/raid1/www/Hosts/bankrupt/TCR_Public/060517.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, May 17, 2006, Vol. 10, No. 116
Headlines
155 EAST: Posts $7.5 Million Net Loss in First Quarter of 2006
ACCO BRANDS: Moody's Holds Corporate Family Rating at Ba3
ADELPHIA COMMS: Judge Morris to Monitor Creditor Disputes
ADELPHIA COMMS: Court Allows Interest Payment to Unsec. Creditors
ADELPHIA COMMS: Committee Wants Bank Lenders' Claims Estimated
AGILENT TECH: Earns $115 Million for Six Months Ended April 30
AIMS WORLDWIDE: Cordovano & Honeck Raises Going Concern Doubt
ALLIED HOLDINGS: Union Wants to Recover Alleged Illegal Pay Cuts
ALLSERVE SYSTEMS: Trustee Hires Xroads as Special Accountant
ARAMARK CORP: Expands by Buying Food Service Company in Beijing
AZTAR CORP: Board Says Columbia Entertainment's Offer is Superior
BANYAN CORPORATION: Schwartz Levitsky Raises Going Concern Doubt
BEAR STEARNS: S&P Puts Class II-B-5 Certs' B Rating on CreditWatch
BPK RESOURCES: Auditor Raises Going Concern Doubt
BROOKSTONE CO: Moody's Holds B3 Rating on $190 MM Sr. Sec. Notes
CALPINE CORP: Lenders Amend DIP Facility to Pay 9.625% Sr. Notes
CALPINE CORP: U.S. Trustee Appoints 5-Member Equity Committee
CARMIKE CINEMAS: Delays Filing of Form 10-Q for First Quarter
CENTRAL FREIGHT: McGladrey & Pullen Raises Going Concern Doubt
CHICAGO HUDSON: Case Summary & 17 Largest Unsecured Creditors
CREST DARTMOUTH: S&P Holds BB+ Rating on $12.25 Mil. Class D Notes
DALE JARRETT: Auditor Raises Going Concern Doubt
DANA CORP: Court Directs Trans-Fleet to Pay DTF Trucking $307,143
DANA CORP: Committee Taps Halperin Battaglia as Conflicts Counsel
DANA CORP: Committee Gets Court's Nod to Hire Kramer as Counsel
DATALOGIC INT'L: Corbin & Company Raises Going Concern Doubt
DELPHI: Workers Vote for Strike Amidst CBA Rejection Deliberations
DELTA AIR: Comair Wants Court to Reconsider Decision on CBA
DELTA AIR: Bank of NY Wants Carrier to Follow Rejection Orders
DIAMOND PEAK: Voluntary Chapter 11 Case Summary
DMX MUSIC: Delaware Court Approves Disclosure Statement
EDISON MISSION: Moody's Ups Corporate Family Rating to Ba3
EDUCATE INC: Moody's Affirms B1 Rating on $160MM Sr. Secured Loan
EMMIS COMMS: Moody's Holds Junk Rating on Cumulative Pref. Stock
ENTERGY NEW ORLEANS: Wants Insurance Allocation Protocol Approved
ENTERGY NEW ORLEANS: Court Approves Quarterly Dividend Payments
FINDEX.COM INC: Posts $1.5 Million Net Loss in 2005 Fiscal Year
GAMING & ENTERTAINMENT: Auditor Raises Going Concern Doubt
GENERAL ENVIRONMENTAL: Weinberg & Co. Raises Going Concern Doubt
HEALTHSOUTH CORP: March 31 Balance Sheet Upside-Down By $1.9 Bil.
HEATING OIL: Has Until July 15 to Make Lease-Related Decisions
IMPART MEDIA: Peterson Sullivan Raises Going Concern Doubt
INDUSTRIAL SYSTEMS: Case Summary & 18 Largest Unsecured Creditors
INFOR GLOBAL: Buying SSA's Stock in $19.50-Per-Share Merger Deal
INTEGRATED DISABILITY: Court Okays Godwin Pappas as Bankr. Counsel
INTEGRATED HEALTH: Court Extends Removal Period to July 7
INTEGRATED HEALTH: Allows Hamilton Trust's $1.4 Mil. Unsec. Claim
INVISTA BV: Moody's Lifts Corporate Family Rating to Ba2 from Ba3
J.L. FRENCH: Court Approves Second Amended Disclosure Statement
J.L. FRENCH: Giuliani Capital Hired as Panel's Financial Advisors
J.W. FERRELL: Voluntary Chapter 11 Case Summary
KAISER ALUMINUM: Court Approves AIG Settlement Agreement
KASSEBAUM AND CRUZ: Case Summary & 3 Largest Unsecured Creditors
KMART CORP: Summary Judgment on Rubloff's Claims Draws Fire
KMART CORP: FLOORgraphics Seeks Reconsideration of Court's Ruling
MASTERCRAFT INTERIORS: Case Summary & 29 Largest Unsec. Creditors
MESABA AVIATION: Unions To Conduct Pickets in Michigan Today
MICHAEL LARSON: Case Summary & 8 Largest Unsecured Creditors
MIRANT CORP: Wilson Asks for $6.45 Million Fee Enhancement
MIRANT CORP: Court Approves Mint Farm-Cascade Settlement Agreement
MIRANT CORP: Earns $467 Million of Net Income in First Quarter
MTR GAMING: Moody's Rates $125 Million Sr. Sub. Notes at B3
MUSICLAND HOLDING: Files Joint Plan of Liquidation in New York
MUSICLAND HOLDING: Claims Classification & Treatment Under Plan
MUSICLAND HOLDING: Inks Termination Agreement with Wachovia Bank
NATIONWIDE MORTGAGE: Fitch Junks Rating on Class DB3 Certificates
NIGHTHAWK SYSTEMS: GHP Horwath Raises Going Concern Doubt
NORTHWEST PIPELINE: Fitch Upgrades Sr. Unsec. Debt Rating to BB+
NVF CO: Wants to Extend Business Consultant's Employment Term
NVF CO: Wants to Hire Corporate Cost as Special Auditors
NYACK HOSPITAL: Fitch Cuts Rating on $18.3 Million Bonds to B-
ORLEANS PARISH: Revenue Impairment Cues Fitch to Retain Neg. Watch
OWENS CORNING: Gets Court Nod to Expand Scope of E&Y's Employment
OWENS CORNING: Has Until Dec. 5 to Make Lease-Related Decisions
OWENS CORNING: Shintech Holds $7 Million General Unsecured Claim
PROCARE AUTOMOTIVE: Court OKs Thompson Hine as Bankruptcy Counsel
PROCARE AUTOMOTIVE: Court Okays Steven Sues as Financial Advisor
PXRE GROUP: Poor Performance Cues Fitch to Maintain Negative Watch
REFCO INC: Chapter 7 Trustee Taps Bridge Associates as Advisors
REFCO INC: Ch. 7 Trustee Can Wind-Down Refco Taiwan's Operations
REVLON CONSUMER: Posts $54 Mil. Net Loss in Quarter Ended March 31
SESI LLC: Moody's Rates $300 Million Sr. Unsec. Notes at Ba3
SILICON GRAPHICS: Can Access Cash Collateral on Interim Basis
SILICON GRAPHICS: Gets Interim OK to Use Cash Management System
SSA GLOBAL: Infor to Buy Stock in $19.50-Per-Share Merger Deal
TELLURIDE GLOBAL: Case Summary & 20 Largest Unsecured Creditors
TELTRONICS INC: March 31 Balance Sheet Upside-Down by $3.3 Million
TRANSCONTINENTAL GAS: Fitch Lifts Rating on Sr. Unsec. Debt to BB+
TRM CORP: Posts $1.4 Million Net Loss in Quarter Ended March 31
TRUMP ENT: Has Until July 13 to Object to NJSEA's Claims
TRUMP ENT: World's Fair Site Proceeds To Be Distributed Under Plan
UNUMPROVIDENT CORP: Launches $300 Million Debt Securities Offering
US AIRWAYS: Judge Mitchell Closes Four Bankruptcy Cases
US AIRWAYS: Reports 2006 First Quarter Financial Results
VANGUARD CAR: Moody's Puts Low-B Rating on $975 Million of Loans
VARTEC TELECOM: Committee Hires "Unidentified" Consulting Expert
WESTPOINT STEVENS: Panel's Re-Evaluation Hearing Motion Denied
WILKINSON HI-RISE: Case Summary & 32 Largest Unsecured Creditors
WILLIAMS COMPANIES: Fitch Upgrades Sr. Unsec. Debt Rating to BB+
WILLIAMS PRODUCTION: Fitch Lifts Sr. Unsecured Debt Rating to BB+
WINN-DIXIE: Revises Stalking Horse Bids Schedule & Cure Amounts
WINN-DIXIE: Court Denies Former Employees & Retirees' Motion
WINN-DIXIE: Wants Two Creditors' Motion For Discovery Denied
WORLDCOM INC: Court Approves Corecomm Settlement Agreement
* Upcoming Meetings, Conferences and Seminars
*********
155 EAST: Posts $7.5 Million Net Loss in First Quarter of 2006
--------------------------------------------------------------
155 East Tropicana, LLC, filed its first quarter financial
statements for the three months ended March 31, 2006, with the
Securities and Exchange Commission on May 15, 2006.
The Company reported a $7,596,079 net loss on $15,130,172 of net
operating revenues for the three months ended March 31, 2006.
At March 31, 2006, the Company's balance sheet showed $167,622,154
in total assets, $155,665,436 in total liabilities, and
$11,956,718 in total stockholders' equity.
The Company's March 31 balance sheet also showed strained
liquidity with $13,624,944 in total current assets available to
pay $22,329,903 in total current liabilities coming due within the
next 12 months.
Full-text copies of the Company's financial statements for the
first quarter ended March 31, 2006, are available for free
at http://ResearchArchives.com/t/s?92d
155 East Tropicana, LLC, owns the Hotel San Remo Casino and Resort
in Las Vegas, Nevada, which it has re-branded as Hooters Casino
Hotel. Hooters celebrated its grand opening on Feb. 2, 2006.
The property is located one-half block from the intersection of
Tropicana Avenue and Las Vegas Boulevard, a major intersection on
the Las Vegas Strip. The Hotel San Remo currently features
711 hotel rooms and an approximately 24,000 square-foot casino.
* * *
As reported in the Troubled Company Reporter on Dec. 29, 2005,
Standard & Poor's Ratings Services revised its outlook on 155 East
Tropicana LLC to positive from stable and affirmed its 'B-'
corporate credit rating.
ACCO BRANDS: Moody's Holds Corporate Family Rating at Ba3
---------------------------------------------------------
Moody's Investors Service confirmed ACCO Brands Corporation's Ba3
corporate family rating and other ratings but assigned a negative
ratings outlook. Although ACCO's operating performance and credit
metrics are weaker than anticipated when Moody's assigned the Ba3
corporate family rating, the confirmation recognizes that the
company has reduced debt more than originally expected and that it
may succeed in improving its credit metrics to an acceptable level
in a reasonable period of time.
Nonetheless, the rating outlook is negative reflecting the risk
that the company's near-term operating performance could be
pressured by rising input and distribution costs, and greater than
anticipated integration spending. This rating action completes
the review for possible downgrade that was initiated on February
17, 2006.
The Ba3 rating is primarily driven by business risks that are
largely consistent with a Ba ratings profile. Key business risks
include a retail customer base that is perpetuating the market
share growth of lower-margin private label and directly-sourced
goods, integration risk as the company embarks on a complicated
and large-scale cost reduction plan, and the potential for more
protracted realization of cost savings due to continued cost
pressures.
The rating is also driven by ACCO's qualitative profile with
credit metrics largely consistent with other Ba and B rated
companies. Rising raw material or distribution costs and
unfavorable legacy GBC customer contracts have had a negative
influence on the company's near-term operating performance.
Additionally, higher capital spending and restructuring expenses
will pressure cash flows during 2006.
The ratings are supported by ACCO's good market positions, a
relatively diverse customer base, and the longer-term potential
cash flow and synergy benefits associated with its cost reduction
plan.
To the extent that cost pressures, integration issues, or
challenging industry conditions results in ACCO's debt to EBITDA
exceeding 4.5 times for 2006 or if free cash flow falls to
breakeven or negative levels over the same period, the ratings
could be lowered.
Moody's could also downgrade ACCO's ratings if restructuring
expenses exceed anticipated levels or if it appears likely that
EBITDA for 2006 will decline from prior year levels. The outlook
could be revised to stable if ACCO successfully executes its
restructuring plan and addresses cost pressures such that it
improves profitability levels, reduces debt-to-EBITDA closer to
4.0 times, and improves its free cash flow to debt metric to
around 5%, while maintaining good levels of liquidity.
ACCO Brands Corporation, with principal executive offices in
Lincolnshire, IL, is a leading supplier of branded office
products, including Swingline, Kensington, Quartet, GBC, and Day-
Timer brands. The company's products are marketed in over 100
countries to retailers, wholesalers, and commercial end-users. Pro
forma sales were approximately $1.9 billion for 2005.
ADELPHIA COMMS: Judge Morris to Monitor Creditor Disputes
---------------------------------------------------------
The Honorable Robert E. Gerber of the U.S. Bankruptcy Court for
the Southern District of New York appointed U.S. Bankruptcy Judge
Cecelia Morris of the Poughkeepsie, New York, court to monitor
creditor disputes over recovery amounts in the chapter 11 cases of
Adelphia Communications Corporation and its debtor-affiliates,
Bloomberg News reports.
Judge Gerber wants to ensure that the ACOM Debtors complete their
sale to Time Warner Inc., and Comcast Corp.
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. PricewaterhouseCoopers serves as the Debtors'
financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and
Klee, Tuchin, Bogdanoff & Stern LLP represent the Official
Committee of Unsecured Creditors. (Adelphia Bankruptcy News,
Issue Nos. 129 & 130; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
ADELPHIA COMMS: Court Allows Interest Payment to Unsec. Creditors
-----------------------------------------------------------------
Adelphia Communications Corporation and its debtor-affiliates
relate that a number of parties-in-interest have filed
confirmation objections and motions relating to the appropriate
rate of interest, if any, that should accrue on allowed unsecured
claims under their Fourth Amended Joint Plan of Reorganization.
The holders of the Term Note issued by Ft. Myers Acquisition
Limited Partnership in the outstanding principal amount of
$108,000,000 as of the Petition Date and secured by an interest
in Olympus Communications, L.P., tell Judge Gerber that although
classified as a secured claim, the FPL Note Claims may now be
treated as an unsecured claim considering that the ACOM Debtors'
Modified Fourth Amended Joint Plan of Reorganization creates
uncertainty about how the Ft. Myers Noteholders' claim will be
treated.
The Ft. Myers Noteholders ask the U.S. Bankruptcy Court for the
Southern District of New York to clarify that any relief granted
with respect to the unsecured creditors' entitlement to pendency
interest will have no evidentiary value or preclusive effect with
respect to the Ft. Myers Noteholders' entitlement, as secured
creditors, to postpetition interest, fees and expenses under
Section 506(b) of the Bankruptcy Code or otherwise.
To the extent that the Ft. Myers Noteholders' claim is treated as
an unsecured claim, the Ft. Myers Noteholders join in the
arguments made by certain unsecured creditors regarding the
entitlement to and rate of postpetition interest on unsecured
claims.
The Ad Hoc Committee of ACC Senior Noteholders asserts that no
postpetition interest is payable because, among others:
a. the payment of postpetition interest to some but not all
unsecured creditors would be unfair and inequitable;
b. rejection of the Plan does not entitle an unsecured
creditor to postpetition interest at the contract rate;
c. there is no basis for the payment of contract, default or
compound interest; and
d. the "settlement" with the unsecured claims of "trade"
creditors is inappropriate.
The Official Committee of Equity Security Holders supports all of
the ACC Committee's arguments.
The Equity Committee emphasizes that:
a. the ACOM Debtors do not have sufficient assets to pay all
creditors the full principal amount of their allowed claims
on the Effective Date, thus it is neither fair nor
equitable to pay postpetition interest to any unsecured
creditors; and
b. if the Court finds that unsecured creditors are entitled to
postpetition interest, that interest should only be paid at
the federal judgment rate, which is the "legal rate."
On the other hand, the Ad Hoc Committee of Arahova Noteholders
asserts that:
a. the unsecured creditors of solvent bankruptcy estates are
entitled to postpetition interest on their claims because:
-- the solvency exception is applicable to the ACOM
Debtors' Case; and
-- equitable considerations do not weigh against the
payment of postpetition interest;
b. the Arahova Noteholders are entitled to postpetition
interest at the rate specified in their governing
indentures because:
-- interest on the Arahova Notes continues to accrue
postpetition;
-- equity has no basis to object to the contract interest
payment;
-- the Second Circuit has not adopted the federal judgment
rate approach; and
-- payment of interest to Arahova Noteholders at the
contract rate is required to satisfy the fair and
equitable test pursuant to Section 1129(b)(2)(B) of the
Bankruptcy Code;
c. the Arahova Noteholders are entitled to compound interest
pursuant to their governing indentures; and
d. the Plan must provide for postpetition interest accruing
from the Petition Date through the Effective Date.
U.S. Bank National Association, as indenture trustee, supports
the Arahova Committee's arguments.
ACOM Debtors' Statement
According to Paul V. Shalhoub, Esq., at Willkie Farr & Gallagher,
in New York, the Modified Plan gives effect to the state law
expectations and entitlements of structurally senior creditors,
with due regard to equitable considerations and the circumstances
through the limitation of those rights to:
-- contractual simple interest for holders of Notes Claim; and
-- 8% simple interest for holders of Trade Claims and other
unsecured claims.
The ACOM Debtors believe that the Modified Plan strikes the
appropriate balance between those creditors arguing for full
compound or default rate interest and those arguing that no
interest should accrue at all.
Mr. Shalhoub asserts that the ACOM Debtors' approach on the
interest calculations set in the Modified Plan is fair because it
does not ignore, as some of the objections do, the structural
seniority of creditors of solvent subsidiary Debtors that have
not been substantially consolidated with structurally junior
Debtors.
$1 Billion in Interest Allowed
The ACOM Debtors obtained Judge Gerber's approval to pay
$1,230,000,000 in interest to unsecured creditors under their
Modified Fourth Amended Plan of Reorganization, Bloomberg News
reports.
Judge Gerber said that the interest payments were fair and
appropriate for creditors who have waited to get paid since ACOM
filed for bankruptcy in June 2002, according to Tom Becker at
Bloomberg.
"I think it would be an abuse of my discretion to deny the
payment of pendency interest here," Mr. Becker quotes Judge
Gerber as saying at a hearing last week.
Bloomberg notes that under the terms of the plan, ACOM will pay
unsecured creditors interest at a non-default rate ranging from
6% to 11.875%, depending on the nature of the claim. Judge
Gerber also authorized ACOM to pay its trade creditors 8%
interest on their claims.
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. PricewaterhouseCoopers serves as the Debtors'
financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and
Klee, Tuchin, Bogdanoff & Stern LLP represent the Official
Committee of Unsecured Creditors. (Adelphia Bankruptcy News,
Issue No. 130; Bankruptcy Creditors' Service, Inc., 215/945-7000)
ADELPHIA COMMS: Committee Wants Bank Lenders' Claims Estimated
--------------------------------------------------------------
The Official Committee of Unsecured Creditors of Adelphia
Communications Corp. and its debtor-affiliates, asks the U.S.
Bankruptcy Court for the Southern District of New York to estimate
certain claims of the bank lenders under six prepetition credit
facilities in connection with the ACOM Debtors' Modified Amended
Joint Plan of Reorganization.
The Creditors Committee asks the Court estimate the Banks' claims
for indemnification for any liability or expenses relating to the
Prepetition Credit Facilities at an amount not to exceed the more
than $50,000,000 that the Banks already have received to defend
the litigation against them -- which is one-half of the almost
$100,000,000 they have received to date from the ACOM Debtors in
payment of fees and expenses -- resulting in a reserve of $0.
The Banks claim entitlement, under the terms of the Prepetition
Credit Facilities:
-- to repayment of approximately $6,800,000,000 in principal
which is in addition to the more than $1,600,000,000 in
interest that they have received postpetition; and
-- to indemnification for any expense, cost or liability
relating to any investigation or litigation relating to
those facilities, to the extent not caused by the Banks'
gross negligence or willful misconduct and already have
received almost $100,000,000 for those indemnification
claims.
David Friedman, Esq., at Kasowitz, Benson, Torres & Friedman LLP,
asserts that there is no need for the ACOM Debtors to reserve any
amounts for the Banks' ultimate liability in the litigation
relating to the Prepetition Credit Facilities because the ACOM
Debtors will have no indemnification obligation with respect to
that liability determination. The only appropriate estimation
for the liability portion of the Indemnification Claims is $0,
Mr. Friedman says.
With respect to the Banks' Indemnification Claims for fees and
expenses, the ACOM Debtors also are only obligated to indemnify
the Banks for those fees and expenses that are not caused by the
Banks' gross negligence or willful misconduct, Mr. Friedman
notes. Thus, he concludes, the ACOM Debtors will only be
obligated to make any indemnification payments to the Banks if
they are successful in defeating the claims asserted against
them. "[G]iven the misconduct of the Banks, it is unlikely that
the Banks will be able to do so, and thus it is unlikely that the
[ACOM] Debtors will ever be obligated to indemnify the Banks of
these fees and expenses."
According to Mr. Friedman, even assuming arguendo that the Banks
ultimately will be entitled to indemnification for their fees and
expenses in connection with the Bank and Securities Litigation,
the $50,000,000 that they received to date to defend the
litigation, in addition to another almost $50,000,000 spent in
connection with the bankruptcy proceedings, is more than adequate
to pay the Banks' reasonable expenses to litigate the actions
pending against them:
-- the Adversary Proceeding against the Banks and others filed
by the Creditors Committee and Equity Committee on behalf
of the ACOM Debtors; and
-- the multi-district litigation commenced by ACOM's
shareholders and bondholders against the Banks and others.
Objection to Bank Litigation Defendants' Claims
In a separate pleading, the Creditors Committee reiterates that
it objects to the allowance of the Banks' Indemnification Claims
on the basis of the allegations and causes of action set forth in
the Bank Litigation. The Creditors Committee wants to avoid any
possible doubt as to whether there is a pending objection to the
Banks' Indemnification Claims and that by reason of that
objection, the Indemnification Claims are not allowed.
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. PricewaterhouseCoopers serves as the Debtors'
financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and
Klee, Tuchin, Bogdanoff & Stern LLP represent the Official
Committee of Unsecured Creditors. (Adelphia Bankruptcy News,
Issue No. 131; Bankruptcy Creditors' Service, Inc., 215/945-7000)
AGILENT TECH: Earns $115 Million for Six Months Ended April 30
--------------------------------------------------------------
Agilent Technologies Inc. earned $115 million of net income on
$1.431 billion of net revenues for the six months ended
April 30, 2006.
At April 30, 2006, the Company's balance sheet showed
$8.057 billion in total assets, $3.983 billion in total
liabilities, and $4.074 billion in total stockholders' equity.
"Agilent continued to deliver on its operating and strategic
commitments during the second quarter of 2006," Bill Sullivan,
Agilent president and chief executive officer, said.
"Both revenues and adjusted earnings per share were at the high
end of our expectations. Preparations for a spinoff of STS are on
schedule.
"As of mid-year, we have successfully reduced Agilent's global
infrastructure to a level commensurate with a pure-play
measurement company.
"Despite the separation and restructuring costs associated with
these actions, Agilent generated approximately $300 million in
cash from operating activities during the second quarter."
Sullivan noted that gross margins remained at the highest level in
five years, that inventories were below 100 Days On Hand for the
first time, and that the company achieved a 24% Return on Invested
Capital during the quarter.
"At this point," he said, "the fundamental strategic opportunity
for this company is to leverage the robust operating model we've
built through higher sustainable growth."
Agilent Technologies Inc. (NYSE: A) -- http://www.agilent.com/--
is the world's premier measurement company and a technology leader
in communications, electronics, life sciences and chemical
analysis. The company's 20,000 employees serve customers in more
than 110 countries. Agilent had net revenue of $5.1 billion in
fiscal 2005.
* * *
Moody's assigned Ba2 credit ratings to Agilent Technologies on
May 22, 2003 with a stable outlook. On April 13, 2005, Standard &
Poor's assigned BB+ credit ratings, with a positive outlook, to
the Company.
AIMS WORLDWIDE: Cordovano & Honeck Raises Going Concern Doubt
-------------------------------------------------------------
Cordovano & Honeck LLP in Denver, Colorado, raised substantial
doubt about AIMS Worldwide, Inc.'s ability to continue as a going
concern after auditing the Company's consolidated financial
statements for the year ended Dec. 31, 2005. The auditor pointed
to the Company's operating losses and working capital deficiency.
The Company reported a $1,926,728 net loss on $1,161,440 of
revenues for the year ended Dec. 31, 2005.
At Dec. 31, 2005, the Company's balance sheet showed $2,883,893 in
total assets and $4,455,569 in total liabilities, resulting in a
$1,571,676 of stockholders' deficit.
The Company's Dec. 31 balance sheet also showed strained liquidity
with $1,066,172 in total current assets available to pay
$4,139,569 in total current liabilities coming due within the next
12 months.
A full-text copy of the Company's 2005 Annual Report is available
for free at http://researcharchives.com/t/s?947
AIMS Worldwide, Inc. -- http://www.aimsworldwide.com/--is a
marketing communications consultancy providing organizations with
its AIMSolutions branded focused marketing solutions.
ALLIED HOLDINGS: Union Wants to Recover Alleged Illegal Pay Cuts
----------------------------------------------------------------
The International Brotherhood of Teamsters are forcing Allied
Holdings to return money to workers that it retroactively and
illegally cut in violation of an order entered by the U.S.
Bankruptcy Court for the Northern District of Georgia.
The Teamsters Union discovered that the illegal cuts were made to
employees' pay for time worked at least as early as April 24 --
well before the court's May 2 order that authorized the wage
decreases.
Fred Zuckerman, co-chair of the Teamsters National Automobile
Transporters Industry Negotiating Committee, immediately issued a
notice to the Company across the bargaining table on May 11
declaring that the Union would strike unless the illegal cuts were
corrected and the members repaid.
"We will continue to monitor the bankruptcy proceedings and fight
for our members' interests," said Mr. Zuckerman, who also serves
as the union's Carhaul Division Director.
The Company admitted its illegal action and reportedly posted
notices in terminals in some parts of the country. Teamsters
whose pay was shorted for periods before the May 2 court order
should contact the company and submit pay claims for the
shortages.
The Teamsters Union will continue to keep a close watch on the
Company and will fight all illegal actions.
Founded in 1903, the Teamsters Union represents more than 1.4
million hardworking men and women in the United States and Canada.
About Allied Holdings
Headquartered in Decatur, Georgia, Allied Holdings, Inc. --
http://www.alliedholdings.com/-- and its affiliates provide
short-haul services for original equipment manufacturers and
provide logistical services. The Company and 22 of its affiliates
filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga.
Case Nos. 05-12515 through 05-12537). Jeffrey W. Kelley, Esq., at
Troutman Sanders, LLP, represents the Debtors in their
restructuring efforts. Henry S. Miller at Miller Buckfire & Co.,
LLC, serves as the Debtors' financial advisor. Anthony J. Smits,
Esq., at Bingham McCutchen LLP, provides the Official Committee of
Unsecured Creditors with legal advice and Russell A. Belinsky at
Chanin Capital Partners, LLC, provides financial advisory services
to the Committee. When the Debtors filed for protection from
their creditors, they estimated more than $100 million in assets
and debts.
ALLSERVE SYSTEMS: Trustee Hires Xroads as Special Accountant
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey gave
Charles A. Stanziale, Jr., Esq., the Chapter 7 Trustee of Allserve
Systems Corp., permission to retain XRoads Solutions Group, LLC,
as his special forensic accountant.
XRoads Solutions is expected to:
a) provide an assessment and preliminary assessment report of
the Debtor's evidence available concerning missing leased
equipment and potential fraud claims, which assessment
services will include:
i) meeting with the Debtor's reciever to gather
information on findings with regard to UK Corporate
structure and listing of suspicious companies,
ii) construction of a chart of all corporate and
affiliated entities,
iii) investigation of the legitimacy of corporate entities
and affiliated parties,
iv) review of original loan or financing documentation, and
v) tracing of funds associated with major financing
transactions
b) perform a future phase of forensic investigative work at the
direction of the Trustee to enhance the recovery of the
estate assets.
Holly Felder Etlin, a principal at XRoads Solutions, discloses
that her Firm will charge $75,000 for its assessment services.
The Firm's professionals bill:
Professional Hourly Rate
------------ -----------
Principal $450 - $595
Managing Director $400 - $450
Director, Senior Consultant $275 - $375
& Consultant
Associate & Paraprofessional $150 - $210
Administrator $125
Ms. Etlin assures the Court that the Firm does not hold or
represent any interest adverse to the estate and is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
Headquartered in North Brunswick, New Jersey, Allserve Systems
Corp. is an outsourcing company for the IT industry. The Debtor
filed for chapter 11 protection on November 18, 2005 (Bankr. D.
N.J. Case No. 05-60401). Barry W. Frost, Esq., at Teich Groh
represents the Debtor. The Court converted the Debtor's chapter
11 case to Chapter 7 liquidation proceeding. Charles A.
Stanziale, Jr., Esq., at McElroy, Deutsch, Mulvaney & Carpenter,
served as the chapter 7 Trustee. When the Debtor filed for
protection from its creditors, it estimated assets between 10
million to $50 million and debts between $50 million to $100
million.
ARAMARK CORP: Expands by Buying Food Service Company in Beijing
---------------------------------------------------------------
ARAMARK Corporation expanded its presence in China with the
completion of its acquisition of Golden Collar, a Beijing-based
food service company.
Golden Collar, with 1,600 employees, provides food service to more
than 60 clients in four major Chinese cities. ARAMARK first
collaborated with Golden Collar in the fall of 2005 to provide
food service at the Chinese FIA Formula One World Championship
Round at the Shanghai International Circuit, an event attended by
over 200,000 fans.
Together with ARAMARK's facility services company, Bright China
Service Industries, acquired in 2004, the Golden Collar food
service operation brings ARAMARK's total employee count in China
to more than 10,000.
"The acquisition of Golden Collar strengthens our professional
service portfolio in Beijing and provides a platform for expansion
to other Chinese cities. We are now in a better position to
service our customers and pursue new business opportunities within
the healthcare, business and sports and entertainment sectors,"
Ravi Saligram, President of ARAMARK International, said.
About ARAMARK International
Operating abroad since 1967, ARAMARK's International sector has
70,000 employees serving clients in 19 countries outside of the
United States. ARAMARK International provides food, refreshment,
facility and other support services for thousands of clients,
including businesses, schools and universities, health care
institutions, senior living centers and sports and entertainment
facilities.
About ARAMARK Corporation
Headquartered in Philadelphia, Pennsylvania, ARAMARK Corporation
(NYSE:RMK) -- http://www.aramark.com/-- is a leader in
professional services, providing award-winning food services,
facilities management, and uniform and career apparel to health
care institutions, universities and school districts, stadiums and
arenas, and businesses around the world. In FORTUNE magazine's
2006 list of "America's Most Admired Companies," ARAMARK was
ranked number one in its industry, consistently ranking since 1998
as one of the top three most admired companies in its industry as
evaluated by peers and industry analysts. The company was also
ranked first in its industry in the 2006 FORTUNE 500 survey.
ARAMARK has approximately 240,000 employees serving clients in 20
countries.
* * *
As reported in the Troubled Company Reporter on May 3, 2006,
Moody's Investors Service placed the credit ratings of ARAMARK
Corporation and its subsidiary, ARAMARK Services, Inc., on review
for possible downgrade following Aramark's announcement that it
received a proposal from a group of investors led by Joseph
Neubauer, Chairman and Chief Executive Officer, to acquire all of
the outstanding shares of common stock for $32 per share in cash.
These ratings were placed on review for potential downgrade: Baa3
rating on $300 million senior unsecured notes due 2006, Baa3
rating on $125 million senior unsecured notes due 2006, Baa3
rating on $300 million senior unsecured notes due 2007, Baa3
rating on $31 million senior unsecured notes due 2007, Baa3 rating
on $300 million senior unsecured notes due 2008, Baa3 rating on
$250 million senior unsecured notes due 2012, (P) Baa3 on senior
unsecured shelf registration, and (P) Ba1 on senior subordinated
shelf registration.
AZTAR CORP: Board Says Columbia Entertainment's Offer is Superior
-----------------------------------------------------------------
The Board of Directors of Aztar Corporation determined that a
revised definitive offer received on May 15, 2006, from Wimar
Tahoe Corporation, dba Columbia Entertainment, the gaming
affiliate of Columbia Sussex Corporation, to acquire Aztar is a
superior proposal when compared to the terms of Aztar's current
merger agreement, as amended, with Pinnacle Entertainment, Inc.
Terms of the Revised Offer
Under the terms of its revised definitive offer, Columbia
Entertainment would acquire Aztar in a merger transaction in which
the holders of Aztar common stock would receive $54 per share in
cash and the holders of Aztar's Series B preferred stock would
receive $571.13 per share in cash. The revised definitive offer
included a signed merger agreement. The proposed merger agreement
contemplates a substantial deposit, payable to Aztar in certain
circumstances (including failure to obtain regulatory approvals),
in the event that an executed merger agreement, if any, is
terminated. The proposed merger agreement also provides for an
increase in the purchase price at the rate of $0.00888 per share
per day beginning six months, and then to $0.01184 per share per
day beginning nine months, after the signing of the merger
agreement in the event all required regulatory approvals have not
been received by such dates. Columbia Entertainment also provided
a signed financing commitment letter.
Columbia Entertainment stated in its revised definitive offer that
the offer will remain open until 2:00 p.m., New York City time,
on Friday, May 19, 2006.
Terms of the Aztar-Pinnacle Agreement
Under the terms of Aztar's merger agreement with Pinnacle, Aztar
must wait three business days before it can terminate the merger
agreement with Pinnacle and enter into a merger agreement with
another party.
As reported in the Troubled Company Reporter on May 8, 2006, Aztar
and Pinnacle amended their merger agreement to increase the
purchase price for each share of Aztar common stock to $47.00 per
share in cash and $4.00 of Pinnacle common stock, subject to a
collar.
Aztar's Board is not making any recommendation at this time with
respect to the Columbia Entertainment offer, and there can be no
assurance that Aztar's Board will approve any such transaction or
that a transaction will result.
About Aztar Corporation
Headquartered in Phoenix, Arizona, Aztar Corporation (NYSE: AZR)
-- http://www.aztar.com/-- is a publicly traded company that
operates Tropicana Casino and Resort in Atlantic City, New Jersey,
Tropicana Resort and Casino in Las Vegas, Nevada, Ramada Express
Hotel and Casino in Laughlin, Nevada, Casino Aztar in
Caruthersville, Missouri, and Casino Aztar in Evansville, Indiana.
* * *
As reported in the Troubled Company Reporter on March 15, 2006,
Standard & Poor's Ratings Services' BB rating on Aztar Corp.
remained on CreditWatch with negative implications, where they
were placed on Feb. 16, 2006. The CreditWatch update followed the
announcement by Pinnacle that it signed a definitive merger
agreement to acquire the outstanding shares of Aztar.
BANYAN CORPORATION: Schwartz Levitsky Raises Going Concern Doubt
----------------------------------------------------------------
Schwartz Levitsky Feldman LLP, Chartered Accountants, raised
substantial doubt about Banyan Corporation's ability to continue
as a going concern after auditing the Company's consolidated
financial statements for the year ended Dec. 31, 2005. The
auditor pointed to the Company's recurring losses from operations,
negative working capital, and stockholders' deficit.
The Company reported a $4,645,817 net loss on $1,090,790 of
revenues for the year ended Dec. 31, 2005.
At Dec. 31, 2005, the Company's balance sheet showed $1,861,066 in
total assets and $2,562,579 in total liabilities, resulting in a
$701,513 in stockholders' deficit.
The Company's Dec. 31 balance sheet also showed strained liquidity
with $312,218 in total current assets available to pay $1,592,297
in total current liabilities coming due within the next 12 months.
A full-text copy of the Company's 2005 Annual Report is available
for free at http://ResearchArchives.com/t/s?931
Banyan Corporation is a holding company focused on investing in
and building a network of subsidiaries engaged in diagnostic
testing, the franchising of Chiropractic USA branded chiropractic
clinics, providing practice development training and assistance to
chiropractors, and offering franchise support and related services
to franchisees.
BEAR STEARNS: S&P Puts Class II-B-5 Certs' B Rating on CreditWatch
------------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on 38
classes of mortgage pass-through certificates from 10 series
issued by Bear Stearns ARM Trust. At the same time, the rating on
class II-B-5 from series 2004-8 is placed on CreditWatch with
negative implications. Additionally, ratings are affirmed on 460
other classes from various Bear Stearns ARM Trust transactions.
The raised ratings reflect:
-- Projected credit support percentages that are at least
1.62x the loss coverage levels associated with the higher
ratings;
-- Excellent pool performance and significant prepayments,
which have allowed credit enhancement percentages to
increase to levels that support the higher ratings; and
-- Cumulative losses that do not exceed 4 basis points, with
most transactions having low or no losses.
The CreditWatch negative placement on class II-B-5 from series
2004-8 is based on recent pool performance that may adversely
affect credit enhancement for the class. Specifically, the
transaction experienced a loss of approximately $336,000 in March
2006 that has compromised the credit support available to class
II-B-5. Standard & Poor's will continue to closely monitor this
transaction. Should delinquencies translate into further losses,
a downgrade can be expected. Conversely, if pool performance
improves, the rating will be affirmed and removed from
CreditWatch.
The rating affirmations are based on credit support percentages
that are adequate to maintain the current ratings on the
certificates. As of the March 2006 distribution date,
transactions issued between 2001 and 2004 with affirmed ratings
had severely delinquent loans (90-plus days, foreclosure, and
REO) ranging between 0.03% and 9.25%. Transactions issued in 2005
had serious delinquencies ranging between 0.00% and 0.32%. As with
the upgraded certificates, most of the transactions with affirmed
ratings have relatively low or no cumulative realized losses.
Credit support for all the transactions is provided by
subordination. The collateral consists primarily of 30-year
adjustable-rate mortgage loans secured by first liens on one- to
four-family residential properties. The mortgage loans have an
initial fixed-rate period of three, five, seven, or 10 years,
after which the interest rate will adjust monthly, semiannually,
or annually based on an index.
Ratings Raised
Bear Stearns ARM Trust
Mortgage pass-through certificates
Rating
------
Series Class To From
------ ----- -- -----
2000-2 B-2 AAA AA+
2000-2 B-3 AA+ A+
2002-2 B-1 AA+ AA
2002-2 B-2 AA- A
2002-2 B-3 A BBB
2002-5 B-2 AAA AA+
2002-5 B-3 AA AA-
2002-11 I-B-1 AAA AA+
2002-11 I-B-2 AA+ A+
2002-11 I-B-3 BBB+ BBB
2002-12 I-B-2 AA AA-
2002-12 I-B-3 A+ A-
2002-12 II-B-1 AAA AA+
2002-12 II-B-2 AA A+
2002-12 II-B-3 A- BBB+
2003-1 B-1 AAA AA+
2003-1 B-2 AA+ AA
2003-1 B-3 A- BBB+
2003-3 B-2 AA AA-
2003-3 B-3 A A-
2003-3 B-4 BBB- BB+
2003-3 B-5 B+ B
2003-4 B-1 AA+ AA
2003-4 B-2 A+ A
2003-4 B-3 BBB+ BBB
2003-5 I-B-1 AA+ AA
2003-5 I-B-2 AA- A
2003-5 I-B-3 BBB+ BBB
2003-5 II-B-1 AA+ AA
2003-5 II-B-2 A+ A
2003-5 II-B-3 BBB+ BBB
2003-5 II-B-4 BB+ BB
2003-6 I-B-1 AA+ AA
2003-6 I-B-2 A+ A
2003-6 II-B-1 AA+ AA
2003-6 II-B-2 A+ A
2003-6 II-B-3 BBB+ BBB
2003-6 II-B-4 BB+ BB
Rating Placed on Creditwatch Negative
Bear Stearns ARM Trust
Mortgage pass-through certificates
Rating
------
Series Class To From
------ ----- -- ----
2004-8 II-B-5 B/Watch Neg B
Ratings Affirmed
Bear Stearns ARM Trust
Mortgage pass-through certificates
Series Class Rating
------ ----- ------
2000-2 A-1, A-2, B-1 AAA
2001-4 I-A, II-A, B-1 AAA
2001-4 B-2 AA+
2001-4 B-3 A+
2002-1 I-A, II-A, III-A AAA
2002-1 B-1 AA
2002-1 B-2 A
2002-1 B-3 BBB
2002-2 I-A, II-A, III-A AAA
2002-5 I-A, II-A, III-A, IV-A1, IV-A2 AAA
2002-5 IV-A3, IV-A4, IV-A5, IV-X, V-A AAA
2002-5 VI-A, VII-A, B-1 AAA
2002-11 I-A-1, I-A-2, I-A-3, I-A-4, I-M-1 AAA
2002-11 I-B-4 BB
2002-11 I-B-5 B
2002-12 I-A-1, I-A-7, I-X-1, I-X-2, II-A-1 AAA
2002-12 II-A-2, II-X-1, II-A-3, I-B-1 AAA
2003-1 I-A-1, II-A-1, III-A-1, IV-A-1, V-A-1 AAA
2003-1 VI-A-1, VII-A-1, VII-A-X, VIII-A-1 AAA
2003-1 VIII-A-X, M AAA
2003-1 B-4 BB
2003-1 B-5 B
2003-2 A-5, X AAA
2003-3 I-A-1, I-X-A-1, I-A-2, II-A-1 AAA
2003-3 II-X-A-1, II-A-2, II-X-A-2, II-X-A-3 AAA
2003-3 II-A-3, II-A-4, II-A-X-4, III-A-1 AAA
2003-3 III-A-2, III-X-A-2, III-A-3 AAA
2003-3 III-X-A-3, IV-A-1, B-1 AAA
2003-4 I-A-1, I-X-A-1, II-A-1, II-X-A-1 AAA
2003-4 III-A-1, III-X-A-1 AAA
2003-4 B-4 BB
2003-4 B-5 B
2003-5 I-A-1, I-A-2, I-A-3, II-A-1, II-X AAA
2003-5 I-B-4 BB
2003-5 I-B-5 B
2003-5 II-B-5 B
2003-6 I-A-1, I-A-2, I-X-2, I-A-3, I-X-3 AAA
2003-6 II-A-1 AAA
2003-6 I-B-3 BBB
2003-6 I-B-4 BB
2003-6 I-B-5 B
2003-6 II-B-5 B
2003-7 I-A, I-X, II-A, III-A, IV-A, IV-AM AAA
2003-7 V-A, V-X, VI-A, VII-A, VIII-A, IX-A AAA
2003-7 B-1 AA
2003-7 B-2 A
2003-7 B-3 BBB
2003-7 B-4 BB
2003-7 B-5 B
2003-8 I-A-1, I-A-2, II-A-1, II-A-2, III-A AAA
2003-8 IV-A-1, IV-A-2, V-A AAA
2003-8 B-1 AA
2003-8 B-2 A
2003-8 B-3 BBB
2003-8 B-4 BB
2003-8 B-5 B
2003-9 I-A-1, I-X-1, I-A-2, I-X-2, I-A-3 AAA
2003-9 I-X-3, II-A-1, II-X-1, II-A-2 AAA
2003-9 II-X-2, II-A-3, II-X-3, III-A-1 AAA
2003-9 III-X-1, III-A-2, III-A-3, III-X-3 AAA
2003-9 IV-A-1, IV-X-1 AAA
2003-9 B-1 AA
2003-9 B-2 A
2003-9 B-3 BBB
2003-9 B-4 BB
2003-9 B-5 B
2004-1 I-1-A-1, I-1-A-2, I-1-A-3, I-1-X AAA
2004-1 I-2-A-1, I-2-A-2, I-2-A-3, I-2-A-4A AAA
2004-1 I-2-A-4M, I-2-A-5, I-2-X, I-3-A-1 AAA
2004-1 I-3-A-2, I-3-A-3, I-3-X, I-4-A-1 AAA
2004-1 I-4-A-2, I-4-X, I-5-A-1, I-5-A-2 AAA
2004-1 I-5-A-3, I-5-X, I-6-A-1, I-6-X AAA
2004-1 I-7-A-1, I-7-X, II-1-A-1, II-1-X AAA
2004-1 II-2-A-1, II-3-A-1 AAA
2004-1 I-B-1, II-B-1 AA
2004-1 I-B-2, II-B-2 A
2004-1 I-B-3, II-B-3 BBB
2004-1 I-B-4, II-B-4 BB
2004-1 I-B-5, II-B-5 B
2004-2 I-1-A, I-2-A-1, I-2-A-2, I-2-A-3 AAA
2004-2 I-2-X, I-3-A, I-4-A, I-4-A-M, II-1-A AAA
2004-2 II-1-X, II-2-A, II-2-X, II-3-A, II-4-A AAA
2004-2 I-B-1, II-B-1 AA
2004-2 I-B-2, II-B-2 A
2004-2 I-B-3, II-B-3 BBB
2004-2 I-B-4, II-B-4 BB
2004-2 I-B-5, II-B-5 B
2004-3 1-A-1, I-A-2, I-A-3, II-A, III-A, IV-A AAA
2004-3 B-1 AA
2004-3 B-2 A
2004-3 B-3 BBB
2004-3 B-4 BB
2004-3 B-5 B
2004-4 A-1-A, A-1-B, A-2, A-3, A-4, A-5 AAA
2004-4 A-6, A-7, X-1 AAA
2004-4 B-1 AA
2004-4 B-2 A
2004-4 B-3 BBB
2004-4 B-4 BB
2004-4 B-5 B
2004-5 I-A, II-A, III-A, IV-A AAA
2004-5 B-1 AA
2004-5 B-2 A
2004-5 B-3 BBB
2004-5 B-4 BB
2004-5 B-5 B
2004-6 I-A-1, I-A-2, II-A-1, II-A-2, III-A AAA
2004-6 B-1 AA
2004-6 B-2 A
2004-6 B-3 BBB
2004-6 B-4 BB
2004-6 B-5 B
2004-7 I-A-1, I-A-2, II-A-1, II-X, III-A AAA
2004-7 IV-A AAA
2004-7 B-1 AA
2004-7 B-2 A
2004-7 B-3 BBB
2004-7 B-4 BB
2004-7 B-5 B
2004-8 I-1-A-1, I-1-A-2, I-1-A-3 AAA
2004-8 I-2-A-1, I-3-A-1, I-4-A-1, II-A-1 AAA
2004-8 I-B-1, II-B-1 AA
2004-8 I-B-2, II-B-2 A
2004-8 I-B-3, II-B-3 BBB
2004-8 I-B-4, II-B-4 BB
2004-8 I-B-5 B
2004-9 I-1-A-1, I-1-X-1, I-2-A-1, I-2-A-2 AAA
2004-9 I-2-A-3, I-2-X-1, I-3-A-1, II-1-A-1 AAA
2004-9 II-2-A-1, II-3-A-1, II-A-4-1 AA
2004-9 I-B-1, II-B-1 AA
2004-9 I-B-2, II-B-2 A
2004-9 I-B-3, II-B-3 BBB
2004-9 I-B-4, II-B-4 BB
2004-9 I-B-5, II-B-5 B
2004-10 I-1-A-1, I-2-A-1, I-2-X-1, I-2-A-2 AAA
2004-10 I-2-X-2, I-2-A-3, I-2-X-3, I-2-A-4 AAA
2004-10 I-2-A-5, I-2-A-6, I-3-A-1, I-4-A-1 AAA
2004-10 I-5-A-1, II-1-A-1, II-2-A-1, II-3-A-1 AAA
2004-10 III-1-A-1, III-2-A-1 AAA
2004-10 I-M-1, I-B-1 AA+
2004-10 I-B-2, II-B-1, III-B-1 AA
2004-10 I-B-3 A+
2004-10 II-B-2, III-B-2 A
2004-10 I-B-4, II-B-3, III-B-3 BBB
2004-10 I-B-5, II-B-4, III-B-4 BB
2004-10 I-B-6, II-B-5, III-B-5 B
2004-11 I-A-1, II-A-1, III-A-1, IV-A-1 AAA
2004-11 M-1 AA+
2004-11 B-1 AA
2004-11 B-2 A
2004-11 B-3 BBB
2004-11 B-4 BB
2004-11 B-5 B
2004-12 I-A-1, I-X-1, II-A-1, II-X-1, II-A-2 AAA
2004-12 II-X-2, II-A-3, II-X-3, III-A-1 AAA
2004-12 IV-A-1 AAA
2004-12 M-1, B-1 AA+
2004-12 B-2 AA
2004-12 B-3 A
2004-12 B-4 BBB
2004-12 B-5 BB
2004-12 B-6 B
2005-1 I-A-1, II-A-1, II-X-1, II-A-2 AAA
2005-1 III-A-1, IV-A-1 AAA
2005-1 B-1, B-2 AA+
2005-1 B-3 AA
2005-1 B-4 A
2005-1 B-5 BBB
2005-1 B-6 BB
2005-1 B-7 B
2005-2 A-1, A-2, A-3, A-4 AAA
2005-3 I-A-1, II-A-1, II-A-2, II-X AAA
2005-3 B-1, B-2 AA+
2005-3 B-3 AA
2005-3 B-4 A
2005-3 B-5 BBB
2005-3 B-6 BB
2005-3 B-7 B
2005-4 I-A-1, II-A-1, II-A-2, II-A-3, II-X-1 AAA
2005-4 III-A-1, IV-A-1 AAA
2005-4 B-1, B-2 AA+
2005-4 B-3, B-4 AA
2005-4 B-5 AA-
2005-4 B-6 A+
2005-4 B-7 A
2005-4 B-8 A-
2005-4 B-9 BBB
2005-4 B-10 BB
2005-4 B-11 B
2005-5 A-1, A-2 AAA
2005-5 M AA+
2005-6 I-A-1, II-A-1, III-A-1, IV-A-1 AAA
2005-6 V-A-1 AAA
2005-6 B-1 AA
2005-6 B-2 A
2005-6 B-3 BBB
2005-6 B-4 BB
2005-6 B-5 B
2005-7 I-A-1, I-A-2 II-A-1, II-A-2 AAA
2005-7 X, B-1 AA
2005-7 B-2 A
2005-7 B-3 BBB
2005-7 B-4 BB
2005-7 B-5 B
2005-8 A-1, A-2, A-3, A-4, X AAA
2005-9 A-1, A-2 AAA
2005-9 X AA+
2005-9 B-1 AA
2005-9 B-2 A
2005-9 B-3 BBB
2005-9 B-4 BB
2005-9 B-5 B
BPK RESOURCES: Auditor Raises Going Concern Doubt
-------------------------------------------------
L J Soldinger Associates, LLC, in Deer Park, Illinois, raised
substantial doubt about BPK Resources, Inc.'s ability to continue
as a going concern after auditing the Company's consolidated
financial statements for the year ended Dec. 31, 2005. The
auditor pointed to the Company's net losses since inception.
The Company reported a $436,410 net loss on $12,298 of revenues
for the year ended Dec. 31, 2005.
At Dec. 31, 2005, the Company's balance sheet showed $1,168,913 in
total current assets and $2,008,531 in total current liabilities,
resulting in a $839,618 stockholders' deficit.
A full-text copy of the Company's 2005 Annual Report is available
for free at http://ResearchArchives.com/t/s?933
Based in Totowa, New Jersey, BPK Resources, Inc., used to acquire,
explore and develop natural gas and oil properties. Over the
past 18 eighteen months, the Company divested substantially all of
its oil and gas interests. During the fourth quarter of 2005, the
sole well in which the Company retained an interest had been
completely depleted. The Company recorded an impairment charge of
$3,528 to fully impair the remaining balance of the well.
BROOKSTONE CO: Moody's Holds B3 Rating on $190 MM Sr. Sec. Notes
----------------------------------------------------------------
Moody's Investors Service affirmed the long term ratings and
speculative grade liquidity rating of Brookstone Company, Inc.,
but changed the outlook to negative from stable. The change in
outlook reflects the weakening in the company's credit metrics
versus Moody's expectations as a result of continued poor
operating performance as evidenced by the sizable negative
comparable store sales.
Comparable store sales were negative 14.7% for the first quarter
ended April 1, 2006 following a negative 7.6% for the fourth
quarter ended Dec. 31, 2005. However, the company has been able
to maintain adequate liquidity as a result of expense cuts,
working capital cash savings, and a reduction in planned capital
expenditures.
These ratings are affirmed:
* Corporate family rating of B3;
* $190 Million of senior secured second lien guaranteed notes
due 2012 of B3,
* Speculative Grade Liquidity Rating of SGL-3.
The outlook is negative. The ratings and negative outlook reflect
the company's very high leverage and weak coverage metrics that
are mitigated to some extent by its continued adequate liquidity
from on balance sheet cash of $38 million and a $100 million
covenant light asset based revolver. Although the company has not
disclosed its borrowing base availability, it did note that there
were no cash borrowings at April 1, 2006.
Ratings could be downgraded should liquidity deteriorate as a
result of any additional erosion in operating performance or the
company being unable to sustain its cash conservation efforts.
In addition, ratings could be downgraded should comparable store
sales prove to disappointing for either Father's Day or the key
Holiday season. Given the negative outlook, it is highly unlikely
that ratings would be upgraded at the present time. However, the
outlook could be stabilized should the company's operating
performance improve causing on a annualized basis, , EBIT/IE to be
sustained above 1.25x and Debt/EBITDA to fall below 7.25x.
Brookstone, headquartered in Merrimack, New Hampshire, is a
nationwide specialty retailer that operates approximately 303
stores, a catalogue, and website under the brand names Brookstone,
Hard-to-Find Tools, and Gardeners Eden. Revenues for the 11 month
period ended December 31, 2005 were approximately $441 million.
CALPINE CORP: Lenders Amend DIP Facility to Pay 9.625% Sr. Notes
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
gave Calpine Corporation final approval to obtain $2 billion
debtor-in-possession credit facility to fund operations during its
chapter 11 restructuring and to retire certain obligations at The
Geysers.
As reported in the Troubled Company Reporter on March 10, 2006,
the DIP facility will remain in place until the earlier of an
effective Plan of Reorganization or Dec. 20, 2007. The DIP
facility is secured by liens on all of Calpine's unencumbered
assets and junior liens on all of its encumbered assets.
DIP Facility Further Amended
Calpine Corp. and certain of its subsidiaries have entered into an
amendment to the Amended and Restated Revolving Credit, Term Loan
and Guarantee Agreement, dated as of Feb. 23, 2006, with, among
others, Credit Suisse Securities (USA) LLC and Deutsche Bank
Securities Inc., as joint syndication agents.
The Amendment authorizes Calpine to use borrowings under the DIP
Credit Agreement to repay a portion of the $646,100,000 remaining
outstanding principal amount of the company's 9.625% First
Priority Senior Secured Notes due 2014. Calpine wants to use
$412,000,000 of cash on deposit in a controlled account relating
to the July 2005 sale of the company's oil and gas reserves, with
the balance of the funds for the repayment of the First Priority
Notes to be borrowed under the DIP Credit Agreement.
In addition, the Amendment extended Calpine's deadline to provide
to lenders audited financial statements until May 15, 2006.
Deutsche Bank Trust Company Americas, as administrative agent, may
grant Calpine further extensions to deliver the audited financial
statements until May 31, 2006.
The Amendment also provides Calpine with an additional 15 days to
deliver certain unaudited quarterly financial information for the
first and second quarters of 2006 and certain unaudited monthly
financial information for the months of April, May and June 2006.
Charles B. Clark, Jr., Calpine senior vice president, controller
and chief accounting officer, relates that the Amendment also
requires Calpine to provide certain annual, quarterly and monthly
combined financial information for Geysers Power Company, LLC,
and Silverado Geothermal Resources, Inc. The Amendment also
extends the date by which the Calpine is to satisfy certain post-
closing covenants.
As partial consideration for the Amendment, Calpine agreed to pay
a fee to each Lender who executed and returned the Amendment
equal to 1/2 of 1% of the outstanding amount of the Lender's
commitment.
A full-text copy of the Company's debtor-in-possession credit
facility amendment is available at no charge at:
http://ResearchArchives.com/t/s?93d
Calpine Geysers Pledges Assets to DIP Loan
The Debtors recently became aware that Calpine Geysers, L.P.,
continues to exist and had not been dissolved or merged into
Debtor Anderson Springs Energy Company. The Debtors could not
confirm that Calpine Geysers maintained its existence as a
limited partnership under Delaware law until the end of April
2006. The Debtors did not file a Chapter 11 petition for Calpine
Geysers and cause it to enter into the DIP Credit Agreement as a
guarantor and grant security interests in its assets.
For the same reason, Anderson Springs did not pledge its limited
partnership interest in Calpine Geysers to the DIP Lenders when
Anderson Springs filed for Chapter 11.
Calpine Geysers filed for bankruptcy on May 2, 2006. The DIP
Credit Agreement requires that, subject to certain exceptions,
each Calpine entity that becomes a Debtor must enter into the DIP
Credit Agreement as a guarantor and grant security interests in
its assets to the DIP Lenders.
As a result, the DIP Lenders may attempt to assert that defaults
or events of default exist under the DIP Credit Agreement and
accelerate all outstanding obligations under the DIP Credit
Agreement, with potentially devastating consequences for all
Debtors.
In this regard, Calpine Geysers with Anderson Springs, sought and
obtained the Court's authority, on an interim basis, to:
a. enter into the DIP Credit Agreement as guarantor and
grant security interests in its assets in support of the
repayment obligations of Calpine and its subsidiaries;
b. grant adequate protection to the Debtors' prepetition
creditors as provided under a Second Amended Final Cash
Collateral Order.
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. 15; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
CALPINE CORP: U.S. Trustee Appoints 5-Member Equity Committee
-------------------------------------------------------------
Diana G. Adams, acting United States Trustee for Region 2,
appoints five entities, being among the largest equity security
holders of the Debtors who are willing to serve, on the Official
Committee of Equity Security Holders in the Debtors' cases:
1. Steelhead Partners, LLC
Attn: J.D. Kritser
PO Box 21749
Seattle, Washington 98111
Telephone (206) 689-2436
2. Paul Leikert
1535 SW 6th Ter
Boca Raton, Florida 33486
3. John Thomas Dolan, III
6500 Shenandoah Drive
Lincoln, Nebraska 68510-5159
4. Alan Ku
2470 Holly Oak
Danville, California 94506
5. Michael Willingham
9202 Meaux Dr.
Houston, Texas 77031
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. 15; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
CARMIKE CINEMAS: Delays Filing of Form 10-Q for First Quarter
-------------------------------------------------------------
Carmike Cinemas, Inc., will delay the filing of its Form 10-Q for
the quarter ended March 31, 2006.
In addition, the Company has not yet filed its Annual Report on
Form 10-K for the fiscal year ended Dec. 31, 2005. The Company
must complete and file the 2005 Form 10-K before it will be in a
position to complete and file the Form 10-Q. As a result, the
Company will be unable, without unreasonable effort or expense, to
finalize the Form 10-Q by the May 10, 2006 filing deadline.
The Company has announced in various previous filings, including
its Current Report on Form 8-K filed on May 4, 2006, that it and
its external accounting advisors are reviewing 35 capital leases
and approximately 40 operating leases to determine whether these
leases were properly accounted for at the date of inception or
subsequent modification. To date, the Company has substantially
completed its initial review of the 35 capital leases and
approximately 40 operating leases and is working to determine the
impact on its previously reported financial statements. The
Company is also evaluating the impact of this matter on its
internal control over financial reporting as of Dec. 31, 2005, as
well as its disclosure controls and procedures. As previously
disclosed, these lease accounting issues are highly technical and
the Company, with the assistance of its external accounting
advisors, is working to complete this process as soon as possible.
Management continues to believe that any potential changes due to
these lease accounting issues will not have a material impact on
the net cash flows of the business. However, due to the highly
technical nature of the lease accounting issues there can be no
assurance as to the ultimate accounting impact. As previously
disclosed, the resolution of these issues likely will require the
Company to restate financial statements for certain prior periods.
The Company continues to work diligently to complete its financial
statements, audit, and evaluation of internal control over
financial reporting for 2005 and file its 2005 Form 10-K promptly
upon completion. However, management cannot currently estimate
the exact filing date of the 2005 Form 10-K and the first quarter
Form 10-Q. The Company will file the Form 10-Q subsequent to the
filing of the 2005 Form 10-K.
Non-Compliance Notice from Nasdaq
As reported in the Troubled Company Reporter on April 11, 2006,
Carmike Cinemas received notice from Nasdaq that it was no longer
in compliance with Nasdaq Marketplace Rule 4310(c)(14), which
requires timely filing of reports with the Securities and Exchange
Commission. This could result in the delisting of Carmike's
securities by Nasdaq. Carmike plans to request a hearing from the
Nasdaq Listing Qualifications Panel on this matter to present its
position. Any action by Nasdaq will be stayed until the hearing
is completed and a decision is issued. Carmike's securities will
remain listed pending the result of this process. There can be no
assurance that Nasdaq will grant Carmike's request for continued
listing.
Headquartered in Columbus, Georgia, Carmike Cinemas, Inc. --
http://www.carmike.com/-- is a motion picture exhibitor in the
United States with 301 theatres and 2,475 screens in 37 states, as
of Dec. 31, 2005. Carmike's focus for its theatre locations is
small to mid-sized communities with populations of fewer than
100,000.
* * *
Standard & Poor's Ratings Services placed its ratings on Carmike
Cinemas including the 'B' corporate credit rating, on CreditWatch
with negative implications after the company announced it will not
be filing its SEC Form 10-K within the 15-day extension period.
Moody's Investors Service also changed the outlook for the company
to negative from positive and affirmed Carmike's B2 corporate
family rating, the B1 senior secured bank facility rating and the
Caa1 rating on Carmike's senior subordinated notes.
CENTRAL FREIGHT: McGladrey & Pullen Raises Going Concern Doubt
--------------------------------------------------------------
McGladrey & Pullen, LLP, in Dallas, Texas, raised substantial
doubt about Central Freight Lines, Inc.'s ability to continue as a
going concern after auditing the Company's consolidated financial
statements for the year ended Dec. 31, 2005. The auditor pointed
to the Company's recurring losses from operations and negative
working capital.
The Company reported a $39,483,000 net loss on $372,140,000 of
revenues for the year ended Dec. 31, 2005.
At Dec. 31, 2005, the Company's balance sheet showed $174,831,000
in total assets, $126,445,000 in total liabilities, and
$48,386,000 in stockholders' equity.
The Company's Dec. 31 balance sheet also showed strained liquidity
with $59,951,000 in total current assets available to pay
$64,970,000 in total current liabilities coming due within the
next 12 months.
A full-text copy of the Company's 2005 Annual Report is available
for free at http://ResearchArchives.com/t/s?930
Central Freight Lines, Inc. -- http://www.centralfreight.com/--
is a regional less-than-truckload trucking company that has
operations in the Southwest, Midwest, and Northwest regions of the
United States. The Company offers inter-regional service between
operating regions and maintain alliances with other similar
companies to complete transportation of shipments outside the
Company's operating territory.
CHICAGO HUDSON: Case Summary & 17 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Chicago Hudson, LLC
853 North Elston Avenue
Chicago, Illinois 60622
Tel: (312) 666-8887
Bankruptcy Case No.: 06-05596
Chapter 11 Petition Date: May 16, 2006
Court: Northern District of Illinois (Chicago)
Judge: Jack B. Schmetterer
Debtor's Counsel: Richard S. Lauter, Esq.
Levenfeld Pearlstein, LLC
2 North LaSalle, Suite 1300
Chicago, Illinois 60602
Tel: (312) 348-8380
Estimated Assets: $10 Million to $50 Million
Estimated Debts: $10 Million to $50 Million
Debtor's 17 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Rezmar Corporation Trade Debt $2,289,747
853 North Elston Avenue
Chicago, IL 60622
CP Kingsburg, LLC Trade Debt $468,000
225 West Hubbard Street
Chicago, IL 60610
Chicago Construction Services Trade Debt $176,478
853 North Elston Avenue
Chicago, IL 60622
DeStefano & Partners Trade Debt $53,671
Pappageorge Haymes Trade Debt $52,604
Emalfarb Swan & Bain Trade Debt $16,057
Power Construction Trade Debt $9,710
Gremley & Biedermann Trade Debt $1,250
Crosstown Electric Trade Dispute $1,218
SBC Trade Debt $784
Katz Randall Weinberg Trade Debt $565
Urban Services Trade Debt $295
Thomas Fleming Company Trade Debt $265
A Buzy Bee Board Up Trade Debt $124
Keyth Technologies, Inc. Trade Debt $95
Hansen Services, Inc. Trade Debt $10
Centrum Properties Trade Debt Unknown
CREST DARTMOUTH: S&P Holds BB+ Rating on $12.25 Mil. Class D Notes
------------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on the class
B-1, B-2, and C notes issued by Crest Dartmouth Street 2003-1
Ltd., a CDO of structured finance transaction backed primarily by
investment-grade CMBS and REIT debt obligations.
At the same time, the ratings on the class A and D notes and the
preference shares are affirmed due to the overcollateralization
available to support the notes.
The raised ratings reflect factors that have positively affected
the credit enhancement available to support the class B-1, B-2,
and C notes since the transaction closed in April 2003, primarily
improvements in the credit quality of the underlying collateral.
Ratings Raised
Crest Dartmouth Street 2003-1 Ltd.
Rating
Class To From Balance
----- -- ---- -------
B-1 A+ A $13,125,000
B-2 A+ A $21,000,000
C BBB+ BBB $14,875,000
Ratings Affirmed
Crest Dartmouth Street 2003-1 Ltd.
Class Rating Balance
----- ------ -------
A AAA $261,537,000
D BB+ $12,250,000
Preference shares BB+ $8,750,000
Transaction Information
Issuer: Crest Dartmouth Street 2003-1 Ltd.
Co-issuer: Crest Dartmouth Street 2003-1 Corp.
Underwriter: Wachovia Securities Inc.
Collateral manager: MFS Investment Management
Trustee: LaSalle Bank N.A.
Transaction type: CDO of structured finance
Industry/Asset Exposure*
REITs & REOCs (%) 57.61
CMBS diversified (conduit and CTL) (%) 37.84
CMBS (large loan, single-borrower, and single-property) (%) 4.55
* Based on the March 31, 2006, trustee report.
CTL - Credit tenant lease.
S&P RATED OC (ROC) Current(%)
------------------ ----------
Class A 110.23
Class B-1 104.26
Class B-2 104.26
Class C 101.95
Class D 101.53
OC - Overcollateralization.
DALE JARRETT: Auditor Raises Going Concern Doubt
------------------------------------------------
Stark Winter Schenkein & Co., LLP, in Denver, Colorado, raised
substantial doubt about Dale Jarrett Racing Adventure, Inc.'s
ability to continue as a going concern after auditing the
Company's consolidated financial statements for the year ended
Dec. 31, 2005. The auditor pointed to the Company's significant
losses from operations and working capital and stockholder
deficiencies.
The Company reported a $2,693,096 net loss on $1,785,356 of sales
for the year ended Dec. 31, 2005.
At Dec. 31, 2005, the Company's balance sheet showed $616,300 in
total assets and $1,448,976 in total liabilities, resulting in a
$832,676 stockholders' deficit.
The Company's Dec. 31 balance sheet also showed strained liquidity
with $440,273 in total current assets available to pay $1,439,449
in total current liabilities coming due within the next 12 months.
A full-text copy of the Company's 2005 Annual Report is available
for free at http://researcharchives.com/t/s?949
Dale Jarrett Racing Adventure, Inc. -- http://www.dalejarrett.com/
-- offers entertainment based oval driving schools and events.
These classes are conducted at various racetracks throughout the
country. The Corporation currently owns fifteen race cars. The
Corporation also offers a number of add-on sale items including
CDs from its Adventure Cam located in the car (four cameras and
complete GPS data), clothing, souvenirs and photography.
DANA CORP: Court Directs Trans-Fleet to Pay DTF Trucking $307,143
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
denied the request of Trans-Fleet Enterprises, Inc., a subsidiary
of International Management Services Company, to (x) extend its
deadline to object to Dana Corporation and its debtor-affiliates'
repudiating vendor notice against Trans-Fleet, and (y) defer the
hearing on the matter.
The Court directed Trans-Fleet to promptly pay $307,143 to DTF
Trucking, Inc.
The Court also directed DTF and Trans-Fleet to perform all of
their obligations pursuant to the terms of their Services
Agreement, pending termination of the agreement.
Judge Lifland further directed DTF to continue paying Trans-
Fleet's invoices under the Services Agreement to the extent the
invoices are for services provided by Trans-Fleet's employees
during the period March 3, 2006 through May 1, 2006, or for
medical expense costs incurred by the covered participants under
the Agreement or their dependents during the postpetition period.
Trans-Fleet's request refers to the Court's prior order directing
Trans-Fleet to show cause why it should not be held in violation
of Sections 362 and 365 of the Bankruptcy Code for willfully
threatening to withhold essential goods from the Debtors.
As reported in the Troubled Company Reporter on Apr. 5, 2006,
Trans-Fleet refused to perform its postpetition obligations under
an executory contract due to the Debtors' failure to pay Trans-
Fleet's prepetition claim.
In a separate order, the Court also directed Continental Teves to
show cause why it should not be held in violation of Sections 362
and 365 of the Bankruptcy Code for willfully threatening to
withhold essential goods from the Debtors under the contracts.
The Debtors have identified Continental Teves as a repudiating
vendor under various purchase orders and supply agreements.
About Dana Corporation
Headquartered in Toledo, Ohio, Dana Corporation --
http://www.dana.com/-- designs and manufactures products for
every major vehicle producer in the world, and supplies
drivetrain, chassis, structural, and engine technologies to those
companies. Dana employs 46,000 people in 28 countries. Dana is
focused on being an essential partner to automotive, commercial,
and off-highway vehicle customers, which collectively produce more
than 60 million vehicles annually. The company and its affiliates
filed for chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y.
Case No. 06-10354). Corinne Ball, Esq., and Richard H. Engman,
Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey
B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at
Jones Day in Cleveland, Ohio, represent the Debtors. Henry S.
Miller at Miller Buckfire & Co., LLC, serves as the Debtors'
financial advisor and investment banker. Ted Stenger from
AlixPartners serves as Dana's Chief Restructuring Officer. Thomas
Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP,
represents the Official Committee of Unsecured Creditors. When
the Debtors filed for protection from their creditors, they listed
$7.9 billion in assets and $6.8 billion in liabilities as of Sept.
30, 2005. (Dana Corporation Bankruptcy News, Issue No. 8;
Bankruptcy Creditors' Service, Inc., 215/945-7000).
DANA CORP: Committee Taps Halperin Battaglia as Conflicts Counsel
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors seeks the U.S.
Bankruptcy Court for the Southern District of New York's authority
to retain Halperin Battaglia Raicht, LLP, as conflicts counsel
under a general retainer, nunc pro tunc, to March 31, 2006.
Thomas Amato, the Committee's co-chair, notes that in mega cases
like the Debtors' Chapter 11, where the Debtors have filed a bevy
of substantive motions that have tight timeframes and will impact
the rights of unsecured creditors, the Committee is concerned
about having the full panoply of professionals it believes are
necessary to enable it to effectively participate in the cases and
discharge its duties to creditors.
The Committee has determined that in certain circumstances, its
primary counsel, Kramer Levin Naftalis & Frankel LLP, may have
potential or actual conflicts of interest on matters that arise in
the Debtors' Chapter 11 cases. To ensure that it receives
seamless legal representation to the extent of any actual or
potential legal conflicts arise, the Committee has asked Halperin
Battaglia to represent it as conflicts counsel during the pendency
of the Debtors' Chapter 11 cases.
Alan D. Halperin, Esq., a member at Halperin Battaglia, relates
that Kramer Levin has identified a conflict with respect to
certain of the Debtors' prepetition lenders that will necessitate
Halperin Battaglia's involvement. Halperin Battaglia will:
-- review and analyze the liens of those lenders;
-- conduct any necessary negotiations;
-- file any necessary pleadings with the Court regarding those
liens; and
-- address the Committee's legal needs with respect to any
other conflicts that may arise after Kramer Levin's
notification.
Halperin Battaglia will charge the Committee at these regular
hourly rates:
Professional Rate per Hour
------------ -------------
Attorneys $395 to $175
Law clerks $125
Paraprofessionals $100 to $75
Halperin Battaglia will also seek reimbursement of necessary and
reasonable out of pocket expenses.
Due to the exigencies of this case, in order to protect the
interests of the unsecured creditors, the Committee asks the Court
to allow Halperin Battaglia to commence work immediately. Mr.
Amato relates that Halperin Battaglia began rendering services to
the Committee on March 31, 2006.
Mr. Halperin assures the Court that Halperin Battaglia is a
"disinterested person" within the meaning of Section 101(14) of
the Bankruptcy Code.
About Dana Corporation
Headquartered in Toledo, Ohio, Dana Corporation --
http://www.dana.com/-- designs and manufactures products for
every major vehicle producer in the world, and supplies
drivetrain, chassis, structural, and engine technologies to those
companies. Dana employs 46,000 people in 28 countries. Dana is
focused on being an essential partner to automotive, commercial,
and off-highway vehicle customers, which collectively produce more
than 60 million vehicles annually. The company and its affiliates
filed for chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y.
Case No. 06-10354). Corinne Ball, Esq., and Richard H. Engman,
Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey
B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at
Jones Day in Cleveland, Ohio, represent the Debtors. Henry S.
Miller at Miller Buckfire & Co., LLC, serves as the Debtors'
financial advisor and investment banker. Ted Stenger from
AlixPartners serves as Dana's Chief Restructuring Officer. Thomas
Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP,
represents the Official Committee of Unsecured Creditors. When
the Debtors filed for protection from their creditors, they listed
$7.9 billion in assets and $6.8 billion in liabilities as of Sept.
30, 2005. (Dana Corporation Bankruptcy News, Issue No. 9;
Bankruptcy Creditors' Service, Inc., 215/945-7000).
DANA CORP: Committee Gets Court's Nod to Hire Kramer as Counsel
---------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in Dana
Corporation and its debtor-affiliates' Chapter 11 cases obtained
authority from the U.S. Bankruptcy Court for the Southern
District of New York, under Sections 328 and 1103 of the
Bankruptcy Code and Rule 2014 of the Federal Rules of Bankruptcy
Procedure, to retain Kramer Levin Naftalis & Frankel LLP as its
counsel, effective as of March 10, 2006.
As reported in the Troubled Company Reporter on April 10, 2006,
the Committee selected Kramer Levin primarily because of the
firm's extensive experience in the fields of bankruptcy and
creditors' rights.
In particular, Kramer Levin has represented creditors committees
in the Chapter 11 cases of, among others, Genuity, Inc.,
Bethlehem Steel Corporation, Adelphia Business Solutions, Inc.,
Dow Corning Corporation, Leap Wireless, Inc., American
Architectural Products, Big V Holdings, and VF Brands, Inc.
Peter Faulkner, co-chairperson of the Creditors Committee, told
the Court that Kramer Levin's broad-based practice, which
includes expertise in the areas of corporate and commercial law,
litigation, tax, intellectual property, employee benefits and
real estate, will permit it to represent fully the interests of
the Creditors Committee in an efficient and effective manner.
Kramer Levin will advise and represent the Creditors Committee in
connection with these matters:
(a) the administration of the Debtors' Chapter 11 cases and
the exercise of oversight with respect to the Debtors'
affairs including all issues arising from the Debtors, the
Committee or the Debtors' cases;
(b) the preparation on behalf of the Committee of necessary
applications, motions, memoranda, orders, reports and
other legal papers;
(c) appearances in Court and at statutory meetings of
creditors to represent the interests of the Committee;
(d) the negotiation, formulation, drafting and confirmation of
a plan or plans of reorganization and related matters;
(e) investigation, if any, as the Committee may desire
concerning, among other things, the assets, liabilities,
financial condition, sale of any of the Debtors'
businesses, and operating issues concerning the Debtors
that may be relevant to the Debtors' Chapter 11 cases;
(f) communications with the Committee's constituents and
others at the direction of the Committee in furtherance of
its responsibilities; and
(g) the performance of all of the Committee's duties and
powers under the Bankruptcy Code and the Bankruptcy Rules
and the performance of other services as are in the
interests of those represented by the Committee.
Kramer Levin will be paid on an hourly basis, subject to its
customary rates:
Professional Hourly Rate
------------ -----------
Partners $500 to $780
Counsel $505 to $855
Associates $280 to $530
Legal Assistants $190 to $220
Kramer Levin will also seek reimbursement of out-of-pocket
expenses.
Thomas Moers Mayer, Esq., a partner at Kramer Levin, assured the
Court that the firm is a "disinterested person" within the meaning
of Section 101(14) of the Bankruptcy Code.
Mr. Mayer disclosed that Kramer Levin represents or previously
represented various parties-in-interest in matters unrelated to
the Debtors' cases. These parties include JPMorgan Chase Bank,
Citibank, N.A., Bank of America, N.A., Deutsche Bank, Gabelli
Asset Management, Inc., and Deloitte & Touche, LLP.
Kramer Levin also provided services to Wilmington Trust Company,
in its capacity as the indenture trustee for each of the Debtors'
unsecured notes. Kramer Levin has resigned as counsel to the
Indenture Trustee.
About Dana Corporation
Headquartered in Toledo, Ohio, Dana Corporation --
http://www.dana.com/-- designs and manufactures products for
every major vehicle producer in the world, and supplies
drivetrain, chassis, structural, and engine technologies to those
companies. Dana employs 46,000 people in 28 countries. Dana is
focused on being an essential partner to automotive, commercial,
and off-highway vehicle customers, which collectively produce more
than 60 million vehicles annually. The company and its affiliates
filed for chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y.
Case No. 06-10354). Corinne Ball, Esq., and Richard H. Engman,
Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey
B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at
Jones Day in Cleveland, Ohio, represent the Debtors. Henry S.
Miller at Miller Buckfire & Co., LLC, serves as the Debtors'
financial advisor and investment banker. Ted Stenger from
AlixPartners serves as Dana's Chief Restructuring Officer. Thomas
Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP,
represents the Official Committee of Unsecured Creditors. When
the Debtors filed for protection from their creditors, they listed
$7.9 billion in assets and $6.8 billion in liabilities as of Sept.
30, 2005. (Dana Corporation Bankruptcy News, Issue No. 8;
Bankruptcy Creditors' Service, Inc., 215/945-7000).
DATALOGIC INT'L: Corbin & Company Raises Going Concern Doubt
------------------------------------------------------------
Corbin & Company, LLP, in Irvine, California, raised substantial
doubt about DataLogic International, Inc.'s ability to continue as
a going concern after auditing the Company's consolidated
financial statements for the year ended Dec. 31, 2005. The
auditor pointed to the Company's recurring losses and need to
establish profitable operations.
DataLogic International, Inc., filed its consolidated financial
statements for the year ended Dec. 31, 2005, with the Securities
and Exchange Commission on April 17, 2006.
The Company reported a $232,771 comprehensive net loss on
$17,522,795 of net revenues for the year ended Dec. 31, 2005.
At Dec. 31, 2005, the Company's balance sheet showed $5,591,108 in
total assets, $4,864,476 in total liabilities, and $726,632 in
total stockholders' equity.
The Company's Dec. 31 balance sheet also showed strained liquidity
with $3,530,150 in total current assets available to pay
$4,194,134 in total current liabilities coming due within the next
12 months.
A full-text copy of the Company's 2005 Annual Report is available
for free at http://ResearchArchives.com/t/s?92e
DataLogic International, Inc. -- http://www.dlgi.com/-- is a
technology and professional services company providing a wide
range of consulting services and communication solutions like
GPS based mobile asset tracking, secured mobile communications
and VoIP. The Company also provides Information Technology
outsourcing and private label communication solutions.
DataLogic's customers include U.S. and international governmental
agencies as well as a variety of international commercial
organizations.
DELPHI: Workers Vote for Strike Amidst CBA Rejection Deliberations
------------------------------------------------------------------
United Auto Workers members at 21 UAW-represented Delphi
Corporation facilities voted overwhelmingly to authorize the Union
to call a strike should Delphi use its bankruptcy court
proceedings to unilaterally impose changes to the UAW-Delphi
collective bargaining agreements. Over 95% of the votes cast
authorized the UAW to call a strike.
The International Union of Electrical Workers-Communications
Workers of America has already taken strike authorization votes
for its 8,500 Delphi U.S. hourly workers.
The vote came as Delphi is battling to reject its collective
bargaining agreements with its unions. As reported in the
Troubled Company Reporter on May 3, 2006, Delphi sought to reject
the CBA's and to modify obligations to provide insurance benefits
for hourly retirees. These unions have objected to the Company's
move:
* The International Union, United Automobile, Aerospace &
Agricultural Implement Workers of America;
* International Union of Electronic, Electrical, Salaried,
Machine and Furniture Workers-Communication Workers of
America;
* International Union of Operating Engineers Locals 18 S, 832 S
and 101; and
* United Steel, Paper and Forestry, Rubber, Manufacturing,
Energy, Allied Industrial and Service Workers, International
Union, AFL-CIO.
The Unions argue that there has not been enough time, information,
or bargaining to justify rejection, and that Delphi has sufficient
liquidity to wait a few more months. Delphi told the United
States Bankruptcy Court for the Southern District of New York that
it would lose $2 billion this year if the CBA's were not rejected.
The hearing on the matter, which commenced last week, will
continue on Wednesday next week, May 24. The Court is expected to
hand down a ruling in the middle of June.
A strike at Delphi could force General Motors Corporation to shut
down plants. GM is Delphi's largest single customer. Both Delphi
and GM is still hopeful that they could reach a consensual
agreement with the Unions.
Headquartered in Troy, Michigan, Delphi Corporation --
http://www.delphi.com/-- is the single largest global supplier of
vehicle electronics, transportation components, integrated systems
and modules, and other electronic technology. The Company's
technology and products are present in more than 75 million
vehicles on the road worldwide. The Company filed for chapter 11
protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No.
05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and
Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP,
represent the Debtors in their restructuring efforts. Robert J.
Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude,
Esq., at Latham & Watkins LLP, represents the Official Committee
of Unsecured Creditors. As of Aug. 31, 2005, the Debtors' balance
sheet showed $17,098,734,530 in total assets and $22,166,280,476
in total debts.
DELTA AIR: Comair Wants Court to Reconsider Decision on CBA
-----------------------------------------------------------
Pursuant to Rules 9023 and 9024 of the Federal Rules of Bankruptcy
Procedure, Comair, Inc., asks the United States Bankruptcy Court
for the Southern District of New York to reconsider the decision
denying its request to reject its collective bargaining agreement
with the International Brotherhood of Teamsters.
John J. Gallagher, Esq., at Paul, Hastings, Janofsky & Walker
LLP, in Washington, DC, argues that the Court's decision creates
several rules of law which place Comair, and any other debtor
needing labor cost reductions from multiple unions, in an
untenable position from both legal and labor relations
perspectives.
The Court's decision would make a consensual collective
bargaining solution at Comair substantially less likely, and
would make less likely the achievement of the cost reductions
necessary for a successful reorganization, Mr. Gallagher
explains.
The result is not consistent with controlling Second Circuit law
or with the Second Circuit's command that Section 1113 be
interpreted and applied in a "workable manner," Mr. Gallagher
says, citing In re Century Brass Products, Inc., 795 F.2d 265,
273 (2d Cir. 1986). Nor is it consistent with the Court's
expressed intent to encourage the parties to reach a negotiated
solution.
Order Inconsistent with 2nd Cir. Ruling
According to Mr. Gallagher, the Court devised an unprecedented
and unworkable interpretation of the requirement that a debtor
"confer in good faith" as required by Section 1113.
The Court has found that Comair failed to confer in good faith
because Comair did not reduce the total value of its Section 1113
Proposal from the levels the Company had determined to be
"necessary" and had proposed to all of its unions. This
proposition is inconsistent with the Second Circuit's
jurisprudence on the issue, In re Maxwell Newspapers, Inc., 981
F.2d 85, 90 (2d Cir. 1992), and with the well developed labor law
principles on bargaining in good faith that inform the Section
1113 standard.
Mr. Gallagher adds that the Court's formulation creates a
conundrum for a debtor contemplating a Section 1113 motion --
Section 1113 explicitly requires that the debtor limit its
proposal to the changes it reasonably believes to be "necessary"
to successful reorganization; that statutory imperative is
irreconcilable with the notion that the debtor is required to
accept less than is "necessary."
Either the debtor's proposal is limited to necessary changes, in
which case it should not have an obligation to decrease
materially the concessions sought -- or the proposal is padded
with unnecessary concessions -- in violation of the statute's
express terms. If the standard adopted by the Court were to
prevail, the debtor would lose in either event, Mr. Gallagher
notes.
He asserts that, on a related point, a union is unlikely ever to
agree to a concessionary contract without the inclusion of
contingency clauses like those contained in the ALPA and IAM
agreements. These clauses are an essential part of the
bargaining process, and in no way reflect a failure to bargain in
good faith with the IBT or preempt the judicial role under
Section 1113.
Comair Proposal Comparable to Market Rates
The Court utilized an impermissible standard for determining
whether the concessions sought from various Comair constituencies
were fair and equitable. Mr. Gallagher points out that in In re
Carey Transportation, Inc., 816 F.2d 82, 90-91 (2d Cir. 1987),
the Second Circuit held that the key element in determining
whether a proposal is fair and equitable is a comparison to
"industry standards," that is, market rates.
Mr. Gallagher contends that so far as Comair has been able to
determine, no court has ever held that the standard employed in
its case -- proportion of payroll -- is a controlling factor.
Mr. Gallagher notes that the Second Circuit has held that some
employee groups may be "exempt" from cost reductions if their
wages are at or below market -- even though an exemption would
surely skew any analysis based on percentage of payroll.
Instead of focusing on the percentage of payroll represented by
various labor groups, the Second Circuit's cases focus on the
relative position of each employee group measured against its
peers in the market, the very analysis adopted by Comair in
formulating its various Section 1113 proposals.
Even assuming arguendo that payroll percentage were a permissible
factor in the Court's analysis of fair and equitable treatment,
the Court erred by taking into account a modest prepetition
concession made by the flight attendants prior to Section 1113
negotiations (the B-scale) but failing to acknowledge far greater
concessions made by Comair's pilots in the same prepetition round
of negotiations, Mr. Gallagher asserts.
He notes that both the express language of Section 1113 and the
Second Circuit jurisprudence make clear that the "fair and
equitable" inquiry is not limited solely to the union members
whose collective bargaining agreement is at issue, but rather to
"all creditors, the debtor and all affected parties."
In Comair's case, the Court found that Comair's proposal was not
fair and equitable because the flight attendants' proportion of
the requested concessions was twice their proportion of payroll.
However, according to Mr. Gallagher, requiring additional
concessions from other labor constituencies, who are each already
at market, is not fair and equitable, but its opposite.
IBT Did Not Negotiate
The Court's determination that the IBT had "good cause" to reject
Comair's proposal is based on both legal and factual errors. Mr.
Gallagher argues that, legally, the Court erred because the
Second Circuit has made clear in In re Royal Composing, Inc., 848
F.2d 345, 349 (2d Cir. 1988), that a representative will have
good cause to reject a proposal if it "seeks to negotiate
compromises that meet its needs while preserving the debtor's
required savings. . . ."
The IBT never sought to negotiate compromises while "preserving
the debtor's required savings," Mr. Gallagher reminds the Court.
To the contrary, the IBT never offered to meet Comair's requested
savings, contending that Comair's request was too high because
Comair was profitable, because Comair's request was not
calibrated to "output costs," and because flight attendant costs
were comparatively insignificant -- arguments rejected by the
Court.
Because it did not seek to preserve Comair's required savings,
the IBT lacked good cause to reject Comair's offer as a matter of
law, Mr. Gallagher says.
Comair clarifies that, contrary to the Court's finding, the value
of savings would not increase in the event that flight attendant
headcount increases -- and there is no evidence in the record to
support the Court's findings that the $8,900,000 value "is
necessarily a calculation with two factors" and that "if the
actual number of employees whose pay and benefits are cut"
increases, then "the total cost savings will be correspondingly
greater."
According to Mr. Gallagher, the uncontradicted evidence showed
that because of the contractual minimum monthly pay guarantees,
increased flight attendant staffing for the same amount of flying
would decrease savings rather than increase savings. Because
airline staffing typically fluctuates based on a variety of
factors, it is standard practice in airline labor negotiations to
rely on a "steady state" set of numbers for calculating the value
of contractual changes.
The same sort of "steady state" model, based on the December 2005
schedule, was used by Comair to compute the proposed concessions
of all employee groups. Mr. Gallagher relates. The flight
attendants were not treated differently or disadvantaged in any
way. Indeed, it would have been unfair and inequitable to
Comair's other constituencies to treat IBT in a non-uniform way,
Mr. Gallagher avers.
Comair Satisfies Balance of Equities Test
The Court's determination that the "balance of the equities" does
not clearly favor rejection was based on the Court's view that
Comair had not satisfied the other provisions of Sections
1113(c)(1) and (c)(2).
However, Mr. Gallagher points out that the "balance of the
equities" standard was not meant to be duplicative of the other
elements of Section 1113(c). Rather, as the court in Carey held,
the "balance of the equities" test "represents a codification of
the equitable test adopted in [NLRB v. Bildisco & Bildisco, 465
U.S. 513, 527 (1984)]," and the "still-vital case law applying
this equitable balancing test."
The Supreme Court held in Bildisco that bankruptcy courts "must
focus on the ultimate goal of Chapter 11 when considering these
equities. The Bankruptcy Code does not authorize freewheeling
consideration of every conceivable equity, but rather only how
the equities relate to the success of the reorganization."
Mr. Gallagher argues that the Court did not perform the
appropriate balancing test, and specifically dismissed as
"Draconian threats" the very crux of the inquiry -- the
legitimate concerns of Comair and the Creditors' Committee that
Comair lacks long term viability without relief from the IBT's
collective bargaining agreement.
The Court's holdings combine in an opinion that will pose
enormous, indeed, even insuperable, obstacles to any attempt by
Comair to reach acceptable agreements with all three of its
unions in a timely manner, Mr. Gallagher maintains. Thus, while
the Court's intention may have been to spur further bargaining
and a spirit of compromise, in fact the Court's decision is
likely to have the opposite effect, with the IBT knowing that it
need not accept the Company's $8,900,000 proposal, even though
the proposal leaves flight attendants at the high end of market.
Mr. Gallagher also tells the Court that the agreements with the
Air Line Pilots Association, International, and International
Association of Machinists is being cast into an uncertain status
if Comair does not achieve the cost savings it needs from all
employee groups. This situation threatens to prejudice the
Debtor's estate and its long-term viability.
About Delta Air Lines
Headquartered in Atlanta, Georgia, Delta Air Lines --
http://www.delta.com/-- is the world's second-largest airline in
terms of passengers carried and the leading U.S. carrier across
the Atlantic, offering daily flights to 502 destinations in 88
countries on Delta, Song, Delta Shuttle, the Delta Connection
carriers and its worldwide partners. The Company and 18
affiliates filed for chapter 11 protection on Sept. 14, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner,
Esq., at Davis Polk & Wardwell, represents the Debtors in their
restructuring efforts. Timothy R. Coleman at The Blackstone Group
L.P. provides the Debtors with financial advice. Daniel H.
Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss
Hauer & Feld LLP, provide the Official Committee of Unsecured
Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey
Howard & Zukin Capital and James S. Feltman at Mesirow Financial
Consulting, LLC, serve as the Committee's financial advisors. As
of June 30, 2005, the Company's balance sheet showed $21.5 billion
in assets and $28.5 billion in liabilities. (Delta Air Lines
Bankruptcy News, Issue No. 30; Bankruptcy Creditors' Service,
Inc., 215/945-7000).
DELTA AIR: Bank of NY Wants Carrier to Follow Rejection Orders
--------------------------------------------------------------
Bank of New York asks the U.S. Bankruptcy Court for the Southern
District of New York to compel Delta Air Lines, Inc., to comply
with the Nov. 29, 2005 orders authorizing the rejection of:
(i) an aircraft bearing FAA Registration No. N806DE; and
(ii) three aircraft bearing FAA Registration Nos. N801DE,
N802DE and N811DE.
The Bank of New York is the pass through trustee and indenture
trustee for the senior secured holders of certain certificates
involving, among other things, four rejected MD-11 aircraft.
Ronald J. Silverman, Esq., at Bingham McCutchen LLP, in New York,
explains that the Rejection Orders required the Debtors to
relinquish possession of, among other things, certain specific
aircraft and equipment "immediately following" the date of the
Orders, and to surrender and return the Records relating to the
relevant equipment.
The Debtors stated in their rejection request that:
(a) The N801DE engine bearing manufacturer serial number
P723871D is located at Delta TechOps Center, at 1775
Aviation Boulevard, in Atlanta, Georgia;
(b) The N802DE engines P723874D and P723876D are located at
Aviotek, 12005 Raymonde de la roche, Cargo Loading Bay 80,
Montreal International Airport, in Mirabel, Quebec,
Canada, and engine P723875 is located at World
Airways, Inc., HLH Building, 101 World Drive, in Peachtree
City, Georgia -- on sublease to World Airways;
(c) The N806DE airframe and engines P723922D and P723924D are
located at Aviotek and engine P723923 is located at Delta
TechOps Center -- scheduled to be out of the shop on
October 1, 2005; and
(d) The N811DE airframe and engine P723951D are located at
Aviotek, and engines P723949D and P723950 are located at
World.
According to Mr. Silverman, despite the passage of over five
months, the Debtors have not produced:
(i) N801DE engine P723871D; and
(ii) material parts relating to (x) all three engines of
N802DE, (y) the airframe and all three engines of N806DE,
and (z) the airframe and all three engines of N811DE.
BNY and the MD-11 Holders have repeatedly requested that the
Debtors relinquish the Missing Engine and Missing Parts, and
surrender and return the related Records.
On November 29, 2005, the Debtors produced five crates containing
a sparse collection of engine parts allegedly belonging to the
Missing Engine. BNY and the MD-11 Holders do not know whether
these items were part of the Missing Engine or another engine.
Most importantly, these parts together are wholly inadequate to
constitute an "engine", Mr. Silverman asserts.
Accordingly, BNY and the MD-11 Holders ask Judge Hardin to direct
the Debtors to relinquish possession of the Missing Engine and
the Missing Parts, and surrender and return all Records with
respect to the Missing Engine and the Missing Parts.
BNY and the MD-11 Holders anticipate that the Debtors may claim
that it is no longer practicable for them to comply with the
terms of the Rejection Orders.
If the Debtors cannot produce the promised Missing Engine and the
Missing Parts, Mr. Silverman asserts that administrative priority
claims should be awarded in favor of BNY and the MD-11 Holders on
any of four separate legal bases:
(i) as damages arising from the Debtors' failure to
perform their postpetition obligations;
(ii) pursuant to Section 507(b) of the Bankruptcy Code as
compensation for the Debtors' failure to adequately
protect the Indenture Trustee's interest in the
Rejected Aircraft;
(iii) as damages arising from the Debtors' failure to obey a
court order; and
(iv) as damages resulting from the Debtors' postpetition
tortious conduct.
About Delta Air Lines
Headquartered in Atlanta, Georgia, Delta Air Lines --
http://www.delta.com/-- is the world's second-largest airline in
terms of passengers carried and the leading U.S. carrier across
the Atlantic, offering daily flights to 502 destinations in 88
countries on Delta, Song, Delta Shuttle, the Delta Connection
carriers and its worldwide partners. The Company and 18
affiliates filed for chapter 11 protection on Sept. 14, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner,
Esq., at Davis Polk & Wardwell, represents the Debtors in their
restructuring efforts. Timothy R. Coleman at The Blackstone Group
L.P. provides the Debtors with financial advice. Daniel H.
Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss
Hauer & Feld LLP, provide the Official Committee of Unsecured
Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey
Howard & Zukin Capital and James S. Feltman at Mesirow Financial
Consulting, LLC, serve as the Committee's financial advisors. As
of June 30, 2005, the Company's balance sheet showed $21.5 billion
in assets and $28.5 billion in liabilities. (Delta Air Lines
Bankruptcy News, Issue No. 30; Bankruptcy Creditors' Service,
Inc., 215/945-7000).
DIAMOND PEAK: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: Diamond Peak 7, LLC
Beckley Singleton, Chtd.
530 Las Vegas Boulevard, South
Las Vegas, Nevada 89101
Tel: (702) 385-3373
Bankruptcy Case No.: 06-11022
Chapter 11 Petition Date: May 15, 2006
Court: District of Nevada (Las Vegas)
Debtor's Counsel: Bob L. Olson, Esq.
Beckley Singleton, Chtd.
530 Las Vegas Boulevard, South
Las Vegas, Nevada 89101
Tel: (702) 385-3373
Fax: (702) 385-9447
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
The Debtor did not file the list of its 20 largest unsecured
creditors.
DMX MUSIC: Delaware Court Approves Disclosure Statement
-------------------------------------------------------
The Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the
District of Delaware approved the Disclosure Statement explaining
Maxide Acquisition, Inc., dba DMX Music, Inc. and its debtor-
affiliates' chapter 11 Liquidation Plan.
The Court determined that the Disclosure Statement contains
adequate information -- the right amount of the right kind -- for
creditors to make informed decisions when the Debtors ask them to
vote to accept the Plan.
Judge Walrath will convene a hearing at 11:30 a.m., on June 27,
2006, to consider confirmation of the Debtors' plan of
liquidation.
As reported in the Troubled Company Reporter on May 8, 2006, under
the Debtors' Plan, holders of these claims will be paid in full:
1) Administrative Claims
2) Priority Tax Claims
3) Priority Claims Against Maxide
4) Priority Claims Against Consolidated Debtors
5) Other Secured Claims Against the Consolidated Debtors
6) Professional Fee Claims
Professional fees and expenses not exceeding $100,000 will be paid
and reimbursed, provided that, without the prior written consent
of Royal Bank of Canada as the lenders' agent, the Liquidating
Debtors may not use:
1) more than $15,000 of the $100,000 to pay any fees or
reimburse any expenses accrued or incurred by any
professionals in connection with the investigation of any
avoidance actions; and
2) any portion of the $100,000 to pay any fees and reimburse
any expenses accrued or incurred by any professionals in
connections with the prosecution or collection of any
avoidance actions.
The Lender Group's Secured Claims Against Maxide are entitled to a
75% pro rata share from the distribution while General Unsecured
Claims Against the Consolidated Debtors will get 20%.
Holders of General Unsecured Maxide Claims, Equity Interests in
Maxide, and Lender Group Secured Claims Against Consolidated
Debtors will receive nothing under the Plan. All Intercompany
Claims and all Equity Interests in Consolidated Debtors will be
cancelled on the effective date of the Plan.
Headquartered in Los Angeles, California, Maxide Acquisition,
Inc., dba DMX MUSIC, Inc. -- http://www.dmxmusic.com/-- is
majority-owned by Liberty Digital, a subsidiary of Liberty Media
Corporation, with operations in more than 100 countries. DMX
MUSIC distributes its music and visual services worldwide to more
than 11 million homes, 180,000 businesses, and 30 airlines with a
worldwide daily listening audience of more than 100 million
people. The Company and its debtor-affiliates filed for chapter
11 protection on Feb. 14, 2005 (Bankr. D. Del. Case No. 05-10431).
The case is jointly administered with Maxide Acquisition, Inc.
(Bankr. D. Del. Case No. 05-10429). Curtis A. Hehn, Esq., and
Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones
& Weintraub P.C., represent the Debtors in their restructuring
efforts. Andrew J. Flame, Esq., and Andrew C. Kassner, Esq., at
Drinker Biddle & Reath LLP, represent 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.
EDISON MISSION: Moody's Ups Corporate Family Rating to Ba3
----------------------------------------------------------
Moody's Investors Service upgraded the Corporate Family Rating of
Edison Mission Energy to Ba3 from B1, affirmed EME's existing
senior unsecured notes at B1, assigned a B1 rating to a proposed
new issuance of senior unsecured notes, and assigned EME a
Speculative Grade Liquidity Rating of SGL-2.
Moody's also affirmed the rating of EME's parent, Mission Energy
Holdings Co., upgraded the second lien notes of subsidiary Midwest
Generation, LLC to Ba3 from B1, and assigned a Ba2 rating to MG's
$830 million first lien amended bank credit facilities. The rating
outlook for EME, MEHC, and MG is stable.
The upgrade of EME's Corporate Family Rating to Ba3 reflects
strong financial performance and cash flow generation for 2005 and
first quarter 2006 and an expectation for improved operating
margins and cash flow generation for the next few years, due to
forward hedges at subsidiaries, MG and Homer City Generating
Station that underpin operating margins for 2006 and 2007.
EME's adjusted funds from operations to adjusted debt for 2005 and
twelve months ending Mar. 31, 2006 was 8.4% and 8.3%,
respectively.
Moody's expects these credit metrics to modestly improve to close
to the 10% level over the next two years, based upon the degree of
forward hedging entered into by EME, which should strengthen
earnings and cash flow predictability during this timeframe.
While these credit metrics are slightly weaker than other merchant
energy companies with a Ba3 CFR, the rating incorporates greater
than average stability of operating margins and cash flow due to
forward hedging and a moderate risk growth strategy that is
largely limited to internal opportunities and wind related
investments.
The B1 rating affirmation of EME's senior unsecured notes and the
B1 rating assignment to a new $1 billion senior unsecured note
offering incorporates the company's recently announced plans to
tender for two series of existing EME unsecured notes totaling $1
billion, and its plan to use cash on hand and the proceeds of the
new senior unsecured note offering to pay for the premium and
principal associated with the tender offer.
The rating affirmation considers the company plans to enter into a
new secured $500 million revolving credit at EME, which will be
senior to EME note holders, and factors in the degree of
structural subordination that exists at the holding company, given
the amount of secured debt and dividend restrictions at various
EME subsidiaries.
The B2 rating affirmation for MEHC factors in another layer of
structural subordination at this holding company, since its
principal source of cash flow are dividends from EME. On a
consolidated basis, MEHC's ratio of adjusted FFO to adjusted debt
was 6.5% and 6.4%, respectively for 2005 and twelve months ending
Mar. 31, 2006. These credit metrics are comparable to those of
other B2 rated merchant energy holding companies.
The assignment of a Speculative Grade Liquidity rating of SGL-2
reflects a good liquidity profile at EME. The rating considers
the substantial holding company cash balances at EME of $1.3
billion at March 31, 2006, and factors in the relatively stable
cash flows anticipated for the next twelve months, based upon
hedges entered into by EME.
The SGL rating considers EME's announced plans to increase the
size of its credit facility to $500 million from $98 million, with
credit availability to be principally used by subsidiary, Edison
Mission Marketing and Trading for hedges in its portfolio and at
Homer City. When added to the $500 million revolving credit
facility at MG, EME's consolidated external sources of liquidity
sources will reach $1 billion and with cash on hand, will serve as
the principal sources of liquidity for the next twelve months.
While a substantial amount of cash collateral was returned to EME
during the first quarter 2006, reflecting the moderation of energy
prices, collateral requirements can negatively impact EME's
liquidity whenever prices move up sharply.
The upgrade of MG's $1 billion 8.75% second lien notes to Ba3 from
B1 and the assignment of a Ba2 senior secured rating to MG's $500
million amended revolving credit facility and $333 million term
loan reflect the noticeable improvement in MG's credit metrics
during 2005 and through the first quarter of 2006, as MG's
adjusted FFO/adjusted debt approximated 20% for each of these
periods.
The rating action incorporates an expectation of similar credit
metrics for 2006 and 2007 given the hedges already arranged for
these periods as well as the competitive position of the company's
coal fleet in the Midwest. While these credit metrics on a
standalone basis would be consistent with a rating in middle to
upper end of the Ba category, MG's ratings are constrained by the
existence of substantial holding company debt at EME and MEHC and
the strong interrelationship between EME, MEHC, and MG.
The stable rating outlook for EME, MEHC, and MG factors in a
continuation of modestly improving cash flows for the next few
years due to contract arrangements entered into during 2006 that
should produce positive margins for EME's fleet of well-placed
coal-fired electric generation in PJM. The stable rating outlook
further considers the company's plans for internal growth
including its planned investment in wind generation.
While the company's competitive fleet of generation and hedging
strategy should produce relatively predictable cash flow during
the next few years, limited prospects exist for the ratings to be
upgraded in the near-term due to the substantial amount of holding
debt that remains at EME and at MEHC.
Upon completion of the previously announced tender offer, the next
sizeable maturity occurs in 2008 at MEHC, and the company intends
to repay this approximately $800 million obligation from cash of
hand at maturity.
Longer term, EME's ratings could be upgraded if the company
maintains a balanced forward hedging strategy that produces
sustainable cash flow resulting in an adjusted FFO/adjusted debt
that exceeds 12 to 13%.
The ratings could be downgraded if there is a prolonged outage at
several units at MG or Homer City, or if there are new material
requirements for environmental capital expenditures at both
subsidiaries which results in substantially higher debt levels and
a reduction in EME's adjusted FFO/adjusted debt to below 7.5% on a
sustainable basis.
Ratings upgraded:
* Edison Mission Energy: Corporate Family Rating
to Ba3 from B1
* Midwest Generation, LLC: second-lien notes to Ba3 from B1
Ratings assigned:
* Edison Mission Energy: senior unsecured notes, B1
* Edison Mission Energy: Speculative Grade Liquidity rating,
SGL-2;
* Midwest Generation, LLC: first lien revolving credit and
term loan due 2011, rated Ba2;
Ratings affirmed:
* Edison Mission Energy: senior unsecured debt, B1
* Midwest Generation, LLC: pass-through certificates,
guaranteed by Edison Mission Energy, B1
* Mission Energy Holding Co.: senior secured debt, B2;
Headquartered in Irvine, California, EME is an independent power
production company and a wholly owned subsidiary of MEHC, which in
turn is wholly-owned by Edison Mission Group. EMG is wholly-owned
by Edison International.
EDUCATE INC: Moody's Affirms B1 Rating on $160MM Sr. Secured Loan
-----------------------------------------------------------------
Moody's affirmed the ratings of Educate, Inc. and those of its
subsidiary, Educate Operating Company LLC. The outlook for the
ratings is stable. The affirmation follows amendments to the
company's existing senior secured credit facilities as of
March 31, 2006, which included an increase in the term loan B of
about $20 million to repay outstanding revolver indebtedness and
related expenses.
The affirmation also follows weakness in cash flow generation in
recent quarters, resulting from acquisition and integration costs,
losses in Education Station and the impact of Hurricane Katrina.
The ratings primarily reflect the company's moderate leverage for
the rating category, counterbalanced by significant rent expense,
the recent weakness in operating cash flow generation and
competitive business. The ratings also consider the company's
strong market share, brand value and low maintenance capital
expenditures.
Moody's affirmed ratings:
Educate, Inc:
* Corporate Family Rating, rated B1;
* Educate Operating Company, LLC:-
* $30 million senior secured revolving credit facility
due 2009, rated B1;
* $160 million senior secured term loan B due 2012, rated B1.
* The outlook for the ratings is stable.
In addition to increasing the size of the facility, the term loan
B amendments provided for increased flexibility in certain other
terms and conditions of the term loan facility, including
financial covenants and capital expenditures.
Sustainable free cash flow to debt ratios of the order of 5% as
the company refocuses on profitable businesses could lead to a
positive ratings outlook. Weaker than expected sales, continued
weak or negative free cash flow to debt ratios, or material
increases in leverage could put negative pressure on the company's
ratings.
The ratings and outlook could also deteriorate if there is no
improvement in free cash flow generation in 2006 or if the company
was to experience margin pressure due to its business mix,
pricing, acquisition strategy, or cost structure.
Educate Operating Company, LLC, is the operating subsidiary of
Educate Inc. The company is headquartered in Baltimore, Maryland,
and is a leading education services company for students ranging
from pre-kindergarten through high school. Its portfolio of
brands includes Sylvan Learning Centers, which provides customized
supplemental, remedial and enrichment programs in reading, writing
and mathematics; Hooked on Phonics, which delivers early reading,
math and study skills programs; and Catapult Learning, a leading
provider of educational services to public and non-public schools.
Educate had revenue of $340 million for the twelve months ending
March 31, 2006.
EMMIS COMMS: Moody's Holds Junk Rating on Cumulative Pref. Stock
----------------------------------------------------------------
Moody's Investors Service affirmed the ratings of Emmis
Communications Corporation and its wholly owned operating
subsidiary, Emmis Operating Company, but changed the outlook to
negative from stable, upon the company's announcement that ECC
Acquisition, Inc. has made a bid to purchase all of the
outstanding common stock for approximately $567 million,
effectively taking the company private.
Separately, the company announced that it signed a definitive
agreement for the sale of its Orlando television station asset to
Hearst-Argyle Television, Inc. and KKFR-FM in Phoenix to
Bonneville for about $295 million in aggregate.
The change in the outlook to negative reflects the potential that
ECC Acquisition will raise incremental debt to complete the
transaction and the combined ECC Acquisition-Emmis organization
may have higher leverage than Moody's previously anticipated at
Emmis as a stand-alone entity as Moody's expected leverage of
approximately 5 times, per Moody's Standard Adjustments.
Further, the negative outlook also reflects the risk that the
company may not use asset sale proceeds from the company's pending
TV station and radio station divestitures to further reduce the
leverage that was taken on to finance the company's previously
announced share repurchase.
Moody's notes that this transaction does not trigger any of the
change of control provisions present in the $375 million of
subordinated notes.
The ratings continue to reflect Emmis' renewed focus on its
attractive radio assets, balanced by the competition present in
these markets and Moody's longer-term concerns that the growth
prospects for radio, particularly in large markets, will be
challenging as advertising spending is spread across a growing
number of mediums.
Moody's affirmed the following ratings:
Emmis Operating Company:
* Senior Secured Debt -- Ba2
* Senior Subordinated Notes -- B2
Emmis Communications Corporation:
* Cumulative Preferred Stock -- Caa1
* Corporate Family Rating -- Ba3
The outlook is now negative.
Additionally, Moody's affirmed the SGL-2 speculative grade
liquidity rating. The SGL-2 rating indicates expectations of
"good" liquidity as projected over the next twelve months. The
SGL-2 rating benefits from the company's cash balances, modest
free cash flow generation, sizeable flexibility under financial
covenants, availability under its revolving credit facility, and
the absence of any material near-term debt amortizations.
Emmis Communications Corporation, headquartered in Indianapolis,
Indiana, is a diversified media company comprised of radio and
television stations and magazine publishing assets.
ENTERGY NEW ORLEANS: Wants Insurance Allocation Protocol Approved
-----------------------------------------------------------------
Entergy New Orleans, Inc., asks the U.S. Bankruptcy Court for the
Eastern District of Louisiana to approve a protocol by which
insurance proceeds related to ENOI's losses for Hurricane Katrina
would be allocated and distributed to and among the Operating
Companies. The allocation and distribution would also apply to
the First Partial Payment.
ENOI's primary non-nuclear property insurance coverage is placed
through Oil Insurance Limited, Elizabeth J. Futrell, Esq., at
Jones, Walker, Waechter, Poitevent, Carrere & Denegre, LLP, in New
Orleans, Louisiana, relates. The OIL Policy provides $250,000,000
of coverage, subject to a $20,000,000 deductible.
Entergy Corporation wholly owns five public utility operating
companies that provide retail service to customers -- Entergy
Gulf States, Inc., Entergy Arkansas, Inc., Entergy Mississippi,
Inc., and Entergy Louisiana, Inc., and ENOI. Although the
Operating Companies are covered under the OIL Policy, Entergy, as
a shareholder of OIL, is the sole named insured on the OIL
Policy.
OIL has advised its insureds that due to the devastation caused by
Hurricane Katrina, it intends to cap the aggregate collective
Katrina damages for all of its insureds to $1,000,000,000. It is
likely that the total damages claimed by all OIL insureds for
Katrina damages will exceed $1,000,000,000.
As a result, it is anticipated that all insureds will suffer a
proportionate reduction in their claim payments.
Ms. Futrell notes that ENOI's excess insurance coverage is placed
through two insurance companies:
* Underwriters at Lloyd's, London, and
* Hartford Steam Boiler Inspection & Insurance Company.
The Excess Policies provide an aggregate of $150,000,000 per
occurrence in addition to the coverage provided by the OIL Policy
on a quota-share basis, with an annual aggregate for flood loss of
$150,000,000.
Like the OIL Insurance Policy, only Entergy is the named insured
under the Excess Policies although it jointly covers ENOI and the
Operating Companies.
The OIL Policy and the Excess Policies were in full force and
effect when ENOI experienced loss and damages as a result of
Hurricane Katrina.
On March 1, 2006, Entergy received $14,750,000, as the first
partial payment from one of the Insurers.
At The Bank of New York's request, as indenture trustee, the
Insurance Proceeds have been held in a segregated, interest-
bearing bank account until the Court approves a protocol for the
allocation and distribution of those proceeds.
The Proposed Protocol
Because Entergy is named insured in the Policies, Entergy will
file a consolidated claims on behalf of ENOI and the Operating
Companies. The consolidated claims will include the current view
of the losses covered by the OIL Policy and the Excess Policies.
1. Allocation of Insurance Proceeds
Each Operating Company's share of the total insurance
proceeds is based on how much of its storm costs are
covered under Entergy's insurance policies.
Entergy will file proofs of loss under its insurance
policies to recover losses resulting from the storms.
These claims will be filed separately for each storm, as
each storm is considered a separate insurable event under
Entergy's insurance policies. A calculation and allocation
of insurance proceeds received will be made separately for
each storm.
The Reimbursement will be calculated as the ratio of:
(i) the total of each Operating Company's submitted
Claims and honored Claims to
(ii) the total submitted Claims and honored Claims.
Entergy will regularly update the allocation ratio. At the
time each additional claim is submitted to an insurer,
Entergy will prepare a revised Insurance Reimbursement
Statement.
The final allocation of the Insurance Proceeds and
deductible will be based on the ratio of each Operating
Company's actual honored Claims to all of the actual
honored Claims of the Operating Companies, or as otherwise
determined by the Bankruptcy Court.
2. Cap on Distribution of Insurance Proceeds
At the time each claim is submitted to an Insurer, Entergy
will prepare a Summary of Estimated Total Insurance
Reimbursement base on the ratio of Entergy's good faith
estimate of:
(i) the total of each Operating Company's submitted or
honored claims and estimates of claims that are
expected to be submitted to
(ii) the total of all submitted or honored claims and
estimates of claims that are expected to be
submitted.
Each Summary of Estimated Total Insurance Reimbursement
will be filed with the Court.
To ensure that no Operating Company receives more than the
pro rata share of the Insurance Proceeds to which it is
ultimately entitled, once an Operating Company receives 75%
of its estimated total insurance recovery, no further
distribution will be made to that Operating Company until
all insurance claims for the relevant storm are adjusted
and all insurance proceeds are paid.
The retained funds will be held in a separate interest
bearing account, and will be distributed only on a final
Court order.
3. Bankruptcy Court Oversight
Any deviation of 3% or more from the amount and ratios
reflected in the Summary of Estimated Total Insurance
Reimbursement, and as updated and filed with the Court,
must be filed with the Court so that all parties-in
interest will have not less than 20 days actual notice of
the revisions. Any objections must be filed, in writing,
with the Court within that 20-day period.
Any lump sum settlement or final release of Claims against
Insurers or any final distribution of Insurance Proceeds
will be made only after the Court's approval.
The Court will retain jurisdiction over all disputes
regarding the allocation of any Insurance Proceeds received
by ENOI.
Neither Entergy nor ENOI will object to BNY or Financial
Guaranty Insurance Company's standing to be heard in the
Court or in any other proceeding involving the recovery of
the insurance proceeds covered by the insurance allocation
protocol.
Ms. Futrell contends that an allocation methodology is needed
because more than one insurance claim will be submitted, and
insurance proceeds are anticipated to be received periodically
during the next year or more rather than in one lump sum.
Furthermore, Ms. Futrell asserts that delays in allocating and
distribution of the Insurance Proceeds could jeopardize ENOI's
timely emergence from bankruptcy.
BNY and the FGIC supports the proposed allocation protocol, Ms.
Futrell tells the Court.
Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc.
-- http://www.entergy-neworleans.com/-- is a wholly owned
subsidiary of Entergy Corporation. Entergy New Orleans provides
electric and natural gas service to approximately 190,000 electric
and 147,000 gas customers within the city of New Orleans. Entergy
New Orleans is the smallest of Entergy Corporation's five utility
companies and represents about 7% of the consolidated revenues and
3% of its consolidated earnings in 2004. Neither Entergy
Corporation nor any of Entergy's other utility and non-utility
subsidiaries were included in Entergy New Orleans' bankruptcy
filing. Entergy New Orleans filed for chapter 11 protection on
Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697). Elizabeth J.
Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker,
Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the
Debtor in its restructuring efforts. When the Debtor filed for
protection from its creditors, it listed total assets of
$703,197,000 and total debts of $610,421,000. (Entergy New
Orleans Bankruptcy News, Issue No. 16; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
ENTERGY NEW ORLEANS: Court Approves Quarterly Dividend Payments
---------------------------------------------------------------
The Hon. Jerry A. Brown of the U.S. Bankruptcy Court for the
Eastern District of Louisiana authorized Entergy New Orleans Inc.
to declare dividends on its 4 3/4% Preferred Stocks and pay the
amount equal to those dividends, starting with the dividend due on
July 1, 2006, subject to these conditions:
(a) Subsequent to the July 2006 payment, ENOI's authority to
pay dividends on the 4 3/4% Preferred Stock will be
subject to rights of BNY, FGIC and the Committee to object
to any quarterly preferred dividend. BNY, FGIC and the
Committee will notify ENOI of their objection not less
than 45 days before a subsequent dividend is due;
(b) ENOI will not be authorized to declare and pay any
preferred dividend unless Entergy provides all funds
to make those payments. If Entergy does not provide the
funds, BNY, FGIC and the Committee will not be required to
object, and ENOI will not pay dividends unless ordered by
the Court;
(c) If BNY, FGIC and the Committee timely file an objection to
any quarterly preferred dividend, ENOI will not pay the
dividend to which the objection was raised, and it will be
ENOI's burden to seek further relief from the Court.
The Court clarifies that the Order does not constitute a
presumption in favor of granting any relief that ENOI might seek
authority to declare and pay dividends to the holders of the 4
3/4% Preferred Stocks.
The Court directs Entergy to:
(a) promptly settle and pay all tax refunds allocable to ENOI,
which may be effected by being credited against amounts
outstanding under the DIP Loan;
(b) pay ENOI in connection with the Income Tax Allocation
Agreement on a quarterly basis, after Entergy's payments
of estimated taxes. Any "true up" of those amounts will
be made after the filing of the Entergy Corporation
consolidated United States federal income tax return for
that tax year; and
(c) advance to ENOI the amount equal to the quarterly
dividends that ENOI pays to the holders of the 4 3/4%
Preferred Stock.
As of the Petition Date, the outstanding balance that ENOI owes
Entergy on the DIP Loan will be credited by the dollar amount of
the amount allocable to ENOI on any refund the Internal Revenue
Service pays to Entergy. That credit will be recognized and
applied immediately on Entergy's receipt of that refund regardless
of whether Entergy has actually paid to ENOI its allocable portion
of that refund.
A similar credit will be recognized and applied for any amount due
to ENOI from Entergy pursuant to the Income Tax Allocation
Agreement, effective as of the date Entergy pays the taxes so
reduced by the benefit.
In addition, the accrual of interest on the DIP Loan will reflect
the immediate recognition and application of the credit equal to
the refund allocable to ENOI or any other amount due to ENOI under
the Income Tax Allocation Agreement.
For each and every quarterly preferred dividend that may become
due after July 1, 2006, ENOI is directed to give 60 days and a
written notice to BNY, FGIC and the Committee in the event that
Entergy is not advancing funding for those dividends.
Any funding Entergy advances to ENOI before the due date of each
quarterly preferred dividend will not bear interest, and ENOI's
obligation to repay those advances will be subordinate to the
payment in full of all claims.
Before the Court's approval, the Official Committee of Unsecured
Creditors was skeptical of any proposed payment to ENOI's
preferred shareholders because it violates the absolute priority
rule in the absence of the full and unimpaired treatment of ENOI's
unsecured creditors, Philip K. Jones, Esq., at Liskow & Lewis
APLC, in New Orleans, Louisiana, tells the Court.
However, after having been provided information and opportunity to
discuss with Entergy Corp. and Entergy Services, Inc., the
situation of ENOI's preferred shareholders and the potential
adverse tax consequences arising from failure to pay the
dividends, the Committee is now persuaded that payment of the
dividend is in the best interests of ENOI and its creditors.
The Committee understands that preserving the Tax Sharing
Agreement will significantly benefit ENOI's estate since ENOI has
and will continue to receive benefits of the tax allocation
agreement. In particular, $76,800,000, of the tax refunds that
Entergy has received will be allocated to ENOI.
Mr. Jones asserts that Entergy should not be allowed to receive
the benefit of tax reductions allocable to ENOI while continuing
to charge ENOI interest on the DIP Loan.
Accordingly, the Committee supports ENOI's request to pay the
dividend on July 1, 2006, to avoid adverse tax consequences.
However, Mr. Jones points out that ENOI's request is unclear as to
its position on issues raised by the application of Louisiana law.
Mr. Jones also points out that if the absolute priority rule were
satisfied, the tax benefits arising from the payment of dividends
would directly profit ENOI's sole common equity shareholder,
Entergy Corp.
The Committee believes that these issues are best addressed if
Entergy contribute, as capital, the exact amount due to be paid to
ENOI's preferred shareholders. It would eliminate any prejudice
to the unsecured creditors and avoids the issue of valuation at
this time. It further insulates the recipients of the transfers
from any claims in the future, as the funds for the dividend
payment would not be derived from ENOI's bankruptcy estate.
Accordingly, the Committee has asked the Court to grant ENOI's
request subject to these conditions:
(a) ENOI will receive a credit against the DIP loan
retroactive to the date Entergy receives any tax refund or
becomes entitled to a reduced tax payment. ENOI will also
receive a credit for any interest accrued and paid on the
amount of the DIP Loan for which ENOI is entitled to
retroactive credit;
(b) ENOI's request is granted solely for the July 1, 2006
payment due to the preferred shareholders; and
(c) the funds to pay the dividend to the preferred
shareholders will come from a capital contribution from
Entergy.
Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc.
-- http://www.entergy-neworleans.com/-- is a wholly owned
subsidiary of Entergy Corporation. Entergy New Orleans provides
electric and natural gas service to approximately 190,000 electric
and 147,000 gas customers within the city of New Orleans. Entergy
New Orleans is the smallest of Entergy Corporation's five utility
companies and represents about 7% of the consolidated revenues and
3% of its consolidated earnings in 2004. Neither Entergy
Corporation nor any of Entergy's other utility and non-utility
subsidiaries were included in Entergy New Orleans' bankruptcy
filing. Entergy New Orleans filed for chapter 11 protection on
Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697). Elizabeth J.
Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker,
Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the
Debtor in its restructuring efforts. When the Debtor filed for
protection from its creditors, it listed total assets of
$703,197,000 and total debts of $610,421,000. (Entergy New
Orleans Bankruptcy News, Issue No. 16; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
FINDEX.COM INC: Posts $1.5 Million Net Loss in 2005 Fiscal Year
---------------------------------------------------------------
FindEx.com, Inc., filed its consolidated financial statements for
the year ended Dec. 31, 2005, with the Securities and Exchange
Commission on April 17, 2006.
The Company reported a $1,581,266 net loss on $5,337,342 of
revenues for the year ended Dec. 31, 2005.
At Dec. 31, 2005, the Company's balance sheet showed $3,704,285 in
total assets and $3,946,338 in total liabilities, resulting in a
$242,053 stockholders' deficit.
The Company's Dec. 31 balance sheet also showed strained liquidity
with $867,750 in total current assets available to pay $3,893,447
in total current liabilities coming due within the next 12 months.
A full-text copy of the Company's 2005 Annual Report is available
for free at http://ResearchArchives.com/t/s?932
FindEx.com Inc. develop, publish, market, and distribute and
directly sell off-the-shelf consumer and organizational software
products for PC, Macintoshr and PDA platforms. We develop our
software products through in-house initiatives supplemented by
outside developers. We market and distribute our software products
principally through direct marketing and Internet sales programs,
but also through secular and non-secular wholesale retailers.
GAMING & ENTERTAINMENT: Auditor Raises Going Concern Doubt
----------------------------------------------------------
J. H. Cohn LLP in Roseland, New Jersey, raised substantial doubt
about Gaming & Entertainment Group, Inc.'s ability to continue as
a going concern after auditing the Company's consolidated
financial statements for the year ended Dec. 31, 2005. The
auditor pointed to the Company's recurring losses, negative
working capital, and accumulated and stockholders' deficiencies.
The Company reported a $1,472,609 net loss on $1,274,819 of total
revenues for the year ended Dec. 31, 2005.
At Dec. 31, 2005, the Company's balance sheet showed $637,507 in
total assets and $1,833,328 in total liabilities, resulting in
$1,195,821 of stockholders' deficit.
The Company's Dec. 31 balance sheet also showed strained liquidity
with $212,460 in total current assets available to pay $669,683 in
total current liabilities coming due within the next 12 months.
A full-text copy of the Company's 2005 Annual Report is available
for free at http://ResearchArchives.com/t/s?937
Gaming & Entertainment Group, Inc., has two wholly owned operating
subsidiaries, Gaming & Entertainment Technology Pty Ltd., a
company formed under the laws of Australia, and Gaming &
Entertainment Group, Ltd., a company formed under the laws of the
United Kingdom. The Company supplies government-regulated
networked gaming technology. The Company built a comprehensive
networked gaming platform that has passed multiple government
prescribed validations in Australia (Tasmania and Queensland),
Republic of Vanuatu and Great Britain (Alderney and the Isle of
Man).
GENERAL ENVIRONMENTAL: Weinberg & Co. Raises Going Concern Doubt
----------------------------------------------------------------
Weinberg & Company, P.A., expressed doubt about General
Environmental Management, Inc.'s ability to continue as a going
concern after auditing the Company's 2005 financial statements.
The auditing firm pointed to the Company's net loss of $4,890,228,
$4,984,409 cash utilization in its operating activities and a
working capital deficit of $2,481,648 at Dec. 31, 2005.
For the fiscal year ended Dec. 31, 2005, total revenue was
$18.3 million, compared to $9.3 million for 2004. Gross margin
for the 2005 year was approximately 18%, compared to approximately
10 percent in 2004. The increase in gross margin was due to
higher margin business related to the integration of the business
of Prime Environmental Services, Inc., which the Company acquired
in August of 2004, and from reduced disposal costs related to the
economies of scale achieved by bulking waste for disposal at the
company's Treatment, Storage and Disposal Facility (TDSF) in
Rancho Cordova, California. Operating expenses for the year-ended
Dec. 31, 2005, were $7.5 million, compared to $5.9 million for
2004. 2005 operating expenses included costs associated with the
company's reverse merger that occurred in February 2005, as well
as higher costs associated with being a public company.
"We made significant progress in 2005," stated Tim Koziol,
chairman and CEO of GEM. "Our full-year revenue growth of 98
percent attests to the strength of our growth strategy and our
ability to effectively integrate prior acquisitions. In addition,
we streamlined our operations to achieve greater efficiencies at
our TDSF and our field service operations. Looking at 2006, we
anticipate building on this foundation via organic growth and
strategic acquisitions that will add high-margin niche business
segments, expand our service offerings and geographic scope, or
achieve both. In keeping with this strategy, we acquired K2M
Mobile Treatment Services, Inc. in early March 2006. K2M provides
wastewater treatment and degassing/vapor control products and
petrochemical treatment expertise. The K2M acquisition also
expands our existing and target customer base as well as broadens
our geographic reach into the Gulf Coast. In fact, we recently
opened new operations in Houston, Texas. We anticipate K2M will
be a key driver in our expected 20 to 25 percent revenue increase
in 2006."
Brett Clark, chief financial officer of GEM, stated, "As announced
on March 6th, we completed a $7 million financing transaction, of
which $1.5 million was used to purchase K2M. K2M has a record of
profitability and is expected to reduce GEM's current deficits.
In addition, we intend to continue our cost containment efforts at
all levels of the business and to bring cost efficiencies to any
new business acquired. These efforts resulted in reducing our
loss from $3.7 million in the first half of 2005 to a loss of $1.4
million in the second half of 2005."
As of Dec. 31, 2005, the company's balance sheet showed total
assets of $9.4 million and total debts of $9.3 million.
A full-text copy of General Environmental's annual report on
Form 10-KSB for the year ended Dec. 31, 2005, is available for
free at http://researcharchives.com/t/s?92b
About General Environmental
Headquartered in Pomona, California, General Environmental
Management, Inc. -- http://www.go-gem.com/-- is a full service
hazardous waste management and environmental services firm
providing integrated environmental solutions managed through its
proprietary web-based enterprise software, GEMWare, including the
following service offering: management and transportation of
waste; design and management of on-site waste treatment systems;
management of large remediation projects; response to
environmental incidents and spills; and environmental, health and
safety compliance. GEM operates five field service locations and
one Treatment, Storage and Disposal Facility (TSDF), servicing all
markets in the Western U.S.
HEALTHSOUTH CORP: March 31 Balance Sheet Upside-Down By $1.9 Bil.
-----------------------------------------------------------------
HealthSouth Corporation filed its financial statements for the
first quarter ended March 31, 2006, with the Securities and
Exchange Commission on May 15, 2006.
The Company reported a $435,490,000 net loss on $791,987,000 of
net revenues for the three months ended March 31, 2006.
At March 31, 2006, the Company's balance sheet showed
$3,456,962,000 in total assets, $4,753,783,000 in total
liabilities, $287,706,000 in minority interest, and $387,452,000
in convertible preferred stock, resulting in a $1,971,979,000
stockholders' deficit.
The Company's March 31 balance sheet also showed strained
liquidity with $841,393,000 in total current assets available to
pay $1,071,571,000 in total current liabilities coming due within
the next 12 months.
Full-text copies of the HealthSouth Corporation's first quarter
financial statements ended March 31, 2006, are available for free
at http://ResearchArchives.com/t/s?944
Headquartered in Birmingham, Alabama, HealthSouth Corporation --
http://www.healthsouth.com/-- provides outpatient surgery,
diagnostic imaging and rehabilitative healthcare services,
operating facilities nationwide.
* * *
Moody's assigned HealthSouth's debt and corporate family ratings
at B2 and B3 respectively. The ratings were placed on April 18,
2006, with a stable outlook.
On April 11, 2006, Standard & Poor's placed the company's long
term local and foreign issuer credit ratings at B with a stable
outlook.
HEATING OIL: Has Until July 15 to Make Lease-Related Decisions
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Connecticut further
extended, until July 15, 2006, the time within which Heating Oil
Partners, L.P., and its debtor-affiliates may assume, assume and
assign, or reject unexpired nonresidential real property leases.
The extension through July 15, 2006, will give the Debtors
sufficient time to complete the confirmation process and to avoid
prematurely assuming an unnecessary unexpired lease or rejecting a
lease necessary to the Debtors' reorganization efforts.
As reported in the Troubled Company Reporter on Feb. 28, 2006, the
Debtors filed their Plan of Reorganization and accompanying
Disclosure Statement, that provided for the assumption and
rejection of certain unexpired leases and executory contracts.
The Bankruptcy Court will convene a hearing at 2:30 p.m. on
May 31, 2006, to consider confirmation of the Debtors' First
Amended Joint Plan of Reorganization.
A list of the Company's unexpired nonresidential real property
leases is available at http://researcharchives.com/t/s?94a
About Heating Oil
Headquartered in Darien, Connecticut, Heating Oil Partners, L.P.
-- http://www.hopheat.com/-- is one of the largest residential
heating oil distributors in the United States, serving
approximately 150,000 customers in the Northeastern United States.
The Company's primary business is the distribution of heating oil
and other refined liquid petroleum products to residential and
commercial customers.
The Company and its subsidiaries filed for chapter 11 protection
on Sept. 26, 2005 (Bankr. D. Conn. Case No. 05-51271) and filed
for recognition of the chapter 11 proceedings under the Companies'
Creditors Arrangement Act (Canada). Craig I. Lifland, Esq., and
James Berman, Esq., at Zeisler and Zeisler, represent the Debtors
in their restructuring efforts. Jeffrey D. Prol, Esq., at
Lowenstein Sandler PC, represents the Official Committee of
Unsecured Creditors. When the Debtors filed for protection from
their creditors, they listed $127,278,000 in total assets and
$155,033,000 in total debts.
IMPART MEDIA: Peterson Sullivan Raises Going Concern Doubt
----------------------------------------------------------
Peterson Sullivan PLLC in Seattle, Washington, raised substantial
doubt about Impart Media Group, Inc., fka Limelight Media Group,
Inc.'s ability to continue as a going concern after auditing the
Company's consolidated financial statements for the year ended
Dec. 31, 2005. The auditor pointed to the Company's recurring
losses from operations and substantial accumulated deficit.
The Company reported a $2,420,327 net loss on $528,689 of revenues
for the year ended Dec. 31, 2005.
At Dec. 31, 2005, the Company's balance sheet showed $932,801 in
total assets and $3,471,886 in total liabilities, resulting in a
$2,539,085 stockholders' deficit.
The Company's Dec. 31 balance sheet also showed strained liquidity
with $899,821 in total current assets available to pay $1,407,050
in total current liabilities coming due within the next 12 months.
A full-text copy of the Company's 2005 Annual Report is available
for free at http://ResearchArchives.com/t/s?938
Impart Media Group, Inc., fka Limelight Media Group, Inc.,
designs, integrates, sells, and installs interactive digital
signage and media solutions to a variety of out-of-home
advertising and information venues. The Company also sells time
slots on networks for the display of advertising and other media
content for delivery to the networked digital elements that the
Company manages and to non-networked, stand-alone displays, cell
phones and personal digital assistant.
INDUSTRIAL SYSTEMS: Case Summary & 18 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Industrial Systems Design (ISD), LLC
114 West Springbrook Drive
P.O. Box 2144
Johnson City, Tennessee 37605-2144
Tel: (423) 282-6088
Fax: (423) 282-8214
Bankruptcy Case No.: 06-50354
Type of Business: The Debtor is a software-engineering company.
The company provides software control and
automation support for various processing and
manufacturing industries.
See http://www.inside-isd.com
Chapter 11 Petition Date: May 15, 2006
Court: Eastern District of Tennessee (Greeneville)
Judge: Marcia Phillips Parsons
Debtor's Counsel: Dean Greer, Esq.
Dean Greer & Associates
2809 East Center Street, P.O. Box 3708
Kingsport, Tennessee 37664
Tel: (423) 246-1988
Total Assets: $1,900,324
Total Debts: $2,397,044
Debtor's 18 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Internal Revenue Service 941 & 940 Taxes $635,745
P.O. Box 21126
Philadelphia, PA 19114
Siemens Energy & Automation Trade Debt $503,212
3333 Old Milton Parkway
Alpharetta, GA 30005
Intrinsic Systems Design Inc. Contract Labor $167,081
c/o Robert Hall
P.O. Box 793872
Dallas, TX 75379
Charles E. Elliott Wages & Travel $97,463
Expenses
Tommy Keefer Wages $56,252
Newmind Group, Inc. Contract Labor $48,545
AWC, Inc. Miscellaneous $44,662
Rich Shull Contract Labor $32,659
Jim Shepherd Wages, Commissions $27,729
William Slocum Wages, Commissions $27,729
Tom Tison Wages, Commissions $25,634
Mike Hollis Wages, Commissions $24,963
Mitchell Stephens Wages, Commissions $24,942
Advance Interface Miscellaneous $24,608
Solutions, Inc.
Ricky Higginbotham Wages, Commissions $22,738
Damond Timmerman Wages, Commissions $21,300
State of Michigan Withholding Tax $20,692
KDH Technical Communications Contract Labor $19,643
INFOR GLOBAL: Buying SSA's Stock in $19.50-Per-Share Merger Deal
----------------------------------------------------------------
SSA Global Technologies, Inc., and Infor Global Solutions AG
entered into a definitive agreement for Infor to acquire SSA
Global.
Under the terms of the agreement, Infor has agreed to pay
$19.50 per share in cash to SSA Global's shareholders. The
agreement was approved by SSA Global's Special Committee of
independent directors, as well as the Board of Directors. The
parties anticipate closing the transaction in the third calendar
quarter of 2006. The closing is subject to certain customary
conditions, including receipt of regulatory approvals and SSA
Global shareholder approval. Certain shareholders representing
approximately 84% of SSA Global's outstanding shares have entered
into voting agreements to support the merger.
"With this acquisition, Infor will become the third largest
enterprise software provider in the industry with approximately
$1.6 billion in revenue," said Jim Schaper, Infor's chairman and
CEO. "Infor has become a significant force in the industry by
assembling and innovating market-specific, best-in-class
enterprise software solutions, which provides customers with a
flexible choice in the market."
"In a rapidly consolidating marketplace we have seen that size and
scale matter," said Mike Greenough, chairman, president and CEO of
SSA Global. "This transaction brings value to all of our key
stakeholders . our investors, our customers and our employees."
Infor was advised by Kirkland & Ellis LLP. Financing for the
acquisition will be arranged by J.P. Morgan Securities Inc. and
Credit Suisse (USA) LLC and is expected to include a combination
of senior secured first-lien credit facilities and second-lien
debt denominated in both US dollars and Euros.
The Special committee of independent directors was advised by
Mayer, Brown, Rowe & Maw LLP and received a fairness opinion from
Houlihan, Lokey, Howard & Zukin. SSA Global was advised by
Schulte Roth and Zabel LLP and J.P. Morgan Securities Inc.
The definitive agreement to acquire SSA Global Technologies, Inc.
was signed by Magellan Holdings, Inc., a wholly owned subsidiary
of Infor Global Solutions AG. Infor is a portfolio company of
Golden Gate Capital and Summit Partners.
About SSA Global
Headquartered in Chicago, Illinois, SSA Global Technologies Inc.
(Nasdaq: SSAG) -- http://www.ssaglobal.com/-- is a leading
provider of extended ERP solutions for manufacturing,
distribution, retail, services and public organizations worldwide.
In addition to core ERP applications, SSA Global offers a full
range of integrated extension solutions including corporate
performance management, customer relationship management, product
lifecycle management, supply chain management and supplier
relationship management. SSA Global has over 50 locations
worldwide and its product offerings are used by approximately
13,000 active customers in over 90 countries. SSA Global(TM) is
the corporate brand for product lines and subsidiaries of SSA
Global Technologies, Inc. SSA Global, SSA Global Technologies and
SSA GT are trademarks of SSA Global Technologies, Inc. Other
products mentioned in this document are registered, trademarked or
service marked by their respective owners.
About Infor
Infor Global Solutions AG -- http://www.infor.com/-- is one of
the largest global software providers focused on delivering
world-class enterprise applications to select verticals in the
manufacturing and distribution industries. Infor delivers
integrated solutions that address the essential challenges its
customers face in areas such as supply chain planning, enterprise
asset management, relationship management, demand management, ERP,
warehouse management, and business intelligence. With more than
3,100 employees in 50 global offices, Infor provides enterprise
solutions to almost 24,700 customers in over 100 countries.
* * *
As reported in the Troubled Company Reporter on Feb. 10, 2006,
Standard & Poor's Ratings Services placed its 'B' rating and '3'
recovery rating on Alpharetta, Georgia-based Infor Global
Solutions AG's $655 million first-lien senior secured bank
facility, which consist of:
* a $50 million revolving credit facility (due 2010); and
* a $605 million term loan (due 2011).
At the same time, Standard & Poor's puts its 'CCC+' rating and
'5' recovery rating to the company's $115 million incremental
second-lien term loan, due 2012. Standard & Poor's also affirmed
its 'B' corporate credit rating and 'CCC+' rating, with a '5'
recovery rating, on the company's existing $200 million second-
lien term facility, and revised its outlook to developing from
positive.
Moody's Investors Service affirmed Infor Global Solutions existing
B3 corporate family rating, the B2 rating to its first lien
facility and Caa2 to its second lien facility. These ratings also
incorporate the additional debt of $305 million to the company's
first lien facility and $115 million to the second lien facility.
Moody's said the outlook remains stable.
INTEGRATED DISABILITY: Court Okays Godwin Pappas as Bankr. Counsel
------------------------------------------------------------------
Integrated DisAbility Resources, Inc., obtained permission from
the U.S. Bankruptcy Court for the Northern District of Texas to
employ Godwin Pappas Langley Ronquillo LLP, as its bankruptcy
counsel.
Godwin Pappas is expected to:
a) advise the Debtor of its rights, powers, and duties as
debtor and debtor-in-possession;
b) take all necessary actions to protect and preserve the
Debtor's estate, including the prosecution of actions on the
Debtor's behalf, the defense of actions commenced against
the Debtor, the negotiation of disputes in which the Debtor
is involved and the preparation of objections to claims
filed against the estate;
c) prepare on behalf of the Debtor, as debtor-in-possession,
all necessary motions, applications, answers, orders,
reports, and papers in connection with the administration of
the estate;
d) draft, negotiate and prosecute on behalf of the Debtor a
plan of the liquidation of the Debtor's estate, the related
disclosure statement(s), and any revisions, amendments,
etc., relating to the foregoing documents, and all related
materials;
e) perform all other necessary legal services in connection
with this chapter 11 case and any other bankruptcy related
representation that the Debtor require; and
f) handle all litigation, discovery and other matters for the
Debtor arising in connection with the chapter 11 case.
Vincent P. Slusher, Esq., a Godwin Pappas partner, will bill the
Debtor $360 per hour for his work. Mr. Slusher discloses the
firm's other professionals bill:
Professional Position Hourly Rate
------------ -------- -----------
Keith Langley Partner $340
Cynthia W. Cole Associate $210
Seth Moore Associate $210
Teresa Barerra Paralegal $115
Godwin Pappas has received a total of $73,288 prepetition retainer
in connection with the firm's representation of the Debtor. As of
the Debtor's bankruptcy filing, the Firm holds a $124,588
retainer, which will be applied to fees and expenses incurred in
the course of the Debtor's chapter 11 proceeding.
The Debtor believes that Godwin Pappas is a "disinterested person"
as that term is defined in section 101(14) of the Bankruptcy Code.
Headquartered in Irving, Texas, Integrated DisAbility Resources,
Inc. -- http://www.myidr.com/-- provides disability plans and
ongoing health and productivity services to claimants and
employees. The Debtor filed for chapter 11 protection on Feb. 10,
2006 (Bankr. N.D. Tex. Case No. 06-30575). Cynthia Williams Cole,
Esq., and Vincent P. Slusher, Esq., at Godwin Pappas Langley
Ronquillo LLP, represent the Debtor in its restructuring efforts.
The United States Trustee for Region 6 was not able to form an
Official Committee of Unsecured Creditors due to lack of interest
and lack of attendance during the creditors' meeting on March 21,
2006. When the Debtor filed for protection from its creditors, it
estimated $1 million to $10 million in assets and $10 million to
$50 million in debts.
INTEGRATED HEALTH: Court Extends Removal Period to July 7
---------------------------------------------------------
The Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the
District of Delaware extended to July 5, 2006, IHS Liquidating,
LLC's deadline to file notices of removal with respect to civil
actions pending on the Petition Date.
As reported in the Troubled Company Reporter on March 9, 2006, the
extension will give IHS Liquidating an opportunity to make more
fully informed decisions concerning the removal of each
Prepetition Action and will assure that IHS Liquidating does not
forfeit the valuable rights afforded to it under Section 1452 of
the Judiciary Code.
Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, in
Wilmington, Delaware, noted that IHS Liquidating has already
resolved many of the Prepetition Actions through the claims
reconciliation process. However, IHS Liquidating anticipates that
removal may be appropriate with respect to certain of the
unresolved Prepetition Actions. Mr. Brady says it is prudent to
preserve the estates' right to seek removal until IHS Liquidating
has completed its analysis of the Prepetition Actions.
Integrated Health Services, Inc. -- http://www.ihs-inc.com/--
operated local and regional networks that provide post-acute care
from 1,500 locations in 47 states. The Company and its
437 debtor-affiliates filed for chapter 11 protection on
February 2, 2000 (Bankr. Del. Case No. 00-00389). Rotech Medical
Corporation and its direct and indirect debtor-subsidiaries broke
away from IHS and emerged under their own plan of reorganization
on March 26, 2002. Abe Briarwood Corp. bought substantially all
of IHS' assets in 2003. The Court confirmed IHS' Chapter 11 Plan
on May 12, 2003, and that plan took effect September 9, 2003.
Michael J. Crames, Esq., Arthur Steinberg, Esq., and Mark D.
Rosenberg, Esq., at Kaye, Scholer, Fierman, Hays & Handler, LLP,
represent the IHS Debtors. On September 30, 1999, the Debtors
listed $3,595,614,000 in consolidated assets and $4,123,876,000 in
consolidated debts. (Integrated Health Bankruptcy News, Issue
No. 104; Bankruptcy Creditors' Service, Inc., 215/945-7000)
INTEGRATED HEALTH: Allows Hamilton Trust's $1.4 Mil. Unsec. Claim
-----------------------------------------------------------------
Kenneth Milton Hamilton Trust, LLC, filed Claim No. 13712 for
$1,679,516, on an unsecured basis, against Integrated Health
Services, Inc., and its affiliates. The Trust asserts amounts
owed by the IHS Debtors under a prepetition lease agreement
between them.
The Trust subsequently filed a separate proof of claim for $81,817
against the IHS Debtors on account of prepetition rent.
Following negotiations, IHS Liquidating LLC, as successor to the
IHS Debtors, and the Trust entered into a stipulation.
The parties agree that:
(1) Claim No. 13712 will be allowed as a general unsecured
claim for $1,400,000;
(2) the stipulation does not resolve the prepetition rent
claim, which is an additional allowed claim in full force
and effect and unaffected by the stipulation; and
(3) they will mutually release each other from all claims or
causes of action related to the lease agreement.
Integrated Health Services, Inc. -- http://www.ihs-inc.com/--
operated local and regional networks that provide post-acute care
from 1,500 locations in 47 states. The Company and its
437 debtor-affiliates filed for chapter 11 protection on
February 2, 2000 (Bankr. Del. Case No. 00-00389). Rotech Medical
Corporation and its direct and indirect debtor-subsidiaries broke
away from IHS and emerged under their own plan of reorganization
on March 26, 2002. Abe Briarwood Corp. bought substantially all
of IHS' assets in 2003. The Court confirmed IHS' Chapter 11 Plan
on May 12, 2003, and that plan took effect September 9, 2003.
Michael J. Crames, Esq., Arthur Steinberg, Esq., and Mark D.
Rosenberg, Esq., at Kaye, Scholer, Fierman, Hays & Handler, LLP,
represent the IHS Debtors. On September 30, 1999, the Debtors
listed $3,595,614,000 in consolidated assets and $4,123,876,000 in
consolidated debts. (Integrated Health Bankruptcy News, Issue
No. 104; Bankruptcy Creditors' Service, Inc., 215/945-7000)
INVISTA BV: Moody's Lifts Corporate Family Rating to Ba2 from Ba3
-----------------------------------------------------------------
Moody's Investors Service upgraded INVISTA B.V.'s corporate family
rating to Ba2 from Ba3. Moody's also upgraded to Ba2 from Ba3 the
ratings on INVISTA S.A.R.L.'s credit facilities and term loans and
upgraded to Ba3 from B1 the rating on ISARL's guaranteed senior
notes due 2012. IBV is the parent holding company for ISARL, and
IBV guarantees the credit facilities of ISARL.
Moody's also affirmed IBV's speculative grade liquidity rating at
SGL-2 reflecting strong cash balances, good availability under its
revolver, a favorable debt maturity profile and the expectation of
strong headroom under its existing bank covenants. The rating
outlook is stable.
The upgrade in the corporate family rating to Ba2 reflects Moody's
belief that the successful integration and cost saving initiatives
completed by management, post IBV's acquisition, April 2004, of
DuPont Textiles & Interiors' assets, have resulted in a sustained
improvement in retained cash flow. This improvement in cash flow
when combined with modest debt reduction has resulted in credit
metrics that support the higher ratings.
In addition Moody's believes that IBV's business profile combined
with its size and relative stability support the upgrade. Limiting
factors to the rating include the need to assess the unique margin
pressures on IBV's ongoing businesses particularly in the spandex
segment.
Moody's notes that but for the very successful and considerable
cost saving initiatives that management has achieved IBV's
adjusted EBITDA would be materially smaller. Nevertheless the
strength and success of the cost savings is decidedly significant.
Moody's Ba2 corporate family ratings also reflects some caution
regarding potential acquisitions that management might decide to
pursue now that a large portion of their integration efforts are
complete.
In light of these factors, Moody's will monitor both INVSTA's
performance with respect to improvement in credit metrics and its
actions with regard to potential acquisitions before another
upgrade is considered.
Moody's previous rating action on IBV was the upgrade of the
speculative grade liquidity rating to SGL-2 from SGL-3 on the 8th
of April 2005.
Upgrades:
Issuer: INVISTA B.V.
* Corporate Family Rating, Upgraded to Ba2 from Ba3
Issuer: INVISTA S.A.R.L.
* Senior Secured Bank Credit Facility, Upgraded to Ba2
from Ba3
* Senior Unsecured Notes, Upgraded to Ba3 from B1
Affirmations:
Issuer: INVISTA B.V.
* Speculative Grade Liquidity Rating -- SGL-2.
INVISTA B.V. is headquartered in the Netherlands. IBV is one of
the world's leading producers of chemical intermediates, polymers
and fibers for use in the manufacture of nylon, spandex, and
polyester products. The company's revenues were $9.6 billion in
2005.
J.L. FRENCH: Court Approves Second Amended Disclosure Statement
---------------------------------------------------------------
The Honorable Mary F. Walrath of the U.S. Bankruptcy Court for
the District of Delaware approved, on May 12, 2006, the Second
Amended Disclosure Statement explaining the Second Amended Plan of
Reorganization filed by J.L. French Automotive Castings, Inc., and
its debtor-affiliates.
Judge Walrath determined that the Disclosure Statement contained
adequate information -- the amount of the right kind of
information necessary allow creditors to make an informed decision
-- as required under Section 1125 of the Bankruptcy Code.
Beginning today, the Debtors will begin soliciting acceptances of
the Plan of Reorganization from impaired classes of creditors.
All votes will be due by June 14, and the rights offering will
commence within a week after that. Concurrent with the
solicitation of plan acceptances, the company will also conduct
its rights offering, which is expected raise between $110 million
and $130 million. The company anticipates a confirmation hearing
on June 21 with a plan effective date on or about June 30.
Terms of the Plan
The Plan is premised on the substantive consolidation of all of
the Debtors. The Plan incorporates the terms of a settlement
between the Company, the Official Committee of Unsecured Creditors
and the second lien agent, on behalf of the required backstop
parties.
The Plan calls for the repayment in full of secured claims
amounting to $7.7 million and the first lien debt totaling
approximately $294 million. All classes related to the payment of
debtor-in-possession financing claims, administrative expenses,
priority claims and capital leases and other secured claims will
be paid in full.
Under the Plan, the second lien notes claims, which total
approximately $177 million, will be converted into 8%-22% of the
new common stock and three tranches of warrants for new common
stock in the reorganized company. The warrants will have strike
prices ranging from $195 million to $295 million in equity value.
Holders of second lien notes claims may also participate in a
Rights Offering that will raise between $110 million and
$130 million in exchange for 78%-92% of the new equity. This cash
will help finance the reorganized company's exit from Chapter 11.
Trade creditors will receive 100% of the face amount of their
claims, but will not receive interest on those claims. General
unsecured creditors other than holders of senior subordinated
11-1/2% notes and trade creditors will receive their pro rata
shares of the greater of $50,000 or common stock having a value
equal to certain property unencumbered by liens.
The subordinated 11-1/2% notes are contractually subordinated to
the second lien notes claims, and holders of those notes will not
receive any distributions unless the second lien notes claims have
been satisfied in full. Preferred and common equity holders will
receive no distribution under the Plan.
Distributions under the Plan will be made through new cash
investment, as well as exit financing of no less than
$255 million, of which $205 million will be a term loan and a
revolver of $50 million, with at least $30 million unfunded
capacity at the time the Plan becomes effective. The company is
considering several exit financing proposals and expects to have
an exit financing commitment shortly.
As of Dec. 31, 2005, J.L. French had approximately $465 million in
first and second lien senior secured debt and $28.9 million in
11.5% senior subordinated unsecured notes due 2009. The company
incurred the majority of this debt as a result of an expansion and
acquisition program in the late 1990s. When J.L. French completes
its reorganization, it anticipates long-term debt of approximately
$26 million, in addition to the new $205 million term facility
that will be added to the balance sheet. As of Dec. 31, 2005, the
company had approximately $268 million in consolidated net
operating losses.
Terms of the Settlement
The settlement provides, among other things, for a distribution of
warrants to holders of the 11-1/2% subordinated notes, as well as
a distribution of certain potential litigation recoveries to
general unsecured claims holders and the note holders. These
distributions will be in addition to the recoveries contemplated
by the Plan of Reorganization as originally filed.
A full-text copy of the Second Amended Disclosure Statement is
available for a fee at:
http://www.researcharchives.com/bin/download?id=060516220019
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.
Ricardo Palacio, Esq., and William Pierce Bowden, Esq., at Ashby &
Geddes, PA, represents the Official Committee Of Unsecured
Creditors. When the Debtor filed for chapter 11 protection, it
estimated assets and debts of more than $100 million.
J.L. FRENCH: Giuliani Capital Hired as Panel's Financial Advisors
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware allowed the
Official Committee of Unsecured Creditors of J.L. French
Automotive Castings, Inc., and its debtor-affiliates to employ
Giuliani Capital Advisors LLC as its financial advisors, nunc pro
tunc to Feb. 22, 2006.
Giuliani Capital will:
a) advise the Committee regarding the Debtors' business plans,
cash flow forecasts, financial projections and cash flow
reporting;
b) advise the Committee with respect to available capital
restructuring, sale and financing alternatives, including
the plan currently being proposed by the Debtors,
recommending specific courses of action and assisting with
the design, structuring and negotiation of an alternative
restructuring or transaction;
c) advise the Committee regarding financial information
prepared by the Debtor, and in its coordination of
communications with interested parties and their respective
advisors;
d) advise the Committee in preparing for, meeting with, and
presenting information to interested parties and their
respective advisors;
e) advise the Committee as to the Debtors' proposals from third
parties for new sources of capital or the sale of the
company;
f) assist and advise the Committee and its counsel in the
development, evaluation and documentation of any plan(s) of
reorganization or strategic transaction(s), including
developing, structuring and negotiating the terms and
conditions of potential plan(s), financings or strategic
transaction(s) and the consideration that is to be provided
to unsecured creditors;
g) provide testimony in the Court; and
h) provide other services as may be reasonably requested in
writing from time to time.
Andrew Scruton, a Giuliani Capital managing director, discloses
the Firm's professionals charge:
i) a $100,000 monthly advisory fee with a three-month
minimum;
ii) the Debtor will pay a completion fee upon the consummation
of:
a) a sale of all or substantially all of the Debtors'
assets; or
b) a restructuring, refinancing or recapitalization of the
Debtors' indebtedness, obligations, debt securities,
preferred stock or other liabilities a fee based on the
aggregate amount of value distributable to general
unsecured creditors.
In addition, the completion fee will be payable only if there is a
distribution of any kind (including stock, warrants, cash, or
property of any kind or nature) to unsecured creditors in an
amount equal to the greater of:
a) 250,000; or
b) Recovery to general GCA Completion Fee
unsecured creditors based on Recovery
------------------- ------------------
Above or equal to $3 million, $300,000
but less than $4 million
Above or equal to $4 million, $400,000
but less than $5 million
Above or equal to $5 million $500,000
Mr. Scruton assures the Court that the Firm is a "disinterested
person" 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.
Ricardo Palacio, Esq., and William Pierce Bowden, Esq., at Ashby &
Geddes, PA, represents the Official Committee Of Unsecured
Creditors. When the Debtor filed for chapter 11 protection, it
estimated assets and debts of more than $100 million.
J.W. FERRELL: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: J.W. Ferrell Concrete Co., Inc.
Red Lion Business Center, Suite A
143 Red Lion Road
Vincentown, New Jersey 08088
Bankruptcy Case No.: 06-14331
Type of Business: The Debtor offers delivery and installation of
concrete products for construction.
Chapter 11 Petition Date: May 16, 2006
Court: District of New Jersey (Trenton)
Debtor's Counsel: David Kasen, Esq.
Kasen, Kasen & Braverman
1874 East Route 70, Suite 3
P.O. Box 4130
Cherry Hill, New Jersey 08034
Tel: (856) 424-4144
Fax: (856) 424-7565
Estimated Assets: Less than $50,000
Estimated Debts: $1 Million to $10 Million
The Debtor did not file the list of its 20 largest unsecured
creditors.
KAISER ALUMINUM: Court Approves AIG Settlement Agreement
--------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved
Kaiser Aluminum Corporation and its debtor-affiliates' Settlement
Agreement with AIG Member Companies.
As previously reported, Kaiser Aluminum & Chemical Corporation and
the AIG Parties reached a settlement that resolves all claims
against the AIG Parties with respect to the Subject Policies,
including coverage for Channeled Personal Injury Claims, as well
as other present and future liabilities, and all Tort Claims
against the AIG Parties with respect to the Other AIG Parties
Policies.
The principal terms of the Settlement Agreement are:
(a) The AIG Member Companies will pay 37.5% of trust expenses
and the liquidation values of Asbestos Personal Injury
Claims liquidated by the PI Asbestos Trust and Silica
Personal Injury Claims liquidated by the PI Silica Trust,
subject to (i) certain quarterly caps and associated
rollover provisions, and (ii) an aggregate cap of
$567,885,590. The AIG Member Companies will pay the
Settlement Amount to the Funding Vehicle Trust.
(b) The AIG Parties have specifically contracted to receive
all of the benefits of being designated as Settling
Insurance Companies in the Plan, including, but not
limited to, the PI Channeling Injunctions.
(c) KACC Parties agree to release all of their rights under
the Subject Policies and certain other rights under the
Other AIG Parties Policies and to dismiss each of the AIG
Member Companies from the Coverage Actions.
(d) The Settlement Agreement covers all claims that might be
covered by the Subject Policies. KACC will sell the
Subject Policies back to the AIG Member Companies, and the
AIG Member Companies will buy back the Subject Policies,
free and clear of all liens, claims or interests, with the
AIG Member Companies' payment of the Settlement Amount
constituting the consideration for the buy-back.
(e) If any claim is brought against any of the AIG Parties
that is subject to a PI Channeling Injunction, the Funding
Vehicle Trust will exercise its reasonable best efforts to
establish that those claims are enjoined as to the AIG
Parties by the PI Channeling Injunction.
(f) The AIG Parties will not seek reimbursement of any
payments that the AIG Member Companies are obligated to
make under the Settlement Agreement.
A full-text copy of the AIG Settlement Agreement is available for
free at http://bankrupt.com/misc/kaiser_AIGsettlement.pdf
About Kaiser Aluminum
Headquartered in Foothill Ranch, California, Kaiser Aluminum
Corporation -- http://www.kaiseraluminum.com/-- is a leading
producer of fabricated aluminum products for aerospace and high-
strength, general engineering, automotive, and custom industrial
applications. The Company filed for chapter 11 protection on
February 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold
off a number of its commodity businesses during course of its
cases. Corinne Ball, Esq., at Jones Day, represents the Debtors
in their restructuring efforts. On June 30, 2004, the Debtors
listed $1.619 billion in assets and $3.396 billion in debts.
(Kaiser Bankruptcy News, Issue No. 96; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
KASSEBAUM AND CRUZ: Case Summary & 3 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Kassebaum And Cruz Realty Partners II, LLC
430 Broadway
Chico, California 95928
Bankruptcy Case No.: 06-21581
Chapter 11 Petition Date: May 15, 2006
Court: Eastern District of California (Sacramento)
Judge: Christopher M. Klein
Debtor's Counsel: Scott A. CoBen, Esq.
CoBen & Associates
1214 F Street
Sacramento, California 95814
Tel: (916) 492-9010
Total Assets: $6,551,200
Total Debts: $5,552,166
Debtor's 3 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
KC Development $800,000
312 Winged Foot
Granite Bay, CA 95746
John DuBois Loan $75,000
c/o Dean Kassebaum
430 Broadway
Chico, CA 95928
Jon Ginoulious Loan $35,000
c/o Dean Kassebaum
430 Broadway
Chico, CA 95928
KMART CORP: Summary Judgment on Rubloff's Claims Draws Fire
-----------------------------------------------------------
As previously reported, Rubloff Development Group, Inc., asks the
U.S. Bankruptcy Court for the Northern District of Illinois to
deny Kmart Corporation's request for a summary judgment
disallowing Rubloff's claims and grant summary judgment in its
favor instead.
Thomas J. Lester, Esq., at Hinshaw & Culbertson LLP, in Rockford,
Illinois, asserted that summary judgment allowing the Claims in
their entirety should be granted because:
(1) the clear language of the Lease Assumption and Assignment
Agreement executed between Kmart and Rubloff did not
release Kmart from its obligations under eight subleases
entered into by the parties between 1998 and 2000; and
(2) Rubloff was damaged in the amounts set forth in its Claims
by Kmart's breach of contractual obligations under the
Subleases.
Kmart Replies
Kmart Corporation asserts that none of the arguments made by
Rubloff Development Group, Inc., creates any genuine issue, which
would preclude summary judgment in Kmart's favor.
William J. Barrett, Esq., at Barack Ferrazzano Kirschbaum Perlman
& Nagelberg LLP, in Chicago, Illinois, cites Article 27 of the
Subleases, which provides that:
"The covenants and obligations of Sublessor [Kmart] under this
Sublease shall not be binding upon the Sublessor [Kmart]
herein named or any subsequent sublessor with respect to any
period subsequent to the transfer of all its interests in the
Demised Premises, and, in the event of any such transfer,
Sublessee [Rubloff] agrees to look solely to the transferee
[Rubloff] for the performance of any term, covenant,
obligation, warranty or representation of Sublessor [Kmart]
hereunder, but only with respect to the period beginning
with such transfer and ending with a subsequent transfer of
such interest."
Rubloff has not offered the Court coherent explanation as to why
Article 27 is not fatal to its argument and its Claims, Mr.
Barrett asserts. Article 27 clarifies that in the event Kmart
transferred its lessee interests, Rubloff would look only to the
new lessee -- in this case, itself -- for performance of the
Sublease, and not to Kmart, which would no longer be able
to deliver possession.
Mr. Barrett contends that Rubloff's argument that Kmart
purportedly breached the Subleases prior to the transfer,
rendering Article 27 inapplicable, fails for two reasons:
(1) the premise for Rubloff's argument that Kmart breached the
Subleases by filing a rejection motion is incorrect as a
matter of law because the motion did not create an
actionable breach of the Subleases; and
(2) even if Kmart's filing of the Rejection Motion could be
construed as a breach, Kmart's status as a debtor
empowered it to cure that breach, rather than be subject
to an irreversible acceleration of years of damages.
Mr. Barrett argues that none of the representations Rubloff made
to the Court in seeking approval of the Assignment and Assumption
Agreement is consistent with its current position that the
Court's approval spawned a $28,000,000 claim for breach of the
Subleases.
By entering into the Assignment and Assumption Agreement, Rubloff
not only took over Kmart as lessee under the Master Leases but
also assumed the obligation as sublessor under the Subleases, Mr.
Barrett says.
Rubloff has also failed to establish any basis upon which the
Court could find that it is entitled to compensation for Kmart's
alleged breach of the Subleases, Mr. Barrett concludes.
Headquartered in Troy, Michigan, Kmart Corporation (n/k/a KMART
Holding Corporation) -- http://www.bluelight.com/-- operates
approximately 2,114 stores, primarily under the Big Kmart or Kmart
Supercenter format, in all 50 United States, Puerto Rico, the U.S.
Virgin Islands and Guam. The Company filed for chapter 11
protection on January 22, 2002 (Bankr. N.D. Ill. Case No.
02-02474). Kmart emerged from chapter 11 protection on May 6,
2003. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate,
Meagher & Flom, LLP, represented the retailer in its restructuring
efforts. The Company's balance sheet showed $16,287,000,000 in
assets and $10,348,000,000 in debts when it sought chapter 11
protection. Kmart bought Sears, Roebuck & Co., for $11 billion to
create the third-largest U.S. retailer, behind Wal-Mart and
Target, and generate $55 billion in annual revenues. The waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act
expired on Jan. 27, without complaint by the Department of
Justice. (Kmart Bankruptcy News, Issue No. 110; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
KMART CORP: FLOORgraphics Seeks Reconsideration of Court's Ruling
-----------------------------------------------------------------
As previously reported, the U.S. Bankruptcy Court for the Northern
District of Illinois barred the introduction of the March 24, 1998
letter from Ken Kramer to George Rebh for the purpose of varying
the terms of the Retail Advertising License Agreement dated
March 18, 1998, or for the purpose of supporting a claim of
promissory estoppel.
Shortly after the Court entered its ruling, FLOORgraphics, Inc.,
took the deposition of Mr. Kramer, wherein Mr. Kramer testified
unambiguously that his Letter was:
* a subsequent modification of the RALA;
* written in response to negotiations that occurred after
execution of the RALA; and
* agreed to in writing by both parties.
J. Mark Fisher, Esq., at Schiff Hardin LLP, in Chicago, Illinois,
relates that in summary, Mr. Kramer testified that:
(a) The Kramer Letter was intended by Kmart, to modify the
RALA to change the provisions regarding renewal, and to
bind Kmart and FGI to the new provisions;
(b) The "discussions" referred to in the Kramer Letter and the
Rebh Letter as the basis for the modification included
discussions that occurred after the execution of the RALA;
and
(c) As a later writing signed by Kmart and FGI which referred
to the RALA, the Kramer Letter complied with the
requirements set forth in the RALA for a contract
modification.
Gary Ruffing, Mr. Kramer's supervisor at Kmart, corroborates
Mr. Kramer's testimony.
According to Mr. Fisher, based on the new evidence, Kmart's
argument that the Kramer Letter was a mere recitation of
negotiations occurring prior to the execution of the RALA has no
factual basis.
FGI submits that the Kramer Letter should not be barred as parol
evidence because it is a subsequent modification of the RALA based
on subsequent negotiations. The parol evidence rule does not
apply because the Kramer letter was negotiated, written and
executed after the RALA, Mr. Fisher explains.
FGI, therefore, asks the Court to reconsider its ruling that, "the
Kramer Letter is inadmissible parol evidence."
Mr. Fisher emphasizes that the Kramer Letter imposes new
obligations on FGI, including the duty to continue to provide
Kmart with floor advertising as long as Kmart desires it. As a
result, new consideration flowed to Kmart for its agreements in
the modification.
Kmart Objects
"The Court ruled correctly on this matter, and there is no reason
it should change its ruling," William J. Barrett, Esq., at Barack
Ferrazzano Kirschbaum Perlman & Nagelberg LLP, in Chicago,
Illinois, asserts.
Mr. Barrett recounts that in Mr. Kramer's January 2002
declaration, Mr. Kramer stated that he "reiterated" the supposed
pre-execution agreement on contract renewal. Mr. Kramer made no
claim that his letter amended, or was intended to amend, the
RALA.
FGI now relies on Mr. Kramer's 2006 deposition testimony that
contradicts his previous declaration, Mr. Barrett points out.
Mr. Barrett contends that FGI had ample opportunity during the
nearly four years since filing its proof of claim to seek and
present the evidence on which it now seeks to rely on.
However, FGI has not given any excuse for failing to:
* timely present the evidence;
* make its arguments based on the evidence in response to
Kmart's request; and
* explain the inconsistencies in Mr. Kamer's testimony.
According to Mr. Barrett, the Court's January 25 ruling met the
criteria for a partial summary judgment ruling. FGI, on the other
hand, failed to "put-up-or-shut-up" as required to defeat a
summary judgment ruling. For this reason, FGI is bound by the
Court's ruling.
Furthermore, Mr. Barrett argues that even if the Court were to
revisit FGI's argument, the Court will determine that the Kramer
Letter does not support a claim for promissory estoppel.
"FGI is belatedly attempting to create a factual issue by
contradicting the sworn statements of its own officers that FGI
previously submitted to [the] Court," Mr. Barrett asserts.
When FGI argued that the Kramer Letter merely clarified the RALA
and presented sworn statements in support of the argument, FGI was
estopped from:
(i) changing its position; and
(ii) arguing that its "new evidence" shows the parties intended
to amend the RALA, or even creates an issue of fact when
its old evidence and former arguments shows they had no
intention to do so.
Mr. Kramer's deposition testimony is not only of highly
questionable value, but his statements are inadmissible parol
evidence as well, Mr. Barrett says.
Even if the Court credits Mr. Ruffing's 2006 declaration and
Mr. Kramer's 2006 deposition testimony as showing that Kmart
intended to amend the RALA, FGI did not, Mr. Barrett continues.
The declarations and amendments that FGI submitted to the Court
and to the Federal District Court in the Eastern District of
Michigan prior to, and up until its current request, contained
testimony that FGI's principals and even Mr. Kramer did not intend
to amend the RALA or make a new agreement, but that instead, the
Kramer Letter only recited a prior agreement or understanding.
FGI Talks Back
Mr. Fisher asserts that the Kramer Letter meets all the
requirements needed for a binding contract modification.
Mr. Fisher says FGI's request for reconsideration should be
granted because:
* The Court's January 25 Ruling expressly refused to grant
summary judgment ruling, granting in limine relief which is
"subject to change when the case unfolds";
* Mssrs. Kramer and Rebh consistently testified that they
intended the Kramer Letter to be a written modification of
the RALA so that it would accurately and completely
memorialize the agreement regarding renewal that the parties
reached after the RALA was signed;
* The Kramer Letter, considered without extrinsic evidence,
constitutes a modification in conformity with the RALA; and
* Kmart cannot bar Mr. Kramer's testimony about the Kramer
Letter after Kmart invited the Court to interpret the letter
based on far less probative extrinsic evidence in the form
of Mr. Rebh's memorandum.
"The [Bankruptcy] Court is free to reconsider its in limine
Ruling as evidence develops throughout the case, and is not barred
by its initial determination," Mr. Fisher reminds Judge Sonderby.
"Evidence has now developed which supports FGI's position, and is
consistent with the express words of the RALA and the Kramer
Letter."
Headquartered in Troy, Michigan, Kmart Corporation (nka KMART
Holding Corporation) -- http://www.bluelight.com/-- operates
approximately 2,114 stores, primarily under the Big Kmart or Kmart
Supercenter format, in all 50 United States, Puerto Rico, the U.S.
Virgin Islands and Guam. The Company filed for chapter 11
protection on January 22, 2002 (Bankr. N.D. Ill. Case No.
02-02474). Kmart emerged from chapter 11 protection on May 6,
2003. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate,
Meagher & Flom, LLP, represented the retailer in its restructuring
efforts. The Company's balance sheet showed $16,287,000,000 in
assets and $10,348,000,000 in debts when it sought chapter 11
protection. Kmart bought Sears, Roebuck & Co., for $11 billion to
create the third-largest U.S. retailer, behind Wal-Mart and
Target, and generate $55 billion in annual revenues. The waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act
expired on Jan. 27, without complaint by the Department of
Justice. (Kmart Bankruptcy News, Issue No. 110; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
MASTERCRAFT INTERIORS: Case Summary & 29 Largest Unsec. Creditors
-----------------------------------------------------------------
Debtor: Mastercraft Interiors, Ltd.
6800 Distribution Drive
Beltsville, Maryland 20705
Tel: (301) 595-4429
Bankruptcy Case No.: 06-12769
Debtor affiliate filing separate chapter 11 petition:
Entity Case No.
------ --------
Kimels of Rockville, Inc. 06-12770
Type of Business: The Debtors manufacture high-quality
furniture and other home furnishings.
See http://www.mastercraftinteriors.com
Chapter 11 Petition Date: May 15, 2006
Court: District of Maryland (Greenbelt)
Judge: Paul Mannes
Debtor's Counsel: Michael J. Lichtenstein, Esq.
Morton A. Faller, Esq.
Shulman Rogers Gandal Pordy & Ecker, P.A.
11921 Rockville Pike, Suite 300
Rockville, Maryland 20852-2743
Tel: (301) 230-5231
Fax: (301) 230-2891
Total Assets Total Debts
------------ -----------
Mastercraft Interiors, Ltd. $10,600,288 $25,485,847
Kimels of Rockville, Inc. $704,227 $10,341,704
A. Mastercraft Interiors, Ltd.'s 19 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
L. & J.G. Stickley, Inc. Trade $1,796,542
Stickley Drive
P.O. Box 480
Manlius, NY 13104
Danny L. Gomez Consulting $1,187,408
18700 Shremor Drive Agreement
Derwood, MD 20855
Hekman Furniture Co. Trade $475,399
1400 Buchanan Avenue, Southwest
Grand Rapids, MI 49507
Brown Jordan Company Trade $445,108
P.O. Box 404277
Atlanta, GA 30384
Hancock & Moore Trade $395,751
P.O. Box 75117
166 Hancock & Moore Lane
Hickory, NC 28601
Durham Furniture, Inc. Trade $380,783
P.O. Box 311116
Detroit, MI 48231
Henkel Harris Trade $321,994
P.O. Box 2170
Winchester, VA 22604
Kindel Trade $259,965
P.O. Box 2047
100 Garden Street Southeast
Grand Rapids, MI 49501
Nazario Corp. Rent $189,527
Sligh Furn Co. Trade $175,661
Drexel Heritage Furniture, Inc. Trade $161,659
Fairfax Associates Rent $160,357
Beers & Cutler Expenses $154,470
Vanguard Furniture Co. Trade $152,407
Southwood Furniture Corp. Trade $148,338
Council Craftsmen Inc. Trade $111,720
Insurance Services Group $110,198
American Leather, Inc. Trade $94,138
Comptroller of Maryland Sales and Use Tax $88,321
B. Kimels of Rockville, Inc.'s 10 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Bank of America, N.A. Blanket Lien $10,286,984
300 Galleria Parkway, Suite 800 Balance
Atlanta, GA 30339
Alvin F. Kimel and Rent $39,510
Ninon S. Kimel
c/o James V. Strickland Jr., CPA
Strickland & Jones, P.C.
749 Boush Street
Norfolk, VA 23510
Comptroller of the Treasury $7,187
301 West Preston Street
Baltimore, MD 21201
Kone, Inc. $3,282
10 Banner Glass, Inc. $2,600
Catherine Frank $674
Calvert-Jones $580
A. Mary Bell $550
Commonwealth Copiers $92
Piney Bowes $36
MESABA AVIATION: Unions To Conduct Pickets in Michigan Today
------------------------------------------------------------
Mesaba Aviation, Inc. pilots, flight attendants and mechanics is
conducting informational picketing in towns throughout Michigan
today, Wednesday, May 17, to demonstrate their displeasure with
management who continues to push for excessive and unnecessary pay
cuts through the bankruptcy courts. A decision by the court on
whether Mesaba Airlines has the right to impose new terms on the
labor groups has been extended three times with the hope that a
consensual agreement might be reached. On Thursday, May 11, 2006
the new deadline was set for Thursday, May 18, 2006.
Management is demanding 19.4% in pay and benefit concessions for
the next six years. The average salaries for flight attendants,
pilots and mechanics currently stand at: $21,000, $45,000 and
$32,000 respectively. The 19.4% pay cuts, in addition to a 66%
increase in health care premiums, will make these employees the
lowest paid in the industry. Many Mesaba employees will be
eligible for federal aid. At the new proposed rates, a first-year
pilot with family health insurance will gross less than $11,000 a
year. A first-year flight attendant with employee only insurance
will gross $11,000 a year under the proposed concessions. Unless
management is able to reach a consensual agreement with its unions
that includes a fair wage, the unions assert that Mesaba will not
be able to stay in business.
Mesaba currently flies to 12 cities throughout Michigan. If the
Mesaba union members were to strike, cities like Alpena, Sault Ste
Marie, Pellston, Marquette and Houghton would lose all or most of
their service.
"Mesaba Airlines provides a tremendous service to the flying
public in Michigan," Captain Tom Wychor, chairman of the Mesaba
unit of Air Lines Pilots Association, International, said. "If
airports like Sault Ste Marie or Houghton lose service, it will
take several hours to drive to the next closest airport. While we
do not wish to inconvenience passengers, the traveling public in
Michigan need to understand that Mesaba management's continued
abuse of the bankruptcy process can only lead to liquidation of
the airline -- either through a labor strike or through a mass
exodus of highly experienced employees," Mr. Wychor said.
What: Mesaba Labor Coalition Informational Picketing
When: Wednesday, May 17, 2006
Where: Bishop International Airport
Flint, Michigan
9:30a.m. - 10:30a.m. ET
Capital City Airport
Lansing, Michigan
2:00p.m. - 3:30p.m. ET
Kalamazoo/Battle Creek International Airport
Kalamazoo, Michigan
5:00p.m. - 6:30p.m. ET
"To say that we are frustrated is an understatement," flight
attendant Carla Rogat, vice president of the Association of Flight
Attendants unit at Mesaba, said. "Mesaba and MAIR executives are
grossly abusing the bankruptcy process in order to abrogate the
unions' contracts."
"The only viable path out of bankruptcy for Mesaba Airlines is a
consensual agreement with each of its unions," Kevin Wildermuth,
AMFA negotiations committee chairman, said "but to date we haven't
seen much progress toward that end and our Northwest Airlink
passengers should be prepared for a possible cessation of
flights."
This year marks the 75th anniversary of the flight attendant
profession and the 60th anniversary of the Association of Flight
Attendants -- http://www.afanet.org/ More than 46,000 flight
attendants join together to form AFA-CWA, the world's largest
flight attendant union. AFA-CWA is part of the 700,000-member
strong Communications Workers of America, AFL-CIO.
Maintenance technicians at Mesaba are represented by Aircraft
Mechanics Fraternal Association -- http://www.amfanatl.org/-- a
craft oriented, independent aviation union created in 1962 with
over 16,000 members at eight airlines. AMFA's creed is, "Safety
In The Air Begins With Quality Maintenance On The Ground."
Founded in 1931, Air Line Pilots Association, International --
http://www.alpa.org/-- celebrates its 75th anniversary this year
representing 62,000 pilots, including 850 Mesaba pilots, at 39
airlines in the U.S. and Canada.
About Mesaba Aviation
Headquartered in Eagan, Minnesota, Mesaba Aviation, Inc., dba
Mesaba Airlines -- http://www.mesaba.com/-- operates as a
Northwest Airlink affiliate under code-sharing agreements with
Northwest Airlines. The Company filed for chapter 11 protection
on Oct. 13, 2005 (Bankr. D. Minn. Case No. 05-39258). Michael L.
Meyer, Esq., at Ravich Meyer Kirkman McGrath & Nauman PA,
represents the Debtor in its restructuring efforts. Craig D.
Hansen, Esq., at Squire Sanders & Dempsey, L.L.P., represents the
Official Committee of Unsecured Creditors. When the Debtor filed
for protection from its creditors, it listed total assets of
$108,540,000 and total debts of $87,000,000.
MICHAEL LARSON: Case Summary & 8 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Michael L. Larson
dba Larson Magic Farms
4600 North 600 East
Buhl, Idaho 83316
Bankruptcy Case No.: 06-40172
Type of Business: The Debtor operates a farmland and markets
alfalfa, wheat, barley, and potatoes.
See http://www.thelarsons.com
Chapter 11 Petition Date: May 15, 2006
Court: District of Idaho (Twin Falls)
Judge: Jim D. Pappas
Debtor's Counsel: Brent T. Robinson, Esq.
Ling, Robinson & Walker
615 "H" Street, P.O. Box 396
Rupert, Idaho 83350-0396
Tel: (208) 436-4717
Fax: (208) 436-6804
Total Assets: $7,119,608
Total Debts: $5,993,730
Debtor's 8 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
CNH Capital America Trade Debt $7,925
Department CH 10460
Palatine, IL 60055-0460
Farm Plan Trade Debt $7,200
P.O. Box 5328
Madison, WI 53705-0328
Chase Southwest Visa Trade Debt $803
P.O. Box 9001074
Louisville, KY 40290-1074
Bank of America Vehicle $160
Napa Auto Parts Trade Debt $150
Jack Tire Twin Falls Trade Debt $88
Wells Fargo Personal Expenses $82
Capital One Personal Expenses $79
MIRANT CORP: Wilson Asks for $6.45 Million Fee Enhancement
----------------------------------------------------------
On behalf of The Wilson Firm, P.C., shareholders Frank Smith,
Kent Koerper, Peter Depavloff, Bart Engram, Mary Leight and L.
Matt Wilson ask the U.S. Bankruptcy Court for the Northern
District of Texas for the payment of:
(a) fees and expenses that the firm incurred for the period
September 18, 2003, through January 3, 2006, totaling
$712,518; and
(b) a $6,450,000 contingency success fee.
The Shareholders seek $7,162,518 in aggregate compensation.
The Shareholders also ask the Court to approve an upward
adjustment of the lodestar of the firm's hourly fees in an amount
equal to the earned contingency success fee, or $6,450,000.
Mr. Wilson clarifies that the firm does not seek double payments.
The $6,450,000 Fee Enhancement serves as an alternative theory of
recovery.
The Shareholders assert that the Firm should be given a fee
enhancement in due consideration of the firm's substantial
contribution towards the final result achieved in the chapter 11
cases of Mirant Corporation and its debtor-affiliates -- 100% +
payment to all creditors, and a $645,000,000
recovery by equity.
The Firm's contributions clearly helped "set the stage" for the
subsequent settlement negotiations which led to the Term Sheet
Agreement, ultimately incorporated into the final Plan of
Reorganization, Mr. Wilson tells Judge Lynn. While the Firm does
not claim any contribution related to the actual negotiations, it
is clear that its contributions prior to that time provided at
least some of the leverage to reach the Term Sheet Agreement.
In addition, after the conclusion of the valuation hearings, the
Firm participated in the valuation implementation process. The
Firm continued to advocate for higher equity recovery, raising
public objections on behalf of equity interests, as to both the
disclosure statement hearing and confirmation.
Specifically, the Shareholders want the Court to approve:
(a) the Fee Application, including the lodestar hourly rates
and expenses, and the earned contingency success fee; or
(b) in addition to the fees and expenses, the $6,450,000 Fee
Enhancement.
Equity Committee Objects
The Official Committee of Equity Security Holders rejects any
notion that the efforts expended by Mr. Wilson or by the Firm
qualify as a substantial contribution. At many points, Mr.
Wilson's actions ran counter to the best interests of
shareholders.
The Equity Committee believes that Mr. Wilson or the Firm failed
to play any effective role, either in the valuation litigation or
in the subsequent plan negotiations, which led to the recovery
realized by shareholders.
Among other things, the Equity Committee contends that the
Shareholders have not incurred any legal fees in connection with
the work performed by Mr. Wilson or the Firm. Even assuming that
Mr. Wilson was entitled to reimbursement of hourly fees for
making a substantial contribution to the Debtors' cases, the
Equity Committee is aware of no authority justifying the payment
of a fee enhancement to an attorney seeking to be paid his fees
from the estate pursuant to Section 503(b) of the Bankruptcy
Code.
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. 96; Bankruptcy Creditors' Service, Inc., 215/945-7000)
* * *
As reported in the Troubled Company Reporter on Dec. 8, 2005,
Standard & Poor's Ratings Services placed a 'B+' corporate credit
rating on Mirant and said the outlook is stable.
MIRANT CORP: Court Approves Mint Farm-Cascade Settlement Agreement
------------------------------------------------------------------
The Honorable Michael D. Lynn of the U.S. Bankruptcy Court for the
Northern District of Texas approves the settlement agreement
entered into between Mint Farm Generation, LLC, and Cascade
Natural Gas Corporation.
Cascade will have an allowed claim against Mint Farm, which will
replace and supersede Claim No. 7307.
Under that Settlement Agreement, the parties agreed that:
(a) Cascade will receive a Mirant Debtor Class 3 Claim against
Mint Farm for $850,000 with respect to damages arising
from the rejection of the Contract;
(b) Subject to certain conditions, Cascade will pay to Mint
Farm 50% of all gross revenue received by Cascade relating
to its Washington Plant in connection with:
(1) the Distribution System Transportation Service Tariff,
as filed with the Washington Utilities and
Transportation Commission;
(2) the Large Volume Distribution System Transportation
Service Tariff, as filed with the WUTC; and
(3) any other applicable law, tariff, contract or other
agreement relating to natural gas delivery or
transportation services to the Plant; and
(c) Cascade's obligation to pay 50% of all Revenue is subject
to these conditions:
(1) Cascade will first have received Revenue amounting
to $1,400,000; and
(2) Cascade's reimbursement obligations will cease on the
earlier to occur of Mint Farm receiving $850,000 from
Cascade or December 31, 2012.
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 placed a 'B+' corporate credit
rating on Mirant and said the outlook is stable.
MIRANT CORP: Earns $467 Million of Net Income in First Quarter
--------------------------------------------------------------
Mirant Corporation reported net income of $467 million for the
quarter ended March 31, 2006, as compared to $11 million in net
income for the same period in 2005.
Adjusted net income for the first quarter of $142 million excludes
unrealized mark-to-market gains of $298 million along with other
non-recurring charges, principally a $40 million gain on the sale
of assets. Adjusted EBITDA for the quarter was $340 million. The
$173 million increase in adjusted EBITDA compared to the first
quarter of 2005 was driven largely by higher realized margins from
hedging activities by the company's U.S. business.
"Our hedging strategy has been effective," said Edward R.
Muller, chairman and chief executive officer. "We are
substantially hedged for the year, which has produced more
predictable financial results mitigating milder weather
experienced across much of the U.S. during the quarter. Our
performance demonstrates the value created by our hedging
program."
Net cash used in operating activities was $246 million for the
quarter. Adjusted for bankruptcy payments, operating cash flow
provided a net of $500 million during the period.
As of March 31, 2006, the company had cash and cash equivalents of
$1.73 billion. The company's total debt balance is currently $4.5
billion.
Guidance
Mirant narrowed its adjusted EBITDA guidance for 2006 from $1.1 to
$1.3 billion to $1.15 to $1.3 billion and provided initial
adjusted EBITDA guidance for 2007 of $1.3 to $1.7 billion.
A full-text copy of Mirant Corporation's Form 10-Q Report is
available at no charge at http://ResearchArchives.com/t/s?929
Headquartered in Atlanta, Georgia, Mirant Corporation (NYSE: MIR)
-- 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. 97; Bankruptcy Creditors' Service, Inc., 215/945-7000)
* * *
As reported in the Troubled Company Reporter on Dec. 8, 2005,
Standard & Poor's Ratings Services placed a 'B+' corporate credit
rating on Mirant and said the outlook is stable.
MTR GAMING: Moody's Rates $125 Million Sr. Sub. Notes at B3
-----------------------------------------------------------
Moody's Investors Service assigned a B3 rating to MTR Gaming
Group, Inc.'s proposed $125 million senior subordinated notes due
2012. Concurrently, Moody's affirmed MTR's B1 corporate family
rating and B2 senior unsecured note rating, and revised the
ratings outlook to stable from developing.
Proceeds from the new senior subordinated notes, along with cash
from operations, FF&E financing, and revolver borrowings will be
used primarily to complete the construction of Presque Isle Downs,
pay a $50 million license fee related to the project, and repay
$41 million of revolver borrowings currently outstanding.
The B1 corporate family rating considers MTR's limited, the
potential negative impact to Mountaineer Park from the opening of
slot parlors in Pennsylvania, and the expectation that leverage
will reach 6.0 times during the construction of Presque Isle
Downs.
The rating also acknowledges that MTR operates in limited license
jurisdictions and considers the expectation that leverage will
return to at/near 4.0x once Presque Isle Downs starts generating
cash flow.
The B3 rating on the new senior subordinated notes considers that
the notes are ranked junior to MTR's existing $105 million secured
revolving credit facility and $130 million guaranteed senior
notes.
The senior subordinated notes will be unconditionally guaranteed
on a senior subordinated basis by all current and future operating
subsidiaries.
The ratings outlook revision to stable from developing takes into
account the formal rejection in January 2006 by a special
committee of the board of directors of MTR of a management-led
buyout proposal to acquire all of the shares of MTR for $9.50 per
share in cash.
Since that time, no other formal bids have been announced. The
ratings outlook also considers MTR's good operating history and
liquidity profile, the favorable risk reward profile of the
Presque Isle Down project, and West Virginia's stable regulatory
environment.
Moody's previous rating action on MTR occurred on January 27, 2006
when the ratings were confirmed at the B1 corporate family rating
after having been on review for possible downgrade and the ratings
outlook was revised to developing.
MTR Gaming Group, Inc. owns and operates the Mountaineer Race
Track & Gaming Resort in Chester, West Virginia; Scioto Downs in
Columbus, Ohio; the Ramada Inn and Speedway Casino in North Las
Vegas, Nevada; Binion's Gambling Hall & Hotel in Las Vegas,
Nevada; and holds a license to build Presque Isle Downs, a
thoroughbred racetrack with pari-mutuel wagering in Erie,
Pennsylvania. The company also owns a 50% interest in the North
Metro Harness Initiative, LLC, which has a license to construct
and operate a harness racetrack and card room outside Minneapolis,
Minnesota and a 90% interest in Jackson Trotting Association, LLC,
which operates Jackson Harness Raceway in Jackson, Michigan.
MUSICLAND HOLDING: Files Joint Plan of Liquidation in New York
--------------------------------------------------------------
Musicland Holding Corp., Media Play, Inc., MG Financial Services,
Inc., MLG Internet, Inc., Musicland Purchasing Corp., Musicland
Retail, Inc., Request Media, Inc., Sam Goody Holding Corp.,
Suncoast Group, Inc., Suncoast Holding Corp., Suncoast Motion
Picture Company, Inc., Suncoast Retail, Inc., TMG Caribbean,
Inc., TMG-Virgin Islands, Inc., and The Musicland Group, Inc.,
delivered to the U.S. Bankruptcy Court for the Southern District
of New York a Joint Plan of Liquidation on May 12, 2006.
The Plan provides that the Debtors will continue to wind down
their businesses subject to all applicable requirements of the
Bankruptcy Code and Bankruptcy Rules.
According to Craig G. Wassenaar, chief financial officer of
Musicland Holding Corp., on and after the Effective date:
(a) the Debtors' estates will be liquidated in accordance with
the Plan, an Administrative Budget to be filed before the
confirmation hearing, and applicable law; and
(b) the Debtors' operations will become the responsibility of
a "Responsible Person" who, in consultation with the
Informal Committee of Secured Trade Vendors, will
thereafter have responsibility for the management, control
and operation of the Debtors, and who may use, acquire and
dispose of property free of any restrictions of the
Bankruptcy Code or the Bankruptcy Rules.
The Plan contemplates and is predicted upon the substantive
consolidation of the Debtors into a single entity solely for
purposes of all actions under the Plan.
The Plan contemplates that the Effective Date will occur no later
than Dec. 31, 2006.
The Responsible Person
Subject to further Court order and in consultation with the
Secured Trade Committee, the Responsible Person will act as
liquidating agent of, and for, the Debtors' estates from and after
the Effective Date.
Subject to consultation with the Secured Trade Committee, the
Responsible Person will be authorized and obligated, as agent on
behalf of the Debtors' estates, to take any and all actions
necessary or appropriate to implement the Plan; or wind up the
Debtors' estates in accordance with applicable law, including any
and all actions necessary to:
-- liquidate the Assets of the Debtors and their Estates;
-- except to any extent authority is granted to the Secured
Trade Committee or with the consent of the Secured
Committee or by Court order to the Official Committee of
Unsecured Creditors, investigate, prosecute and, if
necessary, litigate, any Right of Action on behalf of the
Debtors and their estates;
-- defend, protect and enforce any and all rights and
interests of the Debtors and their estates;
-- make any and all distributions required or permitted to be
made under the Plan;
-- file any and all reports, requests for relief or
opposition;
-- dissolve the Debtors, terminate joint ventures, or
otherwise wind up any corporate entity owned by the Debtors
and their estates; and
-- pay any and all claims, liabilities, losses, damages, costs
and expenses incurred, including all fees and expenses of
his, her or its professionals accruing from and after the
Confirmation Date, to the extent the payment of those
amounts are included in the Administrative Budget or may
otherwise be approved by the Secured Trade Committee,
without any further application to the Court.
The Responsible Person, in consultation with the Secured Trade
Committee, will also be authorized to retain professionals and may
incur any reasonable and necessary expenses in the performance of
his duties as liquidating agent of and for the Debtors' estates.
On the Effective Date, the Responsible Person will be deemed
elected and appointed by all requisite action under law the sole
board-appointed officer and shareholder-appointed director for
each of the Debtors and for all subsidiaries of the Debtors for
all purposes and in all respect.
With respect to all conduct taken while acting as the sole officer
and director for the Debtors, the Responsible Person will benefit
from each and every insurance policy obtained by or for the
benefit of the Debtors' officers or employees.
Liability
Neither the Responsible Person nor any of his designees, employees
or representatives will be liable for the act or omission of any
other member, designee, agent or representative of the Responsible
Person, other than acts or omissions resulting from the
Responsible Person's willful misconduct, gross negligence or
fraud.
Continued Corporate Existence,
Dissolution of the Debtors
From and after the Effective Date, the Debtors will remain in
existence for the purpose of liquidating and winding up their
Estates. As soon as practicable after the liquidation and the
winding up of the Estates and the completion of distributions
under the Plan, the Responsible Person will file a certificate of
dissolution in the applicable state of incorporation for each
Debtor and the Debtors will dissolve and cease to exist.
Preservation of All Rights of Action
Except as otherwise provided in the Plan and in accordance with
Section 1123(b) of the Bankruptcy Code, all claims, causes or
Rights of Action that the Debtors or their estates may have
against any person or entity will be preserved.
Except as to any Rights of Action for which authority has been
granted to the Secured Trade Committee or Creditors' Committee,
the Responsible Person, in consultation with the Secured Trade
Committee, will determine whether to bring, settle, release,
compromise or enforce the claims, causes or Rights of Action.
A full-text copy of Musicland's Joint Plan of Liquidation is
available for free at:
http://bankrupt.com/misc/musicland_planofliquidation.pdf
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. 10; Bankruptcy Creditors' Service, Inc., 215/945-7000)
MUSICLAND HOLDING: Claims Classification & Treatment Under Plan
---------------------------------------------------------------
Under their Joint Plan of Liquidation, Musicland Holding Corp. and
its debtor-affiliates group claims and interests into five
classes:
Class Description Claim Treatment
----- ----------- ---------------
N/A Administrative Expense Each holder will receive cash
Claims equal to the unpaid portion of the
Allowed Administrative Expense
Claim, or other treatment as to
which the Debtors and the holder
of the Administrative Expense
Claim will have agreed upon in
writing.
N/A Wachovia Obligations Wachovia will receive, in full
satisfaction, settlement, release
and discharge of, and in exchange
for any Allowed Wachovia
Obligations treatment as to which
the Debtors and Wachovia have
agreed upon in the Release
Agreement.
N/A Priority Tax Claims At the sole option of the Debtors
and in full satisfaction of an
Allowed Priority Tax Claim, each
holder will be entitled to
receive:
* cash in an amount equal to the
amount of the Allowed Priority
Tax Claim;
* other treatment as to which the
Debtors and the holder have
agreed upon in writing; or
* equal cash payment on the last
business day of each three-month
period after the Effective Date,
during a period ending no later
than January 11, 2001, totaling
the aggregate amount of the
Allowed Priority Tax Claim plus
simple interest on any
outstanding balance from the
Effective Date calculated at the
interest rate available on 90
day United States Treasuries on
the Effective Date but in no
event greater than 7% per annum.
1 Other Priority Claims Each holder will receive, in full
satisfaction and release of the
Allowed Other Priority Claim:
* cash in an amount equal to the
amount of the Allowed Other
Priority Claim; or
* other treatment as to which the
Debtors and the Claimholder
will have agreed upon in
writing.
2 Other Secured Claims Each holder will receive, in full
satisfaction and release of the
Allowed Other Secured Claim:
* cash in an amount equal to the
amount of the Allowed Other
Priority Claim; or
* other treatment as to which the
Debtors and the Claimholder will
have agreed upon in writing.
3 Secured Trade Claims Except as otherwise provided in
the Plan, each holder will
receive, in full satisfaction and
release of the Secured Trade
Claim:
* its Pro Rata Share of available
assets and remaining assets; and
* the Secure Trade Creditor
Release.
4 General Unsecured Each holder will not be entitled
Claims to receive anything on account of
its Claim.
5 Interests and On the Effective Date, the
Interest-related Existing Stock and Interests will
Claims be cancelled. Each holder will
not receive anything on account of
its Interest or Claim.
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. 11; Bankruptcy Creditors' Service, Inc., 215/945-7000)
MUSICLAND HOLDING: Inks Termination Agreement with Wachovia Bank
----------------------------------------------------------------
Musicland Holding Corp., its debtor-affiliates, and Wachovia Bank,
National Association, as successor by merger to Congress Financial
Corporation, as administrative agent, acting for and on behalf of
certain lenders, previously entered into a number of financing
agreements.
On March 27, 2006, the U.S. Bankruptcy Court for the Southern
District of New York approved the sale of substantially all of the
Debtors' assets to TransWorld Entertainment Corporation.
The Debtors have informed Wachovia and the Lenders that as of
March 29, 2006, all obligations are being and will have been
indefeasibly paid in full other than certain continuing
obligations.
The Debtors and Wachovia entered into a termination agreement.
The parties agree that:
(a) Wachovia, on behalf of itself and the other Lenders,
consents to the TWEC Sale;
(b) The Debtors, at their sole cost and expense, will pay or
cause to be paid to Wachovia, for the benefit of itself
and the other Lenders, by federal funds wire transfer:
* $4,255,225, which includes accrued interest and other
charges for each day through March 29, 2006, in
payment of the outstanding Obligations due to
Wachovia and the Lenders;
* $5,891,843, which will be pledged by the Debtors to
Wachovia as Cash Collateral; and
* $3,500,000, which will be pledged by the Debtors to
Wachovia as Professional Fee-Carve-Out Cash
Collateral.
The Debtors will deliver to Wachovia $13,647,068 in total.
(c) Upon Wachovia's receipt of the Pay-off Amount:
* the financing agreements between the Debtors with
Wachovia and the Lenders are terminated, cancelled and of
no further force and effect, except for those provisions
of the Financing Agreement relating to the Continuing
Obligations;
* Wachovia and the Lenders will have no further obligation
to make any Loans, provide any Letters of Credit or other
financial accommodations in connection with the Financing
Agreements; and
* except with respect to the Cash Collateral and the
Professional Fee Carve-Out Cash Collateral, all security
interests in and liens upon any and all of the Debtors'
properties and assets granted to Wachovia, for the
benefit of itself and the other Lenders, pursuant to the
Financing Agreements are released and terminated; and
(d) The parties exchange mutual releases.
A full-text copy of the Wachovia Termination Agreement is
available for free at:
http://bankrupt.com/misc/musicland_wachoviaterminationagreement.pdf
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. 11; Bankruptcy Creditors' Service, Inc., 215/945-7000)
NATIONWIDE MORTGAGE: Fitch Junks Rating on Class DB3 Certificates
-----------------------------------------------------------------
Fitch Ratings has taken rating action on the following First
Nationwide Mortgage Corp. residential mortgage pass-through
certificates:
Series 2001-4 Groups 1 and 2
-- Class A affirmed at 'AAA';
-- Class CB1 affirmed at 'AAA';
-- Class CB2 affirmed at 'AAA';
-- Class CB3 upgraded to 'AA+' from 'AA';
-- Class IB4 & IIB4 upgraded to 'A+' from 'BBB+';
-- Class IB5 & IIB5 upgraded to 'BBB+' from 'BB+';
Series 2001-4 Groups 3, 4 and 5
-- Class A affirmed at 'AAA';
-- Class DB1 upgraded to 'AAA' from 'AA';
-- Class DB2 affirmed at 'A';
-- Class DB3 long-term rating downgraded to 'CCC' from 'BB'
and assigned a Distressed Recovery (DR) rating of 'DR1'
-- Class DB4 long-term rating is affirmed at 'C'/DR6.
The collateral in the aforementioned transactions consist of
fixed-rate and adjustable-rate mortgages extended to prime
borrowers and are secured by first and second liens, primarily on
one- to four-family and multifamily properties. As of May 2006,
the transactions are seasoned 56 months and the pool factors
(current mortgage loan principal outstanding as a percentage of
the initial pool) are 1% and 3% for series 2001-4 group 1-2 and
series 2001-4 groups 3-5, respectively.
The affirmations reflect a satisfactory relationship between
credit enhancement (CE) and future loss expectations and affect
approximately $27.1 million of outstanding certificates. All
affirmed classes have experienced a slight growth in CE since the
last rating action. The upgrades reflect an improvement in the
relationship of CE to future loss expectations and affect
approximately $6.5 million of certificates. The CE levels for all
the upgraded classes have more than tripled their original
enhancement levels since the closing date. The downgrade of class
DB3 reflects the deterioration in the relationship of CE to future
loss expectations and affects approximately $1 million of
outstanding certificates.
Fitch will closely monitor these transactions.
NIGHTHAWK SYSTEMS: GHP Horwath Raises Going Concern Doubt
---------------------------------------------------------
GHP Horwath, P.C., in Denver, Colorado, raised substantial doubt
about Nighthawk Systems, Inc.'s ability to continue as a going
concern after auditing the Company's consolidated financial
statements for the year ended Dec. 31, 2005. The auditor pointed
to the Company's net loss, negative working capital, and
stockholders' deficit.
The Company reported a $2,693,096 net loss on $528,689 of revenues
for the year ended Dec. 31, 2005.
At Dec. 31, 2005, the Company's balance sheet showed $932,801 in
total assets and $3,471,886 in total liabilities, resulting in a
$2,539,085 in stockholders' deficit.
The Company's Dec. 31 balance sheet also showed strained liquidity
with $899,821 in total current assets available to pay $1,407,050
in total current liabilities coming due within the next 12 months.
A full-text copy of the Company's 2005 Annual Report is available
for free at http://ResearchArchives.com/t/s?92f
Nighthawk Systems, Inc., designs and manufactures ready-to-deploy
intelligent remote power control products that can remotely
control virtually any device from any location.
NORTHWEST PIPELINE: Fitch Upgrades Sr. Unsec. Debt Rating to BB+
----------------------------------------------------------------
Fitch upgrades The Williams Companies, Inc.'s outstanding senior
unsecured debt and issuer default rating to 'BB+' from 'BB'. In
addition, the senior unsecured debt and IDRs of Transcontinental
Gas Pipe Line Corp. and Northwest Pipeline Corp. are upgraded to
'BBB-' from 'BB+'. The ratings are removed from Rating Watch
Positive status where they were placed on March 7, 2006.
At the same time, Fitch withdraws Williams Production RMT Co.'s
'BB+' senior secured rating and 'BB-' IDR reflecting the
retirement of RMT's outstanding debt obligations on April 13,
2006. The Rating Outlook is Stable.
The rating action reflects WMB's substantially de-leveraged
balance sheet and continued improvement in consolidated credit
metrics, the recent elimination of all direct secured debt
obligations from WMB's capital structure, the company's solid
liquidity position and limited debt refinancing risk through 2010,
the expectation for continued stable cash flow generation from
WMB's core natural gas businesses, and the strengthened near-term
cash flow profile of WMB's Power segment.
Key risk factors incorporated into WMB's ratings include the
commodity price volatility embedded in WMB's growing natural gas
exploration and production unit and certain phases of the
company's midstream business and the largely unhedged nature of
WMB's off-balance-sheet power tolling obligations beyond 2010.
In addition, WMB management is demonstrating a clear appetite to
boost capital spending to further expand E&P and Midstream
production capacity at the peak of the commodity cycle. Fitch
notes that WMB's near-term capital budget will likely require a
modest level of incremental debt financing at WMB or Williams
Partners, L.P. (WPZ), WMB's publicly traded master limited
partnership affiliate.
WMB has emerged from its restructuring as a more focused
integrated natural gas company with core operations encompassing
FERC regulated interstate pipelines, E&P, and midstream gas and
liquids services. These businesses should continue to generate a
relatively predictable earnings and cash flow stream going forward
with potential commodity price volatility in the E&P segment
offset by the cash flow stability of TGPL and NWP, and WMB's
growing portfolio of fee-based midstream assets. Commodity price
risk at E&P is further mitigated by WMB's focus on developing
lower risk Rocky Mountain based tight sands and coalbed methane
gas reserves.
Although WMB has successfully wound down speculative trading
activities, there is longer-term uncertainty associated with
Power's sizable tolling contract portfolio. WMB currently has
long-term tolling agreements for approximately 7,700 megawatts of
generating capacity under which it is obligated to make fixed
payments averaging $400 million over the next several years with a
total remaining net present value of about $2.5 billion.
Importantly, during 2004 and 2005, WMB sold forward additional
tolling capacity through 2010 thus ensuring minimizing the near-
term cash flow strain at Power. Moreover, Fitch estimates that
existing physical power sales contracts, financial hedges and
conservatively forecasted merchant sales substantially cover
Power's fixed cost structure through 2010.
Since year-end 2002, WMB has decreased consolidated debt by
approximately $5.6 billion by deploying cash raised from asset
sales and the early conversion of equity-linked securities. At the
same time, WMB has expanded the cash flow of its core natural gas
businesses, effectively offsetting a good portion of income lost
due to asset sales. As a result, consolidated credit protection
measures have improved to levels solidly within Fitch's 'BB'
targets for diversified energy companies.
For the fiscal year ended Dec. 31, 2005, consolidated cash
interest coverage approached 3.0 times (x) with total debt/EBITDA
dropping to 3.7x. As part of its analysis, Fitch reviewed WMB's
prospective cash flow performance under less favorable commodity
market conditions, including a scenario envisioning a decline in
natural gas prices to the $4.00 per mmBtu range in 2008. Although
this price level adversely impacts the long-gas position embedded
in E&P, WMB's prospective credit profile remains within parameters
for the rating as the stable cash generation of WMB's regulated
pipelines combined with various offsetting short gas positions at
Midstream and Power compensate for a portion of the resultant
earnings decline at E&P.
The 'BBB-' rating assigned to WMB's pipeline subsidiaries reflects
NWP's and TGPL's strong individual operating and financial
profiles, offset by the structural and functional ties between
these entities and their ultimate parent WMB. Both NWP and TGPL
participate in WMB's daily cash management program under which
each subsidiary makes and/or receives advances from WMB.
Operationally, NWP and TGPL are viewed as two of the premier
pipeline systems in the U.S. In particular, both systems boast
competitive rate structures, captive markets, a high percentage of
capacity subscribed long-term contract profiles, and attractive
expansion opportunities. Furthermore, stand-alone credit measures
at both NWP and TGPL have continued to remain healthy despite
higher dividend payments to WMB and moderate growth spending and
remain consistent with strong investment grade parameters.
The Stable Rating Outlook reflects Fitch's expectation that WMB's
credit and financial profile over the next 12-24 months will
remain consistent with its rating even under more onerous
operating conditions, including a lower natural gas price
environment. Factors leading to potential rating improvement over
time would include further de-leveraging or a potential
transaction or arrangement that would substantially hedge or
assume WMB's remaining contractual obligations under its long-term
power tolling contracts. At the same time, a return to a more
aggressive, debt financed growth strategy or the inability to
hedge tolling obligations beyond 2010 would likely place downward
pressure on WMB's rating or outlook.
A summary of outstanding ratings affected by Fitch's action:
The Williams Companies, Inc.
-- IDR and senior unsecured notes and debentures upgraded to
'BB+' from 'BB';
-- Junior subordinated convertible debentures upgraded to
'BB-' from 'B+'.
-- The 'BB+' senior secured rating previously assigned to WMB
is withdrawn.
Williams Production RMT Co.
-- Senior secured term loan B withdrawn at 'BB+';
-- IDR 'BB-' withdrawn.
Northwest Pipeline Corp.
-- IDR and senior unsecured notes and debentures upgraded to
'BBB-' from 'BB+'.
Transcontinental Gas Pipe Line Corp.
-- IDR and senior unsecured notes and debentures upgraded to
'BBB-' from 'BB+'.
NVF CO: Wants to Extend Business Consultant's Employment Term
-------------------------------------------------------------
NVF Company and its debtor-affiliate ask the U.S. Bankruptcy Court
for the District of Delaware for permission to extend the
employment of Frank Romanelli as their special business
consultant, nunc pro tunc to Feb. 19, 2006.
As reported on Aug. 25, 2005, the Debtors obtained the Court's
approval to retain Mr. Romanelli as their special business
consultant pursuant to the terms of a consulting agreement. Mr.
Romanelli was employed, inter alia, to prepare, review and
implement an approved business plan.
Under the consulting agreement, Mr. Romanelli's consulting term
expired on Feb. 19, 2006.
The Debtors tells the Court that the consulting agreement was
amended, extending the term of Mr. Romanelli for six months.
Under the amended consulting agreement, Mr. Romanelli's term will
be renewed automatically for consecutive two-month terms unless
either party gives notice of termination.
Under the amended consulting agreement, Mr. Romanelli will:
a) continue to provide the Debtors' with advice and assistance
regarding the operations, liquidation and administration of
their chapter 11 estates;
b) prepare, review, implement an approved business plan that
will allow the Debtors to emerge from bankruptcy as soon as
practicable; and
c) perform duties as agreed upon by the Debtors and
Mr. Romanelli.
Mr. Romanelli will be paid a monthly fee of $15,000 and a
performance bonus of $45,000 payable upon:
a) confirmation and consummation of a plan of reorganization
or liquidation; or
b) the termination date,
provided that the Debtors' case is still in chapter 11 and has not
been converted or dismissed.
To the best of the Debtors' knowledge, Mr. Romanelli is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
Based in Yorklyn, Delaware, NVF Company -- http://www.nvf.com/--
manufactures thermoset composites (glass, Kevlar), vulcanized
fiber, custom containers, circuitry materials, custom fabrication,
and welding products. The Company along with its wholly owned
subsidiary, Parsons Paper Company, Inc., filed for chapter 11
protection on June 20, 2005 (Bankr. D. Del. Case Nos. 05-11727 and
05-11728). Rebecca L. Booth, Esq., at Richards, Layton & Finger,
P.A., represents the Debtors in their restructuring efforts. When
the Debtors filed for protection from their creditors, they listed
estimated assets between $10 million to $50 million and estimated
debts of more than $100 million.
NVF CO: Wants to Hire Corporate Cost as Special Auditors
--------------------------------------------------------
NVF Company and its debtor-affiliate ask permission from the U.S.
Bankruptcy Court for the District of Delaware to employ Corporate
Cost Solutions Inc. as their special auditors.
Corporate Cost will:
a) audit the Debtors' payroll, personnel records and insurance
policies, as well as experience rating, restrospective
rating and loss data for all applicable current and former
policies pertaining to workers' compensation insurance;
b) analyze the Debtors' records to ascertain and, to the extent
discovered, assist in the recovery of premium overpayments
by the Debtors' on account of workers' compensation
insurance;
c) assist in the submission of any prospective claims to be
filed by the Debtors in account of premium overpayments made
by the Debtors in connection with workers' compensation
insurance; and
d) provide other services as may be requested by the Debtors
and agreed to by Corporate Cost related to services
contemplated in the Engagement Letter.
In lieu of requiring Corporate Cost to submit a fee application
pursuant to sections 330 and 331 of the U.S. Bankruptcy Code, the
Debtors propose to compensate Corporate Cost on a contingency fee
basis. As indicated in their Engagement Letter, Corporate Cost
will receive 40% of any amount recovered.
To the best of the Debtors' knowledge, Corporate Cost does not
hold any interest adverse to the Debtors or their estates.
Based in Yorklyn, Delaware, NVF Company -- http://www.nvf.com/--
manufactures thermoset composites (glass, Kevlar), vulcanized
fiber, custom containers, circuitry materials, custom fabrication,
and welding products. The Company along with its wholly owned
subsidiary, Parsons Paper Company, Inc., filed for chapter 11
protection on June 20, 2005 (Bankr. D. Del. Case Nos. 05-11727 and
05-11728). Rebecca L. Booth, Esq., at Richards, Layton & Finger,
P.A., represents the Debtors in their restructuring efforts. When
the Debtors filed for protection from their creditors, they listed
estimated assets between $10 million to $50 million and estimated
debts of more than $100 million.
NYACK HOSPITAL: Fitch Cuts Rating on $18.3 Million Bonds to B-
--------------------------------------------------------------
Fitch Ratings downgraded the outstanding $18.3 million Dormitory
Authority of the State of New York hospital revenue bonds (Nyack
Hospital), series 1996, to 'B-' from 'B+' and placed the bonds on
Rating Watch Negative.
The Rating Watch Negative is based on Nyack Hospital's delay in
providing audited financial information, concern relating to
drawing down the debt service reserve fund to make future debt
service payments, and a continued precariously low liquidity
level, which weakens Nyack's ability to absorb an unforeseen
negative event. The Rating Watch Negative indicates that Nyack's
rating may be lowered again over the near term. Nyack is currently
noncompliant with bond documents that require disclosure of its
fiscal 2005 audit (year ended Dec. 31) by April 30, 2006.
Management has indicated that the fiscal 2005 audit will be
available by the end of May 2006. Fitch will evaluate Nyack's
bond rating once its fiscal 2005 audit is made available.
Nyack covenants to disclose only annual financial information and
utilization statistics to the Nationally Recognized Municipal
Securities Information Repositories, which Fitch views negatively.
However, Fitch does note that Nyack's disclosure covenant was
typical of standard practice at time of bond issuance in 1996.
Prior to the end of fiscal 2005, Fitch favorably viewed Nyack's
continuing disclosure practices, which was to provide bondholders
with timely and thorough quarterly and annual financial
statements, including management discussion and analysis, and
operational statistics.
As of late, Nyack has only disclosed to requesting bondholders
quarterly income statements, balance sheets, and utilization
statistics, but no management discussion and analysis. Management
indicates that going forward Nyack's continuing disclosure
practices will, once again, include quarterly disclosure and
investor teleconference calls, which Fitch would view favorably.
Fitch notes that untimely delivery of financial information is not
only a violation of Nyack's obligation to provide bondholders with
continuing disclosure, but also may indicate financial distress
or, at a minimum, poor management practices. Fitch will continue
to monitor the timely disclosure of financial information for
Nyack.
The key rationales for the downgrade are Nyack's continued weak
liquidity position, future capital needs, weak operating
profitability, labor contracts, negative utilization trends, and
management turnover.
Nyack's liquidity position has eroded significantly due to
operating losses. At Dec. 31, 2005, Nyack's unaudited $1.6
million of unrestricted cash and investments indicate a perilously
low 4.2 days cash on hand, declining from $2.84 million and 13.5
days at Dec. 31, 2004 and $3.1 million and 12.4 days at Dec. 31,
2003.
Despite recent maternity- and endoscopy-related capital
expenditures from philanthropic fundraising, Nyack has been
limited in implementing large-scale capital improvements or
clinical program developments to increase new patient volumes and
revenue growth due to its low liquidity level. Nyack's average
age of plant is over 20 years, which is significantly greater than
Fitch's median of 13.1 years for non-investment-grade hospitals.
Nyack's management has stated that as part of any capital plan or
future financing, its existing debt structure, which now includes
front-end-loaded amortization, would benefit from also being
restructured.
Maximum annual debt service is over $6.85 million, which,
according to Nyack's management, could support $70 million to $80
million of debt instead of its approximate $18.3 million of
outstanding debt (of which, according to unaudited Dec. 31, 2005
information, $6.9 million was originally categorized as long-term
debt and $15.7 million was originally categorized as a current
liability). However, in May 2006, the Dormitory Authority of the
State of New York waived Nyack's violation of a covenant to
maintain a 1:1 ratio of net income available for debt service to
MADS until April 2007, which temporarily delays any acceleration
of Nyack's debt. As of Dec. 31, 2005, Nyack had unaudited $13.2
million combined in restricted and trustee-held funds.
Nyack has a scheduled debt service payment of $3.4 million in July
2006. Its sinking fund has been funded to approximately $3.1
million through May 2006 and has a scheduled funding payment in
the amount of $320,000 planned for June 2006, which when combined
should be sufficient to make the July 2006 debt service. In
addition to the sinking fund balance, Nyack's debt service reserve
fund was funded at $3.56 million as of Dec. 31, 2005.
These financial constraints have resulted in continued pressure on
Nyack's operational profile. Nyack's income from operations
decreased further to negative $1.98 million (operating margin
negative 2.2%) in 2005, from negative $2.33 million (negative
1.3%) in 2004.
The union contract for Nyack's nurses expired without being
renewed on Dec. 31, 2005. Having worked without a contract in
1998 and 1999 and then striking for half a year in 2000, the
current nursing issue is a concern. A federal mediator has been
called to settle the current disputes over the union contract.
Nyack is working to reduce out-migration of surgical volume to
Bergen County hospitals in New Jersey. Overall out-migration of
surgical volume from both acute care hospitals in Rockland County
was at 42.5%, which includes 34.2% of general surgery, 41.3% of
orthopedic surgery, and 40.0% of urology surgery.
Nyack's chief financial officer, who had served in this capacity
since May 2001, resigned his position in March 2006, ahead of the
yet-to-be released annual audited financial statements for fiscal
2005, and joined the competing acute care hospital in Rockland
County, Bon Secours Charity Health System (rated 'A-' by Fitch),
which operates Good Samaritan Hospital in Suffern, New York (32%
market share) and two Orange County hospitals. Nyack has hired a
new CFO, with previous experience at Saint Vincent Catholic
Medical Centers in New York, who will commence his employment
later in June 2006.
Credit strengths are Nyack's enhanced corporate relationship with
New York Presbyterian Healthcare System and its favorable service
area characteristics, including strong market share in a limited
competitive environment.
Geographic barriers imposed by Nyack's location along the extreme
eastern edge of New York's Hudson River and limited competition
assist with the maintenance of a leading market share of 39%.
Despite its low cash position, Nyack's management believes that,
given sufficient time, the corporate affiliation between Nyack and
NYP, dated March 2005, will provide some sustained opportunities
in its operations from clinical programmatic enhancements,
increased patient volumes, increased reimbursements from managed
care rates, improved supply chain management, and improved
community image. The most significant benefit of the affiliation
to date has been NYP's assistance in renegotiating rates for
Nyack's managed care contracts; however, some of the new contracts
are still unprofitable.
Fitch does not believe that Nyack will be able to slowly rebuild
its liquidity position from improved cash flow; furthermore, any
growth may be hindered by capital expenditures over the near-to-
medium term, unless it is better able to access capital and
restructure its debt. Due to a protracted inability to make
routine capital expenditures (estimated by Nyack's management at
$20 million), immediate operational improvement is an imperative,
as Nyack has extremely limited financial flexibility.
Fitch believes that Nyack's viability rests largely on the NYP
relationship, and Nyack's ability to improve profitability,
negotiate favorable contracts with managed care payors and labor
unions, and access capital for much needed facility improvements
and debt restructuring; all of which would assist Nyack with
maintaining a competitive advantage in the service area.
Significant credit risk is present. Financial commitments are
currently being met, but a limited margin of safety remains.
Nyack's bonds are secured with a revenue pledge and a mortgage.
Nyack is a 375-bed staffed hospital, with a medical staff of more
than 650 physicians, located in Nyack, New York, approximately 20
miles north of New York City. Nyack had (unaudited) total
operating revenue of $147 million in fiscal 2005. Nyack has not
entered into any swap arrangements.
ORLEANS PARISH: Revenue Impairment Cues Fitch to Retain Neg. Watch
------------------------------------------------------------------
The ratings for various Orleans Parish, Louisiana credits remain
on Rating Watch Negative by Fitch Ratings, reflecting ongoing
concern about the possibility of longer term impairment of revenue
streams and service delivery, as well as the uncertainty
surrounding economic recovery. As noted, most of the issues
covered in the Negative Rating Watch carry bond insurance, with
the insurers expected to cover debt service non-payments, should
they occur. Fitch's Rating Watch Negative status only applies to
the underlying ratings.
These credits remain on Rating Watch Negative by Fitch:
New Orleans Sewerage and Water Board:
-- $198 million sewerage service revenue bonds 'B';
-- $137 million sewerage service refunding bond anticipation
notes, series 2005A 'B';
-- $44 million water revenue bonds 'B';
-- $26 million drainage system bonds 'B'.
(All outstanding debt of the board is insured, except for the
BANs)
Ernest N. Morial-New Orleans Exhibition Hall Authority:
-- $106 million senior lien special tax bonds 'BBB';
-- $394 million senior subordinate special tax bonds 'BBB-'.
(all outstanding bonds under the authority are insured)
New Orleans Audubon Park Commission:
-- $38 million general obligation aquarium bonds 'B'.
(outstanding bonds under the commission are insured)
Recovery in New Orleans continues to lag well behind that in other
storm-affected areas, due to a combination of factors. The long
awaited flood recovery guidance from the Federal Emergency
Management Agency was released on April 12, 2006, removing a
considerable amount of uncertainty regarding rebuilding
guidelines. The amount of federal assistance available for
residential reconstruction efforts remains uncertain, due to lack
of final congressional action on a supplemental appropriations
request. President Bush has threatened to veto the measure upon
congressional approval because of the addition of extraneous
spending provisions. Levee repairs continue, and the U.S. Corps
of Engineers has stated it will complete interim protective
measures by the June 1 beginning of the 2006 hurricane season.
While the repopulation of the city has progressed at a faster pace
than many original predicted, the estimated population of 180,000
is less than 40% of the pre-storm population of 465,000. The
central business district, French Quarter and Uptown neighborhoods
are active, primarily due to limited flood damage. However, large
sections of the city remain virtually empty, as owners of flood-
damaged properties wait for resolution of issues regarding levee
protection and financial assistance for rebuilding.
The most immediate concern for Fitch is the approaching maturity
of $137 million in sewer system BANs. The board reportedly has
only $85 million on hand to retire the BANs, which mature on July
26. One option under consideration is an application for funds
from a proposed sale by the State of Louisiana of federal tax
credit bonds in June. Fitch will continue to monitor developments
regarding resolution of the BAN question and will report to
investors as information becomes available.
The board, which provides retail water, sewer and drainage
services to residents in New Orleans, has resumed water and sewer
service for virtually all of its service area, with the exception
of a portion of the Lower Ninth Ward. Billing has resumed to a
customer base of roughly 130,000 customers, which is down
approximately 10,000 from the pre-storm total. Collections for
the first four months of 2006 are 2/3 of amounts billed, resulting
in sharply reduced revenues. The board is relying on federal
community disaster loan proceeds to help pay operating costs.
Poor liquidity, which Fitch historically has cited as a credit
weakness, remains a significant concern. However, the board has
resumed monthly transfers for debt service payments on its sewer
and water revenue debt.
Repair work continues at the Morial Convention Center, which was
heavily damaged in the days following the storm. Sections of the
facility began hosting shows in February, 2006, and the majority
of the center is scheduled to open in June. The first large
convention - the American Library Association - is scheduled to
bring 20,000 attendees to the hall in June. However, bookings for
2006 and 2007 remain well below historical levels; authority
officials are hopeful that by 2008 activity at the facility will
approach pre-storm totals.
Authority debt is supported primarily from hotel and motel
occupancy tax revenues in New Orleans. With tourist and
convention traffic severely depressed and a number of large hotels
still closed, projections for tax revenues in 2006 are down
significantly. The authority budgeted revenues from its two
largest sources -- hotel and food and beverage taxes -- at roughly
60% of 2004 totals. Fitch's concerns regarding tourist activity
and tax revenues are mitigated to a degree by the authority's
robust level of available reserves. These reserves, which totaled
more than $98 million at March 31, 2006, are available if
necessary to help make debt service payments over the near term.
Fitch maintains an investment grade rating on the authority's
bonds because it believes the reserves will provide a sufficient
cushion until tax revenues recover to a level at which they
provide satisfactory debt service coverage.
The commission operates the Aquarium of the Americas, the debt of
which is repaid through a limited property tax levied against all
taxable property in New Orleans. The extensive flooding in the
city caused by Katrina produced a reduction of the city's net
taxable value of slightly less than 25%. A delay by the New
Orleans City Council in adopting millage rates likely will
postpone mailing of property tax bills until the end of May.
Timely receipt of property tax revenues is critical to the Oct. 1,
2006 payment of debt service on the aquarium-related bonds.
Repairs are winding down at the aquarium, which is scheduled to
re-open on May 26. Commission staff reports no cash flow
problems, as revenues are exceeding original budget projections
and expenditures are within budget. Insurance proceeds and
donations have helped with both repair activities and operations,
according to staff.
Fitch will continue to monitor these entities and other New
Orleans area credits. As developments occur and as the
reconstruction process proceeds, Fitch will review the credit
fundamentals of each and take any appropriate rating action.
OWENS CORNING: Gets Court Nod to Expand Scope of E&Y's Employment
-----------------------------------------------------------------
The Honorable Judith K. Fitzgerald of the U.S. Bankruptcy Court
for the District of Delaware authorizes Owens Corning to expand
the scope of Ernst & Young LLP's employment pursuant to the Master
Tax Services Agreement.
In a separate application, the Debtors sought and obtained the
Court's authority to include project management services with
respect to fresh start accounting, emergence and intercompany
issues, in Ernst & Young's employment, nunc pro tunc to
Feb. 14, 2006.
The Debtors and Ernst & Young entered into a master agreement for
performance of professional services on March 8, 2006.
Pursuant to the Professional Services Agreement, Ernst & Young
will perform these additional services:
A. Routine On-Call Services
* Assisting the Debtors with small, routine projects
involving assignments not to exceed $10,000 in
professional fees when the projects are not covered by a
separate addendum.
* Participating in meetings and telephone calls with the
Debtors or third parties, responding to basic questions
of the Debtors, reviewing transactional documents,
researching issues and preparing letters and other
written documentation.
B. Monthly Operating Reporting
* Assisting the Debtors with preparation and accumulation
of supporting documentation for the monthly operating
report package.
C. Fresh Start Accounting
* Assisting the Debtors with respect to compliance with the
Fresh Start Accounting regulations.
* Providing project management expertise and assistance in
gathering information and documents pursuant to requests
from the Debtors' outside valuation consultant.
* Coordinating activities and communication between the
Debtors and the valuation consultant to ensure accurate
and timely valuation of assets.
* Gathering, preparing and organizing documentation in
response to the valuation consultant's requests and
maintaining and tracking all documentation provided.
D. Emergence Project Management
* Providing assistance with respect to project management
activities relating to the preparation of an interim
reporting solution resulting from new legal entity
structure.
* Preparing and updating overview presentation.
* Defining, preparing and monitoring project management
templates, integrated project plans and related
documents.
* Preparing status reports and attending status and weekly
meetings.
E. Intercompany Activity
* Gathering and evaluating documentation with respect to
the Debtors' intercompany balances.
* Determining whether pro forma adjustments are required
based on intercompany balance information and supporting
documentation.
* Assisting with the development of templates to be used
with pro forma financial statements.
* Coordinating activities between the Debtors' various and
keeping the Debtors apprised of the status of related
projects.
The Debtors will pay Ernst & Young for its services at these
hourly rates:
Billing Category Range
---------------- -----------
Executive Director/Principal/Partner $550
Senior Manager $450
Manager $350
Senior $275 - $250
Staff $225 - $150
Owens Corning (OTC: OWENQ.OB) (BULLETIN BOARD: OWENQ.OB) --
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 Oct. 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. 129; Bankruptcy Creditors' Service, Inc.,
215/945-7000).
OWENS CORNING: Has Until Dec. 5 to Make Lease-Related Decisions
---------------------------------------------------------------
The Honorable Judith K. Fitzgerald of the U.S. Bankruptcy Court
for the District of Delaware extended the time within which Owens
Corning and its debtor-affiliates can must move to assume or
reject their unexpired nonresidential real property leases for six
more months, through and including Dec. 5, 2006.
The Debtors have made substantial and consistent progress in
evaluating their unexpired nonresidential real property leases,
J. Kate Stickles, Esq., at Saul Ewing LLP, in Wilmington,
Delaware, told the Court. Taking into account the leases that
have been assumed, assumed and assigned, or rejected, as well as
those that have expired postpetition, the Debtors currently are
party to 146 prepetition leases.
Most of the Unexpired Leases are for space used by the Debtors
for conducting the production, warehousing, distribution, sales,
sourcing, accounting and general administrative functions that
comprise the Debtors' businesses, and are important assets of the
Debtors' estates.
Given the size and complexity of their portfolio of Unexpired
Leases, the Debtors believe they should not at this time be
compelled to decide on the Unexpired Leases.
Requiring the Debtors to assume or reject the Unexpired Leases at
this point in their Chapter 11 cases may foreclose them or other
parties from pursuing plan modifications or alternative plan
structures that rely on different dispositions of some or all of
the Unexpired Leases than is presently contemplated, Ms. Stickles
explained.
The extension, Ms. Stickles pointed out, is subject to the rights
of each lessor under an Unexpired Lease to request, upon
appropriate notice and motion, that the Court shorten the Lease
Decision Period and specify a period of time in which the Debtors
must determine whether to assume or reject an Unexpired Lease.
Owens Corning (OTC: OWENQ.OB) (BULLETIN BOARD: OWENQ.OB) --
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 Oct. 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 Nos. 129 & 130; Bankruptcy Creditors' Service, Inc.,
215/945-7000).
OWENS CORNING: Shintech Holds $7 Million General Unsecured Claim
----------------------------------------------------------------
As previously reported, Owens Corning and its debtor-affiliates
sought and obtained authority from the U.S. Bankruptcy Court for
the District of Delaware to reject a resin supply contract with
Shintech Incorporated.
In August 2001, Shintech sought allowance and payment of an
administrative expense claim for $10,591,530, which Shintech
later reduced to $3,666,329.
After discovery and arm's-length discussion, the parties entered
into a stipulation dismissing the Administrative Expense Claim
Motion, without prejudice.
Shintech also filed Claim No. 12105, a general unsecured, non-
priority claim against the Debtors, for $38,942,063. The Claim
is comprised of:
-- prepetition accounts receivable claim for $5,298,751; and
-- a claim based on failure to accept contract volume for
$33,643,312.
The Debtors objected to the Claim. In response, Shintech revised
the Claim amount to $14,061,447.
In February 2006, The Court permitted the Debtors to conduct
partial discovery from Shintech. Consequently, Shintech reduced
the Claim Amount to $4,488,430.
After engaging in negotiations, the Debtors and Shintech agreed
to enter into a settlement agreement to resolve their disputes.
The key terms of the Settlement are:
a. Claim No. 12105 will be allowed against Exterior Systems,
Inc., for $7,000,000 as a general unsecured, non-priority
claim, in full and final satisfaction of all claims,
liabilities or demands relating to the Supply Contract.
b. The Settlement Agreement provides for mutual releases from
all claims, liabilities and demands relating to the
Contract, including those that arose postpetition.
The Settlement will end the Claim dispute and result in a
substantial reduction of the claim amount from approximately
$38,000,000 to $7,000,000, J. Kate Stickles, Esq., at Saul Ewing
LLP, in Wilmington, Delaware, points out.
The Debtors do not dispute the $4,488,430 revised claim amount.
The balance of the settlement amount -- $2,511,570 -- reflects
the Debtors' recognition of the risks surrounding the unresolved
factual and legal questions concerning the part of the claim
asserting "failure to accept contract volume," Ms. Stickles
explains.
The Debtors ask the Court to approve the Settlement.
The Debtors assert that the Settlement represents a fair and
reasonable resolution of the Claim and the related disputes.
Owens Corning (OTC: OWENQ.OB) (BULLETIN BOARD: OWENQ.OB) --
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 Oct. 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. 130; Bankruptcy Creditors' Service, Inc.,
215/945-7000).
PROCARE AUTOMOTIVE: Court OKs Thompson Hine as Bankruptcy Counsel
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Ohio
Eastern Division granted the request of ProCare Automotive Service
Solutions, LLC, to employ Thompson Hine, LLP, as its bankruptcy
counsel.
As reported in the Troubled Company Reporter on March 10, 2006,
the Debtor selected Thompson Hine as counsel because of the firm's
extensive and diverse experience, knowledge and reputation in the
field of debtors' and creditors' rights, business reorganizations
under chapter 11 of the Bankruptcy Code, and in other areas of law
related to the within chapter 11 case.
Thompson Hine is expected to:
a) advise the Debtor of its rights, powers and duties as
debtor-in-possession in the continued operation of its
business;
b) advise and assist the Debtor in the preparation of all
necessary applications, motions, pleadings, reports and
other legal papers required in connection with the
administration of the chapter 11 estate;
c) represent the Debtor in certain contested matters or
adversary proceedings commenced by or against the
Debtor;
d) assist the Debtor in connection with the sale of
substantially all of its assets;
e) assist the Debtor in the preparation of a plan of
reorganization, as appropriate; and
f) perform other appropriate and necessary legal services
for the Debtor.
The hourly rate of Thompson Hine's professionals are:
Professionals Hourly Rate
------------ -----------
Alan R. Lepene, Esq. $525
Thomas Aldrich, Esq. $495
Katherine Brandt, Esq. $480
Linn Harson, Esq. $275
Jeremy M. Campana, Esq. $220
Sean A. Gordon, Esq. $220
Jonathon Vinocur, Esq. $200
Renee L. Davis, Esq. $195
Curtis L. Tuggle, Esq. $185
Other partners, $300 to $525
Other associates $185 to $275
Paralegals $150 to $165
Alan R. Lepene, Esq., at Thompson Hine, tells the Bankruptcy Court
that his firm received a total of $200,000 in retainer fees from
the Debtor from Feb. 16, 2006, to March 3, 2006. The firm applied
the retainers to a portion of the work performed, in preparation
for the Debtor's bankruptcy filing.
Mr. Lepene assures the Court that Thompson Hine does not hold or
represent any interest materially adverse to the Debtor's estate
and that the firm is a "disinterested person" as that term is
defined in Section 101(14) of the Bankruptcy Code.
About Thompson Hine
Thompson Hine, LLP -- http://www.thompsonhine.com/news/-- is
among the largest business law firms in the United States. For
the last several years, the firm has been named one of the Best
Corporate Law Firms in America (in an annual survey of 2,000
corporate directors conducted by Corporate Board Member magazine).
With more than 370 lawyers, Thompson Hine serves premier
businesses worldwide. Established in 1911, the firm has offices
in Atlanta, Brussels, Cincinnati, Cleveland, Columbus, Dayton, New
York, and Washington, D.C. Mr. Lepene can be reached at:
Alan R. Lepene, Esq.
Thompson Hine LLP
3900 Key Center
127 Public Square
Cleveland, Ohio 44114-1291
Telephone (216) 566-5500
Fax (216) 566-5800
About ProCare Automotive
Based in Independence, Ohio, ProCare Automotive Service Solutions,
LLC -- http://www.procareauto.com/-- offers maintenance and
repair services to all makes and models of foreign, domestic,
light truck, and commercial-fleet vehicles. ProCare operates 82
retail locations in eight metropolitan areas throughout three
states. The Debtor filed for chapter 11 protection on March 5,
2006 (Bankr. N.D. Ohio Case No. 06-10605). Scott N. Opincar,
Esq., at McDonald Hopkins Co., LPA, represents the Official
Committee of Unsecured Creditors. When the Debtor filed for
protection from its creditors, it estimated assets and debts
between $10 million and $50 million.
PROCARE AUTOMOTIVE: Court Okays Steven Sues as Financial Advisor
----------------------------------------------------------------
ProCare Automotive Service Solutions, LLC, obtained authority from
the U.S. Bankruptcy Court for the Northern District of Ohio,
Eastern Division to employ Steven Sues & Company as its financial
advisor and consultant.
Steven Sues is expected to:
1) assist in the management of the Debtor's financial
functions, including preparing financial statements, monthly
operating reports and complying with the terms of the
Court's DIP Financing order;
2) assist in the management of cash flow, including compliance
with the DIP financing budget, analysis and reporting of
actual receipts and disbursements versus the budget,
preparation of revised and new forecasts, negotiations with
vendors, collection of accounts receivable and other cash
management functions;
3) comply and render oversight of chapter 11 requirements,
including assistance in preparing the Debtor's schedules and
statements of financial affairs, assisting in the management
of the reclamation claims and unsecured claims processes and
assisting in the development and implementation of a plan
of reorganization and disclosure statement;
4) provide testimony at a deposition, hearing, or other similar
forum and assist the Debtor with respect to operational
initiatives, including sales improvement initiatives, cost
control initiatives and other profit improvement
initiatives;
5) assist with the Debtor's sale process for its assets,
including facilitation of the overall process, assist in
negotiations with buyers, review and consult the asset
purchase agreement, bidding procedures and sale motion,
consult with the Debtor's and third party's investment
bankers and counsel and facilitation of potential
purchaser's due diligence;
6) serve as the liaison between the unsecured creditors'
committee, the Debtor's professionals and the secured
noteholders, including assisting in the gathering,
developing and providing information that may be requested
by the creditors' committee;
7) consult and assist the Debtor and its professionals in the
preparing all necessary applications, motions, pleadings,
reports and other legal papers required in connection with
the administration of the Debtor's estate; and
8) perform all other necessary financial advisory services that
are required by the Debtor or its professionals.
Steven G. Sues, a member at Steven Sues, is one of the lead
professionals from his Firm performing services for the Debtor.
Mr. Sues charges $250 per hour for his services. Mr. Sues
discloses that Steven Sues received a $10,000 retainer.
Steven Sues assures the Court that it does not represent any
interest materially adverse to the Debtor and is "disinterested"
as that term is defined in Section 101(14) of the Bankruptcy Code.
About ProCare Automotive
Based in Independence, Ohio, ProCare Automotive Service Solutions,
LLC -- http://www.procareauto.com/-- offers maintenance and
repair services to all makes and models of foreign, domestic,
light truck, and commercial-fleet vehicles. ProCare operates 82
retail locations in eight metropolitan areas throughout three
states. The Debtor filed for chapter 11 protection on March 5,
2006 (Bankr. N.D. Ohio Case No. 06-10605). Alan R. Lepene, Esq.,
Jeremy M. Campana, Esq., and Sean A. Gordon, Esq., at Thompson
Hine LLP, represent the Debtor. Scott N. Opincar, Esq., at
McDonald Hopkins Co., LPA, represents the Official Committee of
Unsecured Creditors. When the Debtor filed for protection from
its creditors, it estimated assets and debts between $10 million
and $50 million.
PXRE GROUP: Poor Performance Cues Fitch to Maintain Negative Watch
------------------------------------------------------------------
Fitch Ratings' existing ratings of PXRE Group Ltd. will remain on
Rating Watch Negative following several recent announcements by
the reinsurer.
Fitch placed PXRE on Rating Watch Negative on Feb. 17, 2006.
Specifically, Fitch's ratings remain on Rating Watch Negative due
to the following key factors:
-- Continued uncertainty related to PXRE's future viability
and business direction as the company continues to explore
strategic alternatives. Fitch believes such actions often
signal a distressed situation and potential run-off.
-- Additional disruptions in senior management. Fitch notes
that the company's Chief Operating Officer has given notice
of his resignation effective July 17, 2006.
-- Shareholder lawsuits that Fitch anticipated have now become
reality, with their ultimate financial impact unknown.
-- Concerns regarding the company's ability to continue to
operate profitably given its reduced premium base and the
potential for inadequately set reserves. Roughly 65% of
PXRE's in-force business as of Jan. 1, 2006 has either been
non-renewed or cancelled.
-- Fitch's belief that PXRE has limited financial flexibility
going forward.
However, positively, through the first quarter of 2006, PXRE did
not experience adverse loss reserve development related to its
2005 hurricane losses, and its catastrophe risk has been reduced
since a large amount of its premium base has non-renewed or
cancelled. Fitch expects this will continue to be the trend.
Fitch originally placed the ratings on Rating Watch Negative on
Feb. 17, 2006, following PXRE's announcement that the company had
increased its pre-tax net loss estimates for hurricanes Katrina,
Rita, and Wilma by $281 million-$311 million, and decided to
explore strategic alternatives. Fitch concurrently downgraded its
Insurer Financial Strength rating on PXRE's lead operating
subsidiaries, PXRE Reinsurance Ltd. and PXRE Reinsurance Company,
to 'BB+' from 'BBB+'.
These ratings remain on Rating Watch Negative:
PXRE Group Ltd.
-- Issuer Default Rating (IDR) 'BB'.
PXRE Capital Trust I
-- Trust preferred securities $100 million 8.85% due Feb. 1,
2027 'B+'.
PXRE Reinsurance Company
PXRE Reinsurance Ltd.
-- IFS 'BB+'.
REFCO INC: Chapter 7 Trustee Taps Bridge Associates as Advisors
---------------------------------------------------------------
Albert Togut, the interim Chapter 7 trustee of the estate of
Refco, LLC, asks the United States Bankruptcy Court for the
Southern District of New York for authority to employ Bridge
Associates, LLC, as his financial advisors.
The Chapter 7 Trustee needs Bridge Associates to assist him in
preparing monthly operating reports for Refco LLC and to
otherwise comply with other reporting requirements of the
Bankruptcy Code, the Bankruptcy Rules, the Local Rules and the
operating guidelines for bankruptcy trustees promulgated by the
office of the U.S. Trustee.
In addition, Mr. Togut needs Bridge Associates to:
-- communicate with the office of the U.S. Trustee concerning
any issues regarding monthly operating reports and related
matters;
-- review reports prepared by other parties-in-interest
regarding, among other things, the transactions between
Refco LLC and the Chapter 11 Debtors, including the
allocation of expenses among the entities pursuant to the
Bankruptcy Court Order approving the Debtors' Statement of
Overhead Allocation Methodology, dated February 1, 2006;
-- assist in the identification of supporting information for
collecting outstanding accounts receivable of Refco LLC;
and
-- perform other necessary services and provide other advice
in connection with Refco LLC's case.
Mr. Togut selected Bridge Associates because of its extensive and
diverse experience, knowledge, and reputation in bankruptcy
cases. Bridge Associates or its professionals have been involved
in numerous large Chapter 11 cases, including Tower Automotive,
Inc.; Wickes Inc.; Brill Media, LLC; United Air Lines, Inc.;
Agribiotech (n/k/a ABT Creditor Trust); and Three Five Systems,
Inc., as well as many other out-of-court restructurings.
Anthony H. N. Schnelling, a managing director at Bridge
Associates, assures the Court that the firm and its professionals
do not have any interest materially adverse to the interest of
the Chapter 7 Trustee, Refco LLC, any class of creditors or
equity security holders, any other party-in-interest, or their
attorneys and accountants. Bridge Associates is a "disinterested
person," as that phrase is defined in Section 101(14) of the
Bankruptcy Code, as modified by Section 1107(b).
Mr. Togut will pay Bridge Associates in accordance with its
ordinary and customary hourly rates. The firm's current hourly
billing rates for 2006 range from $300 to $450 for managing
directors, directors and senior consultants; $250 to $300 for
principals, senior associates and consultants; and $150 to $250
for associates and consultants.
About Refco Inc.
Based in New York, New York, Refco Inc. -- http://www.refco.com/-
- is a diversified financial services organization with operations
in 14 countries and an extensive global institutional and retail
client base. Refco's worldwide subsidiaries are members of
principal U.S. and international exchanges, and are among the most
active members of futures exchanges in Chicago, New York, London
and Singapore. In addition to its futures brokerage activities,
Refco is a major broker of cash market products, including foreign
exchange, foreign exchange options, government securities,
domestic and international equities, emerging market debt, and OTC
financial and commodity products. Refco is one of the largest
global clearing firms for derivatives.
The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts. Luc A.
Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents
the Official Committee of Unsecured Creditors. Refco reported
$16.5 billion in assets and $16.8 billion in debts to the
Bankruptcy Court on the first day of its chapter 11 cases.
Refco LLC, an affiliate, filed for chapter 7 protection on
Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC, is
a regulated commodity futures company that has businesses in the
United States, London, Asia and Canada. Refco, LLC, filed for
bankruptcy protection in order to consummate the sale of
substantially all of its assets to Man Financial Inc., a wholly
owned subsidiary of Man Group plc. (Refco Bankruptcy News, Issue
No. 29; Bankruptcy Creditors' Service, Inc., 215/945-7000)
REFCO INC: Ch. 7 Trustee Can Wind-Down Refco Taiwan's Operations
----------------------------------------------------------------
Albert Togut, the interim Chapter 7 trustee for Refco LLC's
Estate, obtained authority from the U.S. Bankruptcy Court for the
Southern District of New to complete the wind-down of Refco
Taiwan's business in accordance with the laws of Taiwan, and to
pay expenses necessary to complete the wind-down process in
compliance with Taiwanese law.
As reported in the Troubled Company Reporter on Apr. 27, 2006, Mr.
Togut wanted authority to direct actions necessary and appropriate
to complete the liquidation and wind-up of Refco Taiwan,
including, without limitation:
-- preparation of accounting reports, statements of receipts
and disbursements and income statements;
-- preparation and lodging of final tax returns;
-- appearances before the supervising Taiwanese court for
purposes of seeking approval of the liquidation and wind-
down of Refco Taiwan's operations and authorization for
the transfer of Refco Taiwan's remaining funds to the
Trustee; and
-- adjudication and resolution in the Taiwanese court, or
otherwise, of any claims asserted against Refco Taiwan
during the notice period and, if necessary, authorization
for payment of any allowed claims from Refco Taiwan's
remaining funds to the extent required by Taiwanese law.
Refco Taiwan
Mr. Togut tells the Court that prior to filing for chapter 7
liquidation, Refco, LLC, operated a branch office in Taiwan.
Refco Taiwan is not a separate legal entity.
Mr. Togut informs the Court that approximately $3 million remains
in Refco Taiwan's bank accounts that were not novated to Man
Financial, Inc. Funds that are property of the Debtor's estate.
Mr. Togut, however, relates that when he attempted to transfer
those funds to United States bank accounts controlled by him, he
was advised that the funds constituted capital under the laws of
Taiwan that could not be delivered to United States bank accounts
without the approval of governmental authorities.
According to Mr. Togut, it initially appeared that process of
obtaining Taiwanese governmental approval would be a relatively
informal process, and that he simply needed to designate a
representative in Taiwan to act as "liquidator" on his behalf to
request the transfer of the funds. Accordingly, Mr. Togut
designated the Debtor's local branch manager in Taiwan to act in
that capacity.
The Trustee now has been informed that even though Refco Taiwan
is not an independent legal entity, the operations of the Refco
Taiwan branch need to be wound down in accordance with Taiwanese
law before Refco Taiwan's funds can be delivered to the Trustee.
More particularly, the Trustee understands that the process of
winding down Refco Taiwan's operations will include:
(a) a notice must be published advising potential claimants
that they have three months to submit claims against Refco
Taiwan;
(b) upon expiration of the notice period, the liquidator will
produce accounting reports, lodge final tax returns and
prepare an accounting of Refco Taiwan's assets and
liabilities; and
(c) a Taiwanese court will then enter an order concerning the
payment of claims and the return of any excess capital to
the Trustee.
Mr. Togut further relates that Refco LLC's local branch manager
in Taiwan, as liquidator, has caused a three-month creditor
notice to be published in Taiwan.
Mr. Togut reports that the total cost of the wind-down, including
salaries for remaining Taiwan employees undertaking the actions,
should not exceed $100,000.
About Refco Inc.
Based in New York, New York, Refco Inc. -- http://www.refco.com/-
- is a diversified financial services organization with operations
in 14 countries and an extensive global institutional and retail
client base. Refco's worldwide subsidiaries are members of
principal U.S. and international exchanges, and are among the most
active members of futures exchanges in Chicago, New York, London
and Singapore. In addition to its futures brokerage activities,
Refco is a major broker of cash market products, including foreign
exchange, foreign exchange options, government securities,
domestic and international equities, emerging market debt, and OTC
financial and commodity products. Refco is one of the largest
global clearing firms for derivatives.
The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts. Luc A.
Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents
the Official Committee of Unsecured Creditors. Refco reported
$16.5 billion in assets and $16.8 billion in debts to the
Bankruptcy Court on the first day of its chapter 11 cases.
Refco LLC, an affiliate, filed for chapter 7 protection on
Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC, is
a regulated commodity futures company that has businesses in the
United States, London, Asia and Canada. Refco, LLC, filed for
bankruptcy protection in order to consummate the sale of
substantially all of its assets to Man Financial Inc., a wholly
owned subsidiary of Man Group plc. (Refco Bankruptcy News, Issue
No. 29; Bankruptcy Creditors' Service, Inc., 215/945-7000)
REVLON CONSUMER: Posts $54 Mil. Net Loss in Quarter Ended March 31
------------------------------------------------------------------
Revlon Consumer Products Corporation filed its financial
statements for the quarter ended March 31, 2006, with the
Securities and Exchange Commission on May 5, 2006.
The Company reported a $54,600,000 net loss on $325,500,000 of net
sales for the three months ended March 31, 2006.
At March 31, 2006, the Company's balance sheet showed
$1,091,900,000 in total assets and $2,127,500,000 in total
liabilities resulting in a stockholders' deficit of
$1,035,600,000.
A full-text copy of the Company's financial statements for the
quarter ended March 31, 2006, is available at no charge at:
http://ResearchArchives.com/t/s?939
Revlon Consumer Products Corporation is a wholly owned subsidiary
of Revlon, Inc., a worldwide cosmetics, skin care, fragrance, and
personal care products company. The Company's vision is to become
the world's most dynamic leader in global beauty and skin care.
The Company's brands, which are sold worldwide, include Revlon(R),
Almay(R), Ultima(R), Charlie(R), Flex(R), and Mitchum(R).
* * *
As reported in the Troubled Company Reporter on March 6, 2006,
Standard & Poor's Ratings Services revised its outlook on Revlon
Consumer Products Corp. to stable from negative.
At the same time, Standard & Poor's affirmed all of its ratings on
Revlon, including its 'B-' corporate credit rating. About
$1.4 billion of debt is affected by this action.
SESI LLC: Moody's Rates $300 Million Sr. Unsec. Notes at Ba3
------------------------------------------------------------
Moody's upgraded the corporate family and senior unsecured ratings
of SESI, L.L.C. to Ba3 from B1 with a stable rating outlook and
assigned a Ba3 rating to its proposed $300 million senior
unsecured notes due 2014, to be guaranteed by Superior Energy
Services, Inc. and substantially all of its current and future
domestic subsidiaries.
Proceeds will primarily be used to fund the tender for and
retirement of its $200 million of 8.9% senior unsecured notes due
2011, fund the $47 million acquisition from Explore Offshore of
2.7 million barrels of oil equivalent of proved reserves, and fund
$7 million of transaction fees. Moody's will withdraw the rating
on the $200 million 8.9% senior unsecured notes upon their
redemption. The rating outlook is stable.
The upgrade reflects:
(1) the company's increased scale and scope through both
organic growth and acquisitions over the last several
years;
(2) its successful track record to date in executing its
growth strategy while also maintaining conservative
financial policies;
(3) an improved financial leverage profile that helps
accommodate the risks associated with the company's oil
and gas operations and its regional concentration in the
US Gulf of Mexico;
(4) improvement in its profitability metrics;
(5) and the potential for continued strength in the company's
financial results over the near to medium term based on
the favorable outlook for the oilfield services sector
and, in particular, the underlying base of demand in the
Gulf of Mexico for production and decommissioning related
services.
Superior's ratings remain constrained by the inherent cyclicality
of the oilfield services industry; the higher risk profile of its
oil and gas operations, which represents a relatively new area for
the company and which is expected to grow to 25% of consolidated
EBITDA; and its regional concentration in the Gulf of Mexico, a
mature basin with significant full cycle oil and gas costs, which
can result in curtailed E&P spending during oil and gas price
troughs.
The stable rating outlook assumes that Superior will continue to
maintain conservative leverage, its oil and gas operations will
not grow to more than 25% of its EBITDA, its business risk profile
will not increase through drilling risk exposure, and material
acquisitions will be funded with a substantial equity component.
The rating outlook or ratings could face downward pressure if
management is unable to maintain conservative operating and
financial policies, including increasing its financial leverage to
a range unable to withstand the company's business risk profile.
While a positive outlook or rating upgrade is unlikely in the
near-term, significantly increased scale in tandem with reduced
cash flow volatility and the maintenance of low leverage could be
positive for the ratings.
The senior unsecured note ratings are not notched down from the
corporate family rating because of the expectation of low amount
of senior secured debt in the capital structure. Senior unsecured
debt represents approximately 95% of the pro forma debt structure
of the company, with secured debt consisting of $17.4 million in
Marad debt.
The indenture limits secured debt to the amount of the credit
facility, including the accordion feature, and a general basket of
$30 million. The company does not plan to have material revolver
drawings. If revolver drawings become material due to reduced
cash flow or the funding of an acquisition and are not repaid in a
timely manner, the note ratings could be subject to downward
pressure.
Superior Energy Services, Inc. is headquartered in Harvey,
Louisiana.
SILICON GRAPHICS: Can Access Cash Collateral on Interim Basis
-------------------------------------------------------------
The Hon. Allan L. Gropper of the U.S. Bankruptcy Court for the
Southern District of New York permits Silicon Graphics, Inc.,
Silicon Graphics Federal, Inc. and Silicon Graphics World Trade
Corporation to use their lenders' Cash Collateral on an interim
basis.
Prior to their bankruptcy filing, the Debtors obtained financing
from:
* a credit agreement with Wells Fargo Foothill, Inc., and
Ableco Finance, LLC, which provides for a $50,000,000
revolving credit facility and a $50,000,000 term loan
facility;
* $224,000,000 of newly issued Senior Secured Convertible
Notes, which bear interest at the rate of 6.50% per annum,
and $2,400,000 of newly issued Senior Secured Notes, which
bear interest at the rate of 11.75% interest per annum; and
* $115,000,000 Convertible Subordinated Debentures due
February 1, 2011, which bear interest at the rate of 6.125%
per annum.
As of the chapter 11 filing, the Debtors owe their bank lenders
$76,000,000. The Debtors have borrowed $30,000,000 available
under the Term Loan and are using approximately $46,000,000 of
capacity available under the Revolving Credit Facility,
$43,000,000 of which is in letters of credit issued in favor of
affiliates of Goldman Sachs Group in connection with SGI's leases
of nonresidential real property in Mountain View, California.
As of March 31, 2006:
* $189,000,000 of the 6.50% Notes and $2,400,000 of the 11.75%
Notes were outstanding, and
* $56,800,000 was outstanding under the Subordinated
Debentures.
U.S. Bank National Association is the indenture trustee for each
of the Senior Secured Notes.
JPMorgan Chase Bank is the indenture trustee for the Subordinated
Debentures.
Cash Collateral
The Borrowers granted first priority liens and security interests
in favor of Wells Fargo Foothill, as agent for the Prepetition
Lenders, in substantially all of their assets.
Silicon Graphics granted to U.S. Bank, as indenture trustee,
second priority liens on all of its right, title, and interest in,
certain of its assets to secure the Senior Secured Notes.
The Subordinated Debentures are unsecured and are subordinate in
right of payment to the prior payment in full of all obligations
under the Credit Agreement and the Senior Secured Notes.
The Debtors require the use of cash collateral of the Prepetition
Lenders and the holders of the Senior Secured Notes. The use of
Cash Collateral will provide the Debtors with the additional
necessary capital with which to operate their businesses, pay
their employees, maximize value, and successfully reorganize under
Chapter 11.
Because the Debtors filed for bankruptcy, absent court authority
pursuant to Section 363(c) of the Bankruptcy Code, the Debtors
can't touch their lenders' cash collateral.
Thus, the Debtors seek the Court's authority to use their lenders'
Cash Collateral.
The Debtors will limit their use of Cash Collateral to amounts
specified in a 21-Week Budget. A full-text copy of the Debtors'
Cash Flow Forecast commencing as of the week ending May 12, 2006,
through and including the week ending September 29, 2006, is
available for free at:
http://bankrupt.com/misc/silicon_budget.pdf
The Prepetition Lenders have consented to the Debtors' use of Cash
Collateral in the ordinary course of business in accordance with
the Approved Budget, subject to the adequate protection liens and
payments.
Adequate Protection
The Debtors propose to grant Wells Fargo Foothill and their
Prepetition Lenders replacement liens that will be:
* subject only to fees paid to the U.S. Trustee and Chapter 11
professionals; and
* superior to and first priority in the Credit Agreement
Collateral over any liens and interests of postpetition
lenders, U.S. Bank or the holders of the Senior Secured
Notes.
The Debtors also propose to grant and pay Wells Fargo Foothill
superpriority claims, periodic payments equal to the interest
payments due, and other allowed fees and expenses.
U.S. Bank, as indenture trustee for the Senior Secured Notes, will
receive a valid, perfected and enforceable security interest
equivalent to a lien granted under Section 364(c) of the
Bankruptcy Code in and upon all of the Borrowers' assets,
excluding Avoidance Claims.
The Senior Secured Notes Replacement Liens will be subject only to
(i) the liens of the Prepetition Lenders and Prepetition Lenders'
Replacement Liens; (ii) the liens granted to postpetition lenders,
(iii) certain permitted liens; and (iv) fees to the U.S. Trustee
and Chapter 11 professionals.
U.S. Bank and the holders of Senior Secured Notes will receive an
administrative claim if the collateral proves to be inadequate.
Holders of 6.50% Notes will be entitled to payment of all
reasonable costs and expenses of:
(a) Goodwin Procter LLP, as counsel to the Ad Hoc Committee,
(b) Houlihan Lokey Howard & Zukin as financial advisor to the
Ad Hoc Committee, and
(c) counsel to U.S. Bank as the indenture trustee.
The Court will convene the Final DIP Hearing on May 31, 2006, at
10:00 a.m.
Objections must be filed and served no later than May 26, 2006,
on:
(i) counsel to the Debtors
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
Attn: Gary Holtzer, Esq.,
(ii) counsel to the Ad Hoc Committee
Goodwin Procter LLP
599 Lexington Avenue
New York, New York 10022
Attn: Allan S. Brilliant, Esq.;
(iii) counsel to Wells Fargo Foothill Inc.
Jeffer, Mangels, Butler & Marmaro LLP
Two Embarcadero Center, Fifth Floor
San Francisco, California 94111-3824
Attn: Nicolas De Lancie, Esq. and Robert B. Kaplan, Esq.
Pryor Cashman Sherman & Flynn LLP
410 Park Avenue, 10th Floor
New York, New York 10022
Attn: Richard Levy, Jr., Esq.
-- and --
(iv) counsel to Ableco Finance LLC
Paul, Hastings, Janofsky & Walker LLP
600 Peachtree Street, N.E.
Atlanta, Georgia 30308
Attn: Jesse H. Austin III, Esq.,
75 E. 55th Street
New York, New York 10022
Attn: Kristine M. Shryock, Esq.
About Silicon Graphics
Headquartered in Mountain View, California, Silicon Graphics, Inc.
(OTC: SGID) -- http://www.sgi.com/-- offers high-performance
computing. SGI helps customers solve their computing challenges,
whether it's sharing images to aid in brain surgery, finding oil
more efficiently, studying global climate, providing technologies
for homeland security and defense, enabling the transition from
analog to digital broadcasting, or helping enterprises manage
large data. The Debtor and 13 of its affiliates filed for chapter
11 protection on May 8, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10977
through 06-10990). Gary Holtzer, Esq., and Shai Y. Waisman, Esq.,
at Weil Gotshal & Manges LLP, represent the Debtors in their
restructuring efforts. When the Debtors filed for protection from
their creditors, they listed total assets of $369,416,815 and
total debts of $664,268,602. (Silicon Graphics Bankruptcy News,
Issue No. 2; Bankruptcy Creditors' Service, Inc., 215/945-7000)
SILICON GRAPHICS: Gets Interim OK to Use Cash Management System
---------------------------------------------------------------
The Hon. Allan L. Gropper of the U.S. Bankruptcy Court for the
Southern District of New York authorizes Silicon Graphics, Inc.,
and its debtor-affiliates to continue utilizing their current
integrated cash management system in a manner consistent with
their prepetition practices on an interim basis.
The Office of the United States Trustee has established certain
operating guidelines for debtors-in-possession to supervise the
administration of chapter 11 cases, including changes to the
debtor's cash management system.
The Debtors maintain a cash management system, which has domestic
and international features. According to the Debtors, their Cash
Management System has three main components:
(i) cash collection;
(ii) cash concentration; and
(iii) cash disbursements.
The Debtors maintain, among others, a concentration account,
collection account, disbursement account, main payroll account,
and short-term investments account at Wells Fargo Bank in the
United States.
Silicon Graphics, Inc., also maintains two accounts each for
collection and disbursement with Credit Suisse Group in
Switzerland.
Silicon Graphics World Trade Corporation and Cray Research
International, Inc., each maintain a disbursement account outside
of the United States.
Each of the Non-Debtors maintains at least one collection account
with banks in the country in which they are incorporated.
A flow chart summarizing the Debtors' Cash Management System is
available for free at:
http://bankrupt.com/misc/Silicon_CMSflowchart.pdf
Gary T. Holtzer, Esq., at Weil, Gotshal & Manges LLP, in New
York, informs the Court that the Debtors' Cash Management System
constitutes an ordinary course and essential business practice
providing significant benefits to the Debtors, including, the
ability to:
-- control corporate funds;
-- ensure the maximum availability of funds when and where
necessary; and
-- reduce administrative expenses by facilitating the movement
of funds and the development of more timely and accurate
account balance information.
The Debtors also obtained the Court's permission to honor
prepetition intercompany obligations to the Non-Debtors.
The Debtors note that the failure to honor their prepetition
obligations to the Non-Debtors:
-- will diminish the value of their estates through a reduction
in the value of their interest in the affiliates; and
-- could have an immediate and potentially irreparable impact
on their operations.
About Silicon Graphics
Headquartered in Mountain View, California, Silicon Graphics, Inc.
(OTC: SGID) -- http://www.sgi.com/-- offers high-performance
computing. SGI helps customers solve their computing challenges,
whether it's sharing images to aid in brain surgery, finding oil
more efficiently, studying global climate, providing technologies
for homeland security and defense, enabling the transition from
analog to digital broadcasting, or helping enterprises manage
large data. The Debtor and 13 of its affiliates filed for chapter
11 protection on May 8, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10977
through 06-10990). Gary Holtzer, Esq., and Shai Y. Waisman, Esq.,
at Weil Gotshal & Manges LLP, represent the Debtors in their
restructuring efforts. When the Debtors filed for protection from
their creditors, they listed total assets of $369,416,815 and
total debts of $664,268,602. (Silicon Graphics Bankruptcy News,
Issue No. 2; Bankruptcy Creditors' Service, Inc., 215/945-7000)
SSA GLOBAL: Infor to Buy Stock in $19.50-Per-Share Merger Deal
--------------------------------------------------------------
SSA Global Technologies, Inc., and Infor Global Solutions AG
entered into a definitive agreement for Infor to acquire SSA
Global.
Under the terms of the agreement, Infor has agreed to pay
$19.50 per share in cash to SSA Global's shareholders. The
agreement was approved by SSA Global's Special Committee of
independent directors, as well as the Board of Directors. The
parties anticipate closing the transaction in the third calendar
quarter of 2006. The closing is subject to certain customary
conditions, including receipt of regulatory approvals and SSA
Global shareholder approval. Certain shareholders representing
approximately 84% of SSA Global's outstanding shares have entered
into voting agreements to support the merger.
"With this acquisition, Infor will become the third largest
enterprise software provider in the industry with approximately
$1.6 billion in revenue," said Jim Schaper, Infor's chairman and
CEO. "Infor has become a significant force in the industry by
assembling and innovating market-specific, best-in-class
enterprise software solutions, which provides customers with a
flexible choice in the market."
"In a rapidly consolidating marketplace we have seen that size and
scale matter," said Mike Greenough, chairman, president and CEO of
SSA Global. "This transaction brings value to all of our key
stakeholders . our investors, our customers and our employees."
Infor was advised by Kirkland & Ellis LLP. Financing for the
acquisition will be arranged by J.P. Morgan Securities Inc. and
Credit Suisse (USA) LLC and is expected to include a combination
of senior secured first-lien credit facilities and second-lien
debt denominated in both US dollars and Euros.
The Special committee of independent directors was advised by
Mayer, Brown, Rowe & Maw LLP and received a fairness opinion from
Houlihan, Lokey, Howard & Zukin. SSA Global was advised by
Schulte Roth and Zabel LLP and J.P. Morgan Securities Inc.
The definitive agreement to acquire SSA Global Technologies, Inc.
was signed by Magellan Holdings, Inc., a wholly owned subsidiary
of Infor Global Solutions AG. Infor is a portfolio company of
Golden Gate Capital and Summit Partners.
About Infor
Infor Global Solutions AG -- http://www.infor.com/-- is one of
the largest global software providers focused on delivering
world-class enterprise applications to select verticals in the
manufacturing and distribution industries. Infor delivers
integrated solutions that address the essential challenges its
customers face in areas such as supply chain planning, enterprise
asset management, relationship management, demand management, ERP,
warehouse management, and business intelligence. With more than
3,100 employees in 50 global offices, Infor provides enterprise
solutions to almost 24,700 customers in over 100 countries.
About SSA Global
Headquartered in Chicago, Illinois, SSA Global Technologies Inc.
(Nasdaq: SSAG) -- http://www.ssaglobal.com/-- is a leading
provider of extended ERP solutions for manufacturing,
distribution, retail, services and public organizations worldwide.
In addition to core ERP applications, SSA Global offers a full
range of integrated extension solutions including corporate
performance management, customer relationship management, product
lifecycle management, supply chain management and supplier
relationship management. SSA Global has over 50 locations
worldwide and its product offerings are used by approximately
13,000 active customers in over 90 countries. SSA Global(TM) is
the corporate brand for product lines and subsidiaries of SSA
Global Technologies, Inc. SSA Global, SSA Global Technologies and
SSA GT are trademarks of SSA Global Technologies, Inc. Other
products mentioned in this document are registered, trademarked or
service marked by their respective owners.
* * *
Standard & Poor's Ratings Services placed a 'BB-' corporate credit
rating on Chicago, Illinois-based SSA Global Technologies Inc. in
July 2005. At the same time, Standard & Poor's puta 'BB-' rating,
with a recovery rating of '3', to SSA Global's $225 million senior
secured bank facility, which will consist of a $25 million
revolving credit facility due 2010 and a $200 million term loan
due 2011. S&P said the outlook is negative.
TELLURIDE GLOBAL: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Telluride Global Development, LLC
250 South Pine Street, Suite 104
Telluride, Colorado 81435
Bankruptcy Case No.: 06-12720
Chapter 11 Petition Date: May 15, 2006
Court: District of Colorado (Denver)
Judge: Michael E. Romero
Debtor's Counsel: Harold G. Morris, Jr.
Lindquist & Vennum PLLP
600 17th Street, Suite 1800
South Denver, Colorado 80202-5421
Tel: (303) 573-5900
Fax: (303) 573-1956
Total Assets: $3,555,609
Total Debts: $3,820,640
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Anne P. Fleckles Alleged Lien $100,000
11 Bishop Path against Ballard
Sandwich, MA 02563 House North
Alda and Eugene C. Moravec Alleged Lien $75,000
c/o Joseph Aaron Solomon, Esq. Against Ballard
Solomon & Solomon House North
119A West Colorado Avenue
P.O. Box 1748
Telluride, CO 81435
Louis Duval Alleged Lien $65,000
c/o Joseph Aaron Solomon, Esq. Against Ballard
Solomon & Solomon House North
119A West Colorado Avenue
P.O. Box 1748
Telluride, CO 81435
James Trichak Alleged Lien $50,000
Howard R. Hornback Alleged Lien $50,000
Anita and Mike Galvin, and Alleged Lien $50,000
Ken Rhode
Anna Mendrin Alleged Lien $50,000
Oliver James Sterling, II Alleged Lien $50,000
Kevin D. Sorbo Alleged Lien $50,000
Ralph Edward Preston Alleged Lien $48,123
Timothy T. O'Mara Alleged Lien $33,223
Coker, Rita and Alleged Lien $30,000
Choosin Bhandu Savee
Curt and Cynthia Simmons Alleged Lien $30,000
Christina Ann Lee Alleged Lien $30,000
Dennis Scholtz Alleged Lien $30,000
Marc Mendelsohn Alleged Lien $30,000
Jerome Kraft, M.D. Alleged Lien $30,000
Mary L. and Steve Hinkle Alleged Lien $26,646
Howard W. Nutt Alleged Lien $25,000
John Lyle Alleged Lien $25,000
TELTRONICS INC: March 31 Balance Sheet Upside-Down by $3.3 Million
------------------------------------------------------------------
Teltronics, Inc., filed its financial statements for the quarter
ended March 31, 2006, with the Securities and Exchange Commission
on May 4, 2006.
The Company earned $560,000 of net income on $6,915,000 of net
sales for the three months ended March 31, 2006.
At March 31, 2006, the Company's balance sheet showed $17,185,000
in total assets and $20,491,000 in total liabilities resulting in
a stockholders' deficit of $3,306,000.
A full-text copy of the Company's financial statements for the
quarter ended March 31, 2006, is available at no charge at:
http://ResearchArchives.com/t/s?93a
Headquartered in Sarasota, Florida, Teltronics, Inc. --
http://www.teltronics.com/-- provides communications solutions
and services for businesses. The Company manufactures telephone
switching systems and software for small-to-large size businesses
and government facilities. Teltronics' Enhanced 911 solutions
provide lifesaving information to public safety communications
centers. Teltronics offers a full suite of Contact Center
solutions -- software, services and support -- to help their
clients satisfy customer interactions. Teltronics also provides
remote maintenance hardware and software solutions to help large
organizations and regional telephone companies effectively
monitor and maintain their voice and data networks. The Company
serves as an electronic contractmanufacturing partner to customers
in the U.S. and overseas.
TRANSCONTINENTAL GAS: Fitch Lifts Rating on Sr. Unsec. Debt to BB+
------------------------------------------------------------------
Fitch upgrades The Williams Companies, Inc.'s (WMB) outstanding
senior unsecured debt and issuer default rating to 'BB+' from
'BB'. In addition, the senior unsecured debt and IDRs of
Transcontinental Gas Pipe Line Corp. and Northwest Pipeline Corp.
are upgraded to 'BBB-' from 'BB+'. The ratings are removed from
Rating Watch Positive status where they were placed on March 7,
2006.
At the same time, Fitch withdraws Williams Production RMT Co.'s
'BB+' senior secured rating and 'BB-' IDR reflecting the
retirement of RMT's outstanding debt obligations on April 13,
2006. The Rating Outlook is Stable.
The rating action reflects WMB's substantially de-leveraged
balance sheet and continued improvement in consolidated credit
metrics, the recent elimination of all direct secured debt
obligations from WMB's capital structure, the company's solid
liquidity position and limited debt refinancing risk through 2010,
the expectation for continued stable cash flow generation from
WMB's core natural gas businesses, and the strengthened near-term
cash flow profile of WMB's Power segment.
Key risk factors incorporated into WMB's ratings include the
commodity price volatility embedded in WMB's growing natural gas
exploration and production unit and certain phases of the
company's midstream business and the largely unhedged nature of
WMB's off-balance-sheet power tolling obligations beyond 2010.
In addition, WMB management is demonstrating a clear appetite to
boost capital spending to further expand E&P and Midstream
production capacity at the peak of the commodity cycle. Fitch
notes that WMB's near-term capital budget will likely require a
modest level of incremental debt financing at WMB or Williams
Partners, L.P., WMB's publicly traded master limited partnership
affiliate.
WMB has emerged from its restructuring as a more focused
integrated natural gas company with core operations encompassing
FERC regulated interstate pipelines, E&P, and midstream gas and
liquids services. These businesses should continue to generate a
relatively predictable earnings and cash flow stream going forward
with potential commodity price volatility in the E&P segment
offset by the cash flow stability of TGPL and NWP, and WMB's
growing portfolio of fee-based midstream assets. Commodity price
risk at E&P is further mitigated by WMB's focus on developing
lower risk Rocky Mountain based tight sands and coalbed methane
gas reserves.
Although WMB has successfully wound down speculative trading
activities, there is longer-term uncertainty associated with
Power's sizable tolling contract portfolio. WMB currently has
long-term tolling agreements for approximately 7,700 megawatts of
generating capacity under which it is obligated to make fixed
payments averaging $400 million over the next several years with a
total remaining net present value of about $2.5 billion.
Importantly, during 2004 and 2005, WMB sold forward additional
tolling capacity through 2010 thus ensuring minimizing the near-
term cash flow strain at Power. Moreover, Fitch estimates that
existing physical power sales contracts, financial hedges and
conservatively forecasted merchant sales substantially cover
Power's fixed cost structure through 2010.
Since year-end 2002, WMB has decreased consolidated debt by
approximately $5.6 billion by deploying cash raised from asset
sales and the early conversion of equity-linked securities. At the
same time, WMB has expanded the cash flow of its core natural gas
businesses, effectively offsetting a good portion of income lost
due to asset sales. As a result, consolidated credit protection
measures have improved to levels solidly within Fitch's 'BB'
targets for diversified energy companies.
For the fiscal year ended Dec. 31, 2005, consolidated cash
interest coverage approached 3.0 times (x) with total debt/EBITDA
dropping to 3.7x. As part of its analysis, Fitch reviewed WMB's
prospective cash flow performance under less favorable commodity
market conditions, including a scenario envisioning a decline in
natural gas prices to the $4.00 per mmBtu range in 2008. Although
this price level adversely impacts the long-gas position embedded
in E&P, WMB's prospective credit profile remains within parameters
for the rating as the stable cash generation of WMB's regulated
pipelines combined with various offsetting short gas positions at
Midstream and Power compensate for a portion of the resultant
earnings decline at E&P.
The 'BBB-' rating assigned to WMB's pipeline subsidiaries reflects
NWP's and TGPL's strong individual operating and financial
profiles, offset by the structural and functional ties between
these entities and their ultimate parent WMB. Both NWP and TGPL
participate in WMB's daily cash management program under which
each subsidiary makes and/or receives advances from WMB.
Operationally, NWP and TGPL are viewed as two of the premier
pipeline systems in the U.S. In particular, both systems boast
competitive rate structures, captive markets, a high percentage of
capacity subscribed long-term contract profiles, and attractive
expansion opportunities. Furthermore, stand-alone credit measures
at both NWP and TGPL have continued to remain healthy despite
higher dividend payments to WMB and moderate growth spending and
remain consistent with strong investment grade parameters.
The Stable Rating Outlook reflects Fitch's expectation that WMB's
credit and financial profile over the next 12-24 months will
remain consistent with its rating even under more onerous
operating conditions, including a lower natural gas price
environment. Factors leading to potential rating improvement over
time would include further de-leveraging or a potential
transaction or arrangement that would substantially hedge or
assume WMB's remaining contractual obligations under its long-term
power tolling contracts. At the same time, a return to a more
aggressive, debt financed growth strategy or the inability to
hedge tolling obligations beyond 2010 would likely place downward
pressure on WMB's rating or outlook.
A summary of outstanding ratings affected by Fitch's action:
The Williams Companies, Inc.
-- IDR and senior unsecured notes and debentures upgraded to
'BB+' from 'BB';
-- Junior subordinated convertible debentures upgraded to
'BB-' from 'B+'.
-- The 'BB+' senior secured rating previously assigned to WMB
is withdrawn.
Williams Production RMT Co.
-- Senior secured term loan B withdrawn at 'BB+';
-- IDR 'BB-' withdrawn.
Northwest Pipeline Corp.
-- IDR and senior unsecured notes and debentures upgraded to
'BBB-' from 'BB+'.
Transcontinental Gas Pipe Line Corp.
-- IDR and senior unsecured notes and debentures upgraded to
'BBB-' from 'BB+'.
TRM CORP: Posts $1.4 Million Net Loss in Quarter Ended March 31
---------------------------------------------------------------
TRM Corporation filed its financial statements for the quarter
ended March 31, 2006, with the Securities and Exchange Commission
on May 5, 2006.
The Company reported a $1,499,000 net loss on $52,953,000 of sales
for the three months ended March 31, 2006.
At March 31, 2006, the Company's balance sheet showed $334,469,000
in total assets and $194,687,000 in total liabilities, resulting
in a stockholders' equity of $138,282,000.
A full-text copy of the Company's financial statements for the
quarter ended March 31, 2006, is available at no charge at:
http://ResearchArchives.com/t/s?936
Headquartered in Portland, Oregon, TRM Corporation --
http://www.trm.com/-- is a consumer services company that
provides convenience ATM and photocopying services in high-traffic
consumer environments. TRM's ATM and copier customer base has
grown to over 35,000 retailers throughout the United States and
over 46,200 locations worldwide, including 6,400 locations across
the United Kingdom and over 4,900 locations in Canada. TRM
operates one of the largest multi-national ATM networks in the
world, with over 22,000 locations deployed throughout the United
States, Canada, Great Britain, including Northern Ireland and
Germany.
* * *
As reported in the Troubled Company Reporter on Mar. 23, 2006,
Standard & Poor's Ratings Services lowered its corporate credit
rating on Portland, Oregon-based TRM Corporation to 'CCC' from
'B+' and revised its CreditWatch placement to developing from
negative. The downgrade reflected the weakened status of the
company's loan agreement.
As reported in the Troubled Company Reporter on Mar. 23, 2006,
Moody's Investors Service downgraded the corporate family rating
of TRM Corporation to Caa1 from B2 and assigned a negative
outlook.
TRUMP ENT: Has Until July 13 to Object to NJSEA's Claims
--------------------------------------------------------
Trump Entertainment Resorts, Inc., fka Trump Hotels & Casino
Resorts, Inc., and its debtor-affiliates and the New Jersey Sports
and Exposition Authority need more time to continue their
settlement discussions.
Pursuant to Court-approved stipulation, the deadline by which the
Debtors must file any objections to the NJSEA Disputed Claims is
extended to June 13, 2006.
NJSEA has until July 13, 2006, to file its response to the
objection.
The hearing on the objection is continued to July 20, 2006.
As reported in the Troubled Company Reporter on Sept. 6, 2005, the
New Jersey Sports and Exposition Authority and Trump Plaza
Associates entered into an Easement Agreement in 1995, pursuant to
which an enclosed loggia was constructed across the front of the
East Hall of the historic Atlantic City Convention Center to
provide direct enclosed pedestrian access between the Trump Plaza
Casino and the World's Fair Casino.
In January 2000, Trump Plaza terminated the East Hall Loggia
Easement. The NJSEA alleges that despite the termination, Trump
Plaza is still obligated to restore the easement area to its
original condition.
In January 2005, the NJSEA filed Claim No. 1452 against Trump
Plaza. In June 2005, the NJSEA filed an amended claim -- Claim
No. 2263 -- asserting an administrative claim for $1,000,000.
Headquartered in Atlantic City, New Jersey, Trump Entertainment
Resorts, Inc., fka Trump Hotels & Casino Resorts, Inc. --
http://www.thcrrecap.com/-- through its subsidiaries, owns and
operates four properties and manages one property under the Trump
brand name. The Company and its debtor-affiliates filed for
chapter 11 protection on Nov. 21, 2004 (Bankr. D. N.J. Case No.
04-46898 through 04-46925). Robert A. Klymman, Esq., Mark A.
Broude, Esq., John W. Weiss, Esq., at Latham & Watkins, LLP, and
Charles Stanziale, Jr., Esq., Jeffrey T. Testa, Esq., William N.
Stahl, Esq., at Schwartz, Tobia, Stanziale, Sedita & Campisano,
P.A., represent the Debtors in their successful chapter 11
restructuring. When the Debtors filed for protection from their
creditors, they listed more than $500 million in total assets and
more than $1 billion in total debts. The Court confirmed the
Debtors' Second Amended Plan of Reorganization on Apr. 5, 2005,
and the plan took effect on May 20, 2005. (Trump Hotels
Bankruptcy News, Issue No. 38; Bankruptcy Creditors' Service,
Inc., 215/945-7000).
* * *
As reported in the Troubled Company Reporter on Nov. 10, 2005,
Moody's Investors Service affirmed the ratings of Trump
Entertainment Resorts, Inc.'s $200 million senior secured revolver
due 2010 at B2; $150 million senior secured term loan due 2012 at
B2; $150 million senior secured delayed draw term loan due 2012 at
B2; $1.25 billion second lien senior secured notes due 2015 at
Caa1; Speculative grade liquidity rating at SGL-3; and Corporate
family rating at B3. Moody's says the rating outlook is stable.
TRUMP ENT: World's Fair Site Proceeds To Be Distributed Under Plan
------------------------------------------------------------------
At the April 25, 2006, telephonic hearing, Judge Wizmur of the
U.S. Bankruptcy Court for the District of New Jersey stated that
all of the World's Fair Site proceeds would be distributed to
shareholders pursuant to the Second Amended Plan unless Trump
Entertainment Resorts, Inc., fka Trump Hotels & Casino Resorts,
Inc., and its debtor-affiliates could formulate a strategy for
holding back certain distributions pending appellate resolution of
the request of a group of 17 former owners of Old THCR shares for
enforcement of the Court's previous orders concerning the record
distribution date.
Charles A. Stanziale, Jr., Esq., at McElroy, Deutsch, Mulvaney &
Carpenter, LLP, in Newark, New Jersey, informs the Court that the
Debtors were unable to develop a strategy that was consistent
with the terms of the Second Amended Plan, and the distribution
rules established by the U.S. Securities and Exchange Commission,
and applicable law.
The Debtors rest on their argument that the distribution of the
World's Fair Site proceeds will be prejudicial to the estate in
the event the Court's ruling on the Shareholders' Motion is
reversed on appeal, Mr. Stanziale says.
Background
As reported in the Troubled Company Reporter on Sept. 22, 2005,
the Bankruptcy Court approved the sale of the World's Fair Site in
Atlantic City, New Jersey, to BET Investments, Inc., for
$25,150,000.
However, the proceeds of the World's Fair Sale could not be
distributed in view of a Court order prohibiting distributions to
beneficial owners of Old THCR Common Stock under the confirmed
Plan of Reorganization of the Debtors.
Daniel K. Astin, Esq., at The Bayard Firm, in Wilmington,
Delaware, notes that the Order Prohibiting Distributions was a
result of a request filed by 17 shareholders asking the Court to
enforce its previous orders concerning the record distribution
date. The shareholder group alleged that the first distribution
made by the Debtors to non-affiliated shareholders did not
conform to the terms of the Plan.
Pursuant to the Order Prohibiting Distributions, The Bayard
Firm served as escrow agent with respect to the World's Fair
Sale Proceeds. The Sale Proceeds could not be distributed until
the Court gives further order regarding the record date and
distribution issues.
As of Dec. 20, 2005, The Bayard Firm holds $24,518,791 in
an interest bearing escrow account as the World's Fair Sale
Proceeds.
Robino Stortini Holdings LLC asked the Court to direct the Debtors
to make an interim distribution of the World's Fair Escrow Funds
until the resolution of the distribution issues.
RSH was previously a member of the Equity Committee. RSH,
however, resigned prior to the sale of the World's Fair Site.
RSH suggests that a reserve be established pending the account of
the record date and distribution litigation.
17 Former Shareholders Respond
As reported in the Troubled Company Reporter on Feb. 9, 2006,
a group of 17 former owners of Old THCR shares oppose Robino
Stortini Holdings's request for an interim distribution of the
World's Fair site sale proceeds.
The Former Shareholders previously initiated a core proceeding in
the Bankruptcy Court, seeking entitlement to the Class 11
distributions called for under the Reorganized Debtors' Second
Amended Joint Plan of Reorganization,
Michael J. Viscount, Jr., Esq., at Fox Rothschild LLP, in
Atlantic City, New Jersey, argued that the Court should not
permit any distributions from the World's Fair proceeds until it
has made a final determination as to who are entitled to the
Class 11 proceeds.
The 17 Shareholders agree with the Reorganized Debtors' position
that RSH's request is premature and should be denied.
Headquartered in Atlantic City, New Jersey, Trump Entertainment
Resorts, Inc., fka Trump Hotels & Casino Resorts, Inc. --
http://www.thcrrecap.com/-- through its subsidiaries, owns and
operates four properties and manages one property under the Trump
brand name. The Company and its debtor-affiliates filed for
chapter 11 protection on Nov. 21, 2004 (Bankr. D. N.J. Case No.
04-46898 through 04-46925). Robert A. Klymman, Esq., Mark A.
Broude, Esq., John W. Weiss, Esq., at Latham & Watkins, LLP, and
Charles Stanziale, Jr., Esq., Jeffrey T. Testa, Esq., William N.
Stahl, Esq., at Schwartz, Tobia, Stanziale, Sedita & Campisano,
P.A., represent the Debtors in their successful chapter 11
restructuring. When the Debtors filed for protection from their
creditors, they listed more than $500 million in total assets and
more than $1 billion in total debts. The Court confirmed the
Debtors' Second Amended Plan of Reorganization on Apr. 5, 2005,
and the plan took effect on May 20, 2005. (Trump Hotels
Bankruptcy News, Issue No. 38; Bankruptcy Creditors' Service,
Inc., 215/945-7000).
* * *
As reported in the Troubled Company Reporter on Nov. 10, 2005,
Moody's Investors Service affirmed the ratings of Trump
Entertainment Resorts, Inc.'s $200 million senior secured revolver
due 2010 at B2; $150 million senior secured term loan due 2012 at
B2; $150 million senior secured delayed draw term loan due 2012 at
B2; $1.25 billion second lien senior secured notes due 2015 at
Caa1; Speculative grade liquidity rating at SGL-3; and Corporate
family rating at B3. Moody's says the rating outlook is stable.
UNUMPROVIDENT CORP: Launches $300 Million Debt Securities Offering
------------------------------------------------------------------
UnumProvident Corporation (NYSE: UNM) commenced an offer to
purchase for cash up to $300 million aggregate principal and
liquidation amount of its outstanding debt and capital securities.
The terms and conditions of the Offer are set forth in the Offer
to Purchase dated May 11, 2006.
Aggregate
Principal
Amount/
Liquidation
Amount Reference Fixed
Outstanding U.S. Spread Acceptance
Title of (in Treasury (basis) Priority
CUSIP Security millions) Security points) Level
----- -------- --------- -------- ------- -----
743863AA0 7.405% $300 5.375% 265 1
Capital U.S. Maximum
Securities Treasury of $50
due March Bond due million
15, 2038 2/15/2031
91529YAC0 7.625% $575 4.50% U.S. 95 2
Senior Treasury
Notes due Bond due
March 1, 2/28/2011
2011
743862AA2 7.25% $200 5.375% 195 3
Senior U.S.
Notes due Treasury
March 15, Bond due
2028 2/15/31
903192AA0 6.75% Notes $250 5.375% 190 4
due U.S.
Dec. 15 Treasury
2028 Bond due
2/15/31
91529YAD8 7.375% $250 5.375% 195 5
Senior U.S.
Notes due Treasury
June 15, Bond due
2032 2/15/31
743862AD6 7% Senior $200 4.50% U.S. 170 6
Notes due Treasury
July 15, Note due
2018 2/15/2016
The amounts of each series of securities that are purchased in the
Offer will be determined in accordance with Acceptance Priority
Level, and in the case of the 7.405% Capital Securities due
March 15, 2038 will be limited to $50,000,000 liquidation amount.
The amount of Securities that is purchased may be prorated as set
forth in the Offer to Purchase.
In the event that the aggregate amount tendered exceeds the
Maximum Tender Amount, UnumProvident will accept for payment only
the Maximum Tender Amount and the Securities will be purchased in
accordance with the Acceptance Priority Level (in numerical
priority order). All Securities tendered in the Offer having a
higher Acceptance Priority Level will be accepted for purchase
before any tendered Securities having a lower Acceptance Priority
Level are accepted for purchase. For example, all tendered Notes
having Acceptance Priority Level of 2 will be accepted before any
tendered Notes having Acceptance Priority Level of 3 will be
accepted. If there are sufficient remaining funds to purchase
some, but not all of the Securities of a series of an applicable
Acceptance Priority Level, the amount of Securities purchased in
that series will be prorated based on the aggregate principal or
liquidation amount tendered in the Offer with respect to that
series of Securities. In that event, Securities of any other
series subject to the Offer with a lower Acceptance Priority Level
than the prorated series of Securities will not be accepted for
purchase.
Holders of Securities that are validly tendered and not validly
withdrawn before 5:00 p.m., New York City time, on May 24, 2006
and accepted for payment will receive the Full Tender Offer
Consideration. Holders of Securities that are validly tendered
after 5:00 p.m., New York City time, on the Early Tender Date and
not withdrawn before 9:00 a.m., New York City time, on June 9,
2006 and accepted for purchase will receive the Full Tender Offer
Consideration minus an amount in cash equal to $50 for each $1,000
principal or liquidation amount, as applicable, of Securities.
The Full Tender Offer Consideration for each $1,000 principal or
liquidation amount of Securities tendered pursuant to the Offer
will be equal to the price that results in a yield to maturity
equal to
(1) the yield to maturity on the applicable reference United
States Treasury identified in the list above, as measured
at 2 p.m., New York City time, on June 7, 2006, plus
(2) the fixed spread, listed above, for the security.
Payments will include accrued and unpaid interest or
distributions, as the case may be, up to, but not including, the
date of payment of the applicable tender offer consideration.
The Offer is scheduled to expire at 9:00 a.m., New York City time,
on the Expiration Date, unless extended or earlier terminated.
The Offer is not subject to the receipt of any minimum amount of
tenders.
Copies of the Offer to Purchase and Letter of Transmittal may be
obtained from the Information Agent for the Offers:
Global Bondholder Services Corporation
Telephone (212) 430-3774 (collect)
Toll Free (866) 470-3600
Goldman, Sachs & Co. is the Dealer Manager for the Offers.
Questions regarding the Offers may be directed to:
Goldman, Sachs & Co.
Credit Liability Management Group
Telephone (212) 357-7867 (collect)
Toll Free (800) 828-3182
About Unumprovident
UnumProvident Corporation -- http://www.unumprovident.com/-- is
the largest provider of group and individual income protection
insurance in the United States and United Kingdom. Through its
subsidiaries, UnumProvident insures more than 25 million people
and provided $6.0 billion in total benefits to customers in 2005.
With primary offices in Chattanooga, Tennessee, and Portland,
Maine, UnumProvident employs approximately 11,300 people
worldwide.
UnumProvident Corporation's 7-5/8% Senior Notes due 2011 carry
Moody's Investors Service's Ba1 rating and Standard & Poor's BB+
rating.
US AIRWAYS: Judge Mitchell Closes Four Bankruptcy Cases
-------------------------------------------------------
The Honorable Stephen S. Mitchell of the U.S. Bankruptcy Court for
the Eastern District of Virginia entered a final decree closing
the Chapter 11 cases of four debtor-affiliates, effective as of
March 31, 2006:
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
The lead case of US Airways, Inc., Case No. 04-13819, will remain
open pending the Court's entry of a final decree closing that
case.
Judge Mitchell directs US Airways to report the quarterly
disbursements for the Affiliate Reorganized Debtors for the
remainder of the US Airways case. Quarterly fees to the Office
of the U.S. Trustee will not exceed $10,000 per quarter.
US Airways' final report will also address matters as necessary
relating to the Affiliate Reorganized Debtors' closed cases as
well as matters relating to the US Airways case individually.
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.
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. 118; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
US AIRWAYS: Reports 2006 First Quarter Financial Results
--------------------------------------------------------
The new US Airways Group, Inc. (NYSE: LCC) reported a first
quarter 2006 profit before the cumulative effect of a change in
accounting principle of $64 million. This compares to a profit
before the cumulative effect of a change in accounting principle
of $28 million. Results for the new US Airways Group's first
quarter 2006 are being compared to America West's standalone
results for first quarter 2005 due to the former US Airways Group
and America West Holdings Corporation merger on Sept. 27, 2005.
Although the merger was structured so that America West became a
wholly owned subsidiary of the new US Airways Group, America West
was treated as the acquiring company for accounting purposes under
Statement of Financial Accounting Standards No. 141 "Business
Combinations."
US Airways Group's first quarter 2006 results include a
$90 million gain associated with the forgiveness by Airbus of a
Company loan, which represents the return of certain aircraft
deposits previously paid to Airbus as restructuring fees in
conjunction with the merger. In addition, the Company recognized
a $26 million unrealized gain related to the airline's fuel
hedges. These gains were offset in part by $46 million of
merger-related transition expenses and $11 million of costs
incurred in connection with the extinguishment of certain debt
instruments as part of the loan refinancing completed with GE
Commercial Finance on March 31, 2006. The Company also recognized
a $1 million gain from the cumulative effect of a change in
accounting principle upon the adoption of SFAS No. 123R,
"Share-Based Payment." Excluding these special items, the Company
reported a first quarter 2006 profit of $5 million versus a loss
excluding special items of $16 million in the first quarter of
2005.
US Airways Group Chairman, President and CEO Doug Parker stated,
"We are extremely pleased to post a profitable first quarter. We
couldn't be more proud of our 35,000 employees who are doing a
wonderful job of integrating our two airlines and taking care of
our customers.
"While we recognize we are early in the integration process and we
have much work yet to do, these results highlight the tremendous
value we have achieved through the merger of US Airways and
America West. Unit revenues were up significantly at both
airlines as our customers experienced the value of our expanded
network. While fuel prices remain an industry problem, the merger
synergies are allowing us to keep our non-fuel related costs in
line. With our merger we set out to build an airline that could
be profitable in an extremely challenging environment and today's
results confirm that our outstanding employees are making that
goal a reality.
"Looking forward we anticipate a very strong spring and summer and
now expect to be profitable for the full year 2006, even after
accounting for merger related expenses and with continued high
fuel costs."
Revenue and Cost Comparisons
The revenue environment during the first quarter 2006 showed
considerable improvement over the same period in 2005. For the
America West standalone network, total revenue per available seat
mile (RASM) increased 16.2 percent during the first quarter 2006
to 10.27 cents while mainline yields increased 13.2 percent to
11.52 cents as compared to the same period last year. For the US
Airways standalone network, RASM increased 27.7 percent to 13.34
cents while US Airways mainline yields increased 19.0 percent to
13.97 cents as compared to the same period last year.
Continued high fuel prices led to material cost increases for the
new US Airways Group. Had fuel price per gallon remained constant
for mainline and Express versus the first quarter 2005, US Airways
Group's first quarter 2006 operating expenses would have been
$183 million lower. On a standalone basis, America West's
mainline operating costs per available seat mile (CASM) increased
11.2 percent to 8.76 cents for the first quarter 2006, largely
driven by a 37.3 percent increase in the price of fuel from
$1.42 to $1.95 per gallon. Excluding fuel and special items,
America West's mainline CASM increased 4.2 percent from 6.45 cents
for the first quarter 2005 to 6.72 cents for the first quarter
2006 on a 1.4 percent decrease in available seat miles (ASMs). US
Airways standalone mainline CASM during the first quarter 2006
increased 8.8 percent to 11.44 cents, primarily driven by the
increased price of fuel. Excluding fuel and special items, US
Airways' standalone mainline CASM increased 4.3 percent to 8.42
cents for the first quarter 2006 on a 16.3 percent decrease in
ASMs.
Liquidity
As of March 31, 2006, the Company had $2.6 billion in total
cash and investments, of which $1.6 billion was unrestricted.
US Airways completed a $1.1 billion refinancing in the first
quarter, which was used to replace approximately $1.1 billion of
outstanding debt at lower interest rates and with an extended
amortization period. The refinancing transaction was subsequently
upsized to $1.25 billion in April 2006.
Summary of Integration Progress
The Company's integration efforts remain on track. A summary of
integration progress the Company has achieved since closing the
merger between America West Holdings and US Airways Group last
September 2005 shows:
Operations
* Achieved the top ranking in on-time performance among all
major airlines as reported by the Department of
Transportation (DOT) for the fourth quarter 2005 and the
first quarter 2006.
* Consolidated operations at the 30 airports where both
airlines operated prior to the merger (seven airports
remain to be integrated).
* Signed an amended agreement with Embraer, agreeing to
place an initial firm order for 25 Embraer 190 aircraft
and an additional firm order for 32 Embraer 190 aircraft
with options for up to 50 additional aircraft.
Finance
* In April, completed a $1.25 billion refinancing, which was
used to replace approximately $1.1 billion of outstanding
debt at lower interest rates and with an extended
amortization period.
* In April, announced redemption of approximately $112
million in principal amount of America West Holdings
Corporation's 7.50 percent convertible senior notes due
2009. These notes were converted into approximately 3.9
million shares of common stock.
* Combined all insurance programs for the new airline, which
is anticipated to save an additional $41 million annually.
Marketing
* Added numerous fares in several east coast markets
including Philadelphia, Charlotte, Pittsburgh and New
York/LaGuardia.
* Released new US Airways Vacations web site with improved
functionality and eliminated the America West Vacations
brand.
* Established Dividend Miles as the new Company's frequent
flyer program, and created mechanisms for reciprocal
benefits, accrual and redemption.
* Introduced a new affinity card with Barclays Bank.
* Announced three new European destinations, Lisbon, Milan
and Stockholm, which will begin service this summer.
* Integrated certain inflight services, including the
inflight magazine, entertainment and level-off and safety
videos.
Labor Relations
* Reached a Transition Agreement with the airline's pilots
and flight attendants.
* Reached a Transition Agreement with a new labor alliance
between the Communication Workers Association and the
International Brotherhood of Teamsters, which represents
the airline's customer service employees.
* Received single carrier certification by the National
Mediation Board (NMB), and recently received notice that
the NMB will hold an election in order to achieve single
representation for the combined airline's fleet service
workers.
* Recalled 55 furloughed US Airways pilots and up to 510 US
Airways flight attendants.
* Began bringing some of the currently outsourced
reservations work back in house by increasing hiring in
Winston-Salem, North Carolina and Reno, Nevada.
Culture
* Paid out six consecutive monthly bonuses to employees
below officer level for achieving on-time performance
goals in October 2005 through March 2006 (totaling
approximately $10 million).
* Implemented new internal communication programs designed
to ensure senior management visibility among all areas of
the combined airline's operation.
* Unveiled the first of five heritage planes that will
feature throwback liveries of the four major airlines that
comprise the new US Airways (Allegheny, America West,
Piedmont and PSA).
* Began an aggressive leadership development training
program that will ultimately touch all leaders at US
Airways Group.
A full-text copy of US Airways' first quarter 2006 financial
report is available at no charge at
http://ResearchArchives.com/t/s?92a
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. 120; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
VANGUARD CAR: Moody's Puts Low-B Rating on $975 Million of Loans
----------------------------------------------------------------
Moody's Investors Service assigned the following ratings to
Vanguard Car Rental USA Holdings Inc.:
* Corporate Family Rating -- B1;
* $175 million six-year secured revolving credit facility and
$800 million seven-year secured term loan -- B2;
* Speculative Grade Liquidity rating -- SGL-3. The Outlook is
Stable.
The B1 Corporate Family Rating reflects Moody's view that
Vanguard's business model and brand strength position the company
to compete effectively with key peers in the vehicle daily rental
business. Mitigating these strengths is the company's significant
leverage, and the potential risk related to significant fleet
concentration in GM vehicles.
As a result of having the highest financial leverage among its
peers, Vanguard's financial flexibility is more limited than that
of its principal competitors, and its credit metrics will likely
remain more stressed through the intermediate term.
The secured credit facility and term loan are rated at the B2
level -- one notch below the B1 Corporate Family rating. The
rating of these secured obligations is constrained by the
significant level of securitized ABS fleet debt in the company's
capital structure, as well as the limited scope of the remaining
non-fleet assets that provide security for the bank facilities.
The SGL-3 Speculative Grade Liquidity rating reflects Moody's
belief that the company will maintain an adequate liquidity
profile over the next 12-month period. Moody's expects that
Vanguard's solid operating cash flow generation combined with
about $160 million available under its committed revolving credit
facility and about $230 million of unrestricted cash on hand at
FYE05, should be sufficient to fund the company's normal
operational needs, capital spending and debt service requirements
over the next 12 months.
Vanguard also benefits from the relatively short holding period
for its fleet vehicles, its ability to return fleet vehicles to
manufacturers under "buy back" programs, and the flexibility to
rapidly curtail the purchase of new vehicles during a downturn.
Moody's also believes that the credit facility affords Vanguard
reasonable head room under the relevant covenant provisions.
The strength of these liquidity sources are tempered, however, by
the eroding credit quality of General Motors and the attendant
risk to GM's ability to continue repurchasing vehicles from
Vanguard under its "buy-back" agreement. In addition, because the
majority of Vanguard's assets are pledged, the company has modest
ability to raise cash through asset sales.
Vanguard Car Rental USA Holdings Inc., headquartered in Tulsa, OK,
is the world's third largest general use daily car rental and
operates under the National and Alamo brand names.
VARTEC TELECOM: Committee Hires "Unidentified" Consulting Expert
----------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in Vartec
Telecom, Inc., and its debtor-affiliates' chapter 11 proceedings
obtained authority from the U.S. Bankruptcy Court for the Northern
District of Texas to employ a consulting expert in its lawsuit
against the Rural Telephone Finance Cooperative.
As reported in the Troubled Company Reporter on Feb 28, 2006, the
Committee initiated the lawsuit "Official Committee of Unsecured
of VarTec Telecom, Inc. et al., v. Rural Telephone Finance
Cooperative Adv. Pro. No. 05-03514" on June 10, 2005. The
Committee wanted to employ a consulting expert in order to
properly develop and present its case.
The Committee told the Court that because the consulting expert
will be participating in active litigation, it can't disclose the
identity of the expert. The Committee said that when the time
comes that the consulting expert will testify as an expert
witness, then and only then, will it disclose the consulting
expert's identity. This, the Committee said, would be in response
to appropriate discovery requests in the adversary proceeding.
The Committee however said that it will disclose the consulting
expert's identity to the Court in camera, upon the Court's
request.
The Committee disclosed that the consulting expert's professionals
charge:
Designation Hourly Rate
----------- -----------
Shareholders $305 - $345
CPA's $230
Staff Accountants $150 - $190
Clerical & Bookkeepers $50 - $110
The Committee said that it will not ask for payment or
reimbursement of the expenses or fees of the consulting expert
from the estate. Rather, if the Committee is successful with its
adversary proceeding or obtains a settlement, then the consulting
expert will be paid using the proceeds of the successful
prosecution or settlement.
Court Decree
The Court ordered that the Committee shall not receive any current
payment or reimbursement of the expenses or fees of the Consulting
Expert from the estate, and that if the Committee successfully
prosecutes the RTFC Adversary Proceeding to a successful
conclusion, or obtains a settlement, the Committee's firm
(Carrington, Coleman, Sloman & Blumenthal, LLP) will be reimbursed
from the proceeds of said successful prosecution or settlement for
expenses or fees of the Consulting Expert retroactive to Dec. 7,
2005.
About Vartec
Headquartered in Dallas, Texas, Vartec Telecom Inc. --
http://www.vartec.com/-- provides local and long distance service
and is considered a pioneer in promoting 10-10 calling
plans. The Company and its affiliates filed for chapter 11
protection on November 1, 2004 (Bankr. N.D. Tex. Case No. 04-
81694. Daniel C. Stewart, Esq., William L. Wallander, Esq.,
and Richard H. London, Esq., at Vinson & Elkins, represent the
Debtors in their restructuring efforts. J. Michael Sutherland,
Esq., and Stephen A. Goodwin, Esq., at Carrington Coleman Sloman &
Blumenthal, represent the Official Committee of Unsecured
Creditors. When the Company filed for protection from its
creditors, it listed more than $100 million in assets and debts.
WESTPOINT STEVENS: Panel's Re-Evaluation Hearing Motion Denied
--------------------------------------------------------------
The Hon. Robert D. Drain of the U.S. Bankruptcy Court for the
Southern District of New York denies the Steering Committee's
request for a hearing to re-evaluate WestPoint Stevens, Inc.'s
assets pursuant to the Court's findings and conclusions at a
hearing on August 10, 2005.
The Court's denial will not impact, modify, or have any other
effect on the opinion, order and judgment entered on appeal of the
Sale Order by the United States District Court for the Southern
District of New York and the remedies granted.
As reported in the Troubled Company Reporter on Aug. 11, 2006,
Contrarian Funds, LLC, Satellite Senior Income Fund, LLC, CP
Capital Investments, LLC, Wayland Distressed Opportunities Fund I-
B, LLC, and Wayland Distressed Opportunities Fund I-C, LLC, asked
The Court to determine that, due to changed circumstances, which
materially affect the value of the Successful Bid, the
Subscription Rights as allocated in the Sale Order, together with
release of any other Sale consideration to the First Lien Lenders,
will not satisfy the claim of the First Lien Lenders in full.
The Steering Committee believed that evidence collected since the
auction demonstrates that the value of the Successful Bid such the
Subscription Rights as allocated in the Sale Order together with
release of any other Sale consideration to the First Lien Lenders
will not satisfy the claim of the First Lien Lenders in full.
Headquartered in West Point, Georgia, WestPoint Stevens, Inc. --
http://www.westpointstevens.com/-- is the #1 US maker of bed
linens and bath towels and also makes comforters, blankets,
pillows, table covers, and window trimmings. It makes the Martex,
Utica, Stevens, Lady Pepperell, Grand Patrician, and Vellux
brands, as well as the Martha Stewart bed and bath lines; other
licensed brands include Ralph Lauren, Disney, and Joe Boxer.
Department stores, mass retailers, and bed and bath stores are its
main customers. (Federated, J.C. Penney, Kmart, Sears, and Target
account for more than half of sales.) It also has nearly 60 outlet
stores. Chairman and CEO Holcombe Green controls 8% of WestPoint
Stevens. The Company filed for chapter 11 protection on
June 1, 2003 (Bankr. S.D.N.Y. Case No. 03-13532). John J.
Rapisardi, Esq., at Weil, Gotshal & Manges, LLP, represents the
Debtors in their restructuring efforts. (WestPoint Bankruptcy
News, Issue No. 65; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
WILKINSON HI-RISE: Case Summary & 32 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Wilkinson Hi-Rise, LLC
2821 Evans Street
Hollywood, Florida 33020
Bankruptcy Case No.: 06-11939
Debtor affiliate filing separate chapter 11 petition:
Entity Case No.
------ --------
Wilkinson Chutes, Inc. 06-11940
Type of Business: The Debtors manufacture trash and linen chutes,
compactors, and automated recycling systems.
See http://www.hiri.com
Chapter 11 Petition Date: May 15, 2006
Court: Southern District of Florida (Fort Lauderdale)
Judge: Raymond B. Ray
Debtors' Counsel: Charles A. Postler, Esq.
Stephen R. Leslie, Esq.
Wanda Hagan Golson, Esq.
Stichter, Riedel, Blain & Prosser, P.A.
110 East Madison Street, Suite 200
Tampa, Florida 33602
Tel: (813) 229-0144
Fax: (813) 229-1811
Estimated Assets Estimated Debts
---------------- ---------------
Wilkinson Hi-Rise, LLC $100,000 to $10 Million to
$500,000 $50 Million
Wilkinson Chutes, Inc. Less than $50,000 $50,000 to
$100,000
A. Wilkinson Hi-Rise, LLC's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Federal Express Freight $155,426
4103 Collection Center
Chicago, IL 60693
Leiderman Shelomith P.A. $140,636
Trust Account
1909 Tyler Street, Suite 307
Hollywood, FL 33020
Atlas Steel $140,636
7990 Bavaria Road
Twinsburg, OH 44087
Folding Guard Company $129,610
Icon Steel Products $117,757
American Express $111,593
Watkins Motor Lines, Inc. $101,486
Saturn Freight Lines $96,261
All Rite Fabrication $48,724
Meserve, Mumper & Hughes LLP $46,886
Cogan Wire and Metals $46,146
Hill Mechanical Corp. $41,512
Systemation, Inc. $40,932
H&D Steel Service Center $40,327
Apollo Welding & Fabricating $37,285
Willis of North Carolina $36,164
SC Fastening Systems $34,563
John A. Donofrio $33,762
BWC State Insurance Fund $33,280
Will-Burt $26,486
B. Wilkinson Chutes, Inc.'s 12 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Folding Guard Company $65,700
2101 South Carpenter
Chicago, IL 60608
F. Rodgers Insulation $2,848
7775 Las Positas Road
Livermore, CA 94551
WRD $581
P.O. Box 4404
Sunland, CA
Labor Ready $468
Vanguard Cleaning Systems $250
Southern California Edison $144
Azusa Light and Water Co. $126
Athens Services $85
Town of Mammoth Lakes $66
Dragon Fire Protection Co., Inc. $55
Western Exterminator Comp. $35
Gas Company $16
WILLIAMS COMPANIES: Fitch Upgrades Sr. Unsec. Debt Rating to BB+
----------------------------------------------------------------
Fitch upgrades The Williams Companies, Inc.'s (WMB) outstanding
senior unsecured debt and issuer default rating to 'BB+' from
'BB'. In addition, the senior unsecured debt and IDRs of
Transcontinental Gas Pipe Line Corp. and Northwest Pipeline Corp.
are upgraded to 'BBB-' from 'BB+'. The ratings are removed from
Rating Watch Positive status where they were placed on March 7,
2006.
At the same time, Fitch withdraws Williams Production RMT Co.'s
'BB+' senior secured rating and 'BB-' IDR reflecting the
retirement of RMT's outstanding debt obligations on April 13,
2006. The Rating Outlook is Stable.
The rating action reflects WMB's substantially de-leveraged
balance sheet and continued improvement in consolidated credit
metrics, the recent elimination of all direct secured debt
obligations from WMB's capital structure, the company's solid
liquidity position and limited debt refinancing risk through 2010,
the expectation for continued stable cash flow generation from
WMB's core natural gas businesses, and the strengthened near-term
cash flow profile of WMB's Power segment.
Key risk factors incorporated into WMB's ratings include the
commodity price volatility embedded in WMB's growing natural gas
exploration and production unit and certain phases of the
company's midstream business and the largely unhedged nature of
WMB's off-balance-sheet power tolling obligations beyond 2010.
In addition, WMB management is demonstrating a clear appetite to
boost capital spending to further expand E&P and Midstream
production capacity at the peak of the commodity cycle. Fitch
notes that WMB's near-term capital budget will likely require a
modest level of incremental debt financing at WMB or Williams
Partners, L.P. (WPZ), WMB's publicly traded master limited
partnership affiliate.
WMB has emerged from its restructuring as a more focused
integrated natural gas company with core operations encompassing
FERC regulated interstate pipelines, E&P, and midstream gas and
liquids services. These businesses should continue to generate a
relatively predictable earnings and cash flow stream going forward
with potential commodity price volatility in the E&P segment
offset by the cash flow stability of TGPL and NWP, and WMB's
growing portfolio of fee-based midstream assets. Commodity price
risk at E&P is further mitigated by WMB's focus on developing
lower risk Rocky Mountain based tight sands and coalbed methane
gas reserves.
Although WMB has successfully wound down speculative trading
activities, there is longer-term uncertainty associated with
Power's sizable tolling contract portfolio. WMB currently has
long-term tolling agreements for approximately 7,700 megawatts of
generating capacity under which it is obligated to make fixed
payments averaging $400 million over the next several years with a
total remaining net present value of about $2.5 billion.
Importantly, during 2004 and 2005, WMB sold forward additional
tolling capacity through 2010 thus ensuring minimizing the near-
term cash flow strain at Power. Moreover, Fitch estimates that
existing physical power sales contracts, financial hedges and
conservatively forecasted merchant sales substantially cover
Power's fixed cost structure through 2010.
Since year-end 2002, WMB has decreased consolidated debt by
approximately $5.6 billion by deploying cash raised from asset
sales and the early conversion of equity-linked securities. At the
same time, WMB has expanded the cash flow of its core natural gas
businesses, effectively offsetting a good portion of income lost
due to asset sales. As a result, consolidated credit protection
measures have improved to levels solidly within Fitch's 'BB'
targets for diversified energy companies.
For the fiscal year ended Dec. 31, 2005, consolidated cash
interest coverage approached 3.0 times (x) with total debt/EBITDA
dropping to 3.7x. As part of its analysis, Fitch reviewed WMB's
prospective cash flow performance under less favorable commodity
market conditions, including a scenario envisioning a decline in
natural gas prices to the $4.00 per mmBtu range in 2008. Although
this price level adversely impacts the long-gas position embedded
in E&P, WMB's prospective credit profile remains within parameters
for the rating as the stable cash generation of WMB's regulated
pipelines combined with various offsetting short gas positions at
Midstream and Power compensate for a portion of the resultant
earnings decline at E&P.
The 'BBB-' rating assigned to WMB's pipeline subsidiaries reflects
NWP's and TGPL's strong individual operating and financial
profiles, offset by the structural and functional ties between
these entities and their ultimate parent WMB. Both NWP and TGPL
participate in WMB's daily cash management program under which
each subsidiary makes and/or receives advances from WMB.
Operationally, NWP and TGPL are viewed as two of the premier
pipeline systems in the U.S. In particular, both systems boast
competitive rate structures, captive markets, a high percentage of
capacity subscribed long-term contract profiles, and attractive
expansion opportunities. Furthermore, stand-alone credit measures
at both NWP and TGPL have continued to remain healthy despite
higher dividend payments to WMB and moderate growth spending and
remain consistent with strong investment grade parameters.
The Stable Rating Outlook reflects Fitch's expectation that WMB's
credit and financial profile over the next 12-24 months will
remain consistent with its rating even under more onerous
operating conditions, including a lower natural gas price
environment. Factors leading to potential rating improvement over
time would include further de-leveraging or a potential
transaction or arrangement that would substantially hedge or
assume WMB's remaining contractual obligations under its long-term
power tolling contracts. At the same time, a return to a more
aggressive, debt financed growth strategy or the inability to
hedge tolling obligations beyond 2010 would likely place downward
pressure on WMB's rating or outlook.
A summary of outstanding ratings affected by Fitch's action:
The Williams Companies, Inc.
-- IDR and senior unsecured notes and debentures upgraded to
'BB+' from 'BB';
-- Junior subordinated convertible debentures upgraded to
'BB-' from 'B+'.
-- The 'BB+' senior secured rating previously assigned to WMB
is withdrawn.
Williams Production RMT Co.
-- Senior secured term loan B withdrawn at 'BB+';
-- IDR 'BB-' withdrawn.
Northwest Pipeline Corp.
-- IDR and senior unsecured notes and debentures upgraded to
'BBB-' from 'BB+'.
Transcontinental Gas Pipe Line Corp.
-- IDR and senior unsecured notes and debentures upgraded to
'BBB-' from 'BB+'.
WILLIAMS PRODUCTION: Fitch Lifts Sr. Unsecured Debt Rating to BB+
-----------------------------------------------------------------
Fitch upgrades The Williams Companies, Inc.'s (WMB) outstanding
senior unsecured debt and issuer default rating to 'BB+' from
'BB'. In addition, the senior unsecured debt and IDRs of
Transcontinental Gas Pipe Line Corp. and Northwest Pipeline Corp.
are upgraded to 'BBB-' from 'BB+'. The ratings are removed from
Rating Watch Positive status where they were placed on March 7,
2006.
At the same time, Fitch withdraws Williams Production RMT Co.'s
'BB+' senior secured rating and 'BB-' IDR reflecting the
retirement of RMT's outstanding debt obligations on April 13,
2006. The Rating Outlook is Stable.
The rating action reflects WMB's substantially de-leveraged
balance sheet and continued improvement in consolidated credit
metrics, the recent elimination of all direct secured debt
obligations from WMB's capital structure, the company's solid
liquidity position and limited debt refinancing risk through 2010,
the expectation for continued stable cash flow generation from
WMB's core natural gas businesses, and the strengthened near-term
cash flow profile of WMB's Power segment.
Key risk factors incorporated into WMB's ratings include the
commodity price volatility embedded in WMB's growing natural gas
exploration and production unit and certain phases of the
company's midstream business and the largely unhedged nature of
WMB's off-balance-sheet power tolling obligations beyond 2010.
In addition, WMB management is demonstrating a clear appetite to
boost capital spending to further expand E&P and Midstream
production capacity at the peak of the commodity cycle. Fitch
notes that WMB's near-term capital budget will likely require a
modest level of incremental debt financing at WMB or Williams
Partners, L.P. (WPZ), WMB's publicly traded master limited
partnership affiliate.
WMB has emerged from its restructuring as a more focused
integrated natural gas company with core operations encompassing
FERC regulated interstate pipelines, E&P, and midstream gas and
liquids services. These businesses should continue to generate a
relatively predictable earnings and cash flow stream going forward
with potential commodity price volatility in the E&P segment
offset by the cash flow stability of TGPL and NWP, and WMB's
growing portfolio of fee-based midstream assets. Commodity price
risk at E&P is further mitigated by WMB's focus on developing
lower risk Rocky Mountain based tight sands and coalbed methane
gas reserves.
Although WMB has successfully wound down speculative trading
activities, there is longer-term uncertainty associated with
Power's sizable tolling contract portfolio. WMB currently has
long-term tolling agreements for approximately 7,700 megawatts of
generating capacity under which it is obligated to make fixed
payments averaging $400 million over the next several years with a
total remaining net present value of about $2.5 billion.
Importantly, during 2004 and 2005, WMB sold forward additional
tolling capacity through 2010 thus ensuring minimizing the near-
term cash flow strain at Power. Moreover, Fitch estimates that
existing physical power sales contracts, financial hedges and
conservatively forecasted merchant sales substantially cover
Power's fixed cost structure through 2010.
Since year-end 2002, WMB has decreased consolidated debt by
approximately $5.6 billion by deploying cash raised from asset
sales and the early conversion of equity-linked securities. At the
same time, WMB has expanded the cash flow of its core natural gas
businesses, effectively offsetting a good portion of income lost
due to asset sales. As a result, consolidated credit protection
measures have improved to levels solidly within Fitch's 'BB'
targets for diversified energy companies.
For the fiscal year ended Dec. 31, 2005, consolidated cash
interest coverage approached 3.0 times (x) with total debt/EBITDA
dropping to 3.7x. As part of its analysis, Fitch reviewed WMB's
prospective cash flow performance under less favorable commodity
market conditions, including a scenario envisioning a decline in
natural gas prices to the $4.00 per mmBtu range in 2008. Although
this price level adversely impacts the long-gas position embedded
in E&P, WMB's prospective credit profile remains within parameters
for the rating as the stable cash generation of WMB's regulated
pipelines combined with various offsetting short gas positions at
Midstream and Power compensate for a portion of the resultant
earnings decline at E&P.
The 'BBB-' rating assigned to WMB's pipeline subsidiaries reflects
NWP's and TGPL's strong individual operating and financial
profiles, offset by the structural and functional ties between
these entities and their ultimate parent WMB. Both NWP and TGPL
participate in WMB's daily cash management program under which
each subsidiary makes and/or receives advances from WMB.
Operationally, NWP and TGPL are viewed as two of the premier
pipeline systems in the U.S. In particular, both systems boast
competitive rate structures, captive markets, a high percentage of
capacity subscribed long-term contract profiles, and attractive
expansion opportunities. Furthermore, stand-alone credit measures
at both NWP and TGPL have continued to remain healthy despite
higher dividend payments to WMB and moderate growth spending and
remain consistent with strong investment grade parameters.
The Stable Rating Outlook reflects Fitch's expectation that WMB's
credit and financial profile over the next 12-24 months will
remain consistent with its rating even under more onerous
operating conditions, including a lower natural gas price
environment. Factors leading to potential rating improvement over
time would include further de-leveraging or a potential
transaction or arrangement that would substantially hedge or
assume WMB's remaining contractual obligations under its long-term
power tolling contracts. At the same time, a return to a more
aggressive, debt financed growth strategy or the inability to
hedge tolling obligations beyond 2010 would likely place downward
pressure on WMB's rating or outlook.
A summary of outstanding ratings affected by Fitch's action:
The Williams Companies, Inc.
-- IDR and senior unsecured notes and debentures upgraded to
'BB+' from 'BB';
-- Junior subordinated convertible debentures upgraded to
'BB-' from 'B+'.
-- The 'BB+' senior secured rating previously assigned to WMB
is withdrawn.
Williams Production RMT Co.
-- Senior secured term loan B withdrawn at 'BB+';
-- IDR 'BB-' withdrawn.
Northwest Pipeline Corp.
-- IDR and senior unsecured notes and debentures upgraded to
'BBB-' from 'BB+'.
Transcontinental Gas Pipe Line Corp.
-- IDR and senior unsecured notes and debentures upgraded to
'BBB-' from 'BB+'.
WINN-DIXIE: Revises Stalking Horse Bids Schedule & Cure Amounts
---------------------------------------------------------------
D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP,
in New York, relates that after filing their Motion to Sell,
Winn-Dixie Stores, Inc., and its debtor-affiliates continued to
solicit bids and negotiated the form of agreements with the
original Stalking Horse bidders.
As a result, one of the original Stalking Horse bids was
terminated, another Stalking Horse bidder increased its bid for
four alternative stores for a total bid of $2,500,000, and the
Debtors chose an additional Stalking Horse bid for Store No. 719,
which had no prior bid.
Accordingly, the Debtors revised the schedule for the Stalking
Horse Bids:
Bidder Store No. Purchase Price
------ --------- --------------
Sunrise Properties 208 $300,000
Sunrise Properties 211 300,000
Sunrise Properties 339 1,050,000
Sunrise Properties 372 850,000
Fine Foods Gourmet Markets 719 325,000
Publix Supermarkets 643 400,000
Publix Supermarkets 2357 400,000
WS Bravo Supermarket 2257 675,000
The Debtors' proposed cure amounts to each of the Additional
Stores are:
Store No. Cure Amount
--------- -----------
735 195,945
372 108,730
613 72,800
240 70,851
2650 56,681
149 50,309
738 32,506
301 31,304
409 27,703
185 15,011
215 11,024
2254 7,108
339 6,059
2298 4,363
659 2,971
2330 2,420
2357 1,264
217 757
208 212
719 26
71 0
192 0
205 0
211 0
310 0
516 0
602 0
643 0
695 0
725 0
1571 0
1579 0
2257 0
2324 0
2387 0
Landlords Object to Cure Amounts
Sixteen landlords dispute the Debtors' cure amounts and assert
the correct cure amount for their Leases:
Asserted
Landlord Store No. Cure Amount
-------- --------- -----------
Boggy Creek Marketplace, Inc. 2254 $22,271
Benderson Development 613 145,178
SKS Properties, L.C. 659 47,597
TA/Western, LLC 217 66,594
Gator Jacaranda, Ltd. 211 9,047
Gator Carriage Partners, Ltd. 339 6,066
Inland Southeast Countryside LP 738 65,956
JEM Investments, Ltd. 602 122,882
JDN Realty AL, Inc. 409 56,122
Gooding's Supermarkets, Inc. 2387 11,180
Greater Properties, Inc. 2387 78,124
Weston Road Shopping Center, LLC 310 105,654
Cairo Sun Properties, Ltd., LLLP 192 5,715
Treasure Coast Plaza Development JV 2357 60,350
Turney Dunham Plaza Partners LP 2298 10,914
Principal Life Insurance Company 643 16,023
The Landlords ask the U.S. Bankruptcy Court for the Middle
District of Florida to:
(a) sustain their objections as to the cure amounts they
asserted plus any additional amounts; and
(b) require the Debtors or the assignee of the Leases to
continue to comply with the obligations under the lease to
pay indemnification obligations and accrued but not yet
billed year-end adjustments in the regular course of
business.
The Landlords also object to the assumption of the Leases absent
adequate assurance of future performance.
Principal Life contends that if Publix is not the Successful
Bidder for the lease of Store No. 643, it preserves its right to
review and approve the Successful Bidder and to require proof of
adequate assurance once the Successful Bidder is determined.
Principal Life objects to the Debtors' request to the extent they
will sell and assign the Lease without payment of all cure
amounts.
Vogel's Objection and Cure Amount
Vogel and Vogel, owner and landlord for Store No. 1571, asserts
that while the rent for the Store has been paid through April
2006:
(a) some of the 2005 real estate taxes due under the Lease are
in arrears for 3,656;
(b) a portion of the 2006 real estate taxes, in the pro rated
amount of $8,554, is owed through April 30, 2006, and
$70 per day thereafter;
(c) it is also entitled to rent, pro-rated taxes and other
rent-related charges through and including May 18, 2006,
or such other date that any assumption and assignment
becomes effective, plus reasonable attorneys fees and
costs that it incurs in filing and pursuing its Objection
and in collecting rent and other charges that may be due
under the terms of its lease.
Karen K. Specie, Esq., at Scruggs & Carmichael, P.A., in
Gainesville, Florida, also asserts that the Debtors are obligated
under the Lease to return possession of the premises in as good a
condition as originally received. Since Vogel has not been able
to inspect the premises, it is not known what repair or
reconditioning expenses will have to be incurred.
Vogel reserves the right to amend its Objection to include any
additional cure amounts.
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. 37; Bankruptcy Creditors' Service, Inc., 215/945-7000).
WINN-DIXIE: Court Denies Former Employees & Retirees' Motion
------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
denies Richard Ehster, Gary Osborne, Scott Hunt, Stan Timbrook and
John Gardner's request, provided that:
(a) Winn-Dixie Stores, Inc., and its debtor-affiliates will
provide available information to the Claimants;
(b) the Official Committee of Unsecured Creditors will
consider, as part of its examination of the Debtors, any
information provided to it by the Claimants; and
(c) the Creditors Committee will provide the Claimants with a
copy of its examination report when it is publicly filed
with the Court.
Judge Funk rules that the Order is without prejudice to the
Claimants' right to seek additional discovery in the event that
they determine their need for information is not available in the
Creditors Committee's examination.
Background
As reported in the Troubled Company Reporter on April 24, 2006,
Richard Ehster, Gary Osborne, Scott Hunt, Stan Timbrook and John
Gardner are former Winn-Dixie employees and retirees with claims
based on their interests in the Debtors' "MSP" retirement plan.
The Claimants seek to examine, pursuant to Rule 2004 of the
Federal Rules of Bankruptcy Procedure:
(a) dividends paid and other transfers to shareholders of the
Debtors;
(b) the Debtor's "MSP" retirement plan;
(c) life insurance policies owned by the Debtors; and
(d) communications between Debtors and other persons, which
concern, reflect or in any way relate to dividends, the
retirement plan and life insurance policies.
The Claimants also ask the U.S. Bankruptcy Court for the Middle
District of Florida to direct Winn-Dixie Stores, Inc., and its
debtor-affiliates to produce all documents, which in any way refer
to, reflect, or relate to any fact within the scope of the topics
of inquiry.
Debtors Object
Winn-Dixie Stores, Inc., and its debtor-affiliates ask the U.S.
Court to deny Richard Ehster, Gary Osborne,
Scott Hunt, Stan Timbrook and John Gardner's motion because the
discovery they requested is:
(a) duplicative of an examination of the Debtors being
conducted by the Official Committee of Unsecured
Creditors, and therefore would impose duplication and
unnecessary expense on the Debtors' estates; and
(b) overbroad, unduly burdensome, and oppressive.
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. 37; Bankruptcy Creditors' Service, Inc., 215/945-7000).
WINN-DIXIE: Wants Two Creditors' Motion For Discovery Denied
------------------------------------------------------------
Winn-Dixie Stores, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Middle District of Florida to deny Rita
Ferguson and Lydia Greenall's motion because the discovery they
requested is:
(a) duplicative of an examination of the Debtors being
conducted by the Official Committee of Unsecured
Creditors, and therefore would impose duplication and
unnecessary expense on the Debtors' estates; and
(b) overbroad, unduly burdensome, and oppressive.
As reported in the Troubled Company Reporter on May 1, 2006, Rita
Ferguson and Lydia Greenall, as general unsecured creditors in
Winn-Dixie Stores, Inc., and its debtor-affiliates' chapter 11
cases, ask the U.S. Bankruptcy Court for the Middle District of
Florida to direct the Debtors to:
-- submit to examination pursuant to Rule 2004 of the Federal
Rules of Bankruptcy Procedure, and
-- produce certain documents for inspection and copying.
Specifically, the Claimants want to examine:
(a) the Debtors' self-insurance deductions and reserves;
(b) WIN General Insurance, Inc., a wholly owned subsidiary of
Winn-Dixie Stores, Inc.; and
(c) communications between Debtors and other persons relating
to the Debtors' self-insurance deductions and reserves and
WIN General Insurance.
Ms. Ferguson holds an allowed claim -- Claim No. 5158. Ms.
Greenall holds a disputed or disallowed claim -- Claim No. 5157.
The Claimants expect that the Debtors will eventually propose a
plan of reorganization, which seeks to pay unsecured claims,
including their Claims, at some fraction of their total amount.
Ms. Greenall also expects that the Debtors will deny her claim
entirely.
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. 37; Bankruptcy Creditors' Service, Inc., 215/945-7000).
WORLDCOM INC: Court Approves Corecomm Settlement Agreement
----------------------------------------------------------
The Hon. Arthur Gonzalez of the U.S. Bankruptcy Court for the
Southern District of New York approved WorldCom, Inc., and its
debtor-affiliates' Settlement Agreement with CoreComm-ATX, Inc.
The Debtors scheduled CoreComm-ATX, as an unsecured creditor
holding undisputed and non-contingent claims totaling $2,772,737.
On January 15, 2004, CoreComm and certain of its affiliates each
filed a Chapter 11 petition in the United States Bankruptcy Court
for the Southern District of New York.
In January 2003, CoreComm filed Claim Nos. 26209 through 26216
against the Debtors, aggregating more than $10,000,000.
The Debtors objected to CoreComm's claims. Subsequently, Judge
Gonzalez expunged CoreComm's claims.
On May 31, 2005, CoreComm asked Judge Gonzalez to reconsider the
disallowance of its claims, seeking reinstatement on the grounds
that it did not receive proper notice of the Objection, among
other reasons. The Debtor disputed CoreComm's allegations.
In May 2004, the Debtors filed Claim No. 368 for $12,059,247, and
Claim No. 1499 for $1,342,301, in CoreComm's bankruptcy case.
CoreComm disputed the Debtors' claims.
In April 2004, the Debtors also asked the CoreComm Bankruptcy
Court to compel CoreComm to immediately pay charges for certain
utility services. The Debtors asserted that they were entitled to
administrative expense claim status and immediate payment for the
services they provided to CoreComm after the CoreComm
Petition Date. CoreComm objected to the Debtors' Motion to
Compel.
The Debtors and CoreComm have reconciled the postpetition amounts
owed by CoreComm, and have determined that CoreComm's outstanding
balance is $9,069.
Accordingly, the parties agree that:
(a) The CoreComm Claims will be deemed withdrawn from the
Debtors' bankruptcy case, with prejudice;
(b) The Debtors' Claims will be withdrawn from the CoreComm
bankruptcy case, with prejudice;
(c) CoreComm will pay the Debtors the Allowed Administrative
Claim Amount of $9,069. Upon receipt of the payment, the
Debtors' Motion to Compel will be deemed withdrawn, with
Prejudice; and
d) Both parties exchange mutual releases.
About WorldCom
Headquartered in Clinton, Mississippi, WorldCom, Inc., now known
as MCI -- http://www.worldcom.com/-- is a pre-eminent global
communications provider, operating in more than 65 countries and
maintaining one of the most expansive IP networks in the world.
The Company filed for chapter 11 protection on July 21, 2002
(Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, the
Debtors listed $103,803,000,000 in assets and $45,897,000,000 in
debts. The Bankruptcy Court confirmed WorldCom's Plan on October
31, 2003, and on April 20, 2004, the company formally emerged from
U.S. Chapter 11 protection as MCI, Inc. (WorldCom Bankruptcy News,
Issue No. 117; Bankruptcy Creditors' Service, Inc., 215/945-7000)
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Contact: 908-575-7333 or http://www.turnaround.org/
September 13, 2006
TURNAROUND MANAGEMENT ASSOCIATION
LI Turnaround Formal Event
Long Island, New York
Contact: http://www.turnaround.org/
September 13, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Networking Function
Sydney, Australia
Contact: 0438 653 179 or www.turnaround.org
September 13, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Formal Event - Major Speaker to be Announced
Long Island, New York
Contact: 631-251-6296 or http://www.turnaround.org/
September 17-24, 2006
NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES
Optional Alaska Cruise
Seattle, Washington
Contact: 800-929-3598 or http://www.nabt.com/
September 20, 2006
TURNAROUND MANAGEMENT ASSOCIATION
South Florida Dinner
Bankers Club, Miami, Florida
Contact: 561-882-1331 or http://www.turnaround.org/
September 24, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Restructuring the Troubled High Tech Company
Arizona
Contact: http://www.turnaround.org/
September 26, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Luncheon
Centre Club, Tampa, Florida
Contact: 561-882-1331 or http://www.turnaround.org/
September 27, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Joint Education Program with NYIC Joint Reception
CFA/RMA/IWIRC
Woodbridge Hilton, Iselin, NJ
Contact: http://www.turnaround.org/
September 27, 2006
TURNAROUND MANAGEMENT ASSOCIATION
7th Annual Cross Border Business Restructuring and
Turnaround Conference
Banff, Alberta
Contact: http://www.turnaround.org/
October 5, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Commercial Lenders Breakfast
Sydney, Australia
Contact: 0438 653 179 or http://www.turnaround.org/
October 10, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Breakfast Meeting
Center Club, Baltimore, Maryland
Contact: 703-912-3309 or http://www.turnaround.org/
October 11, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Professional Development Meeting
Sydney, Australia
Contact: 0438 653 179 or http://www.turnaround.org/
October 11-14, 2006
TURNAROUND MANAGEMENT ASSOCIATION
2006 Annual Conference
Milleridge Cottage, Long Island, New York
Contact: 312-578-6900; http://www.turnaround.org/
October 17, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Updates on the New Bankruptcy Law
Kansas City, Missouri
Contact: http://www.turnaround.org/
October 19, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Billards Networking Night - Young Professionals
TBA, New Jersey
Contact: 908-575-7333 or http://www.turnaround.org/
October 26, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Breakfast Speaker Series #3
TBA, Calgary, Alberta
Contact: 403-294-4954 or http://www.turnaround.org/
October 26, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Breakfast Speaker Series #3
TBA, Calgary, Alberta
Contact: 403-294-4954 or http://www.turnaround.org/
October 31, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Luncheon
Citrus Club, Orlando, Florida
Contact: 561-882-1331 or http://www.turnaround.org/
October 31 - November 1, 2006
INTERNATIONAL WOMEN'S INSOLVENCY & RESTRUCTURING CONFEDERATION
IWIRC Annual Conference
San Francisco, California
Contact: http://www.iwirc.com/
November 1, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Halloween Isn't Over! - Ghosts of turnarounds past who
remind you about what you should have done differently
Portland, Oregon
Contact: http://www.turnaround.org/
November 1-4, 2006
NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
National Conference of Bankruptcy Judges
San Francisco, California
Contact: http://www.ncbj.org/
November 7, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Networking Breakfast
Marriott, Bridgewater, New Jersey
Contact: 908-575-7333 or http://www.turnaround.org/
November 8, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Breakfast Meeting
Marriott Tyson's Corner, Vienna, Virginia
Contact: 703-912-3309 or http://www.turnaround.org/
November 8, 2006
TURNAROUND MANAGEMENT ASSOCIATION
TMA Australia National Conference
Sydney, Australia
Contact: http://www.turnaround.org/
November 14, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Luncheon Program
St. Louis, Missouri
Contact: 815-469-2935 or http://www.turnaround.org/
November 15, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Joint Reception with NYIC/NYTMA
TBA, New York
Contact: 908-575-7333 or http://www.turnaround.org/
November 15, 2006
LI TMA Formal Event
TMA Australia National Conference
Long Island, New York
Contact: http://www.turnaround.org/
November 15, 2006
TURNAROUND MANAGEMENT ASSOCIATION
South Florida Dinner
Citrus Club, Orlando, Florida
Contact: 561-882-1331 or http://www.turnaround.org/
November 16, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Bankruptcy Judges Panel
Duquesne Club, Pittsburgh, Pennsylvania
Contact: http://www.turnaround.org/
November 16, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Dinner Program
TBA, Seattle, Washington
Contact: 503-223-6222 or http://www.turnaround.org/
November 23, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Martini Party
Vancouver, British Columbia
Contact: 403-294-4954 or http://www.turnaround.org/
November 28, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Luncheon
Centre Club, Tampa, FL
Contact: 561-882-1331 or http://www.turnaround.org/
November 29, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Special Program
TBA, New Jersey
Contact: 908-575-7333 or http://www.turnaround.org/
November 30-December 2, 2006
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
Hyatt Regency at Gainey Ranch, Scottsdale, Arizona
Contact: 1-703-739-0800; http://www.abiworld.org/
December 6, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Holiday Dinner
Portland, Oregon
Contact: 503-223-6222 or http://www.turnaround.org/
December 7, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Networking Breakfast
The Newark Club, Newark, New Jersey
Contact: 908-575-7333 or http://www.turnaround.org/
December 13, 2006
TURNAROUND MANAGEMENT ASSOCIATION
LI TMA Holiday Party
TBA, Long Island, New York
Contact: 631-251-6296 or http://www.turnaround.org/
December 13, 2006
TURNAROUND MANAGEMENT ASSOCIATION
Christmas Function
GE Commercial Finance, Sydney, Australia
Contact: 0438 653 179 or http://www.turnaround.org/
February 2007
AMERICAN BANKRUPTCY INSTITUTE
International Insolvency Symposium
San Juan, Puerto Rico
Contact: 1-703-739-0800; http://www.abiworld.org/
April 11-15, 2007
AMERICAN BANKRUPTCY INSTITUTE
ABI Annual Spring Meeting
J.W. Marriott, Washington, DC
Contact: 1-703-739-0800; http://www.abiworld.org/
March 27-31, 2007
TURNAROUND MANAGEMENT ASSOCIATION
Spring Conference
Four Seasons Las Colinas, Dallas, Texas
Contact: http://www.turnaround.org/
March 29-31, 2007
ALI-ABA
Chapter 11 Business Reorganizations
Scottsdale, Arizona
Contact: 1-800-CLE-NEWS; http://www.ali-aba.org/
June 6-9, 2007
ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS
23rd Annual Bankruptcy & Restructuring Conference
Westin River North, Chicago, Illinois
Contact: http://www.airacira.org/
June 14-17, 2007
AMERICAN BANKRUPTCY INSTITUTE
Central States Bankruptcy Workshop
Grand Traverse Resort, Traverse City, Michigan
Contact: 1-703-739-0800; http://www.abiworld.org/
July 12-15, 2007
AMERICAN BANKRUPTCY INSTITUTE
Northeast Bankruptcy Conference
Marriott, Newport, RI
Contact: 1-703-739-0800; http://www.abiworld.org/
October 10-13, 2007
NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
National Conference of Bankruptcy Judges
Orlando, Florida
Contact: http://www.ncbj.org/
October 16-19, 2007
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
Marriott Copley Place, Boston, Massachusetts
Contact: 312-578-6900; http://www.turnaround.org/
December 6-8, 2007
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
Westin Mission Hills Resort, Rancho Mirage, California
Contact: 1-703-739-0800; http://www.abiworld.org/
March 25-29, 2008
TURNAROUND MANAGEMENT ASSOCIATION
TMA Spring Conference
Ritz Carlton Grande Lakes, Orlando, Florida
Contact: http://www.turnaround.org/
September 24-27, 2008
NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
National Conference of Bankruptcy Judges
Scottsdale, Arizona
Contact: http://www.ncbj.org/
October 28-31, 2008
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
Marriott Copley Place, Boston, Massachusetts
Contact: 312-578-6900; http://www.turnaround.org/
October 5-9, 2009
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
Marriott Desert Ridge, Phoenix, Arizona
Contact: 312-578-6900; http://www.turnaround.org/
2009 (TBA)
NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
National Conference of Bankruptcy Judges
Las Vegas, Nevada
Contact: http://www.ncbj.org/
October 4-8, 2010
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
JW Marriott Grande Lakes, Orlando, Florida
Contact: http://www.turnaround.org/
2010 (TBA)
NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
National Conference of Bankruptcy Judges
New Orleans, Louisiana
Contact: http://www.ncbj.org/
BEARD AUDIO CONFERENCES
Coming Changes in Small Business Bankruptcy
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Distressed Real Estate under BAPCPA
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
High-Yield Opportunities in Distressed Investing
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Fundamentals of Corporate Bankruptcy and Restructuring
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Reverse Mergers - the New IPO?
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Dana's Chapter 11 Filing
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Employee Benefits and Executive Compensation
under the New Code
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Validating Distressed Security Portfolios: Year-End Price
Validation and Risk Assessment
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Changing Roles & Responsibilities of Creditors' Committees
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Calpine's Chapter 11 Filing
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Healthcare Bankruptcy Reforms
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Changes to Cross-Border Insolvencies
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
The Emerging Role of Corporate Compliance Panels
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com
The Meetings, Conferences and Seminars column appears in the
Troubled Company Reporter each Wednesday. Submissions via e-mail
to conferences@bankrupt.com are encouraged.
*********
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, Joel Anthony
Lopez, 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.
*** End of Transmission ***