/raid1/www/Hosts/bankrupt/TCR_Public/060418.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, April 18, 2006, Vol. 10, No. 91
Headlines
ADELPHIA COMMS: Liquidation Analysis Under 4th Amended Ch. 11 Plan
ADELPHIA COMMS: Intercreditor Dispute Resolution Under Ch. 11 Plan
ALBERTSON'S INC: Supervalu Deal Cues Moody's to Lower Ratings
ALLIANCE LAUNDRY: Moody's Holds B3 Rating on $150 Mil. Sub. Notes
AMERICAN RESIDENTIAL: Fitch Holds Low-B Ratings on 4 Cert. Classes
ANGEL MATOS: Case Summary & 6 Largest Unsecured Creditors
AOL LATIN: Brazilian Unit Raises US$541 Million from Auction
ARMSTRONG WORLD: 2005 Financials on Investment & Retirement Plans
ATA AIRLINES: Court OKs Stipulation Resolving Ambac's EETC Claims
ATA AIRLINES: Settles Dispute Over GATX's $7.9 Mil. Unsec. Claim
ATLAS AIR: Distributes New Common Stock to Unsecured Claimholders
B/E AEROSPACE: Earns $84.6 Million During Year Ended Dec. 31, 2005
BIRCH TELECOM: Emerges from Chapter 11 Protection
BOWATER INC: Fitch Affirms Ratings at BB- With Stable Outlook
BREAK THROUGH: Case Summary & 20 Largest Unsecured Creditors
CALPINE CORP: Creditors Object to Plan-Filing Extension Request
CANADIAN OIL: Moody's Shifts Trend on Long-Term Ratings to Neg.
CITRUS VALLEY: Moody's Holds Ba1 Rating on $87 Mil. Certificates
CLAYTON HOLDINGS: Stock Offering Cues Moody's to Hold B1 Rating
CLUETT AMERICAN: S&P Affirms CCC+ Rating & Revises Outlook to Neg.
COLLINS & AIKMAN: Masanovich Named as Chief Accounting Officer
COLLINS & AIKMAN: Hires Brinks Hofer as Special Counsel
COLLINS & AIKMAN: AIG Can Advance Defense Costs to Officers
CSK AUTO: Financial Filing Delay May Cue Lenders' Default Notices
CSK AUTO: S&P Downgrades Subordinate Debt Rating to CCC- from B-
D4D HEALTH: Voluntary Chapter 11 Case Summary
DELTA AIR: S&P Affirms Default Corporate Credit Rating
DOMTAR INC: DBRS Downgrades Notes & Debentures Rating to BB (Low)
DSLA NIM: DBRS Places $4.3 Million Class N-3 Notes' Rating at BB
DUNDEE CORP: S&P Raises Long-Term Sub. Debt Rating to BB from BB-
DYNEGY HOLDINGS: Completes $750 Million Debt Refinancing
FATTORIA ACCAPARRANO: Voluntary Chapter 11 Case Summary
FEDERAL-MOGUL: Wants Lease-Decision Period Stretched to Aug. 1
FLEXTRONICS INT'L: Selling Software Business to KKR for $900 Mil.
FLEXTRONICS INT'L: Board Approves $250 Million Share Repurchase
FORD MOTOR: Will Halt Operations of Two Assembly Plants in 2008
GARY CHAPMAN: Case Summary & 11 Largest Unsecured Creditors
GERDAU AMERISTEEL: Unit Acquires Sheffield Steel for $76 Million
GRAPHIC ARTS: Case Summary & 20 Largest Unsecured Creditors
HARBORVIEW NIM: DBRS Puts BB Rating on $4.4 Mil. Class N-3 Notes
H.E. MILLS: Case Summary & 20 Largest Unsecured Creditors
HERBST GAMING: S&P Affirms B+ Rating & Changes Outlook to Positive
IDI GLOBAL: Case Summary & 21 Largest Unsecured Creditors
INDEPENDENT FISHERMEN'S: Case Summary & 9 Unsecured Creditors
INTERSTATE BAKERIES: Court Extends Exclusive Period to File Plan
INTERSTATE BAKERIES: Provides Update on Restructuring Process
JETBLUE AIRWAYS: 2005 Net Loss Cues Moody's to Cut Debt Ratings
J.L. FRENCH: Hires Deloitte Tax as Tax Service Provider & Advisor
JOHN HENRY: Moody's Places B3 Rating on $22 Million Term Loan
LEAR CORP: S&P Puts B- Rating on $200 Million 2nd-Lien Term Loan
LEVITZ HOME: Court Okays Walker Truesdell as Wind Down Officer
LEVITZ HOME: GHP Buxton Seeks Lease Rejection Confirmation
LION CITY: New York Bankruptcy Court Grants Chapter 15 Petition
MARSULEX INC: Moody's Withdraws B2 Rating on $105 Mil. Note Issue
MICHAEL JACKSON: Strikes Bailout Deal with Fortress Investment
MIRANT CORP: Asks Court to Compel WPS Energy to Dismiss FERC Case
MUSICLAND HOLDING: Court Vacates Stay to Let St. Clair Take Action
NADER MODANLO: Court Denies Sheppard Mullin Retention
ONEIDA LTD: U.S. Trustee Appoints 5-Member Creditors Committee
OWENS CORNING: Parries Plan & Disclosure Statement Objections
OWENS CORNING: Credit Suisse Wants Bank Claims Declared Unimpaired
PARMALAT GROUP: Judge Kaplan Allows BofA to Pursue Counterclaims
PHI INC: Buys Back $184.8 Million of 9-3/8% Senior Notes due 2009
PLIANT CORP: Reports 2006 First Quarter Sales of $298 Million
PROSOFT LEARNING: Voluntary Chapter 11 Case Summary
PROTECTION ONE: Fitch Rates Proposed $66.8 Mil. Add-On Loan at B+
PT HOLDINGS: Gets Access to $2 Million Under Revolving Facility
PYATEROCHKA HOLDING: Merger Deal Prompts Moody's Ratings Review
QUEBECOR MEDIA: Inks EUR59.4 Mil. Financing with Societe Generale
RBC RESIDENTIAL: DBRS Puts Class C Swap Transaction Rating at BBB
RESIDENTIAL CAPITAL: Fitch Puts BB+ Rating on Subordinated Notes
SHEFFIELD STEEL: Sells All Shares to Gerdau Ameristeel for $76MM
SOLUTIA INC: Balance Sheet Upside-Down by $1.4 Billion at Dec. 31
SOLUTIA INC: Plan Fiduciaries Want Chubb to Advance Defense Costs
SOTHEBY'S HOLDINGS: S&P Lifts Ratings to BB With Positive Outlook
STANADYNE CORP: S&P Lowers $160MM Sr. Sub. Notes' Rating to CCC+
STAR VALLEY: Case Summary & 20 Largest Unsecured Creditors
STATION CASINOS: Earns $161.8 Million in 2005 Fiscal Year
STATION CASINOS: Buys Back $232 Million of Common Stock
SUPERVALU INC: Albertson Deal Prompts Moody's Ratings Downgrade
SYBRON DENTAL: Danaher Deal Cues Moody's to Put Ratings on Watch
SYED RAUF: Voluntary Chapter 11 Case Summary
TDC A/S: Moody's Cuts Debt & Corp. Family Ratings to Ba3 from Ba1
TELOGY INC: Wants Exclusivity Periods Extended Until August 28
TOBACCO SETTLEMENT: Fitch Assigns BB Rating to Series 2006C Bonds
TRUSWELL PREMIER: Dwindling Assets Spur Moody's Ratings Downgrade
UNITED RENTALS: S&P Revises BB- Rating's Outlook to Developing
US AIRWAYS: Obtains $1.25 Billion Financing from GE Capital
US AIRWAYS: Asks Court to Close Ch. 11 Cases of Four Affiliates
US AIRWAYS: 16 Add'l Securityholders May Resell 7% Sr. Conv. Notes
USA FLORAL: Judge Gross Closes Florimex USA's Chapter 11 Case
VARIG S.A.: Brazilian Government Will Seize Cash in Pension Fund
VERILINK CORP: Will Be Delisted from Nasdaq Tomorrow
WALCO OIL: Voluntary Chapter 11 Case Summary
WILLIAMS SCOTSMAN: Prices $100 Million Offering of 8.5% Sr. Notes
WILLIAMS SCOTSMAN: S&P Raises $350 Mil. Sr. Notes' Rating to B+
WINN-DIXIE: Court Approves Rejection of 13 Contracts & Leases
WINN-DIXIE: Real Property Investment Gets Jackson Lot for $485K
WINN-DIXIE: Court Disallows Louise Clark's $3 Billion Claim
WKI HOLDING: Moody's Withdraws Debt, Note & Corp. Family Ratings
W.R. GRACE: Wants to Contribute $105.34 Mil. to Retirement Plans
W.R. GRACE: Employs Latham & Watkins as Tax Planning Counsel
W.R. GRACE: Inks $2.1-Mil. N.Y. & N.J. Port Authority Settlement
W.S. LEE: Taps Phoenix Management as Financial Advisor
YUKOS OIL: US Bankruptcy Court's 10-Day TRO Freezes Asset Sale
* Diana Adams Appointed as Acting U.S. Trustee for Region 2
* Katherine Brady Joins Alderman & Alderman as Associate
* White & Case Brings In Sandy Qusba as Partner
* Large Companies with Insolvent Balance Sheets
*********
ADELPHIA COMMS: Liquidation Analysis Under 4th Amended Ch. 11 Plan
------------------------------------------------------------------
Adelphia Communications Corporation and its debtor-affiliates
filed an updated liquidation analysis with the U.S. Bankruptcy
Court for the Southern District of New York, in connection with
their Supplement to their Fourth Amended Disclosure Statement.
The Liquidation Analysis assumes that an expedited sale of Equity
Interests in the Non-Debtor Subsidiaries and Managed Entities,
except for the Managed Entities being retained by the Rigas
Family pursuant to the Government Settlement Agreement,
will be conducted.
The gross amount of Cash available would be the sum of the
proceeds from the disposition of the ACOM Debtors' assets plus
the Cash held by the Debtors as of the Conversion Date reduced by
the costs and expenses of the liquidation. Remaining liquidation
proceeds then would be applied to DIP Lender, Secured Tax and
Other Secured Claims and amounts necessary to satisfy
Administrative Expense, Fee, Priority Tax and Other Priority
Claims that are senior to general unsecured claims, including any
incremental Administrative Expense Claims that may result from
the termination of the Debtors' businesses and the liquidation of
their assets, including a break-up fee to the Buyers.
Any remaining Cash would be available for distribution to general
unsecured creditors, subordinated creditors and equity holders in
accordance with the priority scheme established by Section 726 of
the Bankruptcy Code.
Estimated Liquidation Proceeds
Restricted Cash $0
Cash 415,000,000
Cable Television Systems 12,662,000,000
----------------
Subtotal $13,078,000,000
Less:
Break-up Fee (440,000,000)
Chapter 7 Fees and Expenses:
Trustee and Receiver (129,000,000)
Counsel for Trustee and
other professionals (75,000,000)
Wind-down Costs
Central Services Shutdown (136,000,000)
Retention Requirements (42,000,000)
Severance Requirements (67,000,000)
----------------
Total Wind-down Costs (245,000,000)
----------------
Subtotal (449,000,000)
Plus:
Non-Debtor Subsidiaries 262,000,000
----------------
Net Estimated Liquidation Proceeds 12,450,000,000
Less: Net Holdbacks (456,000,000)
----------------
Net Estimated Liquidation Proceeds $11,995,000,000
================
A full text copy of the Updated Liquidation Analysis is available
for free at http://ResearchArchives.com/t/s?7e9
About Adelphia Communications
Based in Coudersport, Pa., Adelphia Communications Corporation --
http://www.adelphia.com/-- 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. 126;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
ADELPHIA COMMS: Intercreditor Dispute Resolution Under Ch. 11 Plan
------------------------------------------------------------------
Adelphia Communications Corporation and its debtor-affiliates'
Modified 4th Amended Plan of Reorganization provides for a
possible settlement of disputes among:
* Holding Company debtors;
* Arahova Communications, Inc.;
* Frontier Vision debtors; and
* Olympus debtors.
The Holding Company debtors are comprised of:
* ACC Investment Holdings, Inc.;
* Adelphia Communications Corporation; and
* US Tele-Media Investment Company.
The Olympus Debtors are comprised of:
* Olympus Capital Corp.; and
* Olympus Communications, LP.
The Frontier Vision Debtors are comprised of:
* Adelphia GP Holdings, LLC;
* FrontierVision Holdings Capital Corporation;
* FrontierVision Holdings Capital II Corporation;
* FrontierVision Holdings, LLC;
* FrontierVision Holdings, L.P.;
* FrontierVision Operating Partners, L.L.C.; and
* FrontierVision Partners, L.P.
The disputes arose over claims and causes of action between the
holders of claims against or interests in those Debtor Groups
relating to:
-- the amounts, allowance, relative priority, character and
treatment of Intercompany Claims;
-- the appropriate Plan consolidation structure;
-- alleged fraudulent conveyance claims associated with
historical movements of subsidiaries within the corporate
structure;
-- the allocation of the value and form of consideration from
the Sale Transaction to the various Debtor Groups;
-- the allocation of the benefits and cost of the Government
Settlement Agreement;
-- the allocation of the tax liability and the tax reserves
associated with the Sale Transaction; and
-- the allocation of the economic cost of the other reserves
established as part of the Plan.
The Potential Settlements do not reflect a determination of
U.S. Bankruptcy Court for the Southern District of New York or
the ACOM Debtors as to the likely outcome of the Inter-Creditor
Dispute. Rather, the Potential Settlements reflect an economic
adjustment among the parties affected by the Inter-Creditor
Dispute that will eliminate the risk associated with the
continuation of the Inter-Creditor Dispute with respect to the
issues subject to the Potential Settlement.
The Potential Settlements will consist, among others, of a
release from dispute holdback and a release by all other Debtors
of any Intercompany Claims or claims in the Inter-Creditor
Dispute against a Debtor Group and by that Debtor Group of all
Intercompany Claims or claims in the Inter-Creditor Dispute
against all other Debtors.
Release From Dispute Holdback
Debtors' Estimate of Element of Element of
all allowed claims Potential Potential
in Debtor group plus Settlement: Settlement:
simple non-default
interest to the Debtor Grp Amount to be
Effective Date Maximum released
Value from Dispute
Debtor Group Holdback
------------ -------------------- ----------- ------------
Arahova $2,382,000 $1,807,000 $1,807,000
Holding
Company Debtor
Group N/A N/A 575,000,000
------------ -------------------- ----------- ------------
FrontierVision
Holdco Debtor
Group 505,000,000 445,000,000 445,000,000
Holding
Company Debtor
Group N/A N/A 60,000,000
------------ -------------------- ----------- ------------
Olympus Parent
Debtor Group 306,000,000 306,000,000 306,000,000
Holding
Company Debtor
Group N/A N/A 0
------------ -------------------- ----------- ------------
About Adelphia Communications
Based in Coudersport, Pa., Adelphia Communications Corporation --
http://www.adelphia.com/-- 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. 126;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
ALBERTSON'S INC: Supervalu Deal Cues Moody's to Lower Ratings
-------------------------------------------------------------
Moody's Investors Service lowered the ratings of Albertson's,
Inc., including the senior unsecured long-term rating to Ba3 from
Baa3 and the short-term rating to Not Prime from Prime-3.
The review for possible downgrade of the company's long term debt
ratings, begun on Sept. 6, 2005, continues, but is concluded for
the short term rating. Moody's also assigned a corporate family
rating of Ba2 and placed it on review for possible downgrade.
Ratings lowered and continuing under review for possible
downgrade:
* Albertson's, Inc. -- Senior unsecured notes, Medium Term
Notes, debentures, convertible senior notes and bonds to Ba3
from Baa3
* American Stores Company -- Senior unsecured notes, Medium
Term Notes, debentures and bonds, guaranteed by Albertson's,
Inc., to Ba3 from Baa3
Rating assigned, and placed under review for possible downgrade:
* Albertson's, Inc. -- Corporate family rating of Ba2
Rating lowered, and assigned a stable outlook:
* Commercial paper to Not Prime from Prime-3
Should Albertson's commercial paper program be terminated after
the pending acquisition of the company is completed, the short
term rating will be withdrawn.
The downgrade and ongoing review of Albertson's long term ratings
represent an interim rating action that moves the ratings closer
to the likely final outcome provided the sale of the company
proceeds as anticipated. The key drivers of the ratings downgrade
are:
1) Albertson's definitive agreement to sell the entire company
to a consortium composed of SUPERVALU Inc., CVS Corporation
and an investor group led by CERBERUS CAPITAL MANAGEMENT,
L.P.;
2) the pending division of Albertson's assets and operations,
post-transaction, with SUPERVALU acquiring about 1124
stores and related support operations, CVS acquiring all of
Albertson's standalone drugstore business, and the
CERBERUS-led consortium acquiring about 655 underperforming
stores in Dallas/Fort Worth, Florida, Northern California,
Rocky Mountains and Southwestern divisions;
3) the expectation that SUPERVALU will be highly leveraged
post-merger and that it will face significant challenges as
it integrates an acquisition of this size in the face of
intense competition in the supermarket and wholesaling
industries; and
4) Moody's expectation that the legacy debt of both Albertsons
and American Stores will likely be held post-merger by
subsidiaries of SUPERVALU and that it will therefore be
effectively and structurally subordinated to other
obligations.
Moody's continuing review will focus on the corporate structure of
SUPERVALU post-acquisition, the position of Albertsons and
American Stores debt in the post-combination SUPERVALU legal
structure, and the cash flow available to service the legacy debt
of Albertsons and American Stores when they are part of a highly
leveraged SUPERVALU.
Assuming final transaction terms are as currently contemplated, at
the time of closing of the acquisition, the long term debt ratings
of Albertsons and American Stores are likely to be rated in the
single B range.
Headquartered in Boise, Idaho, Albertsons, Inc., operates about
2500 food and drug stores in 37 states. Revenues for the fiscal
year ended Feb. 2, 2006, were approximately $40.4 billion.
ALLIANCE LAUNDRY: Moody's Holds B3 Rating on $150 Mil. Sub. Notes
-----------------------------------------------------------------
Moody's Investors Service affirmed the long term debt ratings of
Alliance Laundry Systems LLC. Ratings affirmed include a B1
rating on Alliance's $50 million senior secured revolver due 2011,
a B1 rating on Alliance's $177 million senior secured term loan
due 2012, a B3 on Alliance's $150 million senior subordinated
notes due 2013, and a B1 corporate family rating. The rating
outlook is stable.
Key factors impacting Alliance's ratings include:
1) substantial financial leverage and modest interest
coverage;
2) significant customer concentration risks, with its ten
largest customers accounting for over 35% of FY2005
revenues;
3) a leading market position in the North American stand-alone
commercial laundry equipment market serving laundromats,
on-premises laundry, and multi-housing sectors;
4) capacity to produce stable operating performance based on
steady demand trends in the commercial laundry machine
industry, and consistent ability to generate positive free
cash flow, which has historically demonstrated a low
sensitivity to economic cycles; and
5) the potential for increased competition from Whirlpool-
Maytag and other international competitors, and risks
associated with the tenure of its current supply agreement
with Coinmach, its largest customer, which Alliance
recently renegotiated on a shorter term arrangement than
what has been practiced in the past.
Alliance's stable outlook reflects Moody's expectation that
financial leverage will be under 6.0x by the end of FY2006,
operating margins will remain consistently above 12%, and that
free cash flow to debt will be at least 5% on a sustainable basis.
Moody's also believes that Alliance's planned closure of its
Marianna, Florida facilities by Q3 2006, which constitute over 30%
of Alliance's manufacturing capacity and 14% of its distribution
capacity, will positively impact its credit profile over the
intermediate term. Although Moody's acknowledges that the
company's credit metrics remain weakly positioned for the B1
rating category, the ratings and outlook are predicated on our
expectation that the company will continue to generate positive
free cash flow that will be applied toward incremental debt
reduction.
Alliance Laundry Systems LLC, located in Ripon, Wisconsin, designs
and produces a full line of commercial laundry equipment in North
America and worldwide. The company's revenues for FY2005 were
$317 million.
AMERICAN RESIDENTIAL: Fitch Holds Low-B Ratings on 4 Cert. Classes
------------------------------------------------------------------
Fitch Ratings affirmed these classes from six American Residential
Mortgage Corp. pass-through certificates:
Series 1992-2A:
-- Class A at 'AA'
Series 1992-2C:
-- Class A at 'AA'
Series 1993-1B:
-- Class A at 'AA'
Series 1993-3:
-- Class Z at 'AA'
Series 1993-4:
-- Class Z at 'AA'
-- Class B-1 at 'A'
-- Class B-2 at 'BBB'
-- Class B-3 at 'BB'
-- Class B-4 at 'B-'
Series 1994-1:
-- Class Z at 'AA'
-- Class B-1 at 'A'
-- Class B-2 at 'BBB'
-- Class B-3 at 'BB'
-- Class B-4 at 'B-'
The affirmations affect approximately $8.89 million in outstanding
certificates and reflect adequate relationships of credit
enhancement to future loss expectations.
Series 1992-2A, 1992-2C, 1993-1B, and 1993-3 benefit from pool
insurance policies provided by United Guaranty Residential
Insurance Company (UGI) which has an insurer financial strength
rating of 'AA+' by Fitch.
The trusts are seasoned 144 to 159 months with only a minimal of
loans remaining. Currently, there are no delinquent loans in any
of the trusts above.
The aforementioned trusts are being serviced by Chase Manhattan
Mortgage Corporation (rated 'RPS1' by Fitch). In 1994 Chase
acquired American Residential Holding Corporation which is the
parent of the American Residential Mortgage Corporation.
ANGEL MATOS: Case Summary & 6 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Angel Luis Roman Matos
dba Roman Truck Services & Rental Equipment
Urb Los Faroles
Calle Rogativa # 49
Bayamon, Puerto Rico 00961
Bankruptcy Case No.: 06-01009
Type of Business: The Debtor previously filed for chapter 11
protection on Nov. 25, 2005 (Bankr. D. P.R.
Case No. 05-12973).
Chapter 11 Petition Date: April 7, 2006
Court: District of Puerto Rico (Old San Juan)
Judge: Chief Judge Gerardo Carlo
Debtor's Counsel: Francisco J. Ramos Gonzalez, Esq.
P.O. Box 371, Puerto Real
Fajardo, PR 00740
Tel: (787) 860-1719
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 6 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
GE Capital Corp. of Puerto Rico $446,600
P.O. Box 70256
San Juan, PR 00936-8556
Multi-Ventas Y Servicios PR, Inc. $17,267
P.O. Box 6012
Caguas, PR 00726-6012
Popular Leasing $15,180
P.O. Box 50042
San Juan, PR 00902-6012
American Equipment $9,000
Heavy Parts Center $7,029
PR Traction Tires Manufactures, Inc. $360
AOL LATIN: Brazilian Unit Raises US$541 Million from Auction
------------------------------------------------------------
The Brazilian unit of America Online Latin America last week
raised 1.16 billion reals (US$541 million) from the auction of its
assets, Business News Americas reports, citing a report from the
TI Inside online news site.
According to the same report, more than 1,200 bidders were present
during the auction of AOLA's 139 lots and other assets.
SuperBid, the auction organizer, told TI Inside that 52% of the
participants came from the state of Sao Paulo, 14% from Rio Grande
do Sul, 13% from Minas Gerais and 10% from Rio de Janeiro.
AOLA Brasil's Avaya PABX fetched the highest bid at 177,500 reals.
The auction followed the Internet Service Provider's decision to
cease its operations in Brazil on March 17, 2006. AOLA
subscribers were transferred to ISP Terra.
Headquartered in Fort Lauderdale, Florida, America Online Latin
America, Inc. -- http://www.aola.com/-- offers AOL-branded
Internet service in Argentina, Brazil, Mexico, and Puerto Rico,
as well as localized content and online shopping over its
proprietary network. Principal shareholders in AOLA are
Cisneros Group, one of Latin America's largest media firms,
Brazil's Banco Itau, and Time Warner, through America Online.
The Company and its debtor-affiliates filed for Chapter 11
protection on June 24, 2005 (Bankr. D. Del. Case No. 05-11778).
Pauline K. Morgan, Esq., and Edmon L. Morton, Esq., at Young
Conaway Stargatt & Taylor, LLP and Douglas P. Bartner, Esq., at
Shearman & Sterling LLP represent the Debtors in their
restructuring efforts. When the Debtors filed for protection
from their creditors, they listed total assets of $28,500,000
and total debts of $181,774,000.
ARMSTRONG WORLD: 2005 Financials on Investment & Retirement Plans
-----------------------------------------------------------------
Armstrong World Industries, Inc., filed with the Securities and
Exchange Commission on March 28, 2006, financial reports on its
Savings and Investment Plan and Retirement Savings Plan for the
period ended September 30, 2005.
The AWI Plans are defined contribution plans established to
provide participants and hourly-paid employees a means for long-
term savings intended for the accumulation of retirement income.
R. Scott Webster, secretary of AWI's Retirement Committee,
discloses that the Investment Plan, formerly known as the
Retirement Savings and Stock Ownership Plan, is comprised of two
parts, each with its own set of participant accounts and
investment funds.
Retirement Savings
Mr. Webster relates that separate balances are maintained for
contributions made by or on behalf of a participant. The balances
in each fund reflect the participants' contributions together with
dividends, interest, other income, and gains and losses being
allocated.
Each participant may have up to seven accounts that make up its
total balance:
(1) Sheltered account
Participants can contribute from 1% to 40% of pretax
compensation as deferred compensation, as permitted under
Section 401(k) of the Internal Revenue Code.
(2) Standard account
Participants may contribute from 1% to 10% of after-tax
compensation.
(3) Rollover account
Participants may invest any untaxed amounts rolled over
from another tax-qualified, employer-sponsored plan,
qualified annuity contracts, tax-deferred annuity plans,
governmental deferred compensation plans, and individual
retirement arrangements.
(4) Retirement savings match account
The account holds any cash match amount contributed by
AWI beginning in December 2000. AWI contributes an
amount equal to 50% of the first 6% of each participant's
sheltered account contributions for all salaried
production employees. For employees hired on or after
January 1, 2005, the company match has been increased to
100% of the first 4% of employee sheltered account
contributions, and 50% of the next 4% of employee
sheltered account contributions.
In addition, the salaried production employees hired
before January 1, 2005, were offered a one-time
opportunity to discontinue accruing benefits under AWI's
Retirement Income Plan and become eligible for the
enhanced company match, effective July 1, 2005. The
account also holds any amount contributed by AWI before
cash matching contributions were discontinued in 1990.
(5) Age 50 catch-up account
Participants aged 50 or older may make "catch-up"
contributions, subject to the annual limits on catch-up
contributions specified in the Internal Revenue Code.
(6) AWP profit sharing account
The account holds discretionary profit sharing money
contributed by AWI for certain employees.
(7) Tax-deductible account
The account holds any contributions made to the
Investment Plan before January 1, 1987. No new
contributions can be made to that account.
Moreover, Mr. Webster states that the Retirement Savings Plan for
hourly paid employees also consists of seven accounts, except that
the Retirement Savings Match Account is replaced by a Company
Match Account, in which AWI contributes an amount equal to 50% of
the first 6% of each participant's sheltered account
contributions. The account also holds any amount contributed by
AWI before cash matching contributions were discontinued in 1989
and 1990, depending on the participant's work location.
Stock Ownership
According to Mr. Webster, the ESOP portion of the Investment Plan
has three accounts maintained for each eligible member for
contributions and allocations of shares of Armstrong Holdings,
Inc., common stock from the Unallocated Armstrong Holdings, Inc.
Common Stock Fund:
(1) Exchange account
Participants who elected to reduce their pre-tax
compensation ranging from 1% to 6% had contributions
credited to an Exchange Account, which were invested in
Armstrong Holdings common stock.
(2) Match account
The Investment Plan matched a portion of the
contributions made to the Exchange Account with
additional shares of Armstrong Holdings common stock.
The matching amounts were recorded in the participants'
Match Accounts. The match percentage, either 50% or 75%,
was determined by the closing stock price on the last day
of the allocation period.
(3) Equity account
Eligible participants also received shares of Armstrong
Holdings common stock in their Equity Account. The
Equity Account was intended to provide a source of funds
to replace certain retiree medical benefits that were
phased out in conjunction with the adoption of the ESOP.
Effective December 1, 2000, all regular contributions and
allocations to those accounts ceased.
Mr. Webster notes that all participants have a 100% vested
interest in the full value of their Exchange Account. Interest in
the Equity and Match Accounts vests after five years of service.
On June 25, 2002, the Investment Plan was amended such that all
participants actively employed on or after October 1, 2002, will
become 100% vested in their Equity and Match Accounts on
completion of three years of service.
Similarly, participants under the Retirement Savings Plan that are
hired prior to and actively employed on January 1, 2003, are fully
vested with regard to any AWI contributions, while those hired on
or after January 1 are fully vested after three years of service.
Mr. Webster relates that participants who were former participants
in:
* Armstrong Wood Products Non-Union Hourly Employees 401(k)
Plan;
* the Hartco Flooring Co. Bargaining Employees' Retirement
Savings Plan;
* the Hartco Flooring Co. Retirement Savings Plan; and
* the Robbins Hardwood Flooring, Inc., Employees' Retirement
Savings Plan,
but were not actively employed on January 1, 2003, will become
vested based on the requirements of those predecessor plans, with
a maximum vesting period of five years.
KPMG LLP audited the Plans' financial statements. KMPG believes
that the financial statements present fairly, in all respects, the
net assets available for benefits of the Investment Plan and the
Retirement Savings Plan as of September 30, 2005, and the related
statements of changes in net assets available for benefits for the
years then ended.
A full-text copy of AWI's Investment Plan is available at no
charge at http://ResearchArchives.com/t/s?7ec
A full-text-copy of AWI's Retirement Savings Plan is available at
no charge at http://ResearchArchives.com/t/s?7ed
About Armstrong World
Headquartered in Lancaster, Pennsylvania, Armstrong World
Industries, Inc. -- http://www.armstrong.com/-- the major
operating subsidiary of Armstrong Holdings, Inc., designs,
manufactures and sells interior floor coverings and ceiling
systems, around the world.
The Company and its debtor-affiliates filed for chapter 11
protection on December 6, 2000 (Bankr. Del. Case No. 00-04469).
Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, and Russell
C. Silberglied, Esq., at Richards, Layton & Finger, P.A.,
represent the Debtors in their restructuring efforts. The Debtors
tapped the Feinberg Group for analysis, evaluation, and treatment
of personal injury asbestos claims.
Mark Felger, Esq. and David Carickhoff, Esq., at Cozen and
O'Connor, and Robert Drain, Esq., Andrew Rosenberg, Esq., and
Alexander Rohan, Esq., at Paul, Weiss, Rifkind, Wharton &
Garrison, represent the Official Committee of Unsecured Creditors.
The Creditors Committee tapped Houlihan Lokey for financial and
investment advice. The Official Committee of Asbestos Personal
Injury Claimant hired Ashby & Geddes as counsel.
When the Debtors filed for protection from their creditors, they
listed $4,032,200,000 in total assets and $3,296,900,000 in
liabilities. (Armstrong Bankruptcy News, Issue No. 91; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
ATA AIRLINES: Court OKs Stipulation Resolving Ambac's EETC Claims
-----------------------------------------------------------------
As reported in the Troubled Company Reporter on Mar. 30, 2006,
certain of ATA Airlines, Inc., and its debtor-affiliates leased
seven aircraft pursuant to a leveraged lease transaction.
Ambac Assurance Corporation participated in the 2000 EETC
Transaction by issuing its Certificate Insurance Policy insuring
the payment of outstanding principal and accrued interest to the
senior tranche of debt holders.
ATA Airlines, Inc., agreed to pay certain fees, premiums and
reimbursements to Ambac under the parties' Insurance and Indemnity
Agreement, dated February 15, 2000.
Ambac filed two prepetition general unsecured claims relating to
Ambac's role as an insurer of the senior tranche of 2000 EETC
debt:
* Claim No. 1057 against ATA Airlines for payments owed to
Ambac under the Policy, a related Policy Fee Letter, and the
Insurance Agreement; and
* Claim No. 1056 against ATA Holdings Corp., for payments owed
to Ambac under a Guarantee.
In October 2005 and January 2006, the Debtors objected to the
Ambac 2000 EETC Claims on either of these grounds:
(a) improper amount;
(b) insufficient documentation or explanation;
(c) improper classification;
(d) exceeded the actual loss claim; and
(e) duplicative claims.
Following arm's-length negotiations relating to the Ambac 2000
EETC Claims and the Objections, the Reorganizing Debtors and
Ambac agree that:
(a) Claim No. 1056 will be allowed for $68,000,000, as Ambac's
only claim under the Leases against ATA Holdings Corp.;
(b) Claim No. 1057 will be allowed for $68,000,000, as Ambac's
only claim under the Leases against ATA Airlines, Inc.;
and
(C) Ambac acknowledges that pursuant to the operation of the
Reorganizing Debtors' confirmed Reorganization Plan, Ambac
will receive distribution pursuant only to one of either
Claim Nos. 1056 or 1057.
The Court approved the Debtors' stipulation with Ambac.
Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA
Holdings Corp. -- http://www.ata.com/-- is the nation's 10th
largest passenger carrier (based on revenue passenger miles) and
one of the nation's largest low-fare carriers. ATA has one of the
youngest, most fuel-efficient fleets among the major carriers,
featuring the new Boeing 737-800 and 757-300 aircraft. The
airline operates significant scheduled service from Chicago-
Midway, Hawaii, Indianapolis, New York and San Francisco to over
40 business and vacation destinations. Stock of parent company,
ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. The
Company and its debtor-affiliates filed for chapter 11 protection
on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868
through 04-19874). Terry E. Hall, Esq., at Baker & Daniels,
represents the Debtors in their restructuring efforts. Daniel H.
Golden, Esq., Lisa G. Beckerman, Esq., and John S. Strickland,
Esq., at Akin Gump Strauss Hauer & Feld, LLP, represents the
Official Committee of Unsecured Creditors. When the Debtors filed
for protection from their creditors, they listed $745,159,000 in
total assets and $940,521,000 in total debts. (ATA Airlines
Bankruptcy News, Issue No. 51; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
ATA AIRLINES: Settles Dispute Over GATX's $7.9 Mil. Unsec. Claim
----------------------------------------------------------------
As reported in the Troubled Company Reporter on Mar. 31, 2006,
GATX Third Aircraft Corporation filed Claim No. 2054 asserting an
unsecured non-priority claim for damages related to the Lease, the
Amended Lease or other Lease Documents. GATX leased to ATA
Airlines a Boeing B757-200 aircraft bearing U.S. Registration No.
N514AT.
The Debtors objected to Claim No. 2054.
Pursuant to an agreement between GATX, ATA and Holdings, GATX
waived its right to require cure of any defaults existing under
the Lease Documents at the time of their assumption.
However, GATX reserved its right to assert general unsecured non-
priority claims for damages arising from any defaults under the
Lease Documents as well a claim for the difference in the amount
of rent provided in the Lease and the Amended Lease.
Having considered both the time and expense that will be required
to litigate the allowed amount of GATX's general unsecured non-
priority claims, and the anticipated distributions on account of
those unsecured claims, GATX and the Reorganizing Debtors agree
that GATX's total unsecured, non-priority claim against the
Reorganizing Debtors, or any of the other Debtors, for the
Aircraft Claims will be $7,878,476.
The allowance of the Allowed GATX Claim fully resolves all of
GATX's Aircraft Claims against the Reorganizing Debtors, or any of
the other Debtors, and all claims, filed or scheduled, other than
the Allowed GATX Claim, for the Aircraft Claims will be disallowed
in their entirety.
The U.S. Bankruptcy Court for the Southern District of Indiana
approved the Debtors' stipulation with GATX.
Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA
Holdings Corp. -- http://www.ata.com/-- is the nation's 10th
largest passenger carrier (based on revenue passenger miles) and
one of the nation's largest low-fare carriers. ATA has one of the
youngest, most fuel-efficient fleets among the major carriers,
featuring the new Boeing 737-800 and 757-300 aircraft. The
airline operates significant scheduled service from Chicago-
Midway, Hawaii, Indianapolis, New York and San Francisco to over
40 business and vacation destinations. Stock of parent company,
ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. The
Company and its debtor-affiliates filed for chapter 11 protection
on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868
through 04-19874). Terry E. Hall, Esq., at Baker & Daniels,
represents the Debtors in their restructuring efforts. Daniel H.
Golden, Esq., Lisa G. Beckerman, Esq., and John S. Strickland,
Esq., at Akin Gump Strauss Hauer & Feld, LLP, represents the
Official Committee of Unsecured Creditors. When the Debtors filed
for protection from their creditors, they listed $745,159,000 in
total assets and $940,521,000 in total debts. (ATA Airlines
Bankruptcy News, Issue No. 51; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
ATLAS AIR: Distributes New Common Stock to Unsecured Claimholders
-----------------------------------------------------------------
Atlas Air Worldwide Holdings, Inc. (OTC: AAWW) has begun
distributing 40,824 shares of its new common stock to holders of
allowed general unsecured claims against the Company and certain
of its subsidiaries pursuant to the terms of their Joint Plan of
Reorganization, which became effective on July 27, 2004.
The current issuance of shares under the Plan follows an initial
pro rata distribution of 16,095,776 shares of new common stock of
AAWW to holders of allowed general unsecured claims in July 2005
and subsequent interim distributions to eligible claimholders of
40,940 shares in October 2005 and 7,493 shares in January 2006.
Distributions from the remaining 1,017,633 shares of new common
stock reserved for issuance to holders of allowed general
unsecured claims by the Plan will take place on a periodic basis.
Altogether, the Plan allocates a total of 17,202,666 shares of
AAWW's new common stock to holders of allowed general unsecured
claims against the bankruptcy estates of AAWW, Atlas Air, Inc.,
Airline Acquisition Corp I, and Atlas Worldwide Aviation
Logistics, Inc.
Under the Plan, these shares will be issued to holders of allowed
claims in the same proportion as each holder's allowed claim bears
to the total amount of allowed claims.
The exact number of shares that each claimholder ultimately
receives pursuant to the Plan is dependent on the final total of
allowed claims and other factors, such as unclaimed distributions
and fractional share interests.
Should any distribution of new common stock result in a
claimholder being entitled to the receipt of a fractional share,
AAWW's disbursing agent will retain the fractional share until a
distribution would result in a whole number of shares being
distributed to the claimholder on the next applicable distribution
date.
For purposes of a final share distribution under the Plan,
fractions of new common stock will not be issued. Instead,
fractions of new common stock will be rounded up or down to the
nearest whole number, with fractions equal to or less than 0.5 of
a share rounded down.
Any remaining undistributed shares on the final distribution date
will be released from AAWW's new common stock reserve and become
authorized, unissued common stock of AAWW.
As of Dec. 31, 2005, $606.9 million of general unsecured claims
against AAWW and the named subsidiaries had been allowed and
claims of $40 million remained in dispute.
The latter figure, however, has been and continues to be reduced
by virtue of the ongoing claims reconciliation process.
Following the current distribution of shares to holders of allowed
unsecured claims, the remaining balance of shares of new common
stock authorized for issuance under the Plan will be reserved for
issuance to holders of disputed general unsecured claims against
the bankruptcy estates of AAWW and the named subsidiaries, in the
event such disputed claims are subsequently determined to be
allowed claims.
To the extent that any such disputed claims become disallowed
claims, the shares of new common stock reserved for issuance to
the holders of such disputed claims will be distributed pro rata
to holders of allowed general unsecured claims previously
receiving shares of new common stock.
Including the current distribution, AAWW will have a total of
approximately 19.9 million shares of common stock outstanding.
Claimholders seeking additional information regarding the number
of shares distributed to them may refer to the following Web
address: http://www.atlasreorg.com/stockdistributionlist.html
About Atlas Air Worldwide Holdings
Atlas Air Worldwide Holdings, Inc. -- http://www.atlasair.com/
-- is a worldwide all-cargo carriers that operate fleets of
Boeing 747 freighters. The Company filed for chapter 11
protection (Bankr. S.D. Fla. Case No. 04-10794) on January 30,
2004. The Honorable Robert A. Mark presided over Atlas'
restructuring proceeding. Jordi Guso, Esq., at Berger Singerman,
represents the debtor. Atlas Air emerged from bankruptcy on
July 27, 2004. When the Company filed for bankruptcy, it listed
$1,451,919,000 in assets and $1,425,156,000 in debts.
B/E AEROSPACE: Earns $84.6 Million During Year Ended Dec. 31, 2005
------------------------------------------------------------------
B/E Aerospace, Inc., reported $84.6 million of consolidated net
earnings for the year ended Dec. 31, 2005, as compared to a
$22 million consolidated loss in 2004. Improved results for 2005
reflect the 45% increase in operating earnings and a $51.9 million
income tax benefit.
Net sales for the year ended Dec. 31, 2005, were $844.1 million,
an increase of $110.6 million or 15.1% as compared to the prior
year. Sales in 2005 increased over the 2004 level due to a higher
level of customer demand for products offered by each of the
Company's three segments.
The Company's balance sheet at Dec. 31, 2005, showed $1.4 billion
in total assets and $856 million in total liabilities. At
Dec. 31, 2005, the Company had working capital of $573.4 million,
as compared to $225 million as of Dec. 31, 2004.
Management attributes the increase in its Dec. 31, 2005,
working capital primarily to the net proceeds of approximately
$269 million from its December 2005 common stock offering.
Proceeds from the stock offer were used to redeem the Company's
$250 principal amount of 8% Senior Subordinated Notes in January
2006.
A full-text copy of the regulatory filing is available for free
at http://researcharchives.com/t/s?7eb
B/E Aerospace, Inc. -- http://www.beaerospace.com/--
manufactures aircraft cabin interior products, and distributes
aerospace fasteners. B/E designs, develops and manufactures
products for both commercial aircraft and business jets. B/E
manufactured products include seating, lighting, oxygen, and food
and beverage preparation and storage equipment. The company also
provides cabin interior design, reconfiguration and passenger-to-
freighter conversion services. Products for the existing aircraft
fleet -- the aftermarket -- generate about 60 percent of sales.
B/E sells its products through its own global direct sales
organization.
* * *
As reported in the Troubled Company Reporter on Jan. 16, 2006,
Moody's Investors Service raised the ratings of B/E Aerospace,
Inc., Corporate Family Rating to B1 from B3. Moody's says the
ratings outlook is stable. B/E has a Speculative Grade Liquidity
Rating of SGL-2.
BIRCH TELECOM: Emerges from Chapter 11 Protection
-------------------------------------------------
On April 13, 2006, Birch Telecom's Plan of Reorganization became
effective and the Company successfully emerged from Chapter 11.
Terms of the Plan
As reported in the Troubled Company Reporter on March 31, 2006,
Birch issued 100% of its post-emergence equity to its secured
lenders. In addition, Birch's pre-petition secured debt of
$108 million has been reduced to $35 million in reinstated debt
held by the secured lenders. Other creditors will receive
distributions as provided under the Plan.
CEO & President Appointment
Also, as previously reported, Stephen Dube has taken over the role
of CEO and President. Mr. Dube is also a member of the new Board
of Directors.
"This is an exciting day for Birch," Mr. Dube said. "We are
emerging as a much stronger company, with a greatly de-leveraged
balance sheet and the cash resources and operational structure
necessary to compete effectively in the current marketplace and
regulatory environment."
Mr. Dube continued, "We are thankful to our customers, employees,
senior management and creditors. It is due to their loyalty,
cooperation and hard word that we were able to successfully
restructure in just eight months.
"Through the changes implemented in the restructuring process, we
believe we are well-positioned for the future. We will remain
focused on offering our customers reliable local, long-distance
and Internet service options, easy conversion, competitive prices
and a better way of doing business," concluded Mr. Dube.
About Birch Telecom
Headquartered in Kansas City, Missouri, Birch Telecom, Inc., and
its subsidiaries -- http://www.birch.com/-- own and operate an
integrated voice and data network, and offer a broad portfolio of
local, long distance and Internet services. The Debtors provide
local telephone service, long-distance, DSL, T1, ISDN, dial-up
Internet access, web hosting, VPN and phone system equipment for
small- and mid-sized businesses. Birch Telecom and 28 affiliates
filed for chapter 11 protection on Aug. 12, 2005 (Bankr. D. Del.
Case Nos. 05-12237 through 05-12265). Mark S. Chehi, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represents Birch and its
debtor-affiliates in its second chapter 11 restructuring since
2002. Robert P. Simons, Esq., and Kurt F. Gwynne, Esq., at Reed
Smith LLP, provide the Official Committee of Unsecured Creditors
with legal advice and Chanin Capital Partners LLC provides the
Committee with financial advisory services. When the Debtors
filed for protection from their creditors, they estimated more
than $100 million in assets and debts.
BOWATER INC: Fitch Affirms Ratings at BB- With Stable Outlook
-------------------------------------------------------------
Fitch Ratings affirmed Bowater, Inc.'s senior unsecured bonds,
bank debt and issuer default ratings at 'BB-'. Nearly $2.5
billion in debt is subject to the rating. The Rating Outlook
remains Stable.
The affirmation reflects Bowater's position in the newsprint and
paper industry and its leveraged financial profile. To de-
leverage its capital structure, Bowater intends to sell $300
million in value of mostly timberland assets and repay debt.
A combination of profit initiatives and the debt reduction should
improve Bowater's financial metrics, a reasonable estimate being
4.0x EBITDA which is less than 5.4x at the end of last year.
Fiber, energy and the Canadian dollar could work in concert
against the company's program. However, Bowater and the rest of
the industry would likely move to push through compensatory price
increases in newsprint to jealously protect operating margins.
This has been a struggle all along, but largely successful when
mill operating rates are high.
Bowater has been making deliberate headway in realigning its
businesses to adjust to a declining market for newsprint, a
punishing currency appreciation in Canadian costs and increased
manufacturing costs across the spectrum.
By mid-year, Bowater will have converted 200,000 tons of capacity
at its Calhoun, Tennessee, mill to lightweight coated and
specialty papers and shuttered an expensive 210,000 tonne pulp
line in Ontario.
The former will move tonnage into product lines that enjoy around
a 3%-4% higher EBITDA margin; the latter will take out an
unprofitable manufacturing line and excess industry capacity.
Plans to boost earnings and cash flow by another $80 million per
year through a change-over in energy systems to biomass,
additional headcount reductions and changes to distribution
systems are being put into operation. Effects from these should
be visible this year; more should be visible next year.
Bowater may have an upper boundary on financial improvement. The
company would like to convert 250,000 tons at Thunder Bay to
lightweight coated grades. The profit motive may be compelling,
but the $200 million cost is difficult to digest.
Bowater probably will not spend money that it has not earned.
However, the returns in this business beat any interest savings
from debt repayment, and so leverage is likely to be around for
some time.
Bowater's major business interests are:
* newsprint (the second largest producer in North America
with 20% of capacity);
* lightweight coated and specialty papers (14% of North
American capacity);
* supercalendered and uncoated mechanical grades (13% of North
American capacity);
* market pulp (the third largest producer in North America with
an 8% share); and
* lumber.
BREAK THROUGH: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Break Through Construction, Inc.
fka Morrison International Construction
fka MICI
fka Miles International Construction
6855 W. Clearwater Avenue, Suite A101-341
Kennewick, Washington 99336
Bankruptcy Case No.: 06-00784
Type of Business: The Debtor is an industrial contractor.
Chapter 11 Petition Date: April 11, 2006
Court: Eastern District of Washington (Spokane/Yakima)
Judge: Frank L. Kurtz
Debtor's Counsel: Dan O'Rourke, Esq.
Southwell & O'Rourke
421 W. Riverside Avenue, Suite 960
Spokane, Washington 99201
Tel: 509-624-0159
Fax: 509-624-9231
Total Assets: $5,021,117
Total Debts: $5,581,255
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Platt Electric $630,469
P.O. Box 2858
Portland, OR 97208
ENIS, LLC $410,000
P.O. Box 3903
Pasco, WA 99302
Siemens Building Technologies, Inc. $229,000
Building Automation Division
6901 Mulkirk Meadow Drive
Beltsville, MD 20705
AL & GI $224,106
Transoceanic Shipping Co., Inc. $209,186
Mustang Power Systems $189,781
Mascott Equipment Company $88,838
Thompson Mechanical Contractors $70,561
Gaffney-Krouse Supply Corp. $70,350
Layfield (C.W. Neal) $67,283
Unitrans International, Inc. $65,750
Fire Power $50,583
Environetics, Inc. $35,125
Meier Enterprises, Inc. $34,022
Greenheck $25,596
DHL Danzas Air & Ocean $25,318
Keller Supply Company $24,704
Consolidated Electrical Distributors, Inc. $24,095
SMK Tri-Cities, Inc. $23,412
Rutherford $16,602
CALPINE CORP: Creditors Object to Plan-Filing Extension Request
---------------------------------------------------------------
Arcadia Power Partners, LLC, U.S. Bank National Association, and
Law Debenture Trust Company of New York objected to the request of
Calpine Corp. and its debtor-affiliates to extend their deadline
to file a Chapter 11 plan.
As reported in the Troubled Company Reporter on April 4, 2006, the
Debtors asked the U.S. Bankruptcy Court for the Southern District
of New York to extend its exclusive periods to file a plan of
reorganization through Dec. 31, 2006, and to solicit acceptances
of that plan through March 31, 2007.
The Debtors wanted more time to develop and propose a viable plan
of reorganization.
Matthew A. Cantor, Esq., at Kirkland & Ellis LLP, in New York,
told the Court that much work remains to be done in the Debtors'
cases given the scale and complexity of their restructuring.
Objections
A. Arcadia Power Partners
Arcadia Power Partners, LLC, informs the Court that Calpine
Energy Services, L.P., has not been religious in paying its
obligations under two prepetition power purchase agreements. The
Debtors misstated their treatment of postpetition obligations and
the Court should not rely upon these statements in considering
their request to extend the exclusive periods, APP says.
Barry N. Seidel, Esq., at King & Spalding LLP, in New York,
relates that the Court will soon be hearing the part of APP's
request to compel the Debtors to perform under the Power Purchase
Agreements and to pay administrative claims amounting to
$12,941,679.
Although CES continues to use power delivered by APP postpetition
and the Debtors maintain in their Extension Motion that they have
"sufficient liquidity to pay postpetition bills as they come due,"
the Debtors have failed to satisfy their postpetition payment
obligations to APP.
B. U.S. Bank National Association
U.S. Bank National Association, as Trustee, says the exclusive
period for filing a plan relating to two gas-fired combined cycle
electric generating facilities -- the Tiverton and Rumford
Facilities -- should be permitted to lapse, so that PMCC Calpine
New England Investment LLC, as Owner Lessor, and the Trustee, as
the primary creditors of Tiverton and Rumford, may have the full
range of options available to address the wind-down of these
Debtors, including the option of filing their own plan.
Keith H. Wofford, Esq., at Ropes & Gray LLP, in New York,
explains that the Debtors have given notice of their intent to
relinquish their right to operate the power plants.
The possibility that the Debtors would undertake any
reorganization of Tiverton and Rumford has been rendered even more
remote as they have renounced any commitment to provide funding to
Tiverton and Rumford under the DIP Financing by including them in
the list of Designated Projects.
Further, Mr. Wofford notes that the Debtors have idled the
Facilities, denied any further ownership or tax obligations, and
publicly announced that continuing to operate the Facilities
under the terms of the leases would be uneconomic for Calpine and
would cause significant harm to the bankruptcy estate.
Under these circumstances, he says an extension of exclusivity as
to the Tiverton and Rumford Debtors can serve no purpose as there
is no progress for the Facilities toward reorganization anyway.
Thus, U.S. Bank asks the Court to deny the Debtors' request
with respect to the Tiverton Debtors and Rumford Debtors.
C. Law Debenture Trust Company of New York
Law Debenture Trust Company of New York, as indenture trustee
under the Indenture for the 9-5/8% First Priority Senior Secured
Notes Due 2014, notes that 255-day or eight-month extension the
Debtors seek "greatly exceeds" the extension granted in other
complex cases and is in contravention of the policies underlying
the Bankruptcy Code's limitations.
Lisa M. Kelsey, Esq., at Brown Rudnick Berlack Israels LLP, in
Boston, Massachusetts, notes that Congress gave courts the power
to reduce the exclusivity period in order to democratize the plan
process and to prevent a debtor from monopolizing the plan
process, as had been the case under chapter XI of the former
Bankruptcy Act, pursuant to which only a debtor could propose a
plan of arrangement.
The First Lien Trustee submits that any extension of exclusivity
should:
(1) in each instance be limited to 180 days; and
(2) be without prejudice to the Debtors' right to seek
additional and further extensions as may be necessary.
About Calpine Corp.
Headquartered in San Jose, California, Calpine Corporation --
http://www.calpine.com/-- supplies customers and communities with
electricity from clean, efficient, natural gas-fired and
geothermal power plants. Calpine owns, leases and operates
integrated systems of plants in 21 U.S. states and in three
Canadian provinces. Its customized products and services include
wholesale and retail electricity, gas turbine components and
services, energy management and a wide range of power plant
engineering, construction and maintenance and operational
services. The Company filed for chapter 11 protection on Dec. 20,
2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri,
Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert
G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in
their restructuring efforts. Michael S. Stamer, Esq., at Akin
Gump Strauss Hauer & Feld LLP, represents the Official Committee
of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed
$26,628,755,663 in total assets and $22,535,577,121 in total
liabilities. (Calpine Bankruptcy News, Issue No. 13; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
CANADIAN OIL: Moody's Shifts Trend on Long-Term Ratings to Neg.
---------------------------------------------------------------
Moody's Investors Service affirmed the long-term debt ratings of
Canadian Oil Sands Limited and changed the outlook to stable from
negative.
The change in COSL's outlook reflects the substantial construction
progress on the Syncrude Stage 3 expansion and improvements in
COSL's leverage compared to Moody's prior rating action in June
2004.
COSL's stable outlook reflects Moody's expectation that Stage 3
will become operational during the second quarter of 2006, which
should reduce COSL's unit operating costs, increase free cash flow
and reduce leverage.
Moody's cited the higher cost estimate and delayed completion of
Stage 3 in its negative outlook. At present, construction of the
upgrader expansion is virtually complete and CDN8.1 billion of the
CDN8.4 billion expected final cost had been expended at the end of
2005.
The new primary upgrading unit, Coker 8-3, has been installed and
first feed is expected to commence by mid-2006. Production is
projected to ramp up to its gross design capacity of 350 thousand
barrels per day during the second half of 2006.
COSL's expected leverage was another concern in the negative
outlook. The company's debt peaked at the end of the second
quarter 2005 and declined slightly during the remaining two
quarters of 2005.
Leverage, measured by debt/cap, and CFO/debt have both improved
since June 2004. Positive net income, driven primarily by higher
oil prices, and distribution reinvestment plan equity issuances by
Canadian Oil Sands Trust, COSL's publicly traded parent, have
increased shareholder's equity, leading to lower debt/cap.
Strong oil prices also have led to increased revenue and operating
cash flow resulting in higher CFO/debt. Moody's expects COSL to
repay debt to its target net debt level of CDN1.2 billion by the
end of 2006.
Outlook Actions:
Issuer: Canadian Oil Sands Limited
* Outlook, Changed To Stable From Negative
Canadian Oil Sands Limited, headquartered in Calgary, Alberta and
wholly owned by publicly traded Canadian Oil Sands Trust, owns a
35.49% working interest in the Syncrude oil sands mining and
upgrading project in northern Alberta.
CITRUS VALLEY: Moody's Holds Ba1 Rating on $87 Mil. Certificates
----------------------------------------------------------------
Moody's Investors Service affirmed Citrus Valley Health Partners'
Ba1 underlying rating affecting $87 million of the outstanding
Series 1998 Certificates of Participation issued through the
California Statewide Communities Development Authority.
The outlook is stable. The Series 1998 COPs are insured by MBIA
and carry the insurer's claims paying rating of Aaa.
Legal Security: The outstanding bonds are secured by a pledge of
gross revenues of the obligated group which includes Citrus Valley
Health Partners, Citrus Valley Medical Center, and Foothill
Presbyterian Hospital. The obligated group makes up the majority
of the system's revenues and assets.
Interest Rate Derivatives: None
Strengths:
* Strong market position in the East San Gabriel Valley with a
stable 36% market share
* Continued financial improvement, reaching peak operating
performance with an operating margin of 2.7% and operating
cash flow margin of 7.8% in fiscal 2005
* Increased liquidity with 84 days cash on hand at fiscal year
end 2005
Challenges:
* Capital needs to address deferred maintenance and seismic
requirements, which we believe will require sizable
investment
* Competitive and difficult operating environment given
state's unfunded mandates and the hospital's high Medi-Cal
exposure
* Challenging labor environment with continued reliance on
contract nurses and recent unionization of Citrus Valley
Medical Center
Recent Results/Developments:
The rating update follows a review of CVHP's unaudited 2005
financial results, which shows a continued trend of financial
improvement to reach peak levels of performance.
CVHP continues to make process since achieving its turnaround and
returning the organization back to profitability in FY 2004.
CVHP reported operating income of $8.5 million compared to prior
year's $4.7 million to generate a solid 2.7% operating margin and
7.8% operating cash flow margin in FY 2005.
The continued improvement reflects higher Medi-Cal
disproportionate share payments, good rate increases on large
commercial managed care contracts as many of CVHP's contracts have
been renegotiated, and continued focus on expenses with close
monitoring of productivity levels and supply costs.
The improvement has been partially offset by growth in labor costs
with continued reliance on agency nurses. While CVHP continues to
experience high demand for its services as evidenced by occupancy
rates in excess of 75% over the past three years, surgical volume
continues to decline due to increased competition from an existing
physician owned surgery center. Inpatient admissions remain flat
with 0.3% growth due to capacity constraints.
Despite the improvement over the past two years, financial
performance is expected to moderate in FY 2006 with increased
labor pressures, requiring high annual wage increases and market
adjustments.
In addition, the nurses at Citrus Valley Medical Center have
recently voted to be represented by the California Nurses
Association. Approximately 23% of the organization's staff may be
represented by a collective bargaining unit.
The improvement has driven higher cash flow levels to strengthen
debt measures and liquidity position, consistent with a higher
rating category.
However, we believe CVHP faces considerable balance sheet pressure
given the system's deferred capital and large seismic
requirements, which limits upward rating movement.
Maximum annual debt service improved to 4.3x and debt to cash flow
is stronger at 3.6x in FY 2005, compared with 3.2x and 5.2x,
respectively, in FY 2004.
Unrestricted cash and investments increased to $66.8 million at
fiscal year end 2005, improving cash on hand to 84 days from 74 in
2004, despite higher capital spending.
While we believe CVHP will continue to gradually build its
liquidity, we believe CVHP faces significant demand for its
limited resources given the system's deferred capital and seismic
requirements.
Moody's believes CVHP's greatest future challenge will be
addressing capital needs given its limited, albeit growing,
financial reserves.
In the near-term capital plans are limited to an emergency room
replacement project for the Foothill Campus which will address
much of the seismic requirements for that campus.
The project is estimated to cost $11 million of which the entire
amount has been fundraised. The system continues to evaluate its
capital needs for the rest of the system and potential partners to
help meet the organization's future needs.
Outlook: Despite positive operating and financial momentum with
expectations that CVHP will continued to make progress and sustain
stronger margins and cash flow generation to improve debt measures
and liquidity position, the outlook is stable and reflects the
organization's limited financial reserves to address what we
believe will be significant future capital needs.
What could change the rating up: Maintenance of higher levels of
performance and continued growth of liquidity; strong market
position and improved volume trends
What could change the rating down: A reversal of current trends
with a deterioration of financial performance or liquidity
position; loss in market share due to increased competitive
pressures, material increase in debt without commensurate
growth in cash flow
Key Indicators
Assumptions & Adjustments:
-- Based on financial statements for Citrus Valley Health
Partners, Inc. and Affiliates
-- First number reflects audit year ended December 31, 2004
-- Second number reflects unaudited year ended December 31,
2005
-- Investment returns smoothed at 6%
* Inpatient admissions: 31,903; 32,001
* Total operating revenues: $303.1 million; $310.1 million
* Moody's-adjusted net revenue available for debt service:
$24.0 million; $28.6 million
* Total debt outstanding: $91.5 million; $88.6 million
* Maximum annual debt service: $6.7 million; $6.7
million
* MADS Coverage with reported investment income: 3.5 times;
4.1 times
* Moody's-adjusted MADS Coverage with normalized investment
income: 3.6 times; 4.3 times
* Debt-to-cash flow: 4.6 times; 3.6 times
* Days cash on hand: 75 days; 84 days
* Cash-to-debt: 64%; 75%
* Operating margin: 1.5%; 2.7%
* Operating cash flow margin: 6.7%; 7.8%
CLAYTON HOLDINGS: Stock Offering Cues Moody's to Hold B1 Rating
---------------------------------------------------------------
Moody's Investors Service affirmed the B1 senior secured credit
facility and corporate family ratings, respectively, of Clayton
Holdings, Inc., and concurrently changed the rating outlook to
positive, from stable.
According to Moody's, this rating action follows Clayton's
successful Initial Public Offering in which the company raised
$127.5 million. The proceeds from the IPO were used in part to
reduce leverage.
According to Moody's, the B1 rating reflects Clayton's position as
a leading provider of non-conforming mortgage-related outsourced
services and analytics that primarily support non-agency mortgage-
backed securities issuance. Other positives include Clayton's
solid margins and revenue growth, as well as strong interest
coverage.
The company's main services are its transaction management
services, including due diligence, which represent a majority of
revenues, and surveillance services.
Clayton is the leading firm in these primary service lines, and
has long-standing relationships with the investment banks that
feed it much of its business.
Clayton's customers typically satisfy due diligence requirements
through outsource providers. However, Clayton's long-term
competitiveness could be weakened due to shifts in customers'
service-sourcing strategies, and to potential new entrants.
"The revision of Clayton's rating outlook to positive reflects its
reduced debt and heightened capital access stemming from its IPO,
as well as the firm's continued efforts to diversify its
revenues," according to Brian Harris, Vice President/Senior Credit
Officer.
The rating agency said that Clayton's challenges include
diversifying its revenues beyond its due diligence services, as
well as effective leverage that remains high given the limited
diversity of revenue sources, and customer concentration.
Positive ratings movement would depend on the continued
diversification of revenues, resulting in Clayton's due diligence
business representing less than half of overall revenues, and the
firm's surveillance and advisory services representing more than
20% of revenues, while growing revenues and maintaining EBITDA
margins in the high teens.
The outlook would return to stable at B1 should interest coverage
increase above 4x, the EBITDA margin fall below 15%, or leverage
rise above 3x.
These ratings were affirmed with positive outlooks:
* Senior secured term loan and Revolver at B1
* Corporate family rating at B1
Clayton Holdings, Inc., is based in Shelton, Connecticut, USA, and
provides outsourced services, information-based analytics and
specialty consulting for buyers and sellers of, and investors in,
mortgage-related loans and securities and other debt instruments.
CLUETT AMERICAN: S&P Affirms CCC+ Rating & Revises Outlook to Neg.
------------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on hosiery
manufacturer Cluett American Corp. to negative from stable.
At the same time, Standard & Poor's affirmed its ratings on the
company, including its 'CCC+' corporate credit rating.
The outlook revision reflects:
* Cluett's very weak credit protection measures;
* high debt leverage; and
* Standard & Poor's concern that the company's financial
metrics will likely remain weak.
Cluett's sales are seasonal and, as a result, higher in the third
and fourth quarters, when they coincide with two peak retail
selling seasons; back-to-school and Christmas. Also, its
customers are somewhat concentrated; the top 10 accounted for
about 82% of the sock group's sales in fiscal 2005, and are
largely in the department store channel. The operating
environment remains challenging for apparel companies, and margins
have been pressured by the highly promotional and competitive
retail environment, especially in the department store channel.
For fiscal year ended Dec. 31, 2005, financial measures remained
very weak, and the company's leverage remains high.
Cluett has not historically generated any meaningful cash flow.
Although it has exited certain unprofitable products and business
segments, sold non-core assets, and restructured its manufacturing
operations, Standard & Poor's believes that the company will be
challenged to improve its business and financial profile given the
difficult industry conditions.
COLLINS & AIKMAN: Masanovich Named as Chief Accounting Officer
--------------------------------------------------------------
Collins & Aikman Corporation appointed Matti Masanovich as the
company's Vice President, Controller and Chief Accounting Officer
on March 31, 2006, the company disclosed in a regulatory filing
with the Securities and Exchange Commission.
Mr. Masanovich had been serving as Collins & Aikman's Vice
President of Internal Audit since joining the company in November
2005.
From 2001 until November 2005, Mr. Masanovich served as Federal-
Mogul Corporation's Chief Audit Executive and Director of Audit
Services.
Under the terms of Mr. Masanovich employment arrangement, he is
entitled to receive, among other things, an annual base salary of
$250,000 and an annual bonus equal to 50% of his annual base
salary.
In addition, Mr. Masanovich is eligible to receive a "success
bonus" and, in certain circumstances, certain severance
benefits, in each case, as determined by the chief executive
officer.
Headquartered in Troy, Michigan, Collins & Aikman Corporation
-- http://www.collinsaikman.com/-- is a global leader in cockpit
modules and automotive floor and acoustic systems and is a leading
supplier of instrument panels, automotive fabric, plastic-based
trim, and convertible top systems. The Company has a workforce of
approximately 23,000 and a network of more than 100 technical
centers, sales offices and manufacturing sites in 17 countries
throughout the world. The Company and its debtor-affiliates filed
for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case
No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP,
represents C&A in its restructuring. Lazard Freres & Co., LLC,
provides the Debtor with investment banking services. Michael S.
Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents
the Official Committee of Unsecured Creditors Committee. When the
Debtors filed for protection from their creditors, they listed
$3,196,700,000 in total assets and $2,856,600,000 in total debts.
(Collins & Aikman Bankruptcy News, Issue No. 29; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
COLLINS & AIKMAN: Hires Brinks Hofer as Special Counsel
-------------------------------------------------------
Collins & Aikman Corporation and its debtor-affiliates sought and
obtained authority from the U.S. Bankruptcy Court for the Eastern
District of Michigan to employ Brinks, Hofer, Gilson & Lione, PC,
as their special matters counsel to represent them:
a) in a patent infringement suit filed by Wilhelm Karmann
GmbH in January 2006;
b) in a potential patent infringement suit involving
American Sunroof Corporation;
c) in a licensing matter; and
d) in intellectual property portfolio management matters.
In addition to handling the Special Counsel Matters, Brinks will
continue to provide legal services to the Debtors as an ordinary
course professional on various matters that pertain to the
ordinary operation of the Debtors' businesses. Since the Petition
Date, Brinks has billed $2,171 in legal fees working on those OCP
Matters. Brinks will continue to invoice the Debtors and will
continue to be compensated as an ordinary course professional.
Brinks has been providing services to the Debtors in connection
with the Special Counsel Matters since January 18, 2006.
The hourly rates for Brinks attorneys who may work on the Special
Counsel Matters range from $150 to $625 and the hourly rates for
paralegals expected to work on those four matters presently range
from $150 to $170.
Since the Petition Date, Brinks has billed $68,910 and been not
yet been paid for services rendered and expenses incurred
postpetition in connection its handling of the Special Counsel
Matters. Fees and expenses have continued to accrue on those
matters. Specifically, Brinks has been billed these amounts:
a) Karmann Litigation -- $43,219 in fees and $3220 in
expenses;
b) ASC Litigation -- $9,608 in fees and $715 in expenses;
c) GM Lambda Matter -- $16,083 in fees and $0 in expenses;
and
d) IP Portfolio Matters -- $0 in fees and $0 in expenses.
Steven L. Oberholtzer, Esq., a shareholder at Brinks, assures the
Court that the firm is disinterested as that term is defined in
Section 101(14) of the Bankruptcy Code.
Headquartered in Troy, Michigan, Collins & Aikman Corporation
-- http://www.collinsaikman.com/-- is a global leader in cockpit
modules and automotive floor and acoustic systems and is a leading
supplier of instrument panels, automotive fabric, plastic-based
trim, and convertible top systems. The Company has a workforce of
approximately 23,000 and a network of more than 100 technical
centers, sales offices and manufacturing sites in 17 countries
throughout the world. The Company and its debtor-affiliates filed
for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case
No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP,
represents C&A in its restructuring. Lazard Freres & Co., LLC,
provides the Debtor with investment banking services. Michael S.
Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents
the Official Committee of Unsecured Creditors Committee. When the
Debtors filed for protection from their creditors, they listed
$3,196,700,000 in total assets and $2,856,600,000 in total debts.
(Collins & Aikman Bankruptcy News, Issue No. 29; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
COLLINS & AIKMAN: AIG Can Advance Defense Costs to Officers
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Michigan
authorized AIG/American Home Assurance Company to advance defense
costs to certain eligible officers and directors of Collins &
Aikman Corporation and its debtor-affiliates.
As reported in the Troubled Company Reporter on Feb. 13, 2006, the
Debtors asked the Court to lift the automatic stay to permit
AIG/American to advance defense costs to certain directors,
officers and other employees covered under a D&O Policy.
Judge Rhodes clarifies that prior to advancing any defense costs
of the D&O Beneficiaries or their professionals:
(a) the relevant professional will submit to the Court and the
Core Group copies of all billings and invoices for which
payment is sought together with advices of payment and
documents incident thereto; and
(b) AIG will submit to the Court and the Core Group a
cumulative detailed accounting and total of all sums paid
out under the D&O Policy and the remaining amounts
available.
The Debtors will not expend postpetition funds to indemnify their
directors, officers or employees for prepetition acts, except as
may be otherwise approved by the Court.
Headquartered in Troy, Michigan, Collins & Aikman Corporation
-- http://www.collinsaikman.com/-- is a global leader in cockpit
modules and automotive floor and acoustic systems and is a leading
supplier of instrument panels, automotive fabric, plastic-based
trim, and convertible top systems. The Company has a workforce of
approximately 23,000 and a network of more than 100 technical
centers, sales offices and manufacturing sites in 17 countries
throughout the world. The Company and its debtor-affiliates filed
for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case
No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP,
represents C&A in its restructuring. Lazard Freres & Co., LLC,
provides the Debtor with investment banking services. Michael S.
Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents
the Official Committee of Unsecured Creditors Committee. When the
Debtors filed for protection from their creditors, they listed
$3,196,700,000 in total assets and $2,856,600,000 in total debts.
(Collins & Aikman Bankruptcy News, Issue No. 28; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
CSK AUTO: Financial Filing Delay May Cue Lenders' Default Notices
-----------------------------------------------------------------
CSK Auto Corporation reported that pending the completion of the
investigation of the Audit Committee of its Board of Directors
into certain accounting errors and irregularities, it is delaying
the filing of its annual report on Form 10-K for the fiscal year
ended Jan. 29, 2006, with the U.S. Securities and Exchange
Commission.
As reported in the Troubled Company Reporter on Mar. 30, 2006, the
company postponed the release of its fourth quarter and fiscal
2005 financial results to provide adequate time for the company
and the Audit Committee of the Board of Directors of the company
to conduct a thorough review of certain accounting errors and
irregularities discovered in the course of the Company's ongoing
assessment of internal control over financial reporting required
under Section 404 of the Sarbanes-Oxley Act of 2002 and an
internal audit.
The company expects its financial results for:
* each of the three fiscal years 2002, 2003 and 2004,
* selected consolidated financial data for each of the five
fiscal years 2000 through 2004, and
* interim financial information for each of its quarters in
fiscal year 2004 and for the first three quarters of fiscal
2005,
will need to be restated in order to account properly for the
matters identified in connection with the investigation.
The company will file its financial statements as soon as
reasonably practicable, however, the timing is dependent upon
substantial completion of the Audit Committee investigation and
completion by the Company of its required assessment of internal
control over financial reporting for fiscal 2005 and restatement
of historical financial results.
The company will be evaluating whether any of the matters
identified in the course of the Audit Committee's investigation
were the result of one or more material weaknesses in its internal
controls in addition to those previously reported in its fiscal
2004 Form 10-K.
Based on current information, the Company expects to identify
additional material weaknesses in its internal controls. The
company will conclude its evaluation and report its findings in
this regard when it files its fiscal 2005 Form 10-K.
Likely Notices of Default
Under the indentures governing CSK Auto, Inc.'s $225 million of
senior subordinated notes and $225 million of exchangeable senior
notes and under the Company's credit agreement, it is required to
file its annual financial information with the SEC.
The company anticipates that holders of certain of its outstanding
notes may file notices of default relating to the delayed filing
of the financial statements, which notices would be a predicate to
any subsequent attempt to accelerate indebtedness.
Based on the present status and scope of the investigation and
discussions with its independent counsel and accounting firm
assisting the Audit Committee with the investigation, the Audit
Committee believes that the investigation should be substantially
concluded in a timeframe that would enable the Company to complete
the required filings before any material adverse consequences
would occur under these agreements. However, no assurance can be
given that this timing will be achieved.
Wants Temporary Waiver
As of Apr. 13, 2006, the company has approximately $132 million
outstanding under its revolving credit agreement with a syndicate
of lenders. If the company fails to deliver its annual financial
information on time, it may not be able to draw on the revolver.
The company is working with its bank lenders to obtain a temporary
waiver of the deadline to permit continued access to the credit
facility pending substantial completion of the investigation.
If the investigation is substantially completed in that the
Company may timely file its audited fiscal 2005 financial
statements as well as any restated prior period financial
statements, the company does not believe any of the notes will be
subject to a right to be accelerated or that the lenders under the
credit agreement will choose to accelerate that indebtedness.
However, because of the uncertainties inherent in the
investigation, the Company is also engaged in preliminary
discussions concerning alternative financing options in the event
any of its outstanding indebtedness is accelerated.
The company believes that by virtue of its overall financial
condition and continuing positive cash flow, it will be able to
secure replacement financing if needed. However, the cost of a
replacement financing would likely be considerably higher than the
cost of the company's existing indebtedness.
About CSK Auto Corporation
Headquartered in Phoenix, Arizona, CSK Auto Corporation --
http://www.cskauto.com/-- is the parent company of CSK Auto,
Inc., a specialty retailer in the automotive aftermarket. As of
Jan. 29, 2006, the Company operated 1,273 stores in 22 states
under the brand names Checker Auto Parts, Schuck's Auto Supply,
Kragen Auto Parts and Murray's Discount Auto Parts.
* * *
As reported in today's Troubled Company Reporter, Standard &
Poor's Ratings Services lowered its corporate credit and senior
unsecured debt ratings on Phoenix, Arizona-based CSK Auto Inc. to
'CCC+' from 'B+'. The subordinate debt rating was lowered to
'CCC-' from 'B-'. The ratings are now on CreditWatch with
developing implications. Prior to the downgrade, the ratings had
been on CreditWatch with negative implications since March 27,
2006.
The downgrade and CreditWatch listing follow the company's
announcement it was delaying the filing of its annual report on
Form 10-K for the fiscal year ended Jan. 29, 2006, and that this
could lead holders of its outstanding notes to file notices of
default.
CSK AUTO: S&P Downgrades Subordinate Debt Rating to CCC- from B-
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
and senior unsecured debt ratings on Phoenix, Arizona-based CSK
Auto Inc. to 'CCC+' from 'B+'.
The subordinate debt rating was lowered to 'CCC-' from 'B-'. The
ratings are now on CreditWatch with developing implications.
Prior to the downgrade, the ratings had been on CreditWatch with
negative implications since March 27, 2006.
The downgrade and CreditWatch listing follow the company's
announcement that it is delaying the filing of its annual report
on Form 10-K for the fiscal year ended Jan. 29, 2006, and that
this could lead holders of its outstanding notes to file notices
of default.
"The lower ratings reflect the potential for such a notice to
affect the company's liquidity position, and ultimately to result
in a payment default," said Standard & Poor's credit analyst
Stella Kapur.
However, ratings could be raised back to the 'B' category:
* if CSK's creditors waive any events of default that occur;
* if it appears that CSK's liquidity position and operating
performance will be satisfactory until it can resolve its
financial reporting difficulties; and
* if the outcome of the internal accounting investigation is
not material.
The delay in filing CSK's 10-K report stems from a previously
announced investigation by the board of directors' audit committee
into certain accounting errors and irregularities.
Standard & Poor's will continue to monitor developments and will
respond accordingly.
D4D HEALTH: Voluntary Chapter 11 Case Summary
---------------------------------------------
Debtor: D4D Health & Wellness Medical Center, LLC
10640 North 28th Drive, Suite A-103
Phoenix, Arizona 85029
Bankruptcy Case No.: 06-01073
Type of Business: The Debtor is a healthcare advocacy
network and specializes in delivering
cost-effective healthcare protection.
See http://www.diabetics4diabetics.com/
Chapter 11 Petition Date: April 17, 2006
Court: District of Arizona (Phoenix)
Judge: Eileen W. Hollowell
Debtor's Counsel: Teresa H. Foster, Esq.
Ellis & Baker, P.C.
7310 North 16th Street, #320
Phoenix, Arizona 85020
Tel: (602) 956-8878
Fax: (602) 224-9663
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.
DELTA AIR: S&P Affirms Default Corporate Credit Rating
------------------------------------------------------
Delta Air Lines Inc. (rated 'D') reached a tentative
contract agreement with its pilots' union, averting the
threat of a potentially devastating strike.
Standard & Poor's Ratings Services affirmed its ratings on the
company, including its 'D' corporate credit rating (which is
defined by Delta's bankruptcy status) and ratings on various
enhanced equipment trust certificates.
A panel of arbitrators was due to rule last week, on Delta's
request to reject the existing pilot contract in bankruptcy, and
the union had threatened to call a strike if that occurred.
Management sought $305 million of concessions from the pilots, in
addition to the $1 billion agreed in late 2004, as part of its
efforts to lower Delta's operating costs and facilitate
reorganization. Details of the tentative agreement were not
disclosed, and the contract must first be reviewed by the union
leadership, which will decide whether to recommend it, and then
voted on by pilots.
"If ratified, the pilot contract would represent an important step
forward in the company's efforts to reorganize," said Standard &
Poor's credit analyst Philip Baggaley.
Delta's other major employee groups are not unionized (excepting
some groups at regional subsidiary Comair Inc.), and have already
taken cuts in pay and benefits. However, a concessionary pilot
contract that falls well short of what management had sought could
cause friction between the pilots and other employees, and make it
more difficult for Delta to attract financing to exit bankruptcy.
In addition, such an outcome would encourage other employee groups
to join unions to improve their bargaining position in future
contract talks.
The 'D' corporate credit rating on Delta Air Lines reflects the
airline's Sept. 14, 2005, bankruptcy filing. Ratings on enhanced
equipment trust certificates reflect payment and collateral
coverage prospects for individual securities, or, in the case of
'AAA' rated securities, insurance provided by bond insurers. The
company is seeking to secure $3 billion of annual profit
improvements through:
* debt and lease restructuring;
* network and revenue improvements; and
* further reductions in labor compensation.
DOMTAR INC: DBRS Downgrades Notes & Debentures Rating to BB (Low)
-----------------------------------------------------------------
Dominion Bond Rating Service downgraded the ratings on Domtar
Inc.'s Unsecured Notes and Debentures and Preferred Shares to BB
(low) from BB (high), and Pfd-5 (high) from Pfd-4, respectively.
The trends have been changed to Stable from Negative.
The rating action reflects the weakness in Domtar's credit
metrics, and the expectation that a measurable improvement in the
Company's financial profile is unlikely over the medium term.
The Stable trend is based on the expectation that Domtar's credit
metrics will not deteriorate further and remain acceptable for the
current rating.
Rating Actions:
* Unsecured Notes and Debentures -- Downgraded BB (low)
* Preferred Shares -- Downgraded Pfd-5 (high)
Domtar's operating results have been negatively impacted by weak
uncoated free sheet demand, high/rising input costs, and strength
in the Canadian dollar; all of which are showing limited signs of
reversing.
DBRS acknowledges that improvement in the UFS market has taken
place in early 2006, but this is not expected to be sustainable.
The structural decline in UFS demand from electronic media
penetration, grade substitution, and conservation, among other
factors, is well-established and remains the key issue facing
Domtar.
DBRS expects that UFS demand will remain under pressure going
forward, particularly with moderating U.S. economic growth.
Industry capacity curtailments will continue to be required to
provide pricing support, but are not expected to be sufficient to
drive a measurable improvement in profitability.
Continuing earnings pressure will constrain Domtar's ability to
generate free cash flow and reduce debt from aggressive levels.
The Company's balance sheet is expected to remain relatively
unchanged, over the near term, but generally acceptable for the
rating.
DBRS would consider further downsides to the rating in the event
of weaker-than-expected operating performance, which would reduce
Domtar's financial flexibility.
However, the Company's liquidity risk is considered manageable,
particularly given its favourable debt repayment schedule and
depreciation well above capex. Furthermore, proceeds from the
sale of Domtar's 50% interest in Norampac would provide additional
support if necessary.
DSLA NIM: DBRS Places $4.3 Million Class N-3 Notes' Rating at BB
----------------------------------------------------------------
Dominion Bond Rating Service assigned new ratings of "A", BBB, and
BB to the above NIM Notes, Series 2006-1, issued by DSLA NIM CI-2
Corp.:
* $24.0 million, Class N-1 -- New Rating A
* $5.1 million, Class N-2 -- New Rating BBB
* $4.3 million, Class N-3 -- New Rating BB
The NIM Notes are backed by a 100% interest in the Class C and
Class P Certificates issued by DSLA Mortgage Loan Trust 2006-AR1.
The Class C Certificates will be entitled to all excess interest
in the Underlying Trust, and the Class P Certificates will be
entitled to all prepayment premiums or charges received in respect
of the mortgage loans.
Payments on the NIM Notes will be made on the 19th of each month
commencing in April 2006. The interest payment amount will be
distributed to the Noteholders, followed by the principal payment
amount to the Noteholders until the principal balance of the NIM
Notes is reduced to zero. Any remaining amounts will be
distributed to the Issuer.
The mortgage loans in the Underlying Trust were originated or
acquired by Downey Savings and Loan Association, F.A. All the
underlying loans are first lien option adjustable rate mortgages
indexed on the monthly treasury average, with a negative
amortization feature.
The monthly scheduled payments on the mortgages adjust on an
annual basis subject to a 7.5% periodic payment cap. Deferred
interest resulting from the payment cap is added to the unpaid
principal balance of the loan, which must not exceed 110% of the
original principal balance.
DUNDEE CORP: S&P Raises Long-Term Sub. Debt Rating to BB from BB-
-----------------------------------------------------------------
Standard & Poor's Ratings Services raised its long-term
counterparty credit and senior unsecured debt ratings on Toronto-
based Dundee Corp., to 'BBB-' from 'BB+'.
At the same time, Standard & Poor's raised its long-term
subordinated debt rating on the company to 'BB' from 'BB-'. The
outlook is stable.
"This upgrade acknowledges the continued strong growth of the
company's core business wealth management, as measured by mutual
fund assets under management, which has consistently been above
industry average," said Standard & Poor's credit analyst Daniel
Koelsch.
"As a result, the company has more than doubled its market share
in the Canadian mutual fund industry since 2001," Mr. Koelsch
added.
Although historically the ratings on Dundee were constrained by
certain risk issues related to the company's ancillary business
activities, such as its resources investment portfolio, the
relative importance of these activities has been decreasing as a
result of the continued strong growth in the company's wealth
management business.
Although Dundee's resources segment, together with some large real
estate projects, typically provides lumpy earnings streams and
causes some degree of volatility in its results, in its current
form the company has a solid core of recurring revenues providing
it with ample cash flows to cover debt servicing payments.
This situation is further supported by prudent levels of liquidity
in the form of cash and marketable securities that, as of year-end
2005, have provided ample coverage
of the company's debt outstanding.
The company remains exposed to market risk and the general
direction of the capital markets. Commission revenues are
dependent on the level of sales activity while the level and
growth of assets under administration (AUA) directly translate
into growth of trailer service revenues.
As such, Dundee's revenues are correlated with the direction of
the capital markets as these markets influence the level of AUA
and the number of investment transactions.
Furthermore, the wealth management industry is highly competitive
where many, sometimes significantly larger, players have ambitious
growth targets.
Although Dundee will certainly continue to play an active role in
this consolidating industry, its market share of 2.7% in the
mutual fund industry is still modest.
The stable outlook reflects Standard & Poor's expectation that
Dundee will be able to maintain or improve its position in the
Canadian wealth management sector, and will see continued earnings
momentum in its 2006 operating results. Furthermore, the ratings
rely on the company's current financial leverage and debt
servicing capacity, which are expected to not materially exceed
(leverage) or fall below (interest coverage) their current levels.
DYNEGY HOLDINGS: Completes $750 Million Debt Refinancing
--------------------------------------------------------
Dynegy Inc. (NYSE:DYN) and its wholly owned subsidiary, Dynegy
Holdings Inc., reported the closing of DHI's private offering of
$750 million aggregate principal amount of its 8.375% Senior
Unsecured Notes due 2016.
Dynegy Inc. and DHI also reported the completion of DHI's cash
tender offer and consent solicitation for DHI's:
-- Second Priority Senior Secured Floating Rate Notes due 2008
(CUSIP No. 26816LAH5),
-- 9.875% Second Priority Senior Secured Notes due 2010 (CUSIP
Nos. 26816LAL6 and U2676AAD5); and
-- 10.125% Second Priority Senior Secured Notes due 2013 (CUSIP
Nos. 26816LAP7 and U2676AAE3).
DHI has used the net proceeds of the offering of the Senior
Unsecured Notes, together with cash on hand, to purchase:
-- the $150.720 million in aggregate principal amount of the
2008 Notes (representing approximately 67% of the
previously outstanding 2008 Notes),
-- the $614.000 million in aggregate principal amount of the
2010 Notes (representing 98.2% of the previously
outstanding 2010 Notes) and
-- the $899.600 million in aggregate principal amount of the
2013 Notes (representing 100% of the previously outstanding
2013 Notes)
that were validly tendered pursuant to the tender offer and
consent solicitation prior to Midnight, New York City time, on
April 11, 2006, the expiration date of the tender offer and
consent solicitation.
The net proceeds of the offering of the Senior Unsecured Notes,
together with cash on hand, were also used to pay related tender
premiums. The total premiums paid on all Second Priority Notes
validly tendered were $199.103 million.
The total accrued and unpaid interest paid on validly tendered
Second Priority Notes was $40.708 million.
The amendments to the indenture pursuant to which the Second
Priority Notes were issued and the releases of the liens on equity
interests securing the obligations of DHI and the guarantors of
the Second Priority Notes under the indenture, which were proposed
in connection with the tender offer and consent solicitation, are
now operative.
The amendments to the indenture eliminate substantially all of the
restrictive covenants and eliminate or modify certain events of
default and related provisions previously contained in the
indenture.
The Senior Unsecured Notes have not been registered under the
Securities Act of 1933 or applicable state securities laws, and
may not be offered or sold in the United States absent
registration or an applicable exemption from the registration
requirements of the Securities Act and applicable state laws.
The costs associated with the offering of the Senior Unsecured
Notes and the tender offer and consent solicitation for the Second
Priority Notes will affect Dynegy Inc.'s 2006 estimates.
Dynegy Inc. will update its 2006 cash flow and earnings estimates
to reflect the impact of these transactions on its estimated
interest expense for 2006 when the company announces its first
quarter 2006 results on May 9, 2006.
About Dynegy Inc.
Dynegy Inc. -- http://www.dynegy.com/-- provides electricity to
markets and customers throughout the United States. The company's
fleet of power generation facilities consists of baseload,
intermediate and peaking power plants fueled by a mix of coal,
fuel oil and natural gas. Located in 12 states, the portfolio is
well-positioned to capitalize on regional differences in power
prices and weather-driven demand.
* * *
As reported in the Troubled Company Reporter on April 11, 2006,
Moody's Investors Service assigned a Ba3 rating to Dynegy Holdings
Inc.'s $600 million senior secured bank facility. Moody's says
the rating outlook is stable.
FATTORIA ACCAPARRANO: Voluntary Chapter 11 Case Summary
-------------------------------------------------------
Debtor: Fattoria Accaparrano, LLC
1020 West CR 72
Wellington, Colorado 80549
Bankruptcy Case No.: 06-11863
Type of Business: The Debtor's affiliate, Grant Family Farms,
Inc., previously filed for chapter 11 protection
on April 13, 2006 (Bankr. D. Colorado, Case No.
06-11795).
Chapter 11 Petition Date: April 17, 2006
Court: District of Colorado (Denver)
Debtor's Counsel: Douglas W. Jessop, Esq.
J. Brian Fletcher, Esq.
Jessop & Company, P.C.
303 East 17th Avenue, Suite 930
Denver, Colorado 80203
Tel: (303) 860-7700
Fax: (303) 860-7233
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
The Debtor does not have any creditors who are not insiders.
FEDERAL-MOGUL: Wants Lease-Decision Period Stretched to Aug. 1
--------------------------------------------------------------
Federal-Mogul Corporation and its debtor-affiliates ask the
U.S. Bankruptcy Court for the District of Delaware to further
extend the time within which they may elect to assume or reject
non-residential real property leases, through and including
August 1, 2006.
The Debtors continue to evaluate the Real Property Leases, which
relate to numerous facilities integral to their ongoing business
operations, James E. O'Neill, Esq., at Pachulski, Stang, Ziehl,
Young, Jones and Weintraub P.C., in Wilmington, Delaware, tells
the Court.
Mr. O'Neill relates that the Debtors are seeking to:
* consolidate their facilities to eliminate redundancies and
inefficiencies; and
* shift certain manufacturing efforts to portions of the
country and the world more suitable to their businesses,
consistent with the overall business plan.
Mr. O'Neill says the requested extension should be granted so the
Debtors may preserve the maximum flexibility in restructuring
their business. "Given the inherent fluidity in the operation of
a large, complex business enterprise such as the Debtors'
circumstances may arise during the pendency of the chapter 11
cases that will cause the Debtors to rethink the need to continue
leasing a particular facility or their decision to reject a given
Real Property Lease."
In the absence of an extension of the current deadline, the
Debtors could be forced to either prematurely:
(1) assume real property leases that would later be
burdensome, giving rise to large potential administrative
claims against the Debtors' estates and hampering their
ability to reorganize successfully; or
(2) reject real property eases that would have been of benefit
to their estates, to the collective detriment of all
stakeholders.
Mr. O'Neill assures the Court that pending their election to
assume or reject the real property leases, the Debtors will
perform all of their obligations arising from and after the
Petition Date in a timely fashion, including payment of
postpetition rent due.
Judge Fitzgerald will convene a hearing on May 4, 2006, at
1:30 p.m., to consider the Debtors' request. By application of
Del.Bankr.LR 9006-2, the Debtors' lease decision deadline is
automatically extended until the Court rules on the Debtors'
request.
About Federal-Mogul
Headquartered in Southfield, Michigan, Federal-Mogul Corporation
-- http://www.federal-mogul.com/-- is one of the world's largest
automotive parts companies with worldwide revenue of some US$6
billion. The Company filed for chapter 11 protection on Oct. 1,
2001 (Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan Esq.,
James F. Conlan Esq., and Kevin T. Lantry Esq., at Sidley Austin
Brown & Wood, and Laura Davis Jones Esq., at Pachulski, Stang,
Ziehl, Young, Jones & Weintraub, P.C., represent the Debtors in
their restructuring efforts. When the Debtors filed for
protection from their creditors, they listed US$10.15 billion in
assets and US$8.86 billion in liabilities. At Dec. 31, 2004,
Federal-Mogul's balance sheet showed a US$1.925 billion
stockholders' deficit. At Nov. 30, 2005, Federal-Mogul's balance
sheet showed a US$1,450.4 billion stockholders' deficit, compared
to a US$1.926 billion deficit at Dec. 31, 2004. Federal-Mogul
Corp.'s U.K. affiliate, Turner & Newall, is based at Dudley Hill,
Bradford. (Federal-Mogul Bankruptcy News, Issue No. 106;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
FLEXTRONICS INT'L: Selling Software Business to KKR for $900 Mil.
-----------------------------------------------------------------
Flextronics International Ltd. signed a definitive agreement to
sell its software development and solutions business to an
affiliate of Kohlberg Kravis Roberts & Co., in a transaction
valued at approximately $900 million.
Upon closing, Flextronics expects to receive in excess of $600
million in cash consideration and will hold a $250 million face
value note with a 10.5% paid-in-kind interest coupon which matures
in eight years. Flextronics will also retain a 15% equity stake
in the business, which will operate as an independent software
development and solutions company.
The purchase price is subject to customary working capital and
certain other post-closing adjustments. Flextronics expects the
after tax gain on the sale transaction to be approximately
$175 million.
"This transaction is the continuation of our previously announced
strategy of focusing our efforts and resources on the
reacceleration of significant growth opportunities in our core EMS
business, which includes design, vertically-integrated
manufacturing services, components and logistics" Michael
McNamara, Chief Executive Officer of Flextronics said.
"By monetizing non-core assets at substantial gains over carrying
values, Flextronics will have generated cash proceeds in excess of
$1 billion through the divestitures of our software, network
services and semiconductor businesses, assuming this transaction
is consummated.
In addition, we will have retained ownership interests in both the
software and network services businesses, which should provide
additional cash and potential future upside when monetized."
Thomas J. Smach, Chief Financial Officer of Flextronics, stated,
"We expect this transaction to be slightly accretive to our fiscal
2007 GAAP earnings per diluted share. There are a number of
attractive opportunities to deploy the cash proceeds from this
transaction in a manner that maximizes earnings and long-term
shareholder returns.
"We expect to invest in working capital to support the rapid
increase in growth we expect in our core EMS business. Other
attractive opportunities include paying down debt or repurchasing
stock, or a combination of both."
McNamara concluded, "We believe this transaction benefits all
parties involved, and we expect continued success for the software
team moving forward. As an independent software development and
solutions company, its customers will benefit from enhanced
service capabilities and its employees will be better positioned
to capitalize on business opportunities as a result of a singular
focus.
"In addition, with Flextronics retaining an equity stake in the
software development and solutions business, both companies will
continue to capitalize on the synergies they have to offer one
another."
Merrill Lynch & Co. acted as financial advisor to Flextronics in
connection with the transaction and rendered a fairness opinion to
the Independent Committee of the Board of Directors of
Flextronics. Banc of America Securities LLC also rendered a
fairness opinion to the Independent Committee of the Board of
Directors of Flextronics. Curtis, Mallet-Prevost, Colt & Mosle
LLP acted as legal advisor to Flextronics.
About Flextronics
Headquartered in Singapore (Singapore Reg. No. 199002645H),
Flextronics International Ltd. (NASDAQ: FLEX) --
http://www.flextronics.com/-- is a leading Electronics
Manufacturing Services provider focused on delivering innovative
design and manufacturing services to technology companies.
Flextronics is a major global operating company that helps
customers design, build, ship, and service electronics products
through a network of facilities in 32 countries on five
continents.
* * *
As reported in the Troubled Company Reporter on Oct. 31, 2005,
Fitch Ratings revised the Rating Outlook on Flextronics
International, Ltd., to negative from stable. Flextronics' 'BBB-'
issuer default rating and senior unsecured bank credit facility
were affirmed, as well as the 'BB+' senior subordinated debt.
FLEXTRONICS INT'L: Board Approves $250 Million Share Repurchase
---------------------------------------------------------------
Flextronics International Ltd. disclosed that its Board of
Directors has authorized the repurchase of up to $250 million of
its outstanding ordinary shares.
Stock repurchases, if any, will be made in the open market at the
times and amounts management deems as appropriate. The
repurchases will be made pursuant to the Share Purchase Mandate
approved by the shareholders at the Company's 2005 Annual General
Meeting, which remains in effect until the Company's 2006 Annual
General Meeting.
The stock repurchase program does not obligate the Company to
repurchase any specific number of shares and may be suspended or
terminated at any time without prior notice. Shares repurchased
under the program will be canceled.
As of March 31, 2006, Flextronics had approximately 578.0 million
ordinary shares outstanding.
Headquartered in Singapore (Singapore Reg. No. 199002645H),
Flextronics International Ltd. (NASDAQ: FLEX) --
http://www.flextronics.com/-- is a leading Electronics
Manufacturing Services provider focused on delivering innovative
design and manufacturing services to technology companies.
Flextronics is a major global operating company that helps
customers design, build, ship, and service electronics products
through a network of facilities in 32 countries on five
continents.
* * *
As reported in the Troubled Company Reporter on Oct. 31, 2005,
Fitch Ratings revised the Rating Outlook on Flextronics
International, Ltd., to negative from stable. Flextronics' 'BBB-'
issuer default rating and senior unsecured bank credit facility
were affirmed, as well as the 'BB+' senior subordinated debt.
FORD MOTOR: Will Halt Operations of Two Assembly Plants in 2008
---------------------------------------------------------------
Ford Motor Company will stop operating its Twin Cities Assembly
Plant in St. Paul, Minn., and its Norfolk Assembly Plant in
Virginia in 2008 as part of the company's Way Forward plan to
restore North American automotive operations to profitability no
later than 2008.
Ford says that it will be able to maintain its production capacity
and leadership of the full-size pickup truck market with fewer
plants, due to flexible manufacturing.
The Way Forward plan, announced on Jan. 23, is a comprehensive
roadmap to strengthen the company's Ford, Lincoln and Mercury
brands through innovative new products, better quality,
straightforward pricing, lower costs and more flexible, efficient
operations.
As part of the plan, Ford said in January that it would idle and
cease manufacturing operations at 14 plants, including seven
assembly plants.
In addition to Norfolk and Twin Cities, Ford previously announced
that it will cease operations in its Wixom (Mich.) Assembly, St.
Louis Assembly, Atlanta Assembly, Windsor (Ontario) Casting and
Batavia (Ohio) Transmission.
"A decision to end production at a plant is not an easy one and
I'm deeply mindful of the impact this decision has on Ford
employees, families and communities," explains Mark Fields, Ford
Motor Company executive vice president and president of The
Americas. "Unfortunately, these are necessary steps we must take
to move the business forward.
"The Way Forward is a long-term strategy and journey," Fields
continues. "But we are very satisfied with early progress and
momentum, and we remain committed to all of the targets
established in what remains a long-term strategy and journey."
The Norfolk plant, which opened in 1925, currently employs 2,275
hourly and 158 salaried workers. The Twin Cities plant, which
also opened in 1925, employs 1,750 hourly and 135 salaried
workers. These staff reductions are part of the 25,000 - 30,000
job workforce reduction announced as part of the Way Forward plan.
Even with the idling of Norfolk, Ford says it will remain the
undisputed leader in full-size pickup truck sales. In the first
quarter, Ford sold 199,801 F-Series trucks, up more than 5%
compared with a year ago, and posted a 2.7 point increase in
segment market share, while many domestic and Asian competitors
posted share declines. Ford said it is on track to sell more than
900,000 F-Series pickups for an unprecedented third year in a row.
Future product plans surrounding Ford compact pickups will be
announced closer to the end of Ford Ranger production in Twin
Cities in 2008. Ranger sales in the first quarter totaled 22,378
units, down 15.9%.
Ford also remains committed to building a new low-cost
manufacturing site for the future, as the company announced in
January.
UAW Reacts
The International Union, United Automobile, Aerospace and
Agricultural Implement Workers of America President Ron
Gettelfinger and Vice President Gerald Bantom denounced Ford's
planned closures of the Twin Cities And Norfolk plants, saying the
move is a continuation of the devastating and disappointing
restructuring plan announced by the Company in January.
UAW said that Ford's hourly and salaried workers are paying the
price for the company's sliding market share. The union added
"once again, workers and communities are paying the price for our
nation's failure to enact a rational, jobs-creating policy for
American industries. The U.S. government stands idle while our
competitors manipulate their currencies and restrict their
markets."
Messrs. Gettelfinger and Bantom assured the affected UAW members
that the union will make sure that they receive the full benefit
of the job security provisions and other protections due under the
terms of the UAW-Ford National Agreement.
About Ford Motor
Headquartered in Dearborn, Michigan, Ford Motor Company --
http://www.ford.com/-- is the world's third largest automobile
manufacturer. The Company manufactures and distributes
automobiles in 200 markets across six continents. With more than
324,000 employees worldwide, the company's core and affiliated
automotive brands include Aston Martin, Ford, Jaguar, Land Rover,
Lincoln, Mazda, Mercury and Volvo. Its automotive-related
services include Ford Motor Credit Company and The Hertz
Corporation.
* * *
As reported on March 15, 2006, Fitch Ratings downgraded the Issuer
Default Rating of Ford Motor Company and Ford Motor Credit Company
to 'BB' from 'BB+'. The downgrade was based on increasing
concerns over the deep stresses affecting the Company's supplier
base, which could restrict Ford's ability to reduce costs.
As reported in the Troubled Company Reporter on Jan. 13, 2006,
Moody's Investors Service lowered its ratings on Ford Motor
Company (Corporate Family and long-term to Ba3 from Ba1). The
rating outlook for Ford Motor is negative.
As reported in the Troubled Company Reporter on Jan. 9, 2006,
Standard & Poor's Ratings Services lowered its corporate credit
ratings on Ford Motor Co., Ford Motor Credit Co. (Ford Credit),
and all related entities to 'BB-/B-2' from 'BB+/B-1' and removed
them from CreditWatch, where they were placed on Oct. 3, 2005,
with negative implications. The outlook is negative.
GARY CHAPMAN: Case Summary & 11 Largest Unsecured Creditors
-----------------------------------------------------------
Debtors: Gary Winther Chapman and Jennifer Pittman Chapman
fdba Gary Chapman Productions
8382 Collins Road
Nashville, TN 37221
Bankruptcy Case No.: 06-01721
Type of Business: Gary Winther Chapman is a singer, songwriter,
and producer. Doublewide Productions LLC
employs him. Jennifer Pittman Chapman is a
homemaker. The Debtors own 60% of
C Acquisitions LLC, which filed for bankruptcy
protection on Sept. 23, 2005 (Bankr. M.D. Tenn.
Case No. 05-11708)(J. Lundin).
Chapter 11 Petition Date: April 12, 2006
Court: Middle District of Tennessee (Nashville)
Judge: Keith M. Lundin
Debtors' Counsel: Robert H. Waldschmidt, Esq.
Howell & Fisher, PLLC
Court Square Building
300 James Robertson Parkway
Nashville, TN 37201-1107
Tel: (615) 244-3370
Fax: (615) 259-2179
Total Assets: $6,852,866
Total Debts: $3,056,955
Debtors' 11 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
GMAC $110,215
P.O. Box 3100
Midland, TX 79702
Amsouth Bank Bankcard Services $100,043
P.O. Box 15137
Wilmington, DE 19886-5137
Keith Chapman $40,000
809 Sneed Road West
Franklin, TN 37069
American Express $35,000
Suite 0002
Chicago, IL 60679-0002
William T. Cheek III/Ann Martin Bone $30,000
Mcallester Norton PLLC
511 Union Street, Suite 1600
Nashville, TN 37219
Sandy Medd, CPA $26,500
P.O. Box 283
305 Harbor Drive
Old Hickory, TN 37138
Citibank M/C $22,923
P.O. Box 688914
Des Moines, IA 50368-8914
Fifth Third Bank $15,917
c/o RAB INC
P.O. Box 34111
Memphis, TN 38014-0111
Aqua Pro $7,627
c/o Chris Felts
P.O. Box 111701
Nashville, TN 37222
Audio One $4,100
1926 N.E. 154th Street
North Miami Beach, FL 33162
Fifth Third Bank $312
MD ROPS05-3110
Cincinnati, OH 45263
GERDAU AMERISTEEL: Unit Acquires Sheffield Steel for $76 Million
----------------------------------------------------------------
Gerdau Ameristeel Corporation's (NYSE: GNA; GNA.TO) U.S. operating
subsidiary, Gerdau Ameristeel US Inc., has entered into a
definitive agreement to acquire all of the outstanding shares of
Sheffield Steel Corporation of Sand Springs, Oklahoma.
Sheffield Steel is a mini-mill producer of long steel products,
primarily rebar and merchant bars with annual shipments of
approximately 550,000 tons of finished steel products.
Sheffield operates a melt shop and rolling mill in Sand Springs,
Oklahoma, a smaller rolling mill in Joliet, Illinois, and three
downstream steel fabricating facilities in Kansas City and Sand
Springs.
Subject to certain closing adjustments, the purchase price for
all of the shares of Sheffield is expected to be approximately
$76 million in cash plus the assumption of approximately
$94 million of debt and certain long-term liabilities, net of
cash.
The transaction, which is subject to Sheffield shareholder
approval, satisfactory completion of anti-trust and applicable
regulatory reviews and other customary closing conditions, is
expected to close in the second quarter of 2006.
Gerdau Ameristeel has sufficient cash on hand to fully fund the
transaction and no additional debt will be incurred.
Mario Longhi, President and CEO of Gerdau Ameristeel commented:
"The combination of the Sheffield team with Gerdau Ameristeel is a
dynamic step in the continuing consolidation and revitalization of
the North American long product steel sector. The addition of the
Sheffield people, resources and assets will expand Gerdau
Ameristeel's primary rebar markets to the Southwest United
States."
About Sheffield Steel
Based in Sand Springs, Oklahoma, Sheffield Steel Corporation
-- http://www.sheffieldsteel.com/-- is a regional mini-mill
producer of hot rolled steel bar, concrete reinforcing bar, and
fabricated products. Sheffield had sales of $297 million in the
fiscal year ended April 30, 2005.
About Gerdau Ameristeel
Headquartered in Tampa, Florida, Gerdau Ameristeel Corporation --
http://www.gerdauameristeel.com/-- is the second largest minimill
steel producer in North America with annual manufacturing capacity
of over 8.4 million tons of mill finished steel products. Through
its vertically integrated network of 15 minimills (including one
50%-owned minimill), 16 scrap recycling facilities and 42
downstream operations, Gerdau Ameristeel primarily serves
customers in the eastern two-thirds of North America. The
Company's products are generally sold to steel service centers,
steel fabricators, or directly to original equipment manufacturers
(or "OEMs") for use in a variety of industries, including
construction, automotive, mining, cellular and electrical
transmission, metal building manufacturing and equipment
manufacturing.
* * *
As reported in the Troubled Company Reporter on March 1, 2005,
Standard & Poor's Ratings Services revised its outlook on Gerdau
Ameristeel Corp. to positive from stable. At the same time,
Standard & Poor's affirmed its 'BB-' corporate credit rating on
the company.
In addition, Standard & Poor's raised its senior unsecured debt
rating on the company to 'BB-' from 'B+', and its rating on its
$350 million senior secured revolving credit facility due 2008, to
'BB+' from 'BB' and assigned a '1' recovery rating.
GRAPHIC ARTS: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Graphic Arts Center Publishing Company
aka Alaska Northwest Books
aka Westwind Press
P.O. Box 10306
Portland, Oregon 97296
Bankruptcy Case No.: 06-30868
Chapter 11 Petition Date: April 7, 2006
Court: District of Oregon
Judge: Trish M. Brown
Debtor's Counsel: Albert N. Kennedy, Esq.
Tonkon Torp LLP
1600 Pioneer Tower
888 Southwest 5th Avenue
Portland, Oregon 97204
Tel: (503) 802-2013
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Times Media Private Ltd. Trade Debt $450,416
Times Centre
1 New Industrial Road
Singapore, 536196
Hing Yip Printing Co. Trade Debt $137,313
Block C 4/F
Sing Teck Fty Building
44 Wong Chuk Hang Road
Aberdeen, Hong Kong
World Publisinh Svc Inc Trade Debt $120,233
Pier 35 #9
263 Lorimer Street
Port Melbourne
Victoria, AST 3207
Epicenter Press Trade debt $102-842
H & Y Printing Ltd. Trade debt $88,291
C&C Offset Printing Co (USA) Trade Debt $87,857
Harbour Publishing Trade Debt $81,207
Documentary Media LLC Trade Debt $68,661
Ball Janik LLP Legal Services $58,242
Fuji Assoc Inc Trade Debt $56,884
Fred Hirschmann Trade Debt $55,680
Raymond Proenneke Trade Debt $48,853
Muench Photography Inc. Trade Debt $45,467
Jane Keith Trade Debt $44,906
McNaughton and Gunn Inc. Trade Debt $30,718
Laurence Parent Inc Trade Debt $29,973
Parson Weems Published Svc. Trade Debt $29,669
Malloy Lithographing Inc. Trade Debt $28,462
Spicers Paper Inc. Trade Debt $26,247
Murdoch Books Ltd./AU Trade Debt $24,327
HARBORVIEW NIM: DBRS Puts BB Rating on $4.4 Mil. Class N-3 Notes
----------------------------------------------------------------
Dominion Bond Rating Service assigned new ratings of "A", BBB, and
BB to the NIM Notes, Series 2006-BU1, issued by HarborView NIM
CI-1 Corp.:
* $12.4 million, Class N-1 -- New Rating A
* $3.6 million, Class N-2 -- New Rating BBB
* $4.4 million, Class N-3 -- New Rating BB
The NIM Notes are backed by a 100% interest in the Class C and
Class P Certificates issued by HarborView Mortgage Loan Trust
2006-BU1. The Class C Certificates will be entitled to all excess
interest in the underlying trust, and the Class P Certificates
will be entitled to all prepayment premiums or charges received in
respect of the mortgage loans.
Payments on the NIM Notes will be made on the 19th of each month
commencing in April 2006. The interest payment amount will be
distributed sequentially to the holders of Class N-1 through Class
N-3 Notes, followed by the principal payment amount to the holders
of Class N-1 through Class N-3 Notes until the note balance of
such class has been reduced to zero. Any remaining amounts will
be distributed to the Issuer, the Indenture Trustee, and holders
of Preference Shares.
The mortgage loans in the Underlying Trust were originated or
acquired by BankUnited, FSB. All the underlying loans are first
lien option adjustable rate mortgages indexed on the monthly
treasury average, with a negative amortization feature. The
monthly scheduled payments on the mortgages adjust on an annual
basis subject to a 7.5% periodic payment cap. Deferred interest
resulting from the payment cap is added to the unpaid principal
balance of the loan, which must not exceed 115% of the original
principal balance.
H.E. MILLS: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: H.E. Mills Electric Company
1017 Iowa Street
Bellingham, Washington 98229
Bankruptcy Case No.: 06-10991
Type of Business: The Debtor is an electrical contractor.
See http://www.millselectric.com/
Chapter 11 Petition Date: April 7, 2006
Court: Western District of Washington (Seattle)
Judge: Karen A. Overstreet
Debtor's Counsel: Marc L Barreca, Esq.
Preston Gates & Ellis LLP
925 4th Avenue #2900
Seattle, Washington 98104-1158
Tel: 206-623-7580
Fax: 206-623-7022
Estimated Assets: $0 to $50,000
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Platt Electric Supply, Inc. Trade Debt $289,842
P.O. Box 2858
Portland, OR 97208-2858
North Coast Electric Trade Debt $278,864
Company
P.O. Box 34399
Seattle, WA 98124-1399
All-Phase Electric Company Trade Debt $188,824
P.O. Box 2820
Issaquah, WA 98027
Stoneway Electric Supply Trade Debt $132,256
P.O. Box 4037
Spokane, WA 99220
Universal Electric Corp. Trade Debt $33,889
Utility Vault Company Trade Debt $22,183
Poore, Roth & Robinson Legal Services $16,456
Acme Construction Supply Co. Trade Debt $15,858
Anderson Zurmuehlen & Co. Trade Debt $15,400
Safway Supply Company Trade Debt $15,291
Wesco Distribution, Inc. Trade Debt $14,178
Security Solutions Trade Debt $11,691
Graybar Electric Company Inc. Trade Debt $11,493
Hardware Sales, Inc. Trade Debt $10,497
Birch Equipment Co., Inc. Trade Debt $10,270
Enterprise Fleet Services Trade Debt $9,208
Unit Process Company Trade Debt $7,766
Newcastle Management Trade Debt $6,250
Federal Firesafety, Inc. Trade Debt $5,879
Crescent Electric Supply Co. Trade Debt $5,716
HERBST GAMING: S&P Affirms B+ Rating & Changes Outlook to Positive
------------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Herbst
Gaming Inc. to positive from stable.
At the same time, Standard & Poor's affirmed its ratings on the
company, including its 'B+' corporate credit rating.
The outlook revision follows Herbst's solid operating results for
the fiscal year ended Dec. 31, 2005, resulting in improved credit
measures with the expectation that this trend will continue over
the near term. EBITDA for fiscal 2005 increased to $124 million,
up 61% over fiscal 2004, resulting primarily from the inclusion of
the Grace Entertainment Inc. assets for 11 months. Excluding the
Grace assets, Herbst still experienced a double-digit increase in
EBITDA. The improvement stemmed from strong gaming volumes in Las
Vegas in the route segment, which more than offset weakness in the
last six months of the year from construction disruption at
Terrible's Las Vegas.
IDI GLOBAL: Case Summary & 21 Largest Unsecured Creditors
---------------------------------------------------------
Lead Debtor: IDI Global, Inc.
462 East 800 North
Orem, Utah 84097
Bankruptcy Case No.: 06-21261
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
IDI Small Business, Inc. 06-21266
Professional Consulting Services, Inc. 06-21268
Chief Financial, Inc. 06-21270
Type of Business: IDI Global, Inc., is a holding company whose
wholly owned subsidiaries are involved in
internet-based application services, seminar
training and mentoring, and web-based products,
software and tools.
Chapter 11 Petition Date: April 17, 2006
Court: District of Utah (Salt Lake City)
Debtors' Counsel: Mary Margaret Hunt, Esq.
Ray Quinney & Nebeker
36 South State Street, Suite 1400
P.O. Box 45385
Salt Lake City, UT 84145-0385
Tel: (801) 532-1500
Fax: (801) 532-7543
Financial Condition of IDI Global, Inc., as of Sept. 30, 2005:
Total Assets: $9,022,581
Total Debts: $3,608,506
Estimated Assets Estimated Debts
---------------- ---------------
IDI Small Business, Inc. Less than $50,000 $1 Million to
$10 Million
Professional Consulting Less than $50,000 Less than $50,000
Services, Inc.
Chief Financial, Inc. Less than $50,000 Less than $50,000
A. IDI Global, Inc.'s 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
HG Marketing, Inc. & Mentoring of America $700,000
c/o Gina Winspear
Dennett & Winspear LLP
321 North Buffalo Drive, Suite 100
Las Vegas, NV 89129
Newave $200,000
c/o Nathan Osher, Osher & Osher $200,000
3015 Ocean Front Walk
Venice Beach, CA 90291
Parsons Behle & Latimer $56,634
201 South Main Street, Suite 1800
P.O. Box 15898
Salt Lake City, UT 84145-0898
Presson Airport, LLC $46,000
Investor Relations Group $35,016
Call, Jensen & Ferrell $22,351
Chisholm, Bierwolf, & Nilson, LLC $13,305
SDW Services $3,208
Dell Financial Services $2,108
Anderson & Karrenberg $2,054
UCN $1,815
State Auto Insurance Companies $1,378
Capital Premium Financing, Inc. $681
Patelco Credit Union $263
Budget Corp Unknown
Fulcrum Financial Unknown
Laurus Capital Management Unknown
Paul Watson Unknown
Pritchett, Siler & Hardy Unknown
Ryan Romero & Jeremy Hall Unknown
B. IDI Small Business, Inc.'s Largest Unsecured Creditor:
Entity Claim Amount
------ ------------
SBI Advisors $1,750,000
610 Newport Center Drive, Suite 1205
Newport Beach, CA 92660
C. Professional Consulting Services, Inc.'s 20 Largest Unsecured
Creditors:
This Debtor has no unsecured creditors who are not insiders.
D. Chief Financial, Inc.'s 20 Largest Unsecured Creditors:
This Debtor has no unsecured creditors who are not insiders.
INDEPENDENT FISHERMEN'S: Case Summary & 9 Unsecured Creditors
-------------------------------------------------------------
Debtor: Independent Fishermen's Cooperative
567 West Channel Islands Boulevard
Port Hueneme, CA 93041
Bankruptcy Case No.: 06-10168
Type of Business: The Debtor is a not for profit corporation
composed of fishermen from Port Hueneme,
California.
Chapter 11 Petition Date: April 14, 2006
Court: Central District of California (Santa Barbara)
Judge: Robin Riblet
Debtor's Counsel: Steven Pinsker, Esq.
Pinsker & Hurlbett
1316 Anacapa Street
Santa Barbara, CA 93101
Tel: (805) 963-9111
Estimated Assets: Less than $50,000
Estimated Debts: $1 Million to $10 Million
Debtor's 9 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Channel Marine Trading Co. Business Debt $486,183
567 West Channel Islands
Boulevard $315
Port Hueneme, CA 93041
Mount Ocean International Business Debt $352,213
11868 Park Avenue
Artesia, CA 90701
F/V Pacific Raider & Owners Business Debt $194,655
3710 Harborview Drive
Gig Harbor, WA 98332
Allied Packing Co. Business Debt $157,437
F/V Ocean Dream & Owners Business Debt $130,625
F/V Trejo & Owners Business Debt $63,359
Bruegaman & Johnson Business Debt $36,049
California Department of Fish Landing Taxes $16,681
And Game
Robert B. Gould Business Debt $9,918
INTERSTATE BAKERIES: Court Extends Exclusive Period to File Plan
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Missouri
extended Interstate Bakeries Corporation (OTC: IBCIQ) and its
debtor-affiliates' exclusive periods.
The Debtors have until Sept. 22, 2006, to file a plan of
reorganization, and until Nov. 21, 2006, to solicit acceptance of
that plan.
Under the previous schedule, the Company had until May 18, 2006,
to file a plan of reorganization and until July 17, 2006, to
solicit acceptance of a plan.
In its request to the Court for the extension, the Company stated
that while it has made significant progress in its reorganization,
additional time is needed to formulate and test a long-term
business plan.
IBC will take time to obtain a full understanding of the impact on
its financial results of various factors that will ultimately
determine the success of the Company's restructuring efforts.
Without such an understanding, it will be difficult to formulate a
credible final business plan, the Company said.
These various factors include:
* Operational changes implemented in the Company's profit
centers;
* Inflation in the cost of materials, packaging and energy
and the potential offsetting effect of increases in pricing
to customers;
* Union contract negotiations;
* New marketing initiatives; and
* Improvements in manufacturing processes and customer
service.
At the time, the Company said that the major factors in the
decision to seek relief under Chapter 11 were liquidity issues
stemming from declining sales, a high fixed-cost structure, excess
industry capacity, rising employee healthcare and pension costs
and higher costs for ingredients and energy.
In the initial stage of the Chapter 11 restructuring, the Company
focused on quickly identifying opportunities for cost reductions
that did not require fundamental operational changes. While these
efforts decreased the Company's operating costs, they did not
directly address or sufficiently offset the continuing decline in
sales revenue, its high fixed-cost structure or the other factors
that lead to its Chapter 11 filing.
About Interstate Bakeries
Headquartered in Kansas City, Missouri, Interstate Bakeries
Corporation is a wholesale baker and distributor of fresh baked
bread and sweet goods, under various national brand names,
including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R),
Merita(R) and Drake's(R). The Company employs approximately
32,000 in 54 bakeries, more than 1,000 distribution centers and
1,200 thrift stores throughout the U.S.
The Company and seven of its debtor-affiliates filed for chapter
11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No.
04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in
their restructuring efforts. Kenneth A. Rosen, Esq., at
Lowenstein Sandler, PC, represents the Official Committee of
Unsecured Creditors. Peter D. Wolfson, Esq., at Sonnenschein Nath
& Rosenthal, LLP, represents the Official Committee of Equity
Security Holders. When the Debtors filed for protection from
their creditors, they listed $1,626,425,000 in total assets and
$1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior
subordinated convertible notes due August 15, 2014, on August 12,
2004) in total debts.
INTERSTATE BAKERIES: Provides Update on Restructuring Process
-------------------------------------------------------------
Interstate Bakeries Corporation reported that the major factors in
the decision to seek relief under Chapter 11 were liquidity issues
stemming from:
* declining sales,
* a high fixed-cost structure,
* excess industry capacity,
* rising employee healthcare and pension costs and
* higher costs for ingredients and energy.
In the initial stage of the Chapter 11 restructuring, the Company
focused on quickly identifying opportunities for cost reductions
that did not require fundamental operational changes.
While these efforts decreased the Company's operating costs, they
did not directly address or sufficiently offset the continuing
decline in sales revenue, its high fixed-cost structure or the
other factors that lead to its Chapter 11 filing.
Profit Center Review and Restructuring
In the second stage of its restructuring, the Company undertook an
extensive review of its 10 profit centers to improve efficiency
and profitability.
The profit centers were created on June 1, 2004, when the Company
transformed its organizational structure from 54 decentralized
bakeries into the 10 geographically structured groupings of
bakeries, depots, routes and bakery outlets. The PC restructuring
was intended to:
* eliminate unprofitable products and routes,
* streamline distribution,
* rationalize the number of brands and
* stock-keeping units and eliminate excess capacity.
To date, the Company has implemented its restructuring plans in
each of its 10 PCs, closing a total of nine bakeries, 200
distribution centers and 300 bakery outlets, while reducing its
overall workforce by 6,000.
The PC review and restructuring process also resulted in the
rationalization of IBC's delivery route network, reducing the
number of routes by 29%, from 9,100 delivery routes to 6,500,
while serving roughly the same number of customers nationwide.
Although almost complete, certain restructuring efforts regarding
the tenth PC, covering the South Central region, are still in
progress.
As anticipated, the PC restructuring process has resulted in lower
revenues that have had, and could continue to have, an adverse
effect on IBC's financial condition and results of operation and
cash flows for at least some period of time after the
restructurings are fully implemented.
Further, the PC restructuring activities involved certain
implementation risks, including the prospect that forecasted sales
might not be achieved either in terms of sales volume or gross
margin.
The Company said that, to date, initial results of the PC
restructurings have been mixed, and while overall route sales
averages have been improved and unprofitable sales selectively
abandoned, it is too early to predict whether these early results
will be sufficient to achieve the desired results.
Inflationary Pressures/Pricing Strategy
IBC said that the results of the PC restructurings have been
further complicated by significant inflationary cost pressures
that could offset savings it might otherwise achieve. These
include increases in materials, ingredients, energy and employee
costs, particularly in the areas of wages, health and welfare and
pensions.
IBC has taken strategic pricing actions designed to address these
inflationary pressures; however, it is not yet clear whether price
increases can be fully implemented or otherwise adequate to offset
these increased costs.
Union Contract Negotiations
Similarly, IBC has sought to address inflationary pressures
related to employee costs by attempting to negotiate more than 430
collective bargaining agreements with its union-represented
employees to achieve cost savings and inflation controls over the
next five years.
To date, long-term extensions have been ratified with respect to
80 CBAs and agreements in principal have been reached with respect
to 41 CBAs, subject to ratification by employees. In total, these
CBAs represent approximately 47 percent of the Company's unionized
workforce.
Marketing Initiatives
IBC also initiated an aggressive marketing program designed to
offset consistent revenue declines, focusing in the development of
protocols to better anticipate and meet changing consumer demand
by developing a consistent flow of new products.
These marketing efforts include the re-launching of the Company's
iconic Wonder(R) bread brand with the launch in January 2006, of
three new Wonder bread products.
On April 1, 2006, the Company also introduced new products for its
buns and rolls product segment, including Wonder wheat hamburger
and hot dog buns and Wonder(R) buns made with whole grains.
On the sweet goods side of the business, the Company recently
launched an updated packaging redesign for the entire Hostess(R)
line, a major promotional and public relations campaign in
connection with the 75th anniversary of the introduction of
Twinkies(R).
Plan-Filing Extension
The extension of the plan filing and solicitation periods granted
by the Court will allow the Company time to implement and assess
these restructuring efforts.
In light of the need for additional time, the Company has begun
discussions with JPMorgan Chase Bank, N.A., the agent for IBC's
post-petition debtor-in-possession (DIP) financing facility
regarding an extension of the Sept. 22, 2006, maturity date of the
DIP financing facility.
About Interstate Bakeries
Headquartered in Kansas City, Missouri, Interstate Bakeries
Corporation is a wholesale baker and distributor of fresh baked
bread and sweet goods, under various national brand names,
including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R),
Merita(R) and Drake's(R). The Company employs approximately
32,000 in 54 bakeries, more than 1,000 distribution centers and
1,200 thrift stores throughout the U.S.
The Company and seven of its debtor-affiliates filed for chapter
11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No.
04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in
their restructuring efforts. Kenneth A. Rosen, Esq., at
Lowenstein Sandler, PC, represents the Official Committee of
Unsecured Creditors. Peter D. Wolfson, Esq., at Sonnenschein Nath
& Rosenthal, LLP, represents the Official Committee of Equity
Security Holders. When the Debtors filed for protection from
their creditors, they listed $1,626,425,000 in total assets and
$1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior
subordinated convertible notes due August 15, 2014, on August 12,
2004) in total debts.
JETBLUE AIRWAYS: 2005 Net Loss Cues Moody's to Cut Debt Ratings
---------------------------------------------------------------
Moody's Investors Service downgraded all debt ratings of JetBlue
Airways Corporation's -- corporate family rating to B2 from Ba3
-- and certain classes of Enhanced Equipment Trust Certificates
supported by payments from JetBlue.
Moody's also withdrew the prospective ratings on a multiple
seniority shelf registration statement. The outlook remains
negative.
Moody's rating actions reflect JetBlue's poorer than expected
operating results which produced a net loss for FY 2005, weakening
trend in credit metrics, and longer term challenges to profitably
execute on the company's growth strategy.
The rating also considers the difficult operating environment in
the US passenger airline industry due to fierce competition,
particularly in JetBlue's core East Coast markets.
High fuel costs are likely to continue to negatively affect
JetBlue's operating margin, although the company does have a fuel
hedging program that provides some protection against higher oil
prices.
Moody's believes that JetBlue's expansion strategy is likely to
increase its operating costs measurably over the next several
years as the airline introduces its new aircraft type, the Embraer
190, which has a higher Cost Per Available Seat Mile than the A320
aircraft type.
As these aircraft are deployed in new markets, JetBlue's
traditional model is to stimulate traffic with lower fares to the
traveling public, which could pressure the margins even further.
JetBlue's non-fuel CASM, while still among the lowest of the major
carriers in the U.S. market, has increased and is expected to
increase in the near term which is somewhat contrary to the trend
exhibited by other carriers in the US and could indicate a
weakening in operating efficiency.
Additionally, the operating complexities associated with
accelerated growth over the next several years, the new fleet
type, and expanding into new markets could all add to the
company's costs.
Substantially all new aircraft deliveries, expected to total
approximately $6.4 billion over the next seven years will be
financed with debt or leases which will increase leverage and
likely weaken credit metrics further.
According to Moody's, at FYE 2005 debt to EBITDA rose to 18.8x
while EBIT to Interest fell to .1x, using Moody's standard
adjustments, metrics which could indicate a somewhat lower rating.
However, the company continues to maintain a strong brand
identity, is well-positioned in the New York metropolitan area,
and has been able to steadily increase market share and revenues.
The ratings also consider the balance sheet liquidity and
JetBlue's committed financing for the majority of its 2006
aircraft deliveries, that should enable JetBlue to meet cash
demands over the near term as it pursues is expansion strategy.
Nevertheless, Moody's is concerned that cash flow improvement may
not keep pace with the rapid debt increase expected over the
longer term.
The negative outlook reflects Moody's concerns that the company
still faces challenges both in executing its growth strategy,
including successfully employing its new aircraft type, and
operating in the a high fuel cost environment.
Absent a significant strengthening of interest coverage with EBIT
to interest expense moving towards 1x over the near term, a
further downgrade is possible.
The outlook or rating could be raised if substantial improvements
to operating results occur and credit metrics return to historic
levels.
Ratings downgraded:
Jet Blue Airways Corporation corporate family rating to B2
from Ba3, $175 Million Convertible Notes to Caa1 from B2, $250
Million Convertible Debentures to Caa1 from B2
Ratings withdrawn:
Multiple Seniority Shelf Registration Statement:
(P)B2/(P)B3/(P)Ba1/(P)Caa1
EETC ratings downgraded:
Series 2004-1 Class C: to Ba3 from Ba1
Series 2004-2 Class C: to Ba3 from Ba1
The Aaa ratings for certain of the JetBlue EETC's that are based
upon the support of insurance policies issued by monoline
insurance companies are affirmed.
JetBlue Airways Corporation is headquartered in Forest Hills, New
York.
J.L. FRENCH: Hires Deloitte Tax as Tax Service Provider & Advisor
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware gave J.L.
French Automotive Castings, Inc., and its debtor-affiliates
permission to employ Deloitte Tax LLP as their tax service
provider and tax consultant.
As reported in the Troubled Company Reporter on Mar. 10, 2006,
Deloitte Tax will:
1) assist the Debtor with federal tax effects of bankruptcy
filing and tax advisory services related to debt discharge
issues by:
a. computing the Debtors' tax basis in order to assist
the Debtors' management in evaluating the income from
the cancellation or discharge of indebtedness and its
effects under Section 108 and 1017 of the Internal
Revenue Code;
b. advising the Debtors in evaluating and modeling
alternative tax methodologies in order to assist the
Debtors management in understanding post-bankruptcy
tax attributes available under applicable newly issued
tax regulations and absorptions of such attributes
based on the Debtors' operating projection; including
a technical analysis of the effects of Treasury
Regulation Section 1.1502-28 and the interplay with
IRC Sections 108 and 1017;
c. advising the Debtors in evaluating and modeling the
potential effect of the alternative minimum tax in
various post-emergence scenarios;
d. assisting the Debtors in analyzing the effects of tax
rules under Sections 382(l)(5) and (l)(6) of the
Internal Revenue Code;
e. advising the Debtor in analyzing the Built-in Gain or
Loss position at date of bankruptcy in order to assist
the Debtor's management in understanding any
limitations on use of tax losses generated from post-
bankruptcy asset or stock sales;
f. assisting the Debtors by working with creditors'
counsel, the Debtors' counsel, and the Debtors'
financial advisors on cash tax effects of bankruptcy
and in understanding the post-bankruptcy tax profile;
g. advising the Debtors as to the proper tax treatment of
post-petition interest;
h. advising the Debtors as to the proper treatment of
pre-petition and post-petition reorganization costs;
i. assisting the Debtors in determining the state tax
consequences of the income from the discharge of
indebtedness and any ownership changes, including
their impact on the amount and use of state net
operating losses;
j. advising the Debtors on the state tax aspects of the
post-bankruptcy environment with a focus on optimizing
the post-bankruptcy tax structure for state tax
purposes;
k. assisting the Debtors in evaluating and modeling the
effects of liquidating, merging, or converting
entities as part of the post-emergence plan,
including, the effects on federal and state tax
attributes, state incentives, apportionment, and other
planning;
l. assisting the Debtors in consulting on the conceptual
tax GAAP requirements of "fresh start" accounting as
required for the emergence date of the US GAAP balance
sheet to identify the appropriate tax treatment of
adjustments to equity, and other adjustments to assets
and liabilities recorded; and
m. documenting, as appropriate, the tax analysis,
opinions, recommendation, conclusion, and
correspondences for any proposed restructuring
alternative tax issue or other tax matter, and
2. provide general corporate tax advisory assistance with day-
to-day federal and state tax questions as requested by the
Debtors' internal tax department, and as may be agreed to
by Deloitte tax, in an effort to assist the Debtors with
ordinary tax needs not able to be satisfied with its
existing internal resources.
Scott Vickman, a partner at Deloitte Tax, told the Court that the
Firm's professionals bill:
Professional Hourly Rate
------------ -----------
Partner $540
Senior Manager $430
Manager $335
Senior Associate $225
Mr. Vickman assured the Court that the Firm is disinterested
as that term is defined in Section 101(14) of the Bankruptcy Code.
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.
JOHN HENRY: Moody's Places B3 Rating on $22 Million Term Loan
-------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to John Henry
Holdings, Inc.'s $91.5 million senior secured first lien term loan
due 2012, a B3 to its $22 million senior secured second lien term
loan due 2013, and a B2 to its $30 million senior secured
revolving credit facility. In addition, Moody's assigned a B2
corporate family rating and a stable outlook.
Proceeds from the term loans will be used to partly finance the
acquisition of Steketee-Van Huis, Inc., and National Graphics,
Inc. and refinance existing debt.
These two tuck-in acquisitions will expand JHH's product offerings
to include multi-media paperboard, plastic, and specialty
components and complement printing technologies for multi-media,
pharmaceutical and consumer markets.
The ratings assume that the transaction will close in the amounts
and along the terms as presented. The combined entity, which
includes the recent purchase of The John Henry Company in December
of 2004 and Hamilton Printing, Inc., in July of 2005, will be a
leading provider of specialty print-based packaging solutions for
the pharmaceutical, multi-media, and value-added consumer markets
and will operate 8 manufacturing facilities in the United States.
JHH will be capitalized with approximately $130 million of debt
and contributed equity of $104 million, primarily in the form of
preferred PIK notes. Bear Stearns Merchant Banking will
contribute approximately $84 million of the contributed equity.
The B2 ratings of JHH primarily reflect the company's modest
aggregate scale of operations, lack of operating history and
audited financial statements as a combined entity, integration and
execution risk, limited free cash flow, customer concentration,
potential dividend payouts, and lack of diversification with
operations solely in North America.
Moody's believes that these factors may slow any improvement in
operating margins and management's ability to achieve its
operating objectives.
The recent decline in margins due to higher raw material costs is
indicative of the challenges management faces as it attempts to
initiate improvements and integrate strategic acquisitions.
Additionally, the high degree of fragmentation in the industry,
along with the size, lack of diversification and technological
issues may limit improvement in financial metrics over time.
Therefore, financial leverage may remain at current levels longer
than management currently anticipates.
Should margin improvement occur, Moody's expects that JHH will
consider debt-financed acquisitions to fund external growth.
Customer concentration remains a concern even though the majority
of customers have been with the company for an extended period.
The company's top ten customers represent approximately 50% of
total sales pro forma for the transaction.
JHH's ratings are supported by relative margin stability, good
credit metrics pro forma for this transaction, strong long-term
customer relationships, experienced senior management team, and
adequate liquidity.
The stable outlook reflects Moody's view that key rating factors
are not likely to change over the near term. However, if the
pricing environment, new business generation, cost synergies, and
financial/IT controls strengthen along with an established track
record of the company's current operating strategy, JHH should be
able to improve its credit metrics on a sustainable basis by
reducing current debt levels.
Specifically, if the company improves its credit metrics on a
sustainable basis over the next 12 to 18 months by maintaining
consolidated leverage on a gross debt to adjusted EBITDA basis of
4.0x, generating positive free cash flow, and maintaining good
liquidity, the ratings would likely improve.
Factors that could negatively impact the ratings include
deterioration in liquidity, a weakening of credit metrics, or
additional debt-financed acquisitions.
As of the last twelve months ended Dec. 31, 2005, pro forma for
the acquisitions, management believes that the company's
consolidated leverage on a gross debt to pro forma EBITDA basis
was approximately 3.9x with interest coverage on a pro forma
EBITDA to gross interest basis of approximately 2.6x.
However, Moody's believes uncertainty exists with respect to the
sustainability of the company's pro forma EBITDA due to the risks
noted above. Additionally, the company expects to transform its
nascent multi-media specialty packaging segment, currently only
10% of revenues, into a significant driver of future growth.
With respect to liquidity, Moody's views JHH's liquidity
arrangements as adequate for its anticipated needs. The company
has access to a $30 million, 5-year revolving credit facility,
with $15 million outstanding subsequent to the acquisitions.
JHH is likely to meet its cash obligations through both internal
resources and the revolver, especially its funding of seasonal
working capital in 2006.
Moody's also believes the company will comply with its financial
covenants over the next twelve months. At the same time, the size
of the credit facility is relatively modest, cash on the balance
sheet is low, and the company does not currently own any assets
that can be sold in the near term to satisfy a liquidity need.
The B2 rating on both the first lien term loan and secured
revolving credit facility recognizes their majority position in
the capital structure resulting in the risk to bank lenders not
being materially different from the corporate entity as a whole.
As a result, both the 1st lien term loan and the secured revolving
credit facility are rated at the corporate family level and
benefit from guarantees from both the operating subsidiaries and
the parent company, Multi Packaging Solutions, Inc.
Furthermore, the facilities will be secured by all assets and
stock of the borrowers. The B3 rating on the second lien term
loan reflects its subordination to both the $91.5 million 1st lien
term loan and the $30 million revolver. The 2nd lien term loan
will also be secured by all assets and stock of the borrowers.
Headquartered in New York, John Henry Holdings, Inc., a subsidiary
of Multi Packaging Solutions, Inc., is a provider of specialty
print-based packaging solutions for the pharmaceutical, multi-
media, and value-added consumer markets.
LEAR CORP: S&P Puts B- Rating on $200 Million 2nd-Lien Term Loan
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its bank loan and
recovery ratings to auto supplier Lear Corp.'s proposed $800
million secured bank financing. The borrower's $600 million
first-lien term loan is rated 'B+' (at the same level as the 'B+'
corporate credit rating on Lear Corp.) with a recovery rating of
'2', indicating the likelihood for substantial recovery of
principal (80%-100%) in the event of a payment default.
The $200 million second-lien term loan is rated 'B-' (two notches
below the corporate credit rating), with a recovery rating of '4',
indicating the expectation for marginal recovery of principal
(25%-50%) in the event of a default.
These ratings are based on preliminary terms and conditions and
are subject to review upon receipt of final documentation. Lear's
existing $1.7 billion first-lien revolving credit facility is not
rated by Standard & Poor's.
Standard & Poor's corporate credit on Southfield, Michigan-based
Lear Corp. is B+/Negative/B-2. The speculative-grade rating
reflects the company's depressed operating performance caused by
severe industry pressures. Earnings and cash flow generation will
likely remain below previously expected levels for the next few
years.
LEVITZ HOME: Court Okays Walker Truesdell as Wind Down Officer
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
allowed Levitz Home Furnishings, Inc., and its debtor-affiliates
to engage Walker, Truesdell & Associates, Inc., as their wind down
officer, effective as of Jan. 12, 2006.
As reported in the Troubled Company Reporter on March 16, 2006,
the order approving the sale of substantially all of the Debtors'
assets 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 anticipated 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.
The United States Trustee for Region 2 asked the Court to deny the
Debtors' request and appoint a Chapter 11 trustee or convert their
cases to Chapter 7.
The U.S. Trustee observed that the services that Walker, Truesdell
& Associates, Inc., will provide are identical to those that would
be provided by a trustee. "Accordingly, the appointment of WTA
would constitute a de facto appointment of a Chapter 11 trustee in
circumvention of [Section 1104 of the Bankruptcy Code]."
The United States Trustee objected to the attempt by the Debtors
to circumvent its authority and jurisdiction. Under Section 1104,
after consultation with the parties, the U.S. Trustee may request
the appointment of a Chapter 11 trustee.
Paul K. Schwartzberg, Esq., trial attorney for the U.S. Trustee,
noted that the Bankruptcy Code contains no provision authorizing
the appointment of a "winddown officer".
The Court overruled the U.S. Trustee's request.
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. 11; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
LEVITZ HOME: GHP Buxton Seeks Lease Rejection Confirmation
----------------------------------------------------------
GHP Buxton LLC, 559 West 164th Buxton LLC, and DJH Buxton LLC ask
the U.S. Bankruptcy Court for the Southern District of New York to
confirm the rejection of Levitz Home Furnishings, Inc., and its
debtor-affiliates' lease at 30 Buxton Farms Road in Stamford,
Connecticut. The Landlord wants the Debtors to immediately vacate
the premises and pay all past due postpetition lease obligations.
The Landlord leases the premises to Levitz Home Furnishings, Inc.,
pursuant to a written Indenture of Lease dated Aug. 26, 2003, with
Huffman Koos, Inc.
In the Chapter 11 case of Breuners Home Furnishings Corp., et al.,
in the United States Bankruptcy Court for the District of
Delaware, KLA/Breuners, LLC, acquired lease designation and
assignment rights. KLA/Breuners exercised its designation rights
with respect to the Lease in favor of the Debtor. The Landlord
consented to the assignment of the Lease after a compromise.
After the assignment, the Landlord received lease rental from the
Debtor but the payments stopped after December 2005. Thus, the
Landlord contends, the Debtor is not in compliance with the
requirement of Section 365(d)(3) that it remain current with its
postpetition obligations under the Lease until the Lease was
either assumed or rejected.
Jeffrey N. Rich, Esq., at Kirkpatrick & Lockhart Nicholson Graham
LLP, in New York, relates that through early February 2006, the
Debtor conducted a retail furniture business on the Premises. On
Feb. 5, 2006, the Debtor removed all furniture and fixtures from
the Premises, ceased doing business at and vacated the Premises.
The Landlord believes that the Debtor had permanently abandoned
the Premises.
Unitary Lease
The Debtors are party to a lease agreement with Levitz SL, LLC,
and various related entities. The Debtors transferred to Levitz
SL certain rights and duties under their leases with their various
landlords. The Unitary Lease provides for various arrangements
for the payment of rent depending on the circumstances.
GHP Buxton, et al., contends that its Lease is not part of the
Unitary Lease.
Rejection Notice
On Feb. 22, 2006, GHP Buxton, et al., received a notice of
rejection from the Debtors. It provides that the Buxton Lease is
rejected effective as of Feb. 1, 2006.
Mr. Rich complains that the Rejection Notice is confusing and
ambiguous because, among other things, it purports to condition
rejection on a finding that the Lease is party of the Unitary
Lease even though the Landlord has never received the requisite
notice of any assignment of the Lease to the Unitary Landlord and
never consented to it.
Mr. Rich relates that on Feb. 28, 2006, without any prior
notice or offer to pay rent arrears, the Debtor appeared at the
Premises with several truckloads of furniture for the stated
purpose of re-occupying the Premises and conducting a going out
of business sale through May 2006.
The Landlord barred the Debtor's attempt to enter the premises.
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)
LION CITY: New York Bankruptcy Court Grants Chapter 15 Petition
---------------------------------------------------------------
The Hon. Stuart M. Bernstein of the U.S. Bankruptcy Court for the
Southern District of New York approved Lion City Run-Off Pte.
Ltd.'s chapter 15 petition on April 13, 2006.
Chapter 15, which became effective Oct. 17, 2005, broadens the
mechanism through which representatives of non-US proceedings
might obtain relief, including injunctive relief, in the United
States; expands the powers of US Bankruptcy Courts; and enhances
the rights of both US and non-US creditors.
David Elman at The Deal reports that with the Bankruptcy Court's
approval, Lion City can now implement a scheme of arrangement
designed to speed up the insurer's wind down.
The Scheme provides for the restructuring of the company's
contractual rights and the orderly wind-up of its business.
Mr. Elman reports that the Lion City plans to pay all of its
creditors in full.
Omni Whittington Insurance Markets Ltd. acquired Lion City on
Nov. 18, 2004. The transfer was effected by a scheme of transfer,
sanctioned by the Singapore courts. Lion City is a special
purpose vehicle set-up to receive the Overseas Insurance Fund
business of the Insurance Company of Singapore.
This month, Omni Whittington disclosed that Scheme Creditors
approved Lion City's proposed Scheme of Arrangement, dated June 3,
2005, as supplemented by the Supplemental Scheme, dated Jan. 27,
2006. Omni Whittington also reported that the English Court
sanctioned the Scheme on March 23, 2006 and the Singapore Court
sanctioned the Scheme on March 30, 2006.
About Lion City
Headquartered in Singapore, Lion City Run-Off Private Limited is
an insurance company that is currently in run-off. Lion City
filed a chapter 15 ancillary proceeding on March 15, 2006 (Bankr.
S.D.N.Y. Case No. 06-10461) Howard Seife, Esq., at Chadbourne &
Parke LLP, represents Lion City in the Unites States.
MARSULEX INC: Moody's Withdraws B2 Rating on $105 Mil. Note Issue
-----------------------------------------------------------------
Moody's Investors Service withdrew the ratings of Marsulex Inc.,
for business reasons.
These ratings were affected:
* The B2 rating on the original $105 million issue of 9.625%
senior subordinated notes due June 2008; and
* The Ba3 Corporate Family Rating.
Marsulex Inc., based in Toronto, Ontario, provides industrial
services, including the processing, removal, treatment and
disposal of inorganic hazardous waste; the distribution and sale
of the by-products resulting from compliance services; and
production and sale of industrial and water treatment chemicals to
customers in western Canada. The company had revenues of CDN$167
million for the twelve months ended Dec. 31, 2005.
MICHAEL JACKSON: Strikes Bailout Deal with Fortress Investment
--------------------------------------------------------------
Michael Jackson disclosed Thursday that he has restructured his
finances with the assistance of Sony Corporation of America, the
long time co-owner of Sony/ATV Music Publishing LLC.
Following negotiations with several leading financial
institutions, Mr. Jackson concluded refinancing with affiliates of
Fortress Investment Group, the lender that currently holds secured
debts that were previously held by Bank of America.
Claudia Parsons at Reuters reports that the deal refinances over
$200 million of Mr. Jackson's obligations to Fortress Investment.
Mr. Jackson secured repayment of his debts to Fortress Investment
with his 50% interest in a catalogue of songs by The Beatles,
which is valued at approximately $500 million.
Mr. Jackson was supported on the refinancing by an advisory team
that included Bahrain-based financial advisor Ahmed Al Khan and
Qays H. Zubi Attorneys & Legal Consultants. Citigroup structured
the transaction for the parties. Mr. Jackson did not disclose the
terms of the financing deal.
MIRANT CORP: Asks Court to Compel WPS Energy to Dismiss FERC Case
-----------------------------------------------------------------
WPS Energy Services, Inc., and Mirant Americas Energy Marketing
LLC were parties to various prepetition contracts for the
delivery of power into the Michigan Electric Coordinated System.
WPS Energy sold the power acquired from MAEM to Quest Energy,
L.L.C.
In July 2003, the Federal Energy Regulatory Commission
established a new rate design that eliminated regional through-
and-out transmission rates for transactions between Midwest
Independent Transmission System Operator, Inc., of which MECS is
a subpart, and PJM Interconnection, LLC.
The FERC also established a transitional "Seams Elimination
Charge/Cost Adjustment/Assignment" to allow transmission owners
to recover lost revenues resulting from the elimination of the
RTOR.
The FERC subsequently recognized that load serving entities with
existing power supply contracts might not see a cost reduction as
the result of the elimination of the RTOR. The FERC allowed
LSEs, under existing contracts for delivered power that continue
into the transition period, to demonstrate that the supplier is
the shipper for those transactions. The FERC also required the
supplier to pay the SECA for that portion of the LSE's load
served by the contracts.
As a result, WPS Energy and Quest Energy, as an LSE, were
assessed with approximately $17,000,000 in SECA charges.
On September 6, 2005, WPS Energy and Quest Energy filed a "Notice
of Intent to Shift to Shipper Case to Phase II" with the FERC,
seeking payment from MAEM on account of SECA charges imposed on
them.
Jason D. Schauer, Esq., at White & Case LLP, in Miami, Florida,
relates that the New Mirant Entities' counsel sent a letter to
WPS Energy and Quest Energy requesting that they immediately
withdraw and dismiss the FERC Proceeding with respect to MAEM.
WPS Energy and Quest Energy refused. They explained that they
were not making any claims against MAEM, but merely submitting
evidence to show that the SECA has been improperly billed.
Mr. Schauer asserts that the dispute is already moot because the
Alleged Claim was discharged pursuant to the Confirmation Order
and Section 1141 of the Bankruptcy Code.
The New Mirant Entities ask Judge Lynn to compel WPS Energy and
Quest Energy to withdraw their claim against MAEM or dismiss
their case pending with the FERC.
About Mirant
Headquartered in Atlanta, Georgia, Mirant Corporation --
http://www.mirant.com/-- is a competitive energy company that
produces and sells electricity in North America, the Caribbean,
and the Philippines. Mirant owns or leases more than 18,000
megawatts of electric generating capacity globally. Mirant
Corporation filed for chapter 11 protection on July 14, 2003
(Bankr. N.D. Tex. 03-46590), and emerged under the terms of a
confirmed Second Amended Plan on January 3, 2006. Thomas E.
Lauria, Esq., at White & Case LLP, represented the Debtors in
their successful restructuring. When the Debtors filed for
protection from their creditors, they listed $20,574,000,000 in
assets and $11,401,000,000 in debts. (Mirant Bankruptcy News,
Issue No. 95; Bankruptcy Creditors' Service, Inc., 215/945-7000)
* * *
As reported in the Troubled Company Reporter on Dec. 8, 2005,
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to power generator and developer Mirant Corp. and
said the outlook is stable. That rating reflected the credit
profile of Mirant, based on the structure the company expects to
have on emergence from bankruptcy at or around year-end 2005, S&P
said.
MUSICLAND HOLDING: Court Vacates Stay to Let St. Clair Take Action
------------------------------------------------------------------
As reported in the Troubled Company Reporter on Mar. 22, 2006, St.
Clair Entertainment Group, Inc., asked the U.S. Bankruptcy Court
for the Southern District of New York to lift the automatic stay
to allow it to proceed with an action to obtain possession of the
Goods and their proceeds.
Christopher R. Belmonte, Esq., at Satterlee Stephens Burke &
Burke LLP, in New York City, relates that St. Clair, a supplier of
entertainment-related goods, entered into a Consignment Agreement
with Musicland Holding Corp. and its debtor-affiliates on Jan. 27,
2005. Under that Agreement, the Debtors would order goods on
consignment and remit payment to St. Clair.
By virtue of the Consignment Agreement and the Uniform Commercial
Code Financing Statement filed by St. Clair against Musicland as
of Sept. 12, 2005, St. Clair held a valid, perfected security
interest in the St. Clair Inventory.
On Jan. 5, 2006, St. Clair sought the return of any of its
consigned, unsold collateral.
Mr. Belmonte disclosed that as of Feb. 9, 2006, approximately
$170,378 was due to St. Clair. The Debtors continue to sell the
consigned goods, resulting in proceeds of more than $250,000 being
due to St. Clair.
Subsequently, St. Clair forwarded a reclamation demand letter,
seeking to reclaim all the goods received by the Debtors.
However, the Debtors refused to return those Goods.
Mr. Belmonte asserted that because the Debtors have no equity in
the Goods and because all proceeds from the sale are the property
of the secured parties, the Goods cannot be necessary for an
effective reorganization of the Debtors.
* * *
Judge Bernstein vacates the automatic stay to the extent necessary
to allow St. Clair Entertainment Group, Inc., to proceed with an
adversary proceeding against the Debtors to obtain possession of
any proceeds arising from the sales of Goods that occurred prior
to Jan. 12, 2006.
The Court directs the Debtors to remit to St. Clair in the
ordinary course, as and for adequate protection, the proceeds
arising from the sales of the Goods that occurred on or after the
Petition Date in accordance with the existing Consignment
Agreement between the parties.
If the Debtors fail to cure any and all of the Adequate
Protection Payments, the Court permits St. Clair to seek a
modification of the automatic stay to allow it to proceed with any
action against the Debtors to obtain possession of the Goods and
any proceeds arising from the sale of the Goods.
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. 9; Bankruptcy Creditors' Service, Inc., 215/945-7000)
NADER MODANLO: Court Denies Sheppard Mullin Retention
-----------------------------------------------------
The Hon. Nancy V. Alquist of the U.S. Bankruptcy Court for the
District of Maryland in Greenbelt denied Nader Modanlo's request
to retain Sheppard, Mullin, Richter & Hampton LLP as his special
counsel.
As reported in the Troubled Company Reporter on Dec. 29. 2005, Mr.
Modanlo sought to employ Sheppard Mullin to represent him in
certain appeals pending before the Maryland Court of Special
Appeals.
Shareholder Lawsuit
Raymond Schettino and other shareholders of Final Analysis
Communication Systems had filed a derivative action for fraud and
related claims against Mr. Modanlo, who served as the company's
president and chairman of the board, with the Circuit Court for
Montgomery County Maryland.
In response, Mr. Modanlo brought a third party action against
Michael H. Ahan, co-equal owner of Final Analysis, and other
parties, for contribution and indemnity. Mr. Ahan in turn filed a
counterclaim against Mr. Modanlo that included claims for breach
of contract and breach of fiduciary duty.
On Oct. 22, 2004, a jury in the Circuit Court returned a verdict
against the Debtor and awarded $103,900,000 to Mr. Ahan.
Mr. Ahan's Objection
Mr. Ahan objected to the Debtor's proposed retention of Sheppard
Mullin, saying Mr. Modanlo no longer had any right to act on
behalf of the estate after the Bankruptcy Court authorized the
appointment of a Chapter 11 Trustee on Dec. 23, 2005.
Mr. Ahan had asked the Bankruptcy Court to appoint a Chapter 11
Trustee in Mr. Modanlo's bankruptcy case. Mr. Ahan charged that:
1. the Debtor has a judicially determined track record of
violating his fiduciary duties;
2. the Debtor refuses to disclose material information
regarding his assets, liabilities and financial affairs;
3. the Debtor has conflicts of interest that preclude him from
acting as a fiduciary for his creditors; and
4. the Debtor is incompetent to act as a fiduciary for his
creditors.
Following the denial of Sheppard Mullin's retention on March 13,
2006, the Bankruptcy Court named Christopher B. Mead, Esq., as
Chapter 11 Trustee for Mr. Modanlo's estate.
Nader Modanlo of Potomac, Maryland, is the President of Final
Analysis Communication Services, Inc. Mr. Modanlo filed for
chapter 11 protection on July 22, 2005 (Bankr. D. Md. Case No.
05-26549). Joel S. Aronson, Esq., at Ridberg Sherbill & Aronson
LLP, represents the Debtor. When the Debtor filed for protection
from his creditors, he listed total assets of $776,237 and total
debts of $106,002,690. Christopher B. Mead is the chapter 11
Trustee for the Debtor's estate.
ONEIDA LTD: U.S. Trustee Appoints 5-Member Creditors Committee
--------------------------------------------------------------
Diana G. Adams, Acting United States Trustee for Region 2,
appointed five creditors to serve on an Official Committee of
Unsecured Creditors in Oneida Ltd. and its debtor-affiliates'
chapter 11 cases:
(1) Niagara Ceramics Corporation
75 Hayes Place
Buffalo, NY 14210
Attn: Robert L. Lupica, President
Tel: (716) 821-5600
(2) The Coca-Cola Company
One Coca-Cola Plaza, NW Nat 2006
Atlanta, GA 30313
Attn: John Lewis, Jr.
Senior Corporate Counsel
Tel: (404) 676-4016
(3) F.M. Howell & Company
dba Howell Packaging
P.O. Box 286
Elmira, NY 14902-0286
Attn: Keith D. Baumann
Director of Finance
Tel: (607) 734-6291
(4) Stephen H. MacIntosh
5743 E. Paseo Hermosa
Cave Creek, AZ 85331
Tel: (480) 595-9968
(5) Alan H. Conseur
681 Penn Place
Winter Park, FL 32789
Tel: (407) 628-1486
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtors'
expense. They may investigate the Debtors' business and financial
affairs. Importantly, official committees serve as fiduciaries to
the general population of creditors they represent. Those
committees will also attempt to negotiate the terms of a
consensual chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest. If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management with
an independent trustee. If the Committee concludes reorganization
of the Debtors is impossible, the Committee will urge the
Bankruptcy Court to convert the chapter 11 cases to a liquidation
proceeding.
Based in Oneida, New York, Oneida Ltd. -- http://www.oneida.com/
-- is the world's largest manufacturer of stainless steel and
silverplated flatware for both the Consumer and Foodservice
industries, and the largest supplier of dinnerware to the
foodservice industry. Oneida is also a leading supplier of a
variety of crystal, glassware and metal serveware for the tabletop
industries. The Company and its 8 debtor-affiliates filed for
Chapter 11 protection on March 19, 2006 (Bankr. S.D. N.Y. Case
Nos. 06-10489 through 06-10496). Douglas P. Bartner, Esq., at
Shearman & Sterling LLP represents the Debtors. Credit Suisse
Securities (USA) LLC is the Debtors' financial advisor. When the
Debtors filed for protection from their creditors, they listed
$305,329,000 in total assets and $332,227,000 in total debts.
OWENS CORNING: Parries Plan & Disclosure Statement Objections
-------------------------------------------------------------
Owens Corning and its debtor-affiliates, together with the
Official Committee of Asbestos Claimants and the Legal
Representative for Future Claimants, insist that the Disclosure
Statement explaining their Fifth Amended Plan of Reorganization:
-- contains more than adequate information by which creditors
can understand the basis on which the payments to the Bank
Debt Holders are premised;
-- adequately discusses intercompany claims;
-- contains adequate information with respect to the treatment
of the Bank Debt Holders' claims;
-- has been updated to reflect the current status of the Ad
Hoc Equity Committee's pending motion to prosecute an
action in the Delaware Chancery Court and the denial of the
Petition for entry of an order providing for relief in the
nature of mandamus;
-- contains adequate information concerning the requirements
for the confirmation of the Plan;
-- contains adequate information regarding OCD Asbestos
Personal Injury Estimation Order;
-- provides adequate information regarding the terms of
compensation or benefits to the Debtors' board and
management under the Plan; and
-- provides adequate information regarding releases.
The Plan Proponents point out that the objections raised by
Pacific Employers Insurance Company, Longacre Master Fund, Ltd.,
and Susan C. McKelvey raised confirmation issues.
The Plan Proponents also assert that pursuant to Section
1125(a)(i) of the Bankruptcy Code, adequate information need not
include information about any other possible or proposed plan.
To address the concerns raised by the official representatives of
the bondholders and trade creditors, the Plan Proponents will
include additional terms to clarify or supplement certain
provisions in the Disclosure Statement. A full-text copy of the
additional terms is available for free at:
http://ResearchArchives.com/t/s?7f2
Aside from the formal objections filed with the Court, the
Debtors also received informal, un-docketed queries and
correspondence with certain parties-in-interest.
The Plan Proponents have prepared a chart setting forth the
various objections to the Disclosure Statement and their
responses to the objections.
A chart of the docketed objections and the Plan Proponents'
response is available for free at:
http://ResearchArchives.com/t/s?7ef
A chart of the informal inquiries made and the Plan Proponents'
response is available for free at:
http://ResearchArchives.com/t/s?7f0
A chart of the correspondence received from various parties and
the Plan Proponents' response is available for free at:
http://ResearchArchives.com/t/s?7f1
The Plan Proponents ask Judge Fitzgerald to approve the
Disclosure Statement and overrule the Objections that have not
been withdrawn.
The Plan Proponents reserve the right to present all legal
arguments and defenses to the objections at the Disclosure
Statement Hearing.
Owens Corning -- http://www.owenscorning.com/-- manufactures
fiberglass insulation, roofing materials, vinyl windows and
siding, patio doors, rain gutters and downspouts. Headquartered
in Toledo, Ohio, the Company filed for chapter 11 protection on
October 5, 2000 (Bankr. Del. Case. No. 00-03837). Norman L.
Pernick, Esq., at Saul Ewing LLP, represents the Debtors. Elihu
Inselbuch, Esq., at Caplin & Drysdale, Chartered, represents the
Official Committee of Asbestos Creditors. James J. McMonagle
serves as the Legal Representative for Future Claimants and is
represented by Edmund M. Emrich, Esq., at Kaye Scholer LLP.
(Owens Corning Bankruptcy News, Issue No. 128; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
OWENS CORNING: Credit Suisse Wants Bank Claims Declared Unimpaired
------------------------------------------------------------------
The steering committee for the Bank Holders may have agreed with
Owens Corning and its debtor-affiliates as to the treatment for
the claims of prepetition bank lenders as embodied in the Fifth
Amended Joint Plan of Reorganization, Rebecca L. Butcher, Esq., at
Landis Rath & Cobb LLP, in Wilmington, Delaware, notes. However,
Ms. Butcher says that does not mean that the Steering Committee
can support the Plan without qualification, or even that the
Steering Committee will not ultimately be constrained to oppose
confirmation of the Plan.
Ms. Butcher explains that the Fifth Amended Plan provides for a
"death trap" for the Bank Holders. Under the Plan, the Bank
Holders will only receive the treatment negotiated by the
Steering Committee -- allowed claims of around $1.467 billion
plus prepetition bank default interest and fees -- if the Bank
Holders:
a. are deemed unimpaired; or
b. vote in favor of the Plan by the requisite statutory
majorities under the Bankruptcy Code.
If the Bank Holders are impaired and fail to vote in favor of the
Plan by the statutory majorities, their allowed claims will be
determined through additional litigation and paid in an as-of-yet
undisclosed mixture of cash and notes.
Accordingly, the Steering Committee is currently in the conflicted
position of simultaneously supporting the Plan and its consensual
treatment of the Bank Holders and opposing the death trap and
cram-down provisions of the Plan.
The problem, Ms. Butcher points out, will cause the Debtors and
their estates to expend their time and resources litigating with
a constituency who wants to support the Plan, at a time when the
Debtors' time and resources are best spent in negotiations with
parties who do not yet support the Plan, and in preparation for
confirmation.
Credit Suisse, as agent for the prepetition institutional lenders
to Owens Corning, believes that the unnecessary and wasteful
litigation can be avoided if the Court finds, at the hearing to
determine the adequacy of the Disclosure Statement, that the Bank
Holders are unimpaired under the Plan.
Credit Suisse and other members of the Steering Committee each
holds claims under a credit agreement dated June 26, 1997, by and
among Owens Corning, Credit Suisse and the lender parties.
Pursuant to Section 1124 of the Bankruptcy Code, Credit Suisse
asks the Court to determine that the Bank Holder classes are
unimpaired under the Plan.
Section 1124 provides that a "class of claims or interests is
impaired under a plan unless, with respect to each claim or
interest of such class, the plan leaves unaltered the legal,
equitable and contractual rights to which such claim or interest
entitles such claim or interest. . . ."
The Bank Holder Claims, Ms. Butcher insists, are clearly
unimpaired because the Fifth Amended Plan provides for full
payment to their holders, in cash, on the Plan's effective date.
Credit Suisse asserts that if the Bank Holders are deemed
unimpaired, there will be clarity as to:
-- whether the Bank Holders can cast votes with respect to the
Plan (or whether they are deemed to have already accepted
the Plan); and
-- what the Bank Holders' treatment under the Plan will be.
The clarity will inure to the benefit of the Debtors, their
estates, and other parties-in-interest, by streamlining the
confirmation process and eliminating unnecessary and time-
consuming solicitation, litigation and discovery, Ms. Butcher
tells Judge Fitzgerald.
About Owens Corning
Owens Corning -- http://www.owenscorning.com/-- manufactures
fiberglass insulation, roofing materials, vinyl windows and
siding, patio doors, rain gutters and downspouts. Headquartered
in Toledo, Ohio, the Company filed for chapter 11 protection on
October 5, 2000 (Bankr. Del. Case. No. 00-03837). Norman L.
Pernick, Esq., at Saul Ewing LLP, represents the Debtors. Elihu
Inselbuch, Esq., at Caplin & Drysdale, Chartered, represents the
Official Committee of Asbestos Creditors. James J. McMonagle
serves as the Legal Representative for Future Claimants and is
represented by Edmund M. Emrich, Esq., at Kaye Scholer LLP.
(Owens Corning Bankruptcy News, Issue No. 127; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
PARMALAT GROUP: Judge Kaplan Allows BofA to Pursue Counterclaims
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At the request of Bank of America Corporation and certain of its
affiliates, Judge Lewis A. Kaplan of the U.S. District Court for
the Southern District of New York modifies the Preliminary
Injunction Order "for the reasons and subject to the conditions
stated on the record in open court," to allow the BofA entities
to proceed with their $1 billion compulsory counterclaims against
Dr. Enrico Bondi, as extraordinary commissioner of Parmalat
Finanziaria and its debtor-affiliates.
The other BofA Entities are Bank of America National Trust &
Savings Association, Banc of America Securities LLC, and Bank of
America, N.A.
The Preliminary Injunction Order prevents the BofA entities from
asserting counterclaims against the Foreign Debtors in response
to the claims that Dr. Bondi has asserted against BofA in the
District Court, even though both sets of claims arise under
United States law.
The 123-page counterclaims in the lawsuit brought by Enrico Bondi,
the Extraordinary Administrator of Parmalat in October 2004,
charge that Parmalat and its management committed fraud,
misrepresentation, conspiracy and other illegal acts, and Bank of
America seeks damages as compensation for financial losses and
other damage it suffered as a result.
In a statement, Bank of America said:
"Parmalat and its management repeatedly lied to Bank of
America, other banks, auditors, rating agencies, investors and
the market in general about its financial condition. Bank of
America was led to believe that Parmalat was a strong, honest
and profitable company, and Bank of America's actions in
providing loans and other financing were consistent with this
belief. Our company was seriously injured by this fraud."
At the time of Parmalat's bankruptcy in December 2003, Bank
of America had $647 million of exposure to Parmalat, $462 million
of which was unsecured.
Under the Federal RICO law, Bank of America can seek damages
up to three times the amount of its losses.
In its counterclaims, Bank of America says that Dr. Bondi's
lawsuit is nothing more than an effort to "shift the blame for
Parmalat's demise from the true culprit -- Parmalat itself -- to
victims of the fraud, such as Bank of America."
The Bank's counterclaims set out the facts about Parmalat's
decade-long, massive fraud, which have come to light through the
admissions of Dr. Bondi and the testimony of Parmalat insiders
themselves.
Beginning in the early 1990s, Parmalat, led by its senior
officers, including CEO Calisto Tanzi and CFO Fausto Tonna, formed
dummy companies to hide Parmalat's true financial condition and
cover up losses suffered by Parmalat's subsidiaries.
Parmalat managers engaged in fraudulent schemes, like creating
fake documents and devising phony transactions that gave rise to
phony income. The various schemes resulted in overstated levels
of cash and earnings and understated levels of debt. Recent
testimony in Milan by former Parmalat officials has confirmed
these facts.
Parmalat's real financial condition and its fraudulent activities
were not reflected in its audited financial statements or in the
representations made by Parmalat and its senior officers. Bank of
America reasonably relied upon these representations in lending
the company hundreds of millions of dollars and raising capital
for Parmalat from institutional investors in the U.S.
Bank of America's counterclaims include:
1) Securities Fraud for false and misleading statements by
Parmalat in connection with Parmalat securities
offerings;
2) Racketeer Influenced and Corrupt Organizations (RICO) Act
violations under 18 U.S.C. Section 1962(c) for engaging
in racketeering through a criminal enterprise (e.g.,
providing false information about Parmalat's financial
conditions in violation of mail fraud and wire fraud
statutes) in violation of the RICO Act. Damages awarded
for RICO violations by Parmalat may be trebled.
3) Fraud for knowingly, and with the intent to defraud,
making false and misleading statements to Bank of America
about Parmalat's financial condition.
4) Negligent Misrepresentation for making negligent
statements to Bank of America about Parmalat's financial
condition.
5) Civil Conspiracy: for participating in a conspiracy by
Parmalat senior managers and others in an effort to hide
Parmalat's true financial condition.
6) Violations of the North Carolina Unfair and Deceptive
Trade Practices Act (N.C. Gen. Stat. Sections 75-1.1 et
seq.): for engaging in unfair and deceptive conduct that
had a substantial effect on Bank of America's North
Carolina business operations.
Bank of America noted that the fraudulent activity detailed in its
counterclaims has already been admitted in legal filings by Dr.
Bondi and in sworn testimony by Parmalat insiders, which will
assist Bank of America in proving that it was damaged.
Thomas McC. Souther, Esq., at Sidley Austin LLP, in New York,
argues that BofA's ability to assert and liquidate its
counterclaims in the District Court is essential to its ability
to defend itself against Dr. Bondi's claims at trial, and to its
ability to assert its fundamental defensive rights of set-off and
recoupment.
If BofA were forced to liquidate its counterclaims in Italy, it
would lose the critical opportunity to put before a jury its
counterclaims against the Foreign Debtors to demonstrate that the
fraud was perpetrated by Parmalat -- and not BofA -- and that BofA
was one of the largest victims of that fraud.
Moreover, Mr. Souther says BofA would effectively -- and
improperly -- be denied its rights of set-off and recoupment.
That would be contrary to basic principles of United States law
and would confer greater rights on Dr. Bondi than those enjoyed
by any other plaintiff under United States law, including
bankruptcy trustees.
Since Dr. Bondi has invoked the District Court's jurisdiction in
seeking to assert claims arising under United States law against
BofA, the District Court has the jurisdiction, and is the most
appropriate forum, to resolve and liquidate BofA's counterclaims
against the Foreign Debtors, which also arise under United States
law, Mr. Souther contends.
Mr. Souther also notes that Dr. Bondi has previously conceded
that the Preliminary Injunction Order should be modified to
permit BofA to assert its compulsory counterclaims in the
District Court.
The Foreign Debtors has represented before the Bankruptcy Court
that they are willing to agree to a modification of the Section
304 Injunction Order that would permit compulsory counterclaims
and discovery in the Recovery Actions initiated by Dr. Bondi
against the Banks.
Mr. Souther also points out that Citigroup, another bank
defendant sued by Dr. Bondi, is already pursuing its compulsory
counterclaims against the Foreign Debtors in the United States.
Denial of BofA's right to liquidate its counterclaims in the
District Court will thus place BofA at a distinct disadvantage
not only vis-a-vis creditors who are defendants in other
jurisdictions, but also vis-a-vis a similarly situated creditor
in the United States.
Judge Kaplan makes it clear that the ruling, which was entered on
March 29, 2006, is without prejudice to any defenses that may be
asserted by Dr. Bondi.
A full-text copy of the BofA Counterclaims is available for free
at http://ResearchArchives.com/t/s?7ee
About Bank of America
Bank of America is one of the world's largest financial
institutions, serving individual consumers, small and middle
market businesses and large corporations with a full range of
banking, investing, asset management and other financial and
risk-management products and services.
The company provides unmatched convenience in the United States,
serving more than 38 million consumer and small business
relationships with more than 5,800 retail banking offices, more
than 16,700 ATMs and award-winning online banking with more than
14 million active users.
Bank of America is the No. 1 overall Small Business Administration
lender in the United States and the No. 1 SBA lender to minority-
owned small businesses. The company serves clients in 150
countries and has relationships with 97 percent of the U.S.
Fortune 500 companies and 79 percent of the Global Fortune 500.
Bank of America Corporation stock (NYSE: BAC) is listed on the New
York Stock Exchange.
About Parmalat
Headquartered in Wallington, New Jersey, Parmalat USA Corporation
-- http://www.parmalatusa.com/-- generates more than 7 billion
euros in annual revenue. The Parmalat Group's 40-some brand
product line includes milk, yogurt, cheese, butter, cakes and
cookies, breads, pizza, snack foods and vegetable sauces, soups
and juices and employs over 36,000 workers in 139 plants located
in 31 countries on six continents. The Company filed for chapter
11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No.
04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at
Weil Gotshal & Manges LLP, represent the Debtors. When the U.S.
Debtors filed for bankruptcy protection, they reported more than
$200 million in assets and debts. The U.S. Debtors emerged from
bankruptcy on April 13, 2005. (Parmalat Bankruptcy News, Issue
No. 71; Bankruptcy Creditors' Service, Inc., 215/945-7000)
PHI INC: Buys Back $184.8 Million of 9-3/8% Senior Notes due 2009
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PHI, Inc. (Nasdaq: PHII) (Nasdaq: PHIIK) accepted for purchase and
payment all of the approximately $184.8 million of its $200
million outstanding aggregate principal amount of 9-3/8% Senior
Notes due 2009 that were validly tendered prior to 5:00 p.m., New
York City time, on April 6, 2006, and not validly withdrawn
pursuant to its cash tender offer and consent solicitation for the
Notes, which commenced on March 24, 2006.
Payment of the Notes pursuant to the Initial Settlement was made
on April 12, 2006. Holders of the Notes who tendered their Notes
prior to the Consent Deadline will receive a consent payment of
$2.00 per $1,000 principal amount of the Notes validly tendered
and accepted for purchase, in addition to the tender offer
consideration of $1,046.88 per $1,000 principal amount of Notes
plus accrued and unpaid interest on those Notes.
Supplemental Indenture
On the Initial Settlement Date, PHI executed a supplemental
indenture to the indenture governing the Notes which supplemental
indenture eliminated substantially all of the restrictive
covenants, and certain events of default provisions in the
indenture and shortened the minimum redemption notice period from
30 to five days should PHI elect to redeem any remaining
outstanding Notes in accordance with the indenture. The
supplemental indenture became operative upon the Initial
Settlement.
The tender offer and the consent solicitation will expire at 9:00
a.m. New York City time, on April 24, 2006, unless extended or
terminated by PHI, and the final settlement date is expected to be
the next business day.
Holders who validly tender their Notes after the Consent Deadline
but before the expiration of the tender offer will not receive the
Consent Payment, but will receive on the final settlement date the
tender offer consideration for Notes accepted for purchase in
accordance with the terms of PHI's Offer to Purchase and Consent
Solicitation Statement, together with accrued and unpaid interest
on those Notes.
Any Notes not tendered and purchased pursuant to the tender offer
will remain outstanding and the holders thereof will be subject to
the terms of the supplemental indenture even though they did not
consent to the amendments.
UBS Investment Bank is acting as the dealer manager and
solicitation agent, and D.F. King & Co., Inc. is the information
agent for the tender offer. Requests for documentation should be
directed to:
D.F. King & Co., Inc.
Telephone (212) 269-5550) for banks and brokerage firms
Toll Free (888) 567-1626
Questions regarding the tender offer and consent solicitation
should be directed to:
UBS Investment Bank
Attention: Liability Management Group
Telephone (203) 719-4210 (collect)
Toll Free (888) 722-9555 x4210
About PHI Inc.
Headquartered in Lafayette, La., PHI -- http://www.phihelico.com/
-- provides helicopter transportation and related services to the
oil and gas industry, air medical industry and others and also
provides third-party maintenance services to select customers.
PHI's Common Stock is traded on The Nasdaq National Market System
(symbols PHII and PHIIK).
* * *
As reported in the Troubled Company Reporter on April 12, 2006,
Moody's assigned a B1 rating to PHI, Inc.'s $150 million senior
unsecured guaranteed notes offering. Moody's also affirmed
the B1 Corporate Family Rating and changed the outlook to positive
from stable.
PLIANT CORP: Reports 2006 First Quarter Sales of $298 Million
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Pliant Corporation reported record first quarter sales of
$298 million. This represents a 13% increase over the first
quarter of 2005 with each division of the company reporting
increased sales. The company grew sales in the US, Canada,
Mexico, Germany and Australia.
"We were pleased with our performance in the 1st quarter. We have
approved our next round of capital spending, customer investment
programs and innovation investments," Harold Bevis, President and
CEO of Pliant Corporation said.
"We remain firmly committed to our strategically sound business
plan built on accretive sales growth, lean business practices,
cost reduction and innovation."
EBITDA(R) Results
Preliminary EBITDA(R) results are $24 million. This represents a
10% increase over the first quarter of 2005. This is also a
sequential increase of $500,000 versus the 4th quarter of 2005.
The company remains focused on growing EBITDA(R) via accretive
sales growth, lean business practices, cost reduction and
innovation.
EBITDA(R) is defined as EBITDA with the company's financial
restructuring expenses added back. These restructuring expenses
are mostly legal fees and financial advisor fees.
Cashflow and Liquidity
The company had $19.8 million of cash on hand at the end of the
quarter, which exceeded its forecast by $1.4 million.
Additionally, the company has a still-unused DIP financing
facility that can provide up to approximately $69 million of
additional liquidity. The company has yet to need or use its DIP
financing facility. The company also continued its capex
investment program in the quarter and initiated an expansion of
the company's operations in Germany.
Resin base prices have declined steadily for the last 4 months and
this is freeing up even further additional liquidity in the
company's working capital accounts.
Chapter 11 Financial Restructuring Process
The company's financial restructuring program is underway and on-
track. The company expects its proposed plan of reorganization to
be confirmed in the second quarter.
Exit Financing Proposals
The company has had a strong response to its request for formal
proposals for exit financing packages. Most of the responses
have been proposals that provide for maximum availability of
$170 million or higher. These proposals exceed the $140 million
of maximum availability under our pre-petition revolving credit
facility. The company expects to obtain an excellent financial
package from a premier financial institution that will meet or
exceed its expected liquidity needs upon emergence from bankruptcy
and beyond.
About Pliant
Headquartered in Schaumburg, Illinois, Pliant Corporation --
http://www.pliantcorp.com/-- produces value-added film and
flexible packaging products for personal care, medical, food,
industrial and agricultural markets. The Debtor and 10 of its
affiliates filed for chapter 11 protection on Jan. 3, 2006
(Bankr. D. Del. Lead Case No. 06-10001). James F. Conlan, Esq.,
at Sidley Austin LLP, and Edmon L. Morton, Esq., and Robert S.
Brady, Esq., at Young, Conaway, Stargatt & Taylor, represent the
Debtors in their restructuring efforts. The Debtors tapped
McMillan Binch Mendelsohn LLP, as their Canadian bankruptcy
counsel. The Ontario Superior Court of Justice named RSM
Richter, Inc., as the Debtors' information officer in their
restructuring proceeding under Companies Creditors Arrangement Act
in Canada. As of Sept. 30, 2005, the company had $604,275,000 in
total assets and $1,197,438,000 in total debts.
PROSOFT LEARNING: Voluntary Chapter 11 Case Summary
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Lead Debtor: Prosoft Learning Corporation
410 North 44th Street, Suite 600
Phoenix, Arizona 85008
Bankruptcy Case No.: 06-01008
Debtor-affiliates filing separate chapter 11 petitions:
Entity Case No.
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Computerprep, Inc. 06-01009
Type of Business: The Debtors develop and sell software
for IT education. Prosoft also manages
vendor-neutral certifications for IT
professionals.
See http://www.prosoftlearning.com/
Chapter 11 Petition Date: April 12, 2006
Court: District of Arizona (Phoenix)
Judge: Randolph J. Haines
Debtors' Counsel: Steven D. Jerome, Esq.
Eric S. Pezold, Esq.
Snell & Wilmer, L.L.P.
One Arizona Center
400 East Van Buren
Phoenix, Arizona 85004
Tel: (602) 382-6323
Fax: (602) 382-6070
Financial Condition of Prosoft Learning Corporation:
Total Assets: $910,598
Total Debts: $5,288,922
Financial Condition of Computerprep, Inc.:
Estimated Assets: Less than $50,000
Estimated Debts: Less than $50,000
The Debtors did not file a list of their 20 largest unsecured
creditors.
PROTECTION ONE: Fitch Rates Proposed $66.8 Mil. Add-On Loan at B+
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Fitch Ratings assigned a 'B+' rating as well as a recovery rating
of 'RR2' to Protection One Alarm Monitoring Inc.'s (POI) proposed
add-on senior secured term loan of $66.8 million, increasing the
total term loan to approximately $300 million.
Due to this expected debt increase as well as lower recovery
values for the secured bank debt, Fitch has downgraded the
company's senior secured bank facility to 'B+/RR2' (average
recovery value of 71%-90%) from 'BB-/RR1'.
Fitch affirmed POI's Issuer Default Rating of 'B-' and the senior
subordinated debt at 'CCC+/RR5'. The company's 'B-' senior
unsecured debt rating is withdrawn. The Rating Outlook is Stable.
These rating actions follow POI's announcement that it expects
to amend its existing credit facility, including increasing the
senior secured term loan to $300 million due 2012 from
$233.2 million while maintaining an undrawn $25 million revolver
due 2010.
Proceeds from the $67 million add-on to the term loan along with a
portion of cash will be used to fund a $75 million shareholder
distribution.
Pro forma for the transaction, total debt increases to
approximately $390 million, consisting of the aforementioned:
* $300 million term loan; and
* $90 million of 8.125% senior subordinated notes due
January 2009.
Fitch estimates pro forma leverage, as measured by total debt-to-
EBITDA, is 4.6x, compared to 3.8x at the end of 2005. Pro forma
interest coverage is expected to remain above 2.0x.
After the aforementioned term loan increase, Fitch expects
liquidity to consist of the $25 million undrawn revolving credit
facility and approximately $10 million of cash.
Rating concerns center on:
* POI's continuous reduction in its customer base;
* necessary capital requirements to acquire customers (limiting
any free cash flow);
* competition from larger, better capitalized companies; and
* more aggressive shareholder friendly transactions.
The ratings continue to reflect POI's recurring revenue stream
from:
* alarm/monitoring services;
* large customer base; and
* declining attrition levels.
Fitch also recognizes POI management's ability to reduce costs
while stabilizing revenue and improving the credit quality of the
alarm customer portfolio.
POI is a provider of security monitoring services, including
electronic monitoring and maintenance of alarm systems. Revenues
are generated primarily from recurring monthly revenues for
monitoring and maintaining the alarm systems that are installed in
customers' homes and businesses. The company provides services to
residential, commercial and wholesale customers.
For 2005, total revenue was $263.3 million compared to $269.3
million in 2004 due to the decline in the customer base. POI had
a net decrease of retail and wholesale customers of 17,316 in
2005, compared to 12,888 in 2004, and a net decrease of 31,295
customers in 2003.
The average retail and wholesale customer base was 697,179 for
2005 compared to 706,047 for 2004, while Network Multifamily was
324,276 for 2005 compared to 333,170 customers in 2004. The
company's customer attrition rate during 2005 declined to 7.7%
from 7.8% in 2004, 9.0% in 2003 and 11.2% in 2002, reflecting
mostly the improved performance and lower attrition levels for
residential customers. The customer attrition rate for the
company's Network Multifamily reporting unit was 6.4%, up from
5.8% in 2003.
PT HOLDINGS: Gets Access to $2 Million Under Revolving Facility
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PT Holdings Company Inc., parent company of Port Townsend Paper
Corporation, entered into an amendment to its revolving credit
facility.
The amendment temporarily frees up $2 million of borrowing
capacity that had previously been restricted under the terms of
the loan agreement. The $2 million in relief is scheduled to:
* reduce to $1.5 million on May 12, 2006,
* reduce to $1 million on June 12, 2006 and
* expire fully on July 12, 2006.
The amendment also releases a reserve associated with the
requirement to deliver to the lender the Company's 2004 audited
financial statements, which frees up an additional $3 million of
borrowing capacity.
The Company's 2004 audited financial statements are now required
to be delivered before May 15, 2006. However, the Company still
expects its 2004 audited financial statements to be released in
April.
The Company explained that the requested $2 million relief,
together with release of the $3 million reserve, is necessary to
fund a $7.5 million semi-annual bond interest payment due this
month.
"We are entering the strong seasonal period of our corrugated box
business, and with recent favorable pricing trends in our
industry, this additional temporary availability under our
revolver should be sufficient to meet our near term cash
requirements," Timothy P. Leybold, the Company's Chief Financial
Officer stated.
The Company's revolving credit facility previously permitted the
Company to borrow an additional $1 million as a term loan upon
delivery of the 2004 audited financial statements.
The amendment provides that this $1 million term loan will not be
available until after Aug. 31, 2006, and only if the Company meets
its 2006 operating plan.
Additionally, the amendment provides that $3 million of previous
borrowing capacity is restricted. The bank amendment also extends
the date for the lender to receive the Company's 2005 audited
financial statements from April 30, 2006, to June 15, 2006.
About The Port Townsend Paper
Headquartered in Puget Sound, Washington, The Port Townsend Paper
family of companies -- http://www.ptpc.com/-- employs 800 people
and annually produces more than 320,000 tons of unbleached Kraft
pulp, paper and linerboard at its mill in Port Townsend,
Washington. The Company also manufactures approximately 1.8
billion square feet of corrugated products annually at its three
Crown Packaging Plants and two BoxMaster Plants located in British
Columbia and Alberta.
* * *
As reported in the Troubled Company Reporter on Dec. 23, 2005,
PT Holdings Company Inc., parent company of Port Townsend Paper
Corporation, reported the receipt of a 30-day waiver extension to
deliver its 2004 audited financial statements under their primary
revolving credit facility. Under the extension, the 2004 audited
financial statements are now due by Jan. 31, 2006.
As previously announced, the company is also in the process of
restating and re-auditing its 2002 and 2003 financial statements.
PYATEROCHKA HOLDING: Merger Deal Prompts Moody's Ratings Review
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Moody's Investors Service placed the Ba3 corporate family rating
and the Aa3.ru national scale rating of Pyaterochka Holding N.V.
under review for possible downgrade.
The review has been prompted by the company's announcement that it
has agreed to merge with Perekriostok Holdings Limited, Russia's
leading supermarket chain. The transaction, which is expected to
be completed in mid-2006, is to occur in two stages:
1) an acquisition of Perekriostok by Pyaterochka for $1,365
million to be paid by $300 million in cash and an issue of
approximately 15.8 million new shares; and
2) Alfa Group, which currently controls Perekriostok, will
then purchase additional stakes in Pyaterochka from the
company's major shareholders for a total of $1,178 million
in cash and become the majority shareholder in the newly
combined entity.
The Ba3 corporate family rating and the Aa3.ru for Pyaterochka,
whilst assuming a moderate amount of bolt-on acquisitions,
particularly with respect to regional franchise operations, did
not incorporate any transformational transactions of the above
mentioned type and incorporated an adjusted debt to EBITDAR ratio
not to exceed a 3x level in the medium term.
The ratings review reflects Moody's expectation that the
transaction, whilst resulting in the establishment of the market
leader in Russia's growing food retail market with a pro forma
combined 2005 net sales of $2.4 billion, will present a number of
challenges for the enlarged entity, particularly given the
different retail formats, Pyaterochka as a discount food retailer
and Perekriostok as a supermarket chain, and the different
strategies and financial policies that each chain has been
pursuing separately until now.
In addition, Moody's considers that the timing and materialization
of advantages for the enlarged business and synergies mainly
driven by economies of scale remain uncertain at the moment.
With Pyaterochka expected to raise $300 million in bank financing
to complete the first stage of the transaction, Moody's believes
that pro forma leverage for the combined entity may fall
materially outside the 3x leverage currently embedded in
Pyaterochka's Ba3/Aa3.ru ratings.
Moody's review will focus mainly on the financial policy and long-
term business and financial targets for the enlarged entity,
execution risk of the financing plan, integration risks of the
merger, the expected amount of synergies and timing of their
implementation and the new major shareholder's commitment to the
business.
At this stage, Moody's expects that a potential ratings downgrade,
if any, is likely to be limited to one notch for the corporate
family rating and to two notches for the NSR.
Headquartered in the Netherlands, Pyaterochka Holding N.V. is a
leading Russian food retailer operating a large store network
largely covering the Moscow region and St. Petersburg but also
with a good presence in other Russian regions through its
franchise operations. The company has recently acquired two of
its successful regional franchise operations -- in Yekaterinburg
and Chelyabinsk. Pyaterochka's 2004 net revenues were $1.1
billion. The company has reported unaudited net revenues of $1.4
billion for 2005.
QUEBECOR MEDIA: Inks EUR59.4 Mil. Financing with Societe Generale
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Quebecor Media Inc. concluded a long-term committed credit
facility with Societe Generale (Canada) for the Canadian dollar
equivalent of EUR59.4 million.
The drawings under this facility will finance the purchase by
Quebecor Media of 6 MAN Roland printing presses. As reported in
the third quarter of 2005, these state-of-the-art presses will be
used mainly to print the Journal de Montreal, the Toronto Sun and
the London Free Press.
The facility, which will be drawn over the course of the next 20
months and repaid over the following 8 years, is associated with a
German export-financing program and will provide funding at a very
attractive interest rate.
The facility will be secured by, among other things, a first
ranking hypothec on the movable properties of the Company.
According to Mark D'Souza, Vice President Finance of Quebecor
Media, "Combined with the important refinancing completed in
January 2006, this facility will contribute to reducing the
Company's financial expenses. This facility will also further
diversify our sources of capital".
Quebecor Media, a subsidiary of Quebecor Inc. (TSX: QBR.MV.A,
QBR.SV.B) -- http://www.quebecor.com/-- owns operating companies
in numerous media-related businesses: Videotron ltee, the largest
cable operator in Quebec and a major Internet Service Provider and
provider of telephone and business telecommunications services;
Sun Media Corporation, Canada's largest national chain of tabloids
and community newspapers; TVA Group Inc., operator of the largest
French language general-interest television network in Quebec, a
number of specialty channels, and the English language general-
interest station SUN TV; Canoe Inc., operator of a network of
English and French language Internet properties in Canada; Nurun
Inc., an important interactive technologies and communications
agency in Canada, the United States and Europe; companies engaged
in book publishing and magazine publishing; and companies engaged
in the production, distribution and retailing of cultural
products, namely Archambault Group Inc., the largest chain of
music stores in eastern Canada, TVA Films, and Le SuperClub
Videotron ltee, a chain of video and video game rental and retail
stores.
* * *
As reported in the Troubled Company Reporter on Jan. 12, 2006,
Moody's Investors Service affirmed the Corporate Family Rating of
Quebecor Media Inc., all ratings at Videotron Ltee and Sun Media
Corporation, assigned a B2 Senior Unsecured rating to QMI's
$525 million Note issue, and upgraded QMI's existing Senior
Secured rating to B1 from B2. The outlook for all ratings remains
stable.
RBC RESIDENTIAL: DBRS Puts Class C Swap Transaction Rating at BBB
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Dominion Bond Rating Service assigned these ratings in respect of
RBC Residential Mortgage Linked Credit Derivative Transaction,
Series 2006-1:
* Class Senior Swap -- New Rating AAA
* Class A Swap -- New Rating AA
* Class B Swap -- New Rating A
* Class C Swap -- New Rating BBB
Under the Transaction, Royal Bank of Canada will be making fixed
payments and in return will receive payments from the Floating
Rate Payer should aggregate losses in a reference portfolio of
prime conventional residential mortgages exceed 0.875% over the
50-month term of the Transaction.
The Reference Obligations are a CDN$10 billion pool of RBC
mortgages with a weighted average loan to value of approximately
63.7% and 94% owner occupancy.
The overall credit characteristics of the Reference Obligations
are strong, and DBRS has considered the excellent loss performance
of similar mortgages originated by RBC in determining the
subordination levels.
The levels of subordination offered for each class of Swap is
commensurate with the risk related to such rating.
In making the assessment of subordination levels, DBRS reviewed a
detailed collateral tape of the Reference Obligations that
contained key borrower and property information.
Some removal and substitution of the Reference Obligations may
take place over the term of the Transaction. The amount of the
individual Swaps may amortize either sequentially or pro rata,
subject to certain requirements and time frames. Subordination
levels were sized to provide for these possibilities.
The ratings address the likelihood that the Floating Rate Payer
under the Transaction will be required to make a protection
payment under the terms of the credit derivative swaps. This is
the second publicly rated synthetic RMBS transaction from RBC.
RESIDENTIAL CAPITAL: Fitch Puts BB+ Rating on Subordinated Notes
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Fitch Ratings assigned 'BBB-' and 'BB+' ratings to ResCap's senior
and subordinated note issuances. Concurrently, these ratings are
placed on Rating Watch Positive. Proceeds from the note issuances
will be used to materially reduce ResCap's intercompany debt to
General Motors Acceptance Corp.
Ratings assigned:
Residential Capital Corporation:
-- Senior notes due 2013 'BBB-'
-- Subordinated notes due 2009 'BB+'
SHEFFIELD STEEL: Sells All Shares to Gerdau Ameristeel for $76MM
----------------------------------------------------------------
Gerdau Ameristeel (NYSE: GNA) entered into a definitive agreement
to acquire all of the outstanding shares of Sheffield Steel
Corporation.
Sheffield Steel is a mini-mill producer of long steel products,
primarily rebar and merchant bars with annual shipments of
approximately 550,000 tons of finished steel products.
Sheffield operates a melt shop and rolling mill in Sand Springs,
Oklahoma, a smaller rolling mill in Joliet, Illinois, three
downstream steel fabricating facilities in Kansas City and Sand
Springs.
Subject to certain closing adjustments, the purchase price for
all of the shares of Sheffield is expected to be approximately
$76 million in cash plus the assumption of approximately
$94 million of debt and certain long-term liabilities, net of
cash.
The transaction, which is subject to Sheffield shareholder
approval, satisfactory completion of anti-trust and applicable
regulatory reviews and other customary closing conditions, is
expected to close in the second quarter of 2006.
Lane Berry & Co. International, LLC acted as financial advisor to
the Special Committee of Sheffield Steel and provided a fairness
opinion to the Board of Directors of Sheffield Steel in connection
with the transaction.
James Nolan, President and CEO of Sheffield Steel commented: "This
transaction is a positive outcome for Sheffield Steel, our
employees, and the communities we operate in because of the
excellent reputation and financial strength of Gerdau Ameristeel.
Under the leadership of Gerdau Ameristeel, the combined
organization will have additional resources and capabilities with
which to service our existing customers as well as the expanding
southwestern markets."
About Gerdau Ameristeel
Headquartered in Tampa, Florida, Gerdau Ameristeel Corporation --
http://www.gerdauameristeel.com/-- is the second largest mini-
mill steel producer in North America with annual manufacturing
capacity of over 8.4 million tons of mill finished steel products.
Through its vertically integrated network of 15 mini-mills
(including one 50% owned mini-mill), 17 scrap recycling facilities
and 43 downstream operations, Gerdau Ameristeel primarily serves
customers in the eastern two thirds of North America. The
company's products are generally sold to steel service centers,
steel fabricators, or directly to original equipment manufacturers
for use in a variety of industries, including construction,
cellular and electrical transmission, automotive, mining and
equipment manufacturing. The common shares of Gerdau Ameristeel
are traded on the New York Stock Exchange under the symbol NYSE:
GNA; and the Toronto Stock Exchange under the symbol GNA.TO.
About Sheffield Steel
Based in Sand Springs, Oklahoma, Sheffield Steel Corporation
-- http://www.sheffieldsteel.com/-- is a regional mini-mill
producer of hot rolled steel bar, concrete reinforcing bar, and
fabricated products. Sheffield had sales of $297 million in the
fiscal year ended April 30, 2005.
Sheffield Steel Corporation's 11-3/8% Senior Secured Notes due
2011 carry Moody's Investors Service's B3 rating.
SOLUTIA INC: Balance Sheet Upside-Down by $1.4 Billion at Dec. 31
-----------------------------------------------------------------
Solutia Inc. delivered its financial results for the year ended
Dec. 31, 2005, to the Securities and Exchange Commission on
March 15, 2006.
Solutia earned $8 million of net income on $2.8 billion of net
sales for the year ended Dec. 31, 2005, in contrast to a
$316 million net loss on $2.6 billion of net sales in the prior
year.
The $128 million, or 5%, increase in net sales in 2005 reflects
higher average selling prices of approximately 11%, partially
offset by lower sales volumes of approximately 6%.
The Company's balance sheet at Dec. 31, 2005, showed $1.9 billion
in total assets and $3.4 billion in total liabilities, resulting
in approximately $1.4 billion in stockholders' deficit.
In 2005, Solutia continued its stated reorganization strategy with
a focus on the principal objectives of
a) managing the businesses to enhance its performance;
b) making changes to its asset portfolio to maximize the
value of the estate;
c) achieving reallocation of "legacy liabilities"; and
d) negotiating an appropriate capital structure.
Solutia took steps in 2005 to enhance its financial performance
including using the tools of bankruptcy and making changes to its
asset portfolio.
Solutia also continues to pursue a reallocation of legacy
liabilities in the bankruptcy proceeding through negotiations with
the other constituents in its Chapter 11 case.
In addition, the Company will also be working in 2006 to obtain a
proper capital structure upon emerging from Bankruptcy Protection.
A full-text copy of the regulatory filing is available for free
at http://researcharchives.com/t/s?7ea
Headquartered in St. Louis, Missouri, Solutia, Inc. --
http://www.solutia.com/-- with its subsidiaries, make and sell a
variety of high-performance chemical-based materials used in a
broad range of consumer and industrial applications. The Company
filed for chapter 11 protection on December 17, 2003 (Bankr.
S.D.N.Y. Case No. 03-17949). When the Debtors filed for
protection from their creditors, they listed $2,854,000,000 in
assets and $3,223,000,000 in debts. Solutia is represented by
Richard M. Cieri, Esq., at Kirkland & Ellis. Daniel H. Golden,
Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin
Gump Strauss Hauer & Feld LLP represent the Official Committee of
Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey
Howard & Zukin Capital provides the Creditors' Committee with
financial advice.
SOLUTIA INC: Plan Fiduciaries Want Chubb to Advance Defense Costs
-----------------------------------------------------------------
On Oct. 7, 2004, Jeremy Dickerson filed a class action
complaint in the U.S. District Court for the Southern District of
New York, on behalf of a putative class of participants in
Solutia, Inc.'s Savings and Investment Plan.
The Complaint alleged that Sheila Feldman, Helen L. Nelling,
Susan E. Bevington, Nancy Stemme, Christopher N. Ast, the
Employee Benefits Plan Committee, Pension and Savings Fund
Committee, John Hunter, Robert Clausen, Robert Potter, Michael E.
Miller, Paul H. Hatfield, J. Patrick Mulcahy, Sally G. Narodick,
Paul Donovan, Robert H. Jenkins, Frank A. Metz, Jr., William D.
Ruckelshaus, John B. Slaughter, Philip R. Lochner, Jr., and
Robert T. Blakely breached their fiduciary duties to the Savings
and Investment Plan in violation of Employee Retirement Income
Security Act of 1974 by, among other things, imprudently
investing Plan assets in Solutia common stock from Sept. 1, 1997
to December 15, 2003.
The Defendants have asked the District Court to dismiss the
Complaint. The dismissal request has been fully briefed and is
currently pending before the Honorable Loretta A. Preska. The
parties have not yet commenced discovery.
The Defendants have incurred a substantial amount of defense
costs in connection with the lawsuit, Karen Wahle, Esq., at
O'Melveny & Myers, in Washington, D.C., tells the Court.
Chubb & Son, a division of Federal Insurance Company, issued a
fiduciary Executive Protection to Solutia Inc. The Policy
provides that Chubb will pay on behalf of Solutia all Loss for
which Solutia grants indemnification to each Insured Person that
the Insured Person had become legally obligated to pay on account
of claims for Wrongful Acts brought during the Policy Period.
The Policy is a claims-made policy and further provides that
payments of Defense Costs are included within the general limits
of liability established by the Policy. The Policy has a
$15,000,000 limit of liability for each Loss and for each Policy
Period.
Counsel for the Defendants in the Litigation asked Chubb to
advance Defense Costs on a current basis for the representation
of the Defendants in connection with the Litigation. Chubb has
agreed to advance the requested Defense Costs under the Policy
once the Court approves the advancement.
According to Ms. Wahle, Chubb requires the Court's approval to
eliminate any subsequent dispute as to whether:
-- the Policy proceeds are property of Solutia's estate;
-- Solutia has some equitable interest in the Policy or its
proceeds; or
-- making payments pursuant to the Policy could be found to be
in violation of the automatic stay.
Accordingly, the Defendants ask the Court to lift the automatic
stay to permit Chubb to advance defense costs solely with regard
to the Litigation.
About Solutia
Headquartered in St. Louis, Missouri, Solutia, Inc. --
http://www.solutia.com/-- with its subsidiaries, make and sell a
variety of high-performance chemical-based materials used in a
broad range of consumer and industrial applications. The Company
filed for chapter 11 protection on December 17, 2003 (Bankr.
S.D.N.Y. Case No. 03-17949). When the Debtors filed for
protection from their creditors, they listed $2,854,000,000 in
assets and $3,223,000,000 in debts. Solutia is represented by
Richard M. Cieri, Esq., at Kirkland & Ellis. Daniel H. Golden,
Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin
Gump Strauss Hauer & Feld LLP represent the Official Committee of
Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey
Howard & Zukin Capital provides the Creditors' Committee with
financial advice. (Solutia Bankruptcy News, Issue No. 58;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
SOTHEBY'S HOLDINGS: S&P Lifts Ratings to BB With Positive Outlook
-----------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit and
senior unsecured debt ratings on New York-based Sotheby's Holdings
Inc. to 'BB' from 'BB-'. The outlook is positive.
"The upgrade is based on the company's continued good revenue and
operating performance and improved credit metrics, which we expect
to remain relatively stable over the intermediate term," said
Standard & Poor's credit analyst Stella Kapur
Sotheby's is benefiting from continued strength in the
international art market. Annual auction revenues grew 13% in
2005, to $502 million, and license fees and other revenues
increased 34% to $11.5 million, after adjusting for the onetime
$45 million benefit in 2004 from the sale of its real estate
business. EBITDA for 2005 was $145 million, or 35% higher than
the prior year, after adjusting for the onetime benefit in 2004.
The company's financial service business has grown to an adequate
size and is expected to be profitable in 2006. The company ended
2005 with roughly $142 million in notes receivables. Standard &
Poor's is comfortable with the company's financial service
business, given its good track record.
The ratings on Sotheby's reflect the global volatility in the
demand for art and the highly seasonal nature of auction revenues.
Sotheby's generates significant profits in the second and fourth
quarters when its spring and fall auctions take place, and incurs
losses in the first and third quarters. Standard & Poor's
believes:
* the company's commission structure;
* the quality of its current assets;
* its carefully guided loan making practices; and
* the relatively small amount of working capital needed to
finance the business
lend support to the ratings.
Furthermore, revenues have improved significantly from their low
point in 2001.
STANADYNE CORP: S&P Lowers $160MM Sr. Sub. Notes' Rating to CCC+
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on engine component supplier Stanadyne Corp. to 'B' from
'B+.'
At the same time, Standard & Poor's lowered its rating on
Stanadyne's $35 million first-lien senior secured asset-based
revolving bank facility to 'B+'.
The $65 million second-lien senior secured term loan rating was
lowered to 'B-', and the $160 million senior subordinated notes
rating was lowered to 'CCC+'.
In addition, Standard & Poor's lowered to 'CCC+' the rating on
$66 million in senior discount notes issued by Stanadyne Holdings
Inc., the parent company of Stanadyne Corp.
The outlook on Stanadyne is negative.
"The rating actions reflect the company's very high leverage at
year-end 2005, following a leveraged dividend distribution in
2004," said Standard & Poor's credit analyst Nancy C. Messer.
"The company also failed to improve EBITDA in 2005."
Standard & Poor's is concerned that Stanadyne will not be able to
attain the credit measures expected for the 'B+' rating in the
year ahead. The company's earnings volatility has increased in
recent years, reflecting increasing competition in the
marketplace. Stanadyne failed to increase EBITDA despite:
* its restructuring activities;
* its shift of certain component procurement to low-cost
countries; and
* its new business
because market conditions remain difficult. EBITDA was only $52
million, lower than in 2004 and below Standard & Poor's
expectations.
Stanadyne has maintained market share and some pricing power,
which allowed it to increase year-over-year revenue in 2005 to a
record level. However, unfavorable product mix and cost-side
factors pressured margins.
Standard & Poor's is concerned that challenging conditions in the
automotive industry, combined with a potential cyclical downturn
in the agricultural markets, could prevent Stanadyne from
regaining its former level of operating margins in the near term.
Privately held Stanadyne Corp., controlled by Kohlberg & Co. LLC,
is an independent manufacturer of diesel fuel-injection equipment
and precision engine components for diesel and gasoline engines
supplied to original equipment manufacturers in the:
* automotive,
* agricultural,
* construction,
* industrial, and
* marine industries.
In addition, Stanadyne sells replacement parts and other products
to the aftermarket. The ratings on the company reflect its highly
leveraged financial risk profile and vulnerable business risk
profile.
Stanadyne, based in Windsor, Connecticut, is wholly owned by
Stanadyne Automotive Holding Corp., which in turn is wholly owned
by Stanadyne Holdings Inc. At Dec. 31, 2005, Stanadyne Corp. had
$294 million of total balance-sheet debt, including $66 million of
discount notes issued by Stanadyne Holdings.
STAR VALLEY: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Star Valley Cheese Corporation, Inc.
dba S.V. Cheese Corporation
P.O. Box 136
Thayne, Wyoming 83127
Bankruptcy Case No.: 06-20153
Type of Business: The Debtor manufactures cheese.
Chapter 11 Petition Date: April 17, 2006
Court: District of Wyoming (Cheyenne)
Judge: Peter J. McNiff
Debtor's Counsel: Paul Hunter, Esq.
2616 Central Avenue
Cheyenne, Wyoming 82001
Tel: (307) 637-0212
Fax: (307) 637-0262
Total Assets: $4,680,813
Total Debts: $4,313,644
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Masson Cheese Corporation $1,740,888
6180 Atcoa Avenue
Vernon, CA 90052
Magic Valley Milk Prod. Coop $763,243
P.O. Box 507
Jerome, ID 83332
Workers Compensation $111,000
1510 E. Pershing Boulevard
Cheyenne, WY 82002
First National Bank-West $95,279
Lower Valley Energy $91,734
Nelson Jameson Inc $87,528
Crook Farm $27,534
K and L Bagley $23,291
Cryovoc $16,845
Thatcher $16,359
Gene or Michelle Warren $15,979
Gleno Draney and Sons $12,676
Frank and Ivie Hansen $12,239
Gordon and Donna White $11,314
Terry Kay $10,422
Draney Creek Dairy $9,850
Bruce W. Bagley $4,261
Quadra Chemicals $3,765
Vern Crook $3,552
Blue J. Inc $3,446
STATION CASINOS: Earns $161.8 Million in 2005 Fiscal Year
---------------------------------------------------------
Station Casinos, Inc., earned $161,886,000 of net income for the
year ended Dec. 31, 2005, in contrast to net income of $66,350,000
earned in 2004.
In its form 10-K for the year ended Dec. 31, 2005, filed with the
Securities and Exchange Commission, Station Casinos reported $1.1
billion of consolidated net revenues for the year ended Dec. 31,
2005, a 12.4% increase as compared to $986.7 million of
consolidated net revenues in the prior year.
Year over year net revenues increased primarily due to:
-- the continued strength of the Las Vegas local economy;
-- continued population and employment growth in the Las
Vegas valley;
-- absence of new competition in the local's market until the
latter part of December 2005; and
-- continued success of the Company's Jumbo brand products,
including Jumbo Jackpot.
Jumbo Jackpot, introduced in April 2003, is an exclusive
progressive slot jackpot that allows customers using a Boarding
Pass or Amigo Club card the opportunity to win between $100,000
and $150,000 just for playing slot machines.
Station Casinos' balance sheet at Dec. 31, 2005 showed
$2,929,043,000 in total assets and $2,298,229,000 in total
liabilities, resulting in a shareholders' equity of $630,814,000.
The Company discloses that its primary cash requirements for 2006
will include:
a) approximately $67 million for the payment of common stock
dividends;
b) approximately $337 million for the development and
construction of Red Rock;
c) approximately $80 million for the phase III expansion at
Santa Fe Station;
d) approximately $48 million for the phase II expansion at
Fiesta Henderson;
e) payments related to its existing and other potential
Native American projects;
f) principal and interest payments on indebtedness;
g) maintenance and other capital expenditures;
h) other strategic land purchases throughout the Las Vegas
area; and
i) opportunistic repurchases of its common stock.
A full-text copy of the regulatory filing is available for free
at http://researcharchives.com/t/s?7e6
About Station Casinos
Station Casinos, Inc. -- http://www.stationcasinos.com/-- is the
leading provider of gaming and entertainment to the residents of
Las Vegas, Nevada. Station owns and operates Palace Station Hotel
& Casino, Boulder Station Hotel & Casino, Santa Fe Station Hotel &
Casino, Wildfire Casino and Wild Wild West Gambling Hall & Hotel
in Las Vegas, Nevada, Texas Station Gambling Hall & Hotel and
Fiesta Rancho Casino Hotel in North Las Vegas, Nevada, and Sunset
Station Hotel & Casino, Fiesta Henderson Casino Hotel, Magic Star
Casino and Gold Rush Casino in Henderson, Nevada. Station also
owns a 50% interest in Green Valley Ranch Station Casino, Barley's
Casino & Brewing Company and The Greens in Henderson, Nevada and a
6.7% interest in the Palms Casino Resort in Las Vegas, Nevada. In
addition, Station manages Thunder Valley Casino near Sacramento,
California on behalf of the United Auburn Indian Community.
* * *
As reported in the Troubled Company Reporter on April 13, 2006,
Moody's Investors Service revised the ratings outlook of Station
Casinos, Inc., to negative. Moody's also assigned a Ba3 rating to
the company's $300 million senior subordinated notes due 2018.
As reported in the Troubled Company Reporter on Feb. 27, 2006,
Standard & Poor's Ratings Services revised its outlook on Station
Casinos Inc. to stable from positive. At the same time, Standard
& Poor's assigned its 'B+' rating to the company's $300 million
senior subordinated notes due 2018. In addition, Standard &
Poor's affirmed its ratings, including the 'BB' corporate credit
rating, on the Las Vegas-based casino owner.
STATION CASINOS: Buys Back $232 Million of Common Stock
-------------------------------------------------------
Station Casinos, Inc. (NYSE:STN) repurchased approximately
$232 million of its common stock from Goldman Sachs & Co. in a
private transaction in connection with an accelerated stock
buyback program.
Under the terms of the ASB program, Goldman Sachs has delivered
2.7 million shares to the Company as of April 11, 2006. The
Company could receive up to an additional 367,539 shares from
Goldman Sachs subject to the volume weighted average price of the
Company's stock during the term of the ASB program and collar
provisions setting minimum and maximum prices for the repurchase
of such shares.
Upon the completion of the ASB program, the Company will have
repurchased between 7.1 million and 7.4 million shares of its
stock during 2006 and will have between 2.7 million and
3.1 million shares remaining under its existing share repurchase
authorization.
The stock repurchase was funded from borrowings under the
Company's revolving credit facility. The repurchased shares will
be held in treasury.
"We continue to believe in the long-term strength of our business
model," said Lorenzo J. Fertitta, vice chairman and president.
"As a result of our flexible financial platform, we have
repurchased over 10% of the outstanding common stock of the
Company since the end of the year without changing the timetable
to develop our pipeline of new properties and master-planned
expansions," said Fertitta.
About Station Casinos
Station Casinos, Inc. -- http://www.stationcasinos.com/-- is the
leading provider of gaming and entertainment to the residents of
Las Vegas, Nevada. Station owns and operates Palace Station Hotel
& Casino, Boulder Station Hotel & Casino, Santa Fe Station Hotel &
Casino, Wildfire Casino and Wild Wild West Gambling Hall & Hotel
in Las Vegas, Nevada, Texas Station Gambling Hall & Hotel and
Fiesta Rancho Casino Hotel in North Las Vegas, Nevada, and Sunset
Station Hotel & Casino, Fiesta Henderson Casino Hotel, Magic Star
Casino and Gold Rush Casino in Henderson, Nevada. Station also
owns a 50% interest in Green Valley Ranch Station Casino, Barley's
Casino & Brewing Company and The Greens in Henderson, Nevada and a
6.7% interest in the Palms Casino Resort in Las Vegas, Nevada. In
addition, Station manages Thunder Valley Casino near Sacramento,
California on behalf of the United Auburn Indian Community.
* * *
As reported in the Troubled Company Reporter on April 13, 2006,
Moody's Investors Service revised the ratings outlook of Station
Casinos, Inc., to negative. Moody's also assigned a Ba3 rating to
the company's $300 million senior subordinated notes due 2018.
As reported in the Troubled Company Reporter on Feb. 27, 2006,
Standard & Poor's Ratings Services revised its outlook on Station
Casinos Inc. to stable from positive. At the same time, Standard
& Poor's assigned its 'B+' rating to the company's $300 million
senior subordinated notes due 2018. In addition, Standard &
Poor's affirmed its ratings, including the 'BB' corporate credit
rating, on the Las Vegas-based casino owner.
SUPERVALU INC: Albertson Deal Prompts Moody's Ratings Downgrade
---------------------------------------------------------------
Moody's Investors Service downgraded all ratings of SUPERVALU,
Inc., including the senior unsecured long-term rating to Ba3 from
Baa3 and kept the ratings on review for further possible
downgrade.
Moody's lowered the short-term rating to Not Prime. Moody's also
assigned a corporate family rating of Ba2 and placed this rating
under review for possible downgrade. This rating action continues
the review for possible downgrade that commenced on Jan. 23, 2006.
Rating downgraded and left on review for possible downgrade:
* Senior unsecured note rating to Ba3 from Baa3.
Rating assigned and placed on review for possible downgrade:
* Corporate family rating at Ba2.
Rating lowered:
* Short-term rating to Not Prime from Prime-3.
SUPERVALU's commercial paper program has been terminated, and the
short-term rating will soon be withdrawn.
As Moody's indicated on January 23, at the time of closing Moody's
is likely to lower the corporate family rating to Ba3 and the
senior note rating to one or two notches below the corporate
family rating, assuming final transaction terms are as currently
contemplated.
The downgrade and ongoing review of SUPERVALU's long-term ratings
represent an interim rating action that moves the ratings closer
to the likely final outcome provided that the acquisition of
approximately 1,124 supermarkets from Albertson's, Inc., proceeds
as anticipated.
The key drivers of the rating downgrade are:
1) the expected increase in business risk resulting from
SUPERVALU's definitive agreement to purchase 1,124
supermarkets from Albertson's, Inc., for total
consideration of about $12.4 billion;
2) the belief that credit metrics for SUPERVALU will
meaningfully deteriorate following incremental bank loan
borrowings and assumption of about $6 billion of debt from
Albertson's;
3) Moody's expectation that SUPERVALU's senior debt likely
will become subordinated to other obligations;
4) Moody's expectation that competition from conventional and
non-traditional grocery retailers will remain intense
during the lengthy integration process; and
5) Moody's belief that full achievement of the promised post-
merger operating efficiencies will prove challenging.
Moody's continuing review will focus on the cash flow available to
improve credit metrics subsequent to the transaction, the ability
to profitably maintain market share at the acquired and existing
store during the transition period, and the relative positions of
the several classes of debt within SUPERVALU's capital structure.
SUPERVALU, Inc., headquartered in Eden Prairie, Minnesota,
currently is the second-largest independent grocery distributor
and a major grocery retailer as the operator or licenser of about
1553 retail grocery locations. Revenue for the twelve months
ending Dec. 3, 2005 was about $19.8 billion. Following the
expected addition of 1,124 supermarkets from Albertson's, total
sales will equal about $44 billion.
SYBRON DENTAL: Danaher Deal Cues Moody's to Put Ratings on Watch
----------------------------------------------------------------
Moody's Investors Service placed all ratings of Sybron Dental
Specialties, Inc., on review for possible upgrade. The review is
in response to the joint announcement that Danaher Corporation and
Sybron have reached a definitive agreement for Danaher to acquire
all the outstanding shares of Sybron and to assume Sybron's
outstanding debt.
The aggregate purchase price of approximately $2 billion includes
transaction costs and is net of cash acquired. Danaher intends to
complete the transaction with a second step cash-out merger at the
offer price.
Moody's placed these ratings on review for possible upgrade:
* $150 million Senior Subordinated Notes, due 2012 -- B1
* Corporate family rating -- Ba2
Moody's review of Sybron's ratings will focus on the impact that
the Danaher transaction would have on Sybron's credit strength,
stemming from either implicit or explicit support from Danaher,
including the potential for Danaher legally to assume Sybron's
senior subordinated notes.
If the acquisition is consummated and the existing rated debt of
Sybron is repaid, all of Sybron's ratings will be withdrawn.
Moody's notes that the senior subordinated note indenture contains
a change of control provision such that, within thirty days
following a change of control, the company will make an offer to
purchase all outstanding notes at a purchase price equal to 101%
of the principal amount plus accrued interest.
Sybron Dental Specialties, Inc., headquartered in Newport Beach,
California, is a leading manufacturer of products for the
professional dental, orthodontics and infection control markets in
the United States and abroad. The company's revenues in fiscal
year 2005 ending Sept. 30, 2005, were approximately $650 million.
SYED RAUF: Voluntary Chapter 11 Case Summary
--------------------------------------------
Debtor: Syed Rauf Ahmed
6524 Spyglass Hill Court
Fort Worth, Texas 76132
Bankruptcy Case No.: 06-41075
Chapter 11 Petition Date: April 13, 2006
Court: Northern District of Texas (Fort Worth)
Judge: Russell F. Nelms
Debtor's Counsel: John J. Gitlin, Esq.
5323 Spring Valley, Suite 150
Dallas, Texas 75254
Tel: (972) 385-8450
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.
TDC A/S: Moody's Cuts Debt & Corp. Family Ratings to Ba3 from Ba1
-----------------------------------------------------------------
Moody's Investors Service downgraded the corporate family rating
of the Danish diversified telecommunications operator TDC A/S to
Ba3 from Ba1 and re-assigned it to its 88.2 % majority owner,
Nordic Telephone Company Holding ApS.
Moody's concurrently downgraded the senior unsecured debt ratings
on the existing notes under the EMTN programme not redeemed under
a tender offer to Ba3 from Ba1 and withdrew the non-prime rating
on commercial paper.
Moody's also assigned a senior secured rating of Ba2 to the
approximate EUR7.46 billion in senior secured credit facilities.
This concludes the review for downgrade initiated on Oct. 6, 2005,
after TDC's announcement that a private equity consortium was in
formal discussions to acquire the company. The outlook on the
ratings is stable.
The Ba3 Corporate Family Rating assigned to NTC reflects the
combination of the consolidated group's strong business risk
profile offset by the impact on the group's credit metrics from
the substantial debt incurred to finance the leveraged buyout with
some consideration given to the expectation that the group may
continue to be managed with a somewhat aggressive financial
profile under its current ownership structure.
The group is a diversified European telecoms operator with leading
market positions in the fixed, mobile, data and cable sectors in
its core market in Denmark, strong market positions in various
other mobile markets including Switzerland, Poland and select
Baltic countries, relatively weaker market positions in other
fixed and data segments in Switzerland, other Nordic markets and
Hungary along with a reseller business in the highly competitive
German mobile market.
The group will be highly leveraged as a result of the debt
incurred to finance the buyout. On a pro-forma 2005 basis,
Total Debt to EBITDA, excluding the impact of approximately
EUR1.75 billion in deeply subordinated Preferred Equity
Certificates, will be approximately 5.9x.
Moody's understands that the PECs will be issued outside the
restricted group, which will be ring-fenced at the NTC level, and
their rights will be limited to an equity claim on the restricted
group.
Moody's notes that there is a possibility that the PECs could be
serviced by cash distributions from the restricted group subject
to restricted payment limitations and the terms and conditions in
the senior secured credit facilities.
The Ba3 corporate family rating also takes into account the medium
term pressure on the group's liquidity to meet sizeable debt
maturities of over EUR 380 million in 2008 and over EUR600 million
in 2009 to repay maturing legacy EMTNs that were not tendered as
well as scheduled senior loan amortizations.
To re-deem the outstanding EMTNs, the group will be reliant upon
future free cash flow generation or proceeds from asset sales.
Moody's has taken into consideration the diversified nature of
TDC's portfolio of businesses outside its core Danish market and
recognizes that some of these could be candidates for disposal in
the future.
Under the terms of the group's senior secured facilities, proceeds
from the asset sales -- other than in select situations where the
leverage has been reduced to below 3.5x or the proceeds are
substantial -- would have to be deployed toward the reduction of
the senior secured facilities or the redemption of the EMTNs.
Moody's also expects the group to continue to be free cash flow
generative despite the substantial increase in leverage but
considers there to be limited headroom for deviation without asset
sales in order to meet medium term scheduled debt amortizations.
The Ba2 rating assigned to the senior secured credit facilities is
one level above the corporate family rating. The Ba2 rating on
the credit facilities takes into account their proximity to the
company's operating assets, guarantees from TDC's operating
subsidiaries and the benefits of the security package.
The Ba3 rating assigned to TDC's senior unsecured debt reflects
the fact that the bonds are at the level of TDC which is the core
holding company of the various operations and are structurally
senior to over EUR2.03 billion of debt at the NTC level.
The rating assignment though recognizes that TDC's unsecured debt
is, nevertheless, effecitvely subordinated to the EUR7.46 billion
in senior secured credit facilities.
The stable outlook reflects Moody's expectation given the group's
strong and diverse business profile that the company will be able
to strengthen free cash flow generation supplemented possibly by
non-core asset sales to meet medium term debt amortization, reduce
overall debt levels and strengthen its credit metrics.
It also takes into account Moody's expectations that the group's
business and financial profile could evolve over time as a result
of asset disposals. It also recognizes Moody's expectation that
the group is likely to continue to be managed toward a leveraged
financial profile over time.
Moody's notes that the group's corporate family rating could be
upgraded as a result of improvements in credit metrics such as
Total Debt to EBITDA improving to below 5.0x concurrent with the
group demonstrating the ability to generate sufficient cash either
from free cash flow or asset disposals to meet debt amortizations
through 2009.
The ratings would be lowered if:
-- the group's cash flow weakens concurrent with not having
successfully completed non-core asset sales, as a result of
deterioration in operating margins or increased
investments, such that credit metrics weaken; or
-- as a result of concerns developing over the ability of TDC
to meet currently scheduled debt amortization.
Nordic Telephone Company Holding ApS is a holding company of TDC
A/S, the Danish diversified telecommunications operator with
operations in Switzerland and in selected Northern and Central
European markets. In 2005, TDC generated revenue of DKK46,588
million and EBITDA before special items of DKK 13,003 million.
TELOGY INC: Wants Exclusivity Periods Extended Until August 28
--------------------------------------------------------------
Telogy, Inc., and its debtor-affiliate e-Cycle L.L.C., ask the
U.S. Bankruptcy Court for the Northern District of California to
extend, until Aug. 28, 2006, the period within which they have the
exclusive right to file a chapter 11 plan and solicit acceptances
of that plan.
As reported in the Troubled Company Reporter on Apr. 11, 2006, the
Debtors submitted to the Court a third amended disclosure
statement explaining their Fourth Amended Joint Plan of
Reorganization.
The Debtors contend that the exclusivity periods should be
extended in order to facilitate the plan process and enable them
to emerge from their chapter 11 cases.
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.
TOBACCO SETTLEMENT: Fitch Assigns BB Rating to Series 2006C Bonds
-----------------------------------------------------------------
Fitch assigned these ratings to Tobacco Settlement Financing
Corporation's tobacco settlement asset-backed bonds, issued on
behalf of the US Virgin Islands:
-- Subordinate series 2006A turbo capital appreciation
bonds 'BBB'
-- Subordinate series 2006B turbo capital appreciation
bonds 'BBB-'
-- Subordinate series 2006C turbo capital appreciation
bonds 'BB'
The total issuance of the subordinate series 2006 tax-exempt turbo
capital appreciation bonds to be rated by Fitch will total
approximately $6.1 million. The series 2006A, 2006B and 2006C
bonds are all due on May 15, 2035. The ratings of the above bonds
address the issuer's ability to pay the accreted value of each
bond by its respective maturity date.
The collateral securing the series 2006 bonds consists of the US
Virgin Island's share of tobacco settlement revenues (TSRs) under
the MSA. Pursuant to a purchase and sale agreement between the US
Virgin Islands and the corporation, the US Virgin Islands has sold
all the right, title and interest in its TSRs to the corporation.
The corporation was created by a bill of the Twenty-Fourth
Legislature of the US Virgin Islands, Tobacco Settlement Financing
Act of 2001. The corporation is a separate entity from the US
Virgin Islands, and the rated bonds are obligations of the
corporation and not of the US Virgin Islands.
The ratings are based on the bond structure and credit quality of
the underlying collateral securing the loan agreement, which
consists of annual payments and strategic contribution payments by
the three largest domestic tobacco manufacturers:
* Philip Morris Inc.,
* Reynolds American Inc., and
* Lorillard Tobacco Co.
(the original participating manufacturers [OPMs]), under a master
settlement agreement (MSA) entered into with the attorneys general
of:
* 46 states,
* the District of Columbia,
* the Commonwealth of Puerto Rico,
* the U.S. Virgin Islands,
* the Commonwealth of Northern Mariana Islands,
* American Samoa, and
* Guam.
Fitch's view of the credit quality of the collateral takes into
account two fundamental characteristics of the MSA:
* since payments under the MSA are based on the relative market
share of the domestic tobacco manufacturers, the payment
obligation can be considered an industry obligation, which
Fitch currently deems to be rated 'BBB-' on an unsecured
basis; and
* the MSA should survive the bankruptcy of a domestic tobacco
manufacturer, making it more likely that the manufacturer
would continue to make payments under the MSA ahead of its
unsecured indebtedness.
These are the major characteristics of the MSA that support and,
at the same time, limit the rating of the tobacco settlement
senior bonds to 'BBB'.
Accordingly, the rating on this transaction is linked to and will
move with Fitch's future assessment of the tobacco industry's
overall credit quality. The credit quality of the industry, in
turn, will be significantly influenced by the underlying ratings
of the three major domestic tobacco manufacturers and Fitch's view
of the relative strength of those three manufacturers within the
overall domestic tobacco industry.
In addition, since payments under the MSA are subject to various
adjustments and offsets based on several factors, including
cigarette consumption, Fitch developed a series of cash flow
stresses to determine the transaction's ability to make timely
payments of interest and to pay principal on the bond's maturity
dates. Therefore, the rating is also based on the transaction's
ability to withstand cash flow stresses commensurate with a 'BBB'
rating for the series 2006A bonds, a 'BBB-' rating for the series
2006B bonds and a 'BB' rating for the series 2006C bonds.
Finally, the ratings reflect the transaction's sound legal and
financial structures.
TRUSWELL PREMIER: Dwindling Assets Spur Moody's Ratings Downgrade
-----------------------------------------------------------------
Moody's Investors Service downgraded the market risk rating
assigned to the Truswell Premier Bond Fund to MR4.tw, from MR3.tw,
to reflect its current liquidity profile in the face of shrinking
assets under management. At the same time, Moody's noted that the
Fund's A.tw credit rating remains unaffected.
The downgrade reflects the Fund's deteriorating liquidity profile
which has been exacerbated by shareholder redemptions,
notwithstanding Truswell Securities Investment Trust Company's
efforts to bolster the Fund's assets under management and, in
turn, its liquidity position.
At present, 18.6% of the Fund's total net assets are invested in
liquid short-dated repurchase agreements, commercial paper, and
time deposits. However, the Fund has sustained redemptions which
have led to a 68% decline in total net assets, from TWD 6.45
billion to TWD 2.04 billion in the six month period to March 31,
2006.
During the same period, however, the Fund took actions to bolster
its portfolio position, including the disposal of its less liquid
structured and corporate bonds, by liquidating structured bonds in
the amount of TWD 1.60 billion and corporate bonds in the amount
of TWD 1.1 billion or so.
Although the Fund intends to maintain its liquidity position at
the current level or higher, the combination of its existing 44%
or so exposure to principle-only bonds, shareholder profile and
susceptibility to additional shareholder withdrawals serve to
expose the Fund's net asset value to additional downside risk that
is more in line with a market risk rating of MR4.tw.
The Fund's asset management company, the Truswell Securities
Investment Trust Co., Ltd, has TWD 18.73 billion under management
with market share of 0.97% in February 2006, including the Fund of
TWD 2.35 billion.
Moody's bond fund credit ratings are opinions on the investment
quality of units in mutual funds that invest in fixed-income
obligations.
These ratings incorporate Moody's assessment of a fund's published
investment objectives and policies, the creditworthiness of the
assets held by the fund, as well as the management characteristics
of the fund.
The ratings are not intended to consider the prospective
performance of a fund with respect to appreciation, volatility of
net asset value, or yield.
Funds rated A.tw are judged to be of an investment quality similar
to A.tw-rated fixed-income obligations. That is, they are judged
to possess many favorable investment attributes and are considered
as upper-medium-grade investment vehicles.
Moody's market risk ratings represent an opinion of the relative
degree of share price volatility due to changing interest rates or
other market conditions, and use a five-tiered numerical scale.
They complement the credit rating by providing investors with a
relative indicator of a fund's potential for loss and the relative
volatility of the net asset value.
The rating is based on Moody's in-depth analysis of qualitative
and quantitative factors, including a fund's long-term investment
goals, interest rate and foreign exchange risk, prepayment and
extension risk, concentration, liquidity and derivatives risk as
well as credit risk.
Funds with the least sensitivity to market changes will receive an
MR1.tw rating, while the most sensitive funds will be rated
MR5.tw.
Funds rated MR4.tw are judged to have high sensitivity to changing
interest rates and other market conditions, and may experience
high levels of total return losses on the basis of one-year
holding periods.
Market risk ratings with a.tw modifier are ratings or opinions of
the relative market risk of money market and bond mutual funds in
Taiwan, notwithstanding current market liquidity conditions as
well as the use of amortized cost rather than mark-to-market
valuation conventions that serve to characterize the market in
Taiwan, and may be used in specific local capital markets.
Referred to as National Scale ratings, these ratings are intended
primarily for use by domestic investors in countries where Moody's
National Scale ratings exist, and they are not comparable to
Moody's global ratings, which do not carry a country
identification extension such as the "tw" notation for Taiwan.
UNITED RENTALS: S&P Revises BB- Rating's Outlook to Developing
--------------------------------------------------------------
Standard & Poor's Ratings Services revised the CreditWatch
implications for its ratings on equipment rental company United
Rentals (North America) Inc. (United Rentals) and for its parent,
United Rentals Inc. (URI), to developing from negative. This
includes the 'BB-' corporate credit rating on the company.
The revision follows URI's filing of quarterly financial reports
for 2005 interim periods. Before the filing, there was concern
that bondholders would send a notice of default for continued
delay; such a notice could have led to an acceleration of
repayment for about $2 billion in outstanding bonds.
The ratings were originally placed on CreditWatch with negative
implications on Aug. 30, 2004, in response to an SEC inquiry into
the company's accounting practices. CreditWatch with developing
implications means that the ratings may be raised, affirmed, or
lowered depending on the outcome of Standard & Poor's pending
review. Key elements of the rating agency's determination would
include a review of these:
-- the status of the ongoing SEC investigation;
-- a review of all the financial reports the company has just
completed and filed; and
-- a review of URI's business and operating plans, as well as
management's financial policy and acquisition strategy.
A special committee appointed by the company to look into the SEC
inquiry previously issued a report with disclosures of improper
accounting and the alleged misconduct of company personnel. The
SEC has not announced any actions or potential actions.
On March 31, 2006, URI filed its annual audited financial reports
for 2005 and 2004 separately on Forms 10-K. The company still has
to address internal controls issues identified in these newly
released financial reports, and Standard & Poor's would like to
understand how management plans to remedy these issues.
Now that it has filed all of its financial reports, the company
may now turn more attention to its business. According to the
reported financial information, URI is currently performing well
in its equipment rental business (as are its peers), because of
the upturn in the business cycle.
URI has adequate liquidity. Its cash on hand was about $315
million on Dec. 31, 2005. It also has access to its mostly
undrawn $650 million revolving credit facility, and access to its
undrawn $200 million accounts receivable facility.
The industry is still under consolidation, and because of the
cyclical business upturn in the sector, there could be
considerable M&A activity in the industry. Should URI pursue
acquisitions, Standard & Poor's would want to understand
management's strategy.
"We expect to meet with management in the near future before
taking any rating action," said Standard & Poor's credit analyst
John R. Sico.
US AIRWAYS: Obtains $1.25 Billion Financing from GE Capital
-----------------------------------------------------------
US Airways Group, Inc., entered into a $1,100,000,000 Loan
Agreement with General Electric Capital Corporation on March 31,
2006. GE Capital Markets, Inc., acted as sole bookrunner for the
facility, while GE Capital Markets and Morgan Stanley Senior
Funding, Inc., acted as joint lead arrangers.
On April 7, 2006, the parties amended and restated the Loan
Agreement to increase the existing $1,100,000,000 financing to
$1,250,000,000.
The Amended and Restated Loan Agreement
The Loan consists of $150,000,000 borrowed on April 7, 2006, and
the $1,100,000,000 borrowed under the existing Loan on March 31,
Derek J. Kerr, senior vice president and chief financial officer
of US Airways Group, Inc., disclosed in regulatory filings with
the Securities and Exchange Commission.
The Loan bears interest at an index rate plus an applicable index
margin or, at US Airways Group's option, LIBOR plus an applicable
LIBOR margin for interest periods of one, two, three or six
months.
The applicable index margin, subject to adjustment, is:
Index Margin Adjusted Loan Balance
------------ ---------------------
1.50% less than $600,000,000
2.00% between $600,000,000 and $750,000,000
2.25% between $750,000,000 and $900,000,000
2.50% between $900,000,000 and $1,250,000,000
The applicable LIBOR margin, subject to adjustment, is:
LIBOR Margin Adjusted Loan Balance
------------ ---------------------
2.50% less than $600,000,000
3.00% between $600,000,000 and $750,000,000
3.25% between $750,000,000 and $900,000,000
3.50% between $900,000,000 and $1,250,000,000
Mr. Kerr notes that interest on the Loan may be adjusted based on
the credit rating for the Loan. Specifically:
(a) if the credit rating for the Loan is B1 or better from
Moody's, and B+ or better from S&P, as of the last day of
the most recently ended fiscal quarter, then:
-- the applicable LIBOR margin will be the lower of 3.25%
and the rate otherwise applicable based on the adjusted
Loan balance; and
-- the applicable index margin will be the lower of 2.25%
and the rate otherwise applicable based on the adjusted
Loan balance; and
(b) if the credit rating for the Loan is Ba3 or better from
Moody's, and BB- or better from S&P, as of the last day of
the most recently ended fiscal year, then the applicable
LIBOR margin will be 2.50% and the applicable index margin
will be 1.50%.
The Loan matures on March 31, 2011. No principal payments are
scheduled until maturity.
Mr. Kerr further notes that the Loan:
-- requires certain mandatory prepayments upon certain asset
sales, including sale-leasebacks, subject to US Airways
Group's right to reinvest net sales proceeds in qualified
assets;
-- provides for mandatory prepayments upon a change in control
or collateral value deficiencies;
-- establishes financial covenants, subject to adjustment,
including:
(a) minimum cash requirements;
(b) minimum ratios of earnings before interest, taxes,
depreciation, amortization and aircraft rent to fixed
charges; and
(c) minimum ratios of collateral value to outstanding
principal;
-- contains customary affirmative covenants and these negative
covenants:
(a) restrictions on liens, investments, restricted
payments, asset sales;
(b) acquisitions, changes in fiscal year, sale and
leasebacks, transactions with affiliates, conduct of
business, mergers or consolidations, amendments to
other indebtedness and certain other documents;
(c) no creation of negative pledges;
(d) no speculative transactions;
(e) no hazardous material releases, and no ERISA events;
and
-- contains customary events of default, including:
(a) payment defaults,
(b) cross-defaults,
(c) breach of covenants,
(d) bankruptcy and insolvency defaults,
(e) judgment defaults, and
(f) business discontinuations.
Specifically, US Airways covenants not to permit, at the close of
any Business Day, the aggregate amount of Available Cash to be
less than the Minimum Available Cash Amount with respect to the
then aggregate outstanding principal amount of the Loan:
Minimum Available
Outstanding Principal Amount Cash Amount
---------------------------- -----------------
>/= $700,000,000 $750,000,000
< $700,000,000 and >/= $650,000,000 $700,000,000
< $650,000,000 and >/= $600,000,000 $650,000,000
< $600,000,000 and >/= $550,000,000 $600,000,000
< $550,000,000 and >/= $500,000,000 $550,000,000
< $500,000,000 and >/= $450,000,000 $500,000,000
< $450,000,000 and >/= $400,000,000 $450,000,000
< $400,000,000 and >/= $350,000,000 $400,000,000
< $350,000,000 and >/= $300,000,000 $350,000,000
< $300,000,000 and >/= $250,000,000 $300,000,000
< $250,000,000 and >/= $200,000,000 $250,000,000
< $200,000,000 and >/= $150,000,000 $200,000,000
< $150,000,000 and >/= $100,000,000 $150,000,000
< $100,000,000 and >/= $50,000,000 $100,000,000
< $50,000,000 $50,000,000
US Airways also covenants not to permit its ratio of Consolidated
EBITDAR to Consolidated Fixed Charges for the four consecutive
fiscal quarters ending on these dates to be less than the
applicable ratio:
Period Applicable Ratio
------ ----------------
June 30, 2006 0.95 to 1.00
September 30, 2006 0.96 to 1.00
December 31, 2006 0.92 to 1.00
March 31, 2007 0.92 to 1.00
June 30, 2007 0.98 to 1.00
September 30, 2007 1.05 to 1.00
December 31, 2007 1.11 to 1.00
March 31, 2008 1.13 to 1.00
June 30, 2008 1.16 to 1.00
September 30, 2008 1.18 to 1.00
December 31, 2008 1.21 to 1.00
March 31, 2009 1.24 to 1.00
June 30, 2009 1.29 to 1.00
September 30, 2009 1.33 to 1.00
December 31, 2009 1.37 to 1.00
March 31, 2010 1.41 to 1.00
June 30, 2010 1.46 to 1.00
September 30, 2010 1.50 to 1.00
December 31, 2010 1.54 to 1.00
March 31, 2011 1.54 to 1.00
However, the Minimum Fixed Charge Coverage Ratio covenant will
not be applicable if a Covenant Suspension Period is then in
effect.
US Airways Group is required to maintain consolidated
unrestricted cash and cash equivalents of not less than
$750,000,000.
Repaid and Terminated Loans
According to Mr. Kerr, the proceeds of the Loan were used, in
part, to repay in full:
(1) the Amended and Restated Loan Agreement, dated Sept. 27,
2005, among US Airways, Inc., the Air Transportation
Stabilization Board, the lenders, Citibank, N.A.,
Wilmington Trust Company, Citicorp North America, Inc.,
and US Airways Group, Inc., and certain of its
subsidiaries;
(2) the Amended and Restated Loan Agreement, dated Sept. 27,
2005, among America West Airlines, Inc., the ATSB, the
lenders, Citibank, N.A., Wilmington Trust Company, and
US Airways Group and certain of its subsidiaries;
(3) the $161,000,000 Loan Agreement, dated as of Sept. 27,
2005, among US Airways, America West, US Airways Group,
Airbus Financial Services, and Wells Fargo Bank Northwest,
N.A.; and
(4) two Loan Agreements (Spare Parts and Engine), dated as
of September 3, 2004, among America West, GECC, Wells
Fargo Bank Northwest, N.A., and the lenders.
The $89,000,000 Loan Agreement, dated as of Sept. 27, 2005,
among US Airways and America West, US Airways Group, Airbus
Financial Services, and Wells Fargo Bank Northwest, National
Association, was terminated on March 31, 2006.
All obligations of the obligors under each of the repaid or
terminated indebtedness have been terminated, Mr. Kerr adds.
A full-text copy of the March 31, 2006 Loan Agreement is
available at the Securities and Exchange Commission at
http://ResearchArchives.com/t/s?7e7
A full-text copy of the Amended and Restated Loan Agreement is
available at the Securities and Exchange Commission at
http://ResearchArchives.com/t/s?7e8
About US Airways
Headquartered in Arlington, Virginia, US Airways' primary business
activity is the ownership of the common stock of:
* US Airways, Inc.,
* Allegheny Airlines, Inc.,
* Piedmont Airlines, Inc.,
* PSA Airlines, Inc.,
* MidAtlantic Airways, Inc.,
* US Airways Leasing and Sales, Inc.,
* Material Services Company, Inc., and
* Airways Assurance Limited, LLC.
Under a chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.
US Airways and its subsidiaries filed another chapter 11 petition
on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian
P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning,
Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and
Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors
in their restructuring efforts. In the Company's second
bankruptcy filing, it lists $8,805,972,000 in total assets and
$8,702,437,000 in total debts.
The Debtors' chapter 11 plan for its second bankruptcy filing
became effective on Sept. 27, 2005. The Debtors completed their
merger with America West on the same date. (US Airways Bankruptcy
News, Issue No. 117; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
US AIRWAYS: Asks Court to Close Ch. 11 Cases of Four Affiliates
---------------------------------------------------------------
Reorganized US Airways, Inc., and its debtor-affiliates ask the
U.S. Bankruptcy Court for the Eastern District of Virginia to
enter a final decree closing four Chapter 11 cases:
Debtor Case No.
------ --------
US Airways Group, Inc. 04-13820
PSA Airlines, Inc. 04-13821
Piedmont Airlines, Inc. 04-13822
Material Services Company, Inc. 04-13823
Douglas M. Foley, Esq., at McGuireWoods LLP, in Norfolk,
Virginia, tells Judge Mitchell that the time is appropriate to
close the cases of the affiliate debtors and leave open only the
lead case of US Airways, Inc., Case No. 04-13819.
Keeping the other cases open at this point serves no purpose, Mr.
Foley asserts.
As previously reported, the Reorganized Debtors' confirmed Joint
Plan of Reorganization provides for equal distribution to all
similarly situated creditors regardless of which Debtor their
claim is against:
Type of Claim Treatment
------------- ---------
General Unsecured Claims pro rata share of 30% of the
Unsecured Creditors Stock
General Unsecured cash equal to 10% of the
Convenience Claims amount of the Allowed Claim
if the amount is less than or
equal to $50,000
Administrative Claims cash equal to 100% of the
Allowed amount of the claim
on the first Periodic
Distribution Date after
Allowance
Accordingly, closing all of the Affiliate Debtors' cases will
have no impact on the outstanding claims resolution and
distribution process, Mr. Foley notes.
Four Cases Must be Closed
Section 350(a) of the Bankruptcy Code provides that "the court
shall close a case after an estate is fully administered and the
court has discharged the trustee."
Additionally, Rule 3022 of the Federal Rules of Bankruptcy
Procedure provides that "after an estate is fully administered in
a chapter 11 reorganization case, the court on its own motion or
on motion of a party in interest, shall enter a final decree
closing the case."
The court in In re A.H. Robins Company, Inc., 219 B.R. 145, 150
n.10 (Bankr. E.D. Va. 1998), examined the standard governing the
closing of a Chapter 11 case and the factors that contribute to a
determination that a Chapter 11 case has been "fully
administered."
The standard includes examining whether:
(1) the order confirming the plan has become final;
(2) deposits required by the plan have been distributed;
(3) the property proposed by the plan to be transferred has
been transferred;
(4) the debtor or the successor of the debtor under the plan
has assumed the business or the management of the property
dealt with by the plan;
(5) payments under the plan have commenced; and
(6) all motions, contested matters, and adversary proceedings
have been fully resolved.
Mr. Foley assures Judge Mitchell that the Reorganized Debtors
meet all of the factors enunciated in A.H. Robins.
The order entered by the Court on September 16, 2005, confirming
the Reorganized Debtors' Plan has become final, Mr. Foley says.
Moreover, the Reorganized Debtors' Plan has been "substantially
consummated" pursuant to Sections 1101(2)(A)-(C) of the
Bankruptcy Code since:
-- the Reorganized Debtors have continued operating and
managing their business;
-- all of the property proposed to be transferred has been
transferred; and
-- distributions to creditors have commenced.
In light of all these factors, the Reorganized Debtors believe
that the cases of the Affiliate Debtors have been "fully
administered" and that the Court should enter an order closing
the four cases.
Mr. Foley maintains that the only remaining task is the
resolution of disputed claims currently under objection, and
making distributions to holders of Allowed Claims under the Plan.
The Reorganized Debtors have filed omnibus claim objections to
3,600 claims. Approximately 1,200 claims remain disputed and
unresolved. The Reorganized Debtors anticipate filing additional
omnibus claim objections in the near future, Mr. Foley tells
Judge Mitchell.
Reporting Obligations
The Reorganized Debtors clarify that they do not intend their
request to affect their final reporting obligations with respect
the Affiliate Debtors, or to reduce their quarterly U.S. Trustee
fees going forward with respect to the Lead Case.
Rather, they intend to address matters as necessary relating to
the Affiliate Debtors in the final report in the Lead Case, and
will continue to pay their U.S. Trustee fees based on collective
disbursements up to the maximum quarterly fee for the remaining
case, Mr. Foley explains.
Tax Collectors Respond
The Tax Collectors of Charlotte and Mecklenburg County, North
Carolina, Hillsborough County, Florida and Chatham County,
Georgia, note that the Reorganized Debtors made no mention of the
treatment of priority creditors. The Reorganized Debtors
indicated that Allowed General Unsecured Claims, Allowed General
Unsecured Convenience Claims and Allowed Administrative Claims
against any of the Reorganized Debtors are entitled to the same
treatment no matter which Debtors may be liable.
The Tax Collectors assume that it is an oversight.
Accordingly, the Tax Collectors ask the Court to deem the
Reorganized Debtors' request to include priority creditors.
About US Airways
Headquartered in Arlington, Virginia, US Airways' primary business
activity is the ownership of the common stock of:
* US Airways, Inc.,
* Allegheny Airlines, Inc.,
* Piedmont Airlines, Inc.,
* PSA Airlines, Inc.,
* MidAtlantic Airways, Inc.,
* US Airways Leasing and Sales, Inc.,
* Material Services Company, Inc., and
* Airways Assurance Limited, LLC.
Under a chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.
US Airways and its subsidiaries filed another chapter 11 petition
on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian
P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning,
Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and
Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors
in their restructuring efforts. In the Company's second
bankruptcy filing, it lists $8,805,972,000 in total assets and
$8,702,437,000 in total debts.
The Debtors' chapter 11 plan for its second bankruptcy filing
became effective on Sept. 27, 2005. The Debtors completed their
merger with America West on the same date. (US Airways Bankruptcy
News, Issue No. 117; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
US AIRWAYS: 16 Add'l Securityholders May Resell 7% Sr. Conv. Notes
------------------------------------------------------------------
US Airways Group, Inc., filed supplements to its Prospectus with
the Securities and Exchange Commission relating to the sale of
7% Senior Convertible Notes and $143,750,000 common stock issuable
by conversion.
The supplements, which were filed on March 13, 17 and 30, 2006,
and April 12, 2006, reflect additional securityholders:
Notes Shares of
Beneficially that may be
Owned and Sold in the
Securityholders Offered Offering
--------------- ------------ -----------
Agamas Continuum Master Fund, Ltd. 165,803 165,803
Aristeia International 433,160 433,160
Aristeia Partners LP Limited 1,050,000 435,233
Alcon Laboratories 277,000 11,481
Arlington County Employees 522,000 21,637
Retirement System
Fidelity Financial Trust: 12,160,000 504,041
Fidelity Convertible
Securities Fund
Fidelity Financial Trust: 1,140,000 47,253
Fidelity Strategic Dividend
& Income Fund
Grady Hospital Foundation 77,000 3,191
City University of New York 81,000 3,357
New Orleans Firefighters 47,000 1,948
Pension Relief Fund
Occidental Petroleum Corporation 178,000 7,378
Pro Mutual 511,000 21,181
City and County of 801,000 33,202
San Francisco
Retirement System
1976 Distribution Trust 3,000 124
f. b. o. Lauder Zinterhofer
2000 Revocable Trust 3,000 124
Lauder Zinterhofer
Tempo Master Fund LP 1,036,270 1,036,270
The March 13, 2006, supplemental prospectus also shows updated
information regarding the selling securityholders:
Principal
Amount at
Maturity Number of Number of
of Notes Shares of Shares of
Beneficially that may be Beneficially
Owned and Sold in the Owned Before
Securityholders Offered Offering the Offering
--------------- ------------ ------------ ------------
Fidelity Financial $7,350,000 304,663 0
Trust: Fidelity
Convertible
Securities Fund
Fidelity Financial 650,000 26,943 10,500
Trust: Fidelity
Strategic Dividend
& Income Fund
Fidelity Devonshire 7,530,000 312,125 0
Trust: Fidelity
Equity-Income Fund
Fidelity Puritan 4,360,000 180,725 0
Trust: Fidelity
Puritan Fund
Variable Insurance 3,110,000 128,912 0
Products Fund:
Equity-Income
Portfolio
About US Airways
Headquartered in Arlington, Virginia, US Airways' primary business
activity is the ownership of the common stock of:
* US Airways, Inc.,
* Allegheny Airlines, Inc.,
* Piedmont Airlines, Inc.,
* PSA Airlines, Inc.,
* MidAtlantic Airways, Inc.,
* US Airways Leasing and Sales, Inc.,
* Material Services Company, Inc., and
* Airways Assurance Limited, LLC.
Under a chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.
US Airways and its subsidiaries filed another chapter 11 petition
on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian
P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning,
Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and
Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors
in their restructuring efforts. In the Company's second
bankruptcy filing, it lists $8,805,972,000 in total assets and
$8,702,437,000 in total debts.
The Debtors' chapter 11 plan for its second bankruptcy filing
became effective on Sept. 27, 2005. The Debtors completed their
merger with America West on the same date. (US Airways Bankruptcy
News, Issue Nos. 116 & 117; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
USA FLORAL: Judge Gross Closes Florimex USA's Chapter 11 Case
-------------------------------------------------------------
The Hon. Kevin Gross of the U.S. Bankruptcy Court for the District
of Delaware issued a final decree closing Florimex USA, Inc.'s
chapter 11 case. Florimex USA is a debtor-affiliate of U.S.A.
Floral Products Inc. and is the last debtor-affiliate case to be
closed.
Judge Gross ruled that the Debtors' chapter 11 plan of liquidation
has been substantially consummated and specifically, Florimex
USA's chapter 11 case shows the absence of any pending motions,
adversary proceedings, contested matters or appeals. Judge Gross
did not close U.S.A. Floral's chapter 11 case.
Robert F. Troisio, the plan administrator appointed pursuant to
the Debtors' confirmed plan, told the Court that closing Florimex
USA's chapter 11 case is in the best interest of the estate since:
* no additional property remains to be administered, and
* it will eliminate the continuing accrual of fees payable to
the U.S. Trustee.
Mr. Troisio however said that U.S.A. Floral's plan cannot be fully
administered since an adversary proceeding is still pending.
Headquartered in Miami, Florida, USA Floral Products, Inc.,
together with its subsidiaries, filed for chapter 11 protection on
April 2, 2001 (Bankr. D. Del. Case Nos. 01-01230 through
01-01246). Christopher S. Sontchi, Esq., at Ashby & Geddes,
represents the Debtor. When the Debtors filed for protection from
their creditors, they listed $253,285,000 in total assets and
$263,993,000 in total debts. The Court confirmed the Debtors'
Amended Joint Plan of Liquidation on Dec. 12, 2001. Robert F.
Troisio is the appointed plan administrator. The plan became
effective on July 18, 2002.
VARIG S.A.: Brazilian Government Will Seize Cash in Pension Fund
----------------------------------------------------------------
The Brazilian government issued a statement last week stating that
it will seize the cash in the pension fund of Varig S.A. aka
Viacao Aerea Riograndense, Reuters reports.
The government said it will distribute the funds to employees and
retirees to prevent the airline from using the money for its
operating needs, Reuters relates.
The decision came a day after the Brazilian aviation authority
rejected a code-sharing proposal between Varig and OceanAir Inc.
that would have thrown a life-line to the ailing carrier. The
rejected deal called for OceanAir's taking over of Varig's
unprofitable routes and airport slots.
News reports said that Varig is in the verge of collapsing as
evidenced by flight cancellations and non-payment of airport fees.
The company is also considering returning 15 leased planes to cut
costs.
As previously reported, Varig's employees demanded help from the
Brazilian government to bail out the country's oldest airline.
However, President Luiz Inacion Lula da Silva said it wasn't the
government's job "to rescue private companies from bankruptcy."
State-owned Petroleo de Brasileiro SA and Infraero are among
Varig's major creditors.
About VARIG
Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's
largest air carrier and the largest air carrier in Latin America.
VARIG's principal business is the transportation of passengers and
cargo by air on domestic routes within Brazil and on international
routes between Brazil and North and South America, Europe and
Asia. VARIG carries approximately 13 million passengers annually
and employs approximately 11,456 full-time employees, of which
approximately 133 are employed in the United States.
The Company, along with two affiliates, filed for a judicial
reorganization proceeding under the New Bankruptcy and
Restructuring Law of Brazil on June 17, 2005, due to a competitive
landscape, high fuel costs, cash flow deficit, and high operating
leverage. The Debtors may be the first case under the new law,
which took effect on June 9, 2005. Similar to a chapter 11
debtor-in-possession under the U.S. Bankruptcy Code, the Debtors
remain in possession and control of their estate pending the
Judicial Reorganization. Sergio Bermudes, Esq., at Escritorio de
Advocacia Sergio Bermudes, represents the carrier in Brazil.
Each of the Debtors' Boards of Directors authorized Vicente Cervo
as foreign representative. In this capacity, Mr. Cervo filed a
Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case Nos.
05-14400 and 05-14402). Rick B. Antonoff, Esq., at Pillsbury
Winthrop Shaw Pittman LLP represents Mr. Cervo in the United
States. As of March 31, 2005, the Debtors reported
BRL2,979,309,000 in total assets and BRL9,474,930,000 in total
debts.
VERILINK CORP: Will Be Delisted from Nasdaq Tomorrow
----------------------------------------------------
Verilink Corporation (NASDAQ: VRLK) received written notification
from The Nasdaq Stock Market (NASDAQ) that its common stock will
be delisted effective at the opening of business on April 19,
2006, unless the company requests a hearing to appeal the
delisting notice.
NASDAQ indicated in its letter that the delisting determination
followed its review of Verilink's filing for protection under
Chapter 11 of the U.S. Bankruptcy Code on April 9, 2006, and was
based on Nasdaq Marketplace Rules 4300 and 450(f).
Headquartered in Hunstville, Alabama, Verilink Corporation --
http://www.verilink.com/-- is a leading provider of next-
generation broadband access solutions for today's and tomorrow's
networks. The Company develops, manufactures and markets a broad
suite of products that enable carriers and enterprises to build
converged access networks to cost-effectively deliver next-
generation communications services to their end customers. The
Company and its debtor-affiliate filed for chapter 11 protection
on April 9, 2006 (Bankr. N.D. Ala. Case No. 06-80566 & 06-80567).
Robert McCay Dearing Mercer, Esq., at Powell Goldstein LLP,
represents the Debtors. When the Debtors filed for protection
from their creditors, they listed total assets of $37,221,000 and
total debts of $23,913,000.
WALCO OIL: Voluntary Chapter 11 Case Summary
--------------------------------------------
Debtor: Walco Oil Company, Inc.
P.O. Box 700
Richton, Mississippi 39476
Bankruptcy Case No.: 06-50275
Type of Business: The Debtor is an oil petroleum retailer.
Chapter 11 Petition Date: April 13, 2006
Court: Southern District of Mississippi
(Gulfport Divisional Office)
Judge: Edward Gaines
Debtor's Counsel: Craig M. Geno, Esq.
Harris & Geno, PLLC
587 Highland Colony Parkway
P.O. Box 3380
Ridgeland, MS 39157
Tel: (601) 427-0048
Fax: (601) 427-0050
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.
WILLIAMS SCOTSMAN: Prices $100 Million Offering of 8.5% Sr. Notes
-----------------------------------------------------------------
Williams Scotsman, Inc., the operating subsidiary of Williams
Scotsman International, Inc. (NASDAQ:WLSC) priced an offering of
$100 million aggregate principal amount of its 8.5% senior notes
due 2015 in a private offering under Rule 144A of the Securities
Act of 1933. The notes were priced at 101.75% of par representing
a yield to maturity of 8.18%.
The offering is an add-on to the company's existing series of 8.5%
senior notes due 2015. The company issued $350 million aggregate
principal amount of the 8.5% senior notes in September 2005 and
the new notes and the existing notes will be treated as a single
class under the indenture governing the notes.
The Company intends to use the net proceeds from the offering to
repay a portion of its outstanding indebtedness under the
revolving portion of its bank credit facility and pay transaction
fees and expenses. The offering of the senior notes is expected
to close on or about April 18, 2006.
The offering of senior notes will not be and has not been
registered under the Securities Act of 1933, as amended, and the
senior notes may not be offered or sold in the United States
absent registration or an applicable exemption from the
registration requirements of the Securities Act.
Headquartered in Baltimore, Maryland, William Scotsman, Inc. --
http://www.willscot.com/-- is the operating subsidiary of
Williams Scotsman International, Inc. The Company provides mobile
and modular space solutions for the construction, education,
commercial, healthcare and government markets. The Company serves
over 25,000 customers, operating a fleet of over 98,000 modular
space and storage units that are leased through a network of 86
locations throughout North America. Williams Scotsman
International, Inc. is a publicly traded company (NASDAQ:WLSC)
with operations in the United States, Canada, Mexico, and Spain.
Williams Scotsman, Inc.'s 10% Senior Secured Notes due 2008 carry
Moody's Investors Service's B2 rating.
WILLIAMS SCOTSMAN: S&P Raises $350 Mil. Sr. Notes' Rating to B+
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' rating to
Williams Scotsman Inc.'s $100 million 8.5% senior notes due 2015.
At the same time, ratings on the company's outstanding $350
million 8.5% senior notes due 2015 were raised to 'B+' from 'B'.
Standard & Poor's affirmed its 'BB-' corporate credit rating on
Williams Scotsman and 'BB' ('1' recovery rating) rating on its
$650 million secured credit facility.
"The rating on the senior notes was raised due to a reduced
percentage of secured debt in the company's capital structure,"
said Standard & Poor's credit analyst Betsy Snyder.
Proceeds from the $100 million senior notes and a proposed
additional $50 million of equity will be used to reduce the
secured credit facility. As a result, the percentage of secured
debt in the company's capital structure will decline to
approximately 32% after the notes issuance from approximately 39%,
and to approximately 28% after the sale of equity expected in
May 2006.
Ratings on Baltimore, Maryland-based Williams Scotsman reflect its
weak, but improved, financial profile, after its September 2005
recapitalization. Ratings also incorporate the company's strong
market position in the leasing of mobile office units, a business
that has tended to be somewhat recession-resistant.
The recapitalization included proceeds of approximately
$217 million from an IPO, which improved its financial profile
somewhat, reducing debt to capital to around 78% at Dec. 31, 2005,
from 98% a year earlier (as a leasing company, Williams Scotsman
can operate at higher leverage than a typical like-rated
industrial company).
If the equity issuance is completed, this percentage will decline
to around 74%. However, the company's financial flexibility is
still weaker than that of its major competitor, GE Capital Modular
Space, owned by 'AAA' rated General Electric
Capital Corp.
Williams Scotsman's earnings and cash flow should improve along
with demand. However, an expected fairly substantial level of
capital spending will likely constrain any significant improvement
in its financial profile. A reduced level of capital spending or
further significant equity issuance could result in a positive
outlook. A material increase in capital spending or significant
debt-financed acquisitions could result in a negative outlook.
WINN-DIXIE: Court Approves Rejection of 13 Contracts & Leases
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida
gave Winn-Dixie Stores, Inc., and its debtor-affiliates authority
to reject 13 executory contracts and unexpired leases as of
March 9, 2006:
CounterParty Contract
------------ --------
Barbco, Inc. Co-Pack/Product Supply
Agreement dated as of
Oct. 28, 2004
Bayforce Staffing Solutions Master Information Technology
Services Agreement dated as of
Jan. 8, 2004
CIT Technologies Corp., Computer Equipment Schedule
assignee of GATX Technology No. 1 to Master Lease Agreement,
Services dated as of July 15, 2003, for
lease of NCR Worldmark 5300,
Serial No. 33177335
Futuristic Foods, Inc. Entree and Side Dish Supply
Agreement dated as of July 20,
2003
Infosys Technologies Limited Services Agreement dated as of
March 31, 2004
MeadWestvaco Packaging Equipment Lease dated as of
Systems, LLC Feb. 20, 2003, for
Specification Model: 18000,
Serial Number: 56, Types of
Packages: YOGOPAK *2x3
Modis Consulting Master Information Technology
Services Agreement, dated as of
Jan. 7, 2004
National Welders Supply Cylinder Lease Agreement dated
Company, Inc. as of Jan. 25, 2004
Scanna EnergyMarketing, Inc. Natural Gas Sales Agreement
Contract No. NCS01838, dated
November 1, 2002, for Taylors,
South Carolina facility
Natural Gas Sales Agreement
Contract No. GS001027, dated
Oct. 1, 2000, for Atlanta,
Georgia facility
Natural Gas Sales Agreement
Contract No. NCS01845, dated
Nov. 1, 2002, for High
Point, North Carolina facility
SAM Group, Inc. Statement of Work #5 dated
Feb. 1, 2005
Wipro Limited Master Business Agreement
dated as of July 1, 2004
Judge Funk clarifies that the Order does not constitute a waiver
of any claims the Debtors may have against any counterparty,
whether or not related to the Contracts.
As reported in the Troubled Company Reporter on Feb. 24, 2006,
the Debtors have determined that they either no longer need these
agreements or that they are able to obtain similar services from
alternative sources at a lower cost.
By rejecting the Contracts, the Debtors will avoid unnecessary
expense and burdensome obligations that provide no tangible
benefit to their estates or creditors, D.J. Baker, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, in New York, said.
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. 35; Bankruptcy Creditors' Service, Inc., 215/945-7000).
WINN-DIXIE: Real Property Investment Gets Jackson Lot for $485K
---------------------------------------------------------------
As reported in the Troubled Company Reporter on Mar. 1, 2006,
Winn-Dixie Stores, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Middle District of Florida to permit
Winn-Dixie Montgomery, Inc., to sell its closed fuel center and
underlying tract of land located in Jackson, Mississippi, to
Eckstein Properties, LLC, or to a party submitting a higher or
better offer, free and clear of liens, claims, and interests.
Through DJM Asset Management, Inc.'s marketing efforts for the
Jackson Property, the Debtors have received two offers including
the offer by Eckstein for $350,000. The Debtors have determined
that Eckstein's offer is the highest or best offer for the
Jackson Property.
Notwithstanding that the Assets have been sufficiently marketed,
the Debtors were soliciting higher and better bids for the Assets.
Auction Result
At the auction held on March 8, 2006, Real Property Investment,
LLC, submitted a final bid of $485,000 for the Jackson
Property.
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. 35; Bankruptcy Creditors' Service, Inc., 215/945-7000).
WINN-DIXIE: Court Disallows Louise Clark's $3 Billion Claim
-----------------------------------------------------------
As reported in the Troubled Company Reporter on Feb. 27, 2006,
Winn-Dixie Stores, Inc., and its debtor-affiliates objected to the
allowance of Louise Clark's Claim No. 8003 for $3,000,000,000
because:
(a) they have no liability on the debt alleged in the Claim;
(b) they dispute the amount of debt alleged in the Claim;
(c) Ms. Clark failed to attach any documentation
substantiating the basis for the claim;
(d) the debt asserted by the claim is barred by the applicable
statute of limitations; and
(e) the claim is barred by res judicata.
Louise Clark Responds
Louise Clark asserts that she was injured by falling objects
transported by a store employee in a Winn-Dixie Store located at
401 East Lakewood Avenue, in Durham, North Carolina. Ms. Clark
alleges that as of Oct. 28, 2005, she has incurred medical
bills in excess of $240,00 as a result of her claim.
Ms. Clark tells the Court that there is a pending lawsuit
regarding her Claim in the Superior Court, Durham County, Durham,
North Carolina.
According to Ms. Clark, she would agree to settle her Claim for
$10,000,000.
* * *
Judge Funk sustains the Debtors objection to Ms. Clark's Claim.
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. 35; Bankruptcy Creditors' Service, Inc., 215/945-7000).
WKI HOLDING: Moody's Withdraws Debt, Note & Corp. Family Ratings
----------------------------------------------------------------
Moody's Investors Service withdrew the ratings of WKI Holding
Company for business reasons. As of Dec. 31, 2005, the company
had roughly $120 million outstanding of rated debt on its balance
sheet.
These ratings were withdrawn:
* $75 million First-Priority Senior Secured Revolving Credit
Facility due 2007, B1;
* $124 million Second-Priority Senior Secured Term Loan B due
2008, B3;
* $9.7 million Third-Priority 12% Senior Subordinated Notes
due 2010, Caa1;
* Corporate family rating, B3
Headquartered in Reston, Virginia, WKI Holding Company, Inc.,
operating through its subsidiary World Kitchen, Inc., is a
manufacturer and marketer of consumer bakeware, dinnerware,
kitchen and household tools, rangetop cookware and cutlery
products. WKI's brands include Pyrex, Corningware, Corelle,
Revere Ware, Baker's Secret, OLFA and Chicago Cutlery.
W.R. GRACE: Wants to Contribute $105.34 Mil. to Retirement Plans
----------------------------------------------------------------
For the past three calendar years, W.R. Grace & Co. and its
debtor-affiliates have sought and obtained permission from the
U.S. Bankruptcy Court for the District of Delaware to make minimum
contributions to the defined benefit retirement plans covering the
Debtors' employees in the United States.
In accordance with the Court's orders approving each Prior
Funding Motion, the Debtors contributed approximately $40,000,000
to the Grace Retirement Plans in 2003, $20,000,000 in 2004,
$16,200,000 in 2005, and $24,000,000 in the first half of 2006.
The Debtors propose to continue funding the Grace Retirement Plans
in the amount of $105,341,263, inclusive from July 15, 2006, to
April 2007.
Grace Retirement Plans
According to James E. O'Neill, Esq., at Pachulski, Stang, Ziehl,
Young, Jones & Weintraub LLP, in Wilmington, Delaware:
(a) The Grace Retirement Plans currently consist of 13
funded, defined benefit pension plans, each of which is
qualified under Section 401(a) of the Internal Revenue
Code.
(b) The most significant Grace Retirement Plan is the W. R.
Grace & Co. Retirement Plan for Salaried Employees, which
comprises approximately 79% of the assets and 82% of the
liability of the Grace Retirement Plans in the aggregate.
(c) The Debtors have a long history of providing employees
with defined benefit pension plans.
(d) Many of the Grace Retirement Plans are maintained
pursuant to collective bargaining agreements.
(e) The employers that are considered competitors or peers
of the Debtors' businesses generally maintain defined
benefit pension plans for their employees.
(f) The "plan year" of each Grace Retirement Plan is a
calendar year.
Funded Status of Grace Retirement Plans
Currently, the Grace Retirement Plans are underfunded by any
generally accepted measure, Mr. O'Neill notes. As of Jan. 1,
2006, the amount by which the Plans are underfunded ranges from
$43,000,000 to $350,000,000, depending on the measure used.
In addition, Mr. O'Neill says that the amount of the underfunding
has not changed significantly from Jan. 1, 2005, to Jan. 1, 2006.
The Debtors updated several different calculations to measure
the liabilities and assets of the Grace Retirement Plans. All
amounts have been calculated by the actuary of the Grace
Retirement Pension Plans.
A chart on the Updated Calculations is available for free at:
http://bankrupt.com/misc/wrgracefundedstatus.pdf
As a result of the underfunded status of the Grace Retirement
Plans, Mr. O'Neill relates, the Debtors were required to make a
filing pursuant to Section 4010 of the Employee Retirement Income
Security Act with the Pension Benefit Guaranty Corporation for
the 2005 plan year.
The Debtors reported that the Grace Retirement Plans were
underfunded by approximately $544,000,000 as of Dec. 31, 2005,
calculated on the basis required by the PBGC for filing.
From a cash flow perspective, the Debtors believe that annual
benefit payments and other expenses from the Grace Retirement
Plans will continue to be significant for the foreseeable future.
The Debtors project that in 2006, approximately $70,000,000 to
$75,000,000 will be paid out of the Grace Retirement Plans for
benefit payments and to satisfy other expenses. As indicated in
the Updated Calculations, the total market value of assets as of
Jan. 1, 2006, was approximately $645,500,000.
The Debtors continue to believe that the amounts paid out each
year represent a high proportion of total assets, when compared
to comparable funded retirement plans of other employers, and
highlights the necessity to continue to make significant
contributions to the Grace Retirement Plans to assure their long-
term financial viability.
Employees Covered by the Grace Retirement Plans
Mr. O'Neill relates that the Grace Salaried Plan covers over
1,900 active, salaried employees, or over 60% of the Debtors'
U.S. workforce.
The Debtors' employees continue to consider ongoing benefit
accruals under the Grace Retirement Plans and the financial
viability of those Plans as among the most important aspects of
their employment relationship with the Debtors.
The employees also continue to closely monitor the financial
viability of the Grace Retirement Plans through the Debtors' ERISA
and SEC disclosures, as well as other research techniques.
The Debtors' management and employees continue to be motivated to
work towards successfully creating value for the Debtors' estates
by growing the revenues and profits of the Debtors' businesses,
with the expectation that at least a portion of the cash
generated by those efforts would be used to provide the funding
necessary to assure the long-term viability of the Grace
Retirement Plans.
Furthermore, the Debtors' management recognizes that continuing
to make at least the legally required minimum contributions to
each of the Grace Retirement Plans is essential to maintaining
the morale of the Debtors' workforce and its confidence in
management. The employees are vital to maintaining and enhancing
the value of the Debtors' estate and to the Debtors' successful
reorganization.
06-07 Funding Approach
Consistent with the previous 2005 funding request, the funding
approach for the 06-07 Funding Period will satisfy the objective
to make only those contributions to the Grace Retirement Plans
that are necessary to satisfy the minimums that are legally
required by applicable laws.
In addition, the 06-07 Funding Approach does not include the
objective of eliminating the requirement of the Grace Retirement
Plans to pay PBGC variable rate premiums. It is estimated that
the Grace Retirement Plans will be required to pay approximately
$3,200,000 in PBGG variable rate premiums for 2006.
To avoid the requirement to pay all premiums for 2005, the
Debtors would be required to contribute approximately
$101,000,000 to the Plans by Sept. 15, 2006. Each contribution
will be made no sooner than one month before the deadline imposed
by federal law.
The legally required minimum contributions to the Grace
Retirement Plans for the 06-07 Funding Period are:
Payment Due Date Contributions Plan Year
---------------- ------------- ---------
For 2006:
July 15 $15,596,358 2006
September 15 44,893,500 2005
October 15 15,671,395 2006
For 2007:
January 15 $16,280,010 2006
April 15 12,900,000 2007
-------------
Total $105,341,2631
Mr. O'Neill informs the Court that the contribution listed on the
Schedule for the 2005 plan year has been finalized, and is not
subject to change as a result of future market performance of the
assets of the Grace Retirement Plans or any contemplated changes
in applicable law.
The contributions for the 2006 plan year are also finalized. The
contributions for the 2007 plan year are estimates, and may
change depending on market performance of the assets of the Grace
Retirement Plans and any changes in applicable federal law, as
well as any changes in the plans' demographics.
Mr. O'Neill further explains that there are two possible changes
in applicable federal law that could affect the amount of the
minimum contributions required to be made to the Grace Retirement
Plans:
(i) If Congress fails to extend the interest rate provisions
of the Pension Funding Equity Act of 2004 from April
2006, then the minimum contributions required by
applicable law will be greater than the amounts listed
on the Schedule.
(ii) If a version of the pension funding reform legislation,
which is currently under consideration by Congress, is
enacted in 2006, it is likely that the minimum required
contributions for 2007 and subsequent years will
increase. While the final provisions of any pension
funding reform legislation are uncertain at present
time, the Debtors have been advised that enactment of
reform could increase the legally required minimum
contributions by 15% to 25%, and that the increase would
likely be effective for the 2007 plan year.
If the market performance of the Grace Retirement Plans' assets
or any changes in applicable law result in lesser legally
required minimum contributions during the 06-07 Funding Period,
then the Debtors would make only the lesser required minimum
contributions.
If market performance or any changes in applicable law result in
larger legally required minimum contributions, then the larger
contributions would be made when due.
Mr. O'Neill tells Judge Fitzgerald that it is necessary to secure
Court's authority regarding the payment of legally required
minimum contributions for the 06-07 Funding Period because the
first due date with respect to those contributions is July 15,
2006.
Authorizing the payment will also eliminate the need for the
Debtors to incur the time and expense associated with the
submission of another funding request within six months or so.
Addressing Employees' and Creditors' Concerns
The Debtors believe that the legitimate concerns of the employees
will be addressed if management can report to the employees that
the Court has approved the legally required minimum funding for
the Grace Retirement Plans for the entire 06-07 Funding Period,
since that approval would permit the Debtors to make significant
contributions to the Plans for the next year.
Mr. O'Neill states that the 05-06 funding approach did not
satisfy its objective to make contributions that would permit the
Debtors to avoid the requirement to distribute to its employees
the pension underfunding notices required by ERISA Section 4011.
Hence, the Debtors will notify their employees by mail during the
last quarter of 2006 that the Grace Retirement Plans were
underfunded for 2006. It is anticipated that the notice will
have a negative effect on the morale of the Debtors' employees.
Similarly, Mr. O'Neill admits that the 06-07 Funding Approach
will not satisfy the same objective of the 05-06 funding
approach. If the Debtors make only the legally required minimum
contributions, employees will be notified that the Grace
Retirement Plans are underfunded for the 2007 plan year.
However, the Debtors believe that the effect will be ameliorated
by informing the employees that the Debtors have secured Court
approval to make all legally required minimum contributions for
the entire 06-07 Funding Period, and the fact that those
contributions will be in significant amounts.
The Debtors maintain that the legitimate concerns regarding the
Debtors' conservation of cash will continue to be addressed by
the 06-07 Funding Approach because the Debtors' cash will only be
used to satisfy the minimum contribution requirements imposed by
applicable law, and not to make any additional contributions to
satisfy any other objective.
If the Court approves the 06-07 Funding Approach, the total
contributions to the Grace Retirement Plans since the inception
of the Debtors' Chapter 11 cases would be approximately
$223,100,000, which would still be significantly less than the
total funds repatriated by the Debtors through April 2006.
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.
W.R. GRACE: Employs Latham & Watkins as Tax Planning Counsel
------------------------------------------------------------
On June 16, 2004, the U.S. Bankruptcy Court for the District of
Delaware authorized W.R. Grace & Co. and its debtor-affiliates to
employ Latham & Watkins, LLP, as their special environmental
counsel.
The Debtors relate that Latham formerly provided tax-related
research for them in connection with a Belgian tax controversy.
Moreover, Nicholas J. DeNovio, Esq., who is currently a partner at
Latham, worked on numerous tax issues while a principal at
PricewaterhouseCoopers LLP, between July 1999 and December 2002,
and a partner at Baker & McKenzie LLP, from 1996 to 1999.
Because of Latham's long-standing involvement with the Debtors,
and the costs that would be involved in educating other counsel
as to the Debtors' operations affecting domestic and
international tax planning, the Debtors seek the Court's
authority to expand Latham's employment as special counsel to
advise and represent them with respect to domestic and
international tax planning matters.
Considering its outstanding reputation and extensive expertise in
advising companies in complex tax planning matters, the Debtors
believe that Latham is well qualified and uniquely able to
provide the specialized legal advice sought by the Debtors on a
going forward basis.
Mr. DeNovio attests that Latham is a "disinterested person" as
that term is construed under Section 101(14) of the Bankruptcy
Court, since the firm does not represent or hold any interest
adverse to the Debtors or their estates with respect to specific
matters for which it is to be employed.
Although the Debtors have sought to extend the retention of
Steptoe & Johnson LLP, to serve as special counsel for tax law
and tax litigation matters, the Debtors assure Judge Fitzgerald
that any domestic and international tax planning services to be
performed by Latham will not overlap with the services performed
by Steptoe.
The Debtors will compensate Latham on an hourly basis at its
customary hourly rates for services rendered, plus reimbursement
of actual, necessary expenses incurred. The tax-related matters
will primarily be handled by Mr. DeNovio at $695 hourly rate.
Latham's current hourly billing rates range from $235 to $850,
depending on the seniority and expertise of the attorney
involved. For paralegals, Latham's hourly rates range from $85
to $370.
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.
W.R. GRACE: Inks $2.1-Mil. N.Y. & N.J. Port Authority Settlement
----------------------------------------------------------------
The Port Authority of New York and New Jersey asserts Claim No.
9563 against W.R. Grace & Co. and its debtor-affiliates for
$1,400,000 plus future costs associated with soil remediation and
groundwater monitoring in a property it purchased from Nitrate
Agencies Company, a former subsidiary of W.R. Grace & CO. The
property is identified as Block No. 373, Lot 3 on the tax map of
the City of Bayonne, New Jersey.
Before selling the property to the Port Authority, Nitrate
Agencies Co. used the property and certain surrounding areas to
manufacture pesticides. In connection with its operations, the
company maintained an arsenic pit and underground storage tank on
what is now the Williams Property.
Before they filed for bankruptcy protection, the Debtors
performed, or cause to be performed, soil testing and soil
remediation on the Williams Property and the Leased Premises.
Following extensive arm's-length negotiations, the Debtors and
the Port Authority have reached a settlement agreement.
The Parties agree that Claim No. 9563 will be allowed as a
general unsecured claim for $2,100,000. In exchange for this
compromise, the Port Authority:
(a) is forever barred, estopped, and enjoined from asserting
any additional claims against the Debtors with respect
to the matters covered by the Settlement;
(b) takes full responsibility, including bearing any and all
costs, for all soil remediation and groundwater monitoring
of the property; and
(c) takes full responsibility for all ongoing operation and
maintenance overlay as may be required by the New Jersey
Department of Environmental Protection following and as
related to the remediation, and will bear all costs
associated with the operation with respect to the
Purchased Property, and for ground water monitoring
reporting with respect to the Purchased Property and the
Williams Property.
The U.S. Bankruptcy Court for the District of Delaware approved
the settlement agreement.
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.
W.S. LEE: Taps Phoenix Management as Financial Advisor
------------------------------------------------------
W.S. Lee & Sons, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Western District of Pennsylvania for
authority to employ Phoenix Management Services, Inc., as their
financial advisor.
Phoenix Management will:
a. review presentations developed by the Debtors that are
intended to be delivered at meetings with representatives
of its secured and unsecured creditors;
b. advise the company with regard to certain aspect and
operating or financial restrictions inherent in the
bankruptcy process;
c. for the first two months, assist in the preparation and
review of certain documents, schedules and statements of
financial affairs, financial reports and monthly operating
reports prior to their submittal, including analysis
required by the Court, the Office of the U.S. Trustee, and
the Debtors' secured and unsecured creditors;
d. advise the Debtors with regard to strategy relating to
negotiations with the Debtors' creditors, customers, and
other parties in interest; and
e. advise the Debtors with regard to elements of any proposed
plan of reorganization that the Debtors might consider.
Michael E. Jacoby, a managing director at Phoenix Management,
tells the Court that the Firm's professionals bill:
Professional Hourly Rate
------------ -----------
Managing Directors $365 - $425
Directors $275 - $345
Vice Presidents $195 - $265
Analysts/Associates $150 - $195
Mr. Jacoby assures the Court that the Firm is disinterested as
that term is defined in Section 101(14) of the Bankruptcy Code.
Based in Altoona, Pennsylvania, W.S. Lee & Sons, Inc., distributes
food and related products to restaurants, delis, schools,
hospitals and other institutions in the mid-Atlantic region of the
United States utilizing a fleet of multi-temperature tractors and
trailers. The Company and its wholly owned subsidiary, Lee
Systems Solutions, LLC, filed voluntary petitions for
reorganization under Chapter 11 of the U.S. Bankruptcy Code on
March 14, 2006 (Bankr. W.D. Pa. Case No. 06-70148). James R.
Walsh, Esq., at Spence Custer Saylor Wolfe & Rose LLC, represents
the Debtors in their restructuring efforts. When the Debtors
filed for protection from their creditors, they listed less than
$50,000 in total assets and $1 million to $10 million in debts.
YUKOS OIL: US Bankruptcy Court's 10-Day TRO Freezes Asset Sale
--------------------------------------------------------------
Eduard K. Rebgun, in his capacity as foreign representative for
Yukos Oil Company, sought and obtained a temporary restraining
order from the U.S. Bankruptcy Court for the Southern District of
New York prohibiting the company from selling its assets absent
his prior consent. The TRO will remain in effect through Friday,
April 21.
Mr. Rebgun filed a chapter 15 petition in the Manhattan Court on
April 13 (Bankr. S.D.N.Y. Case No. 06-10775), in an attempt to
halt the sale of Yukos' 53.7% ownership interest in Lithuanian AB
Mazeikiu Nafta. Published reports suggest that the Company's
stake may have a value at around US$1.2 billion to US$1.4 billion.
As reported in TCR-Europe on March 31, the Moscow Arbitration
Court banned Yukos from selling its assets worth more than RUB30
million without permission from court-appointed external manager
Mr. Rebgun.
The Hon. Pavel Markov placed Yukos under temporary supervision on
March 28, and will consider formally declaring the company
bankrupt at a hearing on June 27.
The bankruptcy suit was brought to court on March 10, by a
consortium of 14 bank lenders led by Societe Generale SA, in an
attempt to recover the remainder of a US$1 billion debt under
outstanding loan agreements.
State-owned oil company Rosneft acquired the debt in December
2005 from the consortium -- which included Citigroup Inc.,
Commerzbank, Credit Lyonnais, Deutsche Bank, HSBC and ING, among
others. Rosneft replaced the bank group as petitioner in the
bankruptcy filing following the assignment, which took place on
March 14. The Arbitration Court also confirmed the claims of
Rosneft against the Company and incorporated Rosneft's claims in
the register of creditors' claims.
Under Russian bankruptcy law, the petitioner, as interim receiver,
is responsible for:
(a) evaluating the Debtor's financial status;
(b) preserving the Debtor's property and taking measures to
secure the debtor's assets;
(c) compiling a register of bankruptcy creditors' claims;
(d) notifying creditors of the commencement of the bankruptcy
proceedings; and
(e) preparing for the first meeting of creditors.
The commencement of a supervision proceeding significantly
restricts the Debtor's dealings and is primarily aimed at allowing
the interim receiver to organize the bankruptcy creditors and
receive, process and register their claims while preserving the
Debtor's financial standing.
Howard Seife, Esq., counsel for Mr. Rebgun, argues that key
managers are continuing their efforts to dispose of certain
foreign assets in direct violation of the injunctive order. Mr.
Seife cited news reports indicating that chief executive Steven
Theede is engaged in active and on-going negotiations with the
Lithuanian government regarding the sale of Mazeikiu Nafta and has
reached an agreement in principle on a purchase price.
Yukos Responds
Mr. Theede advised Mr. Rebgun that the Company's management will
not violate any requirements of Russian Law on Insolvency.
The management said that it has trouble meeting the expectations
of the interim receiver following the incarceration of the sole
nominated executive of YUKOS Oil Company, Vasily Aleksanyan who
was approved by the Board of Directors and the Company's President
to undertake this role.
"The shares of MazeikiuNafta do not belong to NK Yukos," Mr.
Theede said in a statement. "Moreover OAO NK Yukos is not a
nominal holder of the stated shares and does not have any legal
authority which would allow it dispose of Mazeikiu Nafta shares.
"Therefore, under the current legislation, the management of NK
Yukos cannot take any actions violating the Ruling of the
Arbitration Court of Moscow dated March 29 because the stated
shares of Mazeikiu Nafta are not the property of the debtor, NK
YUKOS," Mr. Theede added.
However, Mr. Rebgun dismissed Mr. Theede's contention that it can
sold its ownership interest in Mazeikiu Nafta since it was owned
by a foreign-registered subsidiary and did not appear in Yukos'
accounts, the Wall Street Journal reports.
According to Bloomberg News, Juodeikiai-based Mazeikiu accounts
for about 20% of the economy in Lithuania, which joined the
European Union in 2004, and is the only oil refinery in the Baltic
region.
Headquartered in Moscow, Russia, Yukos Oil Company --
http://yukos.com/-- is an open joint stock company existing
under the laws of the Russian Federation. Yukos is involved in
the energy industry substantially through its ownership of its
various subsidiaries, which own or are otherwise entitled to
enjoy certain rights to oil and gas production, refining and
marketing assets.
The Company filed for Chapter 11 protection Dec. 14, 2004
(Bankr. S.D. Tex. Case No. 04-47742), but the case was dismissed
on Feb. 24, 2005, by the Hon. Letitia Z. Clark. A few days
after, its main production unit Yugansk, was sold by the
government to a little-known firm Baikalfinansgroup for US$9.35
billion, as payment for US$27.5 billion in tax arrears for 2000-
2003. Yugansk eventually was bought by state-owned Rosneft,
which is now claiming more than US$12 billion from Yukos.
* Diana Adams Appointed as Acting U.S. Trustee for Region 2
-----------------------------------------------------------
Diana Adams has been appointed Acting United States Trustee for
New York, Connecticut, and Vermont (Region 2) for an interim
period effective on April 7, 2006, the United States
Trustee Program announced today. She replaces United States
Trustee Deirdre A. Martini, who resigned to return to the private
sector.
Ms. Adams has served as the Assistant United States Trustee in the
U.S. Trustee Program's Brooklyn office from 2001 to the present,
and as an Assistant United States Trustee in the Program's
Manhattan office from 1996 to 2001.
Previously, she served as a law clerk for the Honorable Cecilia H.
Goetz, Bankruptcy Judge for the Eastern District of New York, and
worked in the private practice of law.
Ms. Adams received her law degree from New York University School
of Law and her undergraduate degree magna cum laude from Boston
University.
The U.S. Trustee Program is the component of the Justice
Department that protects the integrity of the bankruptcy system by
overseeing case administration and litigating to enforce the
bankruptcy laws. The Program has 21 regions and 95 field offices.
Region 2 is headquartered in Manhattan with additional offices in
Albany, Brooklyn, Buffalo, Central Islip, Rochester, and Utica,
N.Y., and New Haven, Conn.
* Katherine Brady Joins Alderman & Alderman as Associate
--------------------------------------------------------
Katherine Brady has joined the law firm of Alderman & Alderman as
an associate. Ms. Brady will concentrate her practice in the
areas of business litigation, commercial law and bankruptcy.
A recent graduate of Wake Forest University School of Law,
Winston-Salem, NC, Ms. Brady graduated Magna Cum Laude and Phi
Beta Kappa with a Bachelor of Arts in Political Science from Union
College, Schenectady, NY. She was also inducted into Pi Sigma
Alpha, a national political science honor society.
"We are confident that by applying the same disciplined reasoning
that earned her the Phi Beta Kappa, Pi Sigma Alpha and Magna Cum
Laude distinctions in school, Katherine will provide the quality
legal analysis that our colleagues and clients have come to expect
from Alderman & Alderman," said founding partner Myles Alderman,
Alderman & Alderman.
Based in Hartford, Connecticut and with offices New York City,
Alderman & Alderman -- http://www.alderman.com/-- applies
"results oriented legal solutions" to its representation of
individuals, partnerships, closely held businesses and large
corporations. The firm concentrates its legal practice on:
-- Chapter 11 Reorganizations and Creditors Rights;
-- Environmental Law and Land Use;
-- Intellectual Property;
-- Business Counseling;
-- General Litigation; and
-- Dispute Resolution.
* White & Case Brings In Sandy Qusba as Partner
-----------------------------------------------
Sandeep Qusba has joined White & Case LLP as a partner in the
firm's New York Financial Restructuring and Insolvency practice.
Mr. Qusba's practice focuses on restructurings, bankruptcies,
acquisition of distressed companies, and bank financings. He has
represented agent banks and creditors in some of the largest
Chapter 11 proceedings in recent years.
He represents financial institutions across a wide range of
sectors, among them healthcare, energy, automotive, manufacturing
and telecommunications.
"I've had many occasions to work with Sandy Qusba over the years,
and he is a highly gifted, experienced lawyer whose strengths in
DIP and exit financings for banks will both compliment and mesh
well with our strengths advising debtors, bond holders, and
shareholder committees in complex bankruptcies, and add yet
another layer of capability to our clients," White & Case partner
Tom Lauria, co-head of the Financial Restructuring and Insolvency
group said.
Prior to joining White & Case, Qusba was a partner at O'Melveny &
Myers. Among the restructuring clients that Qusba has
represented: the agent bank in Pacific Crossing's chapter 11
case; the agent bank in the debtor-in-possession financing for
Intermet Corporation; the co-chair of Mirant Corporation's
official creditor's committee and the agent banks in Covanta
Energy Corporation's chapter 11 case.
"I'm very excited to join White & Case's bankruptcy group. Not
only does the Firm's strength in financing and transactional work
provide an ideal platform for me to continue to build my existing
lender-based practice, but the diversity of the Firm's
restructuring practice will give me the opportunity to expand into
new and exciting areas," Qusba said.
As examples of the breadth and diversity of White & Case's
practice, Qusba cited the Firm acting as lead counsel to energy
giant, Mirant Corporation, in its successful chapter 11
reorganization, representing an ad hoc committee of bondholders at
the center of the hotly-contested litigation over Adelphia's
proposed emergence from chapter 11, representing a shareholder
group in the recently filed chapter 11 case of mega-auto parts
manufacturer, Delphi Corporation, and representing Corporacion
Durango in its precedent-setting restructuring under Mexico's new
Concursos Mercantiles law. The practice also was recently named
"Restructuring Team of the Year" at the 2006 IFLR Americas Awards.
White & Case partner Howard Beltzer, co-head of the Firm's Global
Financial Restructuring and Insolvency group, said that the
addition of Qusba is part of the practice's long-term growth
strategy.
"Our practice has grown tremendously over the past five years,
with a dynamic network of 40 insolvency lawyers in the US and 125
worldwide. But our reputation as the go-to-firm-when-the-chips-
are-down has only been limited by the number of practitioners
available to do the work-which is why Sandy will be such a welcome
addition," Beltzer said.
A graduate of Tufts University, Qusba holds a J.D. cum laude from
Syracuse University. Qusba also served as law clerk for Chief
Judge Stephen Gerling, U.S. Bankruptcy Court for the Northern
District of New York.
About White & Case
White & Case LLP -- http://www.whitecase.com/-- is a leading
global law firm with nearly 2,000 lawyers in 38 offices in 25
countries. The firm's clients value the breadth and depth of its
US, English and local law capabilities and rely on the firm for
their complex cross-border commercial and financial transactions
and for international arbitration and litigation. Whether in
established or emerging markets, the hallmark of White & Case is
our complete dedication to the business priorities and legal needs
of our clients.
* Large Companies with Insolvent Balance Sheets
-----------------------------------------------
Total
Shareholders Total Working
Equity Assets Capital
Company Ticker ($MM) ($MM) ($MM)
------- ------ ------------ ------- --------
Abraxas Petro ABP (24) 122 (5)
Accentia Biophar ABPI (9) 39 (19)
AFC Enterprises AFCE (49) 213 40
Adventrx Pharma ANX (8) 24 (9)
Alaska Comm Sys ALSK (19) 576 28
Alliance Imaging AIQ (40) 675 1
AMR Corp. AMR (1,478) 29,495 (2,156)
Atherogenics Inc. AGIX (115) 198 173
Bally Total Fitn BFT (1,463) 486 (442)
Biomarin Pharmac BMRN (77) 195 (29)
Blount International BLT (145) 455 112
CableVision System CVC (2,414) 9,845 (428)
CCC Information CCCG (95) 112 34
Centennial Comm CYCL (1,069) 1,409 32
Cenveo Inc CVO (50) 1,080 122
Choice Hotels CHH (167) 265 (57)
Cincinnati Bell CBB (710) 1,863 16
Clorox Co. CLX (528) 3,567 (205)
Cogdell Spencer CSA (50) 178 N.A.
Columbia Laborat CBRX (15) 15 (3)
Compass Minerals CMP (79) 750 195
Crown Media HL CRWN (123) 1,274 (99)
Deluxe Corp DLX (82) 1,426 (277)
Denny's Corporation DENN (265) 513 (86)
Domino's Pizza DPZ (511) 461 4
DOV Pharmaceutic DOVP (19) 102 79
Echostar Comm DISH (867) 7,410 247
Emeritus Corp. ESC (113) 748 (29)
Emisphere Tech EMIS (15) 19 (1)
Empire Resorts NYNY (27) 57 (3)
Encysive Pharm ENCY (11) 147 111
Foster Wheeler FWLT (313) 1,895 (146)
Gencorp Inc. GY (84) 1,002 (3)
Graftech International GTI (183) 887 245
H&E Equipment SE HEES (5) 531 (92)
Hercules Inc. HPC (25) 2,569 331
Hollinger Int'l HLR (170) 1,065 (354)
I2 Technologies ITWO (71) 202 (34)
ICOS Corp ICOS (59) 242 122
IMAX Corp IMAX (23) 243 35
Immersion Corp. IMMR (17) 45 29
Incyte Corp. INCY (19) 374 326
Indevus Pharma IDEV (126) 100 65
Investools Inc. IED (24) 73 (47)
Koppers Holdings KOP (195) 552 132
Kulicke & Soffa KLIC (3) 440 217
Labopharm Inc. DDS (3) 55 17
Level 3 Comm. Inc. LVLT (476) 8,277 242
Ligand Pharm LGND (110) 315 (102)
Linn Energy LLC LINE (45) 280 (51)
Lodgenet Entertainment LNET (70) 263 14
Maxxam Inc. MXM (661) 1,048 101
Maytag Corp. MYG (187) 2,954 150
McDermott Int'l MDR (83) 1,668 230
McMoran Exploration MMR (58) 408 67
NPS Pharm Inc. NPSP (98) 331 234
New River Pharma NRPH (6) 54 47
Nighthawk Radiol NHWK (78) 36 4
Omnova Solutions OMN (15) 360 65
ON Semiconductor ONNN (276) 1,148 202
Quest Res. Corp. QRCP (73) 247 (61)
Qwest Communication Q (3,217) 21,497 (1,071)
Revlon Inc. REV (1,096) 1,044 121
Riviera Holdings RIV (31) 212 2
Rural/Metro Corp. RURL (89) 310 54
Rural Cellular RCCC (481) 1,481 130
Sealy Corp. ZZ (288) 906 46
Sepracor Inc. SEPR (165) 1,275 769
St. John Knits Inc. SJKI (52) 213 80
Sun Healthcare SUNH (3) 512 (67)
Tivo Inc. TIVO (27) 162 27
USG Corp. USG (302) 6,142 1,579
Unigene Labs Inc. UGNE (17) 13 (11)
Unisys Corp UIS (33) 4,029 339
Uranium Res Inc. URRE (36) 18 (17)
Vertrue Inc. VTRU (30) 446 (82)
Weight Watchers WTW (81) 835 (38)
Worldspace Inc. WRSP (1,492) 724 221
WR Grace & Co. GRA (559) 3,517 876
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com/
On Thursdays, the TCR delivers a list of recently filed chapter 11
cases involving less than $1,000,000 in assets and liabilities
delivered to nation's bankruptcy courts. The list includes links
to freely downloadable images of these small-dollar petitions in
Acrobat PDF format.
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. Marie Therese V. Profetana, Shimero Jainga, Emi Rose S.R.
Parcon, Rizande B. Delos Santos, Cherry A. Soriano-Baaclo,
Christian Q. Salta, Jason A. Nieva, Lucilo Junior M. Pinili, Tara
Marie A. Martin and Peter A. Chapman, Editors.
Copyright 2006. All rights reserved. ISSN: 1520-9474.
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.
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