and the remainder
of the Note shall be converted into KCS shares or cash, at KCS'
discretion, on or before April 1, 2010.
Under the terms of the Consulting Agreement between KCS and Jose
F. Serrano International Business, S.A. de C.V., KCS also made a
contingent payment based on the final resolution of the VAT Claim
and Put today to Serrano International Business in the amount of
$9 million.
About Kansas City Southern
Headquartered in Kansas City, Mo., Kansas City Southern --
http://www.kcsi.com/-- is a transportation holding company that
has railroad investments in the U.S., Mexico and Panama. Its
primary U.S. holdings include The Kansas City Southern Railway
Company, founded in 1887, and The Texas Mexican Railway Company,
founded in 1885, serving the central and south central U.S. Its
international holdings include a controlling interest in TFM, S.A.
de C.V., serving northeastern and central Mexico and the port
cities of Lazaro Cardenas, Tampico and Veracruz, and a 50%
interest in The Panama Canal Railway Company, providing ocean-to-
ocean freight and passenger service along the Panama Canal. KCS'
North American rail holdings and strategic alliances are primary
components of a NAFTA Railway system, linking the commercial and
industrial centers of the U.S., Canada and Mexico.
About Grupo TMM
Headquartered in Mexico City, Grupo TMM S.A. --
http://www.grupotmm.com/-- is a Latin American multimodal
transportation and logistics company. Through its branch
offices and network of subsidiary companies, TMM provides a
dynamic combination of ocean and land transportation services.
* * *
As reported in the Troubled Company Reporter on Dec. 20, 2005,
Standard & Poor's Ratings Services raised its corporate credit
rating on Grupo TMM S.A. to 'B-' from 'CCC.' The rating was
removed from Creditwatch, where it was placed on Dec. 15,
2004. S&P said the outlook is positive.
GSAA TRUST: Moody's Places Ba2 Rating on Class B-4 Certificates
---------------------------------------------------------------
Moody's Investors Service assigned Aaa rating to the senior
certificates issued by GSAA Home Equity Trust 2006-3 Asset-Backed
Certificates, Series 2006-3, and ratings ranging from Aa1 to Ba2
to the subordinate certificates in the deal.
The securitization is backed by Countrywide Home Loans, Inc.,
First National Bank of Nevada, National City Mortgage Co.,
GreenPoint Mortgage Funding, Inc., and Goldman Sachs Mortgage
Conduit originated adjustable-rate Alt-A mortgage loans acquired
by Goldman Sachs Mortgage Company. 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 0.85% to 1.05%.
Countrywide Home Loans Servicing LP, National City Mortgage Co.,
and JPMorgan Chase Bank, N.A. will service the loans. JPMorgan
Chase Bank, N.A. will act as master servicer.
The complete rating actions are:
GSAA Home Equity Trust 2006-3
Asset-Backed Certificates, Series 2006-3
* 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 B-1, Assigned A3
* Class B-2, Assigned Baa1
* Class B-3, Assigned Baa3
* Class B-4, Assigned Ba2
HEADLINERS ENTERTAINMENT: Posts $5.1 Mil. Net Loss in 3rd Qtr.
--------------------------------------------------------------
Headliners Entertainment Group, Inc., incurred a $5,178,864 net
loss on $3,170,103 of net sales for the three months ended
Sept. 30, 2005, in contrast to a $602,585 net loss on $720,942 of
revenue for the comparable period in 2004.
From its founding in 1984 through 2001, Headliners' business
consisted entirely of the operation of stand-alone restaurant and
comedy club facilities. However, since 2002 the Company has
substantially changed the nature of its operations. It began to
grant licenses for the use of its "Rascals" trademark and develop
alternative locations for its clubs.
Commencing April 1, 2005, Headliners consolidated the financial
results of is clubs with other operations, resulting in a marked
disparity in results between the quarters ended Sept. 30, 2004,
and 2005. In particular, this resulted in a significant increase
in the Company's revenues.
The Company's balance sheet at Sept. 30, 2005, showed $9,494,324
in total assets and $14,330,976 in total liabilities, resulting in
a stockholders' deficit of $4,836,652.
A full-text copy of Headliners' financial results for the quarter
ended Sept. 30, 200 filed with the SEC is available for free at
http://ResearchArchives.com/t/s?692
Going Concern Doubt
Bagell, Josephs & Company, LLC, expressed substantial doubt about
Headliners' ability to continue as a going concern after it
audited the Company's financial statements for the year ended Dec.
31, 2004. The auditing firm pointed to the Company's operating
losses and capital deficits.
About Headliners
Based in Montclair, New Jersey, Headliners Entertainment Group,
Inc. -- http://www.rascalscomedyclub.com/-- fka Rascals
International, Inc., through its subsidiaries, engages in the
operation of comedy clubs primarily in New Jersey. It operates
embedded, hotel-based, and licensed comedy clubs. As of
Sept. 30, 2005, the company owned a library of approximately 300
hours of recorded performances by comedic entertainers when they
appeared at a Rascals Comedy Club. In addition, it operates an
entertainment complex consisting of a dance club and other
facilities in Cincinnati, Kansas City, Tucson, Jackson,
Louisville, and Omaha.
INSMED INCO: Recurring Losses Prompt Going Concern Doubt from E&Y
-----------------------------------------------------------------
Ernst & Young LLP expressed substantial doubt about Insmed
Incorporated's ability to continue as a going concern after
reviewing the Company's financial statements for the years ended
December 31, 2005, and 2004. The auditing firm pointed to
Insmed's recurring operating losses, failure to attain profitable
operations and net capital deficiency.
The Company says it will need additional funds in the future to
continue its operations, but it faces uncertainties with respect
to access to capital that could materially adversely impact its
business, financial condition and results of operations.
"Management is focusing on raising capital through securities
offerings, debt financing and partnerships, and use those sources
of capital to fund operations. But there can be no absolute
assurances that any one or more of those options can be
successfully implemented or that the Company will continue as a
going concern," management said.
2005 Financials
For the 12 months ended Dec. 31, 2005, Insmed Inc. reported a
$40,929,000 net loss on $131,000,000 in total revenues. This
compares to a $27,203,000 net loss for the year ended Dec. 31,
2004, on $137,000,000 in total revenues.
At Dec. 31, 2005, Insmed Inc.'s balance sheet showed $22,870,000
in total assets and $12,341,000 in total liabilities. The Company
reports a $254,658,000 accumulated deficit as of Dec. 31, 2005.
A full-text copy of Insmed Incorporated's latest Form 10-K is
available for free at http://ResearchArchives.com/t/s?685
Headquartered in Glen Allen, Virginia, Insmed Incorporated is a
biopharmaceutical company that is focused on the development and
commercialization of drugs to treat metabolic diseases and
endocrine disorders within niche markets that have unmet medical
needs. Currently, the Company's development and commercial
activities involve drugs that modulate Insulin-like Growth
Factor-1, IGF-1, activity in the human body.
ITEC ENVIRONMENTAL: Engages Knight Capital as Financial Advisor
---------------------------------------------------------------
Itec Environmental Group, Inc. (OTCBB:ITEC) entered into an
engagement agreement with Knight Capital Markets, LLC to pursue
strategic corporate finance initiatives.
Knight Capital Markets operates as a market maker in the Nasdaq
InterMarket(sm), the over-the-counter market, for New York Stock
Exchange and American Stock Exchange listed securities. Knight
Capital Markets is a broker-dealer registered with the Securities
and Exchange Commission and is a member of the NASD.
"This is a great opportunity for Itec to build a strong
relationship with a leader for middle market companies in the
areas of corporate finance and capital markets," stated Gary
DeLaurentiis, Chairman & Chief Executive Officer of Itec. "Knight
Capital Markets has extensive experience with emerging growth
companies and their unique background and relationships makes them
a perfect fit for Itec as we move forward," added Mr.
DeLaurentiis.
About Itec Environmental
Headquartered in Riverbank, California, Itec Environmental Group
-- http://www.iteceg.com/-- offers solutions to pressing
environmental problems faced by public agencies and private
entities involved in the recycling of plastics. In a research
partnership with Honeywell FM&T, Itec has developed and
successfully commercialized a new system for the recycling of
plastic containers. Its proprietary Eco2(tm) System costs 30%
less to operate, uses no water, removes all contaminates and odors
from the finished flake, is closed-loop and thus non-polluting,
and produces no toxic by-products.
At Sept. 30, 2005, Itec Environmental Group's balance sheet showed
a stockholders' deficit of $2,333,960, compared to a $1,906,260
deficit at Dec. 31, 2004.
J.L. FRENCH: Taps Deloitte & Touche as Independent Auditors
-----------------------------------------------------------
J.L French Automotive Castings and its debtor-affiliates ask the
U.S. Bankruptcy Court for the District of Delaware for permission
to employ Deloitte & Touche LLP as their independent auditors and
accountants.
Deloitte & Touche will:
a. audit the consolidated annual financial statements of
the Debtors and the consolidated financial statements of
the Debtors' subsidiaries for the fiscal years ended
Dec. 31, 2005 and thereafter;
b. perform reviews of interim financial statements; and
c. as may be agreed to by the Firm, render other audit and
accounting services, including:
* assistance in connection with reports requested of the
Debtors by the Court, the U.S. Trustee or parties-in-
interest, as the Debtors, their attorneys or financial
advisors may from time to time request;
* accounting advisory services during the course of the
reorganization; and
* other similar requested assistance requested by the
Debtors.
The Debtors tell the Court that the Firm's professionals bill:
Designation Hourly Rate
----------- -----------
Partner/Principal/Director $460 - $650
Senior Manager $390 - $490
Manager $320 - $390
Senior Accountants $200 - $250
Staff Accountants $135 - $180
Paraprofessionals $60
Christopher A. Swanson, at Deloitte & Touche, assures the Court
that the Firm is a "disinterested person" as that term is defined
in Section 101(14) of the Bankruptcy Code.
About J.L. French Automotive Castings
Headquartered in Sheboygan, Wisconsin, J.L. French Automotive
Castings, Inc. -- http://www.jlfrench.com/-- is one of the
world's leading global suppliers of die cast aluminum components
and assemblies. There are currently nine manufacturing locations
around the world including plants in the United States, United
Kingdom, Spain, and Mexico. The company has fourteen
engineering/customer service offices to globally support our
customers near their regional engineering and manufacturing
locations. The Company and its debtor-affiliates filed for
chapter 11 protection on Feb. 10, 2006 (Bankr. D. Del. Case No.
06-10119 to 06-06-10127). James E. O'Neill, Esq., Laura Davis
Jones, Esq., and Sandra G.M. Selzer, Esq., at Pachulski Stang
Ziehl Young & Jones, and Marc Kiesolstein, P.C., at Kirkland &
Ellis LLP, represent the Debtors in their restructuring efforts.
When the Debtor filed for chapter 11 protection, it estimated
assets and debts of more than $100 million.
KANSAS CITY SOUTHERN: Delivers Contingent Payment to Grupo TMM
--------------------------------------------------------------
In accordance with the terms of the Amended and Restated
Acquisition Agreement between Kansas City Southern (KCS) (NYSE:
KSU), Grupo TMM, S.A. and certain of their subsidiaries dated
Dec. 15, 2004, KCS paid to Grupo TMM the contingent payment due
upon final resolution of Kansas City Southern de Mexico, S.A. de
C.V.'s value added tax refund claim and the dispute with the
Mexican government over the purchase of the Government's remaining
ownership of KCSM.
In accordance with the terms of the Acquisition Agreement, the
Sept. 12, 2005 settlement between the Mexican government, KCS,
KCSM and Grupo TMM of the VAT Claim and Put is deemed to be final
if no appeal or other claim is brought within 180 days following
the settlement date. As no such claim or appeal has been brought,
the final resolution of the VAT Claim and Put occurred, and KCS
accordingly paid Grupo TMM $35 million in cash and issued to Grupo
TMM shares valued at $35 million. KCS also deposited into escrow
a note payable to Grupo TMM in the amount of $40 million. The
Note is subject to reduction in accordance with the terms of the
Acquisition Agreement and an Escrow Agreement, and the remainder
of the Note shall be converted into KCS shares or cash, at KCS'
discretion, on or before April 1, 2010.
Under the terms of the Consulting Agreement between KCS and Jose
F. Serrano International Business, S.A. de C.V., KCS also made a
contingent payment based on the final resolution of the VAT Claim
and Put today to Serrano International Business in the amount of
$9 million.
About Grupo TMM
Headquartered in Mexico City, Grupo TMM S.A. --
http://www.grupotmm.com/-- is a Latin American multimodal
transportation and logistics company. Through its branch
offices and network of subsidiary companies, TMM provides a
dynamic combination of ocean and land transportation services.
About Kansas City Southern
Headquartered in Kansas City, Mo., Kansas City Southern --
http://www.kcsi.com/-- is a transportation holding company that
has railroad investments in the U.S., Mexico and Panama. Its
primary U.S. holdings include The Kansas City Southern Railway
Company, founded in 1887, and The Texas Mexican Railway Company,
founded in 1885, serving the central and south central U.S. Its
international holdings include a controlling interest in TFM, S.A.
de C.V., serving northeastern and central Mexico and the port
cities of Lazaro Cardenas, Tampico and Veracruz, and a 50%
interest in The Panama Canal Railway Company, providing ocean-to-
ocean freight and passenger service along the Panama Canal. KCS'
North American rail holdings and strategic alliances are primary
components of a NAFTA Railway system, linking the commercial and
industrial centers of the U.S., Canada and Mexico.
* * *
As reported in the Troubled Company Reporter on Dec. 9, 2005,
Standard & Poor's Ratings Services assigned a preliminary 'BB-'
senior secured rating, a preliminary 'B+' senior unsecured rating,
and a preliminary 'B-' preferred stock rating to Kansas City
Southern's (BB-/Stable/--) universal shelf registration.
At the same time, Standard & Poor's assigned its 'B-' rating to
the company's $210 million cumulative perpetual preferred stock
issue. The preferred stock is being used to repurchase the shares
of Kansas City Southern common stock recently sold by Grupo TMM
S.A. The Kansas City, Missouri-based freight railroad has about
$1.8 billion of lease-adjusted debt.
KIRTIE REGAN: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Kirtie Regan, Inc.
463 7th Avenue, Room 600A
New York, New York 10018
Bankruptcy Case No.: 06-10468
Chapter 11 Petition Date: March 15, 2006
Court: Southern District of New York (Manhattan)
Judge: Robert D. Drain
Debtor's Counsel: Gilbert A. Lazarus, Esq.
Lazarus & Lazarus, P.C.
240 Madison Avenue, 8th Floor
New York, New York 10016
Tel: (212) 889-7400
Fax: (212) 684-0314
Debtor's financial condition as of March 14, 2006:
Total Assets: $1,125,000
Total Debts: $1,991,000
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Nexus Corporation $350,000
Dareryung Technotown, 8 Suite 711
481-11 Casan-Dong
Geumcheon-Gu
Seoul, Korea
Jiangsu Animal By Product $189,360
No. South Zhonghuo Road
Nanjing, China 310006
Shaoxing Mont Down $157,099
111 Shuantgta Road of
Economic Development Zone
Shengzhou, Zhejian, China
Zhejiang Zitic I/E Corp. $91,399
Europe Craft Importers, Inc. $90,000
Sima Co., Ltd. $60,000
Impac Logistics Corp. $54,356
J. Corp. World $49,578
Impex Transport Inc. $44,571
Citibank $25,000
Jenny's Garment Inc. $25,000
American Express $12,638
Eisner & Lubin LLP $9,000
Lisboa Sportswear LDA $8,750
Adams & Company $7,494
John Hill Sr. $7,000
ENK International $6,300
Lloyd Waxman Associates $6,000
Nowell Amoroso Klein Bierman $5,479
US Customs Service $3,000
KMART CORP: Withdraws Objection to Premier's Multi-Million Claim
----------------------------------------------------------------
As reported in the Troubled Company Reporter on Nov. 30, 2005,
Kmart Corporation asks the U.S. Bankruptcy Court for the Northern
District of Illinois to reduce and allow the PRN Claim as a
Class 5 Claim for $5,500,000.
On July 22, 2002, Premier Retail Networks, Inc., filed an
unsecured claim against Kmart Corporation for $140,013,530.
On February 2, 2004, Kmart filed its 19th Omnibus Claims Objection
disputing, among other claims, the PRN Claim. PRN responded to
the Objection.
Kmart withdraws its objection to Premier Retail's Claim.
Accordingly, the Court dismisses Kmart's request to reduce the
Claim.
About Kmart
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: Court Lifts Injunction to Let Judi Davis Pursue Claims
------------------------------------------------------------------
As reported in the Troubled Company Reporter on Jan. 31, 2006,
Judi A. Davis, as administrator of the Estate of Tina Bradley
Cole, filed Claim Nos. 34978 and 34979 in Kmart Corporation and
its debtor-affiliates' Chapter 11 cases for the wrongful death of
Ms. Cole.
According to Ms. Davis, Ms. Cole died of acute liver failure due
to acetaminophen toxicity caused by the ingestion of controlled
substances containing acetaminophen. Ms. Davis notes that the
substances were provided by Christmann Joel Cole who was an agent,
employee, and pharmacist of Kmart Corporation.
Ms. Davis filed a lawsuit against Mr. Cole and Kmart in the
Superior Court of Buncombe County, North Carolina, on Feb. 23,
2001, to seek recovery for Ms. Cole's wrongful death.
Ms. Davis alleged, among other things, that Kmart:
(a) negligently failed to supervise Mr. Cole;
(b) negligently retained Mr. Cole;
(c) failed to properly audit, manage, account for, control,
monitor, and track controlled substances at its Kmart
Store located at 1830 Hendersonville Road, City of
Ashville, County of Buncombe, State of North Carolina
(d) failed to have in place reasonable and proper standards,
equipment, computer software, accounting methods, and
personnel sufficient to prevent the unauthorized removal
of controlled substances in that location;
(e) failed to take adequate measure to prevent Mr. Cole from
delivering controlled substances without proper
prescriptions to third parties including the decedent;
(f) acted without reasonable or ordinary care in the operation
of the pharmacy; and
(g) was negligent in other respects.
Ms. Davis, and Kmart Corporation, agree that the automatic stay
and the Plan injunction will be partially lifted to permit the
pending litigation in North Carolina to proceed and continue to
final judgment or settlement.
The automatic stay and Plan injunction will remain in effect with
respect to any and all actions of Ms. Davis to execute on any
final judgment or settlement against Kmart or any of its property.
Judge Susan Pierson Sonderby approved the parties' agreement.
About Kmart
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)
LBI MEDIA: Plans to Refinance New $260 Mil. Senior Secured Loans
----------------------------------------------------------------
LBI Media, Inc., is seeking to refinance its existing $220 million
senior secured revolving credit facility with new $260 million
senior secured credit facilities, consisting of:
* a $110 million term loan credit facility and
* a $150 million revolving credit facility.
If consummated, the new facilities would mature in approximately
six years from the closing date.
The Company intends to use the proceeds of the loans made under
the new credit facilities to refinance outstanding borrowings
under its existing senior credit facility. The proceeds from the
new credit facilities will also be used to fund capital
expenditures, permitted acquisitions, working capital, closing
costs and other general corporate purposes. The consummation of
the new credit facilities will be subject to various conditions
customary for transactions of this nature, including the approval
of the Company's board of directors and the negotiation of final
documentation satisfactory to the Company.
About LBI Media
LBI Media, Inc., is one of the largest owners and operators of
Spanish-language radio and television stations in the United
States, based on revenues and number of stations. The Company
owns sixteen radio stations and four television stations serving
the Los Angeles, California, Houston, Texas, Dallas-Fort Worth,
Texas and San Diego, California markets. The Company also owns a
television production facility in Burbank, California.
LBI Media Inc.'s 10-1/8% Senior Subordinated Notes due 2012 carry
Moody's Investors Service's B3 rating and Standard & Poor's CCC+
rating.
LEAP WIRELESS: Lenders Waive Default Under $710-Mil. Sr. Facility
-----------------------------------------------------------------
Leap Wireless International, Inc. (NASDAQ:LEAP), reported that the
holders of a majority of the company's $710 million senior secured
credit agreement have agreed to waive certain potential defaults
under the credit agreement. The company did not pay any fees or
penalties to obtain the waiver.
The lenders waived defaults and event of defaults under the credit
agreement resulting from errors related to the company's
accounting for income taxes in its financial statements for the
five months ended December 31, 2004 and for the interim periods
ended Sept. 30, 2004, March 31, 2005, June 30, 2005 and September
30, 2005. The company plans to restate the financial information
for all of the periods covered by such financial statements in its
upcoming Annual Report on Form 10-K for the year ended Dec. 31,
2005, and to amend its Quarterly Reports on Form 10-Q for the
fiscal quarters ended March 31, 2005, June 30, 2005 and Sept. 30,
2005 shortly following filing of the 2005 Annual Report on Form
10-K.
The waivers are conditioned upon:
(i) net income for the five months ended Dec. 31, 2004 and
for the nine months ended Sept. 30, 2005 as reflected in
the restated financial statements not decreasing from the
amount shown for net income in the corresponding prior
financial statements for such period, and
(ii) total liabilities as of the nine months ended Sept. 30,
2005 as reflected in the restated financial statements at
such date being no more than $110 million in excess of
the amount shown for total liabilities in the
corresponding prior financial statements at such date.
About Leap Wireless
Leap Wireless International, Inc. -- http://www.leapwireless.com/
-- headquartered in San Diego, Calif., is a customer-focused
company providing innovative mobile wireless services targeted to
meet the needs of customers under-served by traditional
communications companies. With the value of unlimited wireless
services as the foundation of its business, Leap pioneered both
the Cricket(R) and Jump(TM) Mobile services. Through a variety of
low, flat rate, service plans, Cricket service offers customers a
choice of unlimited anytime local voice minutes, unlimited anytime
domestic long distance voice minutes, unlimited text, instant and
picture messaging and additional value-added services over a high-
quality, all-digital CDMA network. Designed for the urban youth
market, Jump Mobile is a unique prepaid wireless service that
offers customers free unlimited incoming calls from anywhere with
outgoing calls at an affordable 10 cents per minute and free
incoming and outgoing text messaging. Both Cricket and Jump
Mobile services are offered without long-term commitments or
credit checks.
* * *
As reported in the Troubled Company Reporter on Mar. 9, 2006,
Standard & Poor's Ratings Services placed its ratings for San
Diego, California-based wireless carrier Leap Wireless
International Inc., including the 'B-' corporate credit rating, on
CreditWatch with negative implications.
"This follows the possibility the company will trigger a potential
default under its $710 million senior secured credit facility,
because of the company's announcement that it planned to restate
its audited financial statements for the five months ended
Dec. 31, 2004, and the nine months ended Sept. 30, 2005," said
Standard & Poor's credit analyst Allyn Arden.
LEAP WIRELESS: Purchasing 13 Spectrum Licenses for $31.8 Million
----------------------------------------------------------------
Leap Wireless International, Inc. (NASDAQ: LEAP) signed an
agreement with Urban Comm-North Carolina, Inc., Debtor-in-
Possession, to purchase 13 spectrum licenses for $31.8 million
in cash in markets spanning North and South Carolina. Leap
Wireless currently offers its Cricket(R) service and Jump(TM)
Mobile service in Charlotte and Greensboro, North Carolina.
Sale Agreement
Under the sale agreement, the Company will purchase spectrum
licenses covering approximately 4.9 million potential customers in
13 markets, including 10 MHz of spectrum in each of these markets:
-- North Carolina: Asheville-Hendersonville, Burlington,
Goldsboro-Kinston, Greenville-Washington, New Bern,
Raleigh-Durham, Roanoke Rapids and Rocky Mount-Wilson.
-- South Carolina: Florence, Myrtle Beach, Orangeburg,
Sumter, and Charleston
"We look forward to our acquisition and subsequent development of
these key markets from Urban Comm-North Carolina," said Doug
Hutcheson, Leap's president and chief executive officer. "Raleigh
and the related markets support the market clustering initiatives
we have identified as instrumental to our business strategy and
future growth in the Southeast. These additional markets will
give our customers who travel in and around the Carolinas more
value from their Cricket(R) and Jump(TM) Mobile services."
Assuming the completion of the purchase described above and the
previously announced sale of Toledo/Sandusky, as well as the
completion of the Company's joint venture transaction in Oregon
through LCW Wireless, Leap and its affiliates will own wireless
licenses covering approximately 76.3 million potential customers.
Completion of this purchase from Urban Comm-North Carolina is
subject to approval of the United States Bankruptcy Court for the
Southern District of New York, which is administering the Urban
Comm-North Carolina, Inc.'s Chapter 11 case, and approval from the
Federal Communications Commission (FCC). Leap expects the
purchase to be completed later this year.
About Leap Wireless
Leap Wireless International, Inc. -- http://www.leapwireless.com/
-- headquartered in San Diego, Calif., is a customer-focused
company providing innovative mobile wireless services targeted to
meet the needs of customers under-served by traditional
communications companies. With the value of unlimited wireless
services as the foundation of its business, Leap pioneered both
the Cricket(R) and Jump(TM) Mobile services. Through a variety of
low, flat rate, service plans, Cricket service offers customers a
choice of unlimited anytime local voice minutes, unlimited anytime
domestic long distance voice minutes, unlimited text, instant and
picture messaging and additional value-added services over a high-
quality, all-digital CDMA network. Designed for the urban youth
market, Jump Mobile is a unique prepaid wireless service that
offers customers free unlimited incoming calls from anywhere with
outgoing calls at an affordable 10 cents per minute and free
incoming and outgoing text messaging. Both Cricket and Jump
Mobile services are offered without long-term commitments or
credit checks.
* * *
As reported in the Troubled Company Reporter on Mar. 09, 2006,
Standard & Poor's Ratings Services placed its ratings for San
Diego, California-based wireless carrier Leap Wireless
International Inc., including the 'B-' corporate credit rating, on
CreditWatch with negative implications.
"This follows the possibility the company will trigger a potential
default under its $710 million senior secured credit facility,
because of the company's announcement that it planned to restate
its audited financial statements for the five months ended
Dec. 31, 2004, and the nine months ended Sept. 30, 2005," said
Standard & Poor's credit analyst Allyn Arden.
LEVITZ HOME: Wants Court to Approve Islip Tax Settlement Offer
--------------------------------------------------------------
Debtor Seaman Furniture Company, Inc., is the tenant under a
lease with JDI Islip, LLC, for the real property located at 111
Windsor Place in Central Islip, New York. Under the Lease,
Seamans is not only responsible for the payment of all real
estate taxes on the Premises, but also has the responsibility to
challenge any taxable assessments on the Premises.
The Town of Islip originally assessed the Premises at $2,575,000
for tax years 1998/99 through 2005/2006, and Seamans paid taxes
based on these assessments.
Seamans has challenged these assessments by filing a proceeding
in the Supreme Court of the State of New York pursuant to New
York's Real Property Tax Law. In the litigation and subsequent
settlement negotiations with Islip, Seamans was represented by
Certilman, Balin, Adler & Hyman, LLP, on a contingent fee
arrangement.
Seamans and Islip have reached agreement on the terms of a
settlement regarding the assessed value of the Premises. Under
an offer letter from Islip for a proposed settlement of the
litigation, the assessed value of the Premises would be reduced:
Original Final Total
Tax Year Assessment Reduction Assessment
-------- ---------- --------- -----------
2001/02 $2,575,000 $250,000 $2,325,000
2002/03 $2,575,000 $300,000 $2,275,000
2003/04 $2,575,000 $400,000 $2,175,000
2004/05 $2,575,000 $550,000 $2,025,000
2005/06 $2,575,000 $650,000 $1,925,000
Under the Settlement Offer, Seamans also would drop its challenge
to the assessed value of the Premises for the tax years 1998/99
through 2000/01. Levitz Home Furnishings, Inc., and its debtor-
affiliates would seek to consummate the Settlement by entering
into a stipulation and an associated order with Islip.
Under the Stipulation, the County or Islip would refund any
overpayment of taxes made by Seamans based on the reduced
assessment. The Debtors estimate that the reduced assessments
contemplated in the Stipulation through the 2004/05 tax year
would result in a $431,166 refund. This would entitle Certilman
to a $143,568 contingent fee.
Under applicable New York law, the Debtors would be barred from
challenging the reduced assessment for a three-year period, and
Islip would be barred from increasing the assessment, subject to
certain exceptions.
The Debtors ask the U.S. Bankruptcy Court for the Southern
District of New York pursuant to Rule 9019 of the Federal Rules of
Bankruptcy Procedure, to:
-- allow them to accept the Settlement Offer,
-- authorize Certilman to execute the Stipulation and file any
necessary papers with the state courts in New York to
consummate the Settlement, and
-- allow them to pay Certilman the contingent fee.
"If the Settlement is not approved, the Debtors would be required
to continue litigating the assessed value of the Premises, which
would entail substantial delay, additional trial costs for
appraisals and expert witness fees and run the risk that no
assessment reduction would occur. The Settlement is clearly
within the range of reasonableness and should therefore be
approved," Richard H. Engman, Esq., at Jones Day, in New York,
says.
About Levitz Home
Headquartered in Woodbury, New York, Levitz Home Furnishings, Inc.
-- http://www.levitz.com/-- is a leading specialty retailer of
furniture in the United States with 121 locations in major
metropolitan areas principally the Northeast and on the West Coast
of the United States. The Company and its 12 affiliates filed for
chapter 11 protection on Oct. 11, 2005 (Bank. S.D.N.Y. Lead Case
No. 05-45189). David G. Heiman, Esq., and Richard Engman, Esq.,
at Jones Day, represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they reported $245 million in assets and $456 million
in debts. Jay R. Indyke, Esq., at Kronish Lieb Weiner & Hellman
LLP represents the Official Committee of Unsecured Creditors.
Levitz sold substantially all of its assets to Prentice Capital on
Dec. 19, 2005. (Levitz Bankruptcy News, Issue No. 10; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
LEVITZ HOME: Wants Court to Validate 15 Reclamation Claims
----------------------------------------------------------
Levitz Home Furnishings, Inc., and its debtor-affiliates
previously obtained the U.S. Bankruptcy Court for the Southern
District of New York's approval for their exclusive procedures for
the reconciliation and treatment of all asserted reclamation
claims.
The Reclamation Claims Procedures provide that:
A. Reclamation Report
(1) Any Seller asserting a reclamation claim must demonstrate
that it has satisfied all requirements entitling it to a
right of reclamation under applicable state law and
Section 546(c)(1);
(2) On or before March 10, 2006, the Debtors will file a
report stating their position as to the validity of any
written reclamation demand the Debtors received on or
prior to October 31, 2005. The Report will be served on:
(i) the U.S. Trustee;
(ii) counsel to the Official Committee Of Unsecured
Creditors;
(iii) counsel to General Electric Capital Corporation, as
agent to the DIP Lenders; and
(iv) each Seller that is subject to the Report;
(3) Each Notice Party will have 20 days after the Report is
filed to lodge an objection relating in detail the reasons
of its objection to the Report; and
(4) A Seller may only file an Objection to the Report with
respect to its own reclamation demands;
B. Supplemental Reclamation Report
(1) If the Debtors become aware of any reclamation claim that
satisfied all requirements under applicable state law and
Section 546(c)(1) after it files the Report, the Debtors
will file a supplemental report with the Court within 30
days from the date that the Debtors receive any written
reclamation demand that any particular Seller allegedly
had sent to the Debtors on or before October 31;
(2) Each Notice Party will have 20 days from the date of the
filing of the Supplemental Report to file with the Court
an Objection stating in detail the reasons for its
objection to the Supplemental Report;
(3) A Seller may only file an Objection to the Supplemental
Report with respect to its own reclamation demands;
C. Resolutions
(1) If an Objection to the Report is filed and served within
the time periods with respect to a particular reclamation
demand, the Debtors will attempt to reach a consensual
resolution of the Objection;
(2) If no consensual resolution is reached within 90 days
after the date of the Objection, unless the period is
extended by mutual agreement of the Debtors and the party
filing the Objection, the Debtors will ask the Court to
resolve the Objection;
(3) The Debtors are authorized to negotiate with all Sellers
and to adjust the asserted reclamation claims either
upward or downward to reach an agreement with the Sellers;
and
(4) In the event that the Debtors and a Seller are able to
settle on the amount or treatment of the Seller's asserted
reclamation claims, the asserted reclamation claim will be
allowed in the settled amount without further Court order.
The Reclamation Procedures would be the sole and exclusive method
for the resolution and payment of reclamation claims asserted
against the Debtors.
Debtors' Report: Validity of Reclamation Demands
Based on their review of the Demand Letters, the Debtors have
prepared a chart assessing the validity of the Reclamation Claims
filed relating to generally unspecified and various furniture
products:
Asserted
Value of
Reclamation Claimant Goods Shipped
-------------------- -------------
BenchCraft LLC $175,486
Berkline LLC $752,483
Dale Tiffany, Inc. $117,488
Douglas Furniture $300,040
GMAC Commercial Finance LLC,
GMAC Commercial Finance and
Life Style Furniture Company, Inc. $681,248
Good Companies Unspecified
Annette Welch Klaussner
Furniture Industries, Inc. $652,798
Annette Welch Klaussner
Furniture Industries, Inc. $403,322
Annette Welch Klaussner
Furniture Industries, Inc. $157,981
Annette Welch Klaussner
Furniture Industries, Inc. $62
Annette Welch Klaussner
Furniture Industries, Inc. $16,748
Leggett & Platt, Inc., Leggett & Platt, Inc.,
c/o Mariann Morgan Checkett & Pauly, PC, and
L&P Financial Services Co. $34,745
Prime Resources International LLC, and
Prime Resources International LLC
c/o Lauren Newman Fagel Haber $543,233
Serta International $61,579
Steve Silver Company $517,898
Richard H. Engman, Esq., at Jones Day, in New York, notes that,
among others:
* The Demands do not establish that goods were shipped in the
ordinary course of business;
* The Demands do not establish that the Debtors were in
possession or control of the reclaimed goods at the time of
demand;
* The Demands do not adequately identify specific goods
sought to be reclaimed;
* The Reclaimed Goods are subject to prior and superior liens;
and
* Some of the Demands are untimely.
A full-text copy of the Reclamation Claims Chart is available for
free at http://bankrupt.com/misc/levitz_reclamationchart.pdf
Pursuant to Section 546(c) of the Bankruptcy Code, each
Reclamation Claimant bears the burden of establishing, by a
preponderance of the evidence, each element of a reclamation
claim. The prima facie elements of a valid reclamation claim
are:
(a) The seller has a statutory or common law right to reclaim
the goods;
(b) The reclaimed goods were shipped in the ordinary course of
business;
(c) The purchaser of the reclaimed goods was insolvent at the
time it received the goods; and
(d) The seller made an adequate written reclamation demand
within ten days of the buyer's receipt of the goods, or
within 20 days of the buyer's receipt of the goods if the
ten-day period expires after the commencement of the
buyer's bankruptcy case.
Mr. Engman contends that the Reclamation Claims are invalid to
the extent they do not establish the prima facie elements of a
valid reclamation claim.
Even if the Reclamation Claimants were able to establish the
prima facie elements for valid Reclamation Claims, Mr. Engman
points out they also are subject to the defenses available to the
Debtors in respect of the Reclamation Claims.
Among other defenses, Mr. Engman says, the Reclamation Claims are
not entitled to administrative priority because the goods that
are the subject of the Reclamation Claims are subject to the
prior, properly perfected lien upon all of the Debtors' inventory
of:
(a) various lenders under a certain Amended and Restated
Credit Agreement, effective as of May 20, 2005;
(b) the holders of the Debtors' 12% senior secured notes due
November 1, 2011; and
(c) the holders of the Debtors' 15% senior secured notes due
November 1, 2011.
Accordingly, because (a) the Goods became subject to the
Inventory Lien; and (b) the Secured Parties' claims secured by
the Inventory Lien far exceed the value of the Goods, the
Reclamation Claimants are not entitled to administrative priority
or the granting of a replacement lien in lieu of reclamation, Mr.
Engman asserts.
In addition, Mr. Engman continues, the Reclamation Claims are not
entitled to administrative priority because the Goods are subject
to superior postpetition liens that have not been satisfied.
If the Court finds that these defenses are inapplicable, the
Debtors reserve their right to assert one or more other, claim-
specific defenses for each asserted Reclamation Claim.
About Levitz Home
Headquartered in Woodbury, New York, Levitz Home Furnishings, Inc.
-- http://www.levitz.com/-- is a leading specialty retailer of
furniture in the United States with 121 locations in major
metropolitan areas principally the Northeast and on the West Coast
of the United States. The Company and its 12 affiliates filed for
chapter 11 protection on Oct. 11, 2005 (Bank. S.D.N.Y. Lead Case
No. 05-45189). David G. Heiman, Esq., and Richard Engman, Esq.,
at Jones Day, represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they reported $245 million in assets and $456 million
in debts. Jay R. Indyke, Esq., at Kronish Lieb Weiner & Hellman
LLP represents the Official Committee of Unsecured Creditors.
Levitz sold substantially all of its assets to Prentice Capital on
Dec. 19, 2005. (Levitz Bankruptcy News, Issue No. 10; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
LEVITZ HOME: Wants to Hire Walker Truesdell as Wind-Down Officer
----------------------------------------------------------------
Pursuant to Section 363 of the Bankruptcy Code, Levitz Home
Furnishings, Inc., and its debtor-affiliates seek the U.S.
Bankruptcy Court for the Southern District of New York's
permission to engage Walker, Truesdell & Associates, Inc., to
serve as their winddown officer.
The order approving the sale of substantially all of the Debtors'
assets, among other things, required the Debtors to distribute
sale proceeds in accordance with the terms of their asset
purchase agreement with PLVTZ, LLC, and The Pride Capital Group,
LLC, doing business as Great American Group.
The Purchaser has agreed to fund approximately $850,000 of the
Debtors' winddown costs.
The Debtors anticipate that by mid-March (a) all of their
directors and officers will have resigned and (b) all of their
employees will have been either terminated or transferred to the
Purchaser's employ. Thus, the Debtors desire to retain a
principal of WTA, Hobart G. Truesdell, as sole director and
officer and WTA as winddown officer.
According to the Debtors, WTA is well qualified to serve as their
winddown officer. "It is a leading provider of winddown
services, has a wealth of experience in providing services in
chapter 11 cases and has an excellent reputation as a result of
the many years of quality services it has rendered on behalf of
debtors throughout the United States."
WTA has provided similar services in its role as plan
administrator, liquidation agent, restructuring agent, trustee,
winddown advisor or crisis manager in several multi-million
dollar chapter 11 cases.
As the Debtors' winddown officer, WTA will:
* work with the Purchaser to fulfill the Debtors' obligations
under the Asset Purchase Agreement;
* ensure the timely issuance and filing of 2005 and 2006
W-2's, 1099's and payroll tax returns;
* file all required federal, state and local tax returns on
behalf of the Debtors and its subsidiaries and resolve any
outstanding tax claims or disputes;
* file Forms 5500 and terminate any pension or other benefit
plans;
* merge or dissolve Levitz's domestic and foreign
subsidiaries;
* attempt to arrange a structured dismissal or other
resolution of the Debtors' chapter 11 case without the need
for a plan of reorganization;
* devise and execute an inexpensive and expeditious claims
filing and resolution process;
* monitor and collect the potential income streams available
to the Debtor;
* make a single distribution to allowed claimants;
* prepare and file Monthly Operating Reports;
* maintain and invest the Debtors' cash;
* provide a Final Report and Accounting; and
* take any other actions that may be necessary to wind-down
the business affairs of the Debtors.
Hobart G. Truesdell at WTA assures the Court that WTA has no
material connection with the Debtors, their creditors, any other
party-in-interest, their attorneys and accountants, the U.S.
Trustee, or any person employed in the office of the U.S.
Trustee.
Accordingly, the Debtors believe that WTA does not hold or
represent any interest adverse to the Debtors or their estates.
The Debtors will pay WTA based on the time spent in providing
services at these hourly rates:
Principal $300
Associates $275
Jr. Associate $175
Paraprofessionals $75
WTA has agreed to cap its fees at $90,000 and has agreed further
that its fees charged in any one month will not exceed $15,000.
WTA will record its time in 1/10th hour increments and will
provide copies of its monthly fee statements and staffing reports
to:
(a) counsel to the Committee
Kronish Lieb Weiner & Hellman LLP
1114 Avenue of the Americas
New York, New York 10036
Attn: Jay R. Indyke, Esq. and
Cathy Hershcopf, Esq.
(b) counsel to the Purchaser
Skadden, Arps, Slate, Meagher & Flom LLP
4 Times Square
New York, New York 10036-6522
Attn: D.J. Baker
(c) counsel to the Debtor
Jones Day
222 East 41st Street
New York, New York 10017
Attn: Richard H. Engman, Esq.
(d) the U.S. Trustee
33 Whitehall Street, 21st Floor
New York, New York 10004
Attn: Greg M. Zipes, Esq. and
Paul K. Schwartzberg, Esq.
About Levitz Home
Headquartered in Woodbury, New York, Levitz Home Furnishings, Inc.
-- http://www.levitz.com/-- is a leading specialty retailer of
furniture in the United States with 121 locations in major
metropolitan areas principally the Northeast and on the West Coast
of the United States. The Company and its 12 affiliates filed for
chapter 11 protection on Oct. 11, 2005 (Bank. S.D.N.Y. Lead Case
No. 05-45189). David G. Heiman, Esq., and Richard Engman, Esq.,
at Jones Day, represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they reported $245 million in assets and $456 million
in debts. Jay R. Indyke, Esq., at Kronish Lieb Weiner & Hellman
LLP represents the Official Committee of Unsecured Creditors.
Levitz sold substantially all of its assets to Prentice Capital on
Dec. 19, 2005. (Levitz Bankruptcy News, Issue No. 10; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
LG.PHILIPS: Case Summary & 29 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: LG.Philips Displays USA, Inc.
9335 Airway Road, Suite 211
San Diego, California 92154
Bankruptcy Case No.: 06-10245
Type of Business: The Debtor is the largest supplier of
televisions, computer monitors, and the
latest LCD and display panels.
See http://www.lgphilips-displays.com/
Chapter 11 Petition Date: March 15, 2006
Court: District of Delaware (Delaware)
Judge: Brendan Linehan Shannon
Debtor's Counsel: Adam Hiller, Esq.
Pepper Hamilton LLP
Hercules Plaza, Suite 5100
1313 Market Street
Wilmington, Delaware 19899-1709
Tel: (302) 777-6500
Fax: (302) 421-8390
Estimated Assets: More than $100 Million
Estimated Debts: $50 Million to $100 Million
Debtor's 29 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
LG Philips Displays Trade debt $82,000,000
Korea Co., Ltd.
LG Twin Towers 20
Yoldo Dong 150-721
Youngdongpo-Gu
Seoul, Korea
LG International Corp. Trade debt $34,756,439
LG Twin Towers 20
Yoido-Dong
Seoul, Korea
United Ventures Former landlord $12,000,000
One SeaGate, Suite 720
Toledo, Ohio 43604
AGA Displays, Inc. Trade debt $3,874,084
680 Andersen Drive, Suite 305
Pittsburgh, PA 15220
DNP Electronics America, LLC Trade debt $3,737,414
2391 Fenton Street
Chula Vista, CA 91914
LG Philips Displays Trade debt $2,450,000
Brasil, Ltd.
Edificios 1 e 2
Manaus, Amazonas
Distrito Industrial CEP
69075-150 Brazil
Delafoil Ohio, Inc. Executory Contract $1,906,497
232 Shoemaker Road
Pottstown, PA 19464
Nichia America Corporation Trade debt $1,330,522
Satoshi Suzuki
3775 Hempland Road
Mountville, PA 17554
OH Sung Electronics USA, Inc. Trade debt $948,184
2371 West Brihton Avenue
El Centro, CA 92243
Beijing LG Philips Trade debt $872,433
Displays Co. Ltd.
Tianzhu Airport Industry Zone
No Jia 12 Tianzhe West Road
Shunyi County 101312, China
Ohsung Electronics Co. Ltd. Trade debt $699,066
181 Gong Dan-Dong, Gumi
Gyeong Buk, Korea
Nippon Electric Trade debt $628,638
Glass Co. Ltd.
Eiko Nishi 4-1-14
Miyahara, Yodogawa
Osaka 532-0003, Japan
Punch Mexico, S.A. de C.V. Trade debt $628,149
No. 320 Gomez Palacio 11111
Mexico
Dan Rich Logistics Trade debt $593,275
P.O. Box 4815
Little Rock, AR 72214
LG Chem Ltd. Trade debt $311,780
LG Twin Tower
26nd Floor of East Tower
13013 East 166th Street
Cerritos, CA 90703
Nippon Electric Glass(M) Trade debt $250,822
SDN BHD
Lot 1-7 Lion Industrial Park
Persiaran Jubli, Perak
Shah Alam
Selangor, Malaysia
Henan Anyang CPT Trade debt $248,352
Glass Bulb Group C
Transervicios, SA de CV Trade debt $220,255
Nippon Electric Glass Trade debt $209,952
(Fujian) Co.
Ja Hwa Electronics, Co., Ltd. Trade debt $87,390
Haesung Hi-Tech Co., Ltd. Trade debt $79,691
Poliestireno Trade debt $72,554
Alfa-Gamma S.A. de C.V.
Henkel Corporation Trade debt $69,364
SPS Spare Parts Service Trade debt $68,681
Mardupol Trade debt $62,857
Tiga Autotransportes Trade debt $54,915
De Carga, S.A.
Login Transporte, S.A. de C.V. Trade debt $42,720
Pierce & Stevens Chemical Corp. Trade debt $34,476
Kihong Trading Co. Trade debt $10,609
LION CITY: Voluntary Chapter 11 Case Summary
--------------------------------------------
Debtor: Lion City Run-Off Private Limited
80 Raffles Place
#33-00 UOB Plaza 1
Singapore 048624
Bankruptcy Case No.: 06-10461
Chapter 11 Petition Date: March 15, 2006
Court: Southern District of New York (Manhattan)
Judge: Stuart M. Bernstein
Debtor's Counsel: Howard Seife, Esq.
Chadbourne & Parke LLP
30 Rockefeller Plaza
New York, New York 10112
Tel: (212) 408-5361
Fax: (212) 541-5369
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.
LOS PORTALES: Case Summary & 10 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Los Portales, Inc.
13033 East Philadelphia Street
Whittier, California 90601
Bankruptcy Case No.: 06-10811
Type of Business: The Debtor operates a restaurant.
Chapter 11 Petition Date: March 14, 2006
Court: Central District Of California (Los Angeles)
Judge: Richard M. Neiter
Debtor's Counsel: Lorraine L. Loder, Esq.
601 West 5th Street, 8th Floor
Los Angeles, California 90071-2004
Tel: (213) 623-8774
Fax: (213) 623-1409
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $100,000 to $500,000
Debtor's 10 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Chareles M. Cruz Accountancy $20,000
5321 East Beverly Boulevard
Los Angeles, CA 90022
Guadalupe Patino $18,690
8611 Dulao Circle
Pico Rivera, CA 90660
Rosalina Barrientos $14,975
11302 Illinois Street
Whittier, CA 90601
Thorpe & Thorpe APC $10,000
State Fund Compensation Insurance $5,400
Crowers Marketing Producers $5,360
Henderson, Inc. $4,200
El Dorado Rotillereria $3,925
SYSCO $2,180
Daniels Meat Co. $986
MAGNITUDE INFORMATION: Losses Spur Auditor's Going Concern Doubt
----------------------------------------------------------------
Rosenberg Rich Baker Berman & Company expressed substantial doubt
about Magnitude Information Systems, Inc.'s ability to continue as
a going concern after reviewing its financial statements for the
years ended December 31, 2004, and 2003. The auditing firm
pointed to Magnitude Information's operating losses and
uncertainty of obtaining additional capital and financing for its
operations.
Magnitude Information filed an amended annual report to:
1) reclassify certain equity positions in connection with
beneficial conversion rights accrued to warrants and shares
of convertible preferred stock issued in 2003 and 2004 due
to the elimination of a discount of 50% applied to the
market price of the Company's common stock when valuing
certain securities issued prior to January 1, 2004 to
employees and non-employees for services rendered; and
2) reclassify warrants and options in excess of authorized
shares available and reclassify deferred compensation.
2004 Financials
For the 12 months ended Dec. 31, 2004, Magnitude Information
reported a $2,308,948 net loss on $2,308,948 in total net
revenues. That compares to a $2,653,331 net loss on $162,335 in
total net revenues for the 12 months ended Dec. 31, 2004.
At Dec. 31, 2004, Magnitude Information's balance sheet showed
$646,162 in total assets and $1,159,208 in total liabilities.
The Company reports a $28,825,57 accumulated deficit as of
Dec. 31, 2004.
A full-text copy of Magnitude Information's Form 10-KSB/A report
is available for free at http://ResearchArchives.com/t/s?68e
Headquartered in Chester, New Jersey, Magnitude Information
Systems, Inc. -- http://www.magnitude.com-- is the leading
developer of Human Capital Optimization Solutions for employers
with computer users. ErgoEnterprise(TM), Magnitude's unique
patented flagship product, delivers RSI Management and
productivity enhancement benefits. ErgoEnterprise has been proven
to help companies and government agencies realize measurable
productivity gains, reduced workers' compensation and medical
claims costs associated with employees using computers.
At Dec. 31, 2004, Magnitude Information incurred a $513,046
stockholders' equity deficit.
MERRILL LYNCH: DBRS Places B Ratings on Three Certificate Classes
-----------------------------------------------------------------
Dominion Bond Rating Service finalized ratings to various classes
of Merrill Lynch Financial Assets Inc., Series 2006-Canada 18
Commercial Mortgage Pass-Through Certificates at AAA through B
(low). The XP and XC balances are notional. The trends are
Stable.
Finalized ratings:
Merrill Lynch Financial Assets Inc.
Series 2006 - Canada 18 Commercial Mortgage
Pass-Through Certificates, Series 2006-Canada 18
* Class A-1 -- AAA
* Class A-2 -- AAA
* Class XP-1 -- AAA
* Class XP-2 -- AAA
* Class XC -- AAA
* Class A-3 -- AAA
* Class B -- AA
* Class C -- A
* Class D -- BBB
* Class E -- BBB (low)
* Class F -- BB (high)
* Class G -- BB
* Class H -- BB (low)
* Class J -- B (high)
* Class K -- B
* Class L -- B (low)
The collateral consists of 83 fixed-rate loans secured by 158
multi-family, mobile home parks, and commercial properties, which
are considered highly diversified. The pool has a total loan
balance of CDN$590,200,380. DBRS inspected 73.0% of the pool.
Based on DBRS's site inspections, 25.5% of the sampled properties
are considered to have excellent property quality, and 14.2% of
the sampled properties to have above-average property quality.
Forty-six loans representing 52.1% of the pool provide for full or
partial recourse to the loan sponsors. DBRS shadow rates four
loans, representing 7.1% of the pool, investment grade. The
investment-grade shadow-rated loans indicate the long-term
stability of the underlying assets. The shadow-rated investment-
grade ratings assigned by DBRS are as follows:
-- Preston Crossing - Phase II - AA
-- Regency Retirement Residence - BBB
-- Bolton Country Shopping Centre - BBB
-- Brant Plains Plaza - BBB (high)
Although 20 loans, representing 14.3% of the pool balance, are
encumbered with subordinate debt, 18 of these loans have
subordination and standstill agreements in place and one
additional loan has subordination agreement in place. Nineteen
loans, representing 28.3% of the pool, have a DBRS-stressed loan-
to-value greater than 90%. Three loans are secured by hotels and
four loans are secured by retirement homes, and both property
types are considered volatile.
The pool weighted-average DBRS-stressed term debt service coverage
ratio is 1.38 times and the weighted-average DBRS-stressed Refi
DSCR is 1.33x. The DBRS-stressed LTV is 82.3%.
MUSICLAND HOLDING: Final Sale Hearing Scheduled for March 22
------------------------------------------------------------
Musicland Holding Corp. and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York to approve:
(a) their asset purchase agreement with Trans World
Entertainment Corporation, dated as of February 17,
2006;
(b) their entry into an agency agreement;
(c) the assumption and assignment of certain leases and
executory contracts to TWEC or other Winning Bidders;
(d) the sale of designation rights to TWEC or other Winning
Bidders; and
(e) an extension of the time to assume or reject unexpired
real estate leases pursuant to Section 365(d)(4) of the
Bankruptcy Code, as required by the APA.
James H.M. Sprayregen, Esq., at Kirkland & Ellis, LLP, in New
York, informs the Court that the Debtors and TWEC entered into an
amendment of the APA on March 7, 2006.
Section 3.13(b) of the APA is amended to provide that with respect
to each Benefit Plan subject to Title IV of the Plan or Section
302 of ERISA, no condition exists that could reasonably be
expected to result in the imposition of any Liabilities upon
Buyer.
A full-text copy of the March 7 Amendment is available for free at
http://ResearchArchives.com/t/s?684
The Debtors also entered into an Agency Agreement with Hilco
Merchant Resources, LLC, and Gordon Brothers Retail Partners,
LLC, for the Agent to conduct a "store closing," "going out of
business" or other similar theme sales for all of the merchandise
located in certain of the Debtors' retail store locations.
A full-text copy of the Agency Agreement is available for free at
http://ResearchArchives.com/t/s?67e
The Debtors note that the identity of the exact leases and
contracts to be assumed and assigned is not known at this time and
likely will vary depending on whether or not TWEC is the Winning
Bidder. Even if TWEC is the Winning Bidder, the APA allows TWEC a
Designation Period within which to determine which of the Debtors'
unexpired leases it desires to be transferred as part of the Sale.
A full-text copy of the Assumption Agreement is available for free
at http://ResearchArchives.com/t/s?67f
Bidding Objections
The Official Committee of Unsecured Creditors believes that the
$3,125,000 Break-Up Fee is unreasonable and unwarranted.
Mark S. Indelicato, Esq., in Hahn & Hessen LLP, in New York City,
contends that even if the Break-Up Fee was warranted, the broad
provisions for the Break-Up Fee Payment does not maximize the
value of the Debtors' estate.
Mr. Indelicato asserts that the expense reimbursement should be
limited to the actual reasonable out-of-pocket expenses incurred
by TWEC. "The Debtors' motion is not clear on that point,
potentially permitting payment of up to $500,000 for expenses that
TWEC will incur in connection with serving as the stalking horse
bidder."
The Expense Reimbursement should not be payable just because of a
failure to hold the Sale Hearing by April 14, 2006, Mr. Indelicato
says, because there may be circumstances beyond the Debtors'
control and good faith attempts which warrant a later date.
The Creditors Committee asks the Court to deny the Debtors'
request to ensure that the value of the Debtors' assets is
maximized in a competitive, fair and open process for the benefit
of all creditors.
Moreover, at least 27 landlords objected to the auction of
substantially all of the Debtors' assets.
The Objecting Landlords are:
* Aronov Realty,
* CBL & Associates Management, Inc.,
* Developers Diversified Realty Corporation,
* EklecCo NewCo, LLC,
* Federal Realty Investment Trust,
* General Growth Management, Inc.,
* Gibraltar Management Co., Inc.,
* Glimcher Properties Limited Partnership,
* Gregory Greenfield & Associates, Ltd.,
* Jones Lang LaSalle Americas, Inc.,
* Kravco Simon Company,
* Lilac Mall Associates,
* Marshall Town Center,
* Minot Dakota Mall, LLC,
* New Plan Excel Realty Trust, Inc.,
* PREIT Services, LLC,
* Simon Property Group, L.P.
* Steamtown Mall Partners LP,
* The Macerich Company,
* The Mills Corporation,
* The Taubman Landlords,
* Union Station Venture II, LLC,
* Urban Retail Properties, Co.,
* Westfield America, Inc.,
* Westfield Corporation, Inc.
* WRI Pinecrest Plaza, LLC, and
* WRI/TEXLA, LLC.
The Objecting Landlords complain that the Debtors' proposed
bidding procedures fail to provide them with sufficient time to
review adequate assurance of future performance information. The
Procedures also do not specify whether the Landlords may attend
the Auction.
The Objecting Landlords assert that the Debtors must comply with
Section 365 of the Bankruptcy Code in the assumption and
assignment of the Leases. The Debtors must pay their postpetition
rent and other lease charges.
On behalf of EklecCo NewCo, Lilac Mall, Steamtown Mall and Minot
Dakota Mall, Kevin M. Newman, Esq., at Menter, Rudin &
Trivelpiece PC, in Syracuse, New York, asserts that:
-- any order on the Debtors' request must provide for
expedited discovery regarding any proposed assignee;
-- if TWEC is the winning bidder, the Debtors should file with
the Court the list of the 330 to 345 stores that they may
seek to assume and assign to TWEC so as to provide
Landlords with due process and sufficient notice;
-- if the Debtors are seeking authority to assume and assign
any leases at the sale hearing, the sale hearing should be
held before March 31, 2006; and
-- if the Debtors are seeking authority to assume and assign
any leases, other than to TWEC, the hearing should be held
on or after April 5, 2006.
To determine whether the requirements of adequate assurance of
future performance will be satisfied, Gregory Greenfield &
Associates, LaSalle Americas, WRI/TEXLA, and WRI Pinecrest Plaza,
through Robert L. LeHane, Esq., at Kelley Drye & Warren LLP, in
New York City, seek certain information, including:
-- the successful bidder's name and the assignee's name;
-- the proposed assignee's 2006 business plan, including sales
and cash flow projections; and
-- any financial projections, calculations or financial
proformas prepared in contemplation of purchasing the
Leases.
According to Ronald M. Tucker, Esq., in Indianapolis, Indiana,
Simon Property's records show that the cure amounts for its leases
total $1,750,759.
Informal Trade Committee Responds
to the Creditors Committee's Objection
On behalf of the Informal Committee of Secured Trade Vendors,
Richard S. Toder, Esq., at Morgan Lewis & Bockius LLP, in New
York City, asserts that the Creditors Committee's objection is
another attempt to substitute pure speculation for the Debtors'
exercise of reasonable business judgment to further prolong the
Chapter 11 case, at the Trade Committee's expense.
The Secured Trade Vendors, who consent to the proposed bid
procedures, are the parties whose interest are truly at risk, Mr.
Toder notes.
"The continuing hemorrhage of money at the rate of $5,000,000 to
$6,000,000 a month and the prospect of a straight liquidation that
would eliminate all jobs and return a fraction of the value of the
assets to the creditors, renders an expeditious sale as not only
the best, but the only realistic alternative to maximize the value
of the estate's assets for all parties-in-interest," Mr. Toder
argues.
Mr. Toder maintains that the Debtors properly exercised their
judgment in agreeing to the terms of the APA, bid procedures and
bid protection, recognizing that they represented the most
favorable avenue towards maximizing the value of the estate's
assets for all parties-in-interest.
The Trade Committee therefore asks the Court to overrule the
Creditor Committee's objection and approve the Bid Procedures.
Debtors' Omnibus Response
Pursuant to the numerous objections to the Bid Procedures, the
Debtors have revised the Bid Procedures Order.
According to Mr. Sprayregen, one common basis of the objections is
timing. In response to the objections, the Debtors propose a
revised timeline:
March 10, 2006 -- Notice Publication in The Wall Street Journal
March 16, 2006 -- Initial Objection Deadline
March 17, 2006 -- Sale Motion Deadline
March 19, 2006 -- Qualified Bid submission Deadline
March 21, 2006 -- Auction
March 22, 2006 -- Sale Hearing and Initial Objections Hearing
March 27, 2006 -- Supplemental Objections Deadline
March 29, 2006 -- Alternate Sale Hearing
May 8, 2006 -- Deadline to consummate an approved sale
The Debtors contend, among others, that:
a. There is no evidence to suggest that the Break-up Fee will
have a chilling effect;
b. The landlords who intend to bid at the Auction and who
submit bids by the bid deadlines can attend the Auction;
c. The proposed revised procedures are reasonable;
d. They reserve their rights to seek to have objections
heard at the hearings;
e. They did not intend to shift the burden to the landlords
and have revised the Bid Procedures to clarify that they
will provide the adequate assurance information;
f. They disagree that the landlords should be able to
supplement its cure amounts at any time of any later motion
except as to alleged non-payments of postpetition amounts
after the initial objection deadline;
g. They agree that the cure procedures should not limit a
landlord's ability to later assert claims accrued but
unbilled, when those charges are later billed in the
ordinary course;
h. They will be seeking an extension of the Section 365(d)(4)
deadline by at most 90 days.
Judge Bernstein approves the Bid Procedures. The Court directs
the Debtors to:
-- publish the Sale Notice by in The Wall Street Journal,
National Edition;
-- file and serve a notice of the Cure Amount;
-- post at http://www.bmcgroup.com/musiclandthe instructions
on how to request additional information regarding TWEC and
its affiliates for adequate assurance analysis, and the
list of Cure Amounts; and
-- identify the unexpired leases that they wish to assume and
assign to TWEC as of the Closing Date.
Objections to the Cure Amounts of the Leases and the adequate
assurance with respect to the Closing Date Assumed Leases must be
filed on or before March 18, 5:00 p.m. EST.
A final hearing to approve the sale of the Assets to TWEC,
pursuant to the APA will be held on March 22, 2006, at 10:00 a.m.,
prevailing Eastern Time.
A final hearing to approve the sale of the Assets to the Winning
Bidder other than TWEC will be held on March 31, 2006, at 10:00
a.m., prevailing Eastern Time.
A full-text copy of the 25-page Bid Procedures Order is available
for free at http://ResearchArchives.com/t/s?67c
The Debtors filed a separate list of the Leases and Executory
Contracts they intend to assume and assign to the winning bidder,
together with the cure amounts they believe are due under the
Leases and Contracts.
A nine-page list of the Leases and Cure Amounts is available for
free at http://ResearchArchives.com/t/s?680
A six-page list of the Contracts and Cure Amounts is available for
free at http://ResearchArchives.com/t/s?67d
About Musicland Holding
Headquartered in New York, New York, Musicland Holding Corp., is a
specialty retailer of music, movies and entertainment-related
products. The Debtor and 14 of its affiliates filed for chapter
11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No.
06-10064). James H.M. Sprayregen, Esq., at Kirkland & Ellis,
represents the Debtors in their restructuring efforts. Mark T.
Power, Esq., at Hahn & Hessen LLP, represents the Official
Committee of Unsecured Creditors. When the Debtors filed for
protection from their creditors, they estimated more than
$100 million in assets and debts. (Musicland Bankruptcy News,
Issue No. 7; Bankruptcy Creditors' Service, Inc., 215/945-7000)
NATIONAL BEEF: S&P Places B- Senior Unsecured Ratings Under Review
------------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'B+' corporate
credit and 'B-' senior unsecured debt ratings on Kansas City,
Mo.-based National Beef Packing Co LLC on CreditWatch with
negative implications.
This means that the ratings could be affirmed or lowered upon
completion of our review.
National Beef's lease-adjusted total debt outstanding at
Nov. 26, 2005, was about $349 million.
The CreditWatch listing follows the announcement that National
Beef and its majority owner, U.S. Premium Beef LLC, have entered
into a non-binding letter of intent to acquire the business of
Brawley Beef LLC. The parties expect to enter into a definitive
agreement after performing due diligence.
It is anticipated that National Beef would own and operate Brawley
Beef, an alliance of cattle producers in Arizona and California
who supply its meat-packing operations with about 400,000 animals
per year. The company produces custom cuts to retail customers.
"Although terms of the acquisition have not been disclosed, we are
concerned that any substantial addition to National Beef's
existing debt levels would weaken credit measures to levels below
those appropriate for the current ratings," Standard & Poor's
credit analyst Ronald Neysmith said.
"Given the company's existing high leverage, this could result in
a one- to two-notch downgrade."
To resolve the CreditWatch listing, Standard & Poor's will meet
with National Beef's management to discuss financing plans, as
well as ongoing business and financial strategies, and evaluate
the company's new capital structure following the acquisition.
NCI BUILDING: Earns $12.9 Million in First Quarter Ended Jan. 29
----------------------------------------------------------------
NCI Building Systems, Inc. (NYSE: NCS) reported its financial
results for the first quarter ended Jan. 29, 2006.
For the quarter, sales were $293.3 million, an increase of
20% from $245.2 million for the first quarter of fiscal 2005.
Net income increased 20% for the first quarter of fiscal 2006 to
$12.9 million from $10.7 million for the first quarter of fiscal
2005.
A. R. Ginn, Chairman and Chief Executive Officer of NCI, remarked,
"We are pleased with our results for the first quarter of fiscal
2006, which, compared with the first quarter of fiscal 2005,
reflected an industry environment that strengthened in the last
quarter of calendar 2005."
"As a result, we experienced significant sales momentum during our
first fiscal quarter, especially in Components sales which
increased 25%. Our first-quarter sales were also positively
affected by earlier than expected shipments of buildings from our
backlog originally scheduled for the second quarter."
"Order flow for our Buildings segment remained on target for the
first quarter, increasing our backlog to $185.1 million at the end
of the first quarter from $170.4 million at the end of the first
quarter of fiscal 2005, even with the impact of greater than
expected first-quarter shipments."
"Sales growth in our Components and Building segments was also
primarily accountable for a 20% increase in Coatings sales for the
first quarter of fiscal 2006 compared with the first quarter of
fiscal 2005."
"Our first quarter results and our outlook for fiscal 2006 are
consistent with broad industry trends, although, with a 21%
increase in tons shipped for the first quarter, we have continued
to grow in excess of the industry's growth rate through increased
market share."
"The Dodge Report indicated square footage in the nonresidential
construction industry increased 2% for calendar 2005, after
projecting flat results in August, which is indicative of growing
momentum in the latter months of the year."
"The Dodge Report also anticipates square footage growth of 4% for
2006. Our guidance for fiscal 2006 is based on our expectations
for continuing to outperform the rate of industry growth for the
fiscal year."
"Our guidance also reflects our expectation that, because of
earlier than expected product shipments in the first quarter and
the anticipated movement of other shipments to the third quarter
from the second, our results for the second quarter will be behind
those of the first quarter."
"Among the other assumptions on which this guidance is based, we
expect 5% growth in square footage in the nonresidential
construction industry for 2006, driving 6% growth in our total
tons shipped for fiscal 2006."
"Our guidance for fiscal 2006 also assumes an increase in the
weighted average cost of our steel supplies of approximately 9%,
as well as an estimated income tax rate of 40%."
"Our guidance for the second quarter and for fiscal 2006 does not
include the impact of potential dilution related to NCI's 2.125%
Convertible Senior Subordinated Notes, because that amount, if
any, will be dependent upon the future price of the Company's
stock. "
Mr. Ginn added, "Our strong first-quarter results position us to
achieve our goals for the seasonally slow first half of our fiscal
year and to prepare for anticipated growth in the second half of
the fiscal year."
"In addition to stronger industry conditions for fiscal 2006, we
also expect to benefit from the completion of our previously
announced definitive agreement to acquire Robertson-Ceco
Corporation, which produced revenues for calendar 2005 of
approximately $430 million."
"We expect this transaction to be accretive to our fiscal 2006
earnings, assuming its completion, which is scheduled for early
April and is subject to a number of closing conditions including
the termination of expiration of any applicable waiting period
under the Hart-Scott-Rodino Act."
"We intend to revise our earnings guidance for fiscal 2006
to address the impact of this transaction after it is completed."
About NCI Building
NCI Building Systems, Inc., is one of North America's largest
integrated manufacturers of metal products for the nonresidential
building industry. The Company operates manufacturing and
distribution facilities located in 16 states and Mexico.
* * *
As reported in the Troubled Company Reporter on Feb. 24, 2006,
Standard & Poor's Ratings Services said that, based on preliminary
information, its corporate credit rating and outlook on Houston,
Texas-based NCI Building Systems Inc. (BB/Stable/--) would not be
affected by the company's recently announced plans to acquire
unrated Robertson-Ceco Corp., an engineered-building-systems
manufacturer with 2005 annual revenues of about $430 million.
At the same time, Standard & Poor's had put NCI's senior secured
bank loan and recovery ratings on CreditWatch with developing
implications pending further details on the term loan amendment.
NELLSON NUTRACEUTICAL: Taps PricewaterhouseCoopers as Tax Advisor
-----------------------------------------------------------------
Nellson Nutraceutical, Inc., and its debtor-affiliates ask the
U.S. Bankruptcy Court for the District of Delaware permission to
employ PricewaterhouseCoopers LLP as their tax advisors, nunc pro
tunc to Jan. 28, 2006.
PricewaterhouseCoopers will:
a. prepare the U.S. Corporation Income Tax Return, Form 1120,
for the tax year Jan. 1, 2005 through Dec. 31, 2005 and any
required state corporate tax returns;
b. prepare the Schedule M-3 filing required by the Treasury
and the Internal Revenue Service;
c. provide tax consulting services, including advice, answers
to questions or opinions on tax planning or reporting
matters, including research, discussions, preparation of
memoranda, and attendance at meetings related to such
matters;
d. advice or assist with respect to matters involving the IRS
or other tax authorities on an as-needed basis;
e. advice the Debtors regarding tax return disclosures,
including but not limited to tax shelter compliance; and
f. provide any other tax assistance as requested by the
Debtors.
Roderick L. Mayo, a partner at PricewaterhouseCoopers, tells the
Court that the Firm's professionals bill:
Designation Hourly Rate
----------- -----------
Partner $570
Director/Senior Manager $500
Manger $360
Senior Associate $260
Associate $205
Mr. Mayo relates that for this engagement, the Firm has agreed to
a fixed fee of $69,000.
Mr. Mayo assures the Court that the Firm is "disinterested" as
that term is defined is Section 101(14) of the Bankruptcy Code.
About Nellson Nutraceutical
Headquartered in Irwindale, California, Nellson Nutraceutical,
Inc., formulate, make and sell bars and powders for the nutrition
supplement industry. The Debtors filed for chapter 11 protection
on Jan. 28, 2006 (Bankr. D. Del. Case No. 06-10072). Laura Davis
Jones, Esq., Rachel Lowy Werkheiser, Esq., Richard M. Pachulski,
Esq., Brad R. Godshall, Esq., and Maxim B. Litvak, Esq., at
Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C. represent
the Debtors in their restructuring efforts. Lawyers at Young,
Conaway, Stargatt & Taylor, LLP, represent an informal committee
of which General Electric Capital Corporation and Barclays Bank
PLC are members. When the Debtors filed for protection from their
creditors, they estimated more than $100 million in assets and
debts.
QUANTA SERVICES: Moody's Holds $150 Mil. Term Loan Rating at Ba3
----------------------------------------------------------------
Moody's Investors Service has affirmed the ratings of Quanta
Services, Inc., and changed the ratings outlook to positive from
negative.
These ratings for Quanta Services, Inc. have been affirmed:
* $35 million Revolving Credit Facility due 2007,
affirmed at Ba3;
* $150 million Senior Secured Term Loan due 2008,
affirmed at Ba3;
* Corporate Family Rating, affirmed at B1.
The ratings outlook has been changed to positive from negative.
The change in the outlook to positive from negative reflects the
company's improving profitability and leverage metrics. Quanta's
EBITDA margin in 2005 increased to approximately 7% from 4.5% in
2004 and the company's cost of goods sold as a percentage of sales
in 2005 declined to approximately 86% from 89% for the same period
a year earlier. Furthermore, there has been a significant
improvement in Quanta's leverage metrics; namely, in 2005 debt to
EBITDA declined to 3.4 times from 6.4 times a year ago and debt as
a percentage of revenues declined to approximately 24% from 29%
the previous year.
Quanta's ratings benefit from the company's strong competitive
position, anticipated industry expansion as reflected by Quanta's
increasing backlog and diversified customer base. Quanta is one
of the largest providers of specialty contracting services in the
electric power, gas, telecommunications, cable television, and
specialty services industries. The company's backlog in 2005
increased by 21% to $1.3 billion from $1.1 billion in 2004.
Furthermore, Quanta should benefit from the Energy Policy Act of
2005, increased outsourcing of the networking services by the
providers of electric power, gas, telecommunications, and cable
television providers, and from the nation's aging and overloaded
infrastructure. In terms of customer concentration, the company
is relatively well diversified with the top 20 customers
accounting for approximately 40% of revenues and its largest
customer accounting for 6% of revenues.
At the same time, Quanta's ratings are constrained by significant
off-balance sheet liabilities, including operating leases, letters
of credit, and surety bonds. In 2005, the company's rent expense
was $64.5 million which translates into a $387 million liability
if using Moody's standard 6 times rent multiple for the industry.
Furthermore, as of Dec. 31, 2005, the company had approximately
$143 million in letters of credit outstanding under the credit
facility. Quanta also uses surety bonds to provide its customers
a guarantee that work will be executed according to the terms and
conditions set forth in its contracts. As of
Dec. 31, 2005, the approximate amount of surety bonds was
approximately $577 million. However, Moody's notes that the total
projected liability on a cost-to-complete basis is projected by
the company to be $148 million. The ratings consider that 44% of
Quanta's employees are unionized.
The company is strongly positioned in the current ratings
category. The ratings could be upgraded if the company continues
to execute its current strategy according to Moody's expectations
or if the company's free cash flow generation improves above 11%
on a sustainable basis. The ratings could be downgraded or the
outlook changed if the company's leverage were to increase above
4.5 times, margins were to weaken, or if its contract backlog were
to decline to under $1 billion. Additionally, a meaningful
reduction in the company's access to surety bonds could adversely
impact the ratings' outlook or ratings.
Headquartered in Houston, Texas, Quanta Services, Inc. is a
leading provider of specialized contracting services, offering
end-to-end network solutions to the electric power, gas,
telecommunications, and cable television industries. Revenues for
FYE 2005 were approximately $1.9 billion.
O'SULLIVAN IND: Files Supplements to 2nd Amended Chapter 11 Plan
----------------------------------------------------------------
On March 6, 2005, O'Sullivan Industries Holdings, Inc., delivered
to the U.S. Bankruptcy Court for the Northern District of Georgia
supplements to their Second Amended Joint Plan of Reorganization:
1. Forms of the Amended and Restated By-Laws, in separate
documents, of:
* Reorganized O'Sullivan Industries, Inc.,
* Reorganized O'Sullivan Industries Holdings, Inc.,
* Reorganized O'Sullivan Industries - Virginia, Inc., and
* Reorganized O'Sullivan Furniture Factory Outlet, Inc.;
A full-text copy of the 44-page Amended and Restated By-
Laws is available for free at:
http://researcharchives.com/t/s?686
2. The individual Debtors' Forms of the Amended and Restated
Certificates of Incorporation, in separate documents;
A full-text copy of the Amended Certificates of
Incorporation is available for free at:
http://researcharchives.com/t/s?687
3. Form of the Registration Rights Agreement, a full-text
copy of which is available for free at:
http://researcharchives.com/t/s?688
4. General summary of the parameters of the Management and
Director Equity Plan;
A full-text copy of the term sheets for the Management and
Director Equity Plan is available for free at:
http://researcharchives.com/t/s?689
5. Forms of the New Secured Notes and the New Secured Notes
Guarantees, a full-text copy of the forms are available
for free at http://researcharchives.com/t/s?68a
James C. Cifelli, Esq., at Lamberth, Cifelli, Stokes & Stout,
P.A., in Atlanta, Georgia, informs the Court that the Supplements
are in draft form and remain subject to continuing revision and
modification.
About O'Sullivan Industries
Headquartered in Roswell, Georgia, O'Sullivan Industries Holdings,
Inc. -- http://www.osullivan.com/-- designs, manufactures, and
distributes ready-to-assemble furniture and related products,
including desks, computer work centers, bookcases, filing
cabinets, home entertainment centers, commercial furniture, garage
storage units, television, audio, and night stands, dressers, and
bedroom pieces. O'Sullivan sells its products primarily to large
retailers including OfficeMax, Lowe's, Wal-Mart, Staples, and
Office Depot. The Company and its subsidiaries filed for chapter
11 protection on Oct. 14, 2005 (Bankr. N.D. Ga. Case No. 05-
83049). Joel H. Levitin, Esq., at Dechert LLP, represents the
Debtors. Michael H. Goldstein, Esq., Eric D. Winston, Esq., and
Christine M. Pajak, Esq., at Stutman, Treister & Glatt, P.C.,
represent the Official Committee of Unsecured Creditors. On
Sept. 30, 2005, the Debtor listed $161,335,000 in assets and
$254,178,000 in debts. (O'Sullivan Bankruptcy News, Issue No. 14;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
O'SULLIVAN IND: Debbie's Staffing Balks at Plan Confirmation
------------------------------------------------------------
Pursuant to an executory contract with Debtor O'Sullivan
Industries - Virginia, Inc., Debbie's Staffing Services, Inc.,
places temporary, contract, and direct hired personnel into
primarily industrial and office support positions at the Debtor's
South Boston, Virginia, manufacturing facility.
Debbie's Staffing objects to the confirmation of the Debtors' Plan
of Reorganization because it does not satisfy the requirements of
Sections 1129(a)(1) and 1123(b)(2) of the Bankruptcy Code, with
respect to the identification and treatment of executory
contracts.
As of the Petition Date, O'Sullivan-Virginia owed $77,678 to
Debbie's Staffing for services provided between September 23 to
October 14, 2005, Ashley S. Rusher, at Blanco Tackabery Combs &
Matamoros, P.A., in Winston-Salem, North Carolina, tells the
U.S. Bankruptcy Court for the Northern District of Georgia.
According to Ms. Rusher, the assumption of the Debbie's Staffing
Contract is critical to the continued operations of O'Sullivan-
Virginia.
However, Ms. Rusher says, the Debtors have failed to identify
whether they will assume or reject their contract with Debbie's
Staffing.
About O'Sullivan Industries
Headquartered in Roswell, Georgia, O'Sullivan Industries Holdings,
Inc. -- http://www.osullivan.com/-- designs, manufactures, and
distributes ready-to-assemble furniture and related products,
including desks, computer work centers, bookcases, filing
cabinets, home entertainment centers, commercial furniture, garage
storage units, television, audio, and night stands, dressers, and
bedroom pieces. O'Sullivan sells its products primarily to large
retailers including OfficeMax, Lowe's, Wal-Mart, Staples, and
Office Depot. The Company and its subsidiaries filed for chapter
11 protection on Oct. 14, 2005 (Bankr. N.D. Ga. Case No. 05-
83049). Joel H. Levitin, Esq., at Dechert LLP, represents the
Debtors. Michael H. Goldstein, Esq., Eric D. Winston, Esq., and
Christine M. Pajak, Esq., at Stutman, Treister & Glatt, P.C.,
represent the Official Committee of Unsecured Creditors. On
Sept. 30, 2005, the Debtor listed $161,335,000 in assets and
$254,178,000 in debts. (O'Sullivan Bankruptcy News, Issue No. 14;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
OCA INC: Voluntary Chapter 11 Case Summary
------------------------------------------
Debtor: OCA, Inc.
fdba Orthodontic Centers of America, Inc.
3850 North Causeway Boulevard, Suite 800
Metairie, Louisiana 70002
Tel: (504) 834-4392
Bankruptcy Case No.: 06-10179
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Orthodontic Centers of Alabama, Inc. 06-10180
Orthodontic Centers of Arizona, Inc. 06-10181
Orthodontic Centers of Arkansas, Inc. 06-10182
Orthodontic Centers of California, Inc. 06-10183
Orthodontic Centers of Colorado, Inc. 06-10184
Type of Business: Publicly held OCA is the leading provider of
business services to orthodontists and pediatric
dentists. The Company's client practices
provide treatment to patients throughout the
United States and in Japan, Mexico, Spain,
Brazil and Puerto Rico. See http://www.oca.com/
and http://www.ocai.com/
Headquartered in Metairie, Louisiana, OCA, Inc.,
was adversely impacted by Hurricanes Katrina and
Wilma.
In December 2005, OCA hired Jefferies & Company,
Inc., as its financial advisor and investment
banker, at a cost of $100,000 per month. In
January 2005, OCA hired Michael F. Gries at
Conway, Del Genio, Gries & Co., LLC, as its
Chief Restructuring Officer, at a cost of
$200,000 per month.
Chapter 11 Petition Date: March 14, 2006
Court: Eastern District of Louisiana (New Orleans)
Debtors' Counsel: William H. Patrick, III, Esq.
Heller Draper Hayden Patrick & Horn, LLC
650 Poydras Street, Suite 2500
New Orleans, Louisiana 70130
Tel: (504) 568-1888
Fax: (504) 522-0949
Debtors' financial condition as of December 31, 2005:
Total Assets: $545,220,000
Total Debts: $196,337,000
The Debtors did not file a list of their 20 largest unsecured
creditors.
OLD HOLLAND: Case Summary & 2 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Old Holland Road, LLC
201 South College Street
Charlotte Plaza, Suite 2020
Charlotte, North Carolina 28244-2020
Bankruptcy Case No.: 06-30373
Chapter 11 Petition Date: March 14, 2006
Court: Western District of North Carolina (Charlotte)
Judge: J. Craig Whitley
Debtor's Counsel: R. Keith Johnson, Esq.
R. Keith Johnson, P.A.
312 West Trade Street, Suite 600
Builders Building
Charlotte, North Carolina 28202
Tel: (704) 372-3867
Total Assets: $2,878,980
Total Debts: $22,443,190
Debtor's 2 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Hamilton Fay Moon $176,250
201 South College Street, Suite 2020
Charlotte, NC 28244
Douglas Simmons & Associates $58,750
8210 University
Executive Park Drive, Suite 160
Charlotte, NC 28262
OPTEUM MORTGAGE: Good Credit Support Cues S&P to Hold Ratings
-------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on
15 classes of asset-backed certificates from Opteum Mortgage
Acceptance Corp. Series 2005-1.
The affirmed ratings are based on credit support percentages that
are sufficient to maintain the current ratings. This transaction
benefits from credit enhancement provided by
overcollateralization, excess spread, and subordination.
As of the February 2006 remittance date, total delinquencies were
4.40%, while cumulative losses, as a percentage of the original
trust balance, were 0.01%. The outstanding pool balance was
71.67% of its original size.
The collateral for this transaction consists primarily of
fixed- and adjustable-rate mortgage loans secured by first and
second liens on one- to four-family residential properties.
Ratings Affirmed
Opteum Mortgage Acceptance Corp.
Series Class Rating
------ ----- ------
2005-1 A1A,A1B,A2,A3,A4 AAA
2005-1 M-1 AA+
2005-1 M-2 AA
2005-1 M-3 AA-
2005-1 M-4 A+
2005-1 M-5 A
2005-1 M-6 A-
2005-1 M-7 BBB+
2005-1 M-8 BBB
2005-1 M-9 BBB-
2005-1 M-10 BB+
PINNACLE ENTERTAINMENT: Aztar Merger Cues S&P's Positive Watch
--------------------------------------------------------------
Standard & Poor's Ratings Services revised its CreditWatch
implications on Pinnacle Entertainment Inc. (B+/Watch Neg/--) to
negative from positive, after Pinnacle signed a definitive merger
agreement to acquire the outstanding shares of Aztar Corp.
(BB/Watch Neg/--).
Ratings on Aztar remain on CreditWatch with negative implications,
where they were placed on Feb. 16, 2006.
"The CreditWatch listing on Pinnacle reflects the potential for a
substantial weakening in the company's credit profile following
the acquisition announcement," Standard & Poor's credit analyst
Michael Scerbo said.
The transaction, at $38 per share, would bring the total purchase
price to $2.1 billion, including the assumption of $723 million of
Aztar's debt.
This could result in significant incremental debt of up to
$2.1 billion at Pinnacle. At Dec. 31, 2005, Pinnacle had about
$657 million of debt outstanding. Pro forma lease-adjusted debt
to EBITDA could increase to well above levels currently expected
over the near term, depending upon how the acquisition is
financed.
Closing of the transaction is subject to, among other things,
executing the definitive documentation necessary to complete the
deal and receiving the required approvals.
Standard & Poor's will evaluate Pinnacle's financial strategies
and objectives, including its previously outlined capital spending
initiatives and potential spending associated with a redevelopment
project at the Tropicana in Las Vegas. If Standard & Poor's
downgrades Pinnacle, it is unlikely that it would be by more than
one notch.
Las Vegas-based Pinnacle owns and operates casino facilities in
Reno, Nev.; New Orleans, Bossier City, and Lake Charles, La.; and
Switzerland County, Ind. The company also operates casino
facilities in Argentina and is in the process of constructing two
facilities in St. Louis, Mo.
POPULAR ABS: S&P Affirms Ratings Due to Good Credit Support
-----------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on
31 classes of asset-backed certificates from Popular ABS Mortgage
Pass-Through Trust 2004-4 and 2004-5.
The affirmed ratings are based on credit support percentages that
are sufficient to maintain the current ratings. These
transactions benefit from credit enhancement provided by
overcollateralization, excess spread, and subordination.
As of the February 2006 remittance date, total delinquencies were
4.66% (series 2004-4) and 4.82% (series 2004-5). Cumulative
losses, as a percentage of the original trust balances, were 0.03%
(series 2004-4) and 0.04% (series 2004-5).
The outstanding pool balances, as a percentage of their original
sizes, were 65.63% (series 2004-4) and 69.17% (series 2004-5).
The collateral for both transactions consists primarily of
fixed- and adjustable-rate, fully amortizing and balloon mortgage
loans secured by first and second liens on one- to four-family
residential properties.
Ratings Affirmed
Popular ABS Mortgage Pass-Through Trust
Series Class Rating
------ ----- ------
2004-4 AF1,AF2,AF3,AF4,AF5,AF6,AV1 AAA
2004-4 M-1 AA
2004-4 M-2 A+
2004-4 M-3 A
2004-4 M-4 A-
2004-4 B-1 BBB+
2004-4 B-2 BBB
2004-4 B-3 BBB-
2004-4 B-4 BB+
2004-5 AF1,AF2,AF3,AF4,AF5,AF6,AV1A,AV1B,AV2 AAA
2004-5 M-1 AA
2004-5 M-2 A
2004-5 M-3 A-
2004-5 M-4 BBB+
2004-5 B-1 BBB
2004-5 B-2 BBB-
2004-5 B-3 BB+
RAPIDPAY LLC: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Rapidpay, LLC
17 Battery Place
New York, New York 10004
Bankruptcy Case No.: 06-10453
Chapter 11 Petition Date: March 14, 2006
Court: Southern District of New York (Manhattan)
Judge: Burton R. Lifland
Debtor's Counsel: Lawrence F. Morrison, Esq.
220 East 72nd Street
New York, New York 10021
Tel: (212) 861-1224
Estimated Assets: $500,000 to $1 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Donald Landis $1,100,000
17 Glenbrooke Drive
White Plains, New York 10605
Ser Corporation $110,545
1150 18th Street Northwest
Suite 800
Washington, D.C. 20036
Battery Commercial Associates, LLC $49,077
P.O. Box 5825
Hicksville, New York 11802
Plans Cafe $40,000
Xanthus Incorporated $35,250
Cohen Czarnik' LLP $35,000
Hall Estill $17,000
West World Financial Group $14,380
Pearce & Luz LLP $13,784
Verizon-T1 $11,679
Hoguet Newman & Regal, LLP $10,129
Clayman of Rosenberg $8,000
Noto & Oswald, P.C. $7,709
Guy N. Harrison, Esq. $7,475
NY Grant Company, Inc. $6,150
Barry L. Rosner, CPA $6,000
Kane Kessler, P.C. $5,200
The Shapiro Firm $4,220
POS Payment System $3,711
H&P Installations $3,384
RAVEN MOON: Registers 600MM Common Shares Under Compensation Plan
-----------------------------------------------------------------
Raven Moon Entertainment, Inc., filed a Registration Statement
with the Securities and Exchange Commission to allow the resale of
600,000,000 shares of its common stock issuable under its 2005
Amended And Restated Equity Compensation Plan. The common shares
are valued at $420,000 at $0.0007 per share.
This is not the first distribution under the Plan.
As reported in the Troubled Company Reporter on:
-- Mar. 1, 2006, the Company also registered 400,000,000 common
shares, and
-- Jan. 5, 2006, the Company also registered 800,000,000 common
shares issuable under the Plan.
The Company's authorized stock consists of 15,000,000,000
authorized shares of Common Stock, par value $.0001 per share,
901,954,014 shares of which were outstanding as of Mar. 6, 2006,
and 800,000,000 authorized shares of Preferred Stock, par value
$.0001 par value, 487,750 shares of which were outstanding as of
Mar. 6, 2006.
Each common share is entitled to one vote, either in person or by
proxy, on all matters that may be voted on at a shareholders
meeting, including the election of directors. The holders of
Common Stock:
(1) have equal, ratable rights to dividends from funds legally
available, when, as and if declared by the Board of
Directors of the Company;
(2) are entitled to share ratably in all of the assets of the
Company available for distribution to holders of Common
Stock upon liquidation, dissolution or winding up of the
affairs of the Company;
(3) do not have preemptive or redemption provisions; and
(4) are entitled to one noncumulative vote per share on all
matters on which shareholders may vote at all meetings of
shareholders.
The Company has appointed Florida Atlantic Stock Transfer, Inc.
7130 Nob Hill Road, Tamarac, Florida 33321, as transfer agent and
registrar for the Common Stock and Preferred Stock.
A full-text copy of the 2005 Equity Amended and Restated
Compensation Plan is available for free at
http://ResearchArchives.com/t/s?418
A full-text copy of the current Registration Statement is
available for free at http://ResearchArchives.com/t/s?68b
About Raven Moon
Raven Moon Entertainment, Inc. -- http://www.ravenmoon.net/--
develops and produces children's television programs and videos,
CD music. At http://www.ginadskidsclub.com/Raven Moon sells
DVDs, music CDs and plush Cuddle Bug toys. Raven Moon also talks
about music publishing and talent management on its Web site.
At Sept. 30, 2005, the company's balance sheet showed a $1,871,796
stockholders' deficit.
RELIANT ENERGY: Weak Finances Prompt Moody's Ratings Downgrade
--------------------------------------------------------------
Moody's Investors Service downgraded the ratings of Reliant
Energy, Inc., and its primary rated subsidiaries, Orion Power
Holdings and Reliant Energy Mid-Atlantic Power Holdings. Reliant
Energy's senior implied, corporate family and senior secured
ratings have been downgraded to B2 from B1, and its senior
subordinated convertible notes have been downgraded to Caa1 from
B3. Orion Power Holdings' senior unsecured rating has been
downgraded to B3 from B2 and REMA's semior secured pass-through
certificates have been downgraded to B2 from B1. The ratings for
Reliant, OPH and REMA are on review for possible further
downgrade.
The rating downgrades reflect the rising business and operating
risks of the consolidated enterprise, a significantly weakened
financial profile and a modest available liquidity position, given
the company's exposure to volatile commodity markets. In Moody's
opinion, Reliant's revised business plans significantly increase
the operating risk profile of the company and its cash flow
variability without any corresponding improvements to near-term
financial metrics. Moody's observes that while the market
environment for both the retail and wholesale energy markets have
demonstrated some improvement over the past three years, Reliant's
financial credit metrics have deteriorated meaningfully.
Over the past three years, Reliant's cash flow to adjusted total
debt coverage metrics have declined from approximately 10% to
roughly 5% in 2005 and its interest coverage ratios have declined
from approximately 2.0x to less than 2.0x in 2005. Moody's does
not expect any meaningful improvement to these metrics over the
near-term, which is a concern given the company's rising operating
cost pressures, capital investment needs, market development risks
and exposure to volatile commodity markets.
From a liquidity perspective, Moody's has confirmed Reliant's
Speculative Grade Liquidity rating at SGL-4, which reflects a weak
liquidity profile. We remain concerned over the possibility of
a financial covenant breach over the next 12 months, which
could, conceivably, adversely impact the company's access to its
$1.7 billion revolver. Moody's acknowledges the recent credit
facility amendments which lowered the near-term financial covenant
metrics, and we would anticipate additional restructuring activity
over the near-term.
The review for possible downgrade will focus on Reliant's ability
to produce meaningful cash flow under its revised operating
strategies, its expected improvements to operating performance
metrics, the sustainability of margins and volumes associated with
the retail electric provider business and any possible legislative
or regulatory developments that could potentially impact retail
cash flows or profitability.
The ratings downgrades and review for possible further downgrade
for Orion Power Holdings and Reliant Energy Mid-Atlantic Power
Holdings reflects the downgrades and review for possible further
downgrade at the parent, Reliant, and the increased business and
operating risks associated with managing a sizeable wholesale
merchant generation fleet, which includes an increasing pressure
to invest capital to meet higher operating performance metrics
such as capacity factors) and more stringent environmental
mandates. In addition, Moody's observes that OPH's over-all cash
flow generation capability could be somewhat constrained going
forward, post the sale of the New York City generating assets,
and a possibility for a cash trap trigger at the entity over the
near-term, which would be viewed negatively for Reliant.
Reliant's revised strategy should result in increased cash flow
variability, as the company reduces its forward sales, hedges,
fuel supply and emission allowance needs to a shorter-term focus.
Moody's observes that the ability to increase the generation
facility capacity and availability rates will be somewhat
dependent on increased capital spending, which has been relatively
modest over the past few years. In our opinion, it may take some
time before certain capital investments translate into improved
operating performances.
The review for possible further downgrade is expected to be
completed over the next 90 days.
Reliant Energy is a merchant generating company, with over 14,000
MW's of capacity and operates a retail electric provider business,
with almost 2 million customers, primarily in Texas. Reliant is
headquartered in Houston, Texas.
Downgrades:
Issuer: Orion Power Holdings, Inc.
* Senior Unsecured Regular Bond/Debenture,
Downgraded to B3 from B2
Issuer: Pennsylvania Economic Dev. Fin. Auth.
* Senior Secured Revenue Bonds, Downgraded to B2 from B1
Issuer: Reliant Energy Inc.
* Corporate Family Rating, Downgraded to B2 from B1
Issuer Rating, Downgraded to B3 from B2
* Preferred Stock Shelf, Downgraded to (P)Caa1 from (P)B3
* Preferred Stock 2 Shelf, Downgraded to (P)Caa1 from (P)B3
* Senior Secured Bank Credit Facility, Downgraded
to B2 from B1
* Senior Secured Regular Bond/Debenture, Downgraded
to B2 from B1
* Senior Secured Shelf, Downgraded to (P)B2 from (P)B1
* Senior Subordinated Conv./Exch. Bond/Debenture,
Downgraded to Caa1 from B3
* Senior Unsecured Shelf, Downgraded to (P)B3 from (P)B2
* Subordinated Shelf, Downgraded to (P)Caa1 from (P)B3
Issuer: Reliant Energy Mid-Atlantic Power Hldgs., LLC
* Senior Secured Pass-Through, Downgraded to B2 from B1
Outlook Actions:
Issuer: Orion Power Holdings, Inc.
* Outlook, Changed To Rating Under Review From Positive
Issuer: Reliant Energy Inc.
* Outlook, Changed To Rating Under Review From Stable
Issuer: Reliant Energy Mid-Atlantic Power Hldgs., LLC
* Outlook, Changed To Rating Under Review From Stable
Confirmations:
Issuer: Reliant Energy Inc.
* Speculative Grade Liquidity Rating, Confirmed at SGL-4
REPUBLIC STORAGE: Case Summary & 21 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Republic Storage Systems Company, Inc.
1038 Northeast Belden Avenue
Canton, Ohio 44705
Tel: (330) 438-5800
Bankruptcy Case No.: 06-60316
Type of Business: The Debtor produces metal lockers and
industrial storage products. See
http://www.republicstorage.com
Chapter 11 Petition Date: March 14, 2006
Court: Northern District of Ohio (Canton)
Judge: Russ Kendig
Debtor's Counsel: James Michael Lawniczak, Esq.
Calfee, Balter & Griswold, LLP
1400 McDonald Investment Center
800 Superior Avenue
Cleveland, Ohio 44114
Tel: (216) 622-8200
Estimated Assets: $10 Million to $50 Million
Estimated Debts: $10 Million to $50 Million
Debtor's 21 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Metal One America, Inc. Trade Debt $2,443,955
98989 Collections Center
Chicago, IL 60693
Valspar Corporation Trade Debt $302,779
540023rd Avenue
Moline, IL 61265
Jamestown Paint Company Trade Debt $216,174
108 Main Street
Jamestown, PA 16134
Universal Steel Trade Debt $144,869
Jemison Demsey Metals Trade Debt $118,557
Master Lock Company Trade Debt $107,448
Greif Brothers Corp. Trade Debt $103,972
Independent Steel Co. Trade Debt $102,413
Viking 7 Worthington Trade Debt $73,046
Steel Enterprise
MacSteel Service Centers USA Trade Debt $58,983
Chesterfield Steel Trade Debt $53,572
Vail Industries Trade Debt $49,716
Michigan & Merrick Trade Debt $49,160
Sheffield Steel Products, Inc. Trade Debt $39,877
Crawford Products Trade Debt $38,738
Pioneer Tool & Die Co. Trade Debt $30,365
Henkel Surface Tech Trade Debt $26,296
Fibercel Corp. Trade Debt $26,227
Wisconsin Bench Trade Debt $22,621
Metallics, Inc. Trade Debt $19,746
J. Gregory Smith & Son, Inc. Trade Debt $17,886
RIDDELL BELL: High Debt Leverage Cues S&P to Hold B+ Corp. Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed all of its ratings on
Riddell Bell Holdings Inc., including the 'B+' corporate credit
rating.
The ratings were removed from CreditWatch with negative
implications, where they were placed on Feb. 8, 2006.
In addition, a 'B+' senior secured bank loan and '2' recovery
rating were assigned to Easton-Bell Sports Inc.'s new $415 million
bank loan, indicating an expectation of substantial recovery of
principal in the event of a payment default.
The bank loan will consist of a $70 million revolving credit
facility maturing in 2012, a Canadian $12 million revolving
credit facility maturing in 2012 and a $335 million term loan B
maturing in 2012.
Proceeds from the bank facility, as well as additional equity from
sponsors, primarily will be used to acquire Easton Sports Inc. for
$385 million, and repay some existing Riddell Bell Holdings' debt.
Upon completion of the acquisition, Riddell Bell Holdings will
change its name to Easton-Bell Sports Inc. The outlook is stable.
Approximately $555 million of pro forma debt is affected by this
action.
"The ratings affirmation is based on Riddell Bell's stable
operating performance since the Bell Sports acquisition in
September 2004, and our expectations that the company's capital
structure and liquidity post-acquisition will remain in line with
the current ratings over the intermediate term," Standard & Poor's
credit analyst Patrick Jeffrey said.
The addition of Easton Sports should help improve the company's
product diversity within the sports equipment category by adding
hockey and baseball equipment to its existing portfolio that
consists primarily of football and bike equipment.
The stable outlook assumes no significant integration issues with
the acquisition, and no significant debt-financed acquisitions.
The ratings reflect Riddell Bell Holdings Inc.'s high debt
leverage, participation in the highly competitive sporting goods
industry, lack of geographic diversity, and some risks of
integrating Easton Sports' operations. These risks are mitigated
by the company's leading market positions in football, bike,
baseball and hockey equipment.
RIM SEMICONDUCTOR: Gets $6 Million in Private Conv. Debt Placement
------------------------------------------------------------------
Rim Semiconductor Company (OTCBB: RSMI) closed a successful
$6 million private placement of its two year 7% Senior Secured
Convertible Debentures to institutional and private investors.
Rim Semi intends to use these funds to accelerate the
commercialization of the Embarq(TM) product family, and to provide
the high-volume, low-cost ASSP semiconductor for sale. Worldwide
demand for broadband continues to soar, and the Company believes
that its product line is uniquely suited to meet it. Rim Semi's
flagship product, the Embarq(TM) E30 digital signal processor, is
a dual-function chip that combines both the long-reach and high
data rate of DSL plus the cost reduction of VoIP into one unique
and powerful package.
"Customers and trade partners are telling us that Rim Semi's
product has the highest data rates over the longest distances",
Brad Ketch, president and chief executive officer stated. "This
power, combined with the potential for our integrated VoIP to
dramatically lower cost, means to me that demand for our products
is sure to be very strong."
$810,000 of the proceeds from this private placement will repay in
full the Company's obligations under loans made in December 2005
and January 2006. The remainder of the proceeds of this financing
will be used for increasing the engineering and marketing staffs,
investing more in research and development, incurring the expenses
necessary to have the ASSP fabricated at a chip foundry, and for
general corporate purposes, including fees and expenses relating
to this transaction. This work is intended to bring the Company
closer to achieving its first orders.
Other Balance Sheet Transactions
The Company also reported that it received approximately $570,000
in the aggregate from the exercise of warrants to purchase Company
common stock.
Further, the Company reported that it eliminated $845,000 in
current liabilities by issuing an aggregate of 12,064,494 shares
of common stock in exchange for the cancellation of six promissory
notes. The notes were held by seven trusts, which have been
investors in the Company since 2001.
"The institutional and private investors who participated in these
transactions enthusiastically and confidently support the Rim Semi
management and advisory team and their successes in bringing the
Embarq(TM) chip to market this year", stated Ray Willenberg, Jr.,
chair of the Company's board of directors. "Most of the investors
have invested previously and continue to show great confidence in
the Company and its team."
The 7% Senior Secured Convertible Debentures are secured by a lien
on Rim Semiconductor's assets. As part of this transaction, the
investors also received warrants to purchase shares of Rim
Semiconductor common stock. $3 million of the $6 million was
placed in escrow and will be released to the Company if the
Company amends its charter before April 25, 2006 to increase the
number of shares of its authorized common stock. The proposed
increase has been approved by the Company's Board of Directors and
is being submitted to a vote of the Company's shareholders at the
2006 annual meeting to be held on April 18, 2006.
About Rim Semiconductor
Headquartered in Portland, Oregon, Rim Semiconductor Company fka
New Visual Corporation -- http://www.rimsemi.com/-- is an
emerging fabless communications semiconductor company. It has
made available an advanced technology that allows data to be
transmitted at greater speed and across extended distances over
existing copper wire.
* * *
Going Concern Doubt
As reported in the Troubled Company Reporter on Feb. 2, 2006,
Marcum & Kliegman LLP expressed substantial doubt about Rim
Semiconductor Company fka New Visual Corporation's ability to
continue as a going concern after it audited the Company's
financial statements for the fiscal years ended Oct. 31, 2005, and
2004. The auditing firm pointed to Rim's $3,145,391 working
capital deficiency at Oct. 31, 2005. Rim Semiconductor's
Oct. 31 balance sheet shows strained liquidity with $407,512 in
current assets available to pay $3,552,903 of current liabilities
coming due within the next 12 months.
SASKATCHEWAN WHEAT: DBRS Holds B Rating on Sr. Subordinated Notes
-----------------------------------------------------------------
Dominion Bond Rating Service changed the trends on the debts of
Saskatchewan Wheat Pool Inc., to Positive from Stable and
confirmed these ratings:
* Senior Secured Debt -- B (high)
* Senior Subordinated Notes -- B
The trend change reflects SWP's significant progress in improving
its credit risk profile in F2005 with its restructuring, which
followed three consecutive years of drought. The Company has
generated positive operating and net income for the past two years
and debt levels have decreased dramatically. In addition, the
grain industry's elevator base continues to rationalize, providing
greater opportunity for enhanced operating results.
While SWP has improved its ability to pursue new business
opportunities with its greater financial strength, it will not be
without challenge given the highly competitive nature and
regulation of the industry that has made strategic planning
difficult for all grain handlers. DBRS notes that the industry's
ratings are impacted by its sensitivity to the size and quality of
the grain crop -- which results in inherently volatile earnings.
SWP, in particular, continues to remain more sensitive to
fluctuating crop production levels than its main competitors, due
to its business concentration in grain handling in Saskatchewan.
In terms of near-term outlook, DBRS acknowledges expectations of
improved operating income from grain handling to more normal
levels for F2006 and F2007.
Higher operating income combined with lower interest costs should
provide a good boost to cash flow that will be available for
significantly higher investment in capex, business improvement,
and growth initiatives.
DBRS anticipates that increased earnings and cash flow from normal
crop conditions in the context of a more rationalized grain
elevator base would be reflective of a structural improvement in
the credit risk profile of the Company.
TELEVIDEO INC: Case Summary & 8 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: TeleVideo, Inc.
2345 Harris Way
San Jose, California 95131
Tel: (408) 954-8333
Fax: (408) 954-0622
Bankruptcy Case No.: 06-10242
Type of Business: The Debtor develops and manufactures
Windows-based network terminals, and
specializes in the video display terminal
industry. See http://www.televideo.com
Chapter 11 Petition Date: March 14, 2006
Court: District of Delaware (Delaware)
Judge: Kevin Gross
Debtor's Counsel: Jami B. Nimeroff, Esq.
Buchanan Ingersoll, P.C.
1007 North Orange Street
The Nemours Building, Suite 1110
Wilmington, Delaware 19801
Tel: (302) 428-5500
Fax: (302) 428-3996
Debtor's financial condition as of January 31, 2006:
Total Assets: $2,284,670
Total Debts: $2,692,712
Debtor's 8 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Hitron Systems, Inc. Trade Debt $311,842
Hitron B/D, 726-5 Suso-Dong
KangNam-Gu, Seoul, 135-220
Korea
All American Semi Trade Debt $70,005
230 Devcon Drive
San Jose, CA 95112
Neoware Systems Trade Debt $20,288
P.O. Box 8500
Philadelphia, PA 19178-4016
Merrill Communications LLC Trade Debt $7,656
AT&T Global Customer Former Utility $4,586
Care Center Provider
Pacific Gas & Electric Former Utility $4,505
Company - Legal Department Provider
American Stock Transfer & Trade Debt $4,000
Trust Company
AT&T Business Services Former Utility $2,205
Provider
TELOGY INC: Hires Alvarez & Marsal as Financial Advisor
-------------------------------------------------------
Telogy Inc. and e-Cycle, L.L.C., sought and obtained authority
from the U.S. Bankruptcy Court for the Northern District of
California to employ Alvarez & Marsal, LLC as their financial
advisor.
Alvarez & Marsal is expected to:
a. prepare a comprehensive analysis of the business,
operations, financial condition and prospects of the
Company;
b. assist management in analyzing the Company's strategic and
business alternatives;
c. assist the Company in assessing its cash flow and income
projections;
d. develop an interactive financial model projecting the
future financial performance of the Company;
e. analyze existing direct and contingent liabilities of the
Company;
f. determine the debt servicing capability of the Company and
additional funding requirements;
g. assist the Company in negotiating and structuring
financing, including the DIP facility and exit financing;
h. assist with development of a restructuring or
recapitalization plan;
i. assist the Company in its presentations to and negotiations
with key creditors;
j. assist with post bankruptcy strategic planning;
k. provide financial advice to the Company in developing and
seeking approval of a restructuring plan, including a plan
of reorganization under chapter 11 of the Bankruptcy Code;
l. participate in hearings before the bankruptcy court; and
m. perform such other services as may be requested by the
Debtors or their counsel to aid the Debtors in the
operation and reorganization of the businesses.
Marc Liebman, an A&M Director, tells the Court that the Firm's
professionals bill:
Designation Hourly Rate
----------- -----------
Managing Directors $475 - 690
Directors $375 - 510
Associates $275 - 400
Analysts $150 - $300
Paraprofessionals $50 - $75
Mr. Liebman assures the Court that the Firm is "disinterested" as
that term is defined in Section 101(14) of the bankruptcy Code.
A full-text copy of the Debtors' engagement letter with Alvarez &
Marsal is available for a fee at:
http://www.researcharchives.com/bin/download?id=060313205108
About Telogy
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.
TEC Foods: Gets Court Okay to Hire UHY LLP as Tax Accountants
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Michigan
gave TEC Foods, Inc., permission to retain UHY LLP as its tax
accountant.
UHY LLP will prepare the Debtor's tax return and combined annual
balance sheet for the fiscal year ending Nov. 29, 2004.
Steven McCarty, principal of UHY LLP, tells the Court that he will
be the lead person for this engagement and bills $300 per hour.
Mr. McCarty discloses that the Firm's other professionals bill
between $120 to $350 per hour.
Mr. McCarty assures the Court that the Firm does not represent any
interest adverse to the Debtor, its estate or its creditors.
About TEC Foods
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.
TXU CORP: Appoints Mike Childers as CEO of Generation Development
-----------------------------------------------------------------
TXU Corp.'s (NYSE: TXU) leadership team changes to align the
organization to drive the company's growth strategy, including the
naming of a chief executive officer of Generation Development. In
addition, the company announced personnel changes for the
positions of chief financial officer and general counsel.
TXU has named Mike Childers chief executive officer of Generation
Development and has launched a search for a new chief executive
officer of Generation Construction. Both roles report directly to
C. John Wilder, chairman and CEO of TXU Corp. Mr. Childers is a
seasoned industry executive with experience in developing power
generation facilities across the country. In his role, Mr.
Childers will coordinate all power generation development
opportunities that TXU pursues, including the previously announced
Oak Grove and Sandow 5 projects. The new generation construction
position will oversee all aspects of power plant construction
associated with these developments; TXU is seeking an executive
with a proven track record in managing large scale, complex energy
infrastructure construction projects. Mr. Childers will have
responsibility for generation construction until this position is
filled.
The current leadership team will continue to drive the company's
core business operations.
TXU Electric Delivery, led by Tom Baker, is focused on achieving
top-decile system reliability, safety, and productivity in the
regulated transmission and distribution business. TXU Energy
Holdings operates in the competitive Texas electric power market
through TXU Power, TXU Wholesale and TXU Energy.
TXU Power, led by Mike Greene, seeks to operate safely and execute
a business plan that establishes the business as the most
productive and lowest-cost operator of solid fuel plants in the
U.S.
TXU Wholesale, led by Mike McCall, strives for commercial
excellence in optimizing generation assets, sourcing power for the
retail business, and monitoring and managing TXU's commodity risk
program.
TXU Energy's retail business, led by Jim Burke, is focused on
providing outstanding customer service and developing innovative
product offerings that clearly distinguish TXU Energy from its
competitors.
TXU also reported that Kirk Oliver, the company's chief financial
officer, and Eric Peterson, the company's general counsel, will be
leaving the company. Both executives intend to pursue other
opportunities as the company transitions to the third, growth-
focused phase of its restructuring program.
"As we move to our growth phase, this is the ideal time for
management changes. Mr. Oliver and Mr. Peterson played important
roles in restructuring TXU's business and financial portfolio and
eliminating billions of dollars of litigation risks. I thank both
of them for their efforts," C. John Wilder, chairman and CEO of
TXU Corp, said.
TXU has launched a search for a new chief financial officer.
While the search is underway, David Campbell, executive vice
president of corporate planning, strategy, and risk, will provide
continuity and leadership by expanding his current duties to
include Kirk's responsibilities.
About TXU Corp
Based in Dallas, Texas, TXU Corp. -- http://www.txucorp.com/--
is an energy company that manages a portfolio of competitive and
regulated energy businesses in North America. In TXU Corp.'s
unregulated business, TXU Energy provides electricity and related
services to 2.5 million competitive electricity customers in
Texas, more customers than any other retail electric provider in
the state. TXU Power has over 18,300 megawatts of generation in
Texas, including 2,300 MW of nuclear and 5,837 MW of lignite/coal-
fired generation capacity. The company is also one of the largest
purchasers of wind-generated electricity in Texas and North
America. TXU Corp.'s regulated electric distribution and
transmission business, TXU Electric Delivery, complements the
competitive operations, using asset management skills developed
over more than one hundred years, to provide reliable electricity
delivery to consumers. TXU Electric Delivery operates the largest
distribution and transmission system in Texas, providing power to
more than 2.9 million electric delivery points over more than
99,000 miles of distribution and 14,000 miles of transmission
lines.
TXU Corp.'s 6.55% Senior Notes due 2034 carry Moody's Investors
Service's Ba1 rating and Standard & Poor's BB+ rating.
UNION CARBIDE: Moody's Lifts B1 Sr. Unsecured Debt Rating to Ba2
----------------------------------------------------------------
Moody's Investors Service upgraded the ratings on the senior
unsecured debt of Union Carbide Corporation to Ba2 from B1. The
upgrade reflects the significant decline in the number of
outstanding asbestos-related claims, absolute number new claims,
and the significant decline in yearly legal and settlement costs,
as well as the significant reduction in balance sheet debt.
Carbide's rating outlook is stable. Moody's also affirmed the
A3 ratings of Carbide's ultimate parent company, The Dow Chemical
Company, and reiterated its negative rating outlook.
Upgrades:
Issuer: Brownsville TX, Navigational District
* Revenue Bonds, Upgraded to Ba2 from B1
* Senior Unsecured Revenue Bonds, Upgraded to Ba2 from B1
Issuer: Camden, Goergia, Development Authority
* Senior Unsecured Revenue Bonds, Upgraded to Ba2 from B1
Issuer: Gulf Coast Waste Disposal Authority, Texas
* Revenue Bonds, Upgraded to Ba2 from B1
* Senior Unsecured Revenue Bonds, Upgraded to Ba2 from B1
Issuer: Hot Springs, AR
* Revenue Bonds, Upgraded to Ba2 from B1
Issuer: Kanawha, WV
* Revenue Bonds, Upgraded to Ba2 from B1
Issuer: Kanawha, WV, County Commission
* Revenue Bonds, Upgraded to Ba2 from B1
* Senior Unsecured Revenue Bonds, Upgraded to Ba2 from B1
Issuer: Mobile, AL
* Revenue Bonds, Upgraded to Ba2 from B1
Issuer: Ohio Water Development Authority
* Revenue Bonds, Upgraded to Ba2 from B1
Issuer: Puerto Rico Ind Med&Env Poll Ctl Fac Fin Auth
* Revenue Bonds, Upgraded to Ba2 from B1
Issuer: South Charleston, WV
* Revenue Bonds, Upgraded to Ba2 from B1
* Senior Unsecured Revenue Bonds, Upgraded to Ba2 from B1
Issuer: St. Charles, LA
* Senior Unsecured Revenue Bonds, Upgraded to Ba2 from B1
Issuer: Tyler, WV
* Revenue Bonds, Upgraded to Ba2 from B1
Issuer: Union Carbide Chemicals & Plastics Co. Inc.
* Senior Unsecured Regular Bond/Debenture, Upgraded to Ba2
from B1
Issuer: Union Carbide Corporation
* Senior Unsecured Medium-Term Note Program, Upgraded to Ba2
from B1
* Senior Unsecured Regular Bond/Debenture, Upgraded to Ba2
from B1
Issuer: West Side Calhoun, TX, Navig. Dist.
* Senior Unsecured Revenue Bonds, Upgraded to Ba2 from B1
Issuer: West Side Calhoun, TX
* Revenue Bonds, Upgraded to Ba2 from B1
Outlook Actions:
Issuer: Union Carbide Chemicals & Plastics Co. Inc.
* Outlook, Changed To Stable From Negative
Issuer: Union Carbide Corporation
* Outlook, Changed To Stable From Negative
The upgrade reflects Moody's belief that Carbide may be able to
address its current and future asbestos liability without
increasing its existing reserve balance; $1.5 billion as of
December 31, 2005. The decline in cases and average settlement
values over the past 12 months has been substantial with total
legal and settlement costs declining from roughly $386 million in
2004 to $214 million in 2005.
Additionally, new claims have fallen to an average of seven
thousand per quarter, over the last two quarters of 2005, from an
average of over 14 thousand per quarter in 2004. While Moody's
does not expect these costs, and the number of new claims, to
continue to decline at the same pace, the company's projected
liability appears to be more manageable, relative to the financial
resources available to Carbide.
Moody's noted that Dow has not taken any dividends from Carbide
since 2002. If Dow elects to keep elevated levels of cash at
Carbide on a long-term basis, this would further improve the
credit profile of Carbide. As of Dec. 31, 2005, Carbide had over
$1.6 billion on loan to Dow, a large part of this cash was related
to the sale of Carbide's equity interest in UOP LLC in November of
2005. Furthermore, Carbide reduced its debt in 2005 by over $580
million to roughly $830 million.
Carbide Ba2 rating reflects Moody's concern over the inherent
uncertainty with regard to product liability litigation,
especially since a Carbide subsidiary was a producer of asbestos.
While settlements with individual claimants have declined, Moody's
remains concerned that there is a potential for additional
litigation that is not captured in the existing caseload.
Carbide's success against Kelly-Moore may discourage similar
lawsuits from other companies, but Moody's noted that there is one
similar lawsuit in California.
Carbide's stable outlook reflects the balance between the
uncertainty with regard to asbestos product liability exposure and
the decline in spending on settlements and legal expenditures
related to these lawsuits. Moody's is unlikely to raise the
company's rating further until the company has experienced a
sustained decline in settlement costs and new cases from current
levels, and no new product liability issues have arisen.
Additionally, in the unlikely event that federal legislation is
passed that would greatly reduce uncertainty over Carbide's
ultimate asbestos-related liability, Moody's could upgrade the
company's senior unsecured ratings. However, if the number of new
cases increases significantly or if there is a substantial and
sustained increase in settlement and litigation costs, Moody's
would likely review the appropriateness of the Ba2 ratings.
Carbide's Ba2 rating also reflects the absence of a guarantee from
Dow. However, Moody's believes that Dow will continue to support
Carbide unless it is overwhelmed by the combination of unusually
large settlements and the exhaustion of insurance coverage.
According to Moody's recently release rating methodology for the
chemical industry, Carbide would map to an average rating in the
high Ba range, assuming no financial support from Dow and after
capitalizing its asbestos liability as debt on the balance sheet.
The key factor driving the company's ratings is its cost position
which includes a measure of contingencies as a percentage of
operating cash flow. In addition, the company's business profile
is weak given its large exposure to volatile feedstocks and
somewhat limited operational diversity. Average financial metrics
for the company are relatively strong indicating a higher (Baa)
rating.
Moody's also affirmed the A3 corporate family ratings of Dow and
reiterated its negative outlook. Although favorable ethylene
chain global supply-demand fundamentals are expected to allow Dow
to generate free cash flow in excess of $2.0 billion again in
2006, Moody's remains concerned that the company's financial
metrics on average do not support an A3 rating at the current debt
level. The negative outlook reflects Moody's concern that Dow
financial performance may not rise to the level necessary that
would, on average, support an A3 rating over the cycle. Moody's
noted that Dow had an unusually strong fourth quarter, relative to
its competitors, and was able to overcome significant problems in
the US to generate higher than expected earnings.
Headquartered in Midland, Michigan, The Dow Chemical Company is a
diversified chemicals and plastics producer that generated over
$46 billion of revenues in 2005. Union Carbide, headquartered in
Houston, Texas is a wholly owned subsidiary of Dow. Union
Carbide's 2005 revenues totaled $6.4 billion.
URBAN HOTELS: Wants to Sell Assets to EBUS for $23 Million
----------------------------------------------------------
Urban Hotels Inc. asks the U.S. Bankruptcy Court for the Central
District of California, Los Angeles Division, for authority to
sell substantially all of Lax Plaza Hotel's assets free and clear
of liens and encumbrances to EBUS, Inc., for $23 million, subject
to higher and better offers.
The sale will include EBUS' assumption of certain personal
property leases. The total payments owed on those leases is
$1 million.
The Debtor reminds the Court that it previously filed a similar
motion seeking approval of a proposed sale of the LAX Hotel assets
to Seemyun Kymm. The Court denied that motion after objections
from a number of parties and Seemyun Kymm exercised a contractual
right to walk away from the agreement.
EBUS Agreement
The Debtor discloses that it has entered into an agreement with
EBUS, Inc., to sell all assets of LAX Hotel for approximately $23
million. Unlike the Kymm agreement, the Debtor tells the Court
that it has removed two provisions in its agreement with EBUS:
* payment to the Debtor's parent company for consulting and
non-competition, and
* payment to a broker for $230,000.
The Debtor also asks the Court to approve a break-up fee of
$175,000 to EBUS as the stalking horse bidder.
Use of Proceeds
The Debtor believes that the proceeds of the sale will be
sufficient to pay all creditors and any taxes, which may be
payable due to the sale.
Liens Against Hotel Assets
The Debtor tells the Court that it owes:
1. $1,030,000 in taxes, for which the taxing authorities hold
statutory liens;
2. $10.4 million to First Credit Bank, the first deed of trust
holder; and
3. $3.8 million to AN Capital, the second priority deed of
trust holder.
The Debtor and Specialty Finance dispute whether their agreement
covering a significant portion of personal property assets located
at the hotel and used in the hotel operations is a lease or a
financing agreement. The Debtor owes Specialty Finance $2 million
if it is determined that the transaction was a property perfected
secured sale. If the transaction is a true lease, it will be
assumed by EBUS.
A full-text copy of the Debtor's Sale Agreement with EBUS is
available for a fee at:
http://www.researcharchives.com/bin/download?id=060313221430
About Urban Hotels
Headquartered in Culver City, California, Urban Hotels Inc.,
operates Lax Plaza Hotel. The Company filed for chapter 11
protection on Nov. 29, 2005 (Bankr. C.D. Calif. Case No.
05-50140), to stop a foreclosure sale by AN Capital, Inc.
M. Jonathan Hayes, Esq., of Woodland Hills, California, represents
the Debtor in its restructuring efforts. Daniel H. Reiss, Esq.,
represents the Official Committee of Unsecured Creditors. When
the Debtor filed for protection from its creditors, it listed
$23,000,000 in assets and $20,000,000 in debts.
URBAN HOTELS: Judge Ahart Sets April 14 as Plan-Filing Deadline
---------------------------------------------------------------
The Hon. Alan M. Ahart gave Urban Hotels Inc. until Apr. 14, 2006,
to file its chapter 11 plan reorganization. Judge Ahart also set
June 14, 2006, as the Disclosure Statement approval deadline and
Aug. 14, 2006, as the confirmation deadline.
Judge Ahart says these extended deadlines are appropriate to
reflect new events in the Debtor's chapter 11 proceedings.
Judge Ahart related that in a chapter 11 status conference held
last Jan. 11, 2006, the parties involved contemplated that the
Debtor would file a motion to sell substantially all of its assets
and the sale hearing was to take place on Feb. 22, 2006. However,
at the sale procedures hearing, the Debtor revealed that Seemyun
Kymm terminated the agreement to purchase the Debtor's LAX Plaza
Hotel assets. Thus the Court denied the first sale procedures
motion.
The Debtor has filed new motions reflecting a new agreement to
sell the LAX Plaza Hotel to EBUS, Inc., subject to higher and
better offers.
About Urban Hotels
Headquartered in Culver City, California, Urban Hotels Inc.,
operates Lax Plaza Hotel. The Company filed for chapter 11
protection on Nov. 29, 2005 (Bankr. C.D. Calif. Case No.
05-50140), to stop a foreclosure sale by AN Capital, Inc.
M. Jonathan Hayes, Esq., of Woodland Hills, California, represents
the Debtor in its restructuring efforts. Daniel H. Reiss, Esq.,
represents the Official Committee of Unsecured Creditors. When
the Debtor filed for protection from its creditors, it listed
$23,000,000 in assets and $20,000,000 in debts.
W.R. GRACE: Judge Fitzgerald Names Sam Pointer as Plan Mediator
---------------------------------------------------------------
The Honorable Judith K. Fitzgerald of the United States Bankruptcy
Court for the District of Delaware appoints Sam C. Pointer, Jr.,
as plan mediator in W.R. Grace & Co., and its debtor-affiliates'
chapter 11 cases.
Judge Pointer will have 60 days to mediate a consensual plan of
reorganization and report to the Bankruptcy Court with respect to
the general status of those discussions.
The reporting, however, will not include any description or
characterization of any party's positions.
Judge Fitzgerald rules that Judge Pointer will be retained under
these terms:
(1) Judge Pointer will be compensated for his reasonable fees
and for the actual and necessary expenses he incurs in
connection with his work. The Mediator's fees will be
based on the actual amount of time he spends providing
services and his billing rate will not exceed $600 per
hour. From time to time, the Mediator may also obtain
assistance from his partner, Robin Hinkle, whose hourly
rate is less than the Mediator's rate.
(2) If the Mediator incurs time or out-of-pocket expenses in
rendering services in a given month, then on or before
the last day of the immediately following month, the
Mediator will file a written billing statement that will
conform with the reporting requirements.
(3) The Mediator's billing statement will include:
(i) a chronological itemization of services performed,
including the date each service was performed,
the amount of time spent in performing each
service, and a narrative description of each
service performed; and
(ii) an itemization of actual and necessary expenses
incurred by the Mediator.
When charges are made for travel and related expenses,
each travel expense and each hotel and meal expense will
be separately stated.
(4) If no parties object to any aspect of the billing
statement, the Debtors will pay the reflected billing
amounts allowed by the Court as administrative expense
of the Debtors' bankruptcy estates.
The Debtors will indemnify, defend and hold the Mediator harmless
from any claims relating to the performance of his duties as
Mediator.
Judge Fitzgerald rules that if the Mediator believes that he is
entitled to payment for any amounts on account of the Debtors'
indemnification, contribution, or reimbursement obligations,
before the earlier of:
(i) the entry of an order confirming a Chapter 11 plan in
the Debtors' cases; and
(ii) entry of an order closing the Debtors' cases,
the Mediator must file an application, and the Debtors may not
pay any amounts to the Mediator before the entry of an order by
the Court approving the payment.
Judge Fitzgerald affirms that the Mediator:
-- is a "disinterested person" within the meaning of
Section 101(14) of the Bankruptcy Code;
-- holds no interest adverse to the Debtors or their estates
for the matters for which he is being employed; and
-- has no connection to the Debtors, their creditors, or
other related parties.
Judge Pointer is a partner at Lightfoot, Franklin & White, L.L.C.,
in Birmingham, Alabama.
Judge Pointer served as a United States District Judge for the
Northern District of Alabama from 1970 to 2000, and as the
Northern District's Chief Judge from 1982 to 1999. He also
served as a judge on the Temporary Emergency Court of Appeals
from 1980 to 1987.
During his almost thirty years on the bench, Judge Pointer
presided over the trial or settlement of a wide variety of major
class, multi-district, multiparty, and other complex cases. As
chairman of the Board of Editors, he was the principal author of
the Manual for Complex Litigation and he served for seven years as
a member of the Judicial Panel on Multidistrict Litigation.
While on the federal bench, Judge Pointer served as Chairman of
the Advisory Committee on Civil Rules and as a member of:
* the Judicial Conference of the United States;
* the Standing Committee on the Rules of Practice and
Procedure;
* the Judicial Ethics Committee; and
* the Judicial Council for the Eleventh Circuit.
Following his retirement from the bench, Judge Pointer joined
Lightfoot in April 2000.
In addition to working on litigation at the trial and appellate
levels on behalf of the firm's clients, Judge Pointer regularly
serves as a mediator and arbitrator and is on the National Panel
of the C.P.R. Institute for Dispute Resolution. He has also been
specially engaged by other law firms as a consultant on class and
multi-district litigation and as an expert witness on litigation-
related issues.
About W.R. Grace
Headquartered in Columbia, Maryland, W.R. Grace & Co. --
http://www.grace.com/-- supplies catalysts and silica products,
especially construction chemicals and building materials, and
container products globally. The Company and its debtor-
affiliates filed for chapter 11 protection on April 2, 2001
(Bankr. Del. Case No. 01-01139). James H.M. Sprayregen, Esq., at
Kirkland & Ellis, and Laura Davis Jones, Esq., at Pachulski,
Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the
Debtors in their restructuring efforts. The Debtors hired
Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.
Stroock & Stroock & Lavan LLP represent the Official Committee of
Unsecured Creditors. The Creditors Committee tapped Capstone
Corporate Recovery LLC for financial advice. David T. Austern,
the legal representative of future asbestos personal injury
claimants, is represented by Orrick Herrington & Sutcliffe LLP and
Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., and
Nathan D. Finch, Esq., at Caplin & Drysdalerepresent the
Official Committee of Asbestos Personal Injury Claimants.
The Asbestos Committee of Property Damage Claimants tapped
Scott L. Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin
Sumberg Baena Price & Axelrod LLP to represent it. Lexecon,
LLP, provided asbestos claims consulting services to the Official
Committee of Equity Security Holders.
WCI STEEL: Gets Consensual Resolution on Plan of Reorganization
---------------------------------------------------------------
WCI Steel, Inc., reported that the parties involved in the
company's Chapter 11 case have reached an agreement in principle
to settle outstanding issues involved in the confirmation of the
amended noteholders' plan of reorganization.
A hearing on the reorganization plan is scheduled for March 28 in
U.S. Bankruptcy Court in Akron.
Confirmation of the plan and ratification of the collective
bargaining agreement by the United Steelworkers union will permit
WCI to conclude its Chapter 11 case and return to the market in a
much-improved competitive position.
"We are obviously pleased that our exit from bankruptcy is in
sight," Patrick G. Tatom, WCI's president and chief executive
officer, said. "Emergence from Chapter 11 will allow everyone at
WCI to focus our full energy on building our future as a strong
and independent custom flat-rolled steel producer."
Mr. Tatom expressed gratitude to all parties involved in efforts
to achieve this consensual resolution.
"We also are deeply gratified by the support of our customers as
well as our suppliers, creditors and employees throughout this
process," Mr. Tatom said.
WCI filed a voluntary petition for protection under Chapter 11 of
the U.S. Bankruptcy Code on Sept. 16, 2003.
The agreement involves WCI's ultimate parent, The Renco Group,
Inc. assuming the responsibility of the existing WCI pension plan,
with certain support payments to be made to Renco by the
reorganized WCI. The USW and the Pension Benefit Guaranty Corp.
have endorsed the agreement.
Under the agreement in principle, Renco will assume WCI's existing
pension plan, resulting in preservation of retiree pension
benefits.
In return, the Reorganized WCI will contribute to the existing
pension plan between approximately $15 million and $25 million,
depending on the tax consequences of the reorganization. The
agreement eliminates all claims filed by the Pension Benefit
Guaranty Corporation against WCI.
The Noteholders Plan is otherwise unchanged and will result in the
issuance of $100 million 8% secured notes and 9 million shares of
preferred and common stock. The Noteholders will receive all of
the new notes and virtually all of the equity of the reorganized
company on account of their claims and their agreements to invest
$50,000,000 in the reorganized company. The Noteholders have
asserted that the reorganized company will have a total enterprise
value of between $275 million and $325 million.
Unsecured trade creditors will receive between 20% and 22% of
their claims in cash.
The USW is a party to the agreement in principle and a supporter
of the Noteholders' Plan, which provides for implementation of a
new collective bargaining agreement and retiree medical plan
negotiated by the USW, subject to the ratification by the members.
Renco's assumption of the existing pension plan ensures that all
retirees and other beneficiaries of that plan will receive the
benefits provided under the plan without interruption.
About WCI Steel
Headquartered in Warren, Ohio, WCI Steel, Inc., is an integrated
steelmaker producing more than 185 grades of custom and commodity
flat-rolled steel at its Warren, Ohio facility. WCI products are
used by steel service centers, convertors and the automotive and
construction markets. WCI Steel filed for chapter 11 protection
on Sept. 16, 2003 (Bankr. N.D. Ohio Case No. 03-44662). Christine
M. Pierpont, Esq., and G. Christopher Meyer, Esq., at Squire,
Sanders & Dempsey, L.L.P., represent the Company. When WCI Steel
filed for chapter 11 protection it reported $356,286,000 in total
assets and liabilities totaling $620,610,000.
WESTPOINT STEVENS: Court Asks Parties How to Dispose Sale Proceeds
------------------------------------------------------------------
The Honorable Robert D. Drain directed all parties-in-interest to
submit their briefs regarding the proper implementation of the
order entered by Judge Laura Taylor Swain of the U.S. District
Court for the Southern District of New York on November 16, 2005,
as amended on December 7, 2005.
Judge Drain wanted the parties to address the issue on the
disposition of certain securities that constitute proceeds of sale
of WestPoint Stevens, Inc., and its debtor-affiliates' assets.
In compliance with that direction, three parties delivered their
briefs or memorandum of law to the Bankruptcy Court:
(a) the Second Lien Lenders, which consists of GSC Partners,
Pequot Capital Management, Inc. and Perry Principals LLC;
(b) the Steering Committee, which consists of Contrarian
Funds, LLC, Satellite Senior Income Fund, LLC, CP Capital
Investments, LLC, Wayland Distressed Opportunities Fund I-
B, LLC, and Wayland Distressed Opportunities Fund I-C,
LLC; and
(c) the Aretex Parties, which consists of Aretex LLC,
WestPoint International, Inc., and WestPoint Home, Inc.
The Second Lien Lenders
The Second Lien Lenders ask the Bankruptcy Court to:
* adhere to applicable law and certain documents in
implementing the District Court's Orders;
* enforce the law of the case;
* retain jurisdiction for the limited purposes of ensuring
compliance with the District Court's Order and proper
application of the sale proceeds to properly calculated
claims;
* indicate whether it is pre-approving the disposition as
commercially reasonable; and
* stay any implementation order pending appeal.
According to Mark Thompson, Esq., at Simpson Thacher & Bartlett,
LLP, in New York, any sale of the Securities must comply with the
Uniform Commercial Code and the relevant security and
intercreditor agreements.
Under the law of the case, Mr. Thompson says, "the Steering
Committee was apparently willing to forego its position that it
had rights to collateral security and to be paid in cash in
exchange for controlling equity in a successor company."
Thus, if the foreclosure and resale process reaches the point
where the First Lien Lenders acquire -- directly or indirectly --
control of WestPoint International, Inc., their right to
collateral security and to be paid in cash should be extinguished
and their claims should be deemed satisfied in full, Mr. Thompson
explains.
"Such a ruling would leave intact the prior distribution to Aretex
as First Lien Lender and would also be consistent with the
valuation that remains undisturbed in the record," Mr. Thompson
adds.
Furthermore, the Second Lien Lenders note that:
* the Bankruptcy Court should retain jurisdiction over the
parties to ensure that the First Lien Lenders properly
calculate their claims and apply the sale proceeds to those
claims and comply with its order implementing the District
Court's Order; and
* Judge Drain should clarify that to the extent the Second
Lien Lenders do not receive the subscription rights awarded
to them under the Sale Order, the claim satisfaction
provisions of that Sale Order based on the delivery are not
enforceable against them.
Mr. Thompson says that the Bankruptcy Court should be mindful that
its order could be construed as pre-approving the disposition as
commercially reasonable under the UCC.
The Second Lien Lenders asserts that any order entered regarding
the Steering Committee's request to implement the District Court's
November 16, 2005, Order should be stayed pending the appeals that
will follow.
"[A] stay would prevent the imposition of substantial harm to
[WestPoint International, Inc.] and its own constituencies arising
from the uncertainty and disruption that would necessarily result
were there to be a change in control while an appeal remained
pending," Mr. Thompson says.
Wilmington Trust Company, as agent to the Second Lien Lenders,
likewise asks the Bankruptcy Court to clarify that any order
implementing the District Court's remand order does not immunize a
subsequent sale from further judicial review to determine the
satisfaction of the UCC's requirements.
The Steering Committee
Sidney P. Levinson, Esq., at Hennigan, Bennett & Dorman, LLP, in
Los Angeles, California, asserts that any implementation of the
District Court's Order must not impair the First Lien Lenders'
existing contractual and other rights and remedies, which include:
* disposal of the collateral in the manner determined by the
First Lien Collateral Trustee, whether "under one or more
Contracts" or "as an entirety";
* purchase of the collateral by the First Lien Lenders; and
* disposal of the collateral without any interference or
objection by the Second Lien Agent and Second Lien Lenders.
Any proposed sale by the Debtors that purports to restrict the
exercise by the First Lien Lenders of their rights and remedies as
secured lenders under applicable non-bankruptcy law would be
"inconsistent" with the Bankruptcy Court's determination that the
automatic stay does not apply to the Securities, Mr. Levinson
points out.
To resolve the issue on the matter of the escrowed Subscription
Rights, Mr. Levinson asserts that the Bankruptcy Court must
require WPI to issue and deliver "Subscription Rights
Certificates" to the Objecting First Lien Lenders, in their
capacity as secured lenders in possession of the Collateral.
According to Mr. Levinson, the proposed form of certificate
expressly provides that the holders of the certificates are the
Objecting First Lien Lenders and, on a junior and subordinate
basis that is subject in all respects to the Intercreditor
Agreement, the Second Lien Lenders.
The certificates would replace the current one that states that
WPI is to serve as escrow agent for the benefit of First Lien
Lenders or Second Lien Lenders. By issuing the Subscription
Rights Certificates in the name of the Objecting First Lien
Lenders, the Court can eliminate the technical objections that
have previously been asserted by WPI and WestPoint Home, Inc.,
with respect to the specific parties entitled to seek registration
of the Subscription Rights.
Under the form of the proposed Subscription Rights Certificates,
the Subscription Rights could be transferred immediately, subject
to compliance with any requirements that may apply under
applicable securities law.
"The right to transfer immediately the Subscription Rights
reflects the changed circumstances as a result of the District
Court's Order," Mr. Levinson notes.
The Steering Committee believes that the Bankruptcy Court need not
play an active role in supervising the disposition of the
Securities, and that its role should be limited to resolution of
the escrowed Subscription Rights.
However, in the event the Bankruptcy Court concludes that it
should, on remand, become actively involved in the supervision and
approval of the disposition of any or all of the Securities,
whether as a sale under Section 363(b) of the Bankruptcy Code or
otherwise, then the Steering Committee asks Judge Drain:
(a) not to permanently impair, in any respect, the First Lien
Lenders' contractual rights and remedies; and
(b) to enable the First Lien Lenders to realize the maximum
amount of cash for the Securities.
In particular, the Steering Committee asks the Bankruptcy Court
not to adopt the Aretex Parties' proposal for a staged, piecemeal
disposition of the Securities.
Mr. Levinson believes that the piecemeal sale would not only
permanently impair the right of First Lien Lenders to dispose of
the Collateral "under one or more contracts or as an entirety,"
but also would place the interests of the Icahn Group - who
obviously want to spend as little money as possible to acquire
control of the Purchasers -- ahead of those of the First Lien
Lenders and non-Aretex Second Lien Lenders, who seek to maximize
their cash recovery.
If the Bankruptcy Court decides to assume an active oversight over
the disposition of the Securities, the Steering Committee asks
Judge Drain to implement the immediate enforcement of the First
Lien Lenders' rights under the Registration Rights Agreements to
an Initial Registration.
If the Bankruptcy Court concludes that it should supervise the
sale process, then Aretex, WPI and their affiliate-owner American
Real Estate Holdings should comply with the subpoenas issued by
the Steering Committee in December 23, 2005, Mr. Levinson says.
The Aretex Parties
Peter D. Wolfson, Esq., at Sonnenschein Nath & Rosenthal, LLP, in
New York, notes that despite the Aretex Parties' disagreement
with, and intent to appeal the District Court's Orders, the
Aretex Parties believe that the most appropriate and sensible way
to implement the District Court's Orders, in the manner consistent
with its Opinion, the Sale Order, the Asset Purchase Agreement,
the Second Amended and Restated Credit Agreement dated June 9,
1998, the Collateral Trust Agreement and the Intercreditor
Agreement, is by:
* directing the sale of the Parent Shares and Subscription
Rights distributed to the First Lien Lenders at the Closing,
and Escrowed Subscription Rights distributed to the Second
Lien Lenders at the Closing, in stages, in a broad
underwritten public offering; and
* recognizing and enforcing all of Aretex's rights to keep
what it purchased or received at the Closing, free and clear
of liens and to its pro rata share of the Escrowed
Distribution Rights, in kind.
However, implementation should be stayed pending appeal to the
Second Circuit Court of Appeals, Mr. Wolfson asserts.
Mr. Wolfson notes that the appropriate and sensible reading of the
District Court's Orders is that Aretex and its affiliates will
retain:
(1) the 5,250,000 Parent Shares they purchased at the Closing
for $187,000,000, free and clear of the liens and
Interests of the First Lien Lenders;
(2) the 4,198,804 Parent Shares Aretex received at the
Closing, in its capacity as a First Lien Lender, free and
clear of any liens and Interests of the Objecting First
Lien Lenders; and
(3) the 3,748,389 Parent Shares they received upon payment of
$38,000,000 to WPI to exercise the Subscription Rights
distributed to Aretex at the Closing, in its capacity as a
First Lien Lender and in accordance with the Equity
Commitment Agreement, free and clear of any liens and
Interests of the Objecting First Lien Lenders.
Mr. Wolfson likewise maintains that under the District Court's
Opinion and Orders, Aretex is entitled to its pro rata share of
the Excluded Assets and Escrowed Subscription Rights in its
capacity as a First Lien Lender.
If Aretex is entitled to its pro rata share of the Subscription
Rights in kind, then the Aretex Parties have no objection to the
sale of the Securities distributed to the First Lien Lenders at
the Closing together with their share of certain Escrowed
Subscription Rights.
However, if the Bankruptcy Court interprets the Opinion and
Orders to mean that Aretex is not entitled to its pro rata share
of the Escrowed Subscription Rights in kind, or if, as the
Opinion and Orders mean that Aretex does not share in the
Escrowed Subscription Rights in its capacity as a First Lien
Lender at all, then the Aretex Parties assert that the District
Court Opinion and Orders intended, and require, a staggered sale
so as:
(a) not to vitiate the purpose of the Aretex Parties' bid;
(b) to comply with the District Court's statement that the
relief sought in connection with the two appellate issues
does not give the First Lien Lenders control;
(c) to enable Aretex and its affiliates to purchase additional
equity as contemplated by the District Court; and
(d) to preserve all or so much of the Escrowed Subscription
Rights as possible for distribution to the Second Lien
Lenders in kind.
Mr. Wolfson further notes that if Judge Swain will interpret the
Opinion and Orders so as to give a lien to the First Lien Lenders
on the Securities distributed to Aretex at the Closing, or to
deprive Aretex of its pro rata share of the Escrowed Subscription
Rights in kind, then the staggered sale should be conducted as a
broad public offering wherein:
(1) the First Lien Lenders must, consistent with their
representations to the District Court, first sell the
6,301,196 Parent Shares and then the 5,625,254
Subscription Rights issued directly to them at the
Closing, for cash, and under the supervision of the
Bankruptcy Court;
(2) if the First Lien Lenders' claims are not satisfied by the
sale of the Parent Shares and Subscription Rights issued
directly to them at the Closing, then any remaining
proceeds from the Excluded Assets, should be distributed
to the First Lien Lenders, and if necessary, so much of
the Escrowed Subscription Rights as the Bankruptcy Court
determines likely are necessary to satisfy the First Lien
Lenders, leaving as much as possible for distribution in
kind to the Second Lien Lenders; and
(3) in the event any Excluded Assets or the Escrowed
Subscription Rights are sold or the proceeds distributed,
the Bankruptcy Court should enforce Aretex's rights under
the Sale Order, the Asset Purchase Agreement, the Credit
Agreement or the Collateral Trust Agreement to its pro
rata share, in kind, of any distribution to the First Lien
Lenders other than the proceeds of the Parent Shares and
Subscription Rights distributed directly to the First Lien
Lenders at the Closing.
Nevertheless, Mr. Wolfson says, the Aretex Parties believe that
the District Court's Opinion and Orders:
-- are wrong;
-- exceed the District Court's jurisdiction;
-- violate Section 363(m) of the Bankruptcy Code; and
-- wreak havoc with the Sale Order and Asset Purchase
Agreement.
About WestPoint Stevens
Headquartered in West Point, Georgia, WestPoint Stevens, Inc. --
http://www.westpointstevens.com/-- is the #1 US maker of bed
linens and bath towels and also makes comforters, blankets,
pillows, table covers, and window trimmings. It makes the Martex,
Utica, Stevens, Lady Pepperell, Grand Patrician, and Vellux
brands, as well as the Martha Stewart bed and bath lines; other
licensed brands include Ralph Lauren, Disney, and Joe Boxer.
Department stores, mass retailers, and bed and bath stores are its
main customers. (Federated, J.C. Penney, Kmart, Sears, and Target
account for more than half of sales.) It also has nearly 60 outlet
stores. Chairman and CEO Holcombe Green controls 8% of WestPoint
Stevens. The Company filed for chapter 11 protection on
June 1, 2003 (Bankr. S.D.N.Y. Case No. 03-13532). John J.
Rapisardi, Esq., at Weil, Gotshal & Manges, LLP, represents the
Debtors in their restructuring efforts. (WestPoint Bankruptcy
News, Issue No. 63; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
WHITCO COMPANY: Case Summary & 17 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Whitco Company, L.P.
7700 Wyatt Drive
Fort Worth, Texas 76108
Tel: (817) 738-8181
Bankruptcy Case No.: 06-40721
Chapter 11 Petition Date: March 15, 2006
Court: Northern District of Texas (Ft. Worth)
Judge: Russell F. Nelms
Debtor's Counsel: Eric A. Liepins, Esq.
Eric A. Liepins, P.C.
12770 Coit Road, Suite 1100
Dallas, Texas 75251
Tel: (972) 991-5591
Fax: (972) 991-5788
Estimated Assets: Less than $50,000
Estimated Debts: $1 Million to $10 Million
Debtor's 17 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Laurus Master Fund, Ltd. $3,467,075
825 Third Avenue, 14th Floor
New York, NY 10022
A.M. Rhyne LP $752,500
P.O. Box 100
Avinger, TX 75630
First Light $255,706
596 Central Drive, Suite 110
Virginia Beach, VA 23454
Jim & Patsy Pritchard $258,690
2625 Torrey Pines
Fort Worth, TX 76109
James K. Pritchard $250,000
6632 Firestone
Fort Worth, TX 76132
Keating Reverse Merger Fund, LLC $250,000
5251 DTC Parkway, Suite 1090
Englewood, CO 80111-2739
Metalpol S.A. de C.V. Bank One $142,306
SAF-T-BOX Manufacturing $130,939
Union Metal Corp. $116,625
Valmont Lexington $111,235
Trace Metal Industries $92,323
Cal Lighting $90,025
Transamerican Power Prod. $88,314
Aztec MFG. Partnership $75,443
J&M Steel Company $70,878
Pelco Structural, LLC $53,880
Halliburton Investor, LLC $51,342
WILLIAMS CONTROLS: Board Approves One-For-Six Reverse Stock Split
-----------------------------------------------------------------
The board of directors and stockholders of Williams Controls, Inc.
(OTC: WMCO), approved its one-for-six reverse stock split of its
common stock.
The reverse stock split was approved at the Company's annual
stockholders' and directors' meetings held on March 2, 2006.
Each block of six shares of common stock registered in the
name of a stockholder on the applicable record date of the reverse
stock split will be converted into one share of the Company's
common stock.
The reverse stock split will reduce the number of authorized
shares of the Company's common stock from 75,000,000 to
12,500,000 shares.
The Company sent notification to The NASDAQ Stock Market of the
approval of the reverse stock split. The effective date of the
reverse stock split will be no earlier than 10 days after
The NASDAQ Stock Market has received a notification.
NASDAQ Capital Market Listing
The Company also intends to apply for listing on the NASDAQ
Capital Market. The Company gave no time frame for the filing of
its listing application.
The Company's stockholders also approved, at the annual
stockholders' meeting, the adoption of the Company's proposal
eliminating the staggered terms of members of its board of
directors, and providing for one-year terms and the annual
election of all directors.
The amendment will not change the present number of directors and
the directors will retain the authority to change that number and
to fill any vacancies or newly created directorships.
About Williams Controls
Headquartered in Portland, Oregon, Williams Controls, Inc. --
http://www.wmco.com/-- designs and manufactures Electronic
Throttle Control Systems for the heavy truck and off-road markets.
At Dec. 31, 2005, the company's balance sheet shows $917,000
stockholders' equity deficit compared to $581,000 positive
stockholders' equity.
WINN-DIXIE: R2 Resigns, Creditors' Committee Now Has Six Members
----------------------------------------------------------------
Pursuant to Section 1102(a) of the Bankruptcy Code, Deirdre A.
Martini, the United States Trustee for Region 2, informs the
U.S. Bankruptcy Court for the Middle District of Florida that R2
Investments, LDC, has resigned from the Official Committee of
Unsecured Creditors, effective Jan. 18, 2006.
The Committee is now comprised of:
1. Deutsche Bank Trust Company Americas
60 Wall Street
New York, NY 10005-2858
Attn: S. Berg
Tel. No. (212) 250-2921
2. New Plan Excel Realty Trust, Inc.
420 Lexington Avenue
New York, NY 10170
Tel. No. (212) 869-3000
3. Kraft Foods Global, Inc.
Three Lakes Drive
Northfield, IL 60093
Attn: Sandra Schirmang, Senior Director of Credit
Tel. No. (847) 646-6719
4. Pepisco & Subsidiaries
7701 Legacy Drive 38-109
Plano, TX 75024
Attn: Scott Johnson, Group Credit Manager
Tel. No. (972) 334-7405
5. OCM Opportunities Fund V, L.P.
c/o Oaktree Capital Management, LLC
Los Angeles, CA 90071
Attn: Alan S. Adler, Vice President
Tel. No. (213) 830-6300
6. Capital Research & Management Company
333 South Hope Street
Los Angeles, CA 90071
Attn: Ellen Carr, Vice President
Tel. No. (213) 486-9200
About Winn-Dixie Stores
Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc.
-- http://www.winn-dixie.com/-- is one of the nation's largest
food retailers. The Company operates stores across the
Southeastern United States and in the Bahamas and employs
approximately 90,000 people. The Company, along with 23 of its
U.S. subsidiaries, filed for chapter 11 protection on Feb. 21,
2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14,
2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840).
D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and
Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King &
Spalding LLP, represent the Debtors in their restructuring
efforts. Paul P. Huffard at The Blackstone Group, LP, gives
financial advisory services to the Debtors. Dennis F. Dunne,
Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B.
Macdonald, Esq., at Akerman Senterfitt give legal advice to the
Official Committee of Unsecured Creditors. Houlihan Lokey &
Zukin Capital gives financial advisory services to the
Committee. When the Debtors filed for protection from their
creditors, they listed $2,235,557,000 in total assets and
$1,870,785,000 in total debts. (Winn-Dixie Bankruptcy News,
Issue No. 34; Bankruptcy Creditors' Service, Inc., 215/945-7000).
* Fried Frank Taps John Duffy as Counsel Resident in Washington
---------------------------------------------------------------
Fried, Frank, Harris, Shriver & Jacobson LLP reported that
Professor John Fitzgerald Duffy has joined the firm as of counsel
resident in Washington DC.
"John is one of the foremost academics in the field of patent
law," said Richard Sauber, head of the firm's litigation practice
in Washington. "Our clients involved in patent litigation will
benefit enormously from his deep knowledge and expertise."
Professor Duffy, a registered patent attorney, received an A.B. in
physics cum laude from Harvard College (1985) and a J.D. cum laude
from the University of Chicago Law School (1989), where he was
Articles Editor of the Law Review, Order of the Coif, and winner
of the John M. Olin Prize for the Outstanding Graduate in Law and
Economics. Between college and law school Professor Duffy did
research work at AT&T Bell Labs.
Following law school Professor Duffy clerked for Judge Stephen
Williams of the U.S. Court of Appeals for the D.C. Circuit and
Associate Justice Antonin Scalia of the Supreme Court of the
United States. Professor Duffy then entered private practice for
three years before entering academe. He is currently a Professor
of Law at George Washington University Law School. He will
continue in his position as a professor while he is affiliated
with the firm. Professor Duffy is co-author of a leading patent
law casebook, Patent Law and Policy (3d ed. 2002), and has
published numerous articles in the field of patent and other
intellectual property law.
Professor Duffy is admitted to the bars of the District of
Columbia, the U.S. Courts of Appeals for the D.C. and Federal
Circuits, and the Supreme Court of the United States.
Fried, Frank, Harris, Shriver & Jacobson LLP --
http://www.friedfrank.com/-- is a leading international law firm
with more than 525 attorneys in offices in New York, Washington,
D.C., London, Paris and Frankfurt. Fried Frank lawyers regularly
represent major investment-banking firms, private equity houses
and hedge funds, as well as many of the largest companies in the
world. The firm offers legal counsel on M&A and corporate finance
matters, white-collar criminal defense and civil litigation,
securities regulation, compliance and enforcement, government
contracts, real estate, tax, bankruptcy, antitrust, benefits and
compensation, intellectual property and technology, international
trade, and trusts and estates.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published by
Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania,
USA, and Beard Group, Inc., Frederick, Maryland USA. 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.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $725 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same firm
for the term of the initial subscription or balance thereof are
$25 each. For subscription information, contact Christopher Beard
at 240/629-3300.
*** End of Transmission ***