/raid1/www/Hosts/bankrupt/TCR_Public/060518.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, May 18, 2006, Vol. 10, No. 117
Headlines
155 EAST: S&P Affirms B- Rating & Revises Outlook to Stable
ADVOCAT INC: Sells 11 Facilities in North Carolina for $11 Million
ALLIED HOLDINGS: CEO Will Not Receive Stay Bonus Under KERP
ALLIED HOLDINGS: Gets Interim Okay to Enforce Teamsters' Pay Cut
ALLIED WASTE: Prices Tender Offer for $600MM of 8-7/8% Sr. Notes
ALLSERVE SYSTEMS: Trustee Gets Access to $90,000 DIP Financing
AMERICAN GREETINGS: S&P Assigns BB+ Rating to Shelf Registration
AMERICAN HOUSING: S&P Ups $29 Mil. Bonds' Rating to BBB- from BB
ANCHOR GLASS: Assumes Warner Robins Gas Supply Contract
ANCHOR GLASS: Court Approves Assumption of O-N Minerals Agreement
ARCH CAPITAL: S&P Rates Proposed $100 Million Pref. Shares at BB+
CALPINE CORP: Court Approves FTI Consulting as Accounting Advisors
CALPINE CORP: Gets Final OK to Hire Lazard as Panel Fin'l Advisor
COLLINS & AIKMAN: GECC Demands Payment of Alleged Lease Debts
COLLINS & AIKMAN: Must Pay Accrued Taxes Under the Fabric Leases
COMMERCIAL MORTGAGE: Moody's Junks Rating on 2 Cert. Classes
D56 INC: Moody's Holds Ba3 Rating on $175 Million Credit Facility
DANA CORP: Sypris Wants to Apply Set Off Rights Under Supply Pacts
DANA CORP: Court Allows Inventory Purchase from Mexican Affiliates
DANA CORP: Gets Court OK to Hire Signature as Real Estate Advisor
DB MASTER: S&P Places BB Rating on $100 Million Class M-1 Notes
DELPHI CORP: Amends Annual Report for Year Ended Dec. 31, 2004
DELPHI CORP: Cherokee Fails to Hasten DAS' Lease Decision Deadline
DESARROLLO ECONOMICO: Voluntary Chapter 11 Case Summary
DLJ MORTGAGE: Moody's Reviews Low-B Ratings and May Downgrade
DOCTORS HOSPITAL: Court Confirms Second Amended Chapter 11 Plan
EASTMAN KODAK: Fitch Downgrades Senior Unsecured Rating to B-
ENRON CORP: Bear Sterns Holds Two Multi-Million Unsecured Claims
ENTERGY NEW ORLEANS: Panel Balks at Entergy Corp.'s Stipulation
EUGENE SCIENCE: SF Partnership Raises Going Concern Doubt
EXIDE TECHNOLOGIES: Closing Shreveport Facility on June 22
F LAMARR: Case Summary & 19 Largest Unsecured Creditors
FALCONBRIDGE LTD: Gets Xstrata Cash Offer for CDN$16.1 Billion
FDL INC: Hires Development Specialists as Financial Consultant
FOAMEX INTERNATIONAL: Bank of Nova Scotia Discloses 1.4% Stake
FOCUS ENHANCEMENTS: Incurs $7.1 Mil. Net Loss in 2006 First Qtr.
G+G RETAIL: U.S. Trustee Amends Creditors' Panel Membership
GENERAL MOTORS: Brazilian Unit Cuts Exports & Lays Off 960 Workers
GENERAL MOTORS: Controller Retirement Prompts Department Changes
GINN-LA CS: S&P Puts BB- Rating on $125 Mil. 2nd-Lien Term Loan
GLAZED INVESTMENTS: Files Amended Plan & Disclosure Statement
GSAMP TRUST: Moody's Puts Ba1 Rating on Class B-2 Certificates
GOODING'S SUPERMARKETS: Wants Until May 30 to File Ch. 11 Plan
GREAT CHINA: Working Capital Deficit Prompts Going Concern Doubt
GREAT CHINA: Delays Filing of Form 10-Q for Quarter Ended March 31
GREENBRIER COMPANIES: S&P Rates Proposed $85M Notes Offer at B+
GSAMP TRUST: Moody's Puts Rating on Class B-2 Certificates at Ba1
GULF COAST: Wants to Hire Hughes & Luce as Bankruptcy Counsel
GULF COAST: Selling Some Assets to PaR Systems for $3 Million
GULF COAST: U.S. Trustee Appoints Three-Member Creditors Committee
HAJAR ESMAILI: Case Summary & 11 Largest Unsecured Creditors
HARD ROCK: Merger Prompts Moody's to Affirm Low-B Rating
HOUT BAY: Moodys Rates $6 Million Subordinated Notes at Ba3
IBSC AGENCY: Case Summary & 40 Largest Unsecured Creditors
INTERSTATE BAKERIES: Selling San Bernardino Property for $550,000
INTERSTATE BAKERIES: Court OKs Sieckmann & Nat'l Union Agreement
J. CREW: Inks $285 Million Credit and Guaranty Agreement
KMART CORP: Amy Himle Wants Stay Lifted to Pursue Claim
KRISPY KREME: Settles North Carolina ERISA Class Suit for $4.75MM
LB COMMERCIAL: Moody's Affirms Junk Rating on 2 Cert. Classes
LEAR CORP: Begins Tender Offer for Zero-Coupon Conv. Sr. Notes
LENOX GROUP: Moody's Affirms B1 Corporate Family Rating
LEVITZ HOME: Wants More Time to Decide on Nine Leases
LEVITZ HOME: Wants to Assign 31 Store Leases to PLVTZ
LIBBEY INC: S&P Assigns B Rating to Proposed $400 Million Notes
LIBBEY GLASS: Moody's Rates $400 Million Sr. Unsec. Notes at B3
LIFESTREAM TECH: March 31 Balance Sheet Upside-Down by $8 Million
LIFESTREAM TECH: Sells Asset to RAB Special for $4.5 Million
LION CAPITAL: Balance Sheet Upside Down By $1.6 Mil. at March 31
M/I HOMES: S&P Affirms BB Corp. Credit & Sr. Unsec. Debt Ratings
MANIWOTOC CO: Pays EUR193 Million for 10.375% Sr. Sub. Notes
MASSACHUSETTS DEVELOPMENT: S&P Affirms Revenue Bonds' BB+ Rating
MEDIACOM COMMS: S&P Lowers Sr. Convertible Notes' Rating to CCC
MERIDIAN AUTOMOTIVE: Can Make Retiree Benefits Compliant with Plan
MERIDIAN AUTOMOTIVE: Has Until Sept. 25 to Decide on Leases
MIDWAY AIRLINES: Chapter 7 Trustee Hires Edward Dobbs as Mediator
MUSICLAND HOLDING: Court Sets May 30 as Administrative Bar Date
MUSICLAND HOLDING: Giuliani Capital Hired as Panel's Fin'l Advisor
NASDAQ STOCK: S&P Downgrades Credit & Bank Loan Ratings to BB+
NEW YORK WATER: S&P Places BB Corporate Credit Rating on Watch
NEWCOMM WIRELESS: Involuntary Chapter 11 Case Summary
NOVELIS INC: Lenders Extend Financial Statement Filing Schedule
NOVELIS INC: Moody's Reviews Low-B Ratings and May Downgrade
NTK HOLDINGS: Moody's Affirms $625 Million Sr. Sub. Notes at Caa1
NUVOX COMMS: Closes $95 Million Sr. Secured Credit Facility
OCA INC: Files Schedules of Assets & Liabilities
OCA INC: Court Sets June 2 General Claims Bar Date
ONEIDA LTD: Bankruptcy Court Approves Equity Trading Procedures
ONEIDA LTD: Section 341(a) Meeting Scheduled Tomorrow
ORIUS CORP: Wants to Pursue Causes of Action Against Lenders
PLIANT CORP: Wants Until September 1 to File Chapter 11 Plan
PLIANT CORP: Gets Court Approval to Pay Exit Lenders' Work Fees
POWERCOLD CORP: Accumulated Deficit Prompts Going Concern Doubt
POWERCOLD CORP: March 31 Balance Sheet Upside-Down $4 Million
PROCARE AUTOMOTIVE: Ct. OKs $3.6 Mil. DIP Financing on Final Basis
PROCARE AUTOMOTIVE: Court Okays Eric Martinez's Employment Pact
PROGRESS RAIL: Caterpillar Merger Prompts S&P to Hold B+ Rating
REYNOLDS AMERICAN: S&P Assigns BB Rating to $1.65 Billion Notes
ROCK-TENN CO: S&P Puts B+ Rating on $500 Mil. Shelf Registration
ROGERS CABLE: DBRS Confirms BB Rating on Notes & Debentures
ROGERS COMMS: DBRS Rates Issuer Debt at BB(low) Positive
ROGERS WIRELESS: DBRS Holds BB(low) Rating on Sr. Subor. Notes
SAINT VINCENTS: Proposes Bidding Procedures for Hospital Sales
SAINT VINCENTS: Inks License Agreement with BIK PC
SILICON GRAPHICS: Taps AlixPartners as Restructuring Advisors
SILICON GRAPHICS: Wants to Employ CMP as Conflicts Counsel
SILICON GRAPHICS: Has Until June 22 to File Schedules & Statements
SINOFRESH HEALTHCARE: Accumulated Deficit Tops $10.5MM at Mar. 31
STONERIDGE INC: S&P Downgrades Senior Unsecured Debt Rating to B+
SUPERIOR ENERGY: S&P Rates $300 Million Sr. Unsecured Notes at BB-
SYNAGRO TECH: Receives $15.6 Million from Public Equity Offering
TARPON INDUSTRIES: Posts $2.4 Mil. Net Loss in 2006 First Quarter
TERWIN MORTGAGE: Moody's Puts Low-B Rating on 2 Cert. Classes
TONY HASTINGS: Case Summary & 13 Largest Unsecured Creditors
TURBOWORX INC: Case Summary & Largest Unsecured Creditors
UAL CORP: Sells MyPoints.com to United Online for $56 Million
UAL CORP: Files April 2006 Status Report on Plan Consummation
UAP HOLDING: Prices Tender Offer for $328.5 Million Senior Notes
UNITED MEDICORP: KBA Group Raises Going Concern Doubt
UNITED MEDICORP: Posts $118,649 Net Loss in First Quarter 2006
US ENERGY: Posts $8.2 Million Net Loss for 2005 Fiscal Year
WINDON COUNTRY: Voluntary Chapter 11 Case Summary
WERNER HOLDING: S&P Places Corporate Credit Rating on Default
XTREME COS: Appoints Laurie Phillips as Chief Executive Officer
XYBERNAUT: Can Borrow Up to $3.2M from East River Under DIP Pact
* NachmanHaysBrownstein Names Jeffrey Jonas as Managing Director
* SSG Facilitates Sale of West Coast Medical Spa Chain
* Chapter 11 Cases with Assets & Liabilities Below $1,000,000
*********
155 EAST: S&P Affirms B- Rating & Revises Outlook to Stable
-----------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on casino
owner and operator 155 East Tropicana LLC to stable from positive.
At the same time, Standard & Poor's affirmed its ratings on the
company, including its 'B-' corporate credit rating. Total debt
outstanding at March 31, 2006, was about $135 million.
The outlook revision follows the company's announcement of first
quarter operating results, including 57 days of the newly re-
branded Hooters Casino Hotel, which showed that while net revenues
at the property were solid, initial earnings have been below
expectations due to operating inefficiencies and weak hotel
performance.
In Standard & Poor's view, the earnings shortfall of the facility
will be longer than expected, extending the timeframe under which
an upgrade would be considered.
ADVOCAT INC: Sells 11 Facilities in North Carolina for $11 Million
------------------------------------------------------------------
Advocat Inc. closed the sale of 11 assisted living facilities in
North Carolina for approximately $11 million. The net proceeds
will be used to reduce debt.
"We are pleased to have the sale of these facilities closed. This
sale will allow us to focus our attention on our core business of
managing nursing home centers and to repay debt," Mr. William
Council, CEO of Advocat stated.
The Company's one remaining assisted living facility in North
Carolina is under contract to sell for approximately $4 million.
This sale is expected to close in the second quarter, although no
assurances can be given.
As reported in the Troubled Company Reporter on April 3, 2006, the
11 assisted living facilities sold secure loans with an
outstanding balance of approximately $17.7 million as of
Dec. 31, 2005. Advocat has entered into negotiations with the
lender to refinance the remaining balance of this debt.
About Advocat Inc.
Headquartered in Brentwood, Tennessee, Advocat Inc. (OTCBB: AVCA)
-- http://www.irinfo.com/avc-- provides long-term care services
to nursing home patients and residents of assisted living
facilities in nine states, primarily in the Southeast. The
Company has 43 centers containing 4,505 licensed nursing beds.
* * *
As reported in the Troubled Company Reporter on April 3, 2006,
BDO Seidman LLP raised substantial doubt about Advocat Inc.'s
ability to continue as a going concern after it audited the
Company's financial statements for the year ended Dec. 31, 2005.
The Company is not in compliance with certain debt covenants that
allow the holders to demand immediate repayment. It has limited
resources, including working capital, available to fund the
reserve recorded for retained professional liability risk and to
meet its debt service requirements during 2006.
ALLIED HOLDINGS: CEO Will Not Receive Stay Bonus Under KERP
-----------------------------------------------------------
Allied Holdings, Inc., disclosed that its President and Chief
Executive Officer, Hugh E. Sawyer, has removed himself from
eligibility for any stay bonus under the Company's Key Employee
Retention Plan. As a result, Mr. Sawyer will not receive any
bonus payment associated with the Company's KERP.
Mr. Sawyer has previously voluntarily accepted a 15% reduction in
his annual salary. This salary reduction was effective on
March 1, 2006. Mr. Sawyer contributes a portion of the cost of
his health care benefits in a manner consistent with all other
non-bargaining employees. Further, the Company stated that Mr.
Sawyer would take additional 2006 salary reductions by
participating in the Company's non-paid furloughs scheduled for
May and June.
"When I considered all the facts of Allied's bankruptcy case, I
ultimately concluded that a 15% reduction in my wages and the
elimination of my KERP bonus were necessary and appropriate to
support our Company and its employees. My decision to voluntarily
accept these reductions in my compensation is consistent with the
Company's longstanding value system and my personal convictions,"
Mr. Sawyer stated.
Mr. Sawyer added, "Our non-bargaining employees have already
contributed to Allied's renewal. Our Teamster-represented
employees in the United States will soon consider the question of
comparable personal sacrifice. My KERP bonus must not be an issue
as our Teamster drivers, mechanics and yard personnel consider the
difficult sacrifices that will be necessary to help Allied survive
and avoid the threat of liquidation."
About Allied Holdings
Headquartered in Decatur, Georgia, Allied Holdings, Inc. (OTC Pink
Sheets: AHIZQ.PK) -- 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. (Allied Holdings Bankruptcy
News, Issue No. 21; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
ALLIED HOLDINGS: Gets Interim Okay to Enforce Teamsters' Pay Cut
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Georgia
gave Allied Holdings, Inc., and its debtor-affiliates interim
relief from certain provisions of their collective bargaining
agreement with the International Brotherhood of Teamsters in the
United States.
The Court allows a 10% compensation reduction for the U.S.
Teamsters on a temporary basis. The interim relief from the
collective bargaining agreement will terminate on June 30, 2006.
Teamsters Object to Pay Cuts
The Teamsters assert that the Debtors failed to meet the
requirements of Section 1113(e) of the Bankruptcy Code.
Section 1113(e) provides that the court may authorize the trustee
to implement interim changes in the terms, conditions, wages,
benefits, or work rules provided by a collective bargaining
agreement.
Although the Debtors' request purports to be of this type, it
does not come close to satisfying the requirements of Section
1113(e), Frederick Perillo, Esq., at Previant, Goldberg, Uelmen,
Gratz, Miller and Brueggeman, s.c., in Milwaukee, Wisconsin,
tells the Court.
According to Mr. Perillo, the Debtors have committed procedural
flaws that are fatal to their request. Specifically:
(a) the Debtors have not filed a Section 1113 request to
reject; no hearing has been scheduled for the rejection of
the contract; and no request for rejection is pending
before the Court;
(b) the Debtors have not properly notified all contractual
parties as required by Section 1113;
(c) the Debtors have filed the request at the explicit behest
of a coterie of bankers who lack constitutional and
statutory standing to participate in the proceedings.
Mr. Perillo argues that the Debtors' request is not based on an
actual lack of operating cash but on problems with imputed future
availability. The request does not demonstrate an imminent
failure, but rather a potentiality of future problems. Even if
the projections about a shortfall in liquidity are correct for
late May and July, the problems asserted only increase the risk
of a liquidity failure.
According to Mr. Perillo, the Debtors revenue projections for 2006
should be stronger than in past years. During the pendency of
their reorganization, the Debtors said they negotiated increases
in their contracts with major suppliers and an increase in the
fuel surcharge from the suppliers.
If, as the Debtors assert, they have remedied many of the problems
that placed them into bankruptcy, Mr. Perillo asserts that the
remedies should:
-- improve the projections for the company; and
-- decrease the likelihood of a liquidity failure in the
upcoming months.
To solve the Debtors' allegedly looming liquidity crisis in May,
Teamsters recommends that the Debtors defer payment of
administrative costs -- like cash KERP payments and professional
fees -- until the availability and liquidity problems are not as
great. Mr. Perillo tells the Court that a decrease in labor
costs will not eliminate the liquidity problems because the
alleged crisis is caused by excessive bonuses and overhead
expenses.
Mr. Perillo further asserts that the Court should:
* repudiate the attempt to transfer payment from production
employees to the highly-paid executives; and
* direct that managers should take a true pay cut of at least
equal magnitude to the cuts sought for production employees.
A 10% cut for the production employees puts their wages
drastically below the claimed sacrifices made by other employees
and would likely result to a loss of skill, an increase in the
rates of damage to vehicles and equipment, and a decline in
revenue -- all of which will exacerbate the Debtors' financial
condition, Mr. Perillo emphasizes.
About Allied Holdings
Headquartered in Decatur, Georgia, Allied Holdings, Inc. (OTC Pink
Sheets: AHIZQ.PK) -- 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. (Allied Holdings Bankruptcy
News, Issue No. 21; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
ALLIED WASTE: Prices Tender Offer for $600MM of 8-7/8% Sr. Notes
----------------------------------------------------------------
Allied Waste Industries, Inc., reported the pricing terms of the
previously reported offer to purchase for cash by its wholly-owned
subsidiary Allied Waste North America, Inc., any and all of its
$600 million in aggregate principal amount of AWNA's outstanding
8-7/8% Senior Notes due 2008 (CUSIP No. 01958XAS6) on the terms of
and subject to the conditions in its Offer to Purchase and Consent
Solicitation Statement, dated May 3, 2006.
The total consideration for each $1,000 principal amount of the
Notes, which will be payable in respect of the Notes that are
accepted for payment and that were validly tendered on or prior to
5:00 p.m., New York City time, on May 16, 2006, will be $1,060.16
per $1,000 principal amount of the Notes. The Total Consideration
consists of the Offer Consideration, plus a $12.50 consent
payment. The "Offer Consideration" was determined as of 2:00
p.m., New York City time, May 16, 2006, and is equal to, for each
$1,000 principal amount of Notes:
(i) the present value of $1,000 discounted to May 17, 2006 from
April 1, 2008, the stated maturity date of the Notes, plus
the present value on the Early Settlement Date of all
interest that would have accrued and been payable on the
Notes from the most recent interest payment date until the
Maturity Date, in each case determined on the basis of a
yield to the Maturity Date equal to the sum of:
(x) the bid-side yield of the 4.625% U.S. Treasury Note due
March 31, 2008, which was 4.945% as of 2:00 p.m., New
York City time, May 16, 2006, plus
(y) a fixed spread of 50 basis points, minus
(ii) accrued and unpaid interest on the Notes to, but not
including, the Early Settlement Date, and minus
(iii) the Consent Payment.
The scheduled payment date for the Notes tendered prior to the
Consent Date will be May 17, 2006, the Early Settlement Date,
subject to the terms of and conditions in the Statement. In
addition to the Total Consideration, such tendering holders will
receive accrued and unpaid interest up to, but not including, the
Early Settlement Date, in the amount of $11.34 for each $1,000
principal amount of Notes validly tendered and not withdrawn prior
to the Consent Date pursuant to the Offer.
As reported in the Troubled Company Reporter on May 5, 2006, the
Offer is scheduled to expire at 11:59 p.m., New York City time, on
May 31, 2006, unless extended. Holders who validly tender their
Notes after the Consent Date and prior to the Expiration Date will
receive the Offer Consideration, but not the Consent Payment.
Payments for Notes tendered after the Consent Date but prior to
the Expiration Date will be made promptly after the Expiration
Date.
Allied and AWNA have received the requisite consents to certain
proposed amendments to eliminate substantially all of the
restrictive covenants in the indenture governing the Notes and
certain other provisions. Upon the satisfaction or waiver of the
remaining conditions set forth in the Statement, including the
sale of $600 million in aggregate principal amount of AWNA's
7-1/8% Senior Notes due 2016, AWNA intends to accept the Notes for
purchase and payment pursuant to the tender offer and consent
solicitation and execute the supplemental indenture effecting the
amendments to the indenture.
None of the representatives or employees of Allied Waste, the
Dealer Managers or the Information Agent makes any recommendations
as to whether or not holders should tender their 8-7/8% Notes
pursuant to the tender offer and no one has been authorized by any
of them to make such recommendations. Holders must make their own
decisions as to whether to tender 8-7/8% Notes and, if so, as to
the principal amount of such 8-7/8% Notes to tender.
The tender offer and consent solicitation is being made solely by
the offer to purchase and consent solicitation statement, dated
May 3, 2006.
The full terms of the tender offer and the consent solicitation
are set forth in the Statement and in the related consent and
letter of transmittal.
UBS Investment Bank and Citigroup Corporate and Investment Banking
are Dealer Managers and Solicitation Agents for the tender offer
and consent solicitation. Questions regarding the tender offer
and the consent solicitation should be directed to:
UBS Investment Bank
Attn: Liability Management Group
Telephone (203) 719-4210
Toll Free (888) 722-9555 x4210
or
Citigroup Corporate and Investment Banking
Attn: Liability Management Group
Telephone (212) 723-6106
Toll Free (800) 558-3745
Requests for documents should be directed to the Information Agent
for the tender offer and consent solicitation:
D.F. King & Co., Inc.
48 Wall Street, 22nd Floor
New York, New York 10005
Toll Free (800) 848-2998
About Allied Waste Industries
Based in Scottsdale, Arizona, Allied Waste Industries, Inc.
(NYSE: AW) -- http://www.investor.alliedwaste.com/-- provides
collection, recycling and disposal services to residential,
commercial and industrial customers in the United States. As of
Dec. 31, 2005, the Company operated a network of 310 collection
companies, 166 transfer stations, 169 active landfills and 57
recycling facilities in 37 states and Puerto Rico.
* * *
As reported in the Troubled Company Reporter on May 8, 2006,
Moody's Investors Service assigned B2 ratings to Allied Waste
North America, Inc.'s $600 million senior secured notes due 2016
and affirmed other long-term debt ratings of Allied Waste North
America and its wholly-owned subsidiary, Browning-Ferris
Industries, Inc., and its parent company Allied Waste Industries,
Inc. Concurrently, Moody's affirmed Allied Waste's Corporate
Family Rating of B2. The outlook for the ratings is stable.
The proposed $600 million senior secured notes due 2016 are
intended to refinance the $600 million of 8.875% senior secured
notes due 2008. Concurrent with the proposed offering, Allied
Waste NA announced a cash tender offer for the 2008 notes, which
expires on May 31, 2006. The consummation of the tender offer is
conditional upon completion of the proposed financing.
ALLSERVE SYSTEMS: Trustee Gets Access to $90,000 DIP Financing
--------------------------------------------------------------
The Honorable Rosemary Gambardella of the U.S. Bankruptcy Court
for the District of New Jersey authorized Charles A. Stanziale,
Jr., Esq., the chapter 7 Trustee of Allserve Systems Corp., to
obtain postpetition financing from D.B. Zwim Special Opportunities
Fund, L.P., Universal Equipment Leasing Company, LLC, and IBM
Credit LLC.
Under the terms of the DIP financing agreement, dated
March 17, 2006, the Lenders agreed to lend the Trustee $90,000.
Interest on any funds advanced to the Debtor will be payable at a
rate equal to 7.5% during the period from and including the date
of the Note and payable, in arrears.
The Trustee is authorized to use the DIP loan proceeds to pay
projected fees and expenses of his professionals. However, the
Trustee is not allowed to use any of the loan proceeds to pay
professionals he has retained to:
* commencing any claims against the Lenders; or
* challenging the liens or the Lenders' claims.
The Lenders will received a security interest in and lien upon:
1) all eligible amounts recovered by the Chapter 7 Trustee from
the collateral including, but not limited to, cash and other
recoveries pursuant to the Avoidance Claims, but excluding:
a) all amounts previously recovered for the Debtor's estate,
including cash on hand, and
b) amounts recovered by the Debtor's estate on account of
the Debtor's accounts receivable, tax and insurance
reimbursements;
2) any and all recoveries of the Trustee based upon avoidance
claims;
3) any and all monies recovered in connection with the
successful prosecution or settlement of any claims or
actions arising from or related to the Debtor or the
Debtor's former management;
4) any shares or interests held by the Debtor; and
5) any proceed of the collateral.
All liens will be deemed valid, binding, enforceable and
perfected.
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.
AMERICAN GREETINGS: S&P Assigns BB+ Rating to Shelf Registration
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary 'BB+'
senior unsecured debt rating to American Greetings Corp.'s
recently filed Rule 415 shelf registration for debt securities.
The new shelf has an indeterminate aggregate initial offering
price or number of debt securities.
"The funds will be used for general corporate purposes including
repaying debt, to fund shares repurchases, fund dividends, finance
acquisitions, finance capital expenditures and operating expenses
and invest in subsidiaries," said Standard & Poor's credit analyst
Alison Sullivan.
The corporate credit rating on American Greetings is BBB-
/Positive/--. The ratings on the company reflect its strong
market position and improving financial profile as a result of
debt reduction, as well as ample liquidity.
Ratings List:
American Greetings Corp.:
Corporate credit rating: BBB-/Positive/--
$650M senior secured credit facility: BBB- (Recovery Rating 2)
Senior secured notes: BBB-
Convertible notes: BB+
$200 million senior unsecured notes: BB+
Rating Assigned:
(Prelim) Rule 415 shelf registration: BB+
AMERICAN HOUSING: S&P Ups $29 Mil. Bonds' Rating to BBB- from BB
----------------------------------------------------------------
Standard & Poor's Ratings Services raised:
* its rating on American Housing Foundation, Texas'
$88.7 million series 2003A bonds to 'AA' from 'AA-';
* its rating on the foundation's $56.0 million series 2003A-T
bonds to 'AA' from 'AA-';
* its rating on the foundation's $74.6 million series 2003B
bonds to 'A' from 'BBB'; and
* its rating on the foundation's $29 million series 2003C bonds
to 'BBB-' from 'BB'.
The outlook is stable.
The bonds were issued by various issuers.
The upgrades reflect operating performance based on restated
fiscal 2004 and fiscal year-end 2005 audited financial statements.
The owner of the properties, American Housing Foundation,
requested that the auditor restate the original fiscal year-end
2004 financial statements because the properties have a new
property manager, Walden Affordable Housing Corp., and a number of
items were not correctly reflected in the audit. Based on this
request the auditor restated fiscal year-end 2004 financial
statements.
The results of these new statements indicate that the issue
performed more in line with the original underwriting than
indicated by the first audited statements. In addition, the
fiscal year-end 2005 audited statements indicate that the issue
has improved, and is now performing well in line with underwritten
levels.
Underwritten debt service coverage levels were:
-- 2.32x for senior debt,
-- 1.52x for subordinate debt, and
-- 1.25x for junior subordinate debt.
Actual debt service coverage based on the restated 2004 audited
statements was:
-- 2.22x for senior debt,
-- 1.46x for subordinate debt, and
-- 1.19x for junior subordinate debt.
Fiscal year-end 2005 audited statements indicate debt service
coverage of:
-- 2.33x for senior debt,
-- 1.53x for subordinate debt, and
-- 1.25x for junior subordinate debt,
all in line with original projections.
The original underwritten net operating income for the entire
pool of properties was approximately $17.9 million. The actual
performance of the pool based on the restated fiscal Dec. 31,
2004, audited financial statements indicate that net operating
income was approximately $400,000 lower than the original
projected levels.
Net operating income for the Austin and Dallas properties
experienced the biggest difference, with the Austin properties
generating NOI approximately $395,000 below projections, and the
Dallas properties producing NOI approximately $495,000 below
projections. The Oklahoma properties experienced about $224,000
lower NOI. The performance in those properties, however, was
mitigated by the positive performance of the properties in the
remaining markets. The Phoenix properties generated NOI
approximately $200,000 above projected levels, and the Florida
properties experienced higher than anticipated NOI of
approximately $468,000 in fiscal 2004.
Fiscal year-end 2005 financial statements indicate that all of the
markets have performed well. Net operating income for the Austin
properties was $295,000 above underwritten levels. The Dallas
properties net income was $167,000 above underwritten levels,
indicating that these markets have begun to turn around. Net
operating income for the Oklahoma properties was approximately
$145,000 above underwritten levels, and NOI for the Phoenix
properties was about $455,000 above the underwritten level. The
Florida properties, which have performed well from the time of
issuance, had NOI of approximately $758,000 above original
projections.
ANCHOR GLASS: Assumes Warner Robins Gas Supply Contract
-------------------------------------------------------
Anchor Glass Container Corporation informs the U.S Bankruptcy
Court for the Middle District of Florida that the City of Warner
Robins in Georgia's request to lift the stay is now moot.
Hywel Leonard, Esq., at Carlton Fields PA, says that the Debtor
will assume its contract with Warner Robins. The agreement was
incorporated in the Confirmation Order, dated April 18, 2006.
As reported in the Troubled Company Reporter on April 24, 2006,
the City of Warner Robins, Georgia, agreed to supply natural gas
to Anchor Glass Container Corporation pursuant to a Natural Gas
Sales Agreement. The term of the Agreement was for five years,
and continued year to year unless terminated by either party.
The City said the Debtor owed it approximately $410,712, for
natural gas provided prior to the Debtor's bankruptcy filing.
On March 31, 2006, Anchor Glass filed its list of executory
contracts to be assumed pursuant to its Second Amended Plan of
Reorganization. The list did not include the Natural Gas Supply
Agreement with the City. The City concluded that under the 2nd
Amended Plan, the Supply Agreement is to be rejected as of the
Effective Date of the Plan. The City subsequently asked the Court
to modify the automatic stay to allow it to:
a) terminate its service to Anchor Glass; and
b) set off the security deposit against its rejection
damages, including the prepetition debt
Headquartered in Tampa, Florida, Anchor Glass Container
Corporation is the third-largest manufacturer of glass containers
in the United States. Anchor manufactures a diverse line of flint
(clear), amber, green and other colored glass containers for the
beer, beverage, food, liquor and flavored alcoholic beverage
markets. The Company filed for chapter 11 protection on Aug. 8,
2005 (Bankr. M.D. Fla. Case No. 05-15606). Robert A. Soriano,
Esq., at Carlton Fields PA, represents the Debtor in its
restructuring efforts. Edward J. Peterson, III, Esq., at
Bracewell & Guiliani, represents the Official Committee of
Unsecured Creditors. When the Debtor filed for protection from
its creditors, it listed $661.5 million in assets and $666.6
million in debts. (Anchor Glass Bankruptcy News, Issue No. 23;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
ANCHOR GLASS: Court Approves Assumption of O-N Minerals Agreement
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
authorized Anchor Glass Container Corporation to assume a supply
agreement with O-N Minerals (Chemstone) Company, aka Global Stone
Chemstone Corp.
As reported in the Troubled Company Reporter on April 17, 2006,
O-N Minerals committed to sell limestone to Anchor Glass Container
Corporation until December 2006, pursuant to a Supply Agreement
dated Jan. 1, 2004.
O-N Minerals asserted a prepetition unsecured claim for
$124,988,24. Anchor Glass and O-N Minerals agreed to the
compromise of the prepetition claim for $87,492.
Headquartered in Tampa, Florida, Anchor Glass Container
Corporation is the third-largest manufacturer of glass containers
in the United States. Anchor manufactures a diverse line of flint
(clear), amber, green and other colored glass containers for the
beer, beverage, food, liquor and flavored alcoholic beverage
markets. The Company filed for chapter 11 protection on Aug. 8,
2005 (Bankr. M.D. Fla. Case No. 05-15606). Robert A. Soriano,
Esq., at Carlton Fields PA, represents the Debtor in its
restructuring efforts. Edward J. Peterson, III, Esq., at
Bracewell & Guiliani, represents the Official Committee of
Unsecured Creditors. When the Debtor filed for protection from
its creditors, it listed $661.5 million in assets and $666.6
million in debts. (Anchor Glass Bankruptcy News, Issue No. 23;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
ARCH CAPITAL: S&P Rates Proposed $100 Million Pref. Shares at BB+
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' preferred
stock rating to Arch Capital Group Ltd.'s (NASDAQ:ACGL) proposed
$100 million issuance of Class B, noncumulative preferred shares.
At the same time, Standard & Poor's affirmed its 'BBB' long-term
counterparty credit and senior debt ratings on Arch Capital Group
Ltd. and affirmed its 'A-' long-term counterparty credit and
financial strength ratings on ACGL's operating companies:
* Arch Reinsurance Ltd.,
* Arch Reinsurance Co.,
* Arch Insurance Co.,
* Arch Specialty Insurance Co., and
* Arch Excess & Surplus Insurance Co.
The outlook is stable.
The ratings are supported by the group's:
* growing business franchise,
* strong operating performance,
* strong capital adequacy, and
* strong financial flexibility.
These factors are partially offset by Arch's relatively short
operating history and significant proportion of casualty writings
that have not fully matured.
"We expect the preferred stock issuance to constitute a draw-down
on Arch's existing universal shelf and to be used to support
increased writings in the property business throughout 2006," said
Standard & Poor's credit analyst Laline Carvalho.
The group's capital adequacy accounting for the issuance and
moderate premium growth is expected to remain in the strong range
and supportive of the ratings. Standard & Poor's also expects
financial leverage to remain within the rating level, with pro-
forma debt plus preferreds, including the new issuance of Series B
preferred shares, at about 20% at March 31, 2006.
Standard & Poor's expects Arch's net exposures in property and
other short-tail lines of business in 2006 (particularly in Arch's
reinsurance division) to grow moderately, reflecting the
expectation of substantially improved market conditions in these
lines. The rating agency expects other lines of business to show
flat or modest growth for the year.
Assuming normal catastrophe losses, Standard & Poor's expects the
group's 2006 operating results to be very strong, with a combined
ratio of 90%-92% and an ROR of 12%-14%. Arch exceeded this
expectation in first-quarter 2006 with a combined ratio of 88.3%
and ROR of 17%; however, the rating agency believes first-quarter
results are not necessarily reflective of expected full-year 2006
results given the very low level of catastrophe losses incurred by
the industry in the first three months of the year.
Standard & Poor's expects the capital adequacy ratio to remain in
the strong range in 2006, reflecting anticipated strong earnings
for the year, partially offset by expected increased net exposures
in property and other short-tail lines. The rating agency expects
total debt plus preferred leverage to remain supportive of the
ratings at about 18%-20% over the medium term, with fixed-charge
coverage remaining very strong at more than 8x.
CALPINE CORP: Court Approves FTI Consulting as Accounting Advisors
------------------------------------------------------------------
The Official Committee of Unsecured Creditors of Calpine
Corporation and its debtor-affiliates obtained permission from the
U.S. Bankruptcy Court for the Southern District of New York to
employ FTI Consulting, Inc., as its accounting advisors, nunc pro
tunc to Jan. 17, 2006.
FTI Consulting is expected to:
a) assist the Committee in reviewing financial related
disclosures required by the Court, including the Schedules
of Assets and Liabilities, the Statement of Financial
Affairs and Monthly Operating Reports;
b) assist in the review of the Debtors' short-term cash
management procedures;
c) assist and advise the Committee with respect to the
Debtors' identification of core business assets and the
disposition of assets or liquidation of unprofitable
operations;
d) assist in a review of the Debtors' performance of
cost/benefit evaluations with respect to the affirmation
or rejection of various executory contracts and leases;
e) assist in the evaluation of operations and identification
of areas of potential cost savings, including overhead and
operating expense reductions and efficiency improvements;
f) review historical and current accounting practices,
including intercompany allocations, to assess their
reasonableness and to determine actual versus reported
financial performance;
g) assist in the review of the Debtors' corporate ownership
and capital structure as it impacts potential claims
various entities and creditor recoveries;
h) assist in the review of financial information distributed
by the Debtors to creditors and others, including cash
flow projections and budgets, cash receipts and
disbursement analysis, analysis of various asset and
liability accounts, and analysis of proposed transactions
for which Court approval is sought;
i) attend meetings and assistance in discussions with the
Debtors, potential investors, banks, other secured
lenders, the Committee, the U.S. Trustee, other parties-
in-interest and professionals, as requested;
j) assist in the review and preparation of information and
analysis necessary for the confirmation of a Plan;
k) assist in the evaluation and analysis of avoidance
actions, including fraudulent conveyances and preferential
transfers; and
l) render litigation advisory services with respect to
accounting and tax matters, along with expert witness
testimony on case related issues as required by the
Committee.
Michael Eisenband, senior managing director at FTI, discloses that
the Firm's professionals bill:
Professional Hourly Rate
------------ -----------
Senior Managing Directors $595 - $655
Directors/Managing Directors $435 - $590
Associates/Consultants $215 - $405
Paraprofessionals $95 - $168
Mr. Eisenband assures the Court that FTI does not represent any
other entity having an adverse interest in connection with the
Debtors' Chapter 11 cases.
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: Gets Final OK to Hire Lazard as Panel Fin'l Advisor
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approved the request of the Official Committee of Unsecured
Creditors of Calpine Corporation and its debtor-affiliates to
retain Lazard Freres & Co. LLC as its financial advisor, effective
as of Jan. 10, 2006, on a final basis.
As reported in the Troubled Company Reporter on April 11, 2006,
Lazard Freres is expected to:
(1) review and analyze the business, operations, liquidity
situation, assets and liabilities, financial condition and
prospects of the Debtors;
(2) review, analyze and report to the Committee with respect
to the Debtors' business plan;
(3) evaluate the Debtors' debt capacity in light of their
projected cash flows;
(4) review and provide an analysis of any proposed capital
structure for the Debtors;
(5) review and provide an analysis of any valuation of the
Debtors or their assets;
(6) advise and assist the Committee in evaluating any
potential DIP loan or other financing for the Debtors;
(7) review, analyze and advise the Committee with respect to
the existing debt structures of the Debtors, and
refinancing alternatives to existing secured debt;
(8) advise and assist the Committee in analyzing strategic
alternatives available to the Debtors;
(9) review and provide an analysis of all restructuring plans;
(10) review and provide an analysis of any new securities,
other consideration or other inducements to be offered or
issued under the Plan;
(11) assist the Committee and participate in negotiations with
the Debtors; and
(12) provide other financial advisory services, including
witness testimony, in connection with the Debtors' chapter
11 cases.
Lazard Freres will be paid according to this compensation
structure:
* Payment of a $225,000 advisory fee for each month of
Lazard's engagement. The Monthly Advisory Fee for January
2006 will be payable pro rated to provide credit for the
first 10 days of the month.
* If a restructuring is consummated, Lazard will be entitled
to receive a $5,000,000 transaction fee payable upon
consummation of the first transaction.
* Payment of a $5,000,000 contingent fee upon the
occurrence of a restructuring that is supported by the
Committee.
The Firm will seek reimbursement for reasonable out-of-pocket
expenses, and other fees and expenses. As part of the overall
compensation payable to the firm, the Committee has agreed to
arrange certain indemnification and contribution obligations.
David S. Kurtz, managing director at Lazard, assured the Court
that the firm is a "disinterested person" as the term is defined
in Section 101(14) of the Bankruptcy Code and does not hold or
represent any interest adverse to the Debtors' estates.
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)
COLLINS & AIKMAN: GECC Demands Payment of Alleged Lease Debts
-------------------------------------------------------------
General Electric Capital Corporation asks the U.S. Bankruptcy
Court for the Eastern District of Michigan to compel Collins &
Aikman Corporation and its debtor-affiliates to timely perform all
obligations first due at least 60 days after their bankruptcy
filing under their leases with GECC, including payment of rent,
taxes, attorneys' fees and costs.
The Debtors have filed a complaint against GECC to recharacterize
the Leases as financing agreements. GECC vigorously disputes that
the Leases are anything other than what they purport to be.
Erin L. Toomey, Esq., at Foley & Lardner LLP, in Detroit,
Michigan, points out that the Uniform Commercial Code and case
law presume that the Leases are true leases until the Debtors
prove otherwise.
According to Ms. Toomey, if GECC prevails in the Debtors'
complaint, there is a substantial risk the Debtors will lack the
financial wherewithal to pay the back rent and taxes.
GECC had sought permission to obtain immediate payment of $209,986
in postpetition rent under a lease with the Becker Group, Inc.,
and $290,552 of postpetition invoices for taxes under its leases
with Collins & Aikman Products Co. Subsequently, the Debtors paid
to GECC (a) $65,522 for unpaid postpetition rent due under the
Becker Lease, and (b) $253,797 for postpetition taxes due under
the Products Leases, for the period commencing 60 days after the
Petition Date and ending on October 25, 2005.
In November 2005, the parties entered into stipulation, which the
Court approved. The Debtors agreed to grant GECC an
administrative claim in satisfaction of unpaid amounts allegedly
owed.
At a hearing on March 9, 2006, the Debtors' counsel reneged on
their agreement to treat rent and taxes first due during the 60
days following the Petition Date as administrative expenses
without prior notice to GECC. The Debtors' counsel informed the
Court that they intend to attempt to recharacterize the Leases as
disguised financings.
Because GECC and the Debtors are likely to vigorously litigate
the recharacterization of the leases, Ms. Toomey says the final
resolution of the issue will not occur quickly. While the
adversary proceeding is being resolved, obligations under the
Leases will continue to accrue. Yearly rental obligations under
the Leases are approximately $13,814,061.
Ms. Toomey also asserts that GECC is entitled to attorneys' fees
under the Leases. Each of the Products Leases and the Becker
Lease provides for the recovery of attorneys' fees incurred by
GECC in connection with the enforcement of the terms of the
Products Leases and Becker Lease.
Debtors Object
Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in Chicago,
Illinois, tells the Court that the leases involving Collins &
Aikman Products Co. document the loans GECC advanced to the
Debtors to enable them to acquire a division of Textron, Inc.
The loans were structured as sale/leaseback transactions and GECC
paid nearly three times the value of the equipment purportedly
purchased, leaving itself seriously under-secured.
GECC had no concerns, however, because the equipment captured
under the Products Leases was essential to the Debtors' continued
operations and each Lease was cross-defaulted with the others.
According to Mr. Schrock, GECC knew that the Debtors could not
effectively operate without the "leased" equipment or replace the
equipment without dramatically disrupting, perhaps even
destroying, their businesses. Needless to say, GECC gained
tremendous leverage and advantage over the Debtors' other
creditors, Mr. Schrock says.
In any event, Mr. Schrock contends that the sole issue before the
Court is whether the term "lease" in Section 365(d)(10) means
"true lease." If so, Products has no obligations under Section
365(d)(10) of the Bankruptcy Code unless and until the Court
finds that the Leases are in fact "true leases."
Products' Complaint to challenge the nature of the Leases is
pending before the Court. Unless and until the Court rules in
favor of GECC in that proceeding, Products has no obligations
under Section 365(d)(10) and GECC's request must be denied, Mr.
Schrock says.
Mr. Schrock adds that Products is continuing its investigation of
the Becker Lease and continues to reserve its right to challenge
the character of that lease.
The Official Committee of Unsecured Creditors agrees with the
Debtors' arguments.
Headquartered in Troy, Michigan, Collins & Aikman Corporation
-- http://www.collinsaikman.com/-- is a global leader in cockpit
modules and automotive floor and acoustic systems and is a leading
supplier of instrument panels, automotive fabric, plastic-based
trim, and convertible top systems. The Company has a workforce of
approximately 23,000 and a network of more than 100 technical
centers, sales offices and manufacturing sites in 17 countries
throughout the world. The Company and its debtor-affiliates filed
for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case
No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP,
represents C&A in its restructuring. Lazard Freres & Co., LLC,
provides the Debtor with investment banking services. Michael S.
Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents
the Official Committee of Unsecured Creditors Committee. When the
Debtors filed for protection from their creditors, they listed
$3,196,700,000 in total assets and $2,856,600,000 in total debts.
(Collins & Aikman Bankruptcy News, Issue No. 30; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
COLLINS & AIKMAN: Must Pay Accrued Taxes Under the Fabric Leases
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Michigan
granted Fabric (DE) GP's request to compel Collins & Aikman
Corporation and its debtor-affiliates to pay all accrued and
unpaid taxes due postpetition under certain leases.
Fabric had asserted that $230,744 in postpetition taxes, excluding
interest and penalties, were outstanding under their leases with
the Debtor.
Judge Rhodes directs the Debtors to pay all of the real estate tax
obligations and any other tax obligations that are unpaid and that
arose and became due after the Petition Date under the lease
covering the non-residential real property located in:
(i) Manchester, Michigan;
(ii) Albemarle, North Carolina;
(iii) Farmville, North Carolina;
(iv) Old Fort, North Carolina;
(v) Holmesville, Ohio; and
(vi) Springfield, Tennessee.
The Debtors must remain current on all of their obligations under
the Lease pending assumption or rejection of the Lease.
Judge Rhodes overruled Debtors and the Committee's objections to
Fabric's request.
Headquartered in Troy, Michigan, Collins & Aikman Corporation
-- http://www.collinsaikman.com/-- is a global leader in cockpit
modules and automotive floor and acoustic systems and is a leading
supplier of instrument panels, automotive fabric, plastic-based
trim, and convertible top systems. The Company has a workforce of
approximately 23,000 and a network of more than 100 technical
centers, sales offices and manufacturing sites in 17 countries
throughout the world. The Company and its debtor-affiliates filed
for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case
No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP,
represents C&A in its restructuring. Lazard Freres & Co., LLC,
provides the Debtor with investment banking services. Michael S.
Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents
the Official Committee of Unsecured Creditors Committee. When the
Debtors filed for protection from their creditors, they listed
$3,196,700,000 in total assets and $2,856,600,000 in total debts.
(Collins & Aikman Bankruptcy News, Issue No. 30; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
COMMERCIAL MORTGAGE: Moody's Junks Rating on 2 Cert. Classes
------------------------------------------------------------
Moody's Investors Service upgraded the ratings of four classes,
downgraded the ratings of two classes and affirmed the ratings of
10 classes of Commercial Mortgage Asset Trust, Commercial Mortgage
Pass-Through Certificates, Series 1999-C2:
* Class A-1, $43,885,018, Fixed, affirmed at Aaa
* Class A-2, $319,833,000, Fixed, affirmed at Aaa
* Class A-3, $108,770,000, Fixed, affirmed at Aaa
* Class X, Notional, affirmed at Aaa
* Class B, $38,759,000, Fixed, affirmed at Aaa
* Class C, $38,759,000, Fixed, affirmed at Aaa
* Class D, $11,627,000, Fixed, upgraded to Aaa from Aa1
* Class E, $29,069,000, Fixed, upgraded to Aa3 from A1
* Class F, $15,503,000, Fixed, upgraded to A2 from A3
* Class G, $15,503,000, Fixed, upgraded to Baa2 from Baa3
* Class H, $15,503,000, Fixed, affirmed at Ba1
* Class J, $7,751,000, Fixed, affirmed at Ba2
* Class K, $11,627,000, Fixed, affirmed at Ba3
* Class L, $7,751,000, Fixed, affirmed at B1
* Class M, $7,751,000, Fixed, downgraded to Caa1 from B3
* Class N, $5,813,000, Fixed, downgraded to Ca from Caa2
As of the April 17, 2006 distribution date, the transaction's
aggregate principal balance has decreased by approximately 12.4%
to $679.2 million from $775.2 million at securitization.
The Certificates are collateralized by 78 loans ranging in size
from less than 1.0% to 5.9% of the pool, with the top ten loans
representing 47.2% of the pool. The pool includes a credit tenant
lease component, which represents 11.8% of the pool.
Twenty-nine loans, representing 31.7% of the pool, have defeased
and have been replaced with U.S. Government securities. The
defeased loans include three of the top 10 loans -- Marina
Pacifica Shopping Center, Luckman Plaza and 80 John Street.
Four loans have been liquidated from the pool resulting in an
aggregate realized loss of approximately $14.3 million. Currently
there are no loans in special servicing. Eight loans, representing
9.4% of the pool, are on the master servicer's watchlist.
Moody's was provided with year-end 2004 and partial or full year
2005 operating results for 100.0% and 90.2% of the pool,
respectively. Moody's weighted average loan to value ratio for
the conduit component is 79.9%, compared to 83.1% at Moody's last
full review in February 2005 and compared to 85.7% at
securitization.
The upgrade of Classes D, E, F and G is due to a high percentage
of defeased loans, stable overall pool performance and increased
credit support. The downgrade of Classes M and N is due to
realized losses of $14.3 million from the specially serviced loans
and LTV dispersion. Based on Moody's analysis, eight loans,
representing 15.4% of the pool, have a LTV in excess of 100.0%.
The top three loans represent 16.5% of the outstanding pool
balance. The largest loan is the Westin Denver Tabor Center Loan,
which is secured by a 430-room full-service hotel located in
downtown Denver, Colorado.
The hotel is part of an upscale mixed-use complex that includes a
570,000 square foot office building and an urban mall. The
hotel's performance has improved since Moody's last review.
RevPAR for the twelve month period ending December 31, 2005 was
$117.70, compared to $102.90 for 2004 and compared to $113.50 at
securitization. The loan sponsor is Host Marriott. Moody's LTV
is 59.9%, compared to 67.9% at last review.
The second largest loan is the 208 South LaSalle Street Loan,
which is secured by a 853,000 square foot Class B office building
located in downtown Chicago, Illinois. The property is 55.0%
occupied, compared to 87.0% at last review and compared to 95.0%
at securitization.
The decline in occupancy since last review is largely due to the
lease expiration of ABM AMRO, which vacated 29.0% of the building
at the expiration of its lease in December 2005. Chicago office
market conditions have weakened since securitization.
The estimated vacancy rate for the LaSalle Street office submarket
is approximately 15.0%, with an average market rent of $17.00 to
$23.00 per square foot on a gross basis. The borrower is a joint
venture between Prime Group Realty and Mansur Investment Partners.
Moody's LTV is 80.1%, compared to 69.8% at last review.
The third largest loan is the Henry W. Oliver Building Loan, which
is secured by a 472,000 square foot Class B office building
located in downtown Pittsburg, Pennsylvania. The building is
93.2% occupied, the same as at last review. The largest tenant is
Kirkpatrick & Lockhart Performance has declined since Moody's last
review due to decreased rental rates and increased expenses.
Moody's LTV is 84.6%, compared to 78.8% at last review.
The CTL component includes 8 loans secured by 22 properties under
bondable leases. The CTL exposures are ACCOR, Circuit City and
Cinemark USA.
The pool's collateral is a mix of U.S. Government securities,
office, retail, CTL, lodging, multifamily and industrial. The
collateral properties are located in 28 states plus Washington,
D.C. The highest state concentrations are Pennsylvania, Illinois,
Colorado, California and Ohio. All of the loans are fixed rate.
D56 INC: Moody's Holds Ba3 Rating on $175 Million Credit Facility
-----------------------------------------------------------------
Moody's Investors Service affirmed the ratings of Lenox Group,
Inc., however changed the ratings outlook to negative from stable
reflecting the agency's revised expectation that the company may
generate weaker free cash flow in 2006 than anticipated at initial
rating assignment in August 2005.
While recognizing the continued weakness in its wholesale gift and
specialty channel, higher than expected integration and
restructuring costs, and greater than anticipated working capital
and capital expenditure requirements, Moody's view of the
company's near term liquidity position remains adequate, as
reflected in today's affirmation of Lenox Group's Speculative
Grade Liquidity Rating of SGL-3.
The notching of the ratings for the existing senior credit
facility was affirmed as it continues to reflect the benefits and
limitations of the respective collateral packages.
Moody's affirmed the following ratings:
Lenox Group, Inc.
* B1 Corporate Family Rating;
D56, Inc.
* The Ba3 rating on the $175 million revolving credit facility
* The B1 rating on the $100 million term loan
* The SGL-3 Speculative Grade Liquidity Rating
* The ratings outlook changed to negative from stable.
Moody's previous rating action on Lenox Group was the August 4,
2005 first-time ratings assignment after the acquisition of Lenox
Inc. by Department 56, Inc., which has changed its name to Lenox
Group, Inc.
For further information, refer to Moody's Summary Opinion and
Speculative Grade Liquidity Assessment on Lenox Group.
Based in Eden Prarie, Minnesota, Lenox Group Inc. was formed on
September 1, 2005 when Department 56, Inc., a leading designer,
wholesaler and retailer of collectibles and giftware products
purchased Lenox, Inc., a leading designer, manufacturer and
marketer of fine china, dinnerware, silverware, crystal and
giftware products. The combined company has proforma revenue
exceeding $500 million.
DANA CORP: Sypris Wants to Apply Set Off Rights Under Supply Pacts
------------------------------------------------------------------
Sypris Technologies, Inc., asks the U.S. Bankruptcy Court for the
Southern District of New York to confirm its right to recoupment
and modify the automatic stay so it may set off the prepetition
balance owed to it by Dana Corporation under the Supply Agreements
against the Debts and any Rebates it owes to Dana.
Sypris supplies axle component parts to Dana pursuant to various
prepetition agreements. Dana provides the raw materials to Sypris
for use in the manufacturing of the Parts.
Sypris manufactures the Parts supplied to Dana in plants located
in Morganton, North Carolina; Marion, Ohio; and Toluca, Mexico.
Sypris purchased the Plants from Dana prepetition through separate
asset purchase agreements and supply agreements.
Under the terms of the Agreements, Sypris purchases its Materials
through Dana and then sells the Parts to Dana at prices that
include Dana's "standard" prices to Sypris for the Materials.
The Toluca Agreements were co-signed by Dana Heavy Axle Mexico
S.A. DE C.V., a wholly owned Mexican subsidiary of Dana. DHAM
has not sought bankruptcy protection and remains a party to, and
joint-obligor under, the terms of the Toluca Agreements. Dana is
also jointly liable with DHAM under the Agreements, both for the
sale of Materials and the purchase of Parts.
Dana owes in excess of $20,986,865 to Sypris for Parts delivered
prepetition, comprising of at least these amounts:
(a) $5,135,865 for Parts delivered to the Debtors prepetition
under the Toluca Supply Agreement;
(b) $6,453,000 for Parts delivered to the Debtors under the
Marion Supply Agreement; and
(c) $9,398,000 for parts delivered to the Debtors under the
Morganton Supply Agreement.
Sypris in turn owed Dana at least $11,733,696 for purchases of
Materials before the Debtors' chapter 11 filing:
(a) at least $5,870,963 for Materials delivered prepetition
under the Toluca Supply Agreement and
(b) at least $5,862,734 for Materials delivered under the
Marion and Morganton Supply Agreements.
Under the Morganton and Toluca Supply Agreements, rebates were to
be paid by Sypris to Dana in each calendar quarter under certain
circumstances. Sypris also asserts that the Rebates are subject
to a right of recoupment under applicable law against any unpaid
portion of the Claim.
According to Ian R. Winters, Esq., at Klestadt & Winters, LLP, in
New York, although the Bankruptcy Code does not contain a
recoupment provision, the common law doctrine of recoupment is
recognized as an exception to set-off in bankruptcy cases. Citing
In re Malinowski, 156 F.3d 131, 133 (2d. Cir. 1998), he relates
that a creditor's recoupment rights are a non-statutory, equitable
exception to the automatic stay and thus may be exercised without
court approval lifting the stay.
Sypris also has rights of set-off pursuant to Sections 362 and
553 of the Bankruptcy Code and Rule 4001 of the Federal Rules of
Bankruptcy Procedure, Mr. Winters asserts. Unlike recoupment,
the automatic stay must be lifted to permit the enforcement of a
creditor's set-off rights.
Mr. Winters contends that the conditions to set off stated in In
re Johnson, 216 B.R. 381, 385 (Bankr. N.D. Ill. 1997), exist:
(1) Sypris holds a 'claim' against the Dana that arose before
the Petition Date;
(2) Sypris owes a 'debt' to Dana that also arose prepetition;
(3) the claim and debt are 'mutual'; and
(4) the claim and debt are each valid and enforceable.
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: Court Allows Inventory Purchase from Mexican Affiliates
------------------------------------------------------------------
Dana Corporation and its debtor-affiliates obtained authority from
the U.S. Bankruptcy Court for the Southern District of New York to
purchase inventory and finished goods from certain of their
Mexican affiliates outside of the ordinary course of business so
as to effectuate the conversion of the Debtors' nondebtor
affiliate, Dana Heavy Axle Mexico S.A. de C.V. into a maquiladora.
After discussions with the Official Committee of Unsecured
Creditors and Sypris Technologies, Inc., the Debtors have
modified the proposed transactions in connection with the
conversion of the Debtors' nondebtor affiliate, Dana Heavy Axle
Mexico S.A. de C.V. into a maquiladora.
The revised structure contemplates that Sypris will be DHAM's
submaquila or will reflect other form of transaction -- as is
acceptable to the parties -- that achieves substantially the same
benefits to the Debtors' estates.
Any material modifications to Sypris' agreements with DHAM or the
Debtors are subject to the Creditors Committee's acceptance or
otherwise approved by Court order.
As reported in the Troubled Company Reporter on April 10, 2006,
prior to the Debtors' bankruptcy filing, DHAM was operated as an
independent corporate entity. As part of their restructuring
plans, the Dana Companies have determined that DHAM should be
converted into a maquiladora so as to minimize the U.S. and
Mexican taxes relating to DHAM's operations paid by the Dana
Companies. The conversion will also have the salutary effect of
moving accounts receivable and inventory ownership from DHAM to
Dana, which will increase the Debtors' borrowing base under their
DIP Credit Facility.
A maquiladora is a Mexican corporation that operates under a
program developed by the Mexican Secretariat of Commerce and
Industrial Development that permits it to:
(a) temporarily receive component parts and raw materials from
a foreign company without being charged any import duties;
(b) convert the component parts and raw materials into
finished goods;
(c) ship the finished goods to, or on behalf of, the foreign
company; and
(d) charge the foreign company for the value added in Mexico
plus a relatively modest government mandated mark-up.
This structure is virtually identical to the way in which other
multinational companies utilize the maquila program.
According to the Debtors, by converting DHAM to a maquiladora,
Dana will be able to save approximately $2,000,000 a year in
Mexican taxes. The conversion will also enable Dana to move
significant taxable income from Mexico to the United States, where
the Debtors have net operating losses that can be offset against
this income. From and after DHAM's conversion to a maquiladora,
DHAM will not be permitted to own any inventory or finished goods,
and all such inventory and finished goods will be owned by Dana or
one of the other Debtors. This inventory and finished goods will
increase the Debtors' borrowing base under the DIP Facility.
To accomplish DHAM's conversion into a maquiladora and to
minimize the taxes associated with the sale of DHAM's inventory,
the Dana Companies intend to implement these transactions:
(a) DHAM will sell all of its finished goods intended for
Mexican customers to Dana's wholly owned nondebtor
affiliate, Dana Comercialzadora S.A. de R.L. de C.V., a
Mexican corporation, in exchange for a note issued by SRL
for $892,242, which, consistent with past pricing
practices, is equal to DHAM's cost plus 6.6%;
(b) DHAM will sell all of its existing stock of finished
goods intended for export customers to Dana in exchange
for a note to be issued by Dana, for $2,525,200, which,
consistent with past pricing practices, is equal to
DHAM's cost plus 6.6%;
(c) DHAM will sell all of its raw material and work in process
inventory to Dana's wholly owned nondebtor affiliate, PTG
Mexico S. de R.L. de C.V., a Mexican corporation and
existing maquiladora, in exchange for a note issued by PTG
Mexico, for $18,347,755, which, consistent with existing
arm's-length pricing, is equal to DHAM's cost plus 0.25%;
(d) PTG Mexico will then sell all of the inventory it
purchased from DHAM to Dana at the cost at which it was
purchased from DHAM plus 0.05%, in exchange for Dana's
issuing a note in favor of PTG Mexico equal in value
to the PTG Note and a note representing the excess markup,
which are estimated to aggregate $18,439,494;
(e) PTG Mexico will repay the PTG Note by transferring the
Dana PTG Note to DHAM;
(f) DHAM will then dividend the SRL Note, the Dana DHAM Note
and the Dana PTG Note to Dana, who will subsequently
cancel the Dana DHAM Note and the Dana PTG Note; and
(g) PTG Mexico will then dividend the Dana Excess Note to
Dana, who will subsequently cancel the Dana Excess Note.
Completing the steps will allow DHAM to operate as a maquiladora
by placing the title with Dana of the inventory and the finished
goods destined for the U.S. market currently owned by DHAM, Ms.
Ball notes. At the end of the steps, Dana will hold:
(1) a note from SRL in the estimated amount of $892,242;
(2) title to the finished goods of DHAM destined for the U.S.
market; and
(3) title to the work in process and inventory of DHAM.
On a going forward basis, Dana or another Debtor will own the
inventory being processed, and the finished goods being produced,
by DHAM.
Because the Debtors anticipate that executing the transition of
accounting systems necessary for DHAM's conversion will require
several weeks, and they want the conversion to be finished by
June 1, 2006, they requested that the 10-day stay imposed by Rule
6004(h) of the Federal Rules of Bankruptcy Procedure be waived so
that the conversion process can commence immediately.
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: Gets Court OK to Hire Signature as Real Estate Advisor
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
gave Dana Corporation and its debtor-affiliates authority to
employ Signature Associates, LLC, as their real estate
consultants, effective April 5, 2006.
In addition to retention terms agreed by the Debtors and
Signature, the Court rules that:
1. Signature will seek the Court's approval to obtain any
payment on account of the indemnity provision in the
Engagement Letter;
2. Signature will not be entitled to any commission for a sale
of property that is sold as part of a going concern sale of
substantially all of the Debtors' assets;
3. before paying any commission to Signature for disposition
of property, the Debtors will certify to the Official
Committee of Unsecured Creditors that:
a. Signature was the primary party engaged in the
negotiation of the underlying transaction; and
b. no other party, other than one engaged and compensated
by Signature or a Cooperating Broker, as defined in the
Engagement Letter, will earn or receive a commission on
account of that transaction; and
4. the Debtors will certify to the Creditors Committee that
Signature was the primary agent for the Debtors with
respect to the negotiations before paying Signature:
a. commission in connection with any "net savings" on a
lease rent reduction; or
b. a Claim Reduction Fee.
As reported in the Troubled Company Reporter on April 28, 2006,
the Debtors expect Signature Associates to:
(i) evaluate whether and on what terms their 35 non-
residential real property leases should be assumed,
assumed and assigned or rejected under Section 365 of the
Bankruptcy Code; and
(ii) develop a strategy with respect to certain of their
properties.
According to Michael L. DeBacker, Esq., Dana's vice president,
general counsel and secretary, Signature is well qualified and
able to represent the Debtors in a cost-effective, efficient and
timely manner.
Signature has extensive knowledge and experience in providing
advice regarding the economics of nonresidential real property
lease agreements and other real property. Signature has provided
similar services to debtors in other bankruptcy cases.
Before their chapter 11 filing, Signature provided the Debtors
real estate services in accordance with the terms of a Real
Estate Services Agreement, dated Oct. 11, 2004.
Pursuant to a Consulting and Advisory Services Agreement, dated
April 5, 2006, Signature agrees to conduct (x) a valuation of
each of the Leases and (y) additional data management and
financial analysis of the Properties.
In addition, Signature agrees to:
-- meet with the Debtors and their advisors to ascertain
the Debtors' goals, objectives and financial parameters
with respect to the potential disposition of their
properties;
-- develop and implement a marketing strategy for the
Properties and the Leases in coordination with the
Debtors' restructuring plans;
-- negotiate agreements for the sale or assignment of some
or all of the Properties;
-- negotiate agreements for the acquisition and leasing of
property;
-- negotiate agreements with landlords under the Leases;
-- report periodically to the Debtors and their other
advisors regarding the status of negotiations;
-- participate in weekly conference calls or other periodic
calls and meetings with the Debtors and their other
advisors to discuss disposition of the Properties;
-- provide other services as requested by the Debtors from
time to time; and
-- provide support documentation and testimony as is
necessary to obtain Court approval of the transactions
contemplated by the Engagement Letter.
The Debtors propose to pay Signature for its services under these
terms:
A. Valuation Services
Signature will be paid $3,000 per Property valuated. The
firm will apply the $73,000 held in escrow under the terms
of the Original Engagement Letter towards the fees and
expenses for additional valuation services. The Debtors
will pay the market fee, capped at $25,000, for MAI
appraisals coordinated by the firm.
B. Disposition Services
* Signature will earn a Commission Fee, based on the total
amount of cash received by the Debtors for sale of the
Properties, in accordance with this sliding scale
structure:
Gross Proceeds Per Property Fee Percentage
--------------------------- --------------
$0 to $10 million 3.75%
$10 to $30 million 3.0%
$30 million and over 2.0%
* Upon obtaining any rent reduction under any Lease that is
not rejected under Section 365, Signature will earn a
commission equal to:
-- 5.0% of the Net Savings up to $500,000;
-- 4.0% of the Net Savings from $500,001 to $1,000,000;
and
-- 3.0% of Net Savings above $1,000,000.
In no event will Signature's fee for any rent reduction
transaction be less than $5,000.
* For reductions of any landlord claim under Section
502(b)(6) with respect to any Lease rejected, Signature
will earn a fee equal to the greater of (a) the Fixed
Claim Reduction Fee and (b) the cash equivalent, as
determined by the Debtors, of a fee equal to 10.0% of the
Claim Reduction Distribution Amount.
The "Fixed Claim Reduction Fee" will be between $1,000 to
$5,000 per Lease, depending on the Claim Reduction Amount,
the amount by which the landlord's claim under Section
502(b)(6) is so reduced minus the net realizable value to
the Debtors of any equipment abandoned to the landlord in
connection with a Claim Reduction Agreement:
Claim Reduction Amount Claim Reduction Fee
---------------------- -------------------
less than $100,000 $1,000 per Lease
$100,000 to $500,000 $3,000 per Lease
$500,001 to $1,000,000 $4,000 per Lease
greater than $1,000,000 $5,000 per Lease
The "Claim Reduction Distribution Amount" will be equal to
the value of the pro rata distribution afforded to a
general unsecured creditor holding a claim in an amount
equal to the Claim Reduction Amount under a confirmed plan
of reorganization for the Debtor lessee.
* Upon execution of a lease for a Property where one of the
Debtors acts as landlord, the Debtors will pay Signature
6% of the aggregate value of lease commitment over the
first five years of a lease term and (b) 3% of the
aggregate value of the lease commitment over the second
five years of a lease term.
If a Cooperating Broker is owed a commission in connection
with the execution of the lease, Signature will pay the
commission owed to the Cooperating Broker up to 50% of the
of the Lease Commission Fee. If the fee payable to the
Broker exceeds 50% of the aggregate Lease Commission Fee,
then the Debtors will directly pay the Broker the
additional fee.
C. Acquisition and Leasing of Properties
The Debtors will not be responsible for the payment of any
expenses, fees or other compensation, other than the
Reimbursable Expenses, to Signature for its assistance in:
* the acquisition of new Properties;
* the leasing of new Properties; and
* the renewal or extension of any Lease.
D. Expert Witness Fees
The Debtors will pay the hourly fees for each representative
of Signature that may be requested to testify to the Court
for purposes of seeking Court approval of a renegotiation of
a Lease, or a disposition transaction for any Property:
Professional Hourly Fee
------------ ----------
John Gordy $450
John Salsberry $350
Dave Miller $350
E. Expenses
Signature will be entitled to reimbursement for all
out-of-pocket expenses, including, without limitation,
reasonable expenses of coach travel and transportation and
the cost of out-of-town travel arrangements.
The parties will indemnify each other for any and all losses,
claims, damages, liabilities and expenses incurred in connection
with the services provided.
John Gordy, Signature's senior vice president, attested that the
firm has in the past and will likely in the future be working
with or against professionals involved in the Debtors' cases in
matters unrelated to the Debtors or their Chapter 11 cases.
Mr. Gordy, however, assured the Court that Signature (a) does not
hold or represent any interest adverse to the Debtors or their
estates and (b) is a "disinterested person" as that term is
defined in 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)
DB MASTER: S&P Places BB Rating on $100 Million Class M-1 Notes
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to DB Master Finance LLC's $1.7 billion notes series
2006-1.
The preliminary ratings are based on:
-- the strength of the Dunkin' Donuts and Baskin-Robbins
brands and their perceived ability to survive a bankruptcy
of Dunkin' Brands Inc. and, provided adequate servicing
remains in place, their resulting capacity to continue to
generate sufficient cash flows in that circumstance;
-- the business risk profile of DBI;
-- an analysis of the cash flows supporting the notes; and
-- a sound legal structure.
The notes will be repaid primarily from franchise royalty payments
by the Dunkin' Donuts, Baskin-Robbins, and Togo's Eateries
franchisees, rent on facilities leased to franchisees, and the
licensing to third parties of the Baskin-Robbins intellectual
property for the production and sale of ice cream.
The class A-1 and A-2 notes benefit from an irrevocable and
unconditional surety policy provided by Ambac Assurance Corp.
('AAA' insurer financial enhancement rating). The class M-1 notes
are subordinated to the class A-1 and A-2 notes and do not benefit
from a surety policy. The class A-1 and A-2 notes received
investment-grade shadow ratings.
Prelimnary Ratings Assigned:
DB Master Finance LLC:
Class Rating Amount
----- ------ ------
A-1* AAA $100,000,000
A-2* AAA $1,500,000,000
M-1 BB $100,000,000
* The class A-1 and A-2 notes are covered by a surety policy from
Ambac.
DELPHI CORP: Amends Annual Report for Year Ended Dec. 31, 2004
--------------------------------------------------------------
Delphi Corporation filed an amendment to its Annual Report on
Form 10-K for the year ended Dec. 31, 2004. The Original Report
was filed with the Securities and Exchange Commission on
June 30, 2005.
The Amendment reflects a decrease of $69,000,000 in the amount of
previously reported net income for the period ending
Dec. 31, 2000. The change is to correct an error made in 2000,
whereby an increase in Delphi's warranty reserves of $112,000,000
-- $69,000,000 after-tax -- during 2000 was accounted for as a
reduction to additional paid-in capital rather than additional
expense.
In periods beginning with the opening balances on Jan. 1, 2001,
the impact of this correction is to increase additional paid-in
capital and reduce retained earnings by $69,000,000, resulting in
no change in total stockholders' (deficit) equity. This
reclassification will be reflected in Delphi's Annual Report on
Form 10-K for the year-ended Dec. 31, 2005, to be filed with the
SEC.
A full-text copy of Amendment No. 1 to the Form 10-K is available
for free at http://researcharchives.com/t/s?951
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. (Delphi Bankruptcy News, Issue No. 24; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
DELPHI CORP: Cherokee Fails to Hasten DAS' Lease Decision Deadline
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
denied Cherokee North Kansas City, LLC's request to compel Delphi
Corporation and its debtor-affiliates to assume or reject their
lease with Cherokee.
Cherokee leases an industrial and warehouse facility located at
144 West 23rd St., North Kansas City, Missouri to three tenants,
including Debtor Delphi Automotive Systems, LLC.
DAS LLC leases 125,566 rentable square feet of industrial and
warehouse space at the Building pursuant to a Lease dated July 2,
2002, as amended. The Lease expires in May 2009, with two
additional five-year options for the Debtors to rent at the
prevailing market rate. Monthly rent for the Premises is $43,327
and increases annually by approximately $900 per month. Delphi
Corporation guarantees DAS LLC's obligations under the Lease.
Pursuant to Section 365(d)(2) of the Bankruptcy Code and Rule
6006 of the Federal Rules of Bankruptcy Procedure, Cherokee asked
the Court to compel the Debtors to either assume or reject the
Lease on or before July 9, 2006.
The Debtors argued that Cherokee failed to show that cause exists
for shortening the lease decision deadline. The Debtors also
noted that Cherokee failed to raise its objections in a timely
manner.
In response, Cherokee asserted that the Debtors ignore the obvious
fact that prompt rejection of the Cherokee Lease would reduce
uncertainty by allow it to begin to look for a new tenant for the
premises immediately.
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. (Delphi Bankruptcy News, Issue No. 24; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
DESARROLLO ECONOMICO: Voluntary Chapter 11 Case Summary
-------------------------------------------------------
Debtor: Corporacion Para El Desarrollo Economico De Ciales
P.O. Box 1404
Ciales, Puerto Rico 00638
Bankruptcy Case No.: 06-01518
Chapter 11 Petition Date: May 16, 2006
Court: District of Puerto Rico (Old San Juan)
Debtor's Counsel: Arturo Gonzalez Martin, Esq.
P.O. Box 193377
San Juan, Puerto Rico 00919-3377
Tel: (787) 653-0224
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $500,000 to $1 Million
The Debtor did not file the list of its 20 largest unsecured
creditors.
DLJ MORTGAGE: Moody's Reviews Low-B Ratings and May Downgrade
-------------------------------------------------------------
Moody's Investors Service placed on review for possible downgrade
three certificates from two transactions, issued by DLJ Mortgage
Acceptance Corp.
The class B-2 and B-3 from Series 1996-QJ, and the class B-1 from
Series 1996-QB are being placed on review for downgrade based on
the weak performance of the underlying loans with historical and
expected cumulative losses exceeding original expectations. The
B-3 certificate from the 1996-QJ has already assumed some
writedowns.
Complete rating actions:
Issuer: DLJ Mortgage Acceptance Corporation
Review for Possible Downgrade
* Series 1996-QJ; Class B-2, current rating Baa3, under review
for possible downgrade;
* Series 1996-QJ; Class B-3, current rating B3, under review
for possible downgrade;
* Series 1996-QB; Class B-1, current rating B3, under review
for possible downgrade;
DOCTORS HOSPITAL: Court Confirms Second Amended Chapter 11 Plan
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas
confirmed the Second Amended Plan of Reorganization filed by
Doctors Hospital 1997 LP, dba Doctors Hospital Parkway-Tidwell,
in its chapter 11 case. The Court determined that the plan
satisfies the 13 requirements for confirmation pursuant to
Section 1129(a) of the Bankruptcy Code.
On and after the effective date of the plan, the Reorganized
Debtor will continue to operate its business. Funding for the
reorganized Debtor's continuing operations of the hospitals will
come from an exit financing facility.
The initial advance under the Exit Financing facility will be used
to repay a portion of GE Financial Healthcare Services'
postpetition claim amounting to around $4,000,000.
The remaining portion of the GE Financial's postpetition claim,
amounting to $22,340,000, will be restructured and repaid over
time. It is secured by a lien on the Reorganized Debtor's assets.
Other secured claims, at the Debtor's option:
(a) will be paid in six years with interest at a rate of 5% per
annum;
(b) will have a reconveyance of its collateral;
(c) gets other treatment that leaves unaltered the legal,
equitable and contractual rights to which the secured
claimholder is entitled; or
(d) other distribution as necessary to satisfy the requirements
of the Bankruptcy Code.
On the effective date, the Creditors' Trust will be created. The
Creditors' Trustee will administer the Creditors' Trust and may
use, acquire and dispose of property subject to the limitations
provided for in a Trust Agreement. The Creditors' Trustee will
make all disbursements to the holders of allowed general unsecured
claims and will pursue avoidance actions for the benefit of the
holders of Allowed General Unsecured Claims.
Holders of general unsecured claims will receive a pro rata share
of distributions by the Creditors' Trustee from the Creditors'
Trust.
Holders of subordinated claims and equity interests get nothing.
A full-text copy of the Second Amended Disclosure Statement
explaining the Second Amended Plan of Reorganization is available
for a fee at:
http://www.researcharchives.com/bin/download?id=060517205321
Headquartered in Houston, Texas, Doctors Hospital 1997 LP, dba
Doctors Hospital Parkway-Tidwell, operates a 101-bed hospital
located in Tidwell, Houston, and a 152-bed hospital located in
West Parker Road, Houston. The Company filed for chapter 11
protection on April 6, 2005 (Bankr. S.D. Tex. Case No. 05-35291).
James M. Vaughn, Esq., at Porter & Hedges, L.L.P., represents the
Debtor in its restructuring efforts. Robert S. Blanc, Esq., at
Gardere Wynne Sewell LLP represents the Official Committee of
Unsecured Creditors. When the Debtor filed for protection from
its creditors, it listed total assets of $41,643,252 and total
debts of $66,306,939.
EASTMAN KODAK: Fitch Downgrades Senior Unsecured Rating to B-
-------------------------------------------------------------
Fitch downgrades Eastman Kodak Company's credit ratings as:
-- Issuer Default Rating to 'B' from 'BB-'
-- Senior unsecured to 'B-/RR5' from 'B+'
-- Secured credit facilities to 'BB/RR1' from 'BB+'
The Rating Outlook is Negative.
Approximately $4.7 billion of debt is affected by Fitch's action,
including $2.7 billion of secured credit facilities (only $1.2
billion drawn at March 31, 2006).
The rating downgrades reflect Kodak's weaker-than-expected first
quarter earnings and higher cash usage to support operations,
including an unexpected 8% decline in digital revenues year-over-
year excluding acquisitions based on Fitch's estimates and
declining operating profit margins in all segments except for the
Graphic Communications Group.
Declines in revenue and profitability were due primarily to:
* rising commodity costs,
* pricing pressure for thermal media, and
* excess retail channel inventory of digital cameras.
The ratings also incorporate Kodak's pressured financial
flexibility and liquidity and the potential for near-term business
disruptions as a result of its ongoing restructuring efforts
driven by the accelerated erosion of Kodak's traditional film
business as well as the company's decision to move to an indirect
distribution model for all of its business segments outside of
Kodak's top 20 countries in an effort to reduce costs.
Fitch believes the acquisitions of Creo Inc. and the remaining 50%
interest in Kodak Polychrome Graphics within the GCG segment in
the second quarter of 2005 obscure the underlying deterioration in
Kodak's remaining operating segments, which Fitch believes could
jeopardize the company's ability to achieve its 2006 forecast.
In the absence of revenue growth via acquisitions, Fitch remains
concerned about the company's ability to generate organic revenue
growth considering:
* the weak digital revenue performance in the first quarter;
* lackluster health imaging outlook; and
* on-going declines of the traditional film business due to
digital substitution.
As a result, Fitch believes y/y revenue growth could potentially
turn negative in the third quarter of 2006.
The Negative Rating Outlook reflects Fitch's expectations for
continued operating and financial pressures and the growing
uncertainty regarding Kodak's future business model. The company
has announced that it is exploring strategic alternatives for the
Health Group segment, which could result in the potential loss of
a more stable cash flow business due to the more insulated nature
of the healthcare business in general to economic fluctuations
relative to the company's remaining segments. The company has not
clarified whether strategic alternatives could result in a sale of
the Health Group segment in its entirety or individual businesses
within the segment.
Fitch estimates the Health Group generated $2.6 billion of revenue
for the latest twelve months ended March 31, 2006, and operating
EBITDA of approximately $500 million, or approximately 30% of
Kodak's total operating EBITDA in the period. The decision to
seek strategic alternatives for the Health Group follows two
consecutive quarters of declining y/y digital health revenue,
accelerating declines of traditional health revenue and sharply
escalating costs of silver, all of which have significantly
pressured health profits.
Kodak's senior secured credit agreement requires net proceeds from
asset sales in excess of $75 million in any year to prepay loans
under the secured credit facility, applied first to the longest
maturities of the term loan until the term loan is repaid in full,
then to any outstanding revolving credit advances, except for
proceeds used within 12 months for reinvestments in the business
of up to $300 million, proceeds from sales of assets used in the
non-digital business of Kodak to pay cash restructuring charges
within 12 months from the date of sale of the assets, or proceeds
from sales of inventory in the ordinary course of business.
Kodak's liquidity and financial flexibility continue to be
pressured with cash declining to $1.1 billion as of March 31,
2006, compared with $1.7 billion at the end of fiscal 2005.
Although Kodak has historically experienced strong seasonality in
its cash flow -- and the first quarter is typically the weakest
quarter -- free cash flow (cash flow from operations minus capital
spending minus dividends) in the first quarter was lower than
Fitch expected at negative $574 million, due to increased working
capital and lower profitability, compared with negative $322
million in the corresponding year-ago quarter.
Further liquidity is provided by a secured credit facility,
consisting of a nearly undrawn $1 billion revolving credit
facility due October 2010 ($888 million net of letters of credit
as of March 31, 2006) and a committed $500 million delayed-draw
term B-2 loan that is available through June 15, 2006.
Based on Dec. 2005 results, Fitch believed the company planned to
utilize FCF and existing cash to pay down $500 million of maturing
debt without drawing upon the delayed-draw term loan. However, in
May 2006 Kodak indicated that it will likely draw upon this $500
million term facility to refinance the $500 million of maturing
debt prior to June 15, 2006, in order to maintain a minimum cash
balance of $1 billion.
Although total debt will remain unchanged, the new term loan
increases the amount of secured debt in the capital structure,
carries a variable interest rate and a slightly higher rate of
interest based on current LIBOR (Fitch estimates $6 million
incremental interest annually).
In addition, the secured credit agreement includes a future
uncommitted term loan of up to $500 million. Financial covenants
for the credit agreement include consolidated interest coverage of
3x and consolidated leverage ranging from 4.5x at March 31, 2006,
to 3.5x at Dec. 31, 2006, based on a rolling four consecutive
quarter basis.
As of March 31, 2006, Kodak's interest coverage was 5.8x and
leverage was 2.8x, as defined in the bank facility agreement.
Fitch believes the company's near-term debt maturities are
manageable. In addition to the $500 million of debt that will be
refinanced in June 2006 with the delayed-draw term loan, upcoming
debt maturities consist primarily of $200 million due in the third
quarter of 2006 relating to the KPG acquisition. The next
material maturity is not until 2008, when $274 million of debt
matures.
ENRON CORP: Bear Sterns Holds Two Multi-Million Unsecured Claims
----------------------------------------------------------------
Williams Power Company, Inc., formerly known as Williams Energy
Marketing and Trading Company -- through a predecessor, Williams
Energy Derivatives Trading Company -- and Enron North America
Corp. -- through a predecessor, Enron Risk Management Services
Corp. -- entered into a prepetition ISDA Master Agreement dated
June 18, 1993.
Enron Corp. guaranteed ENA's obligations to Williams under the
ISDA through a credit support guaranty dated effective as of
January 20, 1994. Enron periodically executed amendments to the
guaranty agreement, including amendments on January 28, 2000,
September 28, 2000, April 17, 2001 and August 2, 2001.
On March 28, 2002, Williams irrevocably sold, transferred and
assigned to Bear, Stearns & Co. Inc., its successors and assigns,
all right, title and interest in $100,000,000 of its net claim
against ENA and its affiliates, including a claim against Enron
under the guaranty agreement.
Bear Stearns subsequently transferred interests in the Original
Williams Claim to Satellite Senior Income Fund, Redwood Master
Fund Ltd., Baupost Group Securities LLC, Citadel Equity Fund Ltd.
and Fernwood Associates, L.P. -- the Claimholders.
On October 11, 2002, Bear Stearns for its own account and as
agent for the Claimholders, filed Claim No. 12113 against Enron
for $100,000,000, based on Enron's alleged obligations under the
guaranty agreement.
On October 11, 2002, Bear Stearns filed Claim No. 12114 against
ENA for $100,000,000, based on the alleged obligations of ENA
under the ISDA Agreement.
Following negotiations, the parties entered into a stipulation
agreement to resolve their dispute.
The terms of the Court-approved Stipulation are:
(1) Claim No. 12113 is allowed as a prepetition, unsecured
guaranty claim against Enron in Plan Class 185 for
$59,500,000;
(2) Claim No. 12114 is allowed as a prepetition, general
unsecured against ENA in Plan Class 5 for $100,000,000;
(3) the parties will mutually release each other from all
claims or rights related to the agreements; and
(4) all scheduled liabilities related to Claims Nos. 12113
and 12114 as set forth in the liability schedules filed
with the Court, including Scheduled Liability No. 10283779,
are disallowed and expunged in their entirety.
About Enron
Headquartered in Houston, Texas, Enron Corporation filed for
chapter 11 protection on December 2, 2001 (Bankr. S.D.N.Y. Case
No. 01-16033) following controversy over accounting procedures,
which caused Enron's stock price and credit rating to drop
sharply. Judge Gonzalez confirmed the Company's Modified Fifth
Amended Plan on July 15, 2004, and numerous appeals followed. The
Debtors' confirmed chapter 11 Plan took effect on Nov. 17, 2004.
Martin J. Bienenstock, Esq., and Brian S. Rosen, Esq., at Weil,
Gotshal & Manges, LLP, represent the Debtors in their
restructuring efforts. Luc A. Despins, Esq., Matthew Scott Barr,
Esq., and Paul D. Malek, Esq., at Milbank, Tweed, Hadley & McCloy,
LLP, represent the Official Committee of Unsecured Creditors.
(Enron Bankruptcy News, Issue No. 171; Bankruptcy Creditors'
Service, Inc., 15/945-7000)
ENTERGY NEW ORLEANS: Panel Balks at Entergy Corp.'s Stipulation
---------------------------------------------------------------
As reported in the Troubled Company Reporter on May 9, 2006,
Entergy Corporation, on behalf of its affiliates, asserted claims
against Entergy New Orleans, Inc., pursuant to various contractual
relationships between them.
To resolve their dispute, the parties stipulated that:
(a) Entergy Corp. and its affiliates may file one or more
joint Proofs of Claim, which will include the alleged
claims possessed by Entergy Corp. and its affiliates;
(b) Entergy Corp. and its affiliates need not attach
supporting documents to the Master Proofs of Claim, as
long as the Master Proofs of Claim includes a list of the
supporting documents and other agreements with reasonable
specificity so that the nature of the claim may be
ascertained; and
(c) on the request of the Debtor, the Official Committee of
Unsecured Creditors, or any other party-in-interest, the
listed documents will be provided within 10 days after the
request.
Committee Seeks Reconsideration
The Official Committee of Unsecured Creditors objects to the
Stipulation because it was filed a day before the Bar Date, and it
clearly benefits Entergy Corporation and its affiliates, excluding
Entergy New Orleans, Inc.
The Committee notes that the Stipulation permits Entergy Corp. and
its affiliates to avoid certain requirements of, and normal
disclosures in, the proofs of claim to be filed in ENOI's Chapter
11 case.
Specifically, the Stipulation allows each Entergy Entity to file
joint proofs of claim, and allows each Entity to avoid the
attachment of "supporting documents" to each master Proof of
Claim.
The Committee also informs the Court that it was not consulted nor
notified about the filing of the Stipulation.
Given that the Committee represents ENOI's unsecured creditors, it
is its duty to ascertain the number and dollar amounts of
prepetition unsecured claims. Philip K. Jones, Esq., at Liskow &
Lewis APLC, in New Orleans, Louisiana, relates that the Committee
was extremely surprised that ENOI did not see fit to discuss the
Stipulation, its purpose or its necessity prior to the filing of
the Stipulation.
Moreover, Mr. Jones asserts that the Stipulation severely
prejudices the Committee in its analysis of any Entergy Entity's
claim against ENOI, and would hinder the Committee's ability to
develop its own plan of reorganization.
The Stipulation would require the Committee to engage in
comprehensive and time-consuming discovery, a process that the
Committee will not have to undertake for any other proof filed by
any other creditor, Mr. Jones adds.
Accordingly, the Committee asks the Court to amend the Stipulation
Order to mandate, among other things:
(a) that Entergy Corp. and ENOI's affiliates must file amended
proofs of claim, within 15 days, and failing that, that
their original claims, filed from April 17 to April 19,
2006, be deemed disallowed;
(b) that each amended proof of claim pertains to one or more
claims of one Entergy entity, although each Entergy
Entity may file multiple amended proofs if it asserts
multiple claims;
(c) that each amended proof of claim clearly include the exact
dollar amount of:
-- each Entergy Entity's prepetition claim,
-- each postpetition payment made by ENOI to an
affiliate claim,
-- each credit taken by an Entergy Entity with respect
to an affiliate claim, and
-- each setoff, recoupment or counterclaim taken by any
Entergy Entity in payment of an affiliate claim; and
(d) that each amended proof of claim must include all
documentation evidencing:
-- the basis for, and amounts of, the Affiliate Claim of
the Entergy Entity,
-- ENOI's postpetition payments on the Affiliate Claim,
and
-- the Entergy Entity's right to claim setoff,
recoupment or counterclaim in payment or satisfaction
of, or with respect to, the Affiliate Claim.
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)
EUGENE SCIENCE: SF Partnership Raises Going Concern Doubt
---------------------------------------------------------
SF Partnership, LLP, Chartered Accountants, in Toronto, Canada,
raised substantial doubt about Eugene Science, Inc., fka Ezomm
Enterprises, 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 operation in a
country whose economy is currently unstable -- South Korea.
The Company reported a $6,343,733 net loss on $886,438 of revenues
for the year ended Dec. 31, 2005.
At Dec. 31, 2005, the Company's balance sheet showed $11,329,962
in total assets and $21,030,630 in total liabilities, resulting in
a $9,700,668 in stockholders' deficit.
The Company's Dec. 31 balance sheet also showed strained liquidity
with $1,330,987 in total current assets available to pay
$19,088,495 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 http://ResearchArchives.com/t/s?94f
Based in Kyonggi Do, South Korea, Eugene Science, Inc., fka Ezomm
Enterprises, Inc. (OTCBB: EUSI) is a global biotechnology company
that develops, manufactures and markets nutraceuticals, or
functional foods that offer health-promoting advantages beyond
that of nutrition. Plant sterols are the Company's primary
products, which include CZTM Series of food additives and
CholZeroTM branded beverages and capsules. In June 2005, the
Company received regulatory approval for certain health claims
associated with the Company's products from government agencies in
the Republic of Korea.
EXIDE TECHNOLOGIES: Closing Shreveport Facility on June 22
----------------------------------------------------------
Exide Technologies will close its Shreveport, Louisiana lead-acid
battery manufacturing facility, effective June 22, 2006.
The facility manufactures automotive batteries for Ford Motor
Company, among other aftermarket customers. Battery production
from the Shreveport facility will be absorbed by other Exide
locations. This production move is anticipated to deliver
significant operational manufacturing and logistical efficiencies
while maintaining support and service to a major customer.
More than 200 employees at the Shreveport location are affected by
the shutdown.
"Our Shreveport location has been operational since 1968, and the
decision to close it was extremely difficult," said Gordon A.
Ulsh, President and Chief Executive Officer of Exide Technologies.
"By no means is the closure a reflection of our employees' efforts
or commitment to Exide. We regret the impact that this will have
on all the people who are affected by this action and thank all of
our Shreveport employees for their many years of service."
The closure is expected to assist Exide in better addressing its
challenges in the marketplace.
About Exide
Headquartered in Princeton, New Jersey, Exide Technologies
(NASDAQ: XIDE) -- http://www.exide.com/-- is the worldwide
leading manufacturer and distributor of lead acid batteries and
other related electrical energy storage products. The Company
filed for chapter 11 protection on Apr. 14, 2002 (Bankr. Del. Case
No. 02-11125). Matthew N. Kleiman, Esq., and Kirk A. Kennedy,
Esq., at Kirkland & Ellis, represented the Debtors in their
successful restructuring. Exide's confirmed chapter 11 Plan took
effect on May 5, 2004. On April 14, 2002, the Debtors listed
$2,073,238,000 in assets and $2,524,448,000 in debts. (Exide
Bankruptcy News, Issue No. 84; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
* * *
As reported in the Troubled Company Reporter on Feb. 6, 2006,
Standard & Poor's Ratings Services lowered its corporate credit
rating on Exide Technologies to 'CCC' from 'CCC+'. S&P also
lowered Exide's senior secured rating on its first-lien credit
facility to 'CCC' from 'B-' and second-lien notes to 'CC' from
'CCC'.
F LAMARR: Case Summary & 19 Largest Unsecured Creditors
-------------------------------------------------------
Debtor: F LaMarr Heyrend
8150 West Emerald, Suite 150
Boise, Idaho 83704
Bankruptcy Case No.: 06-00551
Chapter 11 Petition Date: May 16, 2006
Court: District of Idaho (Boise)
Debtor's Counsel: D. Blair Clark, Esq.
Ringert Clark Chartered
P.O. Box 2773
Boise, Idaho 83701-2773
Tel: (208) 342-4591
Fax: (208) 342-4657
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 19 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
John O. & June H. Fitzgerald Debtor is 50% $600,000
10276 West Burntwood owner with
Boise, ID 83704 creditor (sic)
Larry Gray Personal Loan $55,000
533 Willow Trace Drive
Eagle, ID 83616
Violet Williams Personal Loan $32,000
c/o Linda Ladwig
707 Oakland Avenue
Austin, TX 78703
U.S. Bank Credit Card $21,746
Ada County Treasurer Property Tax $16,594
William C. Friedman Personal Loan $10,000
Internal Revenue Service 3rd Quarter 941 Taxes $8,692
MBNA America Credit Card $7,000
Idaho State Tax Commission Withholding Taxes $6,594
Pike & Smith, P.A. Attorney Fees $4,331
Boise County Treasurer Property Tax $4,121
Lawai Beach Resort Condominium Dues $3,017
Bank of America Credit Card $2,738
Jim Geddings, CPA Accounting Expense $2,497
Quality Heating & Cooling Business Expense $2,367
IdaComm Business Expense $2,291
Ace Consulting Business Expense $1,520
Dee Burr $1,500
McCleod USA Collection $1,357
FALCONBRIDGE LTD: Gets Xstrata Cash Offer for CDN$16.1 Billion
--------------------------------------------------------------
Falconbridge Limited reported that Xstrata plc offered to acquire
the Company's outstanding common shares not already owned by the
Xstrata group for CDN$52.50 in cash per Falconbridge share or
CDN$16.1 billion in total (approximately $14.6 billion) valuing
the total common share capital of Falconbridge at approximately
CDN$20 billion (approximately $18.1 billion). The Offer will be
open until Friday, July 7, 2006. The offer and offering circular
is expected to be filed on May 18, 2006, and mailed to
Falconbridge shareholders.
The combination of Xstrata and Falconbridge (Enlarged Group) will
create the world's fifth largest diversified mining company, with
leading market positions in copper, nickel, thermal and
metallurgical coal, zinc, together with ferroalloys and a world-
class pipeline of growth projects. Xstrata believes there is a
compelling strategic rationale for and substantial benefits to be
gained from the combination of the two businesses and that the
transaction is in the best interests of both Xstrata and
Falconbridge and their respective shareholders, customers,
employees and other stakeholders.
Xstrata's offer price represents a premium of:
-- 12.3% over the value of the revised offer reported by Inco
Limited in its competing offer for Falconbridge, based upon
the May 5 closing price on the TSX of Inco shares, the last
trading day prior to the announcement of the proposed offer
by Teck Cominco Limited to acquire Inco, and assuming full
proration of the share and cash consideration in accordance
with the terms of Inco's offer; and
-- 11.2% over the closing price of CDN$47.23 per Falconbridge
share on May 5, 2006, the last trading day prior to the
announcement of Teck Cominco's proposed offer for Inco.
Financing of the Falconbridge Acquisition
New bank debt facilities have been underwritten by Barclays Bank
PLC, Deutsche Bank AG London, JP Morgan Chase Bank, N.A. and The
Royal Bank of Scotland plc. These new syndicated loan
arrangements have been entered into expressly to:
-- provide debt financing for the Falconbridge Acquisition,
-- refinance Xstrata's existing bank debt and certain existing
indebtedness of Falconbridge, and
-- provide working capital facilities for the Enlarged Group.
Xstrata's acquisition of Falconbridge is conditional, among other
things, on approval by Xstrata shareholders at a meeting to be
held in June, certain regulatory consents (including Investment
Canada approval) and valid acceptances of the Xstrata Offer which,
together with the Falconbridge shares already owned by the Xstrata
group, constitute at least 66-2/3% of the Falconbridge shares on a
fully-diluted basis. Once the 66-2/3% acceptance level is met,
Xstrata intends to take steps to acquire any outstanding
Falconbridge shares. Xstrata may waive the conditions of the
Xstrata Offer in certain circumstances.
If the Falconbridge Acquisition is completed, Xstrata has
committed to undertake one or more equity capital offerings to
refinance a portion of the new debt facilities. Deutsche Bank and
J.P. Morgan Securities Ltd. have irrevocably undertaken to
underwrite any future equity offering to raise funds to repay any
amounts outstanding, under a $7 billion subordinated debt facility
agreement, to raise, in aggregate, such amount as is required to
pay or repay any amounts then outstanding under the Equity Bridge
Facility Agreement, together with costs and expenses. The
Refinancing Amount will be raised by way of an underwritten rights
issue of ordinary shares to existing Xstrata shareholders, unless
Xstrata, with the prior approval of Deutsche Bank and JPMorgan
Cazenove Limited, determines otherwise.
The timing and terms of any such equity offering or offerings will
be based on an assessment of the Enlarged Group's capital
structure following the successful acquisition of Falconbridge.
Xstrata is committed to maintaining a solid investment grade
credit rating. The directors of Xstrata are confident that any
rights issue will be fully supported by Glencore International AG.
Benefits of the Acquisition
Xstrata is confident that its acquisition of Falconbridge will
deliver significant benefits to the operations, employees and
stakeholders of Falconbridge. Given the Group's stated growth
strategy, Xstrata believes its position, as a major and long-term
direct investor in its Canadian businesses, will be of material
overall benefit to Canada. Xstrata therefore expects to receive
the necessary clearance under the Investment Canada Act in due
course. Xstrata is also confident that the Xstrata Offer will not
encounter substantive anti-trust issues in Canada, the United
States or Europe and will promptly receive the necessary
competition authority clearances.
Xstrata currently owns 73,665,996 Falconbridge shares,
representing approximately 19.8% of Falconbridge's issued share
capital. At the Xstrata offer price of CDN$52.50 per Falconbridge
share, the average cost per share of acquiring all of
Falconbridge's shares, including those already owned, will be
approximately CDN$47.76. Xstrata's Directors believe that the
Falconbridge Acquisition will be substantially earnings per share
and cash flow per share accretive in the first full year of
consolidation.
"The proposed combination of Falconbridge and Xstrata will create
an outstanding global mining company, ideally positioned to create
further value for all stakeholders through active involvement in
the ongoing consolidation of our industry," Mick Davis, Xstrata
Chief Executive, said. "I believe our all cash offer of CDN$52.50
per share delivers to Falconbridge shareholders a compelling
opportunity to realise a guaranteed cash value with no market and
minimal regulatory risk and is significantly superior to the
revised offer that Inco has made for Falconbridge.
Inco Offer
Without any prior discussion with Xstrata, Falconbridge's largest
shareholder, Inco and Falconbridge reported in October an offer by
Inco to purchase the entire issued common share capital of
Falconbridge and entered into a support agreement, which Xstrata
believes was structured unduly in favor of Inco. This agreement
includes, amongst other things, restrictive non-solicitation
covenants, an opportunity for Inco to match any third-party offer
within a 7-day period and a break fee (which is likely to be
payable by Falconbridge to Inco). A revised Inco offer was
reported in the Troubled Company Reporter on May 15, 2006, and
approved by Falconbridge's board, which also agreed to increase
the break fee by 40% to $450 million, in an apparent attempt to
thwart a superior offer by Xstrata. Its effect is to deprive
Falconbridge shareholders of a further $130 million of value.
The Offer is being made by Xstrata Canada Inc., a wholly owned
indirect subsidiary of the Company.
About Xstrata
Xstrata plc -- http://www.xstrata.com-- is a major global
diversified mining group, listed on the London and Swiss stock
exchanges. The Group is and has approximately 24,000 employees
worldwide, including contractors.
Xstrata maintains a meaningful position in six major international
commodity markets: copper, coking coal, thermal coal, ferrochrome,
vanadium and zinc, with additional exposures to gold, lead and
silver. The Group's operations and projects span four continents
and nine countries: Australia, South Africa, Spain, Germany,
Argentina, Peru, Colombia, the UK and Canada.
About Falconbridge
Headquartered in Toronto, Ontario, Falconbridge Limited
(TSX:FAL.LV)(NYSE: FAL) -- http://www.falconbridge.com/-- is a
leading copper and nickel company with investments in fully
integrated zinc and aluminum assets. Its primary focus is the
identification and development of world-class copper and nickel
orebodies. It employs 14,500 people at its operations and offices
in 18 countries. The Company owns nickel mines in Canada and the
Dominican Republic and operates a refinery and sulfuric acid plant
in Norway. It is also a major producer of copper (38% of sales)
through its Kidd mine in Canada and its stake in Chile's
Collahuasi mine and Lomas Bayas mine. Its other products include
cobalt, platinum group metals, and zinc.
* * *
Falconbridge's CDN$150 million 5% convertible and callable bonds
due April 30, 2007, carries Standard & Poor's BB+ rating.
FDL INC: Hires Development Specialists as Financial Consultant
--------------------------------------------------------------
The Hon. Frank J. Otte of the U.S. Bankruptcy Court for the
Southern District of Indiana in Indianapolis authorized FDL, Inc.,
to employ Development Specialists, Inc., as its financial
consultant.
DSI has provided certain financial review and reporting services
since approximately 18 months prior to the Debtor's bankruptcy
filing. The Debtor says that DSI's continued services are
essential to its business operations.
In this engagement, DSI is expected to:
a) act as the Debtor's chief restructuring consultant. Day
to day operations will rest with DSI subject to review and
approval of the Company's Board of directors;
b) assist in the Debtor's development, review and evaluation
of overall business and sale plans designed to restore the
confidence of its lenders and other creditors including a
review of all current overhead and operating expenses, and
plans for the implementation of additional financial
controls;
c) assist in negotiations with the Debtor's senior secured
lender to structure a forbearance agreement that allows
the Debtor to assess its current business status and
options;
d) control the Debtor's cash management and expenditures;
e) monitor the Debtor's performance relative to its business
plan on a periodic basis;
f) assist the Debtor and its outside consultant or agent in
approaching alternative sources of financing; and
g) perform other tasks, as directed by the Debtor.
Consultants principally responsible for the relationship between
the Debtor and DSI, and their hourly rates are:
Consultant Hourly Rate
---------- -----------
William A. Brandt, Jr. $495
Frederick R. Reed $425
Steven L. Victor $425
James E. Moore $295
Brain C. Weeple $275
Alan J. Omari $275
Under the engagement agreement with the Debtor, DSI is entitled to
a $100,000 retainer.
To the best of the Debtor's knowledge, DSI holds no interest
adverse to its estate.
Headquartered in Kokomo, Indiana, FDL, Inc., manufactures office
and fast food metal furniture. The company filed for Chapter 11
protection on March 24, 2006 (Bankr. S.D. Ind. Case No. 06-01222).
Deborah Caruso, Esq., and Erick P. Knoblock, Esq., at Dale & Eke,
P.C., represent the Debtor. Elliott D. Levin, Esq., at Rubin &
Levin, represents the Official Committee of Unsecured Creditors.
When the Debtor filed for protection from its creditors, it did
not state its assets but estimated debts between $10 Million and
$50 Million.
FOAMEX INTERNATIONAL: Bank of Nova Scotia Discloses 1.4% Stake
--------------------------------------------------------------
In a regulatory filing with the Securities and Exchange Commission
dated April 21, 2006, The Bank of Nova Scotia discloses that it
beneficially owns 350,000 shares of Foamex International, Inc.'s
common stock, 297,000 shares of which are held by Calder & Co.
The Bank of Nova Scotia's stake represents 1.4% of the 24,509,728
shares of Foamex International common stock issued and outstanding
as of March 17, 2006.
Russell Morgan, managing director of The Bank of Nova Scotia,
relates that the Bank entered into two separate Securities
Purchase Agreement with:
(1) D.E. Shaw Laminar Portfolios, L.L.C., wherein the Bank
sold to Laminar 2,494,526 shares of Foamex International
common stock and 15,000 shares of Foamex International
Preferred Stock for an aggregate cash purchase price of
$1,198,357; and
(2) Goldman, Sachs & Co., wherein the Bank sold to Goldman
Sachs 2,631,000 shares of Foamex International common
stock for an aggregate cash purchase price of $789,300.
Headquartered in Linwood, Pa., Foamex International Inc. --
http://www.foamex.com/-- is the world's leading producer of
comfort cushioning for bedding, furniture, carpet cushion and
automotive markets. The Company also manufactures high-
performance polymers for diverse applications in the industrial,
aerospace, defense, electronics and computer industries. The
Company and eight affiliates filed for chapter 11 protection on
Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693).
Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP,
represent the Debtors in their restructuring efforts. Houlihan,
Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the
ad hoc committee of Senior Secured Noteholders. Kenneth A. Rosen,
Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler PC and
Donald J. Detweiler, Esq., at Saul Ewings, LP, represent the
Official Committee of Unsecured Creditors. As of July 3,
2005, the Debtors reported $620,826,000 in total assets and
$744,757,000 in total debts. (Foamex International Bankruptcy
News, Issue No. 17; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
FOCUS ENHANCEMENTS: Incurs $7.1 Mil. Net Loss in 2006 First Qtr.
----------------------------------------------------------------
Focus Enhancements, Inc., filed its financial results for the
first quarter ended March 31, 2006, with the Securities and
Exchange Commission on May 15, 2006.
For the three months ended March 31, 2006, the company reported a
$7.2 million net loss on $7.1 million of net revenues compared to
a $4.8 million net loss on $5.5 million of net revenues for the
same period in 2005.
At March 31, 2006, the company's balance sheet showed total assets
of $26 million and total debts of $21 million. As of March 31,
2006, the Company's accumulated deficit widened to $96.5 million
from a $89.4 million accumulated deficit at Dec. 31, 2005.
A full-text copy of Focus Enhancements' Quarterly Report is
available for free at http://researcharchives.com/t/s?952
Going Concern Doubt
Burr, Pilger & Mayer LLP, expressed doubt about Focus
Enhancements' ability to continue as a going concern after
auditing the company's 2005 financial statements. The auditing
firm pointed to the company's recurring losses from operations,
net capital deficiency and accumulated deficit at Dec. 31, 2005.
Headquartered in Campbell, California, Focus Enhancements, Inc.
(NASDAQ: FCSE) -- http://www.Focusinfo.com/-- is a leading
designer of world-class solutions in advanced, proprietary video
and wireless video technologies. The company's Semiconductor
Group develops integrated circuits (ICs) for high-performance
applications in the video convergence market, including IPTV set-
top boxes and portable media players. Focus Enhancements is
currently developing a wireless IC chip set based on the WiMedia
UWB standard and designed to be compatible with Wireless USB and
used in personal computer (PC), consumer electronics (CE), and
mobile electronics applications. The company's System Group
develops video products for the digital media markets, with
customers in the broadcast, video production, digital signage and
digital asset management markets.
G+G RETAIL: U.S. Trustee Amends Creditors' Panel Membership
-----------------------------------------------------------
The United States Trustee for Region 2 amended the list of
creditors to serve on an Official Committee of Unsecured Creditors
in G+G Retail Inc.'s chapter 11 case. These creditors are:
1. Capital Factors LLC
1700 Broadway, 19 Floor
New York, NY 10019
Attn: Philip J. Pergolizzi
EVP, National Credit Manager
Tel: (212) 887-7900
Fax: (212) 887-7940
2. Intertex Apparel, Ltd.
1400 Broadway
New York, NY 10018
Attn: Warren Fisk
Ex. V.P. and Chief Financial Officer
Fax: (212) 764-1080
3. The CIT Group, Inc.
1211 Avenue of the Americas
New York, NY 10036
Attn: Patrick K. Rohan
Sr. V.P., Credit Manager
Tel: (212) 382-6896
Fax: (212) 382-7120
4. General Growth Management, Inc.
c/o Samuel B. Garber, Esq.
Assistant General Counsel
100 North Wacker Drive
Chicago, IL 60606
Tel: (312) 960-5079
Fax: (312) 442-6373
5. Simon Property Group
Ronald M. Tucker
Vice President/Bankruptcy Counsel
Simon Property Group, L.P.
115 W. Washington Street
Indianapolis, IN 46204
Tel: (317) 263-8171
Fax: (317) 263-7901
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtors'
expense. They may investigate the Debtors' business and financial
affairs. Importantly, official committees serve as fiduciaries to
the general population of creditors they represent. Those
committees will also attempt to negotiate the terms of a
consensual chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest. If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management with
an independent trustee. If the Committee concludes reorganization
of the Debtors is impossible, the Committee will urge the
Bankruptcy Court to convert the chapter 11 cases to a liquidation
proceeding.
Headquartered in New York, New York, G+G Retail Inc. retails
ladies wear and operates 566 stores in the United States and
Puerto Rico under the names Rave, Rave Girl and G+G. The Debtor
filed for Chapter 11 protection on Jan. 25, 2006 (Bankr.
S.D.N.Y. Case No. 06-10152). William P. Weintraub, Esq., Laura
Davis Jones, Esq., David M. Bertenthal, Esq., and Curtis A.
Hehn, Esq., at Pachulski, Stang, Ziehl, Young & Jones P.C.
represent the Debtor in its restructuring efforts. When the
Debtor filed for protection from its creditors, it estimated
assets of more than $100 million and debts between $10 million
to $50 million.
GENERAL MOTORS: Brazilian Unit Cuts Exports & Lays Off 960 Workers
------------------------------------------------------------------
General Motors Corp.'s Brazilian unit plans to cut exports and
fire 960 workers, Bloomberg News reports, citing a company
spokesman.
According to the same report, the unit's move came as a result of
stronger currency making GM's vehicles uncompetitive.
GM will fire the workers from a plant in Sao Jose dos Campos, in
the interior of Sao Paulo state, said the spokesman who declined
to be identified, Bloomberg relates.
Meanwhile, GM plans to launch a small car in Brazil in 2007. The
cars will be assembled in GM's plant in Gravatai. As a result,
970 jobs will be created in the Gravatai plant plus 300 more at
the automaker's design center, Bloomberg says.
About General Motors
General Motors Corp. -- http://www.gm.com/-- the world's largest
automaker, has been the global industry sales leader for 75 years.
Founded in 1908, GM today employs about 327,000 people around the
world. With global headquarters in Detroit, GM manufactures its
cars and trucks in 33 countries including Mexico. In 2005, 9.17
million GM cars and trucks were sold globally under the following
brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden,
HUMMER, Opel, Pontiac, Saab, Saturn and Vauxhall. GM operates one
of the world's leading finance companies, GMAC Financial Services,
which offers automotive, residential and commercial financing and
insurance. GM's OnStar subsidiary is the industry leader in
vehicle safety, security and information services.
* * *
As reported in the Troubled Company Reporter on May 9, 2006,
Moody's Investors Service placed the B3 senior unsecured rating of
General Motors Corporation under review for possible downgrade,
and affirmed the company's Corporate Family Rating at B3. The
rating actions are in response to the company's disclosure that it
is pursuing various options to replace or amend its existing
$5.6 billion bank credit facility, and that these options could
result in providing its bank lenders with a security interest in
certain GM assets. GM anticipates that any credit facility
replacement or amendment will be completed by the end of the
second quarter or early in the third quarter.
GENERAL MOTORS: Controller Retirement Prompts Department Changes
----------------------------------------------------------------
General Motors Corp. plans to restructure its Corporate
Controller's Office in light of the planned retirement of its
current controller, Paul W. Schmidt.
Mr. Schmidt, 61, is electing to retire from GM later this year,
capping a 37-year career at GM. Following Mr. Schmidt's
retirement, GM will combine the positions of controller and chief
accounting officer. The company has begun an external search for
a candidate using executive recruiter Crist Associates. Mr.
Schmidt will continue in his current position until a successor is
named.
"Paul has made tremendous contributions to General Motors over 37
years in the finance organization," Chief Financial Officer
Frederick "Fritz" Henderson said. "Having worked in a number of
different positions and operations throughout GM, he has been a
tremendous resource to the company on a global scale. And, I'm
grateful that he will continue to help GM over the next several
months through this transition to a new controller and chief
accounting officer."
GM also reported that its current chief accounting officer, Peter
Bible, has elected to resign from the company to pursue other
career options, effective June 1, but at the company's request has
agreed to continue to support GM during the transition period in a
consulting role. "I know the entire GM family joins me in
thanking Pete for his service to GM and wishing him the best as he
pursues new opportunities," said Mr. Henderson.
In addition, GM said it has retained an outside financial advisory
firm, AlixPartners, to assist the corporation with a broad range
of accounting, financial reporting and related matters.
AlixPartners will provide personnel to support the corporation
during the transition to a new controller and chief accounting
officer, including assisting with assessments of the corporation's
internal, financial reporting and disclosure controls and
implementing steps to improve them on an ongoing basis.
"One of our key objectives in finance is to minimize risk," said
Mr. Henderson. "To that end, we are moving quickly to make sure
that we have a robust level of internal controls and systems in
place and AlixPartners has tremendous expertise to support this
initiative."
About General Motors
General Motors Corp. -- http://www.gm.com/-- the world's
largest automaker, has been the global industry sales leader for
75 years. Founded in 1908, GM today employs about 327,000
people around the world. With global headquarters in Detroit,
GM manufactures its cars and trucks in 33 countries including
Mexico. In 2005, 9.17 million GM cars and trucks were sold
globally under the following brands: Buick, Cadillac, Chevrolet,
GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn and
Vauxhall. GM operates one of the world's leading finance
companies, GMAC Financial Services, which offers automotive,
residential and commercial financing and insurance. GM's OnStar
subsidiary is the industry leader in vehicle safety, security
and information services.
* * *
As reported in the Troubled Company Reporter on May 9, 2006,
Moody's Investors Service placed the B3 senior unsecured rating of
General Motors Corporation under review for possible downgrade,
and affirmed the company's Corporate Family Rating at B3. The
rating actions are in response to the company's disclosure that it
is pursuing various options to replace or amend its existing
$5.6 billion bank credit facility, and that these options could
result in providing its bank lenders with a security interest in
certain GM assets. GM anticipates that any credit facility
replacement or amendment will be completed by the end of the
second quarter or early in the third quarter.
GINN-LA CS: S&P Puts BB- Rating on $125 Mil. 2nd-Lien Term Loan
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' issuer credit
rating to Ginn-LA CS Borrower LLC and Ginn-LA Conduit Lender Inc.
(the Co-Borrowers).
At the same time, a 'BB' rating with a '1' recovery rating was
assigned to a $385 million first-lien term loan.
Also, a 'BB' rating with a '1' recovery rating was assigned to a
$165 million first-lien synthetic revolving credit facility.
Additionally, a 'BB-' rating with a '1' recovery rating was
assigned to a $125 million second-lien term loan.
The outlook is stable.
"The ratings reflect the indeterminate credit quality of the
Co-Borrowers' sponsors, the generally speculative nature of
master-planned community development in general, and the
considerable infrastructure requirements at two of the Co-
Borrowers' communities," said credit analyst James Fielding.
"However, relative to similar single-purpose borrowers, the
Co-Borrowers are more diversified, further along in the
entitlement and permitting processes, and less leveraged."
Longer-term demographic trends are expected to support continued
demand for primary and secondary homes in the Co-Borrowers'
desirable resort locations. While recent softness in demand for
higher-end homes may negatively affect pricing and/or absorption
rates for the Co-Borrowers' land parcels, reasonable cash flow
assumptions should provide ample cushion if sales fall modestly
below expectations.
The ratings would be raised if sales proceed as budgeted and debt
levels are rapidly amortized. Conversely, the ratings would be
lowered if sales slow materially and construction costs for the
West End and Laurelmor communities are significantly higher than
expected.
GLAZED INVESTMENTS: Files Amended Plan & Disclosure Statement
-------------------------------------------------------------
Glazed Investments, LLC, filed with the U.S. Bankruptcy Court for
the Northern District of Illinois its Amended Liquidating Plan of
Reorganization and an accompanying Amended Disclosure Statement on
May 8, 2006.
The Plan will be funded by the proceeds of the sale of
substantially all of the Debtor's operating assets to Westward
Dough for $10,000,000. The Debtor will monetize its remaining
assets to further fund the Plan. Krispy Kreme will advance funds
if sale proceeds will be insufficient to pay distributions.
Holders of secured claims amounting to $10,666,018 will be paid in
full on the effective date of the plan. Priority claims amounting
to $465,000 will also be paid in full.
Holders of general unsecured claims, aggregating $4,300,000, will
recover around 13.6% and 20% of their claim.
Equity interests will be cancelled.
A full-text copy of the Amended Disclosure Statement is available
for a fee at:
http://www.researcharchives.com/bin/download?id=060517205044
About Glazed Investments, LLC
Headquartered in Oak Brook, Illinois, Glazed Investments, LLC,
operated 20 franchise locations of Krispy Kreme. Krispy Kreme
owns 97% of the Debtor. The Debtor filed for chapter 11
protection on Feb. 3, 2006 (Bankr. N.D. Ill. Case No. 06-00932).
Daniel A. Zazove, Esq., at Perkins Coie LLP represents the Debtor
in its restructuring efforts. Elizabeth E. Richert, Esq., and
Steven R Jakubowski, Esq., at Robert F. Coleman & Associates
represent the Official Committee of Unsecured Creditors. When the
Debtor filed for protection from its creditors, it listed
$28,599,346 in assets and $32,953,785 in debts.
GSAMP TRUST: Moody's Puts Ba1 Rating on Class B-2 Certificates
--------------------------------------------------------------
Moody's Investors Service assigned a Aaa rating to the senior
certificates issued by GSAMP Trust 2005-WMC2, and ratings ranging
from Aa2 to Ba1 to the subordinate certificates in the deal.
The securitization is backed by WMC Mortgage Corp originated
adjustable-rate and fixed-rate subprime mortgage loans. The
ratings are based primarily on the credit quality of the loans,
and on the protection from subordination, overcollateralization
and excess spread. The credit quality of the loan pool is in line
with the average loan pool backing recent subprime
securitizations. Moody's expects collateral loss to range from
5.10% to 5.60%.
Litton Loan Servicing LP will service the loans. Moody's assigned
its top servicer quality rating to Litton as a primary servicer of
subprime loans.
The Complete Rating Actions:
Issuer: GSAMP Trust 2005-WMC2
Mortgage Pass-Through Certificates, Series 2005-WMC2
* Cl. A-1A, Assigned Aaa
* Cl. A-1B, Assigned Aaa
* Cl. A-2A, Assigned Aaa
* Cl. A-2B, Assigned Aaa
* Cl. A-2C, Assigned Aaa
* Cl. M-1, Assigned Aa2
* Cl. M-2, Assigned Aa3
* Cl. M-3, Assigned A2
* Cl. M-4, Assigned A3
* Cl. M-5, Assigned Baa1
* Cl. M-6, Assigned Baa2
* Cl. B-1, Assigned Baa3
* Cl. B-2, Assigned Ba1
GOODING'S SUPERMARKETS: Wants Until May 30 to File Ch. 11 Plan
--------------------------------------------------------------
Gooding's Supermarkets, Inc., asks the U.S. Bankruptcy Court for
the Middle District of Florida to extend, through May 30, 2006,
the period within which it has the exclusive right to file a
chapter 11 plan of reorganization to May 30, 2006. The Debtor
also asks the Court to extend the exclusive period for
solicitation of any chapter 11 plan to August 27, 2006.
The Debtor did not cite any cause or raise any argument for the
extension in its 2-page motion.
Headquartered in Orlando, Florida, Gooding's Supermarkets, Inc.,
dba Gooding's, offers catering services and operates a chain of
supermarkets in Central Florida. The Company filed for chapter 11
protection on Dec. 30, 2005 (Bankr. M.D. Fla. Case No. 05-17769).
R. Scott Shuker, Esq., at Gronek & Latham LLP represents the
Debtor. W. Glenn Jensen, Esq., at Akerman Senterfitt represents
the Official Committee of Unsecured Creditors. When the Debtor
filed for protection from its creditors, it estimated assets of
$1 million to $10 million and debts of $10 million to $50 million.
GREAT CHINA: Working Capital Deficit Prompts Going Concern Doubt
----------------------------------------------------------------
Murrell, Hall, McIntosh & Co., PLLP, expressed substantial doubt
about Great China International Holdings' ability to continue as a
going concern after it audited the company's financial statements
for the year ended Dec. 31, 2005. The auditing firm pointed to
the company's working capital deficit and bank loan defaults.
For the year ended Dec. 31, 2005, the company reported a net
income of $741,863 on $26,524,108 of total revenues. This
compares to a net loss of $17,288 on $29,671,310 of total revenues
for the same period in 2004.
At Dec. 31, 2005, the company's balance sheet showed $73,239,133
in total assets, $70,325,092 in total liabilities and
stockholders' equity of $2,914,041.
Bank Loan Default
In its Form 10-K filing with the Securities and Exchange
Commission, the Company also reported that it was in default on
$43.9 million of bank loans as of Dec. 31, 2005. These loans are
secured by a substantial portion of the Company's properties in
Shenyang City, Liaoning Province, People's Republic of China.
Since these past due obligations were treated as a current
liability, the company had a working capital deficit of
$31.3 million as of Dec. 31, 2005.
A full-text copy of the company's financial statements for the
year ended Dec. 31, 2005, is available for free at:
http://ResearchArchives.com/t/s?93b
About Great China
Founded in 1989, Great China International Holdings' (OTCBB:GCIH)
wholly owned subsidiary, Shenyang Maryland International Industry
Co., Ltd., is one of the largest non-state-owned real estate
developers in Northeast China. The company's core business is
premium residential and commercial development and management.
It currently owns and manages the President Building, which was
completed in April 2002, with 25 tenants comprised of Fortune 500
companies, including General Electric (China) Co., Ltd., Johnson &
Johnson, Kodak and Philip Morris.
The company's prior developments included the Maryland Building,
Roma Resort Garden, Qiyun New Village, Peacock Garden, University
Campus of Shenyang Teacher's University, and Chenglong Garden,
mostly located in Shenyang.
GREAT CHINA: Delays Filing of Form 10-Q for Quarter Ended March 31
------------------------------------------------------------------
Great China International Holdings disclosed in a filing with the
U.S. Securities and Exchange Commission on May 15, 2006, that it
would be unable to file its Form 10-Q for the quarter ended
March 31, 2006, on time.
The company said that collecting and processing all business and
financial data in sufficient time to file the report could not be
completed without unreasonable effort and expense.
Founded in 1989, Great China International Holdings' (OTCBB:GCIH)
wholly owned subsidiary, Shenyang Maryland International Industry
Co., Ltd., is one of the largest non-state-owned real estate
developers in Northeast China. The company's core business is
premium residential and commercial development and management.
It currently owns and manages the President Building, which was
completed in April 2002, with 25 tenants comprised of Fortune 500
companies, including General Electric (China) Co., Ltd., Johnson &
Johnson, Kodak and Philip Morris.
The company's prior developments included the Maryland Building,
Roma Resort Garden, Qiyun New Village, Peacock Garden, University
Campus of Shenyang Teacher's University, and Chenglong Garden,
mostly located in Shenyang.
GREENBRIER COMPANIES: S&P Rates Proposed $85M Notes Offer at B+
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' rating to
The Greenbrier Companies Inc.'s proposed $85 million convertible
note offering, which will mature in 2026.
At the same time, Standard & Poor's affirmed its ratings on the
Lake Oswego, Oregon-based railcar manufacturer, including its
'BB-' corporate credit rating. The outlook is stable.
With the new debt issue, Standard & Poor's estimates that
Greenbrier had about $400 million of pro forma lease-adjusted
total debt as of Feb. 28, 2006.
Proceeds from the transaction will be used for general corporate
purposes, which may include investments in working capital,
capital expenditures (which includes investments in the company's
leasing and services segment) and potential acquisitions.
GSAMP TRUST: Moody's Puts Rating on Class B-2 Certificates at Ba1
-----------------------------------------------------------------
Moody's Investors Service assigned an Aaa rating to the senior
certificates issued by GSAMP Trust 2005-WMC2, and ratings ranging
from Aa2 to Ba1 to the subordinate certificates in the deal.
The securitization is backed by WMC Mortgage Corp originated
adjustable-rate and fixed-rate subprime mortgage loans. The
ratings are based primarily on the credit quality of the loans,
and on the protection from subordination, overcollateralization
and excess spread. The credit quality of the loan pool is in line
with the average loan pool backing recent subprime
securitizations. Moody's expects collateral loss to range from
5.10% to 5.60%.
Litton Loan Servicing LP will service the loans. Moody's ssigned
its top servicer quality rating to Litton as a primary servicer of
subprime loans.
The Complete Rating Actions:
Issuer: GSAMP Trust 2005-WMC2
Mortgage Pass-Through Certificates, Series 2005-WMC2
* Cl. A-1A, Assigned Aaa
* Cl. A-1B, Assigned Aaa
* Cl. A-2A, Assigned Aaa
* Cl. A-2B, Assigned Aaa
* Cl. A-2C, Assigned Aaa
* Cl. M-1, Assigned Aa2
* Cl. M-2, Assigned Aa3
* Cl. M-3, Assigned A2
* Cl. M-4, Assigned A3
* Cl. M-5, Assigned Baa1
* Cl. M-6, Assigned Baa2
* Cl. B-1, Assigned Baa3
* Cl. B-2, Assigned Ba1
GULF COAST: Wants to Hire Hughes & Luce as Bankruptcy Counsel
-------------------------------------------------------------
Gulf Coast Holdings, Inc., dba Unidynamics, Inc., asks the U.S.
Bankruptcy Court for the Northern District of Texas for permission
to hire Hughes & Luce LLP as its bankruptcy counsel nunc pro tunc
to April 26, 2006.
H&L is a Texas limited liability partnership comprised of duly
licensed attorneys. H&L is experienced in matters of bankruptcy,
insolvency, corporate reorganization, and debtor-creditor law, and
is well qualified to act as counsel for the Debtor in this
bankruptcy case.
The Debtor selected H&L because it has considerable experience and
knowledge in bankruptcy matters. Moreover, H&L attained a
familiarity with the Debtor's case prepetition, so H&L's retention
would avoid unnecessary duplication of effort and expense.
H&L's services to be rendered include:
a. the preparation, filing and prosecution of the Debtor's
bankruptcy petition, schedules, statements of financial
affairs, and various motions essential to or required in the
bankruptcy case;
b. the preparation, filing and defense of objections to various
motions, claims and actions by creditors and parties-in-
interest;
c. negotiation with various creditors, including any creditors
committees, and the preparation of related agreements;
d. negotiations with potential plan proponents and/or
purchasers of the Debtor's assets, and the preparation of
related agreements;
e. matters regarding the restructuring of the Debtor's debts
and equity structure; and
f. all other necessary legal services in connection with the
Debtor's chapter 11 case.
Jeffrey R. Fine, Esq., a partner at the firm tells that he charges
$450 per hour for his services. Other individuals representing
the Debtor and their negotiated hourly rates as of Oct. 1, 2005,
are:
Professional Hourly Rate
------------ -----------
Daniel I. Morenoff $250
Jay L. Krystinik $210
David A. Alexander $190
Trish Brim (Paralegal) $170
On April 11, 2006, the Debtor provided H&L $5,000 to be held as a
retainer in H&L's client trust account. On April 27, 2006, the
Debtor provided H&L an additional $90,000 to be held as a retainer
in H&L's client trust account. Prepetition, the Debtor authorized
H&L to draw down this amount by all amounts owing to H&L for work
performed prepetition; these amounts aggregated to $27,587.65, as
well as Chapter 11 filing fees of $1,039.00. H&L continues to
hold the remaining $66,373.35 of the Debtor's funds as a retainer.
H&L has been fully paid for its prepetition services or has waived
such fees and holds no remaining claim against the Debtor.
Mr. Fine discloses that the only creditor or vendor of the Debtor
with which H&L has a relationship is Lockheed Martin Corporation.
The Debtor has a contract with Marinette Marine Corporation, a
Lockheed subsidiary. H&L has been employed by a different
Lockheed aerospace subsidiary in labor matters unrelated to the
Debtor's bankruptcy. H&L does not believe that this
representation in matters unrelated to the Debtor's case poses any
potential conflict. Mr. Fine contends that his Firm and its
professionals do not hold material interest adverse to the
Debtor's interest and are "disinterested" as defined in Section
101(14) of the Bankruptcy Code.
Headquartered in Conroe, Texas, Gulf Coast Holdings, Inc., designs
and manufactures equipment used by defense contractors.
Currently, the Company makes equipment installed worldwide in
civilian and military applications, including in the Littoral
Combat Ship. After experiencing liquidity problems and lack of
financing, the Company filed for bankruptcy protection on Apr. 28,
2006 (Bankr. N.D. Tex. Case No. 06-31695). Daniel I. Morenoff,
Esq., and Jeffrey R. Fine, Esq., at Hughes & Luce, LLP, represent
the Debtor in its restructuring efforts. In its schedules filed
with the Court, the Debtor reported assets amounting to
$18,258,575 and debts totaling $19,553,664.
GULF COAST: Selling Some Assets to PaR Systems for $3 Million
-------------------------------------------------------------
Gulf Coast Holdings, Inc., asks the U.S. Bankruptcy Court for the
Northern District of Texas for permission to sell some of its
assets to PaR Systems, Inc., or to a bidder submitting the highest
and best offer, during the auction for these assets. PaR Systems
offered to pay $3 million in cash for those assets.
In connection with the sale, the Debtor will assume and assign
various executory contracts and unexpired leases to the successful
bidder.
The assets to be sold exclude:
(a) interest in approximately 14.8009 acres of land and the
improvements on that land located at 188 FM 3083, Conroe,
Texas;
(b) furniture fixtures and equipment designated by the
successful bidder not to be acquired;
(c) cash and cash equivalents;
(d) accounts receivable and other receivables;
(e) rights under a definitive agreement and other agreements
and instruments entered into in connection;
(f) stock records, shares of stock, insurance policies and
rights and claims of refunds of taxes and other
governmental charges; and
(g) causes of action against third-parties, including, without
limitation, bankruptcy avoidance claims.
The Debtor retains the right to qualify any bidder who will, at a
minimum, deliver a good-faith deposit of not less than $75,000,
for keeping in a segregated account. Interested bidders must
initially bid for at least $3.2 million. Minimum increments of
subsequent bids would be $50,000.
The Debtor proposes that the Auction take place on May 24, 2006 at
the offices of Hughes & Luce LLP. If another bidder wins the
auction, the Debtor will pay PaR Systems a $75,000 in termination
fee and up to $40,000 in expenses.
Jeffrey R. Fine, Esq., at Hughes & Luce LLP told The Deal that the
hearing to approve the bidding procedures was postponed to a yet
undetermined date. The hearing was rescheduled to accommodate the
unsecured creditors' committee.
Headquartered in Conroe, Texas, Gulf Coast Holdings, Inc., designs
and manufactures equipment used by defense contractors.
Currently, the Company makes equipment installed worldwide in
civilian and military applications, including in the Littoral
Combat Ship. After experiencing liquidity problems and lack of
financing, the Company filed for bankruptcy protection on April
28, 2006 (Bankr. N.D. Tex. Case No. 06-31695). Daniel I.
Morenoff, Esq., and Jeffrey R. Fine, Esq., at Hughes & Luce, LLP,
represent the Debtor in its restructuring efforts. In its
schedules filed with the Court, the Debtor reported assets
amounting to $18,258,575 and debts totaling $19,553,664.
GULF COAST: U.S. Trustee Appoints Three-Member Creditors Committee
------------------------------------------------------------------
William T. Neary, the United States Trustee for Region 6,
appointed three creditors to serve on an Official Committee of
Unsecured Creditors in Gulf Coast Holdings, Inc.'s chapter 11
case:
1. Jon A. Fitzgerald
Vice President, General Counsel
Bath Iron Works
700 Washington Street,
Bath ME 04530
Tel: 207-442-5841
Fax: 207-442-5592
2. Salvatore J. Mira
42 Redbud Ridge Place
The Woodlands TX 77380
Tel: 281-367-4113
Fax: 281-298-8799
3. Dave Wencka
President
InstaTech, Inc.,
7010 NW 100 Drive, Suite A-103
Houston, TX 77092
Tel: 713-869-9900
Fax: 713-880-1144
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtors'
expense. They may investigate the Debtors' business and financial
affairs. Importantly, official committees serve as fiduciaries to
the general population of creditors they represent. Those
committees will also attempt to negotiate the terms of a
consensual chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest. If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management with
an independent trustee. If the Committee concludes reorganization
of the Debtors is impossible, the Committee will urge the
Bankruptcy Court to convert the chapter 11 cases to a liquidation
proceeding.
Headquartered in Conroe, Texas, Gulf Coast Holdings, Inc., field
for bankruptcy protection on April 28, 2006 (Bankr. N.D. Tex. Case
No. 06-31695). Daniel I. Morenoff, Esq., and Jeffrey R. Fine,
Esq., at Hughes & Luce, LLP, represent the Debtor in its
restructuring efforts. In its schedules filed with the Court, the
Debtor reported assets amounting to $18,258,575 and debts totaling
$19,553,664.
HAJAR ESMAILI: Case Summary & 11 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Hajar Esmaili
1702 Valdes Drive
La Jolla, California 92037-3855
Bankruptcy Case No.: 06-01116
Chapter 11 Petition Date: May 16, 2006
Court: Southern District of California (San Diego)
Judge: Peter W. Bowie
Debtor's Counsel: Judith A. Descalso, Esq.
960 Canterbury Place, Suite 340
Escondido, California 92025
Tel: (760) 745-8380
Fax: (760) 860-9800
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 11 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Monogram Bank North America $63,600
P.O. Box 17054
Wilmington, DE 19884-0001
Chase $43,163
800 Brooksedge Boulevard
Westerville, OH 43081-2822
Discover Fin $37,237
P.O. Box 15316
Wilmington, DE 19850-5316
Citibank $35,312
First USA, NA $32,446
Wells Fargo Bank $29,460
Bank of America $28,971
Resurgance Financial $13,139
Att And T Universal/Citibank $6,904
Amex $651
Fnb Omaha U.b. $42
HARD ROCK: Merger Prompts Moody's to Affirm Low-B Rating
--------------------------------------------------------
Moody's Investors Service affirmed Hard Rock Hotel Inc.'s B2
Corporate Family Rating and changed the outlook back to stable
from developing. This rating action was prompted by the
announcement that the company had entered into an Agreement and
Plan of Merger with Morgans Hotel Group and related entities.
Morgans will acquire the Hard Rock Hotel, Inc. for $421 million,
as well as adjacent land and other related assets from Peter
Morton for another $349 million for a total transaction value of
$770 million. The transaction is subject to regulatory approvals
and is expected to close in January 2007.
The stable rating outlook reflects Moody's expectation that the
company's $200 million 8.75% second lien notes due 2013 will be
repaid upon closing of the merger at which time the ratings would
be withdrawn.
Moody's notes that pursuant to the bond indenture governing the
second lien notes due 2013, the transaction is likely to result in
a change of control thereby requiring the company to offer to
repurchase the notes. Additionally, according to the Merger
Agreement, Morgans agrees to use its best efforts to defease,
repay or otherwise satisfy the second lien notes.
The stable outlook also reflects the positive operating
environment in Las Vegas that is expected to drive slightly higher
earnings and cash flow.
Moody's previous rating action on Hard Rock was a change in the
rating outlook to developing from stable on Feb. 23, 2006, in
light of the announcement that the company had received and was
reviewing proposals to acquire its hotel and casino in Las Vegas,
Nevada.
Hard Rock Hotel, Inc. owns and operates the Hard Rock Hotel &
Casino in Las Vegas, Nevada, which is located one mile east of the
Las Vegas Strip. Revenues for the last twelve months ended
March 31, 2006 were approximately $182 million.
HOUT BAY: Moodys Rates $6 Million Subordinated Notes at Ba3
-----------------------------------------------------------
Moody's Investors Service announced that it assigned the following
ratings to Notes issued by Hout Bay 2006-1 Ltd. and Hout Bay 2006-
1 Corp.:
* Aaa to the U.S. $4,000,000 Class S Floating Rate Notes
Due 2014,
* U.S.$1,275,000,000 Class A 1 Floating Rate Notes Due 2041
* U.S.$127,000,000 Class A 2 Floating Rate Notes Due 2041,
* Aa2 to the U.S.$50,000,000 Class B Floating Rate Notes
Due 2041,
* A2 to the U.S.$21,000,000 Class C Deferrable Floating Rate
Notes Due 2041,
* Baa2 to the U.S.$17,000,000 Class D Deferrable Floating Rate
Notes Due 2041,
* Ba1 to the U.S.$4,000,000 Class E Deferrable Floating Rate
Notes Due 2041 and
* Ba3 to the U.S.$6,000,000 Subordinated Notes Due 2041.
According to Moody's, the ratings on the Notes address the
ultimate cash receipt of all required interest and principal
payments, as provided by the Notes' governing documents, and are
based on the expected loss posed to Noteholders, relative to the
promise of receiving the present value of such payments.
The ratings reflect the risks due to the diminishment of cash flow
from the underlying portfolio consisting of structured finance
securities due to defaults, the safety of the transaction's legal
structure and the characteristics of the underlying assets.
IBSC AGENCY: Case Summary & 40 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: IBSC Agency, Inc.
190 East 162nd Street
Bronx, New York 10451
Bankruptcy Case No.: 06-11092
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
I.B. Security Conscious, Inc. 06-11093
Type of Business: The Debtor offers security services.
Chapter 11 Petition Date: May 17, 2006
Court: Southern District of New York (Manhattan)
Debtor's Counsel: Raymond W. Verdi, Esq.
Heller & Verdi, P.C.
1975 Hempstead Turnpike, Suite 209
East Meadow, New York 11554
Tel: (516) 542-9426
Fax: (516) 542-5977
Estimated Assets: Less than $50,000
Estimated Debts: $1 Million to $10 Million
A. IBSC Agency, Inc.'s 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Internal Revenue Service Trade Debt $1,132,984
Hutchinson Metro Center
1200 Waters Place, Suite 108
Bronx, NY 10461
NYS Department of Trade Debt $250,000
Taxation and Finance
55 Hanson Place
Brooklyn, NY 11217
NYS Unemployment Trade Debt $200,000
75 Broad Street
Brooklyn, NY 11201
NYS Assessment Receivables Trade Debt $99,137
Richard L. Rosen Law Firm, LLC Trade Debt $23,615
ADP Inc. Trade Debt $20,999
Nextel Communications Trade Debt $9,125
Con Edison Trade Debt $7,571
Uniform Base Bank Loan $6,733
Spada Uniforms Trade Debt $6,587
Unishippers of the Bronx Trade Debt $3,459
Verizon Wireless Trade Debt $3,360
Lawrence B. Goodman & Co., P.A. Trade Debt $2,000
Communication Data & Security Trade Debt $1,905
Pitney Bowes Trade Debt $1,709
CARR Business Systems Trade Debt $1,518
Blue Book Trade Debt $1,500
HP Financial Services Trade Debt $1,400
Cit Tech Financial Services Trade Debt $961
DAG Media Trade Debt $920
B. I.B. Security Conscious, Inc.'s 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Internal Revenue Service Trade Debt $1,615,017
Hutchinson Metro Center
1200 Waters Place, Suite 108
Bronx, NY 10461
Department of State Trade Debt $287,000
84 Holland Avenue
Albany, NY 12208
NYS Unemployment Trade Debt $278,000
75 Broad Street
New York, NY 10004
T-Mobile Trade Debt $50,002
State Insurance Fund Trade Debt $49,000
Universal Uniform Sales Trade Debt $37,109
Verizon Trade Debt $33,427
Nextel Communications Trade Debt $18,449
Con Edison Trade Debt $17,821
Lawrence B. Goodman & Co., P.A. Trade Debt $14,085
Tiny Fiesta Realty Trade Debt $10,211
Associates LLC
Hewlett-Packard Financial Trade Debt $9,186
Services Co.
Nextel Communications Trade Debt $7,599
Bronx Lebanon Hospital Trade Debt $7,123
Budget Installments Corp. Trade Debt $7,123
Cit Technology Trade Debt $6,600
Financial Services
Corporate Express Trade Debt $6,015
NYS Department of Trade Debt $6,000
Taxation and Finance
Poland Spring Trade Debt $5,944
Direct Communications 2 U Trade Debt $4,000
INTERSTATE BAKERIES: Selling San Bernardino Property for $550,000
-----------------------------------------------------------------
Interstate Bakeries Corporation and its debtor-affiliates ask the
U.S. Bankruptcy Court for the Western District of Missouri to
approve and authorize the sale of their interest in a real
property located at 1111 West Ninth Street, San Bernardino,
California.
The Property includes 0.89 acre of land with approximately a
12,600-square foot building. The Debtors are no longer using the
Property in connection with their business operations.
In connection with the sale of the Property, the Debtors utilized
the services of a joint venture composed of Hilco Industrial,
LLC, and Hilco Real Estate, LLC.
Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP,
in Chicago, Illinois, relates that the Debtors agreed to sell the
Property to Minh Thu Nghiem and Son Hong Nguyen for $550,000,
subject to higher and better offers and Court approval.
The parties' sale agreement requires a $55,000 deposit to be held
by the escrow agent until all conditions to closing are satisfied
by the Debtors.
About Interstate Bakeries
Headquartered in Kansas City, Missouri, Interstate Bakeries
Corporation is a wholesale baker and distributor of fresh baked
bread and sweet goods, under various national brand names,
including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R),
Merita(R) and Drake's(R). The Company employs approximately
32,000 in 54 bakeries, more than 1,000 distribution centers and
1,200 thrift stores throughout the U.S.
The Company and seven of its debtor-affiliates filed for chapter
11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No.
04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in
their restructuring efforts. Kenneth A. Rosen, Esq., at
Lowenstein Sandler, PC, represents the Official Committee of
Unsecured Creditors. Peter D. Wolfson, Esq., at Sonnenschein
Nath & Rosenthal, LLP, represents the Official Committee of
Equity Security Holders. When the Debtors filed for protection
from their creditors, they listed $1,626,425,000 in total assets
and $1,321,713,000 (excluding the $100,000,000 issue of 6.0%
senior subordinated convertible notes due August 15, 2014, on
August 12, 2004) in total debts. (Interstate Bakeries Bankruptcy
News, Issue No. 40; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
INTERSTATE BAKERIES: Court OKs Sieckmann & Nat'l Union Agreement
----------------------------------------------------------------
Brenda Seickmann obtained a $9,750,500 judgment against Interstate
Brands Corporation relating to a wrongful death action she filed
with the Circuit Court of the City of St. Louis, Missouri.
Approximately $1,500,000 of the Judgment has been satisfied by
Discover Property & Casualty Insurance Company. The net judgment
amount is $8,250,500.
National Union Fire Insurance Company of Pittsburgh, Pennsylvania,
insured Interstate Brands for part of this loss. National Union
asked the U.S. District Court for the Eastern District of Missouri
to declare that its policy was written to apply excess $3,500,000
and excess of other applicable insurance applicable to Interstate
Brands.
Ms. Sieckmann, Interstate Brands and National Union dispute
whether there is a $1,000,000 gap in the coverage for the
$9,750,000 judgment against Interstate Brands after exhaustion of
the $1,000,000 self-insured retention and the $1,500,000 Discovery
policy limits and before the inception of the National Union
Policy.
The parties also dispute whether Ms. Sieckmann waived her claim
to collect the first $1,000,000 of the judgment from Interstate
Brands' $1,000,000 SIR.
Ms. Sieckmann has filed a complaint against Interstate Brands,
National Union and others in the Circuit Court of the City of St.
Louis State of Missouri, concerning the $1,000,000 coverage gap
and the $1,000,000 SIR.
To minimize the expense, delay and uncertainty of litigating the
parties' positions, the Parties agree that:
(a) Ms. Sieckmann will receive structured payments from
National Union or its assignee aggregating $5,022,867;
(b) Ms. Sieckmann will not levy execution, by garnishment, or
otherwise provided by law, for any and all amounts
remaining unsatisfied under the Judgment, including any
claim that she may have had against the Debtors' SIR,
except to levy execution and establish a claim as against
J.D. Kutter and Crum & Forster Specialty Insurance
Company;
(c) Ms. Sieckmann releases National Union from any claims that
have been or could have been brought in or as a result of
any of the lawsuits referred to in the Agreement;
(d) Subject to certain exceptions, each of Interstate Brands
and National Union release the other parties from any
claims that have been or could have been brought in or as
a result of any of the lawsuits referred to in the
Agreement;
(e) Interstate Brands will withdraw and dismiss, with
prejudice, its pending appeal of the Judgment, and Ms.
Sieckmann will cooperate in getting a release and
discharge of the appeal bond;
(f) Ms. Sieckmann will execute and deliver to Interstate
Brands a partial satisfaction of Judgment as per the
Agreement, and will satisfy and release any liens which
may have accrued as a result of medical care or treatment
or any other item of expense related to the wrongful death
action;
(h) Ms. Sieckmann assigns to National Union the proceeds of
any recovery she has relative to any and all claims
Interstate Brands has or may have against Westrope and
Lockton pursuant to the agreement approved by a December
19 Order. National Union will pay all costs, fees, and
expenses associated with the prosecution of the Westrope
and Lockton claim. Ms. Sieckmann retains the assignment
of proceeds of any recovery she has relative to any and
all claims that Interstate Brands has or may have against
J.D. Kutter and Crum & Forster relative to Interstate
Brands' status as an additional insured under Crum &
Forster Policy No. GOI0000262 pursuant to the agreement
approved by a December 19 Order;
(i) Ms. Sieckmann agrees to waive any claim she has or may
have to the $1,000,000 SIR in Interstate Brands'
bankruptcy case and dismiss her complaint against National
Union, with prejudice; and
(j) The Agreement is subject to approval by the Bankruptcy
Court and the St. Louis Circuit Court.
Accordingly, the Debtors sought and obtained the U.S. Bankruptcy
Court for the Western District of Missouri's approval that the
automatic stay will be modified to allow them to implement, and
perform under, their Settlement Agreement.
About Interstate Bakeries
Headquartered in Kansas City, Missouri, Interstate Bakeries
Corporation is a wholesale baker and distributor of fresh baked
bread and sweet goods, under various national brand names,
including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R),
Merita(R) and Drake's(R). The Company employs approximately
32,000 in 54 bakeries, more than 1,000 distribution centers and
1,200 thrift stores throughout the U.S.
The Company and seven of its debtor-affiliates filed for chapter
11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No.
04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in
their restructuring efforts. Kenneth A. Rosen, Esq., at
Lowenstein Sandler, PC, represents the Official Committee of
Unsecured Creditors. Peter D. Wolfson, Esq., at Sonnenschein
Nath & Rosenthal, LLP, represents the Official Committee of
Equity Security Holders. When the Debtors filed for protection
from their creditors, they listed $1,626,425,000 in total assets
and $1,321,713,000 (excluding the $100,000,000 issue of 6.0%
senior subordinated convertible notes due August 15, 2014, on
August 12, 2004) in total debts. (Interstate Bakeries Bankruptcy
News, Issue No. 39; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
J. CREW: Inks $285 Million Credit and Guaranty Agreement
--------------------------------------------------------
On May 15, 2006, J. Crew Operating Corp. entered into a Credit and
Guaranty Agreement by and among the Company, as borrower, J. Crew
Group, Inc. and certain of the Company's direct and indirect
subsidiaries as guarantors, certain lenders named in the Credit
Agreement:
* Goldman Sachs Credit Partners L.P. and Bear, Stearns & Co.
Inc. as joint lead arrangers and joint bookrunners;
* Goldman Sachs Credit Partners L.P. as administrative agent
and collateral agent;
* Bear Stearns Corporate Lending Inc. as syndication agent; and
* Wachovia Bank, National Association as documentation agent.
The total amount of term loan borrowed by the Company under the
Credit Agreement on the Closing Date was $285 million. The Credit
Agreement has an accordion feature by which that amount may be
increased to up to $385 million on a one-time basis prior to
Dec. 31, 2006 subject to certain terms and conditions. Borrowings
under the term loan will bear interest, at the Company's option,
at the base rate plus a margin ranging from 0.75% to 1.25% or at
LIBOR plus a margin ranging from 1.75% to 2.25% per annum, payable
quarterly, and will mature on the earlier of:
(a) the seventh anniversary of the Closing Date and
(b) six months prior to the maturity date or the mandatory
redemption date (unless extended or repaid in accordance
with their terms) of Group's 13-1/8% Senior Discount
Debentures due 2008, the indebtedness outstanding under the
Amended and Restated Credit Agreement with TPG-MD
Investment LLC and Group's outstanding Series A preferred
stock and Series B preferred stock.
In connection with the Credit Agreement, the Company also amended
certain of its existing credit agreements.
Tender Offer & Consent Solicitation Completion
The Company accepted, on May 15, 2006, for payment all of its
9-3/4% Senior Subordinated Notes due 2014 (CUSIP No. 46612GAC1)
that were validly tendered pursuant to its tender offer and
consent solicitation. The Company used the proceeds of the term
loan and cash on hand to pay the total consideration to holders of
the Notes that were validly tendered pursuant to the Offer, and to
pay premiums, fees, commissions and expenses related to the Offer.
Each holder who validly tendered its Notes received total
consideration equal to $1,015.07 per $1,000 principal amount of
the Notes validly tendered, or 101.507% of their par value, plus
accrued and unpaid interest up to, but not including, the
settlement date, which was May 15, 2006.
The Offer was commenced on Oct. 3, 2005 and expired at 9:00 a.m.
on May 15, 2006. The Offer was conditioned upon, among other
things, the satisfaction or waiver of all closing conditions
contained in the underwriting agreement relating to Group's
initial public offering and upon the satisfaction or waiver of all
funding conditions contained in the documents relating to a
previous term loan the Company was going to obtain from certain
lenders, each as described in the Offer documents. The Company
waived both of these conditions. All other conditions of the
Offer were satisfied.
Holders of 100% of the outstanding principal amount of the Notes
($275 million) had tendered their Notes and consented to the
proposed amendments to the indenture governing the Notes, and that
the Company had entered into a supplemental indenture containing
the proposed amendments, which became effective upon the
acceptance by the Company of the Notes that were validly tendered
in the Offer.
On May 15, 2006, Group issued a redemption notice pursuant to the
Indenture dated as of Oct. 17, 1997 (as amended by the First
Supplemental Indenture dated as of May 6, 2003) between Group, as
issuer, and U.S. Bank National Association, as trustee, to redeem
in whole, on June 14, 2006, all of its outstanding Debentures
issued under the Indenture. The Debentures will be redeemed at a
redemption price equal to 100% of the outstanding aggregate
principal amount of the Debentures, together with accrued and
unpaid interest to the redemption date.
J. Crew Group is a nationally recognized retailer of men's and
women's apparel, shoes and accessories. The Company operates 164
retail stores, the J. Crew catalog business, jcrew.com, and 44
factory outlet stores.
As of Oct. 29, 2005, J. Crew's equity deficit narrowed to
$525 million from a $578 million deficit at Oct. 30, 2004.
* * *
As reported in the Troubled Company Reporter on April 27, 2006,
Standard & Poor's Ratings Services' assigned its 'B' rating and
'3' recovery rating to J. Crew Operating Corp.'s $285 million term
loan and listed that rating on CreditWatch with positive
implications. The '3' rating indicates that lenders can expect
meaningful recovery of principal in the event of a payment default
or bankruptcy. The 'B' corporate credit rating for J. Crew Group
remains on CreditWatch with positive implications due to the
planned recapitalization of the company, which includes an IPO of
its common stock and debt refinancing.
KMART CORP: Amy Himle Wants Stay Lifted to Pursue Claim
-------------------------------------------------------
Amy Himle asks the U.S. Bankruptcy Court for the Northern District
of Illinois to lift the automatic stay to allow her to pursue her
claim.
On July 9, 2001, Ms. Himle sustained a head injury at a Kmart
Store in Rapid City, South Dakota. Ms. Himle filed Claim No. 8490
asserting permanent disability due to the injury.
Ms. Himle relates that due to the accident, she has lost her
short-term memory and has experienced seizures. If highly
stressed, traumatic amnesia occurs. In addition, Ms. Himle needs
lifetime medical attention to monitor her two brain subdural
hematomas.
Ms. Himle complains that she has "exhausted all efforts" to
communicate with Kmart lawyers.
Pursuant to a "prepetition bankruptcy court ordered judgment,"
Ms. Himle was awarded $1,750,000 as agreed settlement.
However, Ms. Himle refuses to accept the settlement amount.
Ms. Himle asserts that she wants to have a "decent living" and a
"trust" for her family.
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)
KRISPY KREME: Settles North Carolina ERISA Class Suit for $4.75MM
-----------------------------------------------------------------
A proposed settlement has been reached resolving an Employee
Retirement Income Security Act class action filed on
Mar. 3, 2005, in the U.S. District Court for the Middle District
of North Carolina against Krispy Kreme Doughnuts, Inc. and
individual defendants including certain members of its board of
directors, officers and employees.
The settlement would include a one-time cash payment to be made
by the company's insurer in the amount of $4,750,000. The
company and the individual defendants deny any and all
wrongdoing and would pay no money in the settlement.
The lawsuit alleges that the company and the individual
defendants breached duties with respect to the management and
administration of the Krispy Kreme Doughnut Corp. Retirement
Savings Plan (the 401(k) Plan) and the Krispy Kreme Profit
Sharing Stock Ownership Plan (the KSOP).
If the settlement is finalized, it will impact members of a
settlement class consisting of the plans' participants from Jan.
1, 2003 through May 12, 2006. If the settlement is finalized,
in addition to the cash payment by the company's insurer, the
company will amend the plans to cause the merger of the KSOP
into the 401(k) Plan.
Several contingent events must be satisfied before the
settlement becomes final, including preliminary and final
approval by the U.S. District Court where the matter is pending.
It is anticipated that if the U.S. District Court gives final
approval to the proposed settlement, this matter will be
resolved finally by the end of calendar 2007.
Case Background
The company and certain of its current and former officers and
employees were served with the complaint on Mar. 16, 2005, which
asserts claims for breach of fiduciary duty under ERISA.
Plaintiffs purport to represent a class of persons who were
participants in or beneficiaries of the company's retirement
savings plan or profit sharing stock ownership plan between
Jan. 1, 2003 and the date of filing and whose accounts included
investments in the company's common stock.
Plaintiffs, who seek unspecified monetary damages and other
relief, contend that:
-- defendants failed to manage prudently and loyally the
assets of the plans by continuing to offer the
company's common stock as an investment option and to
hold large percentages of the plans' assets in the
company's common stock;
-- failed to provide complete and accurate information
about the risks of the company's common stock;
-- failed to monitor the performance of fiduciary
appointees; and
-- breached duties and responsibilities as co-fiduciaries.
The plaintiffs filed an amended complaint on Jul. 1, 2005,
asserting the same claims they asserted in their original
complaint.
The defendants received an extension of time to respond to the
amended complaint, and on Dec. 15, 2005, filed a motion to
dismiss the amended complaint for failure to state a claim on
which relief may be granted.
The suit is "Smith v. Krispy Kreme Doughnut Corp., et al., Case
No. 1:05-cv-00187-WLO," filed in the U.S. District Court for the
Middle District of North Carolina under Judge William L. Osteen.
Representing the plaintiffs are:
(1) T. David Copley of Keller Rohrback, L.L.P., 1201 3rd.
Ave., Seattle, WA 98101, Phone: 206-623-1900, Fax: 206-
623-3384, E-mail: dcopley@kellerrohrback.com; and
(2) Gary V. Mauney of Lewis & Roberts, 5960 Fairview Rd.,
Ste. 102, Charlotte, NC 28210-3102, US, Phone: 704-347-
8990, Fax: 704-347-8929, E-mail:
garymauney@lewis-roberts.com.
Representing the defendants are:
(1) Adam H. Charnes of Kilpatrick Stockton, L.L.P., 1001 W.
Fourth St., Winston-Salem, NC 27101, Phone: 336-607-
7382, Fax: 336-734-2602, E-mail:
acharnes@kilpatrickstockton.com;
(2) Stacey Cerrone of Proskauer Rose, LLP, 909 Poydras St.,
Ste. 1100, New Orleans, LA 70112, US, Phone: 504-310-
4089, Fax: 504-310-2022, E-mail:
scerrone@proskauer.com; and
(3) Michael Scott Fox of Tuggle Duggins & Meschan, P.A.,
P.O.B. 2888, Greensboro, NC 27402, Phone: 336-271-5244,
Fax: 336-274-6590, E-mail: mfox@tuggleduggins.com.
About Krispy Kreme
Founded in 1937 in Winston-Salem, North Carolina, Krispy Kreme --
http://www.krispykreme.com/-- is a leading branded specialty
retailer of premium quality doughnuts, including the Company's
signature Hot Original Glazed. There are currently approximately
320 Krispy Kreme stores and 80 satellites operating systemwide in
43 U.S. states, Australia, Canada, Mexico, the Republic of South
Korea and the United Kingdom.
Headquartered in Winston-Salem, North Carolina, Freedom Rings LLC
is a majority-owned subsidiary and franchisee partner of Krispy
Kreme Doughnuts, Inc., in the Philadelphia region. The Debtor
operates six out of the approximately 360 Krispy Kreme stores and
50 satellites located worldwide. The Company filed for chapter 11
protection on Oct. 16, 2005 (Bankr. D. Del. Case No. 05-14268).
M. Blake Cleary, Esq., Margaret B. Whiteman, Esq., and Matthew
Barry Lunn, Esq., at Young Conaway Stargatt & Taylor, LLP,
represent the Debtor in its restructuring efforts. When the
Debtor filed for protection from its creditors, it estimated
$10 million to $50 million in assets and debts.
Headquartered in Oak Brook, Illinois, Glazed Investments, LLC, is
a 97%-owned unit of Krispy Kreme. Glazed filed for chapter 11
protection on Feb. 3, 2006 (Bankr. N.D. Ill. Case No. 06-00932).
The bankruptcy filing will facilitate the sale of 12 Krispy Kreme
stores, as well as the franchise development rights for Colorado,
Minnesota and Wisconsin, for approximately $10 million to Westward
Dough, the Krispy Kreme area developer for Nevada, Utah, Idaho,
Wyoming and Montana. Daniel A. Zazove, Esq., at Perkins Coie LLP
represents Glazed in its restructuring efforts. When Glazed filed
for protection from its creditors, it estimated assets and debts
between $10 million to $50 million.
KremeKo, Inc., Krispy Kreme's Canadian franchisee, is currently
restructuring under the Companies' Creditors Arrangement Act.
Pursuant to the Court's Initial Order, Ernst & Young Inc. was
appointed as Monitor in KremeKo's CCAA proceedings. The Monitor
is attempting to sell the KremeKo business.
LB COMMERCIAL: Moody's Affirms Junk Rating on 2 Cert. Classes
-------------------------------------------------------------
Moody's Investors Service upgraded the ratings of four classes and
affirmed the ratings of nine classes of LB Commercial Mortgage
Trust, Commercial Mortgage Pass-Through Certificates, Series 1999-
C1:
* Class A-1, $31,302,514, Fixed, affirmed at Aaa
* Class A-2, $802,800,000, Fixed, affirmed at Aaa
* Class X, Notional, affirmed at Aaa
* Class B, $90,854,000, Fixed, affirmed at Aaa
* Class C, $86,904,000, Fixed, upgraded to Aaa from A1
* Class D, $63,202,000, Fixed, upgraded to Aa3 from Baa1
* Class E, $31,602,000, Fixed, upgraded to A3 from Baa3
* Class F, $19,750,000, Fixed, upgraded to Baa3 from Ba1
* Class G, $29,232,000, Fixed, affirmed at Ba2
* Class H, $10,270,000, Fixed, affirmed at Ba3
* Class J, $22,911,000, Fixed, affirmed at B3
* Class K, $7,900,000, Fixed, affirmed at Caa2
* Class L, $2,370,000, Fixed, affirmed at Ca
As of the April 17, 2006 distribution date, the transaction's
aggregate balance has decreased by approximately 24.0% to $1.2
billion from $1.6 billion at closing.
The Certificates are collateralized by 151 mortgage loans ranging
in size from less than 1.0% to 10.9% of the pool, with the top 10
loans representing 50.6% of the pool. The pool is composed of a
shadow rated loan component, a conduit component and a credit
tenant lease component. Thirty-eight loans, representing 34.0% of
the pool, have defeased and are collateralized by U.S. Government
securities. The defeased loans include four of the pool's top ten
loans -- EAB Plaza, Natomas Corporate Center, Boston Design Center
and Corporetum Office Campus.
Twelve loans have been liquidated from the trust, resulting in
aggregate realized losses of approximately $8.3 million. Four
loans, representing less than 1.0% of the pool, are in special
servicing. Moody's estimated losses of $4.0 million for the
specially serviced loans. Thirty-five loans, representing 20.6%
of the pool, are on the master servicer's watchlist.
Moody's was provided with year-end 2004 and full or partial year
2005 operating results for 98.9% and 86.3% of the performing
loans, respectively.
Moody's loan to value ratio for the conduit component is 85.1%,
compared to 82.7% at Moody's last full review in June 2004 and
compared to 88.8% at securitization.
Moody's is upgrading Classes C, D, E and F due to a high
percentage of defeased loans, the improved overall performance of
the shadow rated loans and increased credit support.
The pool contains five shadow rated loans. The largest shadow
rated loan is the Starwood Financial Portfolio Loan, which is
secured by 15 full-service and two limited service hotels located
in seven western states. The portfolio contains 3,988 rooms and
the properties are operated as DoubleTree and Red Lion Inn. The
hotels are master leased by a subsidiary of Hilton Hotels
Corporation.
The portfolio's performance has declined significantly since
securitization although it has improved since Moody's last review.
Overall occupancy and RevPAR for calendar year 2005 were 67.0% and
$58.84 respectively, compared to 64.0% and $52.03 at last review
and compared to 71.6% and $84.39 at securitization.
The loan is on the master servicer's watchlist because five of the
properties, representing 25.1% of the allocated loan balance, had
negative net cash flow for 2005. Moody's current shadow rating is
B3, the same as at last review.
The Woodlands Hills Mall Loan is secured by a 1.1 million square
foot regional mall located in Tulsa, Oklahoma. The property is
anchored by Dillard's, Sears, Foley's and J.C. Penney. The in-
line space is 95.4% occupied, compared to 92.3% at last review and
compared to 91.3% at securitization. Performance has improved due
to increased revenues, stable expenses and amortization. The loan
sponsor is Simon Property Group. Moody's current shadow rating is
Aa1, compared to Aa2 at last review.
The Penn Square Mall Loan is secured by a 1.1 million square foot
regional mall located in Oklahoma City, Oklahoma. The property is
anchored by Dillard's, Foley's and J.C. Penney. The in-line space
is 97.0% occupied, essentially the same as at last review.
Performance has improved due to increased revenues, stable
expenses and amortization. The property is owned by an affiliate
of Simon Property Group, Inc. Moody's current shadow rating is
Aaa compared to Aa2 at last review.
The Grand Central Mall Loan is secured by a 1.0 million square
foot regional mall located in Parkersburg, West Virginia. The
property is anchored by Sears, J.C. Penney, Elder-Beerman and
Profitt's. The Mall's overall occupancy is 86.9%, compared to
98.2% at last review.
The increase in vacancy is largely due to Kroger vacating 64,000
square feet in 2005. Despite the decline in occupancy,
performance has improved due to higher rental rates, stable
expenses and amortization. In-line tenant sales were $307.00 per
square foot for calendar year 2005, compared to $259.00 per square
foot at securitization. The property is owned by an affiliate of
Glimcher Reality Trust. Moody's current shadow rating is Ba1,
compared to Ba2 at last review.
The Crossroad Mall Loan is secured by a 765,000 square foot
regional mall located in Portage, Michigan. The property is
anchored by Sears, J.C. Penney, Marshall Field's and Mervyn's. The
in-line space is 92.5% occupied, compared to 97.5% at last review.
Despite the decline in occupancy, performance has improved due to
increased rental rates, stable expenses and loan amortization.
The property is owned by an affiliate of General Growth Properties
Inc. Moody's current shadow rating is Aa2, compared to A3 at last
review.
The top three conduit loans represent 5.8% of the outstanding pool
balance. The largest conduit loan is the Carmel Plaza Loan, which
is secured by an 115,000 square foot open-air specialty retail
center located in Carmel, California.
The property is 61.0% occupied, compared to 73.0% at last review.
The decline in occupancy is largely attributed to Saks Fifth
Avenue and Ann Taylor vacating the center. The center has been
recently renovated and the borrower is in active negotiation with
a number of prospective tenants. The loan is on the master
servicer's watchlist. Moody's LTV is in excess of 100.0%,
compared to 84.5% at last review.
The second largest conduit loan is the Pacific Park Plaza Loan,
which is secured by a 245,000 square foot office building located
in Honolulu, Hawaii. The property is 89.4% occupied, compared to
79.0% at last review. The largest tenants are Kaiser Foundation
Health and the Office of Hawaiian Affairs. Moody's LTV is 98.4%,
essentially the same as at last review.
The third largest conduit loan is the Arden Portfolio, which
consists of three cross-collateralized loans secured by five
office buildings. The buildings total 260,000 square feet and are
all located in southern California. The buildings total 260,000
square feet.
The largest tenant is the State of California which occupies 28.5%
of the premises under a lease expiring in April 2009. Performance
has improved due to increased revenue and amortization since
Moody's last review. Moody's LTV is 82.4%, compared to 98.3% at
last review.
The CTL component includes seven loans secured by properties under
bondable leases. The largest exposures are CVS Corporation and
Kmart Corporation.
The pool's collateral is a mix of retail, U. S. Government
securities, lodging, office and mixed use, multifamily, CTL and
industrial and self storage. The collateral properties are
located in 36 states and the Commonwealth of Puerto Rico. The
highest state concentrations are Oklahoma, California, Michigan,
West Virginia and Washington. All of the loans are fixed rate.
LEAR CORP: Begins Tender Offer for Zero-Coupon Conv. Sr. Notes
--------------------------------------------------------------
Lear Corporation (NYSE: LEA) commenced, on May 16, 2006, a cash
tender offer for any and all of its outstanding Zero-Coupon
Convertible Senior Notes due 2022, issued in February 2002. The
tender offer will expire at midnight (Eastern Time) on June 13,
2006, unless extended.
Lear is offering to purchase the convertible notes for cash at a
purchase price of $475 per $1,000 principal amount at maturity.
Assuming that all of the outstanding convertible notes are
tendered in the tender offer, the aggregate amount of cash
required for Lear to purchase the tendered notes is estimated to
be approximately $304 million. The purchase price will be
financed with a portion of the proceeds of Lear's recently
reported new term loan facility. All notes purchased in the
tender offer will be retired upon consummation of the tender
offer. Payments of the tender consideration for the convertible
notes validly tendered and not withdrawn on or prior to the
expiration date and accepted for purchase will be made promptly
after the expiration date.
In connection with the tender offer, Lear is soliciting the
consents of the holders of the convertible notes to proposed
amendments to the indenture governing the notes. The primary
purpose of the proposed amendments is to eliminate certain
restrictive covenants in the indenture. In order for the
amendments to become effective, holders of a majority in aggregate
principal amount of the convertible notes must consent to the
proposed amendments. Lear is not offering any separate or
additional payment for the consents. Holders of the convertible
notes may not tender their notes without delivering the related
consents.
The terms and conditions of the tender offer appear in Lear's
Offer to Purchase, dated May 16, 2006, and the related Consent and
Letter of Transmittal. The consummation of the tender offer is
conditioned upon, among other things, receipt of the consent of
the holders of a majority in aggregate principal amount of the
convertible notes to the proposed amendments to the indenture
governing the notes and other customary closing conditions. If
any of the conditions are not satisfied, Lear is not obligated to
accept for payment, purchase or pay for, or may delay the
acceptance for payment of, any tendered notes, and may terminate
the tender offer. Subject to applicable law, Lear may waive any
condition applicable to the tender offer and extend or otherwise
amend the tender offer.
Merrill Lynch, Pierce, Fenner & Smith Incorporated is acting as
dealer manager and solicitation agent for the tender offer and
consent solicitation. Questions regarding the tender offer or
consent solicitation may be directed to:
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Telephone (212) 449-4914 (collect)
Toll Free (888) 654-8637
Global Bondholder Services Corporation is acting as the
information agent and the depositary. Copies of the Offer to
Purchase, the Consent and Letter of Transmittal and related
documents may be obtained at no charge from:
Global Bondholder Services Corporation
Telephone (212) 430-3774
Toll Free (866) 857-2200
About Lear Corp
Headquartered in Southfield, Michigan, Lear Corporation
(NYSE: LEA) -- http://www.lear.com/-- is one of the world's
largest suppliers of automotive interior systems and components.
Lear provides complete seat systems, electronic products and
electrical distribution systems and other interior products. With
annual net sales of $17.1 billion, Lear ranks #127 among the
Fortune 500. The Company's world-class products are designed,
engineered and manufactured by a diverse team of 115,000 employees
at 282 locations in 34 countries.
* * *
As reported in the Troubled Company Reporter on April 21, 2006,
Standard & Poor's affirmed the 'B+' rating on the $1 billion
first-lien term loan. Standard & Poor's corporate credit rating
on Lear Corp. is B+/Negative/B-2. The speculative-grade rating
reflects the company's depressed operating performance caused by
severe industry pressures.
LENOX GROUP: Moody's Affirms B1 Corporate Family Rating
-------------------------------------------------------
Moody's Investors Service affirmed the ratings of Lenox Group,
Inc., however changed the ratings outlook to negative from stable
reflecting the agency's revised expectation that the company may
generate weaker free cash flow in 2006 than anticipated at initial
rating assignment in August 2005.
While recognizing the continued weakness in its wholesale gift and
specialty channel, higher than expected integration and
restructuring costs, and greater than anticipated working capital
and capital expenditure requirements, Moody's view of the
company's near term liquidity position remains adequate, as
reflected in today's affirmation of Lenox Group's Speculative
Grade Liquidity Rating of SGL-3.
The notching of the ratings for the existing senior credit
facility was affirmed as it continues to reflect the benefits and
limitations of the respective collateral packages.
Moody's affirmed the following ratings:
Lenox Group, Inc.
* B1 Corporate Family Rating;
D56, Inc.
* The Ba3 rating on the $175 million revolving credit facility
* The B1 rating on the $100 million term loan
* The SGL-3 Speculative Grade Liquidity Rating
* The ratings outlook changed to negative from stable.
Moody's previous rating action on Lenox Group was the August 4,
2005 first-time ratings assignment after the acquisition of Lenox
Inc. by Department 56, Inc., which has changed its name to Lenox
Group, Inc.
For further information, refer to Moody's Summary Opinion and
Speculative Grade Liquidity Assessment on Lenox Group.
Based in Eden Prarie, Minnesota, Lenox Group Inc. was formed on
Sept. 1, 2005, when Department 56, Inc., a leading designer,
wholesaler and retailer of collectibles and giftware products
purchased Lenox, Inc., a leading designer, manufacturer and
marketer of fine china, dinnerware, silverware, crystal and
giftware products. The combined company has proforma revenue
exceeding $500 million.
LEVITZ HOME: Wants More Time to Decide on Nine Leases
-----------------------------------------------------
Levitz Home Furnishings, Inc., and its debtor-affiliates had an
interest in approximately 130 leased locations, and pursuant to
its Designation Rights, PLVTZ LLC has until May 31, 2006, to
provide written notice to the Debtors of either their election:
-- to discontinue their efforts to market and sell a Lease; or
-- to designate a Lease for assumption and assignment.
The Debtors and PLVTZ ask the U.S. Bankruptcy Court for the
Southern District of New York to:
(a) extend the deadline to assume, assume and assign, and
reject unexpired non-residential real property leases
pursuant to Section 365(d)(4) of the Bankruptcy Code, for
any Lease that is subject to a Lease Assumption Notice or
Motion to Assume filed or served on or before the
Designation Deadline through and including the date an
order approving the assumption or requiring the Debtors to
reject the Lease becomes final and non-appealable; and
(b) extend both the Designation Deadline and Section 365(d)(4)
Deadline for these eight store leases and a home office
lease, without prejudice to the Landlords' right to move
to compel the Debtors and PLVTZ to make its election at an
earlier time:
Extension
Store# Address Landlord Date
------ ------- -------- ----------
10205 Sound View, BR Bruckner Corporation 07/28/06
New York
30501 San Bernadino, Harrigan Weidenmuller 08/31/06
California Co.
40201 Santa Clara, Harrigan Weidenmuller 08/31/06
California Co.
40301 Fremont, Imperial Property 08/31/06
California Management LLC
10401 Middletown, Topper Associates, LLC 07/28/06
New York
10504 Kenilworth, Grand Pop Realty Co. 07/28/06
New Jersey Inc.
20509 Nanuet, Masel Properties 07/28/06
New York
30305 Los Angeles, Goldrich & Kest 08/31/06
California Industries, LLC
Home Woodbury, Lake Park 300 Crossways 12/30/06
Office New York Park Drive, LLC, and
CLK-HP 300 Crossways
Park Drive, LLC
PLVTZ believes that it will have made final decisions with
respect to all Leases, except those nine Leases, as of the May
31, 2006, Designation Deadline, D. J. Baker, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, in New York, tells the Court.
PLVTZ has made significant progress over the last five months
with respect to the Leases, and has done so by avoiding most
litigation. Mr. Baker reminds the Court that PLVTZ was able to
settle and resolve disputes with the Unitary Landlord, whose
Unitary Lease affected more than 37 locations at which the
Debtors operated.
More importantly, PLVTZ and its representatives are presently in
negotiations with the Landlords for most of those nine premises
regarding:
* redevelopment of the premises;
* changes to the terms of the leases;
* alterations to the leased premises; and
* short-term occupancy of the leased premises during which
period the landlords may market the Leases and PLVTZ may
effect a smooth transition to a new location.
PLVTZ is hopeful that the extensions will be consensual. To
avoid having the impending deadlines used as leverage, the
Debtors and PLVTZ ask the Court for relative short extensions to
permit those negotiations to be finalized without either party
obtaining negotiating leverage.
Mr. Baker notes that, with respect to at least three of those
nine Leases, the Section 365(d)(4) Deadlines and the Designation
Deadline impose a significant burden on PLVTZ. The Debtors and
PLVTZ not only must determine to assume or reject a lease by
May 31, 2006, they must also "surrender" the Leased premises, he
explains.
About Levitz Home
Headquartered in Woodbury, New York, Levitz Home Furnishings, Inc.
-- http://www.levitz.com/-- is a leading specialty retailer of
furniture in the United States with 121 locations in major
metropolitan areas principally the Northeast and on the West Coast
of the United States. The Company and its 12 affiliates filed for
chapter 11 protection on Oct. 11, 2005 (Bank. S.D.N.Y. Lead Case
No. 05-45189). David G. Heiman, Esq., and Richard Engman, Esq.,
at Jones Day, represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they reported $245 million in assets and $456 million
in debts. Jay R. Indyke, Esq., at Kronish Lieb Weiner & Hellman
LLP represents the Official Committee of Unsecured Creditors.
Levitz sold substantially all of its assets to Prentice Capital on
Dec. 19, 2005. (Levitz Bankruptcy News, Issue No. 13 Bankruptcy
Creditors' Service, Inc., 215/945-7000)
LEVITZ HOME: Wants to Assign 31 Store Leases to PLVTZ
-----------------------------------------------------
PLVTZ, LLC, and the Pride Capital Group, dba Great American Group,
as purchasers of substantially all of Levitz Home Furnishings,
Inc., and its debtor-affiliates' assets, provided the Debtors with
Lease Assumption Notices for 31 store leases.
The Debtors seek authority from the U.S. Bankruptcy Court for the
Southern District of New York to assume and assign these leases to
the Purchasers, and pay the cure amounts:
Store# Address Landlord Cure Amount
------ ------- -------- -----------
10204 New York, 125th Street Gateway $50,653
New York Ventures LLC
20106 Bridgewater, Jerome & Joan Leflien & $19,004
New Jersey Joseph & Joan Leflein
20309 Eatontown, Gage II Family Limited $19,528
New Jersey Partnership
30502 Irvine, Spectrum V Management $0
California (Klaff Realty, L.P. as
paying agent), and SJRD
- Spectrum V Partners
30203 Los Angeles, Walter N. Marks (Klaff $0
California Realty, L.P. as paying
agent), and Helms Hall
of Fame
20505 Yonkers, Acklinis Original $127,958
New York Building, L.L.C.
30205 Arroyo Grande, Waddell Family Trust $20,650
California
40203 San Carlos, Brittan Corners $99,230
California Shopping Center, LLC,
101 San Carlos
Partners, c/o Davila
Group, Inc.
40304 Pleasanton, Excel Realty Trust, and $55,977
California New Plan Excel Realty
Trust, Inc.
40404 Rohnert Park, Commercial Realty $107,966
California Group, Inc.
40504 Phoenix, Red Mountain West $105,038
Arizona Properties, Inc., and
RMRGJFL Portfolio, LLC,
c/o Red Mountain West
Properties, Inc.
10202 New York, Consolidated Edison of $0
New York New York, Inc.
10402 Mohegan Lake, Galileo Cortlandt LLC, $61,842
New York ERT Australian
Management, LP.
10702 Jersey City, Inland Mid-Atlantic $0
New Jersey Management #150 Inland
Southeast Jersey City,
LLC, c/o Inland
Mid-Atlantic Management
Corp.,
10801 Brick, Inland Mid-Atlantic $40,860
New Jersey Management #152 Inland
Southeast Jersey City,
LLC, c/o Inland
Mid-Atlantic Management
Corp.,
20202 Garden City, Feinco, LLC, c/o Buy $128,100
New Jersey Buy Baby
20203 Nesconset, KIMCO Realty $0
New York Corporation, and
PL Smithtown, LLC, c/o
Kimco Realty Corp.
20506 Staten Island, MRP Family Holdings, $0
New York LLC
30103 Victorville, Carol H. Rodman, $15,486
California Trustee, and Hillary S.
Gilson
30503 Corona, KIMCO Realty Corp. $107,840
California
30603 Silverdale, Silverdale Ridgetop, $9,753
Washington LLC, and SRW
Properties, LLC
30604 Tacoma, Krausz Enterprises, $48,307
Washington Krausz FT One, LP, c/o
The Krausz Companies
30605 Tukwila, Klaff Realty, L.P., $130,167
Washington Levitz Tukwila, LLC,
c/o Klaff Realty LP
30702 Portland, Sears, Roebuck & $26,371
Oregon Company
40302 Fresno, Lowenberg Corporation $36,549
California
40305 Stockton, Krausz Enterprises, $40,190
California Krausz FT One, LP, c/o
The Krausz Companies
40403 Pinole, Krausz Enterprises, $12,934
California Krausz FT One, LP, c/o
The Krausz Companies
40501 Glendale, KIMCO Realty $0
Arizona Corporation, and PL
Smithtown, LLC, c/o
Kimco Realty Corp.
40503 North Phoenix, Louise Partners, c/o $50,322
Arizona Richard E. Caruso, Inc.
40601 Henderson, KIMCO Realty $59,624
Nevada Corporation, and PL
Smithtown, LLC, c/o
Kimco Realty Corp.
71201 Clackamas, Clackamas Commerce $16,925
Oregon Center
Richard H. Engman, Esq., at Jones Day, in New York, tells the
Court that the proposed assumption and assignment provide the
Landlords with adequate assurance of future performance.
About Levitz Home
Headquartered in Woodbury, New York, Levitz Home Furnishings, Inc.
-- http://www.levitz.com/-- is a leading specialty retailer of
furniture in the United States with 121 locations in major
metropolitan areas principally the Northeast and on the West Coast
of the United States. The Company and its 12 affiliates filed for
chapter 11 protection on Oct. 11, 2005 (Bank. S.D.N.Y. Lead Case
No. 05-45189). David G. Heiman, Esq., and Richard Engman, Esq.,
at Jones Day, represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they reported $245 million in assets and $456 million
in debts. Jay R. Indyke, Esq., at Kronish Lieb Weiner & Hellman
LLP represents the Official Committee of Unsecured Creditors.
Levitz sold substantially all of its assets to Prentice Capital on
Dec. 19, 2005. (Levitz Bankruptcy News, Issue No. 13 Bankruptcy
Creditors' Service, Inc., 215/945-7000)
LIBBEY INC: S&P Assigns B Rating to Proposed $400 Million Notes
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to Toledo, Ohio-based glass tableware products
manufacturer Libbey Inc.
At the same time, Standard & Poor's assigned its 'B' senior
unsecured debt rating to the company's proposed $400 million of
senior unsecured notes due 2014, which will be issued by the
company's wholly owned subsidiary Libbey Glass Inc. and guaranteed
on a senior basis by Libbey Inc.
For analytical purposes, Standard & Poor's views Libbey Inc. and
Libbey Glass Inc. as one economic entity. All ratings are based
on preliminary offering statements and are subject to review upon
final documentation.
"The company plans to acquire the remaining 51% of the capital
stock of its joint venture Vitrocrisa Holdings S de R.L. de C.V.
and related companies (Crisa) from its joint venture partner Vitro
S.A. de C.V. (B-/Negative/--)," said Standard & Poor's credit
analyst David Kang.
Proceeds from the new notes, along with some borrowings from a new
$150 million senior secured revolving credit facility (unrated)
will be used to:
* acquire the remaining equity interest in Crisa for
$80 million;
* refinance $77.2 million of Crisa indebtedness that will be
assumed by Libbey and approximately $272.7 million of
existing debt at Libbey; and
* pay transaction fees of approximately $14.0 million.
Upon the completion of the acquisition, Crisa will become a wholly
owned subsidiary of Libbey.
The outlook is stable.
Standard & Poor's estimates that Libbey will have about $444
million of total debt outstanding upon the closing of the
transaction.
The ratings on Libbey reflect:
* its narrow business focus;
* capital and labor-intensive operations;
* vulnerability to volatility in natural gas prices;
* sizable unfunded pension and postretirement medical benefit
obligations; and
* leveraged financial profile.
Somewhat mitigating these factors is Libbey's leading market share
as a glassware provider within the U.S. foodservice industry. In
addition, the acquisition of the remaining interest in Crisa
provides the company with greater geographic reach and some cost
savings opportunities.
LIBBEY GLASS: Moody's Rates $400 Million Sr. Unsec. Notes at B3
---------------------------------------------------------------
Moody's Investors Service assigned first time ratings to Libbey
Glass Inc., a leading global maker of tableware products in North
America and one of the largest glass tableware makers in the
world.
The ratings are in response to the company's April 2, 2006
announcement that it has signed a definitive agreement to purchase
the remaining 51% of Vitrocrisa Holdings, S de R.L. de C.V., its
Mexican joint venture with Vitro SA, for approximately $80 million
plus the assumption of $65 million Crisa debt.
Concurrently, Moody's assigned a Speculative Grade Liquidity
rating of SGL-3, reflecting the expectation of marginal near-term
liquidity. The rating outlook is stable.
The $400 million of senior unsecured notes, which will be sold
under rule 144A, along with a portion of a new $150 million
secured revolving credit facility plus balance sheet cash, will be
used to finance the acquisition, refinance existing Libbey and
Crisa debt, and pay fees and expenses.
Moody's assigned ratings:
* Assigned B2 corporate family rating to Libbey Glass Inc.
* Assigned B3 to the proposed $400 million senior unsecured
notes due 2014.
* Assigned a Speculative Grade Liquidity rating of SGL-3
The rating outlook is stable.
The assigned ratings are subject to the closing of the proposed
acquisition and the final review of executed documents.
The key drivers of the B2 corporate family rating and the stable
outlook:
(1) the significant amount of proforma financial leverage as a
result of the proposed transaction, which is expected to
increase to over 6.0 times at close from 5.7 times at the
end of 2005;
(2) declining profitability and returns over the last few
years as a result of manufacturing inefficiencies and
significant increases in labor and raw material costs;
(3) lack of free cash flow generation as a result of the
capital intensive nature of Libbey's business and
incremental spending on a new plant in China;
(4) the company's limited size and product scope.
Supporting the rating:
(1) the company's leading market positions in foodservice
glassware;
(2) its strong brand names;
(3) extensive distribution capabilities.
The stable outlook reflects limited tolerance for adverse
fluctuations in credit metrics which will also be highly sensitive
to the execution risks associated with the company's integration
and restructuring efforts as the company is initially weakly
positioned in the B2 category.
The stable outlook assumes that the company will continue to
maintain its stated core business strategy, manage liquidity
effectively, and improve debt protection measures mainly through
improved profitability over the near-to-intermediate term.
Should operating performance materially deviate from Moody's
expectations, the ratings outlook would change to negative.
Additionally, any additional increases in financial leverage or
unexpected deterioration in free cash flow generation throughout
the near term could also trigger a change in the outlook.
Quantitatively, downward pressure on the ratings would occur if
EBITA margins do not approach 6.5% by FYE 2006 with further
improvement to 9.5% by FYE 2007, EBIT does not cover interest, or
if debt-to-EBITDA exceeds 6.5x.
While it is unlikely the ratings could be upgraded given the
company's weak position in its rating category over the near term
the ratings outlook could change to positive if Libbey were able
to successfully execute its extensive integration, restructuring
and expansion plans resulting in sustained profitability
improvements such that operating margins significantly exceed 10%,
leverage fell below 4.5x, and free cash flow-to-debt were to
exceed 6%.
The B3 ratings assigned to the $400 million senior notes reflect
their structural subordination to the $150 million secured credit
facility as well as modest coverage in a distressed scenario. The
notes will be guaranteed by Libbey Inc., the issuer's parent, and
all domestic subsidiaries.
The notes are non-callable until year four, and contain a put at
101% in the event of a change in control. The $150 million
secured credit facility is unrated.
The facility is secured by a perfected first priority security
interest in all U.S. and Dutch assets of the borrowers and its
subsidiaries and a pledge of up to 65% of the capital stock of all
material foreign subsidiaries.
For further information, refer to Moody's Summary Opinion and
Speculative Grade Liquidity Assessment on Libbey Glass Inc.
Headquartered in Toledo, Ohio, Libbey Glass Inc. is the largest
manufacturer of glass tableware in North America, and one of the
largest manufacturers of glass tableware in the world, with 2005
revenues of $570 million. The Company serves foodservice, retail,
industrial and business-to-business customers in over 90
countries.
LIFESTREAM TECH: March 31 Balance Sheet Upside-Down by $8 Million
-----------------------------------------------------------------
Lifestream Technologies, Inc., delivered its financial results for
the quarter ended March 31, 2006, to the Securities and Exchange
Commission on May 15, 2006.
For the three months ended March 31, 2006, the Company reported a
$435,114 net loss on $377,823 of net sales, in contrast to a
$1,692,026 net loss on $568,761 of net sales for the same period
in 2005.
The Company's balance sheet showed $1,056,197 in total assets at
March 31, 2006, and liabilities of $9,456,612, resulting in a
stockholders' deficit of $8,400,415.
At March 31, 2006, the Company had a working capital deficiency of
$8,704,776, compared to a working capital deficiency of $4,428,438
at June 30, 2005.
Going Concern Doubt
Lifestream's independent registered public accountants, BDO
Seidman, LLP, expressed substantial doubt about the Company's
ability to continue as a going concern after it audited
Lifestream's condensed consolidated financial statements for the
fiscal years ended June 30, 2005 and 2004. The accountants
pointed to substantial operating and net losses, as well
as negative operating cash flow, since its inception.
A full-text copy of the Company's Quarterly Report in Form 10-QSB,
is available at no charge at:
http://ResearchArchives.com/t/s?954
About Lifestream Technologies
Lifestream Technologies Inc. -- http://www.lifestreamtech.com/--
markets a proprietary over-the-counter, total cholesterol-
monitoring device for at-home use by both health-conscious and at-
risk consumers. The Company's cholesterol monitor enables an
individual, through regular at-home monitoring of their total
cholesterol level, to continually assess their susceptibility to
developing cardiovascular disease, the single largest cause of
premature death and permanent disability among adult men and women
in the U.S.
LIFESTREAM TECH: Sells Asset to RAB Special for $4.5 Million
------------------------------------------------------------
Lifestream Technologies, Inc., entered into a patent and trademark
assignment and license assumption agreement with RAB Special
Situations (Master) Fund Limited for the sale of certain patents
pending, licenses, and other intellectual property for the
Company's personal health card technology.
"We are pleased we were able to structure this deal to bring such
value to our shareholders," Matt Colbert, Lifestream's CFO, said.
"Since January 2005, we have converted into common stock
approximately $2.35 million in debt and accrued interest and
significantly reduced general and administrative expenses.
Coupled with this debt reduction, we are better positioned for a
capital investment to facilitate the expected roll out of our new
Lifestream Two in One Blood Pressure/Cholesterol Monitor. We will
continue to pursue additional cost-saving measures, as well as
debt reduction and debt restructuring over the coming months."
In connection with this agreement, the Company assigned to RAB all
of its right, title and interest in certain patent applications,
trademarks and related license agreements in exchange for the
cancellation of $4.5 million of secured and unsecured debt. The
cancelled debt consisted of:
(a) $3,480,000 evidenced by various convertible term notes
previously issued by the Company in favor of RAB and
(b) $1,020,000 evidenced by a loan agreement dated Nov. 12,
2004 between the Company and RAB under which the
outstanding balance as of the date of the assignment was
$2,869,740.
About Lifestream Technologies
Headquartered in Post Falls, Idaho, Lifestream Technologies Inc.
(OTCBB:LFTC) -- http://www.lifestreamtech.com/-- markets a
proprietary over-the-counter, total cholesterol-monitoring device
for at-home use by both health-conscious and at-risk consumers.
The Company's cholesterol monitor enables an individual, through
regular at-home monitoring of their total cholesterol level, to
continually assess their susceptibility to developing
cardiovascular disease, the single largest cause of premature
death and permanent disability among adult men and women in the
U.S.
At March 31, 2006, Lifestream Technologies' balance sheet showed a
stockholders' deficit of $8,400,415, compared to a $6,398,851
stockholders' deficit at June 30, 2005.
LION CAPITAL: Balance Sheet Upside Down By $1.6 Mil. at March 31
----------------------------------------------------------------
Lion Capital Holdings, Inc., filed its first quarter financial
statements ended March 31, 2006, with the Securities and Exchange
Commission on May 15, 2006.
The Company reported a $109,436 net loss with no revenue for the
three months ended March 31, 2006.
At March 31, 2006, the Company's balance sheet showed $78,170 in
total current assets and $1,689,258 in total current liabilities,
resulting in a $1,611,088 stockholders' deficit.
A full-text copy of the Company's 2005 Annual Report is available
for free at http://ResearchArchives.com/t/s?953
Going Concern Doubt
Chisholm, Bierwolf & Nilson, LLC, in Bountiful, Utah, raised
substantial doubt about Lion Capital Holdings, 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, negative working capital, and dependence on
financing to continue operations.
Lion Capital Holdings, Inc., through its subsidiary, Capital Cable
and Wire, Inc., produced specialty custom cable assemblies and
harnesses for various industries.
M/I HOMES: S&P Affirms BB Corp. Credit & Sr. Unsec. Debt Ratings
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB' corporate
credit and senior unsecured debt ratings on M/I Homes Inc. The
affirmations affect approximately $198.5 million in senior
unsecured notes. The outlook is stable.
"The ratings acknowledge M/I's historically conservative, cycle-
tested management team, which has maintained a sound financial
profile while strategically expanding outside of the company's
core Midwestern platform," said credit analyst Tom Taillon.
"Homebuilding operations in Florida are expected to surpass Ohio
as the primary source of revenue during 2006, with sales in the
Mid-Atlantic region providing additional cushion against a
weakened Midwest."
Standard & Poor's anticipates further challenges in M/I's
Midwestern markets, but expects the company's sizeable backlogs in
Florida and the Mid-Atlantic will help cushion potential margin
erosion in the near term. Improvement to the ratings is unlikely
at this time, given current weaker-than-average debt protection
metrics. Ratings could in fact, come under pressure if growth
from M/I's expanded operating platform falls materially short of
current expectations, which would pressure recently weakened debt
protection metrics.
MANIWOTOC CO: Pays EUR193 Million for 10.375% Sr. Sub. Notes
------------------------------------------------------------
The Manitowoc Company completed the redemption of its 10.375%
Senior Subordinated Notes Due 2011. The total cash paid was
EUR193 million and included a call price of 105.188% plus accrued
and unpaid interest at the time of redemption. The Bank of New
York, trustee for the issue, redeemed the notes through its London
and Luxemburg offices. Manitowoc generated proceeds for the
redemption of the notes from its multi-currency revolving credit
facility, its accounts receivable securitization facility, and
cash on hand.
As a result of the redemption, the related indenture dated May 9,
2001, by The Manitowoc Company, the guarantor subsidiaries, and
The Bank of New York, as trustee, terminated automatically as of
May 15, 2006.
About The Manitowoc Company
Headquartered in Maniwotoc, Wisconsin, The Manitowoc Company, Inc.
(NYSE: MTW) -- http://www.manitowoc.com/-- provides lifting
equipment for the global construction industry, including lattice-
boom cranes, tower cranes, mobile telescopic cranes, and boom
trucks. As a leading manufacturer of ice-cube machines,
ice/beverage dispensers, and commercial refrigeration equipment,
the company offers the broadest line of cold-focused equipment in
the foodservice industry. In addition, the company is a leading
provider of shipbuilding, ship repair, and conversion services for
government, military, and commercial customers throughout the
maritime industry.
* * *
As reported in the Troubled Company Reporter on Mar. 27, 2006,
Standard & Poor's Ratings Services raised its ratings on
diversified equipment manufacturer The Manitowoc Co. Inc.,
including the corporate credit rating on the company, which rose
to 'BB' from 'BB-'. S&P said the outlook is stable.
MASSACHUSETTS DEVELOPMENT: S&P Affirms Revenue Bonds' BB+ Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB+' rating on
Massachusetts Development Finance Agency's revenue bonds, issued
for Eastern Nazarene College, and removed the rating from
CreditWatch with negative implications, where it was placed on
March 8, 2006. The outlook is negative.
The negative outlook reflects:
* the college's recent senior management overhaul, with two key
positions yet to be filled;
* a significant decline in enrollment at the Division of
Adult Learning; and
* lower applications for fall 2006 (year to date).
In addition, the college recorded weaker-than-anticipated
financial performance in fiscal 2005, anticipates another deficit
in fiscal 2006, and does not project to achieve break-even
operating results until fiscal 2008.
"We expect that the president will have a complete senior staff by
the fall 2006 semester, that demand will have improved for both
traditional and adult students, and that the college will improve
its operating performance and return to break-even results by
fiscal 2008," said Standard & Poor's credit analyst Marc Savaria.
"We also expect that the college will improve its liquidity
position when excluding relatively nonliquid real estate assets.
Issuance of new debt would be a negative rating factor," he added.
The 'BB+' rating reflects:
* continued variability in enrollment levels, including a sharp
decline in its Division of Adult Learning enrollment over the
past five years;
* history of variable operating performance and a financial
plan that does not produce a net unrestricted operating
surplus until 2008;
* major senior management turnover over the past five years, as
well as high faculty turnover;
* very large real estate exposure (69% of the portfolio) in its
investment portfolio, which provides very little liquidity;
* very weak fundraising history; and
* a relatively high debt burden at 8% of budget.
A lower rating is precluded at this time due to the college's
strong niche as a faith institution, strong financial support from
the Nazarene churches, and no projected debt plans. The college
has roughly $21 million of debt outstanding that is a general
obligation of the college.
ENC is a four-year liberal-arts institution affiliated with the
International Church of the Nazarene. The college is one of eight
Nazarene liberal-arts colleges in the U.S. and one of 60
worldwide.
MEDIACOM COMMS: S&P Lowers Sr. Convertible Notes' Rating to CCC
---------------------------------------------------------------
Fitch Ratings downgraded the debt and Recovery Ratings of
Mediacom Communications Corporation and its wholly owned
subsidiaries, Mediacom LLC and Mediacom Broadband LLC as:
MCCC:
-- Issuer Default Rating to 'B' from 'B+'
-- Senior convertible notes to 'CCC/RR6' from 'CCC+/RR6'
Mediacom LLC:
-- Issuer Default Rating to 'B' from 'B+'
-- Senior unsecured debt 'CCC+/RR6' from 'B-/RR6'
-- Senior secured debt 'BB/RR1' from 'BB+/RR1'
Mediacom Broadband LLC:
-- Issuer Default Rating to 'B' from 'B+'
-- Senior unsecured debt to 'B-/RR5' from 'B/RR5'
-- Senior secured debt to 'BB/RR1' from 'BB+/RR1'
The rating outlook is stable.
Approximately $3.1 billion of debt as of the end of the first
quarter of 2006 is affected by Fitch's rating action.
This action reflects MCCC's high leverage and the lack of debt
reduction and improvement of its credit protection metrics in a
meaningful manner. In Fitch's opinion the company's operating
profile continues to lag behind its industry peer group
(consisting primarily of Insight Communications Company and
Cablevision Systems Corporation).
On balance, Fitch's ratings also incorporate the company's strong
liquidity position and upgraded cable plant, as well as the strong
geographical clustering of the company's subscribers. The ratings
are supported by the expected continuation of revenue and revenue
generating unit diversification through the deepening penetration
of digital cable and high speed data services, as well as the
introduction of voice over Internet protocol telephony service.
As of the end of the first quarter of 2006 MCCC's leverage
(calculated as total debt to LTM EBITDA) was 7.48x, reflecting a
slight improvement from 7.55x at the end of 2005. MCCC's leverage
has increased since the end of 2004 while coverage metrics have
declined. Fitch attributes the erosion of the company's credit
profile to competitive pressures brought on by:
* direct broadcast satellite providers;
* MCCC's launch of its VoIP telephone service; and
* the impact of hurricanes.
These factors have resulted in stagnate EBITDA growth and elevated
capital expenditures, which have contributed to MCCC's swing from
generating free cash flow (2004 free cash flow generation of $43.2
million) to becoming a net user of cash during 2005 and the first
quarter of 2006. Free cash flow is defined as cash from
operations less capital expenditures and dividends.
Increased capital expenditures are attributable to the continued
acceptance of advanced digital services as capital expenditures
continue to shift to success-based spending on customer premise
equipment and preparing the plant for telephone service launch.
Fitch points out that the increase in success-based capital
spending is positive for MCCC's credit profile and expects
incremental revenue and cash flow growth over the medium term,
provided that the company control subscriber churn.
Fitch also notes that MCCC consolidated capital expenditures
during the first quarter are 13.1% lower than the company's
capital spending during the first quarter of 2005. Going forward,
Fitch expects leverage to remain well above 7x (calculated on an
LTM basis) during 2006 and to trend down to 7x by the end of 2007.
Fitch anticipates that MCCC will be free cash flow negative during
2006 and free cash flow neutral during 2007.
Fitch recognizes the steps that MCCC has taken to mitigate
competitive pressure and stabilize its subscriber base. In
Fitch's opinion a key factor in stabilizing its subscriber base
and increase overall revenue generating units was the company's
change in pricing strategy, which focused on product bundles and
longer term pricing promotions. The strategy resulted in
increased customer connect activity while reducing customer churn
in all product categories.
During the first quarter of 2006, MCCC added approximately 52,000
RGUs. This follows a significant rebound in RGU growth during
2005 when MCCC added 196,000 RGUs. However, while MCCC's
subscriber metrics have improved the performance, from Fitch's
view, they continue to lag behind its peer group.
MCCC's pricing strategy has yielded its intended results by
stabilizing its subscriber base; however, in Fitch's opinion, the
reliance on pricing promotions has proven to be detrimental to
MCCC's ability to grow its revenues and EBITDA and expand
operating margins. During 2006, subscribers will be rolling off
the pricing promotions and MCCC will need to migrate these
subscribers to standard rate plans, which in Fitch's opinion can
expose MCCC to higher churn or lead to additional pricing
incentives. However, Fitch does note that contrary to the trend
during the first quarter of 2006, RGU and high speed data ARPU
increased on a sequential basis for the first time in a year and a
half.
Fitch believes the launch of telephony services certainly enhances
MCCC's competitive positioning and clearly focuses the company's
marketing efforts on service bundles. MCCC is offering the triple
play for $99.95 a month and indicates that a substantial
percentage of new telephony customers are taking the triple play
offer. Additionally, Fitch anticipates that the launch of
telephone service will help mitigate the increased risk of
customer churn as subscribers roll off of pricing promotions.
From Fitch's perspective MCCC's liquidity position is strong and
is supported by the available borrowing capacity on the bank
facilities at Mediacom LLC and Mediacom Broadband LLC. Mediacom
LLC and Mediacom Broadband have refinanced the term loans
outstanding on their respective credit facilities. Mediacom LLC
entered into a $650 million new term loan while Mediacom Broadband
entered into a new $800 million term loan. The new term loans
created approximately $400 million of incremental financing, which
could be utilized to repay MCCC's 5.5% convertible notes due July
2006.
In addition to providing the company with additional financing
capacity, the new term loans extend final maturity dates and lower
overall interest costs. MCCC's total available borrowing capacity
pro forma for the two new term loans is approximately $1 billion
as of the end of the first quarter.
The 'RR1' recovery rating assigned to Mediacom LLC and Mediacom
Broadband LLC's senior secured credit facilities indicates
superior recovery prospects, which are based on the asset coverage
of these loans. The 'RR5' and 'RR6' recovery ratings assigned to
the senior unsecured debt issued by Mediacom Broadband and
Mediacom LLC, respectively, as well as the 'RR6' recovery rating
assigned to MCCC's convertible notes are indicative of the
diminished recovery prospects of bondholders at this level of the
capital structure, driven by the large amount of senior secured
debt ahead of these bonds in the capital structure.
The Stable Outlook incorporates Fitch's expectation that MCCC's
operating metrics, including subscriber growth, ARPU, revenue and
EBITDA growth, and operating margins will continue to improve
during 2006. However, the Stable Outlook also incorporates
Fitch's expectation that MCCC's operating metrics will continue to
lag behind the cable MSO peer group.
Fitch anticipates MCCC will encounter resistance from its
subscriber base as the company migrates subscribers from
promotional pricing.
Fitch does expect the company to continue to grow ARPU at a pace
that lags overall industry ARPU growth. Fitch expects that MCCC's
EBITDA margins will be further pressured during 2006 as the
company's marketing, customer care and retention spending
increases, reflecting the company's efforts to further stabilize
its subscriber base migration from promotional pricing and focus
on the triple play service offering.
Fitch notes that the company has approximately $51 million of
remaining capacity under the board-authorized share repurchase
program; the share repurchases thus far have been debt funded.
Incorporated into the Stable Outlook is Fitch's expectation that
the company will not become more aggressive with its share
repurchase policy.
MERIDIAN AUTOMOTIVE: Can Make Retiree Benefits Compliant with Plan
------------------------------------------------------------------
The Honorable Mary Walrath of the U.S. Bankruptcy Court for the
District of Delaware gave Meridian Automotive Systems, Inc., and
its debtor-affiliates authority to exercise their right to bring
their retiree medical insurance expenses at the Jackson Facility
into compliance with the limits stated in their Plan of
Reorganization and the collective bargaining agreements known as
The Goodyear Tire & Rubber Company Comprehensive Medical Benefits
Program for Employees and Their Dependents.
Judge Walrath clarifies that the Order will not:
(a) be construed as interpreting the Collective Bargaining
Agreement between the Debtors and the United Steelworkers;
(b) prejudice the rights, if any, of the United Steelworkers
or any Plan participant to challenge on any basis other
than compliance with the Bankruptcy Code, in the
appropriate forum, including arbitration and any judicial
proceedings relating to it, any modification or proposed
modification of the retiree medical programs and any
appropriate remedy, and likewise will not prejudice the
rights and defenses, if any, of the Debtors with respect
to any challenge; and
(c) be used as evidence by any party, in any forum with
respect to any challenge.
As reported in the Troubled Company Reporter on May 5, 2006,
the Debtors and the United Steel, Paper and Forestry, Rubber,
Manufacturing, Energy, Allied Industrial and Service Workers
International Union amended the Plan and agreed that with respect
to retiree benefits, they would "[r]educe pre-age 65 cap to $7,500
for those not retired as of Dec. 31, 2003."
Thus, the caps currently in place remain:
-- $4,200 annually for retirees over age 65;
-- $11,700 for retirees under the age of 65 who retired on or
after April 20, 1996, but before Jan. 1, 2004; and
-- $7,500 for those under age 65 who retired, or retire, after
Dec. 31, 2003.
There are no participating retirees who retired before April 20,
1996, Mr. Brady tells the Court.
Despite the contractual language calling for the apportionment of
retiree medical expenses above these caps among the participating
retirees, the Debtors have not elected to require any retiree
contributions.
According to Mr. Brady, the Debtors' expenses under the Plan have
exceeded the contractual limits for at least some retirees since
2001. By the Debtors' calculations, the gap has grown to the
extent that for retirees:
* under the age of 65 who retired:
(a) prior to Jan. 1, 2004, the Debtors are bearing an
average annual expense of $14,472 for each retiree,
which exceed the contractual cap by $2,772 per retiree;
and
(b) on or after Jan. 1, 2004, the Debtors are currently
subsidizing an amount greater than what is contractually
required -- $6,972 annually per retiree; and
* over the age of 65, the subsidy above what is contractually
required is $9,163 annually per retiree.
Mr. Brady says that the Debtors can no longer afford to ignore
the contractual limits that they bargained for concerning their
retiree medical expenses. The Debtors therefore seek to
implement the caps as stated in the Letter Agreement and the 2003
CBA. "Although doing so will result in increased premiums for
retirees, they will not be required to pay anything more than
what their Union representatives had bargained for."
The change will save the Debtors $344,000 this year on an
annualized basis, while still allowing the Jackson bargaining
unit retirees to continue to receive retiree medical benefits as
agreed under the terms of the Plan and the CBA.
Headquartered in Dearborn, Mich., Meridian Automotive Systems,
Inc. -- http://www.meridianautosystems.com/-- supplies
technologically advanced front and rear end modules, lighting,
exterior composites, console modules, instrument panels and other
interior systems to automobile and truck manufacturers. Meridian
operates 22 plants in the United States, Canada and Mexico,
supplying Original Equipment Manufacturers and major Tier One
parts suppliers. The Company and its debtor-affiliates filed for
chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos.
05-11168 through 05-11176). James F. Conlan, Esq., Larry J.
Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at
Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon
L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks,
Esq., at Young Conaway Stargatt & Taylor, LLP, represent the
Debtors in their restructuring efforts. Eric E. Sagerman, Esq.,
at Winston & Strawn LLP represents the Official Committee of
Unsecured Creditors. The Committee also hired Ian Connor
Bifferato, Esq., at Bifferato, Gentilotti, Biden & Balick, P.A.,
to prosecute an adversary proceeding against Meridian's First Lien
Lenders and Second Lien Lenders to invalidate their liens. When
the Debtors filed for protection from their creditors, they listed
$530 million in total assets and approximately $815 million in
total liabilities. (Meridian Bankruptcy News, Issue No. 27;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
MERIDIAN AUTOMOTIVE: Has Until Sept. 25 to Decide on Leases
-----------------------------------------------------------
The Honorable Mary Walrath of the U.S. Bankruptcy Court for the
District of Delaware gave Meridian Automotive Systems, Inc., and
its debtor-affiliates more time to assume, assume and assign, or
reject unexpired non-residential real property leases through and
including Sept. 25, 2006.
As reported in the Troubled Company Reporter on May 5, 2006,
Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, in
Wilmington, Delaware, told the Bankruptcy Court that the Debtors
are parties to at least 11 major facility lease agreements, which
include many of their primary production facilities and
warehousing centers:
Lessor Location
------ --------
Etkin Equities 2001 Centerpointe Parkway,
Suite 112,
Pontiac, Michigan
DEMBS/ Roth Group 4280 Haggerty Road,
Canton, Michigan
Ford Motor Land Development 999 Republic Drive,
Corp. Allen Park, Michigan
Growth Properties, LLC 300 Growth Parkway
Angola, Indiana
Communite Improvement Corp. 1020 E. Main Street,
Jackson, Ohio
L.E. Tassel, Inc. 3075 Brenton Road, S.E.
Grand Rapids, Michigan
Meri (NC) LLC 6701 Stateville Blvd.,
Salisbury, North Carolina
North-South Properties LLC 747 Southport Drive,
Shreveport, Louisiana
P&E Realty Inc. 13811 Roth Road,
Grabill, Indiana
Rushville Manufacturing Mall 1350 Commerce Street,
Land Trust # 101 Rushville, Indiana
Westfield Industrial Center 13881 West Chicago Street,
Detroit, Michigan
These facilities are at the core of the Debtors' operations and
many of the locations subject to the Real Property Leases will
play a significant role in the Debtors' reorganization process,
Mr. Brady explains.
According to Mr. Brady, the Debtors have not completed their
review of the leases.
Mr. Brady assures the Court that pending the Debtors' election to
assume or reject the Real Property Leases, the Debtors will
perform all of their undisputed obligations arising from and
after they filed for bankruptcy in a timely fashion, including the
payment of postpetition rent due, as required by Section
365(d)(3) of the Bankruptcy Code.
The Debtors believe that, as of April 17, 2006, they are current
on all postpetition obligations under the Real Property Leases.
Headquartered in Dearborn, Mich., Meridian Automotive Systems,
Inc. -- http://www.meridianautosystems.com/-- supplies
technologically advanced front and rear end modules, lighting,
exterior composites, console modules, instrument panels and other
interior systems to automobile and truck manufacturers. Meridian
operates 22 plants in the United States, Canada and Mexico,
supplying Original Equipment Manufacturers and major Tier One
parts suppliers. The Company and its debtor-affiliates filed for
chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos.
05-11168 through 05-11176). James F. Conlan, Esq., Larry J.
Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at
Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon
L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks,
Esq., at Young Conaway Stargatt & Taylor, LLP, represent the
Debtors in their restructuring efforts. Eric E. Sagerman, Esq.,
at Winston & Strawn LLP represents the Official Committee of
Unsecured Creditors. The Committee also hired Ian Connor
Bifferato, Esq., at Bifferato, Gentilotti, Biden & Balick, P.A.,
to prosecute an adversary proceeding against Meridian's First Lien
Lenders and Second Lien Lenders to invalidate their liens. When
the Debtors filed for protection from their creditors, they listed
$530 million in total assets and approximately $815 million in
total liabilities. (Meridian Bankruptcy News, Issue No. 27;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
MIDWAY AIRLINES: Chapter 7 Trustee Hires Edward Dobbs as Mediator
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of North
Carolina allowed Joseph N. Callaway, the Chapter 7 Trustee for the
estates of Midway Airlines Corp., and Midway Airlines Parts, LLC,
to employ C. Edward Dobbs, Esq., as his mediator in certain
adversary proceedings.
The Trustee is the plaintiff in certain adversary proceedings
pending before the Court regarding the bankruptcy estate's request
for disgorgement of professional fees due to administrative
insolvency of the chapter 11 estate.
Mr. Dobbs, who practices at Parker, Hudson, Rainer and Dobbs, LLP,
in Atlanta, Georgia, will serve as mediator to pending affected
defendants and cases:
a) Kilpatrick Stockton LLP (05-00107-5-ATS);
b) Smith Debnam Narron Wyche Saintsing & Myers, LLP
(05-00108-5-ATS);
c) FTI Consulting and Price Waterhouse Coopers, LLP
(05-00111-5-ATS);
d) Seabury Advisors, LLC (05-00092-5-ATS);
e) Blank Rome, LLP (05-00098-5-ATS); and
f) Shaw Pittman, LLP (05-00106-5-ATS)
The parties to the Disgorgement Cases have agreed to mediate each
case in an attempt to reach consensual resolutions.
Mr. Dobbs charges $450 per hour for his work, divided between the
parties on a per capita basis.
To the best of the Trustee's knowledge, Mr. Dobbs is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
Headquartered in Morrisville, North Carolina, Midway Airlines
Corp., is in the commercial passenger airline business and also
provides cargo and charter transportation on a limited bases. The
Company and its debtor-affiliate, Midway Airlines Parts, LLC,
filed for chapter 11 protection on Aug. 13, 2001 (Bankr. E.D.N.C.
Case No. 01-02319-5-ATS). The Court converted the case to a
Chapter 7 liquidation proceeding on Oct. 30, 2003. Joseph N.
Callaway served as the Debtors' Chapter 7 Trustee. Gerald A.
Jeutter, Jr., Esq., at Kilpatrick Stockton LLP, represents the
Debtors. When the Debtors filed for chapter 11 protection, they
listed total assets of $318,291,000 and total debts of
$231,952,000.
MUSICLAND HOLDING: Court Sets May 30 as Administrative Bar Date
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York:
(a) set May 30, 2006, at 4:00 p.m. Eastern Standard
Time, as the deadline for persons and entities holding
administrative claims against Musicland Holding Corp. and
its debtor-affiliates that arose as of April 13, 2006, to
file their proofs of claim;
(b) approved the proposed Proof of Administrative Form; and
(c) approved the proposed form and manner of notice of the
First Administrative Bar Date.
As reported in the Troubled Company Reporter on May 2, 2006, the
Debtors proposed to serve a copy of the Proof of Administrative
Claim Form on each party who receives a copy of the First
Administrative Bar Date notice. The Debtors will post a copy of
the form on the official BMC Web Site, and provide a toll-free
number in the First Administrative Bar Date Notice.
Furthermore, the Debtors proposed to serve the First
Administrative Bar Date Notice on these parties:
* the U.S. Trustee's Office for the Southern District of New
York;
* the counsel of the Official Committee of Unsecured
Creditors;
* all known counterparties to the Debtors' executory contracts
and unexpired leases;
* the District Director of Internal Revenue of the Southern
District of New York;
* any party who, on reasonable investigation, has provided
postpetition goods or services to the Debtors and have not
been paid;
* all other parties that the Debtors believe may hold an
Administrative Claim; and
* all person or entities that have requested notice of the
proceedings in the Chapter 11 cases.
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: Giuliani Capital Hired as Panel's Fin'l Advisor
------------------------------------------------------------------
The Hon. Stuart M. Bernstein of the U.S. Bankruptcy Court for the
Southern District of New York authorized the Official Committee of
Unsecured Creditors of Musicland Holding Corp. and its debtor-
affiliates to retain Giuliani Capital Advisors LLC as its
financial advisor.
As reported in the Troubled Company Reporter on May 4, 2006,
Giuliani Capital is expected to:
a. advise the Committee regarding:
-- the Debtors' business plans, cash flow forecasts,
financial projections and cash flow reporting;
-- available capital restructuring, sale and financing
alternatives including but not limited to a DIP
facility, including recommending specific courses of
action and assisting with the design, structuring and
negotiation of alternative restructuring and transaction
structures;
-- financial information prepared by the Debtors and in
its coordination of communication with interested
parties and their advisors;
-- preparation for, meeting with, and presenting
information to interested parties and their advisors;
-- the development of a plan of reorganization for the
Debtors and negotiation with parties-in-interest or in
the sale of a portion or substantially all of the assets
of the Debtors, whether structured as a stock transfer,
merger, purchase and assumption transaction or other
business combination;
-- the Debtors' proposals from third parties for new
sources of capital or the sale of the Debtors;
b. assist and advise the Committee and its counsel in the
development, evaluation and documentation of any plan of
reorganization or strategic transaction, including
developing, structuring and negotiating the terms and
conditions of potential plans, financing or strategic
transaction and strategic alternatives for recovery, and
the consideration that is to be provided to unsecured
creditors;
c. provide testimony in the Bankruptcy Court; and
d. perform other services as may be reasonably requested in
writing from time to time by the Committee and its counsel
and agreed by Giuliani Capital.
The Court rules that Giuliani's Monthly Advisory Fee for April
2006 will be $62,000, while for May 2006, it will be $50,000.
Giuliani reserves its right to seek in any interim fee application
filed after June 1, 2006, up to $38,000 in additional fees for
April, and up to $50,000 in additional fees for May, if the
Creditors Committee and the Informal Committee of Secured Trade
Vendors do not agree on a settlement of the outstanding issues
between them prior to May 31, 2006.
Giuliani will be entitled to receive $230,000, for reasonable
expenses incurred from January to March 2006.
Giuliani will not be entitled to, and waives any request for, the
Completion Fee, the Incentive Fee and any compensation in excess
of its Monthly Advisory Fee.
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)
NASDAQ STOCK: S&P Downgrades Credit & Bank Loan Ratings to BB+
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term
counterparty credit rating and bank loan rating on The Nasdaq
Stock Market Inc. to 'BB+' from 'BBB-'. The company was removed
from CreditWatch Negative, where it was placed on April 11, 2006.
The outlook is developing.
The Recovery Rating on the bank loan facilities is '2', which
indicates substantial recovery.
"The credit rating downgrade is a function of Nasdaq's high debt
leverage, resulting primarily from its acquisitions of the INET
platform in 2005, and, more recently, its purchase of a 24.1%
stake in the London Stock Exchange," said Standard & Poor's credit
analyst Charles D. Rauch.
Current ratings reflect Standard & Poor's expectation that Nasdaq
will continue to employ debt, bank loans, and/or available on-
balance-sheet liquidity to further increase its stake in the LSE.
After being spurned by LSE management, Nasdaq is pursuing this
exchange the hard way. It purchased a 14.9% interest in the LSE
in mid-April and, shortly thereafter, issued 18.5 million shares
of common stock to provide permanent financing for the bulk of
this initial stake. Subsequently, Nasdaq purchased an additional
9.2% stake, using available cash and the remainder of its Tranche
C long-term bank loan.
Although this increased stake reduced Nasdaq's financial
flexibility, an expected GBP123.4 million special cash dividend
from the LSE in June will help restore liquidity. The secondary
stock offering and the special dividend boost tangible equity
ratios into the positive territory. The net result is a balance
sheet that is moderately better than at the beginning of the year.
Standard & Poor's expects Nasdaq will further leverage the balance
sheet and/or utilize available liquidity in its pursuit of the
LSE.
Standard & Poor's is not only concerned about the financial
ramifications, but also Nasdaq's merger strategy going forward.
The rating agency is of the opinion that a 24.1% LSE stake gives
Nasdaq little in terms of either synergistic opportunities or
cash-flow generation.
To complicate matters, the LSE's share price is getting
increasingly expensive and other entities have expressed interest
in this target. There are many possibilities as to what may
happen next, but the ramifications on Nasdaq's financial profile
could be significant. If another suitor wins, Nasdaq could
achieve a nice capital gain on what is now a financial investment.
At worst ratings-wise, it could lever up more substantially in the
fight to gain control of the LSE.
The developing outlook incorporates the many uncertainties as to
how Nasdaq's pursuit of the LSE will play out. Ratings could be
lowered if management becomes undisciplined and harms the
exchange's financial posture in acquiring additional shares in the
LSE. Alternatively, a successful merger that is conservatively
financed could lead to an upgrade.
NEW YORK WATER: S&P Places BB Corporate Credit Rating on Watch
--------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'BB' corporate
credit rating on regulated water utility New York Water Service
Corp. on CreditWatch with positive implications.
"The rating action follows the announcement that regulated water
utility Aqua America Inc. has reached an agreement with Utilities
& Industries Corp. LLC to acquire New York Water," said Standard &
Poor's credit analyst Kevin Beicke.
The transaction is valued at $51 million, of which Aqua America
will pay $28 million in cash to acquire the stock of the company
and assume $23 million in debt.
The acquisition is subject to approval by the New York Public
Service Commission, and Aqua America anticipates closing the
transaction by year end.
Aqua America's largest subsidiary, Aqua Pennsylvania Inc., is
rated 'A+/Stable/--'.
NEWCOMM WIRELESS: Involuntary Chapter 11 Case Summary
-----------------------------------------------------
Alleged Debtor: Newcomm Wireless Services, Inc.
P.O. Box 71569
San Juan, Puerto Rico 00936-8669
Involuntary Petition Date: May 16, 2006
Case Number: 06-00971
Chapter: 11
Court: District of Puerto Rico (Old San Juan)
Petitioner's Counsel: Ruben Nigaglioni, Esq.
Nigaglioni & Ferraiuoli Law Offices P.S.C.
P.O. Box 195384
San Juan, Puerto Rico 00919-5384
Tel: (787) 765-9966
Fax: (787) 751-2520
Petitioner: Atento De Puerto Rico, Inc.
P.O. Box 908
Caguas, Puerto Rico 00726
Amount of Claim: Unknown
NOVELIS INC: Lenders Extend Financial Statement Filing Schedule
---------------------------------------------------------------
Novelis Inc.'s lenders have agreed to waive Novelis' non-
compliance with the provision of its Jan. 7, 2005, Credit
Agreement that requires the Company to furnish timely consolidated
financial statements in the 2005 Annual Report on Form 10-K and
the Form 10-Qs for the first, second and third quarters of 2006.
This waiver extends until Sept. 29, 2006, the deadline for filing
the Annual Report for 2005. The quarterly filings for the first,
second and third quarters of 2006 must be completed by Oct. 31,
2006, Nov. 30, 2006, and Dec. 29, 2006, respectively. The waiver
also extends until June 15, 2006, the deadline for filing the
third quarter of 2005, and the re-stated first and second quarters
of 2005.
On May 5, 2006, the Company applied to the Ontario Superior Court
of Justice for an order extending the time for holding the annual
meeting date to a date not later than Dec. 31, 2006. Novelis
received the order on May 9, 2006, allowing it to extend the date.
The Company is currently evaluating the time that will be required
to complete, print and mail its 2005 Annual Report. Once this
analysis is finalized, the Company will announce the new date for
the annual meeting and record date.
A full-text copy of the Credit Agreement is available at no charge
at http://ResearchArchives.com/t/s?7fc
Based in Atlanta, Georgia, Novelis Inc. (NYSE: NVL)(TSX: NVL) --
http://www.novelis.com/-- provides customers with a regional
supply of technologically sophisticated rolled aluminum products
throughout Asia, Europe, North America, and South America. The
company operates in 11 countries and has approximately 13,000
employees. Through its advanced production capabilities, the
company supplies aluminum sheet and foil to the automotive and
transportation, beverage and food packaging, construction and
industrial, and printing markets.
* * *
As reported in the Troubled Company Reporter on April 11, 2006,
Standard & Poor's Ratings Services placed its 'BB-' long-term
corporate credit and bank loan ratings and 'B' senior unsecured
debt rating on Novelis Inc. on CreditWatch with negative
implications.
NOVELIS INC: Moody's Reviews Low-B Ratings and May Downgrade
------------------------------------------------------------
Moody's Investors Service placed the ratings of Novelis Inc., and
its subsidiary, Novelis Corporation, under review for possible
downgrade. In a related rating action, Moody's changed Novelis
Inc's speculative grade liquidity rating to SGL-3 from SGL-2.
While Moody's expects the company to file its Form 10Q for the
third quarter 2005 and restated second and first quarter 2005 Form
10Q's within the time frame provided by the fourth waiver, the
review is prompted by the company's further push-out of the time
frame in which the Form 10K for 2005 and the Form 10Q's for each
of the first three quarters of 2006 will be provided.
Under the company's fourth waiver with the lenders in the
revolving credit and the term loan B facilities the deadline for
filing the Form 10Q's for the first three quarters of 2005 is
extended to June 15, 2006, the 2005 K is extended to September 29,
2006, while the filing dates for the first, second and third
quarter 10Q's are extended to October 31, 2006, November 30, 2006,
and December 29, 2006 respectively.
While Moody's notes the company disclosed that debt has been
reduced by approximately $380 million since the spin-off, bringing
total debt to approximately $2.5 billion, the lack of timely
audited financials and quarterly Form 10Q's continues to result in
uncertainty over the company's financial performance.
In the event the company is not able to meet the revised filing
dates Moody's would consider withdrawing the company's ratings at
that time.
The change in the speculative grade liquidity rating to SGL-3 is
driven principally by concerns over liquidity available from
external sources. The continued need to obtain waivers from the
bank group to extend the date required for the delivery of
financial statements makes Novelis vulnerable to the decisions by
the banks on a relatively short time scale.
While the banks have been amenable to date in providing waivers,
there is no assurance that they would do so going forward. Given
the shorter than twelve month time horizon provided by the
waivers, Moody's methodology for SGL ratings would consider
amounts drawn, either under the revolver or the term loans, to
represent a debt maturity over the next several months.
In addition, given the continued strengthening in aluminum prices
and Moody's expectation that working capital requirements will
increase on the significant price run-up since the beginning of
2006, continued availability under the revolver remains a key
issue.
Downgrades:
Issuer: Novelis Inc.
* Speculative Grade Liquidity Rating, Downgraded to SGL-3 from
SGL-2
On Review for Possible Downgrade:
Issuer: Novelis Corporation
* Senior Secured Bank Credit Facility, Placed on Review for
Possible Downgrade, currently Ba2
Issuer: Novelis Inc.
* Corporate Family Rating, Placed on Review for Possible
Downgrade, currently Ba3
* Senior Secured Bank Credit Facility, Placed on Review for
Possible Downgrade, currently Ba2
* Senior Unsecured Regular Bond/Debenture, Placed on Review
for Possible Downgrade, currently B1
Outlook Actions:
Issuer: Novelis Corporation
* Outlook, Changed To Rating Under Review From Stable
Issuer: Novelis Inc.
* Outlook, Changed To Rating Under Review From Stable
Headquartered in Atlanta, Georgia, Novelis Inc. is the worlds
leading aluminum rolled products producer. Revenues were $7.8
billion in 2004.
NTK HOLDINGS: Moody's Affirms $625 Million Sr. Sub. Notes at Caa1
-----------------------------------------------------------------
Moody's affirmed all existing ratings of NTK Holdings, Inc., and
Nortek, Inc., after taking into consideration Nortek's recent
announcement that the company has taken on additional debt and is
contemplating an initial public offering.
Proceeds from the IPO which may follow the new debt transaction by
a few months, are expected to go towards reducing Nortek's debt
levels, including the $205 million of new indebtedness. If the
IPO does not occur within the next two quarters, the company's
debt ratings are likely to be downgraded.
The new indebtedness is in the form of a senior unsecured loan
facility that was issued at the NTK Holdings, Inc., level and is
pari passu with the company's existing 10.75% senior discount
notes.
The proceeds from the new bridge loan are to be used to pay a $175
million dividend to the stockholder of NTK Holdings, Inc., and
together with cash on hand to make a $54 million distribution to
the participants of Nortek Holdings 2004 Deferred Compensation
Plan. The ratings outlook remains negative.
These ratings for NTK Holdings, Inc., affirmed:
* $403 million senior discount notes, due 2014, affirmed at
Caa2;
* Corporate Family Rating, affirmed at B2.
These ratings for Nortek, Inc., affirmed:
* $200 million senior secured revolving credit facility, due
2010, affirmed at B2;
* $691.25 million senior secured term loan, due 2011, affirmed
at B2;
* $625 million 8 1/2% senior subordinated notes, due 2014,
affirmed at Caa1.
What could change the rating -- Up
For the company to be upgraded, the company's financial metrics
would have to be well within the parameters that are typical for a
B1 rated company such that debt/EBITDA would be less than 4.0
times and free cash flow to debt be no less than 8% and Moody's
believes that those metrics would be sustainable.
What could change the ratings -- Down
Ratings could be pressured if free cash flow to debt falls below
3% and if the company's leverage remains materially over 6 times
for several quarters. A large debt financed acquisition would be
a major concern as the company has traditionally been very
successful with its small acquisitions strategy.
Nevertheless, the ratings could also be pressured if the company
takes on additional debt without generating significant additional
free cash flow. If the company's planned IPO does not occur and
debt is therefore not substantially reduced, the company's
leverage levels could be precariously close to justifying a B3
corporate family rating.
Moody's previous rating action on the company was in March 2006
when Moody's changed the company's outlook to negative from stable
because Nortek amended its credit facility resulting in loosened
covenants which included the elimination of the cap on
acquisitions.
Headquartered in Providence, Rhode Island, Nortek, Inc. is a
leading international manufacturer and distributor of high-
quality, competitively priced commercial and residential
ventilation, HVAC and home technology comfort, convenience and
entertainment products.
NUVOX COMMS: Closes $95 Million Sr. Secured Credit Facility
-----------------------------------------------------------
NuVox Communications aka NuVox Inc. closed a $95 million senior
secured credit facility, consisting of an $85 million 6-year term
loan and a $10 million 5-year revolving credit facility. The
proceeds from the new facility will be used to refinance certain
existing indebtedness and for general corporate purposes.
"This financing positions NuVox to rapidly expand the deployment
of VoxIP, our voice over Internet protocol offering. VoxIP, which
was introduced in 2005, now represents approximately 10% of sales
to new customers," Jim Akerhielm, Chief Executive Officer of
NuVox, commented. "Over the past year, NuVox has made major
investments in the network infrastructure and back-office
platforms necessary to provide a fully-managed, private network-
based VoIP solution to our customers. This financing will enable
us to significantly accelerate our VoxIP sales and marketing
efforts in the second half of 2006."
"This financing substantially improves our financial flexibility
and liquidity position," Steve Shoemaker, Chief Financial Officer
of NuVox added. "We will continue to have modest financial
leverage after this transaction, and are provided with additional
capital resources for organic and acquisitive growth. This
broadly syndicated transaction involving over 15 institutions
demonstrates the financial community's confidence in our business
plan and VoIP strategy."
NuVox recently received a B2 rating from Moody's Investors Service
and a B- rating from Standard & Poor's on this new $95 million
senior secured credit facility.
The credit facility was syndicated by a group of financial
institutions led by Wachovia Bank, N.A., which served as
Administrative Agent and Wachovia Capital Markets, LLC as the Sole
Lead Arranger and Joint Book Manager. CIT Lending Services
Corporation was Syndication Agent and Joint Book Manager, and
Deutsche Bank Securities Inc. served as Documentation Agent. Q
Advisors LLC acted as financial advisor to NuVox.
About NuVox
Based in Greenville, South Carolina, NuVox Communications aka
NuVox Inc. -- http://nuvox.com/-- provides voice, data, and
security services to business customers in Alabama, Arkansas,
Florida, Georgia, Illinois, Indiana, Kansas, Kentucky, Louisiana,
Mississippi, Missouri, North Carolina, Ohio, Oklahoma, South
Carolina, and Tennessee. These services are provided through
advanced Lucent, Nortel, Sonus, and Cisco technology. NuVox's
VoIP product, VoxIP, is delivered via technology from Cisco,
Sonus, Sylantro, IP Unity, and Acme Packet. The board of directors
of NuVox includes representatives from Kohlberg Kravis Roberts &
Company, Goldman Sachs, JP Morgan Partners, Quadrangle Group, LLC,
Whitney & Company, Wachovia Capital Partners, M/C Venture
Partners, and Columbia Capital.
* * *
As reported in the Troubled Company Reporter on April 28, 2006,
Standard & Poor's Ratings Services assigned its 'B-' corporate
credit rating to privately owned Greenville, South Carolina-based
competitive local exchange carrier NuVox Communications aka NuVox
Inc., and a 'B-' bank loan rating to its funding conduit Gabriel
Communications Finance Co.'s $90 million of secured credit
facilities. A recovery rating of '5' was also assigned to the
loan, indicating negligible recovery of principal in the event of
a payment default or bankruptcy. The bank loan rating is based on
preliminary information, subject to receipt of final bank loan
documents.
"The outlook is stable; borrowings under the bank loan will be
used to refinance existing debt, as well as for general corporate
purposes," said Standard & Poor's credit analyst Catherine
Cosentino.
OCA INC: Files Schedules of Assets & Liabilities
------------------------------------------------
OCA, Inc., delivered to the U.S. Bankruptcy Court for the Eastern
District of Louisiana its schedules of assets and liabilities,
disclosing:
Name of Schedule Assets Liabilities
---------------- ------ -----------
A. Real Property $86,902,729
B. Personal Property
C. Property Claimed
as Exempt
D. Creditors Holding $92,225,022
Secured Claims
E. Creditors Holding 7,308,180
Unsecured Claims
F. Creditors Holding 12,495,052
Nonpriority Claims
----------- ------------
Total $86,902,729 $112,028,256
Based in Metairie, Louisiana, OCA, Inc. -- http://www.ocai.com/
-- provides a full range of operational, purchasing, financial,
marketing, administrative and other business services, as well as
capital and proprietary information systems to approximately 200
orthodontic and dental practices representing approximately almost
400 offices. The Company's client practices provide treatment to
patients throughout the United States and in Japan, Mexico, Spain,
Brazil and Puerto Rico.
The Company and its debtor-affiliates filed for Chapter 11
protection on March 14, 2006 (Bankr. E.D. La. Case No. 06-10179).
William H. Patrick, III, Esq., at Heller Draper Hayden Patrick &
Horn, LLC, represents the Debtors. Patrick S. Garrity, Esq., and
William E. Steffes, Esq., at Steffes Vingiello & McKenzie LLC
represent the Official Committee of Unsecured Creditors. When the
Debtors filed for protection from their creditors, they listed
$545,220,000 in total assets and $196,337,000 in total debts.
OCA INC: Court Sets June 2 General Claims Bar Date
--------------------------------------------------
The United States Bankruptcy Court for the Eastern District of
Louisiana, set June 2, 2006, as the deadline for all creditors
owed money by OCA, Inc., on account of claims arising prior to
March 14, 2006, to file their proofs of claim.
Creditors must file written proofs of claim on or before the June
2 Claims Bar Date and those forms must be delivered to:
Clerk of the Bankruptcy Court
Hale Boggs Federal Building
500 Poydas Street, Suite B-601
New Orleans, LA 70130
For governmental units, the Claims Bar date is set at 4:30 p.m.,
on Sept. 13, 2006.
Based in Metairie, Louisiana, OCA, Inc. -- http://www.ocai.com/--
provides a full range of operational, purchasing, financial,
marketing, administrative and other business services, as well as
capital and proprietary information systems to approximately 200
orthodontic and dental practices representing approximately almost
400 offices. The Company's client practices provide treatment to
patients throughout the United States and in Japan, Mexico, Spain,
Brazil and Puerto Rico.
The Company and its debtor-affiliates filed for Chapter 11
protection on March 14, 2006 (Bankr. E.D. La. Case No.
06-10179). William H. Patrick, III, Esq., at Heller Draper Hayden
Patrick & Horn, LLC, represents the Debtors. Patrick S. Garrity,
Esq., and William E. Steffes, Esq., at Steffes Vingiello &
McKenzie LLC represent the Official Committee of Unsecured
Creditors. When the Debtors filed for protection from their
creditors, they listed $545,220,000 in total assets and
$196,337,000 in total debts.
ONEIDA LTD: Bankruptcy Court Approves Equity Trading Procedures
---------------------------------------------------------------
The Honorable Allan L. Gropper of the U.S. Bankruptcy Court for
the Southern District of New York approved, on a financial basis,
the notification and hearing procedures for trading in equity
securities of Oneida Ltd. and its debtor-affiliates.
Any person or entity that currently owns at least 2,150,157 shares
(representing around 4.5% of all issued and outstanding shares) of
the Debtors' common stock, or at least 3,871 shares (representing
around 4.5% of all issued and outstanding shares) of the 6%
cumulative preferred stock should file with the Court and serve on
the Debtors and their counsel, a notice of their holdings.
Anyone interested to acquire or dispose any of the Debtors' equity
securities should, at least ten calendar days before the proposed
date of any transfer of equity securities, notify the Court, the
Debtors and their counsel.
The Debtors will have ten calendar days after the notification to
object to the equity transfer. The Debtors will bear the burden
of establishing the adverse effect of the proposed transfer of
equity securities of Oneida on the Debtors' ability to utilize
their NOLs. If the Debtors do not object to the proposed
transfer, then it could proceed as planned.
Any purchase, sale or other transfer of the Debtors' equity
securities in violation of the procedures will be null and void ab
initio as an act in violation of the automatic stay pursuant to
Sections 362 and 105(a) of the Bankruptcy Code.
About Oneida Ltd.
Based in Oneida, New York, Oneida Ltd. -- http://www.oneida.com/
-- is the world's largest manufacturer of stainless steel and
silverplated flatware for both the Consumer and Foodservice
industries, and the largest supplier of dinnerware to the
foodservice industry. Oneida is also a leading supplier of a
variety of crystal, glassware and metal serveware for the tabletop
industries. The Company and its 8 debtor-affiliates filed for
Chapter 11 protection on March 19, 2006 (Bankr. S.D. N.Y. Case
Nos. 06-10489 through 06-10496). Douglas P. Bartner, Esq., at
Shearman & Sterling LLP represents the Debtors. Credit Suisse
Securities (USA) LLC is the Debtors' financial advisor. As of
May 4, 2006, the Official Committee of Unsecured Creditors has not
sought for appointment of its counsel. When the Debtors filed for
protection from their creditors, they listed $305,329,000 in total
assets and $332,227,000 in total debts.
ONEIDA LTD: Section 341(a) Meeting Scheduled Tomorrow
-----------------------------------------------------
The United States Trustee for Region 2 will convene a meeting of
Oneida Ltd. and its debtor-affiliates' creditors at 11:00 a.m.,
tomorrow May 19, 2006, at Second Floor, 80 Broad Street in New
York. This is the first meeting of creditors required under
Section 341(a) of the Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Based in Oneida, New York, Oneida Ltd. -- http://www.oneida.com/
-- is the world's largest manufacturer of stainless steel and
silverplated flatware for both the Consumer and Foodservice
industries, and the largest supplier of dinnerware to the
foodservice industry. Oneida is also a leading supplier of a
variety of crystal, glassware and metal serveware for the tabletop
industries. The Company and its 8 debtor-affiliates filed for
Chapter 11 protection on March 19, 2006 (Bankr. S.D. N.Y. Case
Nos. 06-10489 through 06-10496). Douglas P. Bartner, Esq., at
Shearman & Sterling LLP represents the Debtors. Credit Suisse
Securities (USA) LLC is the Debtors' financial advisor. Scott L.
Hazan, Esq., and Lorenzo Marinuzzi, Esq., at Otterbourg,
Steindler, Houston & Rosen, P.C., represent the Official Committee
of Unsecured Creditors. When the Debtors filed for protection
from their creditors, they listed $305,329,000 in total assets and
$332,227,000 in total debts. On May 12, 2006, Judge Gropper
approved the Debtors' disclosure statement.
ORIUS CORP: Wants to Pursue Causes of Action Against Lenders
------------------------------------------------------------
The Official Committee of Unsecured Creditors of Orius Corp. and
its debtor-affiliates asks the U.S. Bankruptcy Court for the
Northern District of Illinois, Eastern Division, for authority to
pursue certain causes of action against:
-- Deutsche Bank Trust Company Americas,
-- Aimco CDO Series 2000-A,
-- Allstate Life Insurance Company,
-- Banc of America Strategic Solutions,
-- Bank of America NA,
-- Blackrock - Magnetite,
-- BNP Paribas,
-- Carlyle High Yield Partners, LP, Corporate Actions,
-- First Dominion Funding II,
-- First Dominion Funding III,
-- Gracie Capital LP,
-- Guggenheim Portfolio Co. XII LLC,
-- Highland Floating Rate Advantage Fund,
-- Highland Floating Rate LLC,
-- ING Inv. - Pilgrim CLO 1999-1,
-- JP Morgan Chase NA,
-- Merrill Lynch Credit Products, LLC,
-- Morgan Stanley Senior Funding, Inc.,
-- PPM Spyglass Funding Trust,
-- Stein Roe & Farnham CLO I Ltd.,
-- UBS Willow Fund LLC,
-- Van Kampen Sr. Loan Fund, and
-- Van Kampen Sr. Income Trust
According to the Committee, any proceeds of the causes of action
they plan to pursue against the lenders will benefit the Debtors'
estates and their creditors.
The Committee asked to pursue certain causes of action against the
defendants because the Debtors had expressly waived their right to
bring claims against their lenders pursuant to a final order to
use the lenders' cash collateral granted by the Court in January
2006.
Aaron L. Hammer, Esq., at Freeborn & Peters LLP, tells the Court
that the Debtors have acknowledged that the Committee's complaint,
and its underlying causes of action, is an issue between the
Committee and the lenders.
About Orius Corp.
Headquartered in Barrington, Illinois, Orius Corp. --
http://www.oriuscorp.com/-- is a nationwide provider of
construction, deployment and maintenance services to customers
operating within the telecommunications; broadband; gas and
electric utilities; and government industries. The Company and
its affiliates filed for chapter 11 protection on Dec. 12, 2005
(Bankr. N.D. Ill. Case No. 05-63876). Aaron C. Smith, Esq., and
Folarin S. Dosunmu, Esq., at Lord, Bissell & Brook LLP represent
the Debtors in their restructuring efforts. Aaron L. Hammer,
Esq., Joji Takada, Esq., Thomas R. Fawkes, Esq., at Freeborn &
Peters LLP, represent the Official Committee of Unsecured
Creditors. When the Debtors filed for protection from their
creditors, they listed estimated assets of $10 million to
$50 million and estimated debts of $50 million to $100 million.
PLIANT CORP: Wants Until September 1 to File Chapter 11 Plan
------------------------------------------------------------
Pliant Corporation and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York to extend
the period within which they have the exclusive right to file a
chapter 11 plan of reorganization to September 1, 2006. The
Debtors also want the Court to extend the period within which they
have the exclusive right to solicit acceptances for a plan to
October 30, 2006.
Section 1121(b) of the Bankruptcy Code provides for an initial
period of 120 days after a debtor files for bankruptcy for a
debtor to formulate and file a plan of reorganization. Given that
a plan of reorganization has been formulated, Section 1121(c)(3)
of the Bankruptcy Code provides for an initial period of 180 days
after the Petition Date for a debtor to obtain acceptance of the
reorganization plan.
Section 1121(d) permits the Court to extend the Exclusive Periods
for "cause".
Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, LLP,
in Wilmington, Delaware, tells the Court that since the Petition
Date, the Debtors have stabilized their business operations and
managed a smooth transition to the Chapter 11 environment.
Among the Debtors' accomplishments are:
(1) seeking and obtaining the Court's approval of an
approximately $68,800,000 postpetition financing
facility;
(2) gaining approval of their "first-day" and second-day"
relief;
(3) preparing and filing schedules and statements of
financial affairs for all 11 Debtors;
(4) navigating a parallel foreign proceeding in Canada and
successfully gaining recognition of the United States
Court's orders in the Canadian proceeding;
(5) finalizing a long-term business plan;
(6) undergoing and completing an audit;
(7) maintaining customer relations;
(8) negotiating with the Official Committee of Unsecured
Creditors and other ad hoc committees concerning a
variety of issues;
(9) stabilizing cash management;
(10) successfully managing the daily operations of their
businesses;
(11) developing responsive information and responding to
diligence requests by parties-in-interest; and
(12) filing their proposed joint plan of reorganization and
the related disclosure statement on March 17, 2006.
Mr. Brady argues that the Debtors' request is warranted because
the Debtors' cases are large and complex. There are 11 Debtors
in these jointly administered Chapter 11 cases.
Moreover, since the Petition Date, the Debtors have continued to
manage their businesses while also attending to the heightened
requirements of the bankruptcy process, and have responded to
creditor issues.
Mr. Brady notes that the Debtors have gained approval of a
disclosure statement, and have secured a May 31st confirmation
hearing.
The Debtors' request will not prejudice the legitimate interests
of any creditor, and will afford the parties the opportunity to
pursue to fruition the beneficial objectives of a confirmable
plan of reorganization, Mr. Brady asserts.
Headquartered in Schaumburg, Illinois, Pliant Corporation --
http://www.pliantcorp.com/-- produces value-added film and
flexible packaging products for personal care, medical, food,
industrial and agricultural markets. The Debtor and 10 of its
affiliates filed for chapter 11 protection on Jan. 3, 2006
(Bankr. D. Del. Lead Case No. 06-10001). James F. Conlan, Esq.,
at Sidley Austin LLP, and Edmon L. Morton, Esq., and Robert S.
Brady, Esq., at Young, Conaway, Stargatt & Taylor, represent the
Debtors in their restructuring efforts. The Debtors tapped
McMillan Binch Mendelsohn LLP, as their Canadian bankruptcy
counsel. The Ontario Superior Court of Justice named RSM
Richter, Inc., as the Debtors' information officer in their
restructuring proceeding under Companies Creditors Arrangement Act
in Canada. Kenneth A. Rosen, Esq., at Lowenstein Sandler, P.C.,
serves as counsel to the Official Committee of Unsecured
Creditors. Don A. Beskrone, Esq., at Ashby & Geddes, P.A., is
local counsel to the Creditors' Committee. As of Sept. 30, 2005,
the company had $604,275,000 in total assets and $1,197,438,000 in
total debts. (Pliant Bankruptcy News, Issue No. 12; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
PLIANT CORP: Gets Court Approval to Pay Exit Lenders' Work Fees
---------------------------------------------------------------
Pliant Corporation obtained the U.S. Bankruptcy Court for the
District of Delaware's authority to enter into the certain fee
letters with up to three potential lenders or potential lending
syndicate members in connection with prospective exit financing,
which require the Debtors to:
(a) pay the Work Fees of Potential Lenders with respect to
their non-binding proposals to provide the Debtors with
exit financing;
(b) provide the Deposits to Potential Lenders attributed to
the Potential Lenders' costs and expenses incurred in
evaluating, preparing and submitting an exit financing
that is acceptable to the Debtors; and
(c) provide indemnification of those Potential Lenders with
respect to the prospective financing.
Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, LLP,
in Wilmington, Delaware, relates that a key element of the
restructuring contemplated by the Debtors' Plan of Reorganization
and a condition precedent to the effectiveness of the Plan is the
availability of exit financing that provides sufficient funding
for the Debtors to meet their cash obligations under the Plan as
of the Effective Date of the Plan.
Specifically, the Plan will not become effective unless and until
the Exit Facility Credit Agreement and all related documents will
have been executed and delivered by all parties, and all
conditions precedent will have been satisfied. Pursuant to the
Plan, this condition may not be waived by the Debtors, Mr. Brady
emphasizes.
In anticipation of the need for an exit financing, the Debtors
have contacted or were contacted by a number of financial and
banking institutions. After reviewing the financing proposals
submitted by certain of these institutions, the Debtors have
narrowed the group of prospective lenders or lending syndicate
members to three entities as presenting the best preliminary exit
financing proposals, Mr. Brady tells the Court.
According to Mr. Brady, the Financing Proposals of the Potential
Lenders were chosen from the proposals received because of their
favorable lending structures, total availability and pricing, and
acceptable covenants. The Financing Proposals provide for
financing between $175,000,000 to $200,000,000.
The Debtors anticipate that one or more of the Potential Lenders
will provide the exit facility. However, no commitments have
been made at this time and any actual commitment is subject to
each Potential Lender's diligence and review of the Debtors.
As a condition precedent to moving forward with the diligence
effort, each Potential Lender has asked the Debtors to enter into
the Fee Letters, which provide that the Debtors:
-- will indemnify the lenders with respect to the financing;
and
-- pay either certain Work Fees and Deposits associated with
the Potential Lenders' reasonable out-of-pocket expenses,
including legal fees, that may be incurred in connection
with their due diligence and documentation efforts.
The Debtors are still negotiating the terms of the Fee Letters
with the Potential Lenders, Mr. Brady says. The Debtors
anticipate that the Work Fees will not exceed $500,000. In
addition, the Debtors anticipate that the Deposits will total
$700,000 in the aggregate, excluding any outside appraisal fees.
With respect to any Potential Lender that ultimately provides the
exit financing selected by the Debtors, the Deposits, to the
extent remaining, as applicable, paid to that Potential Lender
will be applied toward the closing fees.
Mr. Brady asserts that the procurement of financing commitments
at the earliest possible time is necessary to confirm the Plan.
By providing the Work Fees and Deposits, the Debtors will be able
to proceed with the Potential Lenders in a financing process to
support confirmation and consummation of the Plan.
Proceeding with the due diligence of each of the Potential
Leaders will result in solid financing commitments, which will,
in turn, lead to a cost-effective exit facility and the Debtors'
successful recovery from bankruptcy, Mr. Brady contends.
The Debtors reserve the right to seek Court authority to increase
any of the amounts they seek in connection with the exit
financing.
Headquartered in Schaumburg, Illinois, Pliant Corporation --
http://www.pliantcorp.com/-- produces value-added film and
flexible packaging products for personal care, medical, food,
industrial and agricultural markets. The Debtor and 10 of its
affiliates filed for chapter 11 protection on Jan. 3, 2006
(Bankr. D. Del. Lead Case No. 06-10001). James F. Conlan, Esq.,
at Sidley Austin LLP, and Edmon L. Morton, Esq., and Robert S.
Brady, Esq., at Young, Conaway, Stargatt & Taylor, represent the
Debtors in their restructuring efforts. The Debtors tapped
McMillan Binch Mendelsohn LLP, as their Canadian bankruptcy
counsel. The Ontario Superior Court of Justice named RSM
Richter, Inc., as the Debtors' information officer in their
restructuring proceeding under Companies Creditors Arrangement Act
in Canada. Kenneth A. Rosen, Esq., at Lowenstein Sandler, P.C.,
serves as counsel to the Official Committee of Unsecured
Creditors. Don A. Beskrone, Esq., at Ashby & Geddes, P.A., is
local counsel to the Creditors' Committee. As of Sept. 30, 2005,
the company had $604,275,000 in total assets and $1,197,438,000 in
total debts. (Pliant Bankruptcy News, Issue Nos. 12 & 13;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
POWERCOLD CORP: Accumulated Deficit Prompts Going Concern Doubt
---------------------------------------------------------------
Williams & Webster, P.S., expressed substantial doubt about
PowerCold Corporation's ability to continue as a going concern
after it audited the company's financial statements for the year
ended Dec. 31, 2006. The auditing firm pointed to the company's
substantial operating losses and accumulated deficit. The
auditing firm also noted that the company's intangible assets
comprise a material portion of their assets.
Asset Sale
On Dec. 31, 2005, PowerCold Corporation disposed of its interest
in its wholly owned subsidiary, PowerCold ComfortAir Solutions,
Inc. The company was sold to Comfort Air Solutions, Inc, a
corporation formed by the employees of PowerCold ComfortAir
Solutions, Inc. Included in the transaction was a technology and
trademark license agreement granted to Comfort Air Solutions, Inc.
that will provide royalty revenue for PowerCold Corporation.
Discontinued Operations
Effective Jan. 1, 2006, two of PowerCold Corporation's wholly
owned subsidiaries, PowerCold Products, Inc. and PowerCold
International, Ltd., were terminated and the assets transferred to
PowerCold Corporation. PowerCold Technology, LLC, which holds
title to all the intellectual property and licensing rights of the
company will remain a wholly owned subsidiary of PowerCold
Corporation.
Financial Advisors
On Jan. 9, 2006, the Company engaged Flagstone Securities to
provide advisory and financial services and to secure various
funding sources to support the monetary needs and growth of the
Company. Flagstone Securities, LLC is a boutique investment bank
headquartered in St. Louis, Missouri with additional offices in
New York, Los Angeles and Geneva.
Year-End Financials
For the year ended Dec. 31, 2005, the company reported a net loss
of $6,687,755 on $667,375 of total revenues. This compares to a
net loss of $4,257,631, on $511,159, of total revenues for the
year ended Dec. 31, 2004.
At Dec. 31, 2005, the company's balance sheet showed assets
totaling $1,559,696 and liabilities totaling $6,094,350, resulting
in a stockholders' deficit of $4,534,654. At Dec. 31, 2005, the
company reported an accumulated deficit of $27,302,257 compared to
an accumulated deficit of $20,614,502, for the year ended Dec. 31,
2004.
The company's Dec. 31 balance sheet also showed strained liquidity
with $967,381 in total current assets and $4,675,702 in total
current liabilities. coming due within the next 12 months.
A full text copy of the company's financial statements for the
year ended Dec. 31, 2006, is available for free at:
http://ResearchArchives.com/t/s?935
About PowerCold Corporation
PowerCold Corporation -- http://www.powercold.com/-- designs,
develops and markets unique HVAC products and systems for
commercial use. The company derives its revenues from two
principal product line applications. The first is a line of
proprietary energy efficient products, including evaporative
condensers and fluid coolers for the HVAC industry. The second is
a proprietary four pipe integrated piping system for large
commercial buildings that reduces power costs by up to 50% for air
conditioning and refrigeration systems and provides a clean
comfort air environment.
POWERCOLD CORP: March 31 Balance Sheet Upside-Down $4 Million
-------------------------------------------------------------
PowerCold Corp. reported in a Form 10-Q filing with the United
States Securities and Exchange Commission on May 15, 2006, its
financial statements for the quarter ended Mar. 31, 2006.
For the quarter ended Mar. 31, 2006, the company reported a net
loss of $457,809 on total revenues of $624,959. This compares to
a net loss of $1,209,724 on total revenues of $153,528 for the
quarter ended Mar. 31, 2005.
At Mar. 31, 2005, the company reported total assets of $1,473,296
and total liabilities of $5,482,759, resulting in a stockholders'
deficit of $4,012,463.
A full text copy of the company's financial statements for the
quarter ended Mar. 31, 2006, is available for free at:
http://ResearchArchives.com/t/s?934
PowerCold Corporation -- http://www.powercold.com/-- designs,
develops and markets unique HVAC products and systems for
commercial use. The company derives its revenues from two
principal product line applications. The first is a line of
proprietary energy efficient products, including evaporative
condensers and fluid coolers for the HVAC industry. The second is
a proprietary four pipe integrated piping system for large
commercial buildings that reduces power costs by up to 50% for air
conditioning and refrigeration systems and provides a clean
comfort air environment.
PROCARE AUTOMOTIVE: Ct. OKs $3.6 Mil. DIP Financing on Final Basis
------------------------------------------------------------------
The Honorable Pat E. Morgenstern-Clarren of the U.S. Bankruptcy
Court for the Northern District of Ohio in Cleveland gave ProCare
Automotive Service Solutions, LLC, authority to:
-- secure a $3,650,000 postpetition financing under Section 364
of the Bankruptcy Code from Monro Muffler, Inc.;
-- use cash collateral under Section 363 of the Bankruptcy
Code.
Cash Collateral
The Debtor is a party to various prepetition agreements:
-- a $200,000 debt from JPMorgan Chase Bank, N.A., secured by
some of the Debtor's accounts receivable;
-- an agreement with Stoney Hollow Tire, Inc., which asserts
security interests in some of the Debtor's tire inventory;
-- an agreement with East Penn Manufacturing, Inc., dated
Aug. 21, 2001, which asserts security interests in certain
battery inventory sold by East Penn to the Debtor;
-- a $6.4 million Key Mezzanine Capital Fund I, L.P.;
-- a $1.6 million debt from Regis Capital Partners, L.P.;
-- a $236,000 debt from PASS Holdings LLC; and
-- a $$96,000 debt from Sullivan Partners LLC.
Key, Regis, PASS, and Sullivan are referred to as Prepetition
Lenders.
JPMorgan and the Prepetition Lenders are granted valid and
perfected replacement liens as of the bankruptcy filing.
The Adequate Protection Replacement Liens will only be effective
to the extent of the validity, perfection, priority and
enforceability of the prepetition security interests and liens
held by the respective creditor to which those liens are granted.
The Debtor will use the cash collateral and postpetition financing
to continue its business and preserve and maintain the going
concern value of its estate.
DIP Financing
The DIP Financing constitutes allowed superpriority administrative
expense claims. The debt is secured by any unencumbered
prepetition and postpetition property of the Debtor.
The postpetition lien will be:
(i) senior to validly perfected liens or security interests
held by the Prepetition Lenders as of the bankruptcy filing
and the Adequate Protection Replacement Liens granted to
the Prepetition Lenders, but
(ii) junior and subordinate to all Permitted Priority Liens,
including, without limitation, liens and security interests
held by General Electric Capital Business Asset Funding
Corporation of Connecticut, as assignee of GE Capital
Franchise Finance Corporation, on a ground lease, dated as
of May 14, 2002, between Thomas H. Lurie and the Debtor for
real property located at 5160 Hamilton Road, Columbus,
Ohio, and the building and equipment at that address, and
the Adequate Protection Replacement Liens granted to
JPMorgan, Stoney Hollow and East Penn.
The Debtor is authorized to exceed 105% of the budgeted total
disbursement for the week, provided those expenses will not exceed
$365,000.
Lawrence V. Gelber, Esq., at Schulte, Roth & Zabel LLP represents
Monro Muffler, Inc.
A full-text copy of the DIP Financing Final Order is available for
a fee at:
http://www.researcharchives.com/bin/download?id=060509214522
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. Joseph M. Geraghty at Conway MacKenzie &
Dunleavy gives financial advisory services to the Committee. When
the Debtor filed for protection from its creditors, it estimated
assets and debts between $10 million and $50 million.
PROCARE AUTOMOTIVE: Court Okays Eric Martinez's Employment Pact
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Ohio
approved ProCare Automotive Service Solutions, LLC's Employment
Agreement with Eric Martinez.
As reported in the Troubled Company Reporter on March 17, 2006,
Mr. Martinez has been the Debtor's chief executive officer and
chief financial officer for two years. The Debtor told the Court
that Mr. Martinez has the requisite institutional history and
knowledge and the experience and skills necessary to support the
Debtor's business operations pending the sale of its assets as a
going-concern.
Summary of the Martinez Agreement
1) Term of Engagement: from the petition date through termination
of the engagement and Mr. Martinez can be terminated with or
without cause.
2) Position and Annual Salary: the Debtor's CEO and CFO and an
annual salary of $250,000, plus benefits and reimbursement of
travel expenses.
3) Bonus: .35% of any cash sale price and .35% of any deferred
sale price based on future earnings.
4) Indemnification: The Debtor agrees to indemnify Mr. Martinez
for costs arising out of any and all claims, whether threatened
or actual in connection with his employment activities with the
Debtor. The Debtor is not obligated to indemnify Mr. Martinez
for his willful acts of misconduct.
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. Joseph M. Geraghty at Conway MacKenzie &
Dunleavy gives financial advisory services to the Committee. The
Debtor estimated its assets and debts at $10 to $50 million when
it filed for bankruptcy protection.
PROGRESS RAIL: Caterpillar Merger Prompts S&P to Hold B+ Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services held its ratings on railroad
maintenance provider Progress Rail Services Holdings Corp.,
including its 'B+' corporate credit rating, on CreditWatch with
positive implications, where they were placed on March 22, 2006.
The Albertville, Alabama-based company had approximately $242
million in total debt outstanding at Nov. 30, 2005.
The CreditWatch update follows the announcement that Progress Rail
has entered into an agreement to be acquired by Caterpillar Inc.
The purchase price of about $800 million is expected to consist of
53% cash proceeds and 47% stock. In addition, Caterpillar will
assume about $200 million of long-term debt.
REYNOLDS AMERICAN: S&P Assigns BB Rating to $1.65 Billion Notes
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' senior
secured debt rating and '3' recovery rating to Reynolds American
Inc.'s proposed issue of seven-, ten-, and 12-year senior secured
notes, totaling $1.65 billion. (Allocation of maturities has not
been determined yet.) These ratings are based on preliminary
offering statements and are subject to review upon final
documentation.
"At the same time, we lowered our senior secured debt rating on RJ
Reynolds Tobacco Holdings Inc.'s existing senior secured notes to
'BB' from 'BB+', and assigned a recovery rating of '3' to these
notes," said Standard & Poor's credit analyst David Kang.
However, the company announced that it plans to commence an
exchange offer for up to $1.45 billion of RJR's existing senior
secured notes for new notes to be issued at RAI with collateral
and guarantees identical to the new notes being rated.
In connection with the exchange offer, RAI will solicit consents
to remove substantially all of the restrictive covenants on the
remaining RJR notes. If sufficient consents are obtained (more
than 50%), the existing RJR senior secured notes that are not
exchanged will become unsecured. As such, the ratings on these
notes could be lowered an additional notch because of their
junior position relative to the RAI senior secured notes.
Therefore, the ratings on these notes remain on CreditWatch with
negative implications, pending the outcome of the exchange offer.
These ratings were placed on CreditWatch on April 25, 2006,
following RAI's announcement of its plans to acquire the Conwood
companies.
In addition, Standard & Poor's lowered its senior unsecured debt
rating on RJR's existing senior unsecured notes to 'BB-' from
'BB', because of the increased amount of priority debt ahead of
it, and removed these ratings from CreditWatch where they were
placed April 25, 2006. Standard & Poor's also lowered its
existing preliminary senior secured/senior unsecured/subordinated
debt ratings on RJR's shelf registration for debt securities to
'BB/BB-/BB-' from 'BB+/BB/BB-'. These ratings also were removed
from CreditWatch, where they were placed on April 25, 2006.
The corporate credit ratings on both RAI and RJR are
BB+/Negative/--.
Recovery Analysis
RAI's new senior secured notes are secured by a shared interest in
the principal properties of all RAI's subsidiaries and are
guaranteed by the direct and indirect material domestic
subsidiaries of RAI, other than RJR.
The existing senior secured notes are secured by a shared interest
in the principal properties of RJR's subsidiaries (excluding
Conwood and other subsidiaries). The new notes and RJR's existing
senior secured notes are effectively subordinated to RAI's credit
facilities because of their more limited collateral packages.
While the new notes are structurally subordinated to the existing
senior secured notes at RJR, Standard & Poor's believes the
upstream guarantees provided by RAI's material subsidiaries,
namely RJR Tobacco Co., makes the new and existing senior secured
notes pari passu. Therefore, the new senior secured notes to be
issued by RAI and the existing senior secured notes at RJR are
both rated one notch below RAI's corporate credit rating; this and
the '3' recovery rating indicate that lenders can expect
meaningful recovery of principal (50% to 80%) in the event of a
payment default.
Standard & Poor's default scenario contemplates a significant
legal claim against the company as the trigger point for a
potential default or bankruptcy filing. The rating agency
believes that if the borrower were to default, there would
continue to be a viable business model driver by the continued
demand for cigarettes and the strength of the company's brands.
Therefore, it is believed lenders would achieve the greatest
recovery amounts through reorganization of the company rather than
liquidation. Standard & Poor's recovery analysis assumes an
enterprise value of approximately $14.2 billion, based on a
conservative 6x multiple of the four-year average of projected
EBITDA. After reducing the emergence enterprise value by the
present value of operating leases ($98.5 million) and a potential
sizable legal claim ($10 billion), there is $4.1 billion of
remaining enterprise value. Therefore, under the simulated
default scenario, there is adequate emergence enterprise value to
fully cover the $2.05 billion of senior secured credit facilities
(assuming a fully drawn revolving credit facility) and provide
approximately 60% coverage to the senior secured notes.
Ratings List:
Ratings assigned:
Reynolds American Inc.:
* $1.65B senior secured notes due 2013, 2016, 2018 -- BB
(Recovery Rating 3)
RJ Reynolds Tobacco Holdings Inc.:
* Senior secured debt -- (Recovery Rating 3)
Ratings Lowered; Remain On CrediWatch:
RJ Reynolds Tobacco Holdings Inc.:
To From
-- ----
Senior secured debt BB/Watch Neg. BB+/Watch Neg.
Ratings Lowered; Removed From CreditWatch:
RJ Reynolds Tobacco Holdings Inc.:
To From
-- ----
Senior unsecured debt BB- BB/Watch Neg.
Senior secured debt BB BB+/Watch Neg.
Senior unsecured debt BB- BB/Watch Neg.
Subordinated debt BB- BB-/Watch Neg.
ROCK-TENN CO: S&P Puts B+ Rating on $500 Mil. Shelf Registration
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary 'B+'
senior unsecured rating to the recently filed $500 million shelf
registration of Norcross, Georgia-based Rock-Tenn Co.
(BB/Negative/--), pursuant to rule 415 under the Securities Act of
1933. Proceeds are preliminarily slated for general corporate
purposes. Total debt stood at $855 million on March 31, 2006.
The ratings on Rock-Tenn, a leading folding carton and paperboard
manufacturer, reflect modest operating margins and aggressive
financial leverage following the acquisition of the pulp,
paperboard, and packaging businesses of Gulf States Paper Corp. on
June 6, 2005. Ratings also reflect benefits from forward
integration and relatively stable cash flow generation.
Ratings List:
Rock-Tenn Co.:
Corporate credit rating: BB/Negative/--
Senior secured debt: BB (Recov rtg: 4)
Senior unsecured debt: B+
Ratings Assigned:
$500 mil shelf registration: Senior unsecured (prelim) B+
ROGERS CABLE: DBRS Confirms BB Rating on Notes & Debentures
-----------------------------------------------------------
Dominion Bond Rating Service changed the trend on the Senior
Secured Notes & Debentures of Rogers Cable Inc. to Positive from
Stable and confirmed the rating at BB. The trend change is
supported by steady improvements to Rogers Cable's credit profile
and the Company's successful bundling efforts, which are reducing
customer churn and driving EBITDA growth.
In addition, as a result of considerable improvement to the
overall Rogers group of companies, DBRS has changed the trend to
Positive. See separate press releases on Rogers Wireless Inc.
Even though the Company's operations continue to be in a negative
free cash flow position, these deficits have recently been funded
through inter-company subordinated debt owed to the parent, RCI.
This inter-company activity further supports DBRS's consolidated
view on the Rogers group of companies.
DBRS notes that the group has made considerable progress in
improving consolidated free cash flow and leverage, driven largely
by the strong performance of Rogers Wireless.
Rogers Cable is in the enviable position to be able to offer a
true facilities-based "quadruple play" of services, including
video, Internet, telephony, and wireless, in a relatively
unencumbered regulatory environment, when compared to its Canadian
telco competitors. This should present Rogers Cable with a window
of opportunity to bundle telephony to high-valued customers with
multiple services, which contributes to decreased customer churn
and drives EBITDA growth.
However, DBRS believes this window of opportunity will not be
everlasting. Rogers Cable's main competitor, Bell Canada, is
preparing to launch terrestrial video solutions of its own, and
the regulatory environment, which restricts flexibility
surrounding pricing and bundling for telco, will not likely last
forever.
Currently, DBRS believes the pricing strategy adopted by both
Rogers and Bell Canada is rational; however, if this were to
change, Rogers Cable would not be able to endure a prolonged
pricing war with its balance sheet, which is relatively weak when
compared to Bell Canada.
Notwithstanding the slowly improving profile and metrics, Rogers
Cable continues to be in a negative free cash flow position.
However, these deficits should begin to diminish through
continuous incremental EBITDA gains, reasonable capex
requirements, and the inclusion of the Call-Net Enterprises Inc.'s
operations into Rogers Cable.
These deficits are expected to be funded through further inter-
company borrowings with RCI. DBRS expects free cash flow deficits
to be moderately reduced in 2006, which lends further support to
the trend change.
DBRS notes that the key to rating improvement will be translating
the improved metrics and bundling efforts into free cash flow.
Likewise, the trend could revert to stable if RCI on a
consolidated basis begins to weaken or if the competitive
environment intensifies and free cash flow deficit is further
prolonged.
ROGERS COMMS: DBRS Rates Issuer Debt at BB(low) Positive
--------------------------------------------------------
Dominion Bond Rating Service changed the trend on Rogers
Communications Inc. to Positive from Stable and confirmed its
rating at BB (low). The trend change has been driven by reduced
financial risk for the group and an improved business-risk profile
at its operating companies.
DBRS also placed a Positive trend on RCI's two largest operating
companies, Rogers Wireless Inc. and Rogers Cable Inc.
Firstly, RCI has reduced its funding requirements after
eliminating all of its external debt and preferred securities at
the corporate level over the past 12 months.
DBRS notes this reduction were significant relative to roughly
Cdn$1.6 billion in debt and preferred securities outstanding at
the end of 2002. In addition, DBRS notes that RCI's recent
acquisition of Call-Net Enterprises Inc. in 2005 was completed in
a more balanced fashion versus mostly debt-financed acquisitions
in 2004.
DBRS believes that the reduction and elimination of these
corporate securities, which required funding from its operating
companies to support, has allowed RCI to support its common
dividend.
Secondly, DBRS expects the RCI group as a whole to generate a
significant level of free cash flow in 2006 after years of free
cash flow deficits and with only modest free cash flow over the
past two years.
DBRS expects the improvement in free cash flow to be driven by
Rogers Wireless, RCI's largest operating segment, as it continues
to scale its business, benefits from improved churn levels, and
achieves greater operating efficiencies.
DBRS expects the free cash flow at Rogers Wireless to be applied
to its debt maturing during the year with the remaining roughly
Cdn$420 million likely to be distributed to RCI in the form of a
dividend or return of capital.
DBRS expects this distribution to cover RCI's acquisition of a
corporate building and help to fund Roger Cable's persistent free
cash flow deficits. While these free cash flow deficits at Rogers
Cable continue to remain a concern for DBRS, they are expected to
be more modest going forward with the addition of Rogers Telecom's
roughly Cdn$130 million in annual EBITDA and as capex levels at
Rogers Cable are reduced.
Overall, DBRS expects both business and financial risk improvement
in RCI's operating companies in 2006, which should put these
companies in a position to improve their credit profiles and
metrics individually.
As a result, DBRS believes that this should translate into
improved consolidating credit metrics for RCI, which, with no debt
or preferred securities currently outstanding at the corporate
level, can direct more of the funding its operating subsidiaries
provides toward paying a common dividend to shareholders.
ROGERS WIRELESS: DBRS Holds BB(low) Rating on Sr. Subor. Notes
--------------------------------------------------------------
Dominion Bond Rating Service changed the trend on Rogers Wireless
Inc. to Positive from Stable and confirmed its ratings at BB and
BB (low). This has resulted from an improved business-risk
profile and the expectation that its financial profile will
continue to improve after leverage increased significantly in 2004
as a result of acquisitions.
DBRS also placed a Positive trend on Rogers Wireless' parent,
Rogers Communications Inc., and Rogers Cable Inc.
Firstly, DBRS expects Rogers Wireless will improve its EBITDA
margins significantly in 2006 - from around the mid-30% range to
the low 40% range, which is good for any wireless carrier. Drivers
of this expected improvement include continued good subscriber
growth, churn levels remaining low, and continued ARPU growth as
data usage accelerates.
In addition, DBRS notes that the Company's focus on improving its
churn levels, including signing subscribers onto multi-year
contracts, is in anticipation of wireless number portability being
implemented in Canada beginning in May 2007. As a result, DBRS
expects that by the end of 2006, Rogers Wireless' operating
metrics will be more in line with its two Canadian competitors.
DBRS also notes that the wireless market in Canada remains
rational, with three strong players all growing on a profitable
basis with further growth opportunities expected as penetration
rates remain low in the mid-50% range, substantially below other
developed countries.
Secondly, DBRS expects that operating cash flow will increase
substantially in 2006 and more than offset higher capex levels,
which are expected to be directed towards the Company's wireless
data network rollout and its fixed-wireless initiative.
As a result, DBRS expects free cash flow to be significant going
forward. DBRS expects that this free cash flow will be used to
repay maturing debt at Rogers Wireless in 2006 and potentially to
distribute to RCI through a dividend or distribution.
DBRS expects that this could aid other segments within the Rogers
group. As a result, DBRS expects Rogers Wireless' key credit
metrics to improve in 2006 with cash flow-to-debt improving to at
least 0.25 times and gross debt-to-EBITDA improving to below 3.0
times.
Also supporting this trend change is the reduced funding
requirements at RCI, which recently eliminated its last public
note outstanding in February 2006. Furthermore, DBRS expects that
RCI on a consolidated basis will generate good free cash flow in
2006 and, going forward, Rogers Cable will burn cash at a lesser
rate.
SAINT VINCENTS: Proposes Bidding Procedures for Hospital Sales
--------------------------------------------------------------
Saint Vincents Catholic Medical Centers of New York, its debtor-
affiliates and Wyckoff Heights Medical Center have agreed to
uniform bidding procedures, which will govern the submission of
bids for the purchase of all or a portion of the Debtors' Mary
Immaculate and St. John's Queen's hospitals. The Debtors ask the
Court to approve the Bidding Procedures for the Queens Assets.
As reported in the Troubled Company Reporter on May 16, 2006, the
Debtors and entered into an Asset Purchase Agreement dated May 9,
2006, with Caritas Health Care Planning, Inc., an affiliate of
Wyckoff Heights Medical Center for the sale of the Queens
Hospitals and related assets, subject to higher or better offers
received through a bidding process and auction. Pursuant to the
Purchase Agreement, the Debtors selected Wyckoff as the "stalking
horse" bidder for purposes of the sale of the Queens Hospitals and
other Queens Assets.
George A. Davis, Esq., at Weil, Gotshal & Manges LLP, in New York,
relates that the Bidding Procedures provides that A Qualified
Bidder must first deliver to the Debtors an executed
confidentiality agreement and a written non-binding expression of
interest, and thereafter must submit a Qualified Bid.
A Qualified Bid must:
(a) be on the same terms and conditions as those in the
Purchase Agreement, and must include an agreement
substantially similar to the Purchase Agreement;
(b) must include a purchase price that is greater than
$41,650,000, or that is greater than $43,150,000, if for
all or substantially all of the Queens Assets; and
(c) be accompanied by a deposit equal to at least the lesser
of 2.5% of the purchase price or $750,000.
All bids for the Queens Assets must be received by June 16, 2006.
To maximize the value the Debtors might receive for the Queens
Assets, the Debtors propose to hold an auction at 10:00 a.m., New
York Time, on June 21, 2006.
The Auction will only be held if one or more Qualified Bids of
sufficient value is received pursuant to the Bidding Procedures
before the Bid Deadline.
The Debtors propose to publish a Notice of Auction and Sale
Hearing in the Wall Street Journal (National Edition).
About Saint Vincents
Headquartered in New York, New York, Saint Vincents Catholic
Medical Centers of New York -- http://www.svcmc.org/-- the
largest Catholic healthcare providers in New York State, operate
hospitals, health centers, nursing homes and a home health agency.
The hospital group consists of seven hospitals located throughout
Brooklyn, Queens, Manhattan, and Staten Island, along with four
nursing homes and a home health care agency. The Company and six
of its affiliates filed for chapter 11 protection on July 5, 2005
(Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary
Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will &
Emery, LLP, filed the Debtors' chapter 11 cases. On Sept. 12,
2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took
over representing the Debtors in their restructuring efforts.
Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the
Official Committee of Unsecured Creditors. As of Apr. 30, 2005,
the Debtors listed $972 million in total assets and $1 billion in
total debts. (Saint Vincent Bankruptcy News, Issue No. 25;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
SAINT VINCENTS: Inks License Agreement with BIK PC
--------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approved a license agreement Saint Vincents Catholic Medical
Centers of New York and its debtor-affiliates signed with BIK,
P.C.
SVM's operations are located, in part, at the Link Building in
Manhattan. From time to time, in the ordinary course of business,
the Debtors enter into license agreements and leases with
physicians and other professionals for the use of office and
clinic space at the Link Building in Manhattan and other
locations, Andrew M. Troop, Esq., at Weil, Gotshal & Manges LLP,
in Boston, Massachusetts, related.
Currently, Dr. Eli Bryk, the chairman of St. Vincent's Hospital
in Manhattan's Orthopedics Department, is party to a lease
agreement with St. Vincents Catholic Medical Centers, whereby Dr.
Bryk leases space for the operation of a private, orthopedics
clinic. Dr. Bryk is also party to an administration, supervision,
and teaching agreement with SVCMC, pursuant to which he trains
SVCMC's medical residents and provides clinical and other services
to SVCMC. In consideration for Dr. Bryk's services under the AS&T
Agreement, he receives a rent abatement under the Orthopedics
Lease.
The AS&T Agreement and the corresponding rent abatement are common
place within the Debtors' organization, Mr. Troop explained.
Pursuant to the License Agreement, the Debtors will grant BIK
authority to utilize 2,400 square feet of office space located at
153 West 11th Street, in New York. BIK will be permitted to
operate a private physical therapy clinic at the Premises on a
part- time, non-exclusive basis, for 34 hours per week. The
Debtors will retain the right to treat their own physical therapy
patients at the Premises during the remainder of the week.
Pursuant to the proposed License Agreement:
(a) the Debtors will permit BIK to utilize the Premises for a
five-year term, with one five-year renewal option at fair
market value;
(b) the License Agreement will terminate in the event that:
* the Orthopedics Lease and the AS&T Agreement are not
renewed on or before June 30, 2008; or
* SVM is divested in connection with the Debtors' Chapter
11 cases;
(c) the Debtors reserve the right to relocate the Physical
Therapy Clinic operated by BIK to a comparable space, as
needed, upon 180 days' written notice; and
(d) the Debtors reserve the right to terminate operation of
their own physical therapy program at the Premises after
completion of the second year of the License Agreement and
annually on each subsequent anniversary date.
Unless the Debtors elect to relocate the Physical Therapy Clinic,
BIK will be entitled to continue to operate the Physical Therapy
Clinic at the Premises, subject to an increase in rent based on
the full-time use of the Premises.
BIK is also required to remit a $77,000 license fee yearly to the
Debtors subject to increase:
(i) at an hourly rate, if the Premises is utilized in excess
of 34 hours per week; and
(ii) at a 3% rate in each of the 3rd-5th years of the License
Agreement.
In addition, BIK will bear the entire cost of renovating the
Premises, which is anticipated to total $70,000.
BIK and SVCMC agree to make their equipment available for use by
each other's staff at the Physical Therapy Clinic. The parties
will assess the fair market value for use of each other's
equipment and compensate each other for the usage.
Attendant to the proposed License Agreement, the parties agree to
enter into an agreement to hire physical therapists and other
necessary Physical Therapy Clinic staff, subject to BIK's
obligation to reimburse the Debtors for 100% of the costs
associated with these employees. BIK also agree to pay an
administrative fee to compensate the Debtors for costs associated
with hiring each of the employees needed to operate the Physical
Therapy Clinic.
Mr. Troop asserts that the License Agreement and the operation of
the Physical Therapy Clinic will be advantageous to the Debtors
because:
(1) installation and operation of the Physical Therapy Clinic
in the Link Building furthers the Debtors' objective to
offer comprehensive healthcare services;
(2) pursuant to the License Agreement, the Debtors will not
only be paid a license fee and other operating expenses by
BIK for the use of the Premises, they will also benefit
from revenues generated from providing physical therapy
services to their patients at the Physical Therapy Clinic;
(3) the Debtors will also utilize the Physical Therapy Clinic
to treat their own physical therapy patients; and
(4) the License Agreement provides the Debtors with the
flexibility to relocate the Physical Therapy Clinic and
terminate their own physical therapy program as needed.
About Saint Vincents
Headquartered in New York, New York, Saint Vincents Catholic
Medical Centers of New York -- http://www.svcmc.org/-- the
largest Catholic healthcare providers in New York State, operate
hospitals, health centers, nursing homes and a home health agency.
The hospital group consists of seven hospitals located throughout
Brooklyn, Queens, Manhattan, and Staten Island, along with four
nursing homes and a home health care agency. The Company and six
of its affiliates filed for chapter 11 protection on July 5, 2005
(Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary
Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will &
Emery, LLP, filed the Debtors' chapter 11 cases. On Sept. 12,
2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took
over representing the Debtors in their restructuring efforts.
Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the
Official Committee of Unsecured Creditors. As of Apr. 30, 2005,
the Debtors listed $972 million in total assets and $1 billion in
total debts. (Saint Vincent Bankruptcy News, Issue No. 25;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
SILICON GRAPHICS: Taps AlixPartners as Restructuring Advisors
-------------------------------------------------------------
Pursuant to Section 327(a) of the Bankruptcy Code, Silicon
Graphics, Inc., and its debtor-affiliates ask the U.S. Bankruptcy
Court for the Southern District of New York's permission to employ
AlixPartners, LLC, as their restructuring advisors, nunc pro tunc
to the Petition Date.
Barry Weinert, Esq., vice president, secretary and general counsel
of the Silicon Graphics, Inc., maintains that AlixPartners is well
qualified to serve as the Debtors' bankruptcy consultants and
restructuring advisors. AlixPartners is a leading corporate
restructuring advisor and has a wealth of experience in providing
services in Chapter 11 cases of similar size and complexity to the
Debtors' cases, Mr. Weinert says. AlixPartners has provided
restructuring advisory and consulting services to the Debtors
since 2005.
AlixPartners has provided and will continue to:
(a) analyze cash sources and identify potential additional
sources of cash;
(b) assist the Debtors in securing postpetition DIP and exit
financing;
(c) assess the Debtors' relationship with their key vendors;
(d) assist in the preparation of reviewing the Debtors'
restructuring plan and provide the Debtors an assessment
of that plan;
(e) review the Debtors' borrowing base and collateral
reporting;
(f) assist the Debtors in supporting the due diligence and
other activities of their current and prospective lenders
in evaluating the Debtors and their request for financing;
(g) assist management to improve the Debtors' net cash
position;
(h) assist the Debtors in reviewing and updating existing
alternative strategy plans;
(i) develop contingency plans and financial alternatives in
the event an out-of-court restructuring cannot be
achieved;
(j) assist in the preparation of documents and the
implementation of procedures related to the filing and
subsequent administration of a bankruptcy petition; and
(k) assist the Debtors in the negotiation and preparation of a
plan of reorganization.
The Debtors will pay AlixPartners a fixed monthly fee of
$260,000, based on the full-time services of James A. Mesterharm
and one full-time equivalent staff person.
Additional personnel will be billed based on these hourly rates:
Position Rates
-------- -----
Managing Directors $590 - 750
Directors $440 - 550
Vice Presidents $330 - 430
Associates $260 - 300
Analysts $190 - 220
Paraprofessionals $160
The Debtors will also reimburse AlixPartners for all reasonable
out-of-pocket expenses incurred.
Mr. Mesterharm, managing director of AlixPartners, assures the
Court that his firm has no connection with, and holds no interest
adverse to, the Debtors, their creditors, or any other party-in-
interest. AlixPartners is a "disinterested person," as defined in
Section 101(14) of the Bankruptcy Code.
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. 3; Bankruptcy Creditors' Service, Inc., 215/945-7000)
SILICON GRAPHICS: Wants to Employ CMP as Conflicts Counsel
----------------------------------------------------------
Silicon Graphics, Inc., and its debtor-affiliates seek the U.S.
Bankruptcy Court for the Southern District of New York's
permission to employ Curtis, Mallet-Prevost, Colt & Mosle LLP, as
their conflicts counsel, nunc pro tunc to May 8, 2006.
The Debtors are aware of certain active matters between them and
other parties, which present a conflict for their attorneys, Weil,
Gotshal & Manges LLP. One of the conflicts involves matters
between the Debtors and Goldman Sachs Group, Inc., according to
Barry Weinert, Esq., vice president, secretary and general counsel
of Silicon Graphics, Inc.
In conjunction with Weil Gotshal, CMP will:
(a) consult on all aspects of the Debtors' Chapter 11 cases,
including all of the legal and administrative
requirements;
(b) assist in preparing administrative and procedural
applications and motions;
(c) prosecute and defend litigation;
(d) participate in the preparation and filing of a plan of
reorganization and disclosure statement;
(e) review and object to claims;
(f) analyze and prosecute any causes of action created under
the Bankruptcy code;
(g) take all steps necessary and appropriate to bring the
Debtors' Chapter 11 case to a conclusion; and
(h) perform the full range of legal, but not financial,
services associated with the Debtors' Chapter 11 cases.
Weil Gotshal and CMP have prior experience working as bankruptcy
co-counsel for large bankruptcy cases pending before the Court,
Mr. Weinert relates. Thus, the Debtors are confident that the
assignment of tasks will be maintained efficiently and with a
clear delineation of duties in order to prevent the duplication of
work.
The Debtors will pay CMP in accordance with its ordinary and
customary hourly rates:
Position Rate
-------- ----
Partners $495 to $700
Counsel $385 to $540
Associates $240 to $495
Legal Assistants $120 to $170
Managing Clerk $385
Other Support Personnel $60 to $125
Mr. Weinert discloses that CMP has received a $50,000 general
retainer from the Debtors. Fees for services rendered and
expenses incurred by CMP prior to the Petition Date were applied
against the retainer. As of the Petition Date, the Debtors do not
owe CMP any amounts for legal services or expenses prepetition,
which are not covered by the retainer.
L.P. Harrison, 3rd, Esq., a member of CMP, assures the Court that
the firm does not have any connection with or interest adverse to
the Debtors, their creditors, or other parties-in-interest. CMP
is a "disinterested person" as that term is defined in Section
101(14) of the Bankruptcy Code.
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. 3; Bankruptcy Creditors' Service, Inc., 215/945-7000)
SILICON GRAPHICS: Has Until June 22 to File Schedules & Statements
------------------------------------------------------------------
At the request of Silicon Graphics, Inc., and its debtor-
affiliates, the U.S. Bankruptcy Court for the Southern District of
New York extended the deadline to file their Schedules and
Statements, through and including June 22, 2006.
The Court also waives the requirement under Bankruptcy Rule
1007(a)(3) to file a list of equity security holders and the
requirement under Bankruptcy Rule 2002(d) to provide a notice of
the commencement of the Debtors' Chapter 11 cases to all equity
security holders.
Pursuant to Section 521 of the Bankruptcy Code and Rule 1007 of
the Federal Rules of Bankruptcy Procedure, a debtor is required,
within 15 days from the Petition Date, to file with the Court:
(i) schedules of assets and liabilities,
(ii) schedules of current income and expenditures,
(iii) schedules of executory contracts and unexpired leases, and
(iv) statements of financial affairs.
Gary T. Holtzer, Esq., at Weil, Gotshal & Manges LLP, in New York,
says that due to the complexity and diversity of their operations,
the Debtors won't be able to complete their Schedules in the 15
days provided under Bankruptcy Rule 1007(c).
Mr. Holtzer discloses that while the Debtors, with the help of
their professional advisors, are mobilizing their employees to
work diligently and expeditiously on the preparation of the
Schedules, resources are limited. In the past eight months, the
Debtors have undertaken extensive measures to restructure their
operations, including significant, company-wide workforce
reductions. Specifically, the Debtors' workforce has been reduced
from 1,668 to 1,237 domestic employees, with additional reductions
of the remaining workforce still being contemplated.
Mr. Holtzer maintains that the vast amount of information that
must be assembled and compiled, the multiple places where the
information is located, and the number of employee and
professional hours required to complete the Schedules all
constitute good and sufficient cause for extending the Debtors'
schedules filing deadline.
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. 3; Bankruptcy Creditors' Service, Inc., 215/945-7000)
SINOFRESH HEALTHCARE: Accumulated Deficit Tops $10.5MM at Mar. 31
-----------------------------------------------------------------
SinoFresh HealthCare, Inc., filed its financial results for the
first quarter ended March 31, 2006, with the Securities and
Exchange Commission on May 15, 2006.
For the three months ended March 31, 2006, the company reported a
$703,400 net loss on $371,153 of net revenues compared to a $1
million net loss on $487,856 of net revenues for the same period
in 2005.
At March 31, 2006, the company's balance sheet showed total assets
of $5.1 million and total debts of $3.5 million. As of Mar 31,
2005, the Company's accumulated deficit widened to $10.5 million
from a $9.8 million accumulated deficit at Dec. 31, 2005.
A full-text copy of SinoFresh HealthCare's Quarterly Report is
available for free at: http://researcharchives.com/t/s?945
Going Concern Doubt
Moore Stephens Lovelace, P.A., expressed doubt about SinoFresh
HealthCare's ability to continue as a going concern after auditing
the company's 2005 financial statements. The auditing firm
pointed to the company's substantial losses since its inception,
has incurred negative cash flow from operations and has a working
capital deficiency of $2.8 million at Dec. 31, 2005.
Headquartered in Englewood, Florida, SinoFresh HealthCare, Inc. --
http://www.sinofresh.com/-- is a developer and marketer of
innovative upper respiratory system therapies. The Company is
researching broad-spectrum antiseptic approaches to reducing
viral, bacterial, and fungal organisms that are suspected to cause
pathogenesis of the mouth, nose, and throat. The Company's lead
product, SinoFresh (TM) Nasal Mist, is a hygienic cleansing spray
that kills germs and removes other nasal-sinus irritants. The
Company is also researching how antiseptic cleansing may alleviate
chronic sinus distress, a condition that may affect 37 million
Americans annually. SinoFresh (TM) Nasal Spray is available in
Wal-Mart, Walgreens, Rite Aid, CVS, and other drug, grocery, and
mass merchandise retailers.
STONERIDGE INC: S&P Downgrades Senior Unsecured Debt Rating to B+
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
and senior unsecured debt ratings on Stoneridge Inc. to 'B+' from
'BB-' and to 'B' from 'B+', respectively.
At the same time, Standard & Poor's affirmed its 'BB' senior
secured credit facility rating. The ratings were removed from
CreditWatch, where they were placed with negative implications on
March 9, 2006.
In addition, Standard & Poor's assigned a recovery rating of '1'
to the company's senior secured facility.
The ratings outlook on the Warren, Ohio-based automotive and
commercial vehicle supplier is negative. The company had total
balance sheet debt of $200 million at April 1, 2006.
The rating actions reflect Stoneridge's weaker-than-expected
credit protection measures, largely driven by internal operating
inefficiencies at several manufacturing plants in 2005, and
external volume, mix, and price concerns. Earnings in 2005 were
very weak, and continued deterioration in the automotive industry
could preclude the company from improving its credit measures in
the year ahead.
In 2006, the company may face soft volumes for light vehicle
production, and in 2007, the widely expected commercial vehicle
market downturn will add to Stoneridge's challenges.
Difficult auto industry conditions hurt the company's revenues and
profitability, since light vehicle production volumes were weak,
raw materials costs were high, and pricing pressures were
persistent.
EBITDA for the first quarter of 2006 improved from the fourth
quarter but fell year over year. The sequential increase resulted
from seasonally high production volumes and improvement at the
company's U.K. operations. While plant operations are turned
around, EBITDA for 2006 will likely remain depressed due to
continuing price pressures, high raw materials costs, and
unpredictable production volumes.
Revenues from new business wins in 2007 could somewhat alleviate
the expected cyclical downturn in the commercial vehicle market.
SUPERIOR ENERGY: S&P Rates $300 Million Sr. Unsecured Notes at BB-
------------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB' corporate
credit rating on Superior Energy Services Inc. and assigned its
'BB-' senior unsecured rating to the $300 million senior unsecured
notes issued by SESI LLC and guaranteed by Superior, due 2014.
The outlook is stable.
Proceeds from the note offering should be used to:
* redeem Superior's $200 million senior notes due 2011;
* fund the acquisition of oil and gas properties from
Explore Offshore LLC; and
* help fund the recently announced $70 million investment in
Coldren Oil & Gas Co. L.P.
Harvey, Louisiana-based Superior will have around $320 million of
debt on a pro forma basis after this transaction.
"The ratings on Superior reflect its limited geographic
diversification, highly cyclical markets, and a growing crude oil
and natural gas production business, which we view as higher risk
than the remainder of Superior's business portfolio," said
Standard & Poor's credit analyst Paul Harvey.
"Solid financial measures, good cash flow generation, and moderate
required spending needs buffer these weaknesses," said Mr. Harvey.
Superior's business risk profile is considered fair, reflecting
its focus on the highly volatile Gulf of Mexico market, where it
provides shallow-water and deepwater drilling services, with
profits and cash flows highly dependent on very cyclical drilling
levels.
Standard & Poor's is concerned about Superior's entry into the oil
and gas production business, which potentially creates further
cyclicality in cash flows and earnings.
The stable outlook reflects the expectation that Superior will
remain focused on its core services business and pursue a moderate
financial policy.
If Superior increases its oil and gas production beyond its stated
goal of 25% EBITDA, or if that segment exhibits greater-than-
expected volatility, ratings would come under negative pressure.
On the other hand, if Superior can successfully expand away from
the Gulf of Mexico and bolster its business risk profile, ratings
could be raised over the medium to long term.
SYNAGRO TECH: Receives $15.6 Million from Public Equity Offering
----------------------------------------------------------------
Synagro Technologies, Inc. closed its underwritten public offering
of common stock. The Company has issued and sold 2,000,000 shares
of its common stock at a public offering price of $4.15 per share.
The Company also issued and sold 2,000,000 additional shares to
the underwriter upon exercise of its option to purchase such
shares at the public offering price, less underwriting discounts
and commissions. The Company received total net proceeds from the
sale of such shares, after underwriting discounts and commissions
and offering expenses, of approximately $15,636,000. Total common
stock outstanding after this offering is approximately 77,338,568
shares. The Company plans to use the net proceeds from the
offering for working capital and general corporate purposes.
Banc of America Securities LLC is the sole manager for the
offering. Copies of the final prospectus may be obtained from:
Banc of America Securities LLC
Attn: Prospectus Department, 100 West 33rd Street
New York, New York 10001
About Synagro Technologies
Headquartered in Houston, Texas, Synagro Technologies, Inc.
(Nasdaq:SYGR)(ArcaEx:SYGR) -- http://www.synagro.com/-- offers a
broad range of water and wastewater residuals management services
focusing on the beneficial reuse of organic, nonhazardous
residuals resulting from the wastewater treatment process,
including drying and pelletization, composting, product marketing,
incineration, alkaline stabilization, land application, collection
and transportation, regulatory compliance, dewatering, and
facility cleanout services.
* * *
The company's $180 million term loan due 2012, $30 million delayed
draw term loan due 2012, and $95 million revolving credit facility
due 2010, all carry Standard & Poor's BB- rating. Those ratings
were assigned on Jan. 31, 2005.
TARPON INDUSTRIES: Posts $2.4 Mil. Net Loss in 2006 First Quarter
-----------------------------------------------------------------
Tarpon Industries, Inc., filed its financial results for the first
quarter ended March 31, 2006, with the Securities and Exchange
Commission on May 15, 2006.
For the three months ended March 31, 2006, the Company reported a
$2.4 million net loss on $17 million of net revenues compared to a
$1.6 million net loss on $14 million of net revenues for the same
period in 2005.
As of March 31, 2006, the Company's balance sheet showed total
assets of $35.4 million and total debts of $32.6 million. At
March 31, 2006, the Company's accumulated deficit widened to
$13.1 million from a $10.7 million accumulated deficit at Dec. 31,
2005.
Material Weakness
The Company's accounting firm has identified a variety of material
weaknesses in the company's internal controls over financial
reporting. These material weaknesses stem in significant part
from the acquisition policy, which the company is following in
which private, unrelated companies are being combined. The
material weaknesses include:
a) lack of formalized accounting policies and procedures,
including written procedures for monthly, quarterly and
annual closing of financial books and records.
b) lack of common systems or a common chart of accounts and use
of spreadsheets to perform consolidations, which resulted in
errors.
c) insufficient resources or knowledge to adequately complete
the process of documenting, testing, and evaluating our
internal controls over financial reporting as required by
the Sarbanes-Oxley Act.
d) insufficient process to ensure financial statements
adequately disclose information required by Generally
Accepted Accounting Principles (GAAP).
e) account reconciliations and supporting documentation not
prepared on a timely basis.
f) duties and control activities within the finance function
have not been appropriately segregated.
g) the Company does not have a formal process to ensure that
appropriate system access is granted.
h) lack of adequate process to identify and ensure that non-
standard journal entries are subject to an appropriate level
of review.
i) the Company's invoicing system relies on certain manual
controls which may not be sufficient to minimize the risk of
incorrect revenue recognition.
A full-text copy of Tarpon Industries' Quarterly Report is
available for free at http://researcharchives.com/t/s?943
Going Concern Doubt
Grant Thornton LLP, expressed doubt about Tarpon Industries'
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 $7.3 million, its default of certain
debt covenants of its credit agreements and its working capital
deficit of $11 million at Dec. 31, 2005.
About Tarpon Industries
Headquartered in Marysville, Michigan, Tarpon Industries, Inc. --
http://www.tarponind.com/-- through its wholly owned subsidiaries
within the United States and Canada, manufactures and sells
structural and mechanical steel tubing and engineered steel
storage rack systems. Through an aggressive acquisition-driven
business model, the Company's mission is to become a larger and
more significant manufacturer and distributor of structural and
mechanical steel tubing, engineered steel storage rack systems and
related products.
TERWIN MORTGAGE: Moody's Puts Low-B Rating on 2 Cert. Classes
-------------------------------------------------------------
Moody's Investors Service assigned an Aaa rating to the senior
notes issued by Terwin Mortgage Trust 2006-4SL, and ratings
ranging from Aa2 to Ba2 to the subordinate notes in the deal.
The securitization is backed by two groups of mortgage loans.
Group 1 consists of fixed-rate, closed-end second lien mortgage
loans acquired by Terwin Securitization LLC and originated by
various mortgage lenders. Group 2 consists of adjustable-rate,
home equity line of credit mortgage loans also acquired by Terwin
Securitization LLC and also originated by various mortgage
lenders.
The ratings are based primarily on the credit quality of the
loans, and on the protection from subordination, excess spread,
and overcollateralization. The ratings of the class A-1 and A-2
notes also reflect the benefit of a financial guarantee policy
provided by Ambac Assurance Corporation, rated Aaa. Moody's
expects collateral losses to range from 7.35% to 7.85%.
Specialized Loan Servicing LLC and GreenPoint Mortgage Funding Inc
will service the loans, and GMAC Mortgage Corporation will act as
master servicer. Moody's assigned SLS its servicer quality rating
as a primary servicer of second-lien and home equity loans.
The Complete Rating Actions:
Terwin Mortgage Trust 2006-4SL
Asset-Backed Securities, Series 2006-4SL
* Cl. A-1, Assigned Aaa
* Cl. A-2, Assigned Aaa
* Cl. M-1, Assigned Aa2
* Cl. M-2, Assigned Aa3
* Cl. M-3, Assigned A2
* Cl. B-1, Assigned A3
* Cl. B-2, Assigned Baa1
* Cl. B-3, Assigned Baa2
* Cl. B-4, Assigned Baa3
* Cl. B-5, Assigned Ba1
* Cl. B-6, Assigned Ba2
* Cl. G, Assigned (P)Aaa
TONY HASTINGS: Case Summary & 13 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Toney V. Hastings
2780 Keasler Circle East
Germantown, Tennessee 38139
Bankruptcy Case No.: 06-23530
Chapter 11 Petition Date: May 17, 2006
Court: Western District of Tennessee (Memphis)
Judge: Jennie D. Latta
Debtor's Counsel: Jerome C. Payne, Esq.
Jerome C. Payne, P.C.
605 Poplar Avenue
Memphis, Tennessee 38105
Tel: (901) 524-1177
Fax: (901) 544-9443
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 13 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Internal Revenue Services Taxes $553,000
P.O. Box 21126
Philadelphia, PA 19114
Wells Fargo Financial Judgment $39,653
c/o William W. Parish
100 North Main, Suite 3217
Memphis, TN 38103
Portfolio Recovery Credit Account $34,100
P.O. Box 12914
Norfolk, VA 23541
Travelers Bank Credit Account $25,000
Discover Bank Judgment $14,900
Mercedes Benz Credit Corp. Vehicle $12,700
AMEX Credit Card $8,500
Discover Financial Credit Card $7,700
First TN Bank Credit Card $6,906
HSBC Credit Account $5,000
First Tennessee Credit Account $4,270
Zale/CBUSA Credit Account $3,300
MCDF/CBUSA Credit Account $3,000
TURBOWORX INC: Case Summary & Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Turboworx, Inc.
aka TurboGenomics, Inc.
401 Broadway, Suite 912
New York, New York 10013
Bankruptcy Case No.: 06-11074
Type of Business: The Debtor is a software services company
providing systems solutions for high-performance
workflows in the health, financial,
manufacturing, and petroleum services.
See http://www.turboworx.com
Chapter 11 Petition Date: May 16, 2006
Court: Southern District of New York (Manhattan)
Judge: Stuart M. Bernstein
Debtor's Counsel: William J. Reilly, Esq.
401 Broadway, Suite 912
New York, New York 10013
Tel: (212) 683-1570
Fax: (212) 219-9167
Total Assets: $271,788
Total Debts: $4,183,470
A full-text copy of the Debtor's 14-page list of its largest
unsecured creditors is available for free at
http://bankrupt.com/misc/TurboworxInc_ScheduleF.pdf
UAL CORP: Sells MyPoints.com to United Online for $56 Million
-------------------------------------------------------------
United Online, Inc. (Nasdaq:UNTD), has acquired MyPoints, Inc., a
provider of member-driven Internet direct marketing services, from
UAL Corp. (Nasdaq:UAUA) for approximately $56 million in cash.
MyPoints, Inc., now a wholly owned subsidiary of United Online, is
also known as MyPoints.com and features a True Opt-in(r) database
of approximately 4.5 million members and provides advertisers with
an integrated suite of incentive-based media products. In the
quarter ended March 31, 2006, MyPoints.com had approximately
1.4 million members with activity in their accounts.
MyPoints.com provides its members with MyPoints rewards points for
a variety of advertising and e-commerce related activities,
including making purchases from hundreds of participating
retailers and service providers. MyPoints.com members can then
redeem their rewards points for products and services from a broad
list of participating companies including retailers, theaters,
restaurants, airlines and hotels, among others.
For the year ended December 31, 2005, MyPoints.com grew
revenues by 44% to $38.4 million, and reported operating income
of $2.4 million after $2.4 million of depreciation and
amortization. The company has 100 employees, and United Online
intends to maintain MyPoints.com operations in San Francisco,
Calif., and Schaumburg, Illinois.
"Our purchase of MyPoints.com represents another major step
forward in United Online's strategy of expanding our growing
content and commerce business," said Mark R. Goldston, chairman,
CEO and president of United Online, Inc. "MyPoints.com is a major
name in the online media and loyalty business, effectively
bringing millions of active and loyal Internet consumers together
with marketers that speak directly to their interests. We are
excited about the prospect of offering United Online's over 50
million registered accounts in North America the opportunity to
earn MyPoints.com loyalty rewards for many of the activities they
are already doing today, both offline and online."
The parties have agreed to elect, under Internal Revenue Code
section 338(h)(10), to treat United Online's acquisition of
MyPoints stock as an acquisition of assets for tax purposes. Such
election will result in the purchase price being deductible for
income tax purposes over a maximum period of 15 years.
About United Online
United Online, Inc. (Nasdaq:UNTD) -- http://www.untd.com/-- is a
provider of consumer Internet and media services through a number
of brands, including NetZero, Juno, Classmates, PhotoSite,
NamesDatabase, FreeServers and MySite. The company's
communication services include Internet access, accelerated dial-
up services, Voice-over-Internet Protocol (VoIP) and premium
email. The company's content and commerce services include social
networking, personal web hosting and domain services and online
photo-sharing. United Online is headquartered in Woodland Hills,
Calif., with offices in New York City, Renton, Washington, San
Francisco, Calif., Orem, Utah, Munich, Germany, and Hyderabad,
India.
About UAL Corp.
Headquartered in Chicago, Illinois, UAL Corporation --
http://www.united.com/-- through United Air Lines, Inc., is the
holding company for United Airlines -- the world's second largest
air carrier. The Company filed for chapter 11 protection on
Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M.
Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq.,
and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the
Debtors in their restructuring efforts. Fruman Jacobson, Esq., at
Sonnenschein Nath & Rosenthal LLP represented the Official
Committee of Unsecured Creditors before the Committee was
dissolved when the Debtors emerged from bankruptcy. When the
Debtors filed for protection from their creditors, they listed
$24,190,000,000 in assets and $22,787,000,000 in debts. Judge
Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20,
2006. The Company emerged from bankruptcy protection on Feb. 1,
2006. (United Airlines Bankruptcy News, Issue No. 122; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
UAL CORP: Files April 2006 Status Report on Plan Consummation
-------------------------------------------------------------
Reorganized UAL Corporation and its debtor-affiliates have made
progress in distributing the New UAL Common Stock, which has
traded on NASDAQ since February 2, 2006. Erik W. Chalut, Esq., at
Kirkland & Ellis LLP, in Chicago, Illinois, relates that as of
April 25, 2006, United Air Lines, Inc., has authorized the
issuance of 97,600,000 shares -- 93,700,0000 of which have been
issued to unsecured creditors and employees -- out of 115,000,000
shares set aside for the unsecured creditor body. Through the
close of business on April 25, 2006, over 119,000,000 shares have
been traded on NASDAQ.
The Reorganized Debtors have completed the monetization process
for about 3,600,000 shares of New UAL Common Stock reserved for
$813,000,000 of allowed convenience class claims. In early
March, United completed similar monetizations to provide the New
UAL Common Stock required under settlements incorporated into the
Plan with the Pension Benefit Guaranty Corporation, the Public
Debtor Group, the Official Committee of Unsecured Creditors
Committee, the Internal Revenue Service, and certain indenture
trustees.
United also has distributed about 23,600,000 shares of New UAL
Common Stock to its employees' 401(k) plans. After monetizing
1,300,000 shares to satisfy tax-withholding obligations,
employees and retirees have received 2,400,000 net shares
directly.
In accordance with the Plan and after over 80% of the shares of
New UAL Common Stock available for issuance to United's employees
and unsecured creditors was distributed, the Plan Oversight
Committee was disbanded as of March 24.
Seventh Circuit Matters
Mr. Chalut relates that the United States Court of Appeals for
the Seventh Circuit heard oral argument on February 24, 2006,
regarding the United Retired Pilots Benefit Protection
Association's appeal of the January 2005 United-ALPA CBA
Restructuring Agreement. The Seventh Circuit subsequently
affirmed the Bankruptcy Court's ruling in favor of United on
March 31, 2006.
The Seventh Circuit heard oral argument on February 16, 2006, to
consider the consolidated appeals of the Denver and Los Angeles
municipal bond recharacterization rulings. No ruling has yet
been made with respect to these matters.
United's appeal of the Bankruptcy Court's October 6, 2005, order
compelling United to pay non-qualified benefits for the month of
October was heard by the United States District Court for the
Northern District of Illinois on February 23, 2006. On March 17,
the District Court upheld the Bankruptcy Court's ruling on
grounds of ripeness.
On March 24, United appealed the District Court's judgment to the
Seventh Circuit. A settlement conference regarding this matter
is scheduled for May 5. In the event a settlement agreement is
not reached, United's opening brief on appeal to the Seventh
Circuit will be due June 5, URPBPA's response will be due July 5,
and United's reply will be due on July 19.
District Court Matters
As noted in United's previous status report in February 2006, two
parties filed appeals of the order confirming the Plan -- URPBPA
and the Public Debt Group. The Public Debt Group subsequently
withdrew its appeal. Judge Darrah of the U.S. District Court for
the Northern District of Illinois set June 22, as the next status
hearing on the URPBPA Appeal at which time a ruling may be made.
In connection with the appeals filed by United, the Creditors
Committee, and Atlantic Coast Airlines with respect to the
Bankruptcy Court's order allowing the Atlantic Coast Airlines
claim at $500,000,000, Judge Darrah suspended a briefing schedule
and stayed the appeal on April 7, 2006, pending the Bankruptcy
Court's approval of a settlement reached by the parties. The
District Court also scheduled a status hearing on May 31 on these
appeals, which will be stricken if a settlement is finalized
prior to that time.
On February 2, 2006, Judge Darrah held that the PBGC's action to
terminate the Pilot plan was non-core and remanded the proceeding
to the Bankruptcy Court to make proposed findings of fact and
conclusions of law rather than entering a final order authorizing
termination of the plan. Subsequently, Bankruptcy Court entered
its proposed findings of fact and conclusions of law, which were
transmitted to the District Court before Judge Lefkow for
consideration. Judge Lefkow scheduled oral argument with respect
to this matter for May 3.
The City of Los Angeles filed a notice of appeal with the
District Court of the Bankruptcy Court's order denying
intervention in Adversary Proceeding No. 05-1884 and filed its
opening brief on March 21. A status hearing in this matter is
set for June 21.
On March 17, the Bankruptcy Court ruled that United was required
to make payment of nonqualified pension benefits through
January 31, 2006, but has no obligation to pay non-qualified
pension benefits after January 31, 2006. United, URPBPA, and
ALPA each filed Appeals of the order. The Bankruptcy Court
transferred the appeal to the District Court on April 19. The
District Court set a status hearing for May 25.
Matters Pending Outside of Circuit
In litigation pending outside the Seventh Circuit, the Aircraft
Mechanics Fraternal Association took an appeal to the Fourth
Circuit Court of Appeals from the ruling of the U.S. District
Court for the Eastern District of Virginia that the effective
termination date of the Ground Plan would be March 11, 2005.
Although the matter has been fully briefed, the Fourth Circuit
has not issued a ruling, nor has it set a status date.
On March 6, 2006, the U.S. Supreme Court denied petitions for
writs of certiorari by HSBC and CSCDA relating to the Seventh
Circuit's ruling in the San Francisco municipal bond
recharacterization litigation.
About UAL Corp.
Headquartered in Chicago, Illinois, UAL Corporation --
http://www.united.com/-- through United Air Lines, Inc., is the
holding company for United Airlines -- the world's second largest
air carrier. The Company filed for chapter 11 protection on
Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M.
Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq.,
and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the
Debtors in their restructuring efforts. Fruman Jacobson, Esq., at
Sonnenschein Nath & Rosenthal LLP represented the Official
Committee of Unsecured Creditors before the Committee was
dissolved when the Debtors emerged from bankruptcy. When the
Debtors filed for protection from their creditors, they listed
$24,190,000,000 in assets and $22,787,000,000 in debts. Judge
Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20,
2006. The Company emerged from bankruptcy protection on Feb. 1,
2006. (United Airlines Bankruptcy News, Issue No. 122; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
UAP HOLDING: Prices Tender Offer for $328.5 Million Senior Notes
----------------------------------------------------------------
UAP Holding Corp. (Nasdaq: UAPH) and United Agri Products, Inc.
set pricing of offers to purchase for cash any and all of UAP
Holdings' outstanding $125 million principal amount at maturity of
10-3/4% Senior Discount Notes due 2012 and any and all of United
Agri Products' outstanding $203.5 million principal amount of
8-1/4% Senior Notes due 2011.
As reported in the Troubled Company Reporter on May 8, 2006:
* the total consideration to be paid for tendered and accepted
10-3/4% Discount Notes is equal to the present value of
future payments on the 10-3/4% Discount Notes up to and
including Jan. 15, 2008 (the first date on which the 10-3/4%
Discount Notes may be redeemed at UAP Holdings' option),
based on the assumption that the 10-3/4% Discount Notes will
be redeemed in full at $1,053.75 per $1,000 principal amount
at maturity on such date, discounted at a rate equal to 50
basis points over the yield to maturity on the 4.375% U.S.
Treasury Note due Dec. 31, 2007, of which $20 will be a
consent payment payable only to holders who validly tender
their 10-3/4% Discount Notes and deliver consents by 5:00
p.m., New York City Time, on May 16, 2006, unless extended,
and
* the total consideration to be paid for tendered and accepted
8-1/4% Notes is equal to the present value of future payments
on the 8-1/4% Notes up to and including Dec. 15, 2007 (the
first date on which the 8-1/4% Notes may be redeemed at
United Agri Products' option), based on the assumption that
the 8-1/4% Notes will be redeemed in full at $1,041.25 per
$1,000 principal amount on such date, discounted at a rate
equal to 50 basis points over the yield to maturity on the
4.25% U.S. Treasury Note due Nov. 30, 2007. The total
consideration to be paid for tendered 8-1/4% Notes will also
include accrued but unpaid interest on the 8-1/4% Notes to,
but not including, the payment date. Of this total
consideration, $20 will be a consent payment payable only to
holders who validly tender the 8-1/4% Notes and deliver
consents by the Consent Payment Deadline.
Credit Suisse Securities (USA) LLC, the Dealer Manager and Consent
Solicitation Agent for the tender offers and consent
solicitations, has calculated that the yield to maturity on the
10-3/4% Discount Note Reference Security as of 2:00 p.m., New York
City time, on May 16, 2006 was 4.981%. Based on an assumed
payment date of June 1, 2006, the Total 10-3/4% Discount Note
Consideration to be paid for each $1,000 principal amount at
maturity of tendered and accepted 10-3/4% Discount Notes would be
$965.26, an amount equal to the 10-3/4% Discount Note Fixed Spread
Price. Of this Total 10-3/4% Discount Note Consideration, $20 is
a consent payment payable only to holders who validly tender the
10-3/4% Discount Notes and deliver consents by the Consent Payment
Deadline.
Credit Suisse has calculated that the yield to maturity on the
8-1/4% Note Reference Security as of 2:00 p.m., New York City
time, on May 16, 2006 was 4.975%. Based on an assumed payment
date of June 1, 2006, the Total 8-1/4% Note Consideration to be
paid for each $1,000 principal amount of tendered and accepted
8-1/4% Notes would be $1,116.39, an amount equal to the sum of (x)
the 8-1/4% Note Fixed Spread Price, calculated as $1,078.35, and
(y) the amount of accrued and unpaid interest on the 8-1/4% Notes
to, but not including, the assumed payment date for the 8-1/4%
Notes accepted for purchase, calculated as $38.04. Of this Total
8-1/4% Note Consideration, $20 is a consent payment payable only
to holders who validly tender the 8-1/4% Notes and deliver
consents by the Consent Payment Deadline.
The tender offer will expire at 9:00 a.m., New York City Time, on
June 1, 2006, unless extended or earlier terminated. In the event
that the Expiration Date is extended, new pricing terms may be
determined. Information regarding the pricing, tender and
delivery procedures and conditions to the tender offers and
consent solicitations relating to the 8-1/4% Notes and the 10-3/4%
Discount Notes are contained in the Offer to Purchase and Consent
Solicitation Statement, dated May 3, 2006, as supplemented by
Supplement thereto dated May 10, 2006, and the accompanying Letter
of Transmittal and Consent.
Questions about the tender offers may be directed to the Dealer
Manager and Consent Solicitation Agent:
Credit Suisse
Telephone (212) 325-7596 (collect)
Toll Free (800) 820-1653
or to the information agent for the tender offers and consent
solicitations:
MacKenzie Partners, Inc.
Telephone (212) 929-5500 (collect)
Toll Free (800) 322-2885
Copies of the Offer Documents and other related documents may be
obtained from the information agent.
About UAP Holding
UAP Holding Corp. (Nasdaq: UAPH) -- http://www.uap.com/-- is the
holding company of United Agri Products, Inc., the largest
independent distributor of agricultural and non-crop inputs in the
United States and Canada. United Agri Products markets a
comprehensive line of products, including crop protection
chemicals, seeds and fertilizers, to growers and regional dealers.
United Agri Products also provides a broad array of value-added
services, including crop management, biotechnology advisory
services, custom blending, inventory management and custom
applications of crop inputs. United Agri Products maintains a
comprehensive network of approximately 330 distribution and
storage facilities and three formulation and blending plants,
strategically located throughout the United States and Canada.
* * *
As reported in the Troubled Company Reporter on May 8, 2006,
Moody's Investors Service upgraded UAP Holding Corp.'s corporate
family rating to Ba3 from B1. Moody's also assigned a Ba2 rating
to United Agri Products, Inc.'s proposed senior secured $675
million revolving credit due 2011. UAP's proposed $175 million
senior secured term loan due 2012 was assigned a Ba3 rating.
UNITED MEDICORP: KBA Group Raises Going Concern Doubt
-----------------------------------------------------
KBA Group, LLP, expressed substantial doubt about United Medicorp
Inc.'s ability to continue as a going concern after it audited the
company's financial statement for the year ended Dec. 31, 2005.
The auditing firm pointed to the company's net loss and loss of
significant customer contracts.
Total revenue for the fourth quarter of 2005 was $634,411, down
22% compared with $810,088 for the fourth quarter of 2004. Net
income for the fourth quarter of 2005 was $4,589 compared to net
income of $12,406 in the fourth quarter of 2004.
Total revenue in 2005 was $2,793,723, down 32% compared with
$4,099,005 in 2004. For the year ended Dec. 31, 2005, the company
reported a net loss of $101,635 compared to net income of $337,803
in 2004.
For the year ended Dec. 31, 2005, the company reported total
assets of $1,462,004, total liabilities of $634,638, and
stockholders' equity of $827,366.
Pete Seaman, CEO, stated, "UMC management is very disappointed
with the Company's performance in 2005. Due to increased
competition in the markets for our traditional services, UMC will
face another challenging year in 2006. UMC will continue to make
investments in sales and marketing, and actively pursue entry into
the debt purchasing market to position the Company to meet its
growth objectives."
A full-text copy of the company's financial statement for the year
ended Dec. 31, 2006, is available for free at
http://ResearchArchives.com/t/s?93e
United Medicorp, Inc. provides extended business office services
to healthcare providers nationwide.
UNITED MEDICORP: Posts $118,649 Net Loss in First Quarter 2006
--------------------------------------------------------------
United Medicorp, Inc., submitted its financial statement on Form
10-Q on May 15, 2006, to the U.S. Securities and Exchange
Commission.
For the quarter ended Mar. 31, 2006, the company reported a net
loss of $118,649 on $522,416, of revenues. This compares to a net
income of $15,340 on $822,459 of net revenues for the quarter
ended Mar. 31, 2005.
At Mar. 31, 2006, the company's balance sheet showed total assets
of $1,306,346, total liabilities of $597,629, and stockholders'
equity of $708,717.
Loss of MRMC Contract
On Jan. 19, 2006, the company received notice from Marshall
Regional Medical Center that MRMC would discontinue using the
Registrant's Claims Billing Services, effective Mar. 1, 2006.
MRMC management advised the company that with the Company's
assistance and guidance, MRMC would be able to bring this service
back in-house. Total revenues earned by the Registrant from
Claims Billing Services provided to MRMC were $239,000 and
$292,000, which represented 46% and 36% of the Registrant's total
revenue for the first quarter of 2005 and 2006, respectively.
Total revenues earned by the Registrant from Claims Billing
Services provided to MRMC were $1,119,633 and $653,088, which
represented 40% of Registrant's total revenue for the year 2005
and 16% of the Registrant's total revenue for the year 2004.
Likely Risks
The company reports that, despite negative cash flow from
operations, working capital and liquidity requirements were
adequately covered during the current quarter.
The company says that as of May 15, 2006, it faced two significant
risks with regard to cash flow and liquidity. The loss of the
MRMC contract effective Mar. 1, 2006 had a significant negative
impact on the company's revenue and profitability beginning in the
first quarter of 2006. The company says that its management will
continue its efforts to bring in new business, and to reduce
expenses, however, there can be no assurance that the company will
be successful in increasing revenue or reducing expenses to a
level that will be adequate to maintain the Company's cash
position and profitability. The company also faces a significant
risk with regard its concentration of accounts receivable. At
Mar. 31, 2006 $488,862 or 76% of the company's outstanding
accounts receivable were from one customer, and $138,710 or 28% of
the outstanding balance from this customer was aged over 90 days.
As of May 9, 2006, MRMC's accounts receivable balance with the
company was $301,675. During 2004 and 2005, this customer
experienced cash flow problems that resulted in the aging of its
payables to the company. In January of 2005, UMC began receiving
weekly payments from this customer in amounts intended to not only
cover the amount of weekly invoices generated by UMC to this
customer, but to also begin paying down the outstanding amount.
A full-text copy of the company's financial statement for the
quarter ended Mar. 31, 2006, is available for free at
http://ResearchArchives.com/t/s?93f
United Medicorp, Inc. provides extended business office services
to healthcare providers nationwide.
US ENERGY: Posts $8.2 Million Net Loss for 2005 Fiscal Year
-----------------------------------------------------------
U.S. Energy Initiatives Corporation fka Hybrid Fuel Systems, 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 $8,261,371 net loss on $652,400 of revenues
for the year ended Dec. 31, 2005.
At Dec. 31, 2005, the Company's balance sheet showed $3,858,816 in
total assets and $4,130,393 in total liabilities, resulting in a
$271,577 in stockholders' deficit.
The Company's Dec. 31 balance sheet also showed strained liquidity
with $2,358,239 in total current assets available to pay
$4,130,393 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?950
U.S. Energy Initiatives Corporation fka Hybrid Fuel Systems, Inc.
(OTCBB: HYFS) manufactures and markets retrofit systems for the
conversion of gasoline and diesel engines, stationary or
vehicular, to non-petroleum based fuels like compressed natural
gas and liquefied natural gas. The Company holds a worldwide
exclusive license to commercialize the technology embodied in five
issued and one pending US patent. The Company currently offers
HFS dual-fuel conversion system designed to convert medium and
heavy-duty mobile diesel engines to operate in a natural
gas/diesel dual-fuel mode. The Company intends to file for a
change in trading symbol.
WINDON COUNTRY: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: Windon Country Homes, L.P.
803 West Market Street
West Chester, Pennsylvania 19382
Tel: (610) 864-1805
Bankruptcy Case No.: 06-12024
Type of Business: The Debtor is a real estate developer.
Chapter 11 Petition Date: May 17, 2006
Court: Eastern District of Pennsylvania (Philadelphia)
Debtor's Counsel: Peter William DiGiovanni, Esq.
Somers & Associates, P.C.
P.O. Box 250
Gradyville, Pennsylvania 19039-0250
Tel: (610) 640-8209
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.
WERNER HOLDING: S&P Places Corporate Credit Rating on Default
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on
Greenville, Pennsylvania-based Werner Holding Co. (DE) Inc.
The corporate credit rating was lowered to 'D' from 'CCC'.
The rating action followed Werner's announcement that it did not
make its semiannual coupon payment, due May 15, 2006, on its 10%
senior subordinated notes and that it was in negotiations with its
creditors to recapitalize its debt obligations.
"We believe that Werner is unlikely to make the payment during the
30-day grace period and is attempting to restructure its debt for
less than par," said Standard & Poor's credit analyst Lisa Wright.
Werner, a ladder manufacturer, was affected by high raw-material,
transportation, and interest costs and by intensely competitive
industry dynamics.
XTREME COS: Appoints Laurie Phillips as Chief Executive Officer
---------------------------------------------------------------
Xtreme Companies, Inc. (OTC Bulletin Board: XTME) reported that
its CFO Laurie Phillips has been appointed Chief Executive
Officer. Kevin Ryan has resigned his position as CEO and Director
to pursue other opportunities. Mike Thomas was also promoted to
VP of Operations and Manufacturing.
"We would like to thank Kevin for his past contributions to
Xtreme," Xtreme Chairman Michael Novielli stated. "Having now
fully assimilated the Challenger acquisition, our Board of
Directors felt that the CEO position required an individual with
substantial manufacturing and assembly experience to lead the
Company to the next plateau. Laurie's performance as our CFO for
the past year has been outstanding. She possesses a thorough
knowledge of finance and management as well as an in depth
understanding of the marketing and sales processes. Given her
prior experience directing a manufacturing and assembly
organization with over 200 employees, I have no doubt that we can
achieve our mission of establishing Challenger Offshore as a well
recognized and respected niche player at the premium end of the
performance and pleasure boat market."
"I am looking forward to this challenge and believe we have a
significant opportunity to grow Challenger Offshore into a brand
in which our shareholders, investors, employees and customers can
all be proud of," Incoming Xtreme CEO Laurie Phillips commented.
"My mandate from the Board of Directors is clear, and that is to
focus on creating maximum efficiencies in our processes, so we can
rapidly grow market share as we transition to positive cash flow
and profitability."
Prior to her tenure at Xtreme, Ms. Phillips was employed for
twelve years with Ace Electric. Prior to its acquisition, Ace was
one of the largest suppliers serving the U.S. automotive
aftermarket. After serving as Ace's CFO for four years, she was
promoted in 2001 to VP and General Manager, responsible for
overseeing the company's entire operation and its 200+ employees.
She is a certified public accountant and received her BS in
Accounting from Pittsburg State University in Kansas.
Mr. Thomas joined Xtreme in April of 2005. Prior to his tenure at
the Company, he spent over twenty years in the marine industry,
beginning at Caterpillar Marine where he was instrumental in
developing a partnership with an industry leader Carver Yachts,
and subsequently became their production manager. He was also
employed by pleasure boat concern Larson Boats, overseeing the
successful startup of a new operations plant. Additionally, Mr.
Thomas was a Sr. Financial Auditor with Transamerica Business
Credit Corp. where he audited manufacturing companies with credit
limits up to $500 million including the makers of Calvin Klein and
Giorgio Armani clothing.
About Xtreme Companies
Headquartered in Washington, Missouri, Xtreme Companies, Inc. --
http://www.xtremecos.com/-- is engaged in manufacturing and
marketing of mission-specific Fire-Rescue and Patrol boats used in
emergency, surveillance and defense deployments. The boats have
been marketed and sold directly to fire and police departments,
the U.S. Military and coastal port authorities throughout the
United States.
At Sept. 30, 2005, Xtreme Companies, Inc.'s balance sheet showed a
$1,437,064 stockholders' deficit compared to an $894,853 deficit
at Dec. 31, 2004.
XYBERNAUT: Can Borrow Up to $3.2M from East River Under DIP Pact
----------------------------------------------------------------
The Honorable Robert G. Mayer of the U.S. Bankruptcy Court for the
Eastern District of Virginia allowed Xybernaut Corporation and its
debtor-affiliates to borrow, on a final basis, $3.2 million from
East River Capital LLC.
The Debtors sought access to the debtor-in-possession financing to
fund their operations, meet their payroll and other necessary,
ordinary course business expenditures, acquire raw materials,
goods and services.
The DIP Obligations is be secured by valid, binding, enforceable,
non-avoidable and automatically perfected postpetition first
priority liens on the Debtors' assets.
All DIP Obligations will be immediately due and payable in full,
without notice or demand, on the earliest to occur of:
(a) September 1, 2006;
(b) the effective date of any plan of reorganization for one or
more of the Debtors confirmed pursuant to Bankruptcy Code
section 1129; and
(c) the consummation of the sale of all or substantially all
assets of either Debtor.
Headquartered in Fairfax, Virginia, Xybernaut Corporation,
develops and markets small, wearable, mobile computing and
communications devices and a variety of other innovative products
and services all over the world. The corporation never turned a
profit in its 15-year history. The Company and its affiliate,
Xybernaut Solutions, Inc., filed for chapter 11 protection on
July 25, 2005 (Bankr. E.D. Va. Case Nos. 05-12801 and 05-12802).
John H. Maddock III, Esq., at McGuireWoods LLP, represents the
Debtors in their chapter 11 proceedings. Paul M. Sweeney, Esq.,
at Linowes & Blocher LLP, represents the Official Committee
of Unsecured Creditors. Craig Benson Young, Esq., at Connolly
Bove Lodge & Hutz, represents the Official Committee of Equity
Security Holders. When the Debtors filed for protection from
their creditors, they listed $40 million in total assets and
$3.2 million in total debts.
* NachmanHaysBrownstein Names Jeffrey Jonas as Managing Director
----------------------------------------------------------------
NachmanHaysBrownstein, Inc., named Jeffrey G. Jonas as Managing
Director in its New York office.
Mr. Jonas joined NHB as a Senior Consultant and has over 20 years
of senior level financial and operational experience across a
broad range of industries. He has significant expertise in
business plan preparation and analysis, working capital
management, international finance and business process
reengineering, including Sarbanes Oxley compliance implementation.
Among his other NHB experience, Mr. Jonas is the caseteam leader
in NHB's engagement as Financial Advisor to the Debtor in Markson
Rosenthal & Co., Inc., a Ch.11 bankruptcy proceeding in New
Jersey.
NachmanHaysBrownstein, Inc. -- http://www.nhbteam.com/-- is one
of the country's leading turnaround and crisis management firms,
having been included among the "Top Twelve Turnaround Firms" in
Turnarounds & Workouts for the past eleven consecutive years.
* SSG Facilitates Sale of West Coast Medical Spa Chain
------------------------------------------------------
SSG Capital Advisors, LP, facilitated the closing of the sale of a
West Coast-based chain of retail medical spas to Pure Laser Hair
Removal Clinics, in March 2006. SSG was retained with the mandate
of quickly selling the business to maximize value for all
stakeholders.
The professionals involved in the transaction were J. Scott
Victor, Geoffrey Frankel and Matthew Sobieralski of SSG Capital
Advisors, LP, Michael Richman, Adrian Stewart and Justin Hoffman
of Mayer, Brown, Rowe & Maw LLP for the Company and James Elder of
Borden Ladner Gervais LLP and Timothy Mann, Seth Cohen and Daniel
Fishbein of Kilpatrick Stockton LLP for Pure Laser and its
affiliates.
The medical spa chain operates approximately 40 stores in premier
locations in California, Nevada, Oregon and Washington. The
Company is one of the largest providers of spa services such as
laser hair removal, skin rejuvenation, botox injections,
microdermabrasion and vein treatment in the country.
Acquired out of bankruptcy in mid-2005, the chain initiated
aggressive capital expenditure and store conversion program across
all its units. Despite the re-branding of its stores and the
installation of new equipment, the Company continued to experience
slower than expected growth and liquidity constraints.
With offices in Philadelphia, New York and Cleveland, SSG Capital
Advisors, L.P. -- http://www.ssgca.com/-- advises middle market
businesses nationwide and in Europe that are undercapitalized or
facing turnaround situations. With more than 100 investment
banking assignments completed in the last five years, the firm is
recognized for its expertise in mergers and acquisitions; private
placements of debt and equity; complex financial restructurings,
and valuations and fairness opinions. In addition, SSG assists
institutional and individual limited partners, throughout the
country, in selling their private equity fund interests into the
secondary market.
* Chapter 11 Cases with Assets & Liabilities Below $1,000,000
-------------------------------------------------------------
Recent chapter 11 cases filed with assets and liabilities below
$1,000,000:
In re East West Trading, Inc.
Bankr. E.D.N.Y. Case No. 06-11010
Chapter 11 Petition filed May 9, 2006
See http://bankrupt.com/misc/nysb06-11010.pdf
In re J.A. Enterprise Inc.
Bankr. W.D. Mich. Case No. 06-02067
Chapter 11 Petition filed May 9, 2006
See http://bankrupt.com/misc/miwb06-02067.pdf
In re Jimmy Joe Freeman
Bankr. M.D. Tenn. Case No. 06-02224
Chapter 11 Petition filed May 9, 2006
See http://bankrupt.com/misc/tnmb06-02224.pdf
In re Jobie, Inc
Bankr. D. N.J. Case No. 06-14042
Chapter 11 Petition filed May 9, 2006
See http://bankrupt.com/misc/njb06-14042.pdf
In re Nilo Tuazon & Marita Tuazon
Bankr. W.D. Wash. Case No. 06-11407
Chapter 11 Petition filed May 9, 2006
See http://bankrupt.com/misc/wawb06-11407.pdf
In re BAVA, LLC
Bankr. N.D. Ala. Case No. 06-40641
Chapter 11 Petition filed May 10, 2006
See http://bankrupt.com/misc/alnb06-40641.pdf
In re Jeffrey A. Butya
Bankr. W.D. Pa. Case No. 06-22114
Chapter 11 Petition filed May 10, 2006
See http://bankrupt.com/misc/pawb06-22114.pdf
In re May I. Landsee
Bankr. W.D. Tenn. Case No. 06-23362
Chapter 11 Petition filed May 10, 2006
See http://bankrupt.com/misc/tnwb06-23362.pdf
In re Miguel A. Marrero MD PC
Bankr. W.D. Pa. Case No. 06-22096
Chapter 11 Petition filed May 10, 2006
See http://bankrupt.com/misc/pawb06-22096.pdf
In re Alcar Electric, Inc.
Bankr. E.D. Mich. Case No. 06-45905
Chapter 11 Petition filed May 11, 2006
See http://bankrupt.com/misc/mieb06-45905.pdf
In re Credit River Development, LLC
Bankr. D. Minn. Case No. 06-40825
Chapter 11 Petition filed May 11, 2006
See http://bankrupt.com/misc/mnb06-40825.pdf
In re Diva Business Management Group, L.L.C.
Bankr. E.D. Tex. Case No. 06-40677
Chapter 11 Petition filed May 11, 2006
See http://bankrupt.com/misc/txeb06-40677.pdf
In re Luis R. Mertins & Barbara A. Mertins-Chiodini
Bankr. E.D. Mo. Case No. 06-42008
Chapter 11 Petition filed May 11, 2006
See http://bankrupt.com/misc/moeb06-42008.pdf
In re Midway Party Rental, Inc.
Bankr. D. Minn. Case No. 06-30963
Chapter 11 Petition filed May 11, 2006
See http://bankrupt.com/misc/mnb06-30963.pdf
In re Summit Film and Media Services, LLC
Bankr. W.D. Pa. Case No. 06-22118
Chapter 11 Petition filed May 11, 2006
See http://bankrupt.com/misc/pawb06-22118.pdf
In re WRS, Inc.
Bankr. W.D. Pa. Case No. 06-22119
Chapter 11 Petition filed May 11, 2006
See http://bankrupt.com/misc/pawb06-22119.pdf
In re Alive Auto Repairs, Inc.
Bankr. S.D.N.Y. Case No. 06-11050
Chapter 11 Petition filed May 12, 2006
See http://bankrupt.com/misc/nysb06-11050.pdf
Inre Andrea Kidz Inc. t/a Kidz-Kazoom
Bankr. D. N.J. Case No. 06-14210
Chapter 11 Petition filed May 12, 2006
See http://bankrupt.com/misc/njb06-14210.pdf
In re N.W. Investment Properties, LLC
Bankr. D. Ore. Case No. 06-31241
Chapter 11 Petition filed May 12, 2006
See http://bankrupt.com/misc/orb06-31241.pdf
In re Phillip Joseph Klober
Bankr. M.D. Tenn. Case No. 06-02330
Chapter 11 Petition filed May 12, 2006
See http://bankrupt.com/misc/tnmb06-02330.pdf
In re Professional Delivery Systems, Inc. aka "PDS"
Bankr. E.D. Va. Case No. 06-31152
Chapter 11 Petition filed May 12, 2006
See http://bankrupt.com/misc/vaeb06-31152.pdf
In re Sunflower Park Healthcare, Inc.
Bankr. N.D. Tex. Case No. 06-41404
Chapter 11 Petition filed May 12, 2006
See http://bankrupt.com/misc/txnb06-41404.pdf
In re Turbine & Machine Works, Inc.
Bankr. N.D. Ga. Case No. 06-40804
Chapter 11 Petition filed May 12, 2006
See http://bankrupt.com/misc/ganb06-40804.pdf
In re Walters Trucking, Inc.
Bankr. W.D. Pa. Case No. 06-22150
Chapter 11 Petition filed May 12, 2006
See http://bankrupt.com/misc/pawb06-22150.pdf
In re Law Offices of John Ventura, P.C.
Bankr. S.D. Tex. Case No. 06-20295
Chapter 11 Petition filed May 15, 2006
See http://bankrupt.com/misc/txsb06-20295.pdf
In re Light of the World Interdenominational Deliverance
Church, Inc.
Bankr. N.D. Okla. Case No. 06-10583
Chapter 11 Petition filed May 15, 2006
See http://bankrupt.com/misc/oknb06-10583.pdf
In re Nutex Industries
Bankr. D. Mass. Case No. 06-11416
Chapter 11 Petition filed May 15, 2006
See http://bankrupt.com/misc/mab06-11416.pdf
In re Red Plains Communications, L.P.
Bankr. N.D. Tex. Case No. 06-31974
Chapter 11 Petition filed May 15, 2006
See http://bankrupt.com/misc/txnb06-31974.pdf
In re Scacchetti's Inc.
Bankr. N.D. Ohio Case No. 06-40666
Chapter 11 Petition filed May 15, 2006
See http://bankrupt.com/misc/ohnb06-40666.pdf
In re Brothers Three Corporation
Bankr. E.D. Va. Case No. 06-10495
Chapter 11 Petition filed May 16, 2006
See http://bankrupt.com/misc/vaeb06-10495.pdf
In re Eric Storage & Handling Corporation
Bankr. E.D.N.Y. Case No. 06-41581
Chapter 11 Petition filed May 16, 2006
See http://bankrupt.com/misc/nyeb06-41581.pdf
In re Fieldstone Specialties, LLC
Bankr. D. Mont. Case No. 06-60336
Chapter 11 Petition filed May 16, 2006
See http://bankrupt.com/misc/mtb06-60336.pdf
In re Gayta Motors Inc.
Bankr. D. P.R. Case No. 06-01523
Chapter 11 Petition filed May 16, 2006
See http://bankrupt.com/misc/prb06-01523.pdf
In re God's Love Christian Church, Inc.
Bankr. S.D. Ind. Case No. 06-02419
Chapter 11 Petition filed May 16, 2006
See http://bankrupt.com/misc/insb06-02419.pdf
In re Nesher Industries, Inc.
Bankr. E.D.N.Y. Case No. 06-41582
Chapter 11 Petition filed May 16, 2006
See http://bankrupt.com/misc/nyeb06-41582.pdf
*********
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 M.
Pinili, Jr., Tara Marie A. Martin and Peter A. Chapman, Editors.
Copyright 2006. All rights reserved. ISSN: 1520-9474.
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*** End of Transmission ***