/raid1/www/Hosts/bankrupt/TCR_Public/060522.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, May 22, 2006, Vol. 10, No. 120
Headlines
A.B. FREEMAN: Case Summary & 11 Largest Unsecured Creditors
AIRBASE SERVICES: Court Gives Interim Nod on Goodrich as Counsel
AIRBASE SERVICES: Chap. 11 Trustee Taps Haynes as Special Counsel
AMCAST INDUSTRIAL: Court Establishes June 1 as Claims Bar Date
AMERICAN NATURAL: Losses Prompt PwC's Going Concern Doubt
AMERICAN NATURAL: Delays Filing of First Quarter Financials
ARMOR HOLDINGS: Ups Per Share Offer for Stewart Stock to $36.50
ATA AIRLINES: Court Approves NatTel Agreement Settlement
ATA AIRLINES: AFA Withdraws Request for $828,484 Payment
BLYTH INC: Earns $24.9 Million in Fiscal Year Ended Jan. 31, 2006
BRITESMILE INC: Working Capital Deficit Cues Going Concern Doubt
CABOODLES LLC: Wants Until July 3 to File Chapter 11 Plan
CABOODLES LLC: Wants Until June 2 to Decide on Leases
CALPINE CORP: Court Approves Miller Buckfire as Financial Advisors
CALPINE CORP: Court Okays Bracewell & Giuliani as Special Counsel
CATHOLIC CHURCH: Portland Wants Deposition of 54 Claims Conducted
CATHOLIC CHURCH: Portland Gets Okay to Hire Prudential as Broker
CATOCTIN ASSOCIATES: Case Summary & 18 Largest Unsecured Creditors
CELL THERAPEUTICS: Completes Offer for 7.5% Convertible Sr. Notes
CELL THERAPEUTICS: Posts $53.2 Million Net Loss in First Quarter
CONGOLEUM CORP: Court Okays Piper Jaffray as Financial Advisor
CONMED CORP: District Court Denies Johnson & Johnson's Plea
CONSECO INC: Earns $64.6 Million for Three Months Ended March 31
COOPER-STANDARD: Earns $5.4 Million in 2006 First Fiscal Quarter
COPA CASINO: S&P Rates Proposed $230 Million Credit Facility at B
CORVUS INVESTMENTS: Fitch Pares Ratings on Three Note Classes to C
DANA CORP: Asks Court to Approve Metaldyne Settlement Agreement
DANA CORP: Committee Taps Halperin Battaglia as Conflicts Counsel
DANA CORP: Can't File First Quarter 2006 Report on Time
DAVITA INC: Earns $57.4 Million for Three Months Ended March 31
DAVITA INC: Wants to Amend Senior Secured Credit Facilities
DEAN FOODS: Signs Underwriting Pact for $500 Million Notes Sale
DEAN FOODS: Fitch Withdraws BB+ Issuer Default Rating
DELPHI CORP: Seeks Court Approval for XM Satellite Deal
DELPHI CORP: Pardus European Joins Official Equity Committee
DELPHI CORP: Delays Filing 1st Quarter 2006 Report on Form 10-Q
DIGITAL LIFESTYLES: Files Annual Report for Fiscal 2004
DND TECHNOLOGIES: Farber Hass Raises Going Concern Doubt
DOANE PET: Commences Tender Offer for $213MM 103/4% Senior Notes
EASY GARDENER: Gets Court Nod to Hire Porter & Hedges as Counsel
EASY GARDENER: Court Approves Pachulski Stang as Delaware Counsel
EASY GARDENER: U.S. Trustee Appoints Five-Member Creditors Panel
EASYLINK SERVICES: Outlines 2006 Executive Compensation Plan
EMPIRE DISTRICT: S&P Lowers Senior Unsecured Debt Rating to BB+
ENRON CORP: Inks Pact Resolving Linden's Multi-Million Claim
ENRON CORP: Settles PPL EnergyPlus's Three Claims
ENRON CORP: Stephen Forbes Agree to 50% Success Fee Reduction
FALCON AIR: Hires Berger Singerman as Bankruptcy Counsel
FALCON AIR: Has Until June 15 to File Schedules
FBO AIR: Recurring Losses Cues Going Concern Doubt
FIRSTLINE CORP: Court Okays Mesirow Financial as Investment Banker
FIRSTLINE CORP: Hires Hays Financial as Committee Fin'l Advisor
FOAMEX INTERNATIONAL: Sigma Capital Discloses 9.4% Stake
GARY GILILEO: Case Summary & 13 Largest Unsecured Creditors
GATEHOUSE MEDIA: S&P Puts B+ Rating on Planned $152 Million Loan
GENELABS TECH: Posts $3.3 Mil. Net Loss in 2006 First Fiscal Qtr.
HANDMAKER JEWISH: Gets Okay to Hire Integra Realty as Appraiser
HEARTLAND PARTNERS: BDO Seidman Raises Going Concern Doubt
HOUGHTON MIFFLIN: Fitch Assigns CCC- Rating to $300 Million Notes
ILLINOIS POWER: Fitch Affirms BB+ Preferred Stock Rating
INEX PHARMA: Court of Appeals Confirms Tekmira Spinout
INTEGRATED DISABILITY: Can Access Cash Collateral on Final Basis
INTERFACE INC: S&P Puts B- Rating on Rule 415 Shelf Registration
INTERSTATE BAKERIES: Sells Dorchester Lot to Tenean for $3.55MM
JO-ANN STORES: Posts $6.6 Mil. Net Loss in Fiscal First Quarter
JUNIPER GROUP: Morgenstern Svoboda Raises Going Concern Doubt
JUNIPER GROUP: Mar. 31 Balance Sheet Upside-Down by $506,878
KANSAS CITY SOUTHERN: S&P Puts Preferred Stock Ratings on Default
KMART CORP: Settles Dispute Over Eleven Lease Rejection Claims
LIBERTY MEDIA: S&P Holds BB+ Corp. Credit Rating on Negative Watch
LINN ENERGY: Expects to File 2005 Financials Before May 30
LONDON FOG: Court Okays Development Specialists as Consultants
MAGRUDER COLOR: New Jersey Court Approves Disclosure Statement
MANITOWOC COMPANY: Earns $29.7 Million in Quarter Ended March 31
MARATHON REAL: Fitch Puts B Rating on $26.7 Million Class K Notes
MARK IV: S&P Puts BB- Rating on Subsidiary's $170 Mil. Term Loan
MASTERCRAFT INTERIORS: Wants to Hire Shulman Rogers as Counsel
MASTERCRAFT INTERIORS: Wants to Borrow $2.5 Million from BofA
MASTR ADJUSTABLE: S&P Raises Class B-4 Debt Rating to BB- from BB
MD BEAUTY: S&P Downgrades Second-Lien Facility's Rating to CCC
MUSICLAND HOLDING: Deluxe's Lien Payment Motion Draws Fire
NATIONAL BEEF: S&P Affirms B+ Rating With Negative Outlook
NTELOS INC: S&P Affirms Amended $665MM Debt Facility's B Rating
OAM LLC: Case Summary & 20 Largest Unsecured Creditors
OPEN DOOR: Case Summary & 11 Largest Unsecured Creditors
ORCHARD AT HANSEN: Voluntary Chapter 11 Case Summary
OVERSEAS SHIPHOLDING: Credit Facility Limit Raised to $1.8 Billion
PAC NATIONAL: Case Summary & 20 Largest Unsecured Creditors
PENN NATIONAL: Annual Shareholders' Meeting Set for June 1
PLIANT CORP: Inks $200 Mil. Revolving Facility with Merrill Lynch
PLIANT CORP: Noteholders Want to Resolve Discovery Dispute
PLIANT CORP: Gets Court Nod to Hire Mesirow as Financial Advisor
PREMIUM PAPERS: Committee Taps Traxi LLC as Financial Advisor
PROTECTION ONE: Can Access $66.8 Mil. More from Credit Facility
PUBLICARD INC: Balance Sheet Upside-Down By $7.6 Mil. at March 31
RANGE RESOURCES: S&P Rates Planned $200 Mil. Sr. Sub. Notes at B
REFCO INC: Chapter 7 Trustee Hires Bridge Associates as Advisor
REFCO INC: Court Adjourns Exclusive Periods Hearing to June 27
RIVERSTONE NETWORKS: Committee Hires Klehr Harrison as Co-Counsel
SFBC INTERNATIONAL: S&P Holds Neg. Watch on B+ Corp. Credit Rating
SAMSONITE CORP: Jan. 31 Balance Sheet Upside-Down by $51.2 Million
SANTIAGO ASSOCIATES: Case Summary & 14 Largest Unsecured Creditors
SEARS HOLDINGS: Earns $180 Million in First Quarter of Fiscal 2006
SILGAN HOLDINGS: S&P Rates Planned EUR200 Million Facility at BB+
SILICON GRAPHICS: Hires BSI LLC as Claims & Noticing Agent
SILICON GRAPHICS: Wants to Pay Prepetition Taxes & Fees
SILICON GRAPHICS: Can Continue Using Existing Business Forms
STEVE'S SHOES: Wants to Hire Kane Mitchell as Accountants
SUNRISE CDO: Fitch Lowers $45.1 Mil. Class B Notes' Rating to C
TRINITY MARKETING: Case Summary & 16 Largest Unsecured Creditors
UAL CORP: Independence Air Holds $750 Mil. of Unsecured Claim
UAL CORP: Asks Court to Approve Post-97 Trust Cert. Settlement
UAL CORP: Earns $23 Billion of Net Income in First Quarter
VERILINK CORP: Wants to Retain Grisanti Galef as Crisis Manager
WESTERN OIL: Posts $21.6 Million Net Loss in 2006 First Quarter
WESTPORT COMMUNITY: Taps Seigfreid Bingham as Bankruptcy Counsel
WESTPORT COMMUNITY: Taps Wyrsch Hobbs as Special Counsel
WHITEHALL JEWELLERS: PwC Raises Going Concern Doubt
WHITEHALL JEWELLERS: Special Stockholders' Meeting Set on June 8
WILLIAM CODRINGTON: Case Summary & 15 Largest Unsecured Creditors
WINN-DIXIE: Posts $29.9 Million Net Loss in Third Fiscal Quarter
WINN-DIXIE: Amended DIP Credit Deal Allows Stores Sale
WINN-DIXIE: Sets June 2 as Special Bar Date for Add'l. Claimants
WORLDCOM INC: Telnet Wants Amended Claim Dismissal Motion Denied
* BOND PRICING: For the week of May 8 - May 12, 2006
*********
A.B. FREEMAN: Case Summary & 11 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: A.B. Freeman Enterprises, LLC
dba Anthony B. Freeman
dba Meineke Shop
dba A.B. Freeman Group
2107 Metropolitan Parkway
Atlanta, Georgia 30315
Bankruptcy Case No.: 06-65457
Chapter 11 Petition Date: May 12, 2006
Court: Northern District of Georgia (Atlanta)
Judge: Robert Brizendine
Debtor's Counsel: Rodney L. Eason, Esq.
The Eason Law Firm, Suite 200
6150 Old National Highway
College Park, Georgia 30349-4367
Tel: (770) 909-7200
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 11 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Meineke Car Care Centers, Inc. Franchise Fees $89,000
128 South Tyron Street
Suite 900
Charlotte, NC 28202
Wachovia Bank, NA Credit Line $30,198
P.O. Box 96074
Charlotte, NC 28296-0074
Bank of America, NA Credit Line $9,365
P.O. Box 1070
Newark, NJ 07101-1070
Advance Commercial Charge Trade Debt $8,120
Westport Insurance Corp. Insurance Fees $4,785
RPM Exhaust Warehouse Trade Debt $4,587
Marlin Leasing Corp. Equipment Lease $3,653
Atlanta Fuel Co. Oil Equipment $1,386
Relizon Trade Debt $716
Cintas Corp. Uniforms $346
Linde Gas LLC Gas Supplier $340
AIRBASE SERVICES: Court Gives Interim Nod on Goodrich as Counsel
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas gave
its interim approval for Dennis Faulkner, the Chapter 11 Trustee
appointed in Airbase Services, Inc.'s bankruptcy case, to employ
Goodrich Postnikoff Albertson & Petrocchi, LLP, as his bankruptcy
counsel.
Goodrich Postnikoff will:
a. advise the Trustee with respect to general corporate and
restructuring matters;
b. represent and advise the Trustee with respect to matters
that generally arise in the Debtor's chapter 11 case or an
ordinary chapter 11 case;
c. assist the Trustee and his other professional with the
protection and preservation of the estate of the Debtor;
d. assist the Trustee and his other professionals with
preparing necessary motions, applications, answers, orders,
reports, and papers in connection with and required for the
orderly administration of the estate; and
e. perform any and all other general and corporate and
restructuring legal services for the Trustee in connection
with the Debtor's chapter 11 case.
The Trustee tells the Court that the firms attorneys bill between
$150 to $275 per hour. The Trustee discloses that Mark J.
Petrocchi, Esq., a partner at Goodrich Postnikoff, will be the
lead counsel for this engagement and bills $250 per hour.
Mr. Petrocchi assures the Court that his firm is "disinterested"
as that term is defined in Section 101(14) of the Bankruptcy Code.
Headquartered in Grand Prairie, Texas, Airbase Services, Inc. --
http://www.airbaseservices.com/-- maintains and repairs a wide
range of cargo equipment and cabin interior designs for commercial
airlines, and provides maintenance and management services for the
airline industry. Due to bankruptcies filed by several of its
airline customers, the Company filed for bankruptcy protection on
May 1, 2006 (Bankr. N.D. Tex. Case. No. 06-41231). The Court
approved the appointment of Dennis Faulkner as trustee in the
Debtor's chapter 11 case on May 3, 2006. Mark J. Petrocchi, Esq.,
at Goodrich Postnikoff Albertson & Petrocchi, LLP, represents the
trustee. No Official Committee of Unsecured Creditors has been
appointed yet. When the Debtors filed for bankruptcy, the Company
reported assets and debts amounting to $10 million to $50 million.
AIRBASE SERVICES: Chap. 11 Trustee Taps Haynes as Special Counsel
-----------------------------------------------------------------
Dennis Faulkner, the Chapter 11 Trustee appointed in Airbase
Services, Inc.'s bankruptcy case, asks the U.S. Bankruptcy Court
for the Northern District of Texas for permission to employ Haynes
and Boone, LLP, as his special counsel.
Haynes and Boone is expected:
a. to represent the estate with regard to the sale of some, or
possibly all, of the Debtor's assets;
b. to perform a review of Harris Bank, N.A.'s pre-petition
claims and liens; and
c. to represent the estate as conflicts counsel, to the extent
necessary.
The Trustee tells the Court that the primary attorneys and
paralegal within the firm who will represent the Debtor bills:
Professional Designation Hourly Rate
------------ ----------- -----------
Mark X. Mullin, Esq. Partner $510
Ian T. Peck, Esq. Associate $350
Mark J. Elmore, Esq. Associate $275
Dian Gwinnup Paralegal $170
To the best of the Trustee's knowledge, Haynes and Boone does not
hold an interest adverse to the Debtor, its estate, creditors,
equity security holders, or affiliates.
Headquartered in Grand Prairie, Texas, Airbase Services, Inc. --
http://www.airbaseservices.com/-- maintains and repairs a wide
range of cargo equipment and cabin interior designs for commercial
airlines, and provides maintenance and management services for the
airline industry. Due to bankruptcies filed by several of its
airline customers, the Company filed for bankruptcy protection on
May 1, 2006 (Bankr. N.D. Tex. Case. No. 06-41231). The Court
approved the appointment of Dennis Faulkner as trustee in the
Debtor's chapter 11 case on May 3, 2006. Mark J. Petrocchi, Esq.,
at Goodrich Postnikoff Albertson & Petrocchi, LLP, represents the
trustee. No Official Committee of Unsecured Creditors has been
appointed yet. When the Debtors filed for bankruptcy, the Company
reported assets and debts amounting to $10 million to $50 million.
AMCAST INDUSTRIAL: Court Establishes June 1 as Claims Bar Date
--------------------------------------------------------------
The United States Bankruptcy Court for the Southern District of
Indiana, set June 1, 2006, at 5:00 p.m., as the deadline for all
creditors owed money by Amcast Industrial Corporation and Amcast
Automotive of Indiana, Inc., on account of claims arising prior to
Dec. 1, 2006, to file their proofs of claim.
Creditors must file written proofs of claim on or before the
June 1 Claims Bar Date and those forms must be delivered to:
BMC Group
Attn: Amcast Claims Agent
P.O. Box 941
El Segundo, CA 90245-0941
or by overnight mail or hand delivery:
BMC Group
Attn: Amcast Claims Agent
1330 East Franklin Avenue
El Segundo, CA 90245
Headquartered in Fremont, Indiana, Amcast Industrial Corporation,
manufactures and distributes technology-intensive metal products
to end-users and suppliers in the automotive and plumbing
industry. The Company and four debtor-affiliates filed for
chapter 11 protection on Nov. 30, 2004. The U.S. Bankruptcy Court
for the Southern District of Ohio confirmed the Debtors' Third
Amended Joint Plan of Reorganization on July 29, 2005. The
Debtors emerged from bankruptcy on Aug. 4, 2005.
Amcast Industrial Corporation and Amcast Automotive of Indiana,
Inc., filed for chapter 11 protection a second time on Dec. 1,
2005 (Bankr. S.D. Ind. Case No. 05-33322). David H. Kleiman, Esq.,
and James P. Moloy, Esq., at Dann Pecar Newman & Kleiman, P.C.,
represent the Debtors in their restructuring efforts. Henry A.
Efromson, Esq., and Ben T. Caughey, Esq., at Ice Miller LLP,
represent the Official Committee of Unsecured Creditors. Kevin I.
Dowd at Berkeley Square Group LLC serves as Amcast's financial
advisor. The Creditors' Committee receives financial advice from
Thomas E. Hill at Alvarez & Marsal, LLC. When the Debtor and its
affiliate filed for protection from their creditors, they listed
total assets of $97,780,231 and total liabilities of $100,620,855.
AMERICAN NATURAL: Losses Prompt PwC's Going Concern Doubt
---------------------------------------------------------
PricewaterhouseCoopers LLP expressed substantial doubt about
American Natural Energy Corporation's ability to continue as a
going concern after it audited the Company's financial statements
for the years ended Dec. 31, 2005, and Dec. 31, 2004. The
auditing firm pointed to the Company's substantial losses, working
capital deficit and accumulated deficit.
For the year ended Dec. 31, 2005, the company reported a
$6,171,803 net loss on $2,626,801 of total revenue. This compares
to a net loss of $14,887,455 on total revenues of $3,255,773 a
year earlier.
At Dec. 31, 2005, the company's balance sheet showed total assets
of $8,022,140 and total liabilities of $21,206,244, resulting in a
stockholders' deficit of $13,184,104.
The Dec. 31, 2005, balance sheet also reflected strained liquidity
with current assets totaling $1,336,738 and current liabilities
totaling $19,924,137. The company's balance sheet further showed
an accumulated deficit of $35,471,289 at Dec. 31, 2005, compared
to an accumulated deficit of $29,299,486 at Dec. 31, 2004.
A full-text copy of the company's financial statements for the
years ended Dec. 31, 2005 and Dec. 31, 2004, is available for free
at http://ResearchArchives.com/t/s?977
Headquartered in Tulsa, Oklahoma, American Natural Energy Corp.
-- http://annrg.com/-- is engaged in the acquisition,
development, exploitation and production of oil and natural gas.
AMERICAN NATURAL: Delays Filing of First Quarter Financials
-----------------------------------------------------------
In a filing with the U.S. Securities and Exchange Commission,
American Natural Energy Corporation disclosed that the company
will delay the filing of its Form 10-Q for the quarter ended
Mar. 31, 2006.
The company discloses that its management has been involved in
matters relating to its lawsuit against the supplier of the tools,
which the company claims caused a mechanical failure in the well
being drilled and is seeking to recover damages the Company
sustained.
Therefore, the company says that assembling the necessary
information to complete the report has extended beyond the time
anticipated.
Headquartered in Tulsa, Oklahoma, American Natural Energy Corp.
-- http://annrg.com/-- is engaged in the acquisition,
development, exploitation and production of oil and natural gas.
ARMOR HOLDINGS: Ups Per Share Offer for Stewart Stock to $36.50
---------------------------------------------------------------
Armor Holdings, Inc., its wholly owned subsidiary Santana
Acquisition Corp., and Stewart & Stevenson Services, Inc., amended
their Plan of Merger dated Feb. 27, 2006.
The amendment provides for an increase in the Per Share
Consideration from $35 to $36.50 per share in cash. However, if
Stewart & Stevenson's shareholders do not approve the proposal
relating to the merger, the Per Share Consideration will
automatically revert to $35.
As reported in the Troubled Company Reporter on March 2, 2006,
Armor Holdings agreed to acquire all of the outstanding stock of
Stewart & Stevenson for $35 per share in a cash merger
transaction. The total value of the transaction is expected to be
approximately $755 million.
Armor Holdings was advised on the transaction by Pruzan & Co. LLC.
Wachovia Securities provided financing and a fairness opinion to
Armor Holdings' Board of Directors. The law firm of Kane Kessler,
P.C. acted as legal counsel for Armor Holdings.
Stewart & Stevenson's financial advisor was Merrill Lynch & Co.,
with Robinson Partners acting as a consultant to the Company. The
law firms of Fulbright & Jaworski LLP and Wachtell, Lipton, Rosen
& Katz acted as legal counsel for Stewart & Stevenson.
About Armor Holdings
Armor Holdings, Inc. (NYSE: AH) -- http://www.armorholdings.com/
-- is a diversified manufacturer of branded products for the
military, law enforcement and personnel safety markets.
* * *
Armor Holdings, Inc.'s 8.25% Senior Subordinated Notes due 2013
carry Moody's Investor Service's B1 rating and Standard & Poor's
B+ rating.
ATA AIRLINES: Court Approves NatTel Agreement Settlement
--------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Indiana
gave ATA Airlines, Inc., and its debtor-affiliates authority to
enter into a settlement agreement with NatTel, LLC, regarding
various objections filed and various claims asserted against their
estates.
As reported in the Troubled Company Reporter on Apr. 12, 2006,
over the course of the Debtors chapter 11 cases, NatTel filed
various objections and asserted various claims, including notices
of appeal and a pending appeal.
Following arm's-length negotiations, the Debtors, the Official
Committee of Unsecured Creditors, and NatTel agreed to settle all
outstanding matters among the parties pursuant to a settlement
agreement.
Settlement Agreement
The salient terms of the Settlement Agreement are:
(i) The Debtors, the Committee and NatTel will enter into a
stipulation providing that NatTel's appeal pending in the
U.S. District Court for the Southern District of Indiana
will be dismissed with prejudice, with each side to bear
its own attorneys' fees and costs. The stipulation will
be filed with the District Court;
(ii) Except with respect to two filed prepetition claims,
NatTel abandons all claims it holds in any of the Chapter
11 cases and agrees that neither NatTel nor its affiliates
will be or will become a party-in-interest with respect
to any of the Chapter 11 cases or any contested matter or
proceeding arising in, or related to, any of the Chapter
11 cases;
(iii) NatTel abandons all pleadings filed in any of the Chapter
11 cases and abandons all rights remedies and objections
it may have or might assert in any of the Chapter 11
cases, including its objections to various administrative
claims asserted in the Chapter 11 case of C8 Airlines,
Inc., and any rights or remedies NatTel may have or might
assert to comment on or object to any proposed plan or
disclosure statement.
However, notwithstanding anything to the contrary, NatTel
may vote its claims regarding any plan proposed in the C8
Chapter 11 case and share in any recoveries pursuant to
the claims pari passu with all of C8's other general
unsecured creditors.
NatTel agrees that it will not file any other pleadings
nor appeal any other orders in the Chapter 11 cases, and
the Debtors and the Creditors Committee agree that any
plan or disclosure statement filed or approved in the C8
Chapter 11 case will not refer to or mention by name,
NatTel and its Affiliates; and
(iv) The Parties exchange mutual releases.
About ATA Airlines
Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA
Holdings Corp. -- http://www.ata.com/-- is the nation's 10th
largest passenger carrier (based on revenue passenger miles) and
one of the nation's largest low-fare carriers. ATA has one of the
youngest, most fuel-efficient fleets among the major carriers,
featuring the new Boeing 737-800 and 757-300 aircraft. The
airline operates significant scheduled service from Chicago-
Midway, Hawaii, Indianapolis, New York and San Francisco to over
40 business and vacation destinations. Stock of parent company,
ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. The
Company and its debtor-affiliates filed for chapter 11 protection
on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868
through 04-19874). Terry E. Hall, Esq., at Baker & Daniels,
represents the Debtors in their restructuring efforts. Daniel H.
Golden, Esq., Lisa G. Beckerman, Esq., and John S. Strickland,
Esq., at Akin Gump Strauss Hauer & Feld, LLP, represents the
Official Committee of Unsecured Creditors. When the Debtors filed
for protection from their creditors, they listed $745,159,000 in
total assets and $940,521,000 in total debts. (ATA Airlines
Bankruptcy News, Issue No. 54; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
ATA AIRLINES: AFA Withdraws Request for $828,484 Payment
--------------------------------------------------------
The Association of Flight Attendants withdrew its motion asking
the U.S. Bankruptcy Court for the Southern District of Indiana to
direct ATA Airlines, Inc., and its debtor-affiliates to pay its
$828,484 administrative expense claim.
Documents submitted to the Court did not say why AFA withdrew its
motion.
As reported in the Troubled Company Reporter on May 2, 2006, ATA
Airlines and the AFA were parties to a collective bargaining
agreement that was an extension of the parties' 2000-2004
collective bargaining agreement as modified by Letter Agreement
No. 18.
The bargaining unit of flight attendants of ATA Airlines is
represented by the AFA.
According to Richard J. Swanson, Esq., at Macey Swanson and
Allman, in Indianapolis, Indiana, the CBA provides for health
insurance coverage for AFA bargaining unit members. The
bargaining unit members have $275,743 in unpaid medical expenses
arising between the Petition Date and January 24, 2005.
Mr. Swanson asserts that the $275,743 expense is an administrative
expense pursuant to Sections 503(b)(1)(A) and 507(a)(1) of the
Bankruptcy Code.
Mr. Swanson further notes that the CBA contains a grievance-
arbitration procedure. The AFA filed 16 grievances between the
Petition Date and January 24, 2005, on behalf of terminated flight
attendants. The grievances are still pending.
The amount of back pay owed to the grievants is $552,741. This is
likewise asserted as an administrative expense, Mr. Swanson
maintains.
About ATA Airlines
Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA
Holdings Corp. -- http://www.ata.com/-- is the nation's 10th
largest passenger carrier (based on revenue passenger miles) and
one of the nation's largest low-fare carriers. ATA has one of the
youngest, most fuel-efficient fleets among the major carriers,
featuring the new Boeing 737-800 and 757-300 aircraft. The
airline operates significant scheduled service from Chicago-
Midway, Hawaii, Indianapolis, New York and San Francisco to over
40 business and vacation destinations. Stock of parent company,
ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. The
Company and its debtor-affiliates filed for chapter 11 protection
on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868
through 04-19874). Terry E. Hall, Esq., at Baker & Daniels,
represents the Debtors in their restructuring efforts. Daniel H.
Golden, Esq., Lisa G. Beckerman, Esq., and John S. Strickland,
Esq., at Akin Gump Strauss Hauer & Feld, LLP, represents the
Official Committee of Unsecured Creditors. When the Debtors filed
for protection from their creditors, they listed $745,159,000 in
total assets and $940,521,000 in total debts. (ATA Airlines
Bankruptcy News, Issue No. 54; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
BLYTH INC: Earns $24.9 Million in Fiscal Year Ended Jan. 31, 2006
-----------------------------------------------------------------
Blyth, Inc., disclosed its financial results for the fourth
quarter and fiscal year ended Jan. 31, 2006.
For the fiscal year ended Jan. 31, 2006, the company reported
$24.9 million of net income on $1.6 billion of net revenues
compared to $96.2 million of net income on $1.6 billion of net
revenues for the same period in 2005.
The company had net sales for the fourth quarter ended Jan. 31,
2006, declined 3.6% to $480.6 million compared to $498.8 million a
year earlier. Excluding the adverse impact of foreign currency
movement, fourth quarter net sales were approximately even with
last year. Operating loss for the quarter was $6.7 million
compared to operating income of $65 million for the prior year
period and reflects a one-time non-cash goodwill impairment charge
of $53.3 million pre-tax arising from a re-evaluation of the
goodwill associated with the Wholesale segment.
Lower fourth quarter net Sales versus last year resulted from
several factors, all of which the Company has experienced
throughout the fiscal year. Robust growth in most of PartyLite's
European markets and in Canada, where sales grew 23% year over
year, was more than offset by an 8% decline in PartyLite U.S.,
which began the fourth quarter with fewer active independent sales
consultants than the same time a year earlier. Most of Blyth's
Wholesale business units and brands within the Catalog & Internet
segment experienced lower sales versus last year's fourth quarter.
The Company's operating profits were negatively impacted by lower
sales, continued higher commodity costs versus a year ago and
higher freight costs resulting in part from fuel surcharges.
Management also noted that cash flow from operations was $99
million in fiscal year 2006, and capital expenditures of $17
million were recorded during the year.
Commenting on the Company's financial results, Robert B. Goergen,
Blyth's Chairman of the Board and CEO, said, "Blyth's fourth
quarter results on an operating basis reflect the challenges our
business has experienced all year. Reduced consumer discretionary
spending impacted sales in our direct to consumer channels in the
U.S., and retailers in the wholesale channel remained conservative
in their inventory positions. However, continued solid growth
throughout most of PartyLite's European markets and the dramatic
turn around of its Canadian business is very encouraging."
Mr. Goergen continued, "Despite these areas of growth and
management's best efforts to increase sales in our more
challenging markets, commodity costs and freight surcharges had a
significant effect on profitability throughout fiscal year 2006.
We continue to take proactive actions such as implementing select
price increases and cost savings initiatives throughout our
businesses in an effort to combat exogenous forces."
The Management has engaged Bear Stearns & Co. to advise it on
strategic alternatives within the Wholesale segment, and will
likely focus on one or more of its European Wholesale businesses,
believing that substantial upside opportunities exist in the North
American Wholesale business despite challenging market conditions
impacting the Home Expressions industry.
A full-text copy of Blyth, Inc.'s Annual Report is available for
free at http://researcharchives.com/t/s?98a
About Blyth Inc.
Headquartered in Greenwich, Connecticut, Blyth, Inc. (NYSE:BTH) --
http://www.blyth.com/-- is a Home Expressions company competing
primarily in the home fragrance, home decor, seasonal decorations
and gift industry. The Company designs, markets and distributes
an extensive array of candles, home fragrance products, decorative
accessories, seasonal decorations and household convenience items,
as well as tabletop lighting and chafing fuel for the Away From
Home or foodservice trade. Blyth manufactures most of its candles
and sources nearly all of its other products.
* * *
Standard & Poor's Ratings Services lowered its corporate credit,
senior unsecured bank loan, and senior unsecured debt ratings on
Blyth, Inc., to 'BB-' from 'BB'. Standard & Poor's said the
outlook is negative. The downgrade reflected the company's
continued weak operating performance for its fourth quarter and
fiscal year ended Jan. 31, 2006, with a total debt outstanding of
$371.7 million.
BRITESMILE INC: Working Capital Deficit Cues Going Concern Doubt
----------------------------------------------------------------
Stonefield Josephson, Inc., expressed substantial doubt about
BriteSmile, Inc.'s ability to continue as a going concern after
auditing the company's financial statement for the year ended Dec.
31, 2005. The auditing firm pointed to the company's accumulated
deficit and net loss. The auditing firm also noted that the
company is in the process of selling its entire operations as well
as the legal claims against the company.
For the year ended Dec. 31, 2005, the company reported a net loss
of $17,772,000. This compares to a net loss of $7,820,000 for the
year ended Dec. 31, 2004, and a net loss of $14,582,000 for the
year ended Dec. 31, 2003.
At Dec. 31, 2005, the company's balance sheet showed total assets
of $27,842,000 and total liabilities of $30,293,000, resulting in
a shareholders' deficit of $2,451,000. The company's balance
sheet at Dec. 31, 2005, also showed an accumulated deficit of
$175,829,000 compared to an accumulated deficit of $158,057,000,
at Dec. 31, 2004.
A full-text copy of the company's financial statement for the year
ended Dec. 31, 2005, is available for free at:
http://ResearchArchives.com/t/s?973
BriteSmile Inc. -- http://www.britesmile.com/-- develops and
markets the most advanced teeth whitening technology available, as
well as manages state-of-the-art BriteSmile Professional Teeth
Whitening Centers. BriteSmile Spa Centers currently operates in
Beverly Hills, Irvine, Palo Alto, Walnut Creek, San Francisco and
La Jolla, California; Houston, Texas; Denver, Colorado; Boston,
Massachusetts; McLean, Virginia; Atlanta, Georgia; New York, New
York; Chicago and Schaumburg, Illinois; and, Phoenix, Arizona.
CABOODLES LLC: Wants Until July 3 to File Chapter 11 Plan
---------------------------------------------------------
Caboodles, LLC, asks the U.S. Bankruptcy Court for the Western
District of Tennessee to further extend, until July 3, 2006, the
period within which it has the exclusive right to file a chapter
11 plan. The Debtor also asks the Court to extend, until
Aug. 1, 2006, its exclusive period to solicit acceptances of that
plan.
The Debtor tells the Court that it is still in the early stages of
formulating a Plan of Reorganization and requires additional time
to explore financial strategies and alternatives. The Debtor
contends that an extension would give it more time to file a more
meaningful and acceptable Plan.
Headquartered in Memphis, Tennessee, Caboodles, LLC, aka Caboodles
Cosmetics, manufactures cosmetics. The company filed for chapter
11 protection on Sept. 30, 2005 (Bankr. W.D. Tenn. Case No.
05-35710). Steven N. Douglass, Esq., at Harris Shelton Hanover
Walsh, PLLC, represents the Debtor in its restructuring efforts.
No Official Committee of Unsecured Creditors has been appointed in
the Debtor's case. When the Debtor filed for protection from its
creditors, it listed $18,422,133 in assets and $15,874,247 in
debts.
CABOODLES LLC: Wants Until June 2 to Decide on Leases
-----------------------------------------------------
Caboodles, LLC, asks the U.S. Bankruptcy Court for the Western
District of Tennessee to further extend, until June 2, 2006, the
period within which it can decide whether to assume, assign and
assign, or reject non-residential real property leases.
The Debtor is the lessee of a warehouse location at Suite 112,
6400 Shelby View Drive in Memphis, Tennessee and a warehouse
location at 750 Chester Road, Delta in British Columbia.
The Debtor tells the Court that it is still reviewing and
exploring its reorganization options.
Headquartered in Memphis, Tennessee, Caboodles, LLC, aka Caboodles
Cosmetics, manufactures cosmetics. The company filed for chapter
11 protection on Sept. 30, 2005 (Bankr. W.D. Tenn. Case No.
05-35710). Steven N. Douglass, Esq., at Harris Shelton Hanover
Walsh, PLLC, represents the Debtor in its restructuring efforts.
No Official Committee of Unsecured Creditors has been appointed in
the Debtor's case. When the Debtor filed for protection from its
creditors, it listed $18,422,133 in assets and $15,874,247 in
debts.
CALPINE CORP: Court Approves Miller Buckfire as Financial Advisors
------------------------------------------------------------------
The Hon. Burton R. Lifland of the U.S. Bankruptcy Court for the
Southern District of New York gave his final stamp of approval to
Calpine Corporation and its debtor-affiliates' request to employ
Miller Buckfire & Co., as their financial advisors and investment
bankers.
Miller Buckfire is expected to:
(1) review and analyze the Debtors' liquidity position and
assist management in identifying areas and means to
improve and preserve the Debtors' liquidity;
(2) assist in the determination of a capital structure for
the Debtors;
(3) provide financial advice and assistance to the Debtors
in developing and seeking approval of a restructuring
plan;
(4) advise the Debtors on the terms of new securities to be
offered pursuant to a restructuring plan;
(5) provide financial advice and assistance to the Debtors
in a sale of all or substantially all of the Debtors'
business; and
(6) advise and assist the Debtors in evaluating potential
financings by the Debtors, including debtor-in-
possession and exit financing.
The Debtors propose to pay Miller Buckfire:
(a) A $250,000 Monthly Advisory Fee;
(b) A $2,000,000 DIP Financing Fee once a written commitment
for a DIP financing facility is obtained;
(c) A $17,000,000 Completion Fee, if the Debtors consummate
a transaction. The fee will be paid upon closing of the
transaction and the effective date of a plan of
reorganization approved by the Court;
(d) A $2,000,000 Retainer, to be credited in full against
the Completion Fee; and
(e) Regardless of whether any transaction occurs, the
Debtors will promptly reimburse Miller Buckfire, upon
request from time to time, for all reasonable out-of-
pocket expenses and other reasonable fees and expenses,
including expenses of counsel retained with the Debtors'
consent.
Under the terms of the Engagement Letter entered on Dec. 1, 2005,
between the Debtors and Miller Buckfire, the Debtors will
reimburse Miller Buckfire on a monthly basis for its travel and
other reasonable out-of-pocket expenses. The retainer fee was
paid on Dec. 15, 2005.
Prior to the Petition Date, the Debtors also paid Miller Buckfire
$1,875,000 for Monthly Advisory Fees and $167,850 for expense
reimbursement.
Miller Buckfire discloses that it:
-- has no connection with the Debtors, their creditors, or
other parties-in-interest, the U.S. Trustee or any person
employed in the office of the U.S. Trustee;
-- does not hold any interest adverse to the Debtors'
estates; and
-- is a "disinterested person" as defined by Section 101(14)
of the Bankruptcy Code.
Judge's Decree
Judge Lifland approves a $14,000,000 Completion Fee for Miller
Buckfire. The firm will be compensated in accordance with
Sections 330 and 331 of the Bankruptcy Code.
In addition to the other services contemplated by the Engagement
Letter, Miller Buckfire will act as the financial advisor and
investment banker to the Debtors in respect of the sale by the
Debtors of Power Systems Mfg., LLC.
If at any time during the term of the engagement or within the
12 months following its termination, a Sale of PSM is consummated
or an agreement in principle or definitive agreement to effect a
Sale of PSM is entered into and concurrently, or at any time
after the Sale is consummated, Miller Buckfire will be entitled
to receive a transaction fee, contingent upon the consummation of
the Sale and payable at the closing, which will be equal to 2% of
the total amount of cash and the fair market value of all
securities and other property; provided that the PSM Transaction
Fee will not exceed $2,000,000.
The Court also rules that Miller Buckfire will apply the Retainer
against its monthly financial advisory fees and expenses in
respect of its fee applications. Miller Buckfire may apply the
Retainer against 80% of its monthly financial advisory fees
incurred since the Petition Date through April 30, 2006 -- which
total $1,000,000 -- without need of further Court application.
Once exhausted, the Retainer will not be replenished.
About Calpine Corp.
Headquartered in San Jose, California, Calpine Corporation --
http://www.calpine.com/-- supplies customers and communities with
electricity from clean, efficient, natural gas-fired and
geothermal power plants. Calpine owns, leases and operates
integrated systems of plants in 21 U.S. states and in three
Canadian provinces. Its customized products and services include
wholesale and retail electricity, gas turbine components and
services, energy management and a wide range of power plant
engineering, construction and maintenance and operational
services. The Company filed for chapter 11 protection on Dec. 20,
2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri,
Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert
G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in
their restructuring efforts. Michael S. Stamer, Esq., at Akin
Gump Strauss Hauer & Feld LLP, represents the Official Committee
of Unsecured Creditors. Lazard Freres & Co. LLC serves as the
Committee's financial advisor. 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: Court Okays Bracewell & Giuliani as Special Counsel
-----------------------------------------------------------------
Calpine Corp. and its debtor-affiliates obtained authority from
the U.S. Bankruptcy Court for the Southern District of New York to
employ Bracewell & Giuliani LLP as their special counsel.
Robert G. Burns, Esq., at Kirkland & Ellis LLP, in New York,
relates that Bracewell, which was initially retained by the
Debtors as an ordinary course professional, has represented the
Debtors and certain of their affiliates and subsidiaries for more
than 11 years in the areas of energy regulatory matters, energy
marketing and trading, bankruptcy, and litigation.
Bracewell is a full-service law firm based in Houston, Texas.
Since 1994, its lawyers have performed extensive legal work for
the Debtors. As a result of its prior and current representation
of Calpine, Bracewell has become familiar with the Debtors'
business, finances and operations.
Bracewell is expected to:
(a) advise the Debtors and assist the Debtors' bankruptcy and
reorganization counsel in connection with any Texas energy
regulatory matters; CES issues relating to CalBear;
governmental inquiries or investigations relating to CES;
South and Midwest energy project development and
operational matters; South and Midwest environmental and
real estate matters; project and structured financing and
investments; or purchases or sales of assets or business
entities; and energy regulatory matters;
(b) advise the Debtors with respect to energy marketing and
trading matters relating to new or restructured
arrangements for master agreements like ISDA, EEI, NAESB,
GISB and WSPP agreements, as well as power purchase
agreements, futures contracts, tolling agreements, netting
arrangements and related security arrangements, and
energy-related commodities like natural gas, power,
capacity, coal and various other commodities;
(c) represent Debtors related to Texas employment and human
resources litigation, including investigations, pre-
litigation claims, EEOC, Texas Employment Commission,
claims and acting as defense counsel in civil litigation
matters; and
(d) represent the Debtors in any litigation, arbitration or
third party insolvency matters in which Bracewell has
appeared as of the Petition Date, and other matters
including appearing before state or federal courts and
agencies.
Thomas O. Moore, III, Esq., a partner at Bracewell, discloses the
Firm's professionals bill:
Professional Hourly Rate
------------ -----------
Partners $275 - $750
Of Counsel $340 - $480
Associates $170 - $450
Paraprofessionals $60 - $190
Mr. Moore assures the Court that the firm has no connection with
the Debtors, their creditors, the United States Trustee or any
other party with an interest in the cases. Further, he says
Bracewell does not represent or hold any interest adverse to the
Debtors or their estates with respect to the matters on which
Bracewell is to be employed.
About Calpine Corp.
Headquartered in San Jose, California, Calpine Corporation --
http://www.calpine.com/-- supplies customers and communities with
electricity from clean, efficient, natural gas-fired and
geothermal power plants. Calpine owns, leases and operates
integrated systems of plants in 21 U.S. states and in three
Canadian provinces. Its customized products and services include
wholesale and retail electricity, gas turbine components and
services, energy management and a wide range of power plant
engineering, construction and maintenance and operational
services. The Company filed for chapter 11 protection on Dec. 20,
2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri,
Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert
G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in
their restructuring efforts. Michael S. Stamer, Esq., at Akin
Gump Strauss Hauer & Feld LLP, represents the Official Committee
of Unsecured Creditors. Lazard Freres & Co. LLC serves as the
Committee's financial advisor. 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)
CATHOLIC CHURCH: Portland Wants Deposition of 54 Claims Conducted
-----------------------------------------------------------------
The Archdiocese of Portland in Oregon seeks Judge Perris'
permission to take mini depositions of 54 present child sex abuse
tort claimants in connection with its proposed supplemental claims
estimation methodology to be filed on May 31, 2006.
The Claimants are the holders of Claim Nos. 95, 110, 114, 195,
215, 217, 243, 244, 247, 259, 261, 263, 268, 276, 278, 279, 280,
284, 293, 294, 297, 298, 299, 305, 315, 316, 317, 324, 325, 326,
330, 435, 436, 438, 439, 440, 441, 442, 444, 445, 446, 448, 449,
458, 463, 466, 467, 471, 472, 548, 549, 550, 842, and 845.
Specifically, the Archdiocese asks the U.S. Bankruptcy Court for
the District of Oregon:
(a) for a two-hour deposition for claims estimation purposes;
(b) to rule that, in taking the two-hour deposition, it is not
waiving its rights to a more full and complete deposition
of a claimant in the adversary proceeding or state court
proceeding to actually liquidate the claim; and
(c) to rule that, at a subsequent deposition, it will not
repeat the questions asked during the mini deposition, but
reserves its right to explore to other topics.
According to Margaret Hoffmann, Esq., at Schwabe, Williamson &
Wyatt, PC, in Portland, Oregon, the 54 Claimants gave little
information requested in the proof of claim form. Thus, the
Archdiocese believes that the two-hour depositions are the most
efficient and effective way to obtain the necessary information to
properly pursue claims estimation.
The Archdiocese anticipates that its methodology will disclose
certain "claim attributes," relevant to the values of the claims.
Ms. Hoffman explains that the disclosure of the claim attributes
prior to obtaining basic investigative facts about the claims to
be estimated will be prejudicial to the Archdiocese and other
claimants because it would open the door to potentially
influencing some claimants to shape their stories to achieve
maximum estimation value.
It could also place the claimants in an advantageous position
relative to other claimants who did provide basic proof of claim
information and who have already given basic information about
their claims without the benefit of knowing the "claim attributes"
that are relevant to value, Ms. Hoffman says.
Tort Committee Objects
Timothy J. Conway, Esq., at Tonkon Torp LLP, in Portland, Oregon,
tells the Court that mini depositions are premature and
unnecessary. Engaging in over 100 hours of depositions, plus
preparation time for counsel, and the trauma of putting victims
through multiple depositions, is not warranted to determine an
appropriate estimation methodology.
By definition, estimation will not have the precision of actual
discovery and trials, Mr. Conway contends. The purpose of the
process is to estimate the total aggregate amount of all claims,
not the liquidated value of each individual claim.
Mr. Conway points out that once discovery is completed, cases
could be set for trial and estimation would not be necessary.
Additionally, the information sought for the Archdiocese's grid
proposal could be obtained in much simpler and more efficient
ways. Furthermore, additional depositions at this time would
allow the Archdiocese to skew its proposed methodology.
Mr. Conway asserts that abuse victims will have no advantage in
having the grids determined prior to their depositions because:
(1) the facts are the facts and it is insulting for the
Archdiocese to assume that the abuse victims would perjure
themselves for the purpose of fitting into a claims
estimation grid; and
(2) the claims estimation process does not determine the
validity or amount of any individual victim's claim.
There is no incentive for the individual victims to misrepresent
their facts, Mr. Conway points out. The Archdiocese is the only
party that could gain a strategic advantage in the estimation
process by seeking multiple depositions, which it could also use
later to its advantage in the litigation process.
The time and resources of all parties should be directed toward
trial, Mr. Conway suggests. "The only true way to estimate the
value of claims is to determine the way that jurors will value
those claims. The best, most efficient and most accurate way to
determine how jurors will value claims is to have actual jury
trials."
About Archdiocese of Portland
The Archdiocese of Portland in Oregon filed for chapter 11
protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004.
Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman
Shank LLP, represent the Portland Archdiocese in its restructuring
efforts. Albert N. Kennedy, Esq., at Tonkon Torp, LLP, represents
the Official Tort Claimants Committee in Portland, and scores of
abuse victims are represented by other lawyers. David A. Foraker
serves as the Future Claimants Representative appointed in the
Archdiocese of Portland's Chapter 11 case. In its Schedules of
Assets and Liabilities filed with the Court on July 30, 2004, the
Portland Archdiocese reports $19,251,558 in assets and
$373,015,566 in liabilities. (Catholic Church Bankruptcy News,
Issue No. 58; Bankruptcy Creditors' Service, Inc., 215/945-7000)
CATHOLIC CHURCH: Portland Gets Okay to Hire Prudential as Broker
----------------------------------------------------------------
The Archdiocese of Portland obtained permission from Judge
Elizabeth L. Perris of the U.S. Bankruptcy Court for the District
of Oregon to employ Prudential Northwest Properties, particularly,
Patricia A. Evert, as real estate broker, in connection with the
sale of a residential property located at 144 S. 14th Street,
St. Helens, Oregon.
Howard M. Levine, Esq., at Sussman Shank LLP, in Portland, Oregon,
relates that the Property is held in the name of Portland
Archdiocese for the benefit of St. Frederic Church in St. Helens.
The Property is currently not habitable and the Parish is without
the financial resources to renovate it for continued rental or
hold it for future development.
According to Mr. Levine, Prudential has put the Property on the
market for $119,000, pursuant to an RMTLS(TM) Oregon Listing
Contract Form, executed on December 26, 2005.
Except for certain provisions relating to dispute resolution, the
Court approves the terms of the Listing Agreement.
Mr. Levine informs the Court that Prudential has obtained an offer
for $115,000. The proceeds will help fund parish operations of
St. Frederic. St. Frederic is willing to deposit the funds in the
Parish's Archdiocese Long-Term Investment Protocol account,
pending further Court order.
Prudential will be paid a 6% commission from the sale price.
Prudential's compensation will be subject to application and
Court approval, Mr. Levine notes.
Mr. Levine adds that Portland and St. Frederic recognize the
Court's ruling on December 30, 2005, which held that the parishes
within the Archdiocese are not separate legal entities and
instead, part of the Portland Archdiocese.
Nevertheless, Mr. Levine points out that Portland and St.
Frederic still make the distinction between themselves, as that
distinction remains their legal position unless and until a final
judgment to that effect is entered and all appeals have been
exhausted. Regardless of civil law status, Portland and St.
Frederic maintains that they are still governed by Canon Law,
which mandates that distinction.
About Archdiocese of Portland
The Archdiocese of Portland in Oregon filed for chapter 11
protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004.
Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman
Shank LLP, represent the Portland Archdiocese in its restructuring
efforts. Albert N. Kennedy, Esq., at Tonkon Torp, LLP, represents
the Official Tort Claimants Committee in Portland, and scores of
abuse victims are represented by other lawyers. David A. Foraker
serves as the Future Claimants Representative appointed in the
Archdiocese of Portland's Chapter 11 case. In its Schedules of
Assets and Liabilities filed with the Court on July 30, 2004, the
Portland Archdiocese reports $19,251,558 in assets and
$373,015,566 in liabilities. (Catholic Church Bankruptcy News,
Issue No. 58; Bankruptcy Creditors' Service, Inc., 215/945-7000)
CATOCTIN ASSOCIATES: Case Summary & 18 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Catoctin Associates, LLC
dba Catoctin Inn
dba Catoctin Inn Resort & Spa
dba Serenity Day Spa
dba Camellia's
dba Quills
dba Quills Catering
3619 Buckeystown Pike
P.O. Box 243
Buckeystown, Maryland 21717
Tel: (301) 874-5555
Fax: (301) 874-2026
Bankruptcy Case No.: 06-12846
Type of Business: The Debtor operates a colonial-style hotel and
restaurant. See http://www.catoctininn.com
Chapter 11 Petition Date: May 18, 2006
Court: District of Maryland (Greenbelt)
Judge: Thomas J. Catliota
Debtor's Counsel: Robert K. Goren, Esq.
Goren, Wolff & Orenstein, LLC
15245 Shady Grove Road, Suite 465
Rockville, Maryland 20850
Tel: (301) 984-6266
Total Assets: $3,134,760
Total Debts: $2,136,026
Debtor's 18 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Earl and Sarah MacGillivray $166,000
532 Main Street
Freyburg, ME 04037
MBNA $25,000
P.O. Box 15019
Wilmington, DE
19886-5019
Sue Kelly $17,050
Caldwell Banker/Kelly & Assoc.
23 West Main Street
Middletown, MD
21769
Frederick Electric Co. $16,249
Prime Rate Premium $12,034
Paychex $7,000
American Express $5,051
B&R Design Group, Inc. $4,200
Diversions $3,711
Lowes $3,617
Laura Melia, PA $3,259
Randall Family, LLC $2,540
Nassau Broadcasting $2,353
National Propane Buyer Coop. $2,263
Metropolitan Meat, Seafood & Poultry $1,923
Sysco Corporation $1,872
Pulse Publishing, LLC $1,740
Valpak of Central Maryland $1,638
CELL THERAPEUTICS: Completes Offer for 7.5% Convertible Sr. Notes
-----------------------------------------------------------------
Cell Therapeutics, Inc., entered into an agreement on
April 24, 2006, with CRT Capital Group LLC to sell an aggregate of
$33,156,000 million principal amount of its 7.5% convertible
senior notes due 2011 in a registered offering.
The Corporation sold the Notes to the Initial Purchaser at a
discount of 4%, or $1,326,240. The Notes are issued pursuant to
the terms of an Indenture, dated April 27, 2006 between the
Company and U.S. Bank National Association, as trustee. The
registered offering of the notes was completed on April 27, 2006.
Terms of the 7.5% Notes due 2011
The New Notes will bear an annual interest rate of 7.5 percent and
be initially convertible into Company common stock, no par value
at a rate of 478.519 shares per $1,000 principal amount of the
notes, which is equivalent to an initial conversion price of
approximately $2.09 per share.
On or after April 30, 2009, the Corporation will have the right to
redeem some or all of the New Notes for cash at any time, at a
redemption price equal to par value plus accrued and unpaid
interest to, but not including, the redemption date.
The New Notes will automatically convert if, at any time after
June 26, 2006 and prior to maturity, the closing price of the
Common Stock has exceeded 125% of the Conversion Price then in
effect for at least 20 trading days within any 30 consecutive
trading day period, subject to certain conditions.
Interest on the New Notes and any Make-Whole Payment is payable,
at the option of the Company, in cash, Common Stock or some
combination thereof, subject to certain conditions. If not
converted, redeemed or repurchased, the New Notes mature on April
30, 2011. Upon the occurrence of certain events of default, the
full aggregate principal amount of the New Notes, together with
interest and other amounts owing, becomes immediately due and
payable.
The New Notes will be the Corporation's senior unsecured
obligations and will rank pari passu in right of payment with all
existing and future senior indebtedness of the Corporation,
including the Corporation's 6.75% Convertible Senior Notes due
2010, and will rank senior in right of payment to the
Corporation's currently outstanding 5.75% Convertible Senior
Subordinated Notes due 2008, 5.75% Convertible Subordinated Notes
due 2008 and 4% Convertible Senior Subordinated Notes due 2010.
The Corporation has also agreed to certain restrictions on its
incurrence of future indebtedness.
A full text copy of the Indenture governing the New Notes is
available for free at http://researcharchives.com/t/s?981
About Cell Therapeutics
Based in Seattle, Washington, Cell Therapeutics, Inc. --
http://www.cticseattle.com/-- engages in the development,
acquisition, and commercialization of treatments for cancer. The
company was co-founded by James A. Bianco, Louis A. Bianco, and
Jack W. Singer in 1991.
At March 31, 2006, the Company's balance sheet showed a
$98,941,000 shareholders' deficit, as compared to a $107,097,000
shareholders' deficit at Dec. 31, 2005.
CELL THERAPEUTICS: Posts $53.2 Million Net Loss in First Quarter
----------------------------------------------------------------
Cell Therapeutics, Inc.'s Net loss for the quarter ended
March 31, 2006, totaled $53.2 million. This included interest
make-whole charges of $20.2 million and related non-cash expenses
of $3.3 million associated with conversions into common stock of
$59.8 million of its 6.75% convertible debt, a $1.9 million
settlement expense, and a $500,000 restructuring charge related to
excess facilities.
Excluding these debt-related, settlement, and restructuring
expenses, net loss for the quarter was $27.3 million compared to a
net loss of $39.1 million for the same period in 2005.
Total revenues for the quarter were $0.02 million compared to
$6.1 million in the first quarter of 2005. There were no net
product sales for TRISENOX® for the quarter ended March 31, 2006,
as a result of its divestiture to Cephalon in July 2005, compared
to TRISENOX revenues of $6 million in the same period in 2005.
The Company ended the quarter with approximately $50.3 million in
cash and cash equivalents, securities available-for-sale,
restricted cash, and interest receivable, before taking into
account net proceeds of $31.4 million from the recent financing
and convertible notes exchange.
"We have worked diligently to manage expenses while strengthening
our balance sheet by restructuring debt and raising additional
capital," said James A. Bianco, M.D., President and CEO of CTI.
"We are making progress on the PIONEER trial and we also are
working with women's health and lung cancer advocacy groups to
raise the awareness of the dangers of lung cancer, which is the
number one cancer killer of both men and women."
About Cell Therapeutics
Based in Seattle, Washington, Cell Therapeutics, Inc. (Nasdaq and
MTAX: CTIC) -- http://www.cticseattle.com/-- engages in the
development, acquisition, and commercialization of treatments for
cancer. The company was co-founded by James A. Bianco, Louis A.
Bianco, and Jack W. Singer in 1991.
At March 31, 2006, the Company's balance sheet showed a
$98,941,000 shareholders' deficit, as compared to a $107,097,000
shareholders' deficit at Dec. 31, 2005.
CONGOLEUM CORP: Court Okays Piper Jaffray as Financial Advisor
--------------------------------------------------------------
R. Scott Williams, the Future Claimants' representative in
Congoleum Corporation and its debtor-affiliates' chapter 11 cases,
obtained authority from the U.S. Bankruptcy Court for the District
of New Jersey to employ Piper Jaffray & Co., as his financial
advisor.
Piper Jaffray is expected to:
a. assist Mr. Williams in analyzing and reviewing the acts,
conduct, assets, liabilities and financial condition of the
Debtors;
b. familiarize itself to the extent appropriate with the
operation of the Debtors' businesses, advise Mr. Williams
with respect to a proposed restructuring of the Debtors and
implementation of a trust as contemplated under Section
524(g) of the Bankruptcy Code, including analyzing,
negotiating and effecting a plan of reorganization or
recapitalization for the Debtors, and perform valuation
analyses on the Debtors and its assets;
c. evaluate the financial effect of the implementation of any
plan of reorganization upon the assets or securities of the
Debtors, including the different plans of reorganization
recently filed by the various parties in interest in the
Debtors' bankruptcy cases; and
d. render any other tasks as mutually agreed upon by the Firm
and Mr. Williams.
Joseph J. Radecki, Jr., a managing director at Piper Jaffray,
tells the Court that the Firm will receive a monthly cash fee of
$75,000, starting on the effective date of the engagement
agreement.
Mr. Radecki assures the Court that the Firm is "disinterested" as
that term is defined in Section 101(14) of the Bankruptcy Code.
Headquartered in Mercerville, New Jersey, Congoleum Corporation --
http://www.congoleum.com/-- manufactures and sells resilient
sheet and tile floor covering products with a wide variety of
product features, designs and colors. The Company filed for
chapter 11 protection on December 31, 2003 (Bankr. N.J. Case No.
03-51524) as a means to resolve claims asserted against it related
to the use of asbestos in its products decades ago. Richard L.
Epling, Esq., Robin L. Spear, Esq., and Kerry A. Brennanat, Esq.,
at Pillsbury Winthrop Shaw Pittman LLP represent the Debtors.
Michael S. Stamer, Esq., and James R. Savin, Esq., at Akin Gump
Strauss Hauer & Feld LLP represents the Official Committee of
Unsecured Bondholders. R. Scott Williams serves as the Futures
Representative, and is represented by lawyers at Orrick,
Herrington & Sutcliffe LLP. Aaron Van Nostrand, Esq., at Coughlin
Duffy, LLP, represents Continental Casualty Company and
Continental Insurance Company. When Congoleum filed for
protection from its creditors, it listed $187,126,000 in total
assets and $205,940,000 I n total debts.
At Dec. 31, 2005, Congoleum Corporation's balance sheet showed a
$44,960,000 stockholders' deficit compared to a $20,989,000
deficit at Dec. 31, 2004. Congoleum is a 55% owned subsidiary of
American Biltrite Inc. (AMEX:ABL).
CONMED CORP: District Court Denies Johnson & Johnson's Plea
-----------------------------------------------------------
The U.S. District Court for the Southern District of New York
issued an order on May 2, 2006, denying Johnson & Johnson's motion
for a summary judgment in connection with a lawsuit CONMED
Corporation filed in November 2003.
CONMED commenced litigation against Johnson & Johnson and several
of its subsidiaries, including Ethicon, Inc., for violations of
federal and state antitrust laws. The lawsuit claims that Johnson
& Johnson engaged in illegal and anticompetitive conduct with
respect to sales of product used in endoscopic surgery, resulting
in higher prices to consumers and the exclusion of competition.
The Company has sought relief which includes an injunction
restraining Johnson & Johnson from continuing its anticompetitive
practice as well as receiving the maximum amount of damages
allowed by law. In October 2005, Johnson & Johnson filed a motion
for summary judgment and the hearing on the motion was held on
Dec. 16, 2005.
The Court has scheduled a pre-trial conference for June 2006. In
its order, the Court found that there are genuine issues of
material fact and that summary judgment was therefore not
appropriate.
CONMED says the order does not represent a determination on the
merits with respect to its claims against Johnson & Johnson, but
rather represents a ruling that the Company has produced
sufficient evidence to warrant submitting the case to a jury. The
Company believes that its claims are well-grounded in fact and
law, but there can be no assurance that it will be successful in
its claims in a trial before a jury.
About Conmed
Headquartered in Utica, New York, Conmed Corp. (Nasdaq: CNMD) --
http://www.conmed.com/-- is a medical technology company with an
emphasis on surgical devices and equipment for minimally invasive
procedures and monitoring. The Company's products serve the
clinical areas of arthroscopy, powered surgical instruments,
electrosurgery, cardiac monitoring disposables, endosurgery and
endoscopic technologies. The Company's 2,800 employees distribute
its products worldwide from eleven manufacturing locations.
* * *
As reported in the Troubled Company Reporter on March 28, 2006,
Moody's Investors Service placed a Ba2 rating on ConMed
Corporation's $250 million senior secured credit facility.
Moody's also affirmed the Ba3 Corporate Family Rating and the B2
rating on ConMed's $150 million senior subordinated convertible
notes. Moody's changed the rating outlook to negative from
stable.
Standard & Poor's Ratings Services also placed a BB- rating on
ConMed Corp.'s $250 million secured credit facility, consisting of
a $150 million seven-year term loan; and a $100 million five-year
revolving credit facility. At the same time, Standard & Poor's
affirmed the existing 'BB-' corporate credit rating on the
company. S&P said the outlook is stable.
CONSECO INC: Earns $64.6 Million for Three Months Ended March 31
----------------------------------------------------------------
Conseco, Inc., filed its financial statements for the quarter
ended March 31, 2006, with the Securities and Exchange Commission
on May 8, 2006.
The Company earned $64,600,000 of net income on $1,121,700,000 of
revenues for the three months ended March 31, 2006.
At March 31, 2006, the Company's balance sheet showed
$31,371,300,000 in total assets and $ 27,088,000,000 in total
liabilities resulting in a stockholders' equity of $4,283,300,000.
A full-text copy of the Company's financial statements for the
quarter ended March 31, 2006, is available at no charge at:
http://ResearchArchives.com/t/s?985
Based in Carmel, Indiana, Conseco, Inc. (NYSE:CNO) --
http://www.conseco.com/-- through its subsidiaries, engages in
the development, marketing, and administration of supplemental
health insurance, annuity, individual life insurance, and other
insurance products throughout the United States. The company
operates in two segments, Bankers Life and Conseco Insurance. The
Bankers Life segment markets and distributes Medicare supplement
insurance, life insurance, long term care insurance, and certain
annuity products to the senior market.
* * *
As reported in the Troubled Company Reporter on May 8, 2006,
Standard & Poor's Ratings Services affirmed its 'BB+' counterparty
credit and financial strength ratings on Conseco Inc.'s core
insurance companies and its 'BB-' counterparty credit rating
on Conseco Inc.
Standard & Poor's also said that the outlook on Conseco Inc. is
stable, and the outlook on the operating companies is positive.
COOPER-STANDARD: Earns $5.4 Million in 2006 First Fiscal Quarter
----------------------------------------------------------------
Cooper-Standard Automotive Inc. filed its first quarter financial
statements for the three months ended March 31, 2006, on Form 10Q,
with the Securities and Exchange Commission on May 15, 2006.
The Company earned $5,482,000 of net income on $540,371,000 of
sales for the three months ended March 31, 2006.
At March 31, 2006, the Company's balance sheet showed
$2,024,667,000 in total assets, $1,699,808,000 in total
liabilities, and $324,859,000 in stockholders' equity.
Full-text copies of the Company's first quarter financial
statements, are available for free at:
http://ResearchArchives.com/t/s?986
Headquartered in Novi, Michigan, Cooper-Standard Automotive Inc. -
- http://cooperstandard.com/-- specializes in the manufacture and
marketing of systems and components for the global automotive
industry. Products include body sealing systems, fluid handling
systems, and NVH control systems. The Company employs more than
16,000 across 63 facilities in 14 countries.
* * *
As reported in the Troubled Company Reporter on Jan 19, 2006,
Standard & Poor's Ratings Services lowered its ratings on
Cooper-Standard Automotive Inc. and removed them from CreditWatch,
where they were placed with negative implications on Dec. 5, 2005.
The corporate credit rating was lowered to 'B+' from 'BB-'. The
ratings on the senior secured credit facility were lowered to 'B+'
from 'BB-', while the recovery rating of '2' was affirmed.
The debt rating on Cooper-Standard's $200 million senior unsecured
notes was lowered to 'B-' from 'B', while the rating on the
$350 million senior subordinated notes fell to 'B-' from 'B'.
As reported in the Troubled Company Reporter on Jan. 17, 2006,
Moody's Investors Service lowered the ratings of Cooper-Standard
Automotive Inc. and its wholly owned Canadian subsidiary Cooper-
Standard Automotive Canada Limited -- corporate family, to B2 from
B1; guaranteed senior secured credit facility, to B2 from B1;
guaranteed senior unsecured notes, to B3 from B2; guaranteed
senior subordinated notes, to Caa1 from B3.
COPA CASINO: S&P Rates Proposed $230 Million Credit Facility at B
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' rating and '3'
recovery rating to Copa Casino of Mississippi LLC's proposed
$230 million senior secured credit facility, indicating Standard &
Poor's opinion that lenders can expect meaningful (50%-80%)
recovery of principal in the event of a payment default.
At the same time, a 'B' issuer credit rating was assigned to Copa.
The outlook is positive. Pro forma consolidated debt outstanding
is expected to peak at approximately $215 million.
Proceeds from the proposed bank facility will be used:
* to refinance existing debt;
* to fund the refurbishment and expansion of the company's
Gulfport Oasis Casino Resort in Gulfport, Mississippi; and
* for fees and expenses.
The ratings on Copa reflect:
* its narrow business position as an operator of a single
casino, once its Gulfport Oasis Casino Resort partially
opens;
* the expectation that as capacity returns to the Gulf Coast
region the competitive environment will significantly
intensify;
* construction risks associated with the refurbishment of the
facility; and
* a moderate-size pro forma cash flow base.
Still, Copa's pro forma capital structure provides cushion in the
event of a slower-than-expected ramp up period, adequate
construction contingencies exist in the event of cost overruns,
and the Gulfport Oasis will benefit from a limited direct
competitive situation in the Gulfport market.
Copa purchased the Grand Casino Gulfport in March 2006 from
Harrah's Entertainment Inc., an asset that has been non-
operational after sustaining significant damage during Hurricane
Katrina in September 2005. The company was also the owner and
operator of the Copa Casino Rick's Place, which was located
next door to Grand Casino and destroyed during the hurricane. The
purchase of the Grand Casino was partially driven by the late-2005
legalization of land-based gaming along the Gulf Coast, including
Gulfport.
As a result of this regulatory change, the company intends to
refurbish, expand, and re-brand the Grand Casino into the Gulfport
Oasis Casino Resort. This project, which began in the first
quarter of 2006, is expected to be completed over time, with Phase
I opening in September 2006, followed by Phase II in March 2007.
CORVUS INVESTMENTS: Fitch Pares Ratings on Three Note Classes to C
------------------------------------------------------------------
Fitch Ratings downgrades the long-term and Distressed Recovery
ratings, and removes from Rating Watch Negative, these classes of
notes issued by Corvus Investments Limited:
-- $485,497,185 class A-1 notes to 'B/DR1' from 'BB-'
-- $187,270,056 class A-2 notes to 'B/DR1' from 'BB-'
-- $65,000,000 class B notes to 'C/DR6' from 'CCC/DR5'
-- $60,000,000 class C notes to 'C/DR6' from 'CC/DR6'
-- $40,000,000 class D notes to 'C/DR6' from 'CC/DR6'
Classes B, C, and D are subsequently withdrawn.
Corvus is a collateralized debt obligation that closed
Dec. 7, 2000. Barclays Bank Plc is the arranger, portfolio credit
swap counterparty, and portfolio manager. The transaction's
referenced portfolio is composed of:
* residential mortgage-backed securities,
* commercial mortgage-backed securities,
* real estate investment trusts,
* asset-backed securities,
* collateralized debt obligations, and
* corporate credits.
Since the last rating action, the credit enhancement available to
support the rated liabilities has declined. The class A
overcollateralization ratio has declined to 110.9% as of the
March 31, 2006 trustee report, from 119.7% as of Aug. 31, 2004.
Due to the failing class A coverage test, all cashflows are being
diverted to the class A notes. While some mild impairment is
expected on the class A notes, ultimate recovery prospects remain
highly favorable due to the current interest payments as well as
the ultimate recovery of principal.
Regarding the classes B, C, and D notes, any future cashflow to
these notes is highly unlikely due to the failing class A coverage
test. Given that no future cashflow is expected, the ratings have
been downgraded and withdrawn.
Fitch will continue to monitor and review this transaction for
future rating adjustments.
DANA CORP: Asks Court to Approve Metaldyne Settlement Agreement
---------------------------------------------------------------
Dana Corporation and its debtor-affiliates ask the U.S. Bankruptcy
Court for the Southern District of New York to approve their
settlement agreement with Metaldyne Company LLC, and in connection
with it, approve the rejection of a supply agreement between them.
Debtors Dana Corp., Torque-Traction Manufacturing Technologies,
LLC, and Torque-Traction Integration Technologies, LLC, are
parties to a seven-year Supply Agreement dated May 15, 2003, with
Metaldyne. Metaldyne agreed to supply TT Manufacturing and
TT Integration with certain machined steering knuckles until
March 31, 2010.
The Debtor Parties were required to consider Metaldyne as a
"preferred supplier," that essentially gave Metaldyne a right of
first refusal with respect to the sourcing of Knuckle Parts for
successor or replacement light vehicle or light truck programs.
Before the Petition Date, the Debtor Parties identified Metaldyne
as a supplier for a certain JK program, which likely is a
"successor" program under the Knuckles Agreement, Corinne Ball,
Esq., at Jones Day, in New York, relates.
Metaldyne planned to produce the JK Parts on two machines:
(a) a seven-station dial machine already being used at
Metaldyne's Greensboro, North Carolina facility, but which
was owned by Dana; and
(b) a second machine that Dana was to provide to Metaldyne for
its use.
TT Manufacturing and TT Integration, and Metaldyne were also
parties to a six-year Supply Agreement (Differential Gears), dated
May 15, 2003. Metaldyne supplies TT Manufacturing and TT
Integrated with certain assembly-ready gears.
In February 2006, Metaldyne began to express concerns regarding
the Debtors' financial condition. Metaldyne asserted that the
Debtor Parties missed payments under the Supply Agreements.
Accordingly, Metaldyne considered the Agreements terminated for
cause.
In that light, Metaldyne advised the Debtors that it would no
longer ship Differential Gear Parts and Knuckles Parts unless they
agreed to certain changes in their commercial relationship.
Even though the Debtor Parties disputed Metaldyne's contentions,
they recognized that Metaldyne's refusal to supply the Parts would
have a deleterious impact on their businesses.
On March 1, 2006, the Debtor Parties and Metaldyne entered into an
agreement. Pursuant to the agreement:
-- the Debtor Parties are required to pay Metaldyne, for a
period of 30 days, on cash in advance payment terms instead
of the 62-day payment terms required by the Supply
Agreements; and
-- a reassessment of payment terms is provided after the
expiration of the 30-day period.
As of the Petition Date, the Debtor Parties estimate that they
owed to Metaldyne:
(1) under the Knuckles Agreement, approximately:
* $4,600,000 for purchases made on or before February 10,
2006; and
* $2,700,000 for purchases made between February 11 and
March 2, 2006;
(2) under the Differential Gears Agreement:
* $2,600,000 for purchases made on or before February 10,
2006; and
* $650,000 for purchases made between February 11 and
March 2, 2006.
Metaldyne sold its manufacturing business relating to the
Differential Gear Parts in March 2006. In that regard, the
parties agreed to terminate the Gears Agreement to avoid any
future obligations under the contract.
Purported Dana Nakata Recoupment
Dana Industrias Ltda - Nakata Division, a Brazilian nondebtor
affiliate of the Debtors, supplies Metaldyne with certain parts
that it incorporates into the parts that it sells to the Debtor
Parties.
On April 7, 2006, Metaldyne informed Dana Nakata that it will set
off $2,568,360 of the amounts owing to Dana Nakata against amounts
owed by the Debtor Parties to Metaldyne.
Dana advised Metaldyne that the set-off or recoupment was legally
improper for a number of reasons, including that it was in
violation of the automatic stay imposed by Section 362 of the
Bankruptcy Code. Metaldyne disagreed with Dana's position on the
basis that Dana Nakata was a nondebtor.
Settlement Agreement
Since the Petition Date, the Debtor Parties have concluded that
they would prefer to manufacture the JK Parts themselves, but
would like to have Metaldyne continue to manufacture the other
Knuckle Parts under the terms of the Knuckles Agreement.
The Debtor Parties have concluded that doing so will allow them to
improve their control over the production process and their
ability to ensure timely production of the JK Parts and will
result in substantial savings to their estates.
As a result of substantial negotiations between the parties,
Metaldyne and the Debtor Parties entered into the Settlement
Agreement.
The key terms of the Settlement Agreement are:
a. The Debtor Parties will reject the Knuckles Agreement, as
amended by the March Agreement, thus relieving the Debtor
Parties from their obligation to purchase JK Parts from
Metaldyne. The Debtor Parties and Metaldyne will release
each another from their obligations relating to the
manufacture and purchase of JK Parts;
b. The Debtor Parties and Metaldyne will enter into a new
supply agreement for the supply of Knuckle Parts other than
the JK Parts, to guarantee the Debtor Parties with a supply
of parts crucial to their business operations;
c. The Debtor Parties will pay Metaldyne $2,475,000,
representing 75% of Metaldyne's administrative claims under
Section 503(b)(9) of the Bankruptcy Code. This amount will
be reconciled and an additional payment will be made if 75%
of Metaldyne's Section 503(b)(9) claims prove to be
greater than $2,475,000 on reconciliation. Metaldyne
retains the right to be paid the remaining 25% of its
Section 503(b)(9) claims at the end of the Debtors'
Chapter 11 cases;
d. The Debtor Parties are entitled immediately to enter
the Metaldyne Greensboro facility, and remove the seven-
station dial machine necessary to manufacture JK Parts;
e. Metaldyne will be paid a contingent administrative claim in
the event that the Settlement Agreement remains unapproved
by May 31, 2006. The amount will be repaid to the Debtors
in the event the Settlement is approved;
f. Metaldyne will be permitted to recoup 75% of the Asserted
Recoupment Amount and will pay the remaining 25% of the
Asserted Recoupment Amount to Dana Nakata;
g. The Debtor Parties agree to reconcile and pay Metaldyne's
allowed reclamation claims, if any, on an accelerated
basis;
h. The Debtor Parties release Metaldyne from any preference
liabilities arising under Section 547;
i. Metaldyne will have allowed general unsecured claims:
1. $10,000,000, which includes all claims for:
-- damages relating to the rejection of the Knuckles
Agreement; and
-- prepetition amounts owed to Metaldyne under the
Knuckles Agreement, that are not claims under Section
503(b)(9); and
2. prepetition payables under the Differential Gears
Agreement that are not Section 503(b)(9) claims, less
75% of the Asserted Recoupment Amount;
j. The unsecured claim amounts are subject to a dollar-for-
dollar reduction to the extent that Metaldyne receives
payment on its reclamation claims; and
k. Metaldyne will have no other prepetition claims.
About Dana Corporation
Headquartered in Toledo, Ohio, Dana Corporation --
http://www.dana.com/-- designs and manufactures products for
every major vehicle producer in the world, and supplies
drivetrain, chassis, structural, and engine technologies to those
companies. Dana employs 46,000 people in 28 countries. Dana is
focused on being an essential partner to automotive, commercial,
and off-highway vehicle customers, which collectively produce more
than 60 million vehicles annually. The company and its affiliates
filed for chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y.
Case No. 06-10354). Corinne Ball, Esq., and Richard H. Engman,
Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey
B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at
Jones Day in Cleveland, Ohio, represent the Debtors. Henry S.
Miller at Miller Buckfire & Co., LLC, serves as the Debtors'
financial advisor and investment banker. Ted Stenger from
AlixPartners serves as Dana's Chief Restructuring Officer. Thomas
Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP,
represents the Official Committee of Unsecured Creditors. When
the Debtors filed for protection from their creditors, they listed
$7.9 billion in assets and $6.8 billion in liabilities as of Sept.
30, 2005. (Dana Corporation Bankruptcy News, Issue No. 9;
Bankruptcy Creditors' Service, Inc., 215/945-7000).
DANA CORP: Committee Taps Halperin Battaglia as Conflicts Counsel
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors of Dana Corporation
and its debtor-affiliates seeks the U.S. Bankruptcy Court for the
Southern District of New York's authority to retain Halperin
Battaglia Raicht, LLP, as its conflicts counsel under a general
retainer, nunc pro tunc, to March 31, 2006.
Thomas Amato, the Creditors Committee's co-chair, explains that in
certain circumstances, the committee's primary counsel, Kramer
Levin Naftalis & Frankel, LLP, may have potential or actual
conflicts of interest on matters that arise in the Debtors'
Chapter 11 cases.
To ensure that it receives seamless legal representation to the
extent of any actual or potential legal conflicts arise, the
Committee has asked Halperin Battaglia to represent it as
conflicts counsel.
Alan D. Halperin, Esq., a member of Halperin Battaglia, relates
that Kramer Levin has identified a conflict with respect to
certain of the Debtors' prepetition lenders that will necessitate
Halperin Battaglia's involvement. Halperin Battaglia will:
-- review and analyze the liens of those lenders;
-- conduct any necessary negotiations;
-- file any necessary pleadings with the Court regarding those
liens; and
-- address the Committee's legal needs with respect to any
other conflicts that may arise after Kramer Levin's
notification.
Halperin Battaglia will be paid based on its regular hourly rates:
Professional Rate per Hour
------------ -------------
Attorneys $395 to $175
Law clerks $125
Paraprofessionals $100 to $75
Halperin Battaglia will also seek reimbursement of necessary and
reasonable out-of-pocket expenses.
Mr. Halperin assures the Court that Halperin Battaglia is a
"disinterested person" within the meaning of Section 101(14) of
the Bankruptcy Code.
About Dana Corporation
Headquartered in Toledo, Ohio, Dana Corporation --
http://www.dana.com/-- designs and manufactures products for
every major vehicle producer in the world, and supplies
drivetrain, chassis, structural, and engine technologies to those
companies. Dana employs 46,000 people in 28 countries. Dana is
focused on being an essential partner to automotive, commercial,
and off-highway vehicle customers, which collectively produce more
than 60 million vehicles annually. The company and its affiliates
filed for chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y.
Case No. 06-10354). Corinne Ball, Esq., and Richard H. Engman,
Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey
B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at
Jones Day in Cleveland, Ohio, represent the Debtors. Henry S.
Miller at Miller Buckfire & Co., LLC, serves as the Debtors'
financial advisor and investment banker. Ted Stenger from
AlixPartners serves as Dana's Chief Restructuring Officer. Thomas
Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP,
represents the Official Committee of Unsecured Creditors. When
the Debtors filed for protection from their creditors, they listed
$7.9 billion in assets and $6.8 billion in liabilities as of Sept.
30, 2005. (Dana Corporation Bankruptcy News, Issue No. 9;
Bankruptcy Creditors' Service, Inc., 215/945-7000).
DANA CORP: Can't File First Quarter 2006 Report on Time
-------------------------------------------------------
Dana Corporation informed the U.S. Securities and Exchange
Commission that it will be unable to timely file its report on
Form 10-Q for the quarter ended March 31, 2006.
Dana expects to submit its quarterly report before May 31, 2006.
Kenneth A. Hiltz, Dana's chief financial officer, explains that as
a result of its Chapter 11 filing, Dana has adopted the accounting
requirements of American Institute of Certified Public
Accountants Statement of Position 90-7, "Financial Reporting by
Entities in Reorganization under the Bankruptcy Code."
Under SOP 90-7:
-- revenues, expenses, realized gains and losses and
provisions for losses that can be directly associated with
the reorganization must be reported separately as
reorganization items in the statement of operations;
-- the balance sheet must distinguish prepetition liabilities
subject to compromise from both prepetition liabilities
that are not subject to compromise and postpetition
liabilities; and
-- statement of cash flows must disclose cash provided by the
reorganization items.
Mr. Hiltz explains that the SOP 90-7 requirements are new to
Dana; hence, it will require additional time to prepare the
financial statements to be included in the Form 10-Q.
The company expects to record a loss for the first quarter of
2006, compared to a profit in the first quarter of 2005, primarily
as a result of its lower operating margins, reorganization costs
and discontinued recognition of tax benefits on U.S. losses, Mr.
Hiltz relates.
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).
DAVITA INC: Earns $57.4 Million for Three Months Ended March 31
---------------------------------------------------------------
DaVita Inc. filed its financial statements for the quarter ended
March 31, 2006, with the Securities and Exchange Commission on
May 3, 2006.
The Company reported $57,469,000 of net income on $1,163,188,000
of revenues for the three months ended March 31, 2006.
At March 31, 2006, the Company's balance sheet showed
$6,189,454,000 in total assets and $5,226,922,000 in total
liabilities resulting in a stockholders' equity of $962,532,000.
Full-text copies of the Company's financial statements for the
quarter ended March 31, 2006, is available at no charge at:
http://ResearchArchives.com/t/s?988
Headquartered in El Segundo, California, DaVita (NYSE: DVA) is a
leading provider of dialysis services for patients suffering from
chronic kidney failure. The Company provides services at kidney
dialysis centers and home peritoneal dialysis programs
domestically in 41 states, as well as Washington, D.C. As of
March 31, 2006, DaVita operated or managed over 1,200 outpatient
facilities serving approximately 98,000 patients
* * *
The Company's 6-5/8% Senior Notes due Mar. 15, 2013 carries
Standard & Poor's Ratings Services' B rating.
DAVITA INC: Wants to Amend Senior Secured Credit Facilities
-----------------------------------------------------------
DaVita Inc. disclosed in a filing with the Securities and Exchange
Commission on May 16, 2006, that it is seeking an amendment and
restatement to its existing Senior Secured Credit Facilities
primarily to reduce the margin over LIBOR that the Company pays as
interest under the existing Term Loan A and Term Loan B.
The outstanding balances on the Senior Secured Term Loan A and
Senior Secured Term Loan B are approximately $279 million and
$2,400 million, respectively.
J.P. Morgan Securities Inc. will lead the amendment and
restatement. Approval of the amendment and restatement requires
approval of the existing lenders, and there can be no assurance
that the Company will be able to secure that approval.
Headquartered in El Segundo, California, DaVita (NYSE: DVA) is a
leading provider of dialysis services for patients suffering from
chronic kidney failure. The Company provides services at kidney
dialysis centers and home peritoneal dialysis programs
domestically in 41 states, as well as Washington, D.C. As of
March 31, 2006, DaVita operated or managed over 1,200 outpatient
facilities serving approximately 98,000 patients
* * *
The Company's 6-5/8% Senior Notes due Mar. 15, 2013, carries
Standard & Poor's Ratings Services' B rating.
DEAN FOODS: Signs Underwriting Pact for $500 Million Notes Sale
---------------------------------------------------------------
On May 11, 2006, Dean Foods Company and certain subsidiary
guarantors entered into an underwriting agreement with Citigroup
Global Markets Inc. for the sale by the Company of $500 million
aggregate principal amount of 7.000% Senior Notes due 2016.
The offering is being made under the Company's shelf registration
statement on Form S-3 (File No. 333-130309), filed with the
Securities and Exchange Commission on Dec. 14, 2005 and by a
prospectus supplement dated May 11, 2006.
The Underwriters will purchase the Notes from the Company at
98.3915% of their principal amount. The Notes will be issued
under an indenture to be entered into among the Company, the
Guarantors and The Bank of New York Trust Company, N.A. The
offering is scheduled to close on May 17, 2006, subject to
customary closing conditions.
Dean Foods Company is reportedly one of the leading food and
beverage companies in the United States. Its Dairy Group division
is the largest processor and distributor of milk and other dairy
products in the country, with products sold under more than 50
familiar local and regional brands and a wide array of private
labels. The Company's WhiteWave Foods subsidiary is the nation's
leading organic foods company. WhiteWave Foods markets and sells
a variety of well-known dairy and dairy-related products, such as
Silk(R) soymilk, Horizon Organic(R) dairy products and juices,
International Delight(R) coffee creamers and LAND O'LAKESr
creamers and cultured products. Dean Foods Company also owns the
fourth largest dairy processor in Spain and the leading brand of
organic dairy products in the United Kingdom.
* * *
As reported in the Troubled Company Reporter on May 15, 2006,
Standard & Poor's Ratings Services assigned its 'BB-' rating to
Dean Foods Inc.'s proposed issue of $300 million 10-year notes.
The notes are a drawdown from a Rule 415 shelf filing. As senior
unsecured obligations, the rating is notched down twice from the
'BB+' corporate credit rating on the company because of the amount
of secured debt outstanding. These notes will be used to reduce
borrowings under the senior secured revolving credit facility.
As reported in the Troubled Company Reporter on May 12, 2006,
Moody's assigned a Ba2 rating to the $300 million senior unsecured
bonds issued by Dean Foods Company from its shelf and affirmed the
company's other ratings with a stable outlook.
DEAN FOODS: Fitch Withdraws BB+ Issuer Default Rating
-----------------------------------------------------
Fitch Ratings affirmed the ratings of Dean Foods Company and
Dean Holding Company. The Rating Outlook has been revised to
Stable from Positive.
In addition, Fitch simultaneously withdraws all ratings for these
issuers. The withdrawn ratings are:
Dean Foods Company (Parent):
-- Issuer default rating 'BB+'
-- Senior secured bank facility 'BBB-'
Dean Holding Company (Operating Subsidiary):
-- Senior unsecured notes 'BB'
This rating action affects Dean's approximately $3.5 billion of
debt as of March 31, 2006.
DELPHI CORP: Seeks Court Approval for XM Satellite Deal
-------------------------------------------------------
Delphi Corporation and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York to approve
their settlement agreement with XM Satellite Radio, Inc.
The Debtors and XM Satellite, have been bringing digital direct
satellite radio products and service to vehicles and to the
consumer electronics market for a number of years.
John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher &
Flom LLP, in Chicago, Illinois, tells the Court that the Debtors
and XM have cooperated in the design, development, manufacture,
distribution, and marketing of numerous in-vehicle and portable
satellite radio products and accessories. In the course of their
relationship, however, certain disputes have arisen and the
parties have become involved in protracted negotiations in
connection with the Debtors' purchase of the Roady2, SKYFi2, and
MyFi satellite radio products.
Mr. Butler relates that the parties dispute the impact of certain
finance and extended warranty fees or charges imposed by
Flextronics International USA Inc., a third party manufacturer and
supplier of various products to the Debtors, on the calculation of
subsidies.
In an effort to resolve the dispute, the parties enter into an
agreement, pursuant to which:
(1) XM and the Debtors will waive and release all claims against
each other directly related to the Dispute.
(2) In lieu of agreeing to increase Subsidies for the Products
to cover fees or charges that are the subject of the Dispute,
XM will make three quarterly payments to the Debtors for
$100,000 each, commencing on June 30, 2006. XM will continue
to pay the Subsidies for the Products in accordance with the
terms of applicable agreements and excluding any fees or
charges imposed by Flextronics.
(3) Delphi will use good faith efforts to resolve with
Flextronics any open issues related to certain
non-manufacturing fees and charges with respect to the
Products manufactured by Flextronics by no later than May 31,
2006.
(4) XM will waive all past and future minimum Marketing
Development Fund spending requirements imposed on the
Debtors under the various product agreements. XM will not be
required to reimburse the Debtors for any MDF already
expended or committed by the Debtors.
(5) XM and the Debtors will use commercially reasonable steps to
fulfill certain obligations, as specified in the Settlement
Agreement, regarding the SKYFi3 product, which has not yet
been introduced at retail.
(6) The Debtors will invoice XM for $1,000,000 to support the
Debtors' current 2006 engineering and supplier non-
restructuring engineering costs for the SKYFi3 product. XM
will pay this invoice in full no later than June 30, 2006.
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. 25; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
DELPHI CORP: Pardus European Joins Official Equity Committee
------------------------------------------------------------
Diana G. Adams, the United States Trustee for Region 2, appoints
Pardus European Special Opportunities Master Fund, L.P., to the
Official Committee of Equity Security Holders. Dr. Betty Anne
Jacoby has stepped down from the Equity Committee.
The Equity Committee now consists of:
1. Brandes Investment Partners, L.P.
11988 El Camino Real, Suite 500
San Diego, CA 92103
2. Pardus European Special Opportunities Master Fund, L.P.
c/o Pardus Capital Management L.P.
1101 Avenue of the Americas, Suite 1100
New York, NY 10018
Attention: Joseph R. Thornton
3. Luqman Yacub
P. O. Box 1026
Hartville, Ohio 44632
4. James E. Bishop, Sr.
502 Shiloh Dr. # 9
Laredo, Texas 78045
5. D.C. Capital Partners, L.P.
800 Third Avenue 40th Floor
New York, NY 10022
6. James N. Koury, trustee of the Koury Family Trust
410 Reposado Dr.
La Habra Heights, California 90631
7. James H. Kelly
P. O. Box 4426
Boulder, Colorado 80306
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. 25; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
DELPHI CORP: Delays Filing 1st Quarter 2006 Report on Form 10-Q
---------------------------------------------------------------
Delphi Corporation has advised the Securities and Exchange
Commission that its Quarterly Report on Form 10-Q for the quarter
ended March 31, 2006, could not be filed on time.
John D. Sheehan, Delphi vice president and chief restructuring
officer, chief accounting officer and controller, says that the
company could not complete the preparation of the required
information without unreasonable effort and expense.
On March 17, 2006, Delphi said it was unable to file its Annual
Report on Form 10-K for the year ended Dec. 31, 2005, within the
prescribed time period because it had not yet completed its
audited financial statements for the year ended Dec. 31, 2005.
Mr. Sheehan relates that Delphi is in the process of completing
audited annual financial statements so that it can become current
again in its SEC filings.
Once the audit is complete and Delphi has filed the Form 10-K, it
will then begin preparing the Form 10-Q, Mr. Sheehan maintains.
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. 25; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
DIGITAL LIFESTYLES: Files Annual Report for Fiscal 2004
-------------------------------------------------------
Digital Lifestyles Group Inc. has completed its annual audit for
fiscal 2004 and has filed its Annual Report on Form 10-K for 2004
with the Securities and Exchange Commission. In an effort to
return to compliance with the SEC and meet the closing conditions
of its previously announced merger with Protron Digital
Corporation, the Company is working diligently to complete its
remaining necessary SEC filings in a timely manner.
Andy Teng, Chairman and Chief Executive Officer of the Company,
stated, "We are pleased to have successfully completed the 2004
audit and file our annual report. The completion of this audit is
a major step in our efforts to reorganize Digital and finalize the
merger with Protron. We will continue to focus our time and
resources to further implement the necessary initiatives to meet
our SEC filing obligations and to effectuate the proposed merger
with Protron, including our quarterly filings for 2005 and the
2005 audit."
In March 2006, the Company announced the signing of a definitive
merger agreement with Protron Digital Corporation, a consumer
electronics company focused on the manufacture and sale of home
entertainment systems. Protron is a privately held company, of
which one of its principal owners is Leo Chen, a member of the
board of directors of Digital Lifestyles Group.
Leo Chen added, "Protron is encouraged and pleased with Digital
Lifestyle Group's efforts to satisfy the conditions necessary to
complete the merger and the filing of the 2004 annual report is a
very significant step toward achieving that goal."
Going Concern Doubt
Corbin & Company LLP, expressed doubt about Digital Lifestyles'
ability to continue as a going concern after auditing the
company's 2004 financial statements. The auditing firm pointed to
the company's recurring losses and has negative cash flow from
operations for each of the last three fiscal years and has ceased
operations subsequent to December 31, 2004.
At Dec. 31, 2004, the company's balance sheet showed total assets
of $9.1 million and total debts of $17.3 million resulting to a
$8.2 million stockholders' equity deficit.
A full-text copy of Digital Lifestyles' 2004 Annual Report is
available for free at http://researcharchives.com/t/s?96f
Headquartered in Walnut, California, Digital Lifestyles Group,
Inc. (OTC: DLFG) -- http://www.dig-life.com/-- is a computer and
consumer electronics company that designs, manufactures and
markets digital lifestyle products. More information about Digital
Lifestyles Group will be made available upon request.
DND TECHNOLOGIES: Farber Hass Raises Going Concern Doubt
--------------------------------------------------------
Farber Hass Hurley & McEwen LLP raised substantial doubt about DND
Technologies, 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
losses, negative working capital, receipt of a license agreement
termination notice for its agreement with a major supplier, and
default on the majority of its term debt.
The Company reported a $4,560,362 net loss on $13,753,725 of
revenues for the year ended Dec. 31, 2005.
At Dec. 31, 2005, the Company's balance sheet showed $4,024,507 in
total assets and $10,581,978 in total liabilities, resulting in a
$6,557,471 stockholders' deficit.
The Company's Dec. 31 balance sheet also showed strained liquidity
with $3,736,104 in total current assets available to pay
$10,555,434 in total current liabilities coming due within the
next 12 months.
Lam License Agreements Default
On Nov. 8, 2002, DND signed a License Agreement with Lam Research
Corporation in which Lam granted DND a non-exclusive license to
several of its patents and other intellectual property pertaining
to its AutoEtch and Drytek etch machines.
The License Agreement enabled the Company to sell, import, repair
and distribute products using this licensed intellectual property.
In June 2004, DND and Lam amended their agreement and restructured
inventory payment terms and requirements to make a $28,220 monthly
payment until Jan. 1, 2007, and a $9,404 monthly payment until
Jan. 1, 2006, as payment for past purchases.
To date, the Company has purchased parts for approximately
$2.2 million pursuant to the Lam Agreement. Under the terms of
the Agreement, DND is also required to pay approximately
$5.3 million as a royalty for the licensed intellectual property.
The royalty payment is $56,000 per month and the final payment is
due March 15, 2011. To date, the Company has paid $1.7 million of
the royalty fee.
In December 2005, DND determined that its license agreement with
Lam was fully impaired and recognized a $2,705,013 impairment
charge.
Axcelis License Agreement Default
DND signed a License Agreement with Axcelis Technologies, Inc., in
November 2003. The agreement in which Axcelis granted DND an
exclusive license to some of Axcelis' patents and trade secrets to
manufacture, use, sell, maintain and service ASI MX-1 and ASI MX-
10 dry strip semiconductor manufacturing equipment.
The agreement provides for:
-- a $150,000 one-time license payment,
-- a quarterly payment equal to 18% of net revenues from
DND's sale of these products until the $2,750,000 license
fee has been paid, and
-- payment of a declining royalty from 10% down to 2% on
related sales over a calendar schedule that ends on
Dec. 31, 2010.
The Company owes Axcelis approximately $1.5 million at Dec. 31,
2005.
The Company's management believes the agreement is beneficial to
both parties. Axcelis has been willing to provide the Company
with additional time to make these payments.
Axcelis could terminate the license agreements with 90 days
written notice. Management is exploring payment options, but it
is unlikely the Company could become current on its obligations to
Axcelis within a 90-day period.
Merrill Lynch Debt Default
The restructured term loan with Merrill Lynch Business Financial
Services, Inc., had a balance of $773,696 at Dec. 31, 2005.
The loan will be paid over a term of 17 months and bears a 2%
interest plus the prime rate with principal amortized over a
45-month period and a balloon payment in February 2006.
The new loan is guaranteed by the Company and Douglas Dixon, the
Company's chief executive officer, and is secured by a first lien
on the Company's total assets. The Company is negotiating
extended payment terms.
Cornell Capital Debt Default
On July 22, 2005, DND signed a promissory note with Cornell
Capital Partners, LP, for $300,000. The loan bears a 12% interest
and will be paid with $20,000 monthly payments beginning
Oct. 21, 2005, with the final payment of $34,121 due on
Jan. 27, 2006.
When the Company's pending registration is effective, the note
will be partially secured by the escrow of the Company's 9,765,625
shares of common stock.
As of March 23, 2006, DND had not made any required payments to
Cornell under the promissory note, and as a result is in default
under this loan.
A full-text copy of the Company's 2005 Annual Report is available
for free at http://ResearchArchives.com/t/s?96b
Headquartered in Chandler, Arizona, DND Technologies, Inc.'s
(OTCBB: DNDT) operating subsidiary, Aspect Systems, Inc. --
http://www.aspectsys.com/-- supplies semiconductor manufacturing
equipment and complete after-market support, which includes spare
parts and assemblies, and various engineering services. Through
licensing agreements negotiated with Lam Research Corporation and
Axcelis Technologies, Inc., ASI has become the original equipment
manufacturer of AutoEtch plasma etch systems originally designed
by Lam, and plasma etch and strip products manufactured on the ASI
MX-1 and ASI MX-10, and the Arista and Arista Dual platforms. ASI
also offers new and refurbished support products including a wide
array of sub-assemblies, both consumable and non-consumable repair
and process related parts, and remanufactured temperature control
units that are designed to maintain critical operating
temperatures for the plasma systems.
DOANE PET: Commences Tender Offer for $213MM 103/4% Senior Notes
----------------------------------------------------------------
Doane Pet Care Company commenced cash tender offers for its
$213 million aggregate principal amount of 103/4% Senior Notes due
2010 and $152 million aggregate principal amount of 105/8% Senior
Subordinated Notes due 2015, on May 12, 2006.
In connection with the tender offers, Doane is soliciting consents
to proposed amendments that would, among other things, eliminate
most of the restrictive covenants contained in the indentures
governing the Notes. The tender offers will expire at 5:00 p.m.,
prevailing eastern time, on June 12, 2006. The solicitations of
consents will expire at 5:00 p.m., prevailing eastern time, on May
25, 2006.
Both tender offers and consent solicitations are being made
pursuant to the terms and subject to the conditions set forth in
an Offer to Purchase and Consent Solicitation Statement, dated
May 12, 2006.
Doane is commencing the tender offers and consent solicitations in
connection with and subject to the consummation of the previously
announced acquisition by Mars, Incorporated of Doane's parent
corporation, Doane Pet Care Enterprises, Inc. Each tender offer
is conditioned upon, among other things, the closing of the
acquisition as well as receipt of the tender and consent of at
least a majority in aggregate principal amount of the 2010 Notes
and 2015 Notes outstanding.
Subject to certain exceptions set forth in the Offer to Purchase
and Consent Solicitation Statement, tenders of Notes may be
withdrawn and consents may be revoked at any time until the
earlier of 5:00 p.m., prevailing eastern time, on the applicable
Consent Date and the time and date upon which Doane gives notice
to the trustee and announces in a press release that it has
received the requisite consents. Notes tendered and consents
delivered after such time may not be withdrawn or revoked,
respectively.
In accordance with the Offer to Purchase and Consent Solicitation
Statement, Doane is offering to purchase the Notes using fixed-
spread pricing in accordance with these securities table:
http://researcharchives.com/t/s?984
Subject to the terms and conditions of the tender offers and
consent solicitations, the total consideration to be paid for each
validly tendered (and not validly withdrawn) 2010 Note and 2015
Note will be paid in cash and calculated based on the present
value as determined at 2:00 p.m. on the business day following the
Consent Date of the required payments to, and the redemption
premium as of March 1, 2007 (in the case of the 2010 Notes) and
November 15, 2010 (in the case of the 2015 Notes), a discount rate
equal to the bid-side yield of the 3.375% U.S. Treasury Note due
February 28, 2007 (in the case of the 2010 Notes) and the bid-side
yield of the 4.50% U.S. Treasury Note due November 15, 2010 (in
the case of the 2015 Notes), plus in each case 50 basis points.
Holders who tender their Notes at or prior to 5:00 p.m.,
prevailing eastern time, on the applicable Consent Date will be
eligible to receive the total consideration, which includes a
consent payment equal to $30 per $1,000 principal amount of Notes.
Holders of the Notes who tender their Notes after 5:00 p.m.,
prevailing eastern time, on the Consent Date but at or prior to
5:00 p.m., prevailing eastern time, on the applicable Expiration
Date will not be eligible to receive the $30 consent payment.
In addition, Doane also will pay accrued and unpaid interest to
but not including, the applicable settlement date on all Notes
accepted in the applicable tender offers. The settlement date for
each tender offer is expected to occur promptly after the
Expiration Date.
Doane has retained Lehman Brothers to serve as the Lead Dealer
Manager for the tender offers and the Lead Solicitation Agent for
the consent solicitations. CIBC World Markets Corp. and Harris
Nesbitt Corp. have been retained to serve as Co-Dealer Managers
and Co-Solicitation Agents, and D. F. King & Co., Inc. has been
retained to serve as the Tender Agent and Information Agent for
the tender offers and consent solicitations. Requests for
documents may be directed to:
D. F. King & Co. Inc.
48 Wall Street, 22nd Floor
New York, NY 10005.
Phone: (800) 487-4870 or (212) 269-5550
Questions regarding the tender offers may be directed to:
Lehman Brothers, Inc.
745 Seventh Avenue
30th Floor
New York, NY 10019
Phone: (800) 438-3242 or (212) 528-7581.
About Doane Pet
Doane Pet Care Company -- http://www.doanepetcare.com/-- based in
Brentwood, Tennessee, is the largest manufacturer of private label
pet food and the second largest manufacturer of dry pet food
overall in the United States. The Company sells to approximately
550 customers around the world and serves many of the top pet food
retailers in the United States, Europe and Japan. The Company
offers its customers a full range of pet food products for both
dogs and cats, including dry, semi-moist, soft-dry, wet, treats
and dog biscuits.
* * *
As reported in the Troubled Company Reporter on April 28, 2006,
Standard & Poor's Ratings Services placed its ratings on Doane Pet
Care Co. on CreditWatch with positive implications. This included
the 'B+' corporate credit rating and other ratings on the company.
Total debt outstanding at Dec. 31, 2005, was about $564 million.
Doane Pet Care Company's 10-5/8% Senior Subordinated Notes due
2015 also carry Moody's Investors Service's Caa1 rating.
EASY GARDENER: Gets Court Nod to Hire Porter & Hedges as Counsel
----------------------------------------------------------------
Easy Gardener Products, Ltd., and its debtor-affiliates obtained
the U.S. Bankruptcy Court for the District of Delaware's authority
to employ Porter & Hedges, LLP, as their bankruptcy counsel.
The Debtors initially retained P&H in December 2005 to assist the
company in connection with its restructuring efforts. During the
course of this representation, P&H has become familiar with the
Debtors' business affairs and many of the pertinent legal issues,
which may arise in the context of the Debtors' chapter 11 cases.
P&H's services include:
(a) providing legal advise with respect to the Debtors' rights
and duties as continued business operations;
(b) assisting, advising and representing the Debtors in
analyzing the Debtors' capital structure, investigating the
extend and validity of liens, cash collateral stipulations
and contested matters;
(c) assisting, advising, and representing the Debtors in
postpetition financing transactions;
(d) assisting, advising, and representing the Debtors in the
sale of certain assets or companies;
(e) assisting, advising, and representing the Debtors in the
formulation of a joint disclosure statement and plan of
reorganization and assisting the Debtors in obtaining
confirmation and consummation of a joint plan of
reorganization;
(f) assisting, advising, and representing the Debtors in any
manner relevant to preserving and protecting the Debtors'
estates;
(g) investigating and prosecuting preference, fraudulent
transfer and other actions arising under the Debtors'
bankruptcy avoiding powers;
(h) preparing on behalf of the Debtors all necessary
applications, motions, answers, orders, reports and other
legal papers;
(i) appearing in Court and protecting the Debtors' interests;
(j) assisting the Debtors in administrative matters;
(k) performing all other legal services for the Debtors which
may be necessary and proper their chapter 11 proceedings;
(l) assisting, advising, and representing the Debtors in any
litigation matter;
(m) continuing to assist and advise the Debtors in general
corporate and other matters;
(n) providing other legal advise and services, as requested by
the Debtors from time to time.
John F. Higgins, Esq., a partner at the firm, informed the Court
that his firm's professionals charge these hourly rates:
Professionals Hourly Rates
------------- ------------
Partners $275 to $600
Of Counsel $275 to $375
Associates and Staff Attorneys $180 to $325
Legal Assistants and Law Clerks $140 to $150
Mr. Higgins assured the Court that his firm and its professionals
do not hold material interest adverse to the Debtors' interests
and are "disinterested" as defined in Section 101(14) in the
Bankruptcy Code.
Easy Gardener Products, Ltd. -- http://www.easygardener.com/--
manufactures and markets a broad range of consumer lawn and garden
products, including weed preventative landscape fabrics,
fertilizer spikes, decorative landscape edging, shade cloth and
root feeders, which are sold under various recognized brand names
including Easy Gardener, Weedblock, Jobe's, Emerald Edge, and
Ross. The Company and four of its affiliates filed for bankruptcy
on April 19, 2006 (Bankr. D. Del. Case Nos. 06-10393 to 06-10397).
James E. O'Neill, Esq., Laura Davis Jones, Esq., and Sandra G.M.
Selzer, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub LLP
represent the Debtors in their restructuring efforts. When the
Debtors filed for bankruptcy, they reported assets amounting to
$103,454,000 and debts totaling $107,516,000.
EASY GARDENER: Court Approves Pachulski Stang as Delaware Counsel
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware gave Easy
Gardener Products, Ltd., and its debtor-affiliates permission to
hire Pachulski Stang Ziehl Young Jones & Wintraub LLP as their
local bankruptcy counsel, nunc pro tunc to April 19, 2006.
The Debtors wanted Pachulski Stang as their counsel because of the
firm's extensive experience and knowledge in the field of debtors'
and creditors' rights and business reorganizations under chapter
11 of the Bankruptcy Code and the firm's expertise, experience and
knowledge practicing before the Delaware Court.
Pachulski Stangs' services include:
(a) providing legal advise with respects to the Debtors' powers
and duties in the continued operation of their businesses
and management of their properties;
(b) preparing and pursuing confirmation of the Debtors' plans
and approval of the Debtors' disclosure statement;
(c) preparing necessary applications, motions, answers, orders,
reports and other legal papers on behalf of the Debtors;
(d) appearing in Court and protecting the Debtors' interests in
Court;
(e) performing all other legal services for the Debtors that
may be necessary and proper in their proceedings.
Laura Davis Jones, Esq., a partner at the firm disclosed that she
charges $675 per hour for her services. She added that she will
be working with her colleagues who charge these hourly rates:
James E. O'Neill $445
Sandra G.M. Selzer $295
Timothy O'Brien $150
Ms. Jones assured the Court her firm and its professionals do not
hold material interest adverse to the Debtors' interests and are
"disinterested" as defined in Section 101(14) of the Bankruptcy
Code.
Easy Gardener Products, Ltd. -- http://www.easygardener.com/--
manufactures and markets a broad range of consumer lawn and garden
products, including weed preventative landscape fabrics,
fertilizer spikes, decorative landscape edging, shade cloth and
root feeders, which are sold under various recognized brand names
including Easy Gardener, Weedblock, Jobe's, Emerald Edge, and
Ross. The Company and four of its affiliates filed for bankruptcy
on April 19, 2006 (Bankr. D. Del. Case Nos. 06-10393 to 06-10397).
James E. O'Neill, Esq., Laura Davis Jones, Esq., and Sandra G.M.
Selzer, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub LLP
represent the Debtors in their restructuring efforts. When the
Debtors filed for bankruptcy, they reported assets amounting to
$103,454,000 and debts totaling $107,516,000.
EASY GARDENER: U.S. Trustee Appoints Five-Member Creditors Panel
----------------------------------------------------------------
Kelly Beaudin Stapleton, the U.S. Trustee for Region 3 appointed
five creditors to serve on the Official Committee of Unsecured
Creditors in the chapter 11 cases of Easy Gardener Products, Ltd.,
and its debtor-affiliates.
1. Wilmington Trust Company
Attn: Mike Diaz
520 Madison Ave.
New York, NY 10022
Phone: 212-415-0509
Fax: 212-415-0513
2. Rosti (Dallas), Inc.
Attn: Jerre Ross
2109 Vanco Drive
Irving, TX 75061
Phone: 972-554-1597
Fax: 972-554-6937
3. Tredegar Film Products Corporation
Attn: Randal M. Reaves
1100 Boulders Parkway
Richmond, VA 23225
Phone: 804-330-1430
Fax: 804-330-1010
4. Englander Container and Display
Attn: Martin Englander
P.O. Box 22067
Waco, TX 76702
Phone: 254-776-2300
Fax: 254-741-0740
5. Freudenberg Spunweb Co.
Attn: William A. Casey
3500 Industrial Drive
Durham, NC 27704
Phone: 919-479-7256
Fax: 413-235-2571
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.
Easy Gardener Products, Ltd. -- http://www.easygardener.com/--
manufactures and markets a broad range of consumer lawn and garden
products, including weed preventative landscape fabrics,
fertilizer spikes, decorative landscape edging, shade cloth and
root feeders, which are sold under various recognized brand names
including Easy Gardener, Weedblock, Jobe's, Emerald Edge, and
Ross. The Company and four of its affiliates filed for bankruptcy
on April 19, 2006 (Bankr. D. Del. Case Nos. 06-10393 to 06-10397).
James E. O'Neill, Esq., Laura Davis Jones, Esq., and Sandra G.M.
Selzer, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub LLP
represent the Debtors in their restructuring efforts. When the
Debtors filed for bankruptcy, they reported assets amounting to
$103,454,000 and debts totaling $107,516,000.
EASYLINK SERVICES: Outlines 2006 Executive Compensation Plan
------------------------------------------------------------
The Compensation Committee of the Board of Directors of Easylink
Services Corporation adopted a 2006 Executive Incentive Plan for
the Company on April 25, 2006.
The Company's 2006 executive incentive compensation is based on
achieving specified revenue and EBITDA objectives. Officers and
key management employees are eligible to participate upon the
recommendation of the Chief Executive Officer and the approval of
the Compensation Committee of the Board of Directors.
Under the plan, a target award based on percentage of base salary
has been established for each participant, which varies from 10%
to 75% of base salary for the participant. The total pool for all
executives at target is approximately $1.4 million for 2006. The
participant may receive a bonus from 0% to 200% of the target
award based upon the actual level of under-achievement or over-
achievement of the revenue and EBITDA performance objectives.
Bonus payments under the plan will be paid first using shares of
the Company's Class A common stock available under the Company's
2005 Stock and Incentive Plan. The bonus pool will be funded with
up to 800,000 shares from the 2005 Stock and Incentive Plan. If
the value of the shares as determined in accordance with the plan
is not adequate to satisfy the bonus in full, then cash may be
used to make up the remaining portion of the bonus payment to the
extent that EBITDA does not fall below a specified amount as a
result of the payment in cash of the remaining portion. Any
remaining balance will be forfeited.
All bonus payments will be paid net of applicable withholding
taxes which will be withheld first from the cash portion of the
bonus and second from the stock portion of the bonus. The value
of the shares issued in payment of the bonus (including the amount
of any cash used to pay withholding taxes in respect of a bonus
paid in stock) is not treated as an expense item in the EBITDA
calculation for this purpose.
The Compensation Committee retains full authority to approve final
amounts, which may be higher or lower than plan results.
A full-text copy of the Company's 2006 Executive Incentive
Compensation Plan is available for free at:
http://researcharchives.com/t/s?982
Headquartered in Piscataway, New Jersey, Easylink Services
Corporation -- http://www.EasyLink.com/-- provides outsourced
business process automation services to medium and large
enterprises, including 60 of the Fortune 100, to improve
productivity and competitiveness by transforming manual and paper-
based business processes into efficient electronic business
processes.
* * *
As reported in the Troubled Company Reporter on May 16, 2006,
Grant Thornton LLP expressed substantial doubt about Easylink
Services Corporation's ability to continue as a going concern
after it audited the Company's financial statement for the year
ended Dec. 31, 2005. The accounting firm pointed to the Company's
history of operating losses as well as its $542.0 million
accumulated deficit and $9.5 million working capital deficit at
Dec. 31, 2005.
EMPIRE DISTRICT: S&P Lowers Senior Unsecured Debt Rating to BB+
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term corporate
credit rating on The Empire District Electric Co., an integrated
electric utility, to 'BBB-' from 'BBB'.
Also, senior secured debt ratings were lowered to 'BBB+' from
'A-', and senior unsecured debt ratings were lowered to 'BB+' from
'BBB-'. The short-term rating of 'A-3' was affirmed.
The outlook is stable.
Joplin, Missouri-based Empire had $456 million in debt and trust-
preferred securities as of March 31, 2006.
"The downgrade reflects our view that Empire's financial measures
will be constrained over the next several years by fuel and power
costs that continue to exceed the level recoverable in rates, and
by Empire's higher-than-historical level of capital spending,
including the acquisition of a Missouri gas utility," said
Standard & Poor's credit analyst Gerrit Jepsen.
The outlook is stable and incorporates the expectation of steady
financial performance through Empire's construction program and
successful integration of the gas utility. In addition, Standard
& Poor's expects that Empire will finance its capital needs in a
manner that is consistent with the current rating.
The outlook could be revised to negative as a result of
unfavorable regulatory actions or if the financial measures weaken
from increased capital spending or higher-than-expected use of
leverage over the next several years.
The outlook could be revised to positive:
* if rate recovery is supportive during the construction
program;
* if a reasonable energy cost recovery mechanism is adopted;
and
* if financial measures begin to show sustainable improvement.
ENRON CORP: Inks Pact Resolving Linden's Multi-Million Claim
------------------------------------------------------------
On Aug. 10, 2005, Linden #2 LLC filed Claim No. 25380 for
$13,352,718 against Enron Corp., and Claim No. 25381 for
$13,352,718 against Enron North America Corp. for damages arising
from the rejection of:
(1) the Enfolio(C) Master Firm Sales Agreement, dated as of
October 1, 1996;
(2) a Transaction Agreement, between SB Linden LLC and Enron
Capital & Trade Resources Corp., now known as ENA; and
(3) a Guaranty Agreement, dated October 1, 1996, executed by
Enron in favor of SB Linden.
Linden was the successor to certain of SB Linden's assets,
including the proofs of claim filed by SB Linden against Enron
and ENA relating to the MFSA.
On September 19, 2005, Linden filed six proofs of claim against
the Debtors each for $16,275,263. The six claims are:
Claim No. Debtor
-------- ------
25388 ENA
25391 Enron Energy Services Operations, Inc.
25392 Enron Energy Services, Inc.
25393 Enron Energy Services LLC
25394 Enron
25395 Enron
On February 27, 2006, certain assets of Linden, including the
Linden Claims, were transferred to Linden Hold Co., LLC.
Following negotiations, the Reorganized Debtors and Linden HoldCo
entered into a stipulation to resolve the Claims.
The parties agree that:
(1) Claim Nos. 25380 and 25381 will be disallowed and expunged
in their entirety;
(2) Claim No. 25388 will be allowed as a class 5 general
unsecured claim for $1,467,542;
(3) Claim No. 25391 will allowed as a class 10 general
unsecured claim for $1,027,279;
(4) Claim No. 25392 will be allowed as a class 12 general
unsecured claim for $1,467,542;
(5) Claim No. 25393 will be allowed as a class 13 general
unsecured claim for $1,027,279;
(6) Claim No. 25394 will be allowed as a class 4 general
unsecured claim for $1,027,279;
(7) Claim No. 25395 will be allowed as a class 185 general
unsecured claim for $1,467,542;
(8) the Allowed ENA Claim, Allowed EESO Claim, Allowed EESI
Claim, Allowed EES LLC Claim and the Allowed Enron
Unsecured Claim will be treated as joint liability claims
under the Plan, and Linden HoldCo's pro rata share of
distributive assets and distributive interests with respect
to the claims will include the amounts calculated pursuant
to the Plan; and
(9) Linden HoldCo will satisfy the postpetition receivable that
SB Linden LLC owes to EESI in connection with its sale of
gas to SB Linden by paying $325,771 to the Reorganized
Debtors.
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)
ENRON CORP: Settles PPL EnergyPlus's Three Claims
--------------------------------------------------
Enron Power Marketing, Inc., and PPL EnergyPlus, LLC, were parties
to one or more contracts for the sale of power before Enron
Corporation and its debtor-affiliates filed for bankruptcy. Enron
North America Corp. and PPL EnergyPlus were parties to:
(i) an SO2 Emission Allowance Put Option Purchase and Sale
Transaction; and
(ii) an ISDA Master Agreement and a number of related
transactions.
On November 6, 2001, Enron Corp. issued a guaranty in favor of
PPL EnergyPlus, effective as of October 29, 2001, whereby Enron
guaranteed certain obligations of EPMI and ENA up to the amount
of $50,000,000.
On October 15, 2002, PPL EnergyPlus filed proofs of claim against
Enron based on its alleged obligations under the Guaranty:
Claims No. Asserted Amount
---------- ---------------
12773 $51,869
12774 12,551,702
12775 8,672,646
On November 25, 2003, Enron filed Adversary Proceeding No.
03-93418 seeking, inter alia, to avoid the Guaranty.
The parties engaged in negotiations.
Accordingly, the Reorganized Debtors sought and obtained the
Court's approval of a settlement agreement with PPL EnergyPlus.
The terms of the Settlement are:
(i) Claim Nos. 12774 and 12775 will be reduced and allowed as
Class 185 prepetition, general unsecured claims against
Enron for undisclosed amounts;
(ii) Claim No. 12773 will be disallowed and expunged in its
entirety; and
(iii) the Avoidance Action will be dismissed, with prejudice and
without costs to any party.
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. 170; Bankruptcy Creditors'
Service, Inc., 15/945-7000)
ENRON CORP: Stephen Forbes Agree to 50% Success Fee Reduction
-------------------------------------------------------------
The U.S. Trustee for Region 2, reviewed Stephen Forbes Cooper,
LLC's payment request in the chapter 11 cases of Enron Corporation
and its debtor-affiliates. The U.S. Trustee investigated and,
subsequently, identified unacceptable billing practices and
billing irregularities, which were not disclosed to the Court.
However, Stephen Forbes denies any billing irregularities and
maintains that its billing practices were:
-- proper and not irregular;
-- in accordance with the terms and provisions of the
Court-approved Employment Agreement with the Debtors and
applicable law; and
-- adequately disclosed to the Debtors, the Court, the
Official Committee of Unsecured Creditors, the U.S. Trustee
and other interested parties.
Based on their contradictory positions, the U.S. Trustee and
Stephen Forbes entered into discussions and have reached a
resolution of the disputes between them.
In a stipulation Judge Gonzalez approved, the parties agree that
Stephen Forbes will amend its request to reduce the amount of its
success fee to $12,500,000. The U.S. Trustee will not object to
the payment of a success fee to Stephen Forbes in the reduced
amount.
The Stipulation will be a full and final settlement and
resolution of all the issues raised by the U.S. Trustee. The
U.S. Trustee will cease all proceedings and investigation of
Stephen Forbes, its affiliates and officers relating to the
success fee payment request.
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. 169; Bankruptcy Creditors'
Service, Inc., 15/945-7000)
FALCON AIR: Hires Berger Singerman as Bankruptcy Counsel
--------------------------------------------------------
Falcon Air Express, Inc., and MAJEL Aircraft Leasing Corp.,
obtained authority from the U.S. Bankruptcy Court for the Southern
District of Florida to employ Berger Singerman, P.A., as their
bankruptcy counsel, nunc pro tunc to May 8, 2006.
Berger Singerman is expected to:
a. give advice to the Debtors with respect to their powers and
duties as debtors-in-possession and the continued
management of their business operations;
b. advise the Debtors with respect to their responsibilities
in complying with the U.S. Trustee's Operating Guidelines
and Reporting Requirements and with the rules of the Court;
c. prepare motions, pleading, orders, applications, adversary
proceedings, and other legal documents necessary in the
administration of the Debtors cases;
d. protect the interests of the Debtors in all matters pending
before the Court; and
e. represent the Debtors in negotiations with their creditors
and in the preparation of a plan.
Brian G. Rich, Esq., a shareholder at Berger Singerman, tells the
Court that he will bill $345 per hour for this engagement. Paul
Steven Singerman, Esq., another shareholder, will also be involved
in the Debtors' chapter 11 cases and bills $450 per hour. Mr.
Rich discloses that the firm's other professionals bill:
Professional Hourly Rate
------------ -----------
Attorneys $220 - $450
Associate Attorneys $220 - $325
Legal Assistants & Paralegals $65 - $145
Mr. Rich assures the Court that his firm is "disinterested" as
that term is defined in Section 101(14) of the Bankruptcy Code.
Headquartered in Miami, Florida, Falcon Air Express, Inc. --
http://www.falconairexpress.net/-- is a small and low-cost
airline company that provides charter service and renders foreign
and U.S. carriers sub-services on schedules routes. The Debtor
and its affiliate, MAJEL Aircraft Leasing Corp., filed for chapter
11 protection on May 10, 2006 (Bankr. S.D. Fla. Case Nos. 06-11877
& 06-11878). Brian G. Rich, Esq., at Berger Singerman, P.A.,
represents the Debtors in their restructuring efforts. When the
Debtors filed for protection from their creditors, they estimated
assets and debts between $10 million and $50 million.
FALCON AIR: Has Until June 15 to File Schedules
-----------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida
gave Falcon Air Express, Inc., and MAJEL Aircraft Leasing Corp.,
until June 15, 2006, to file their Schedules and Statements of
Financial Affairs.
The Debtors tells the Court that they have assembled the majority
of the information necessary to file the schedules and statements
of financial affairs, however, gathering the information was
laborious and took longer than expected, particularly in view of
the immediate efforts being undertaken to stabilize the Debtors'
operations.
The Debtors assure the Court that the extension will not prejudice
the rights of any creditors or parties in interest.
Headquartered in Miami, Florida, Falcon Air Express, Inc. --
http://www.falconairexpress.net/-- is a small and low-cost
airline company that provides charter service and renders foreign
and U.S. carriers sub-services on schedules routes. The Debtor
and its affiliate, MAJEL Aircraft Leasing Corp., filed for chapter
11 protection on May 10, 2006 (Bankr. S.D. Fla. Case Nos. 06-11877
& 06-11878). Brian G. Rich, Esq., at Berger Singerman, P.A.,
represents the Debtors in their restructuring efforts. When the
Debtors filed for protection from their creditors, they estimated
assets and debts between $10 million and $50 million.
FBO AIR: Recurring Losses Cues Going Concern Doubt
--------------------------------------------------
Marcum & Kliegman LLP in New York raised substantial doubt about
FBO Air, 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 operating losses since inception.
The Company reported a $1,914,297 net loss on $13,805,562 of
revenues for the year ended Dec. 31, 2005.
At Dec. 31, 2005, the Company's balance sheet showed $11,894,486
in total assets, $8,581,066 in total liabilities, $949,681 in
Convertible Preferred Stock and $2,363,739 in stockholders'
equity.
The Company's Dec. 31 balance sheet also showed strained liquidity
with $899,821 in total current assets available to pay $1,407,050
in total current liabilities coming due within the next 12 months.
A full-text copy of the Company's 2005 Annual Report is available
for free at http://ResearchArchives.com/t/s?97d
FBO Air, Inc. (OTCBB: FBOR) is an aviation services company with
operations in the aircraft charter management and fixed base
operations segments of the general aviation industry. The Company
has two segments -- FirstFlight segment, which provides on-call
passenger and cargo air transportation, and Tech Aviation, which
provides services like fueling, hangaring, maintenance and repair
to private/general aviation aircraft operators.
FIRSTLINE CORP: Court Okays Mesirow Financial as Investment Banker
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Georgia gave
Firstline Corporation permission to employ Mesirow Financial, Inc.
as its investment banker.
Mesirow Financial is expected to:
a) assist in analyzing and evaluating the business,
operations and financial position of the Debtor;
b) prepare and negotiate any confidentiality agreements to be
entered into with potential purchasers (the terms of which
are subject to the prior approval of the Debtor);
c) assist in preparing an offering memorandum for
distribution and presentation to potential purchasers;
d) assist in the preparation and implementation of a
marketing plan;
e) assist in the screening of interested prospective
purchasers;
f) identify and contact selected prospective purchasers on
the Debtor's behalf;
g) assist in coordinating the data room and with potential
purchasers' due diligence investigations;
h) assist in evaluating proposals which are received from
potential purchasers;
i) assist in structuring and negotiating the Sale; and
j) be available at the Debtor's request to meet with its
Board of Directors to discuss the proposed Sale and its
financial implications.
Ward Stone, Jr., Esq., at Stone & Baxter, LLP, discloses that the
Debtor will pay Mesirow Financial a non-refundable retainer of
$50,000 and a monthly fee of $25,000.
Mr. Stone assures the Court that his firm does not hold any
interest materially adverse to the Debtor and is "disinterested"
within the meaning of Section 101(14) of the Bankruptcy Code.
Headquartered in Valdosta, Georgia, FirstLine Corporation --
http://www.firstlinecorp.com/-- supplies home-building and
construction materials. The company filed for chapter 11
protection on Mar. 6, 2006 (Bankr. M.D. Ga. Case No. 06-70145).
Ward Stone, Jr., Esq., at Stone & Baxter, LLP, represents the
Debtor in its restructuring efforts. Todd C. Meyers, Esq., at
Kilpatrick Stockton LLP represent the Official Committee of
Unsecured Creditors. As of Jan. 31, 2006, the Debtor reported
assets totaling $37,061,890 and debts totaling $26,481,670.
FIRSTLINE CORP: Hires Hays Financial as Committee Fin'l Advisor
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Georgia gave
the Official Committee of Unsecured Creditors of Firstline
Corporation authority to employ Hays Financial Consulting, LLC, as
its financial advisor.
Hays Financial will:
a) assist the Committee in assessing the Debtor's current
financial needs and review the Debtor's financial and
operating budgets;
b) assist the Committee with respect to the anticipated sale of
the Debtor's business, including, but not limited to:
* review and comment on an offering memorandum for
distribution and presentation to potential purchasers,
* assist the Committee in its assessment of the marketing
plan for the Debtor's business
* assist the Committee in the screening and identifying of
prospective purchasers of the Debtor
* assist the Committee in evaluating proposals received
from potential purchasers of the Debtor's business, and
* review the structure of any proposed sale of the Debtor's
business;
c) attend meetings of the Committee and meetings with the
Debtor, its attorneys, and other professionals, as
requested;
d) attend and provide testimony at hearings before the Court;
and
e) provide other assistance as the Committee and its counsel
may deem necessary and appropriate.
S. Gregory Hays, Managing Principal at Hays Financial, discloses
that he and a J. Wesley Pennington bill at $295 per hour. Mr.
Hays further discloses that the Firm's other professionals bill
between $90 and $225 per hour.
Mr. Hays assures the Court that the Firm is a "disinterested
person" as defined in Section 101(14) of the U.S. Bankruptcy
Court.
About FirstLine Corporation
Headquartered in Valdosta, Georgia, FirstLine Corporation --
http://www.firstlinecorp.com/-- supplies home-building and
construction materials. The company filed for chapter 11
protection on Mar. 6, 2006 (Bankr. M.D. Ga. Case No. 06-70145).
Ward Stone, Jr., Esq., at Stone & Baxter, LLP, represents the
Debtor in its restructuring efforts. Glassratner Advisory &
Capital Group LLC serves as the Debtor's financial advisor.
Michael D. Langford, Esq., at Kilpatrick Stockton LLP, represents
the Company's Official Committee of Unsecured Creditors. As of
Jan. 31, 2006, the Debtor reported assets totaling $37,061,890 and
debts totaling $26,481,670.
FOAMEX INTERNATIONAL: Sigma Capital Discloses 9.4% Stake
--------------------------------------------------------
In a regulatory filing with the Securities and Exchange
Commission dated May 1, 2006, Sigma Capital Management LLC, Sigma
Capital Associates, LLC, and Steven A. Cohen disclose that they
are deemed to beneficially own 2,300,000 shares of Foamex
International, Inc.'s common stock.
Pursuant to an investment agreement, Sigma Management has
investment and voting power with respect to the securities held by
Sigma Associates. On the other hand, Mr. Cohen controls Sigma
Management. Thus, Sigma Management and Mr. Cohen may be deemed to
be beneficial owners of Sigma Associates' shares.
Sigma Management, Sigma Associates and Mr. Cohen's stake
represents 9.4% of the 24,509,728 shares of Foamex International's
common stock issued and outstanding as of Jan. 1, 2006.
As of April 2006, Sigma Capital Associates has purchased these
shares of common stock:
Transaction Date No. of Shares Bought
---------------- --------------------
04/13/2006 350,000
04/17/2006 400,000
04/18/2006 50,000
04/19/2006 700,000
04/20/2006 100,000
04/21/2006 419,000
04/24/2006 281,000
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)
GARY GILILEO: Case Summary & 13 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Gary L. Gilileo
Cheryl A. Gilileo
P.O. Box 90549
Lakeland, Florida 33804
Bankruptcy Case No.: 06-02395
Type of Business: The Debtors filed for chapter 11 protection
on May 10, 2005 (Bankr. M.D. Florida, Case No.
05-09443).
Chapter 11 Petition Date: May 18, 2006
Court: Middle District of Florida (Tampa)
Debtors' Counsel: Buddy D. Ford, Esq.
Buddy D. Ford, P.A.
115 North MacDill Avenue
Tampa, Florida 33609
Tel: (813) 877-4669
Fax: (813) 877-5543
Total Assets: $695,145
Total Debts: $1,083,610
Debtors' 13 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Internal Revenue Service 1040 Taxes $534,316
Special Procedures Staff
400 West Bay Street, Stop 5720
Jacksonville, FL 32202
Suncoast Roofers Supply Purchases $95,000
3730 Ethel Avenue
Auburndale, FL 33823
Countrywide Real Estate $30,829
450 American Street
Simi Valley, CA 93065
Preferred Collection Collection $20,293
Bank of the West Vehicle $9,978
GMAC Vehicle Interest $9,123
Sunniland Corp. Purchases $6,000
Gulfeagle Supply Purchases $5,500
Westlake Manufacturing Purchases $2,500
Oxford Lumber Purchases $1,500
Citibank Credit Card $799
Maf Collection Service Collection $480
Action Card/Bank First Credit Card $8
GATEHOUSE MEDIA: S&P Puts B+ Rating on Planned $152 Million Loan
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' bank loan
ratings, with recovery ratings of '1', to GateHouse Media
Operating Inc.'s (formerly named Liberty Group Operating Inc.)
planned $610 million first-lien senior secured credit facilities,
indicating expectations for full recovery of principal in the
event of a payment default. The facilities consist of:
* a $40 million seven-year revolving credit facility; and
* a $570 million seven and a half-year term loan.
At the same time, a 'B+' bank loan rating, with a recovery rating
of '2', was assigned the company's planned $152 million eight-
year, second-lien senior secured term loan, indicating
expectations for a substantial recovery (80%-100%) of principal in
the event of a payment default.
Proceeds from the credit facilities will be used to fund the
acquisition of CP Media Inc. and Enterprise NewsMedia Holding LLC,
and to refinance GateHouse Media Operating's outstanding debt.
In addition, Standard & Poor's affirmed its ratings on the
newspaper publisher, including the 'B+' corporate credit rating.
The outlook is negative.
GENELABS TECH: Posts $3.3 Mil. Net Loss in 2006 First Fiscal Qtr.
-----------------------------------------------------------------
Genelabs Technologies, Inc., filed its first quarter financial
statements for the three months ended March 31, 2006, with the
Securities and Exchange Commission on May 15, 2006.
The Company reported a $3,390,000 net loss on $1,705,000 of total
revenues for the three months ended March 31, 2006.
At March 31, 2006, the Company's balance sheet showed $9,827,000
in total assets and $10,610,000 in total liabilities, resulting in
a $783,000 stockholders' deficit.
Full-text copies of the Company's first quarter financial
statements for the three months ended March 31, 2006, are
available for free at http://ResearchArchives.com/t/s?97f
Going Concern Doubt
As reported in the Troubled Company Reporter on May 1, 2006, Ernst
& young LLP expressed substantial doubt about Genelabs
Technologies, 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 points to the company's
recurring losses from operations, accumulated deficit and
availability of funds for use in operations.
Headquartered in Redwood City, California, Genelabs Technologies,
INc. -- http://www.genelabs.com/-- discovers and develops
pharmaceutical products to improve human health. The company has
built drug discovery capabilities that can support various
research and development projects. Genelabs is currently
concentrating these capabilities on discovering novel compounds
that selectively inhibit replication of the hepatitis C virus and
advancing preclinical development of compounds from this hepatitis
C virus drug discovery program, while also developing a late-stage
product for lupus.
HANDMAKER JEWISH: Gets Okay to Hire Integra Realty as Appraiser
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Arizona approved the
request of Handmaker Jewish Services for the Aging to employ
Charles A. Bissell, MAI, CRE, at Integra Realty Resources as its
appraiser.
Integra Realty will:
a) perform an update to the appraisal prepared for the Debtor
prior to its bankruptcy filing; and
b) serve as an expert witness at the evidentiary hearing on
valuation.
The Firm charges the Debtor $200 per hour for Mr. Bissell's work.
To the best of the Debtor's knowledge, the Firm represents no
interest materially adverse to the Debtor or its estate.
Headquartered in Tucson, Arizona, Handmaker Jewish Services for
the Aging owns and operates a multiple residence-retirement
community complex facility. The Company filed for chapter 11
protection on Sept. 30, 2005 (Bankr. D. Ariz. Case No. 05-05924).
Michael W. McGrath, Esq., at Mesch Clark & Rothschild, represents
the Debtor in its restructuring efforts. When the Debtor filed
for protection from its creditors, it listed $10,384,351 in assets
and $21,625,125 in debts.
HEARTLAND PARTNERS: BDO Seidman Raises Going Concern Doubt
----------------------------------------------------------
BDO Seidman, LLP, expressed doubt about Heartland Partners, LP's
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 at Dec. 31, 2005.
For the fiscal year ended Dec. 31, 2005, the Company incurred a
4.7 million net loss on $5.5 million of net revenues compared to a
$4.4 million net loss on 4 million of net revenues in 2004.
The Company posted a net loss for the quarter ended December 31,
2005 of $3,602,000 and a net loss of $4,712,000 for the year.
After allocations to the Class B Unit pursuant to the terms of the
Company's partnership agreement there was a net loss of $141,000.
In comparison, operations for the quarter ended Dec. 31, 2004,
resulted in net loss of $4,906,000 and there was a net loss of
$4,355,000 for the year. The 2004 loss was allocated entirely to
the Class B Unit pursuant to the terms of the Company's
partnership agreement.
Heartland had higher sales and lower selling, G&A and
environmental expenses in 2005 compared to 2004. This was offset
by high carrying costs for certain of the properties sold, terms
of a settlement with Heartland Technology, and lower rental
income.
Headquartered in Chicago, Illinois, Heartland Partners, LP,
(Amex: HTL) is a based real estate limited partnership with
properties, primarily in the upper Midwest and northern United
States. CMC Heartland is a subsidiary of Heartland Partners, L.P.
and is the successor to the Milwaukee Road Railroad, founded in
1847. The company and four of its affiliates filed for chapter 11
protection on Apr. 28, 2006 (Bankr. N.D. Ill. Case No. 06-04764).
Steven B. Towbin, Esq., at Shaw Gussis Fishman Glantz Wolfson &
Towbin LLC, represents the Debtor. No Official Committee of
Unsecured Creditors has been appointed in the Debtors' chapter 11
cases. When the Debtors filed for protection from their
creditors, they listed total assets of $4,375,000 and total debts
of $3,951,000. The Debtors' consolidated list of 20 largest
unsecured creditors however showed more than $30 million in
environmental litigation claims.
HOUGHTON MIFFLIN: Fitch Assigns CCC- Rating to $300 Million Notes
-----------------------------------------------------------------
Fitch Ratings affirmed Houghton Mifflin's Issuer Default Rating at
'B-' and at the same time assigned a 'CCC-' rating to Houghton
Mifflin LLC and Houghton Mifflin Finance Inc.'s $300 million
senior unsecured PIK notes.
Fitch also upgraded Houghton Mifflin Company's senior unsecured
notes due 2011 to 'B+' from 'B-' and affirmed the other security
ratings. The notching of the newly rated debt reflects Fitch's
analysis of the minimal recovery prospects for this debt under a
distressed scenario. The Rating Outlook is Stable.
Houghton Mifflin LLC and Houghton Mifflin Finance, Inc.:
-- Issuer Default Rating rated 'B-'
-- Senior PIK notes due 2011 rated 'CCC-/RR6'
Houghton Mifflin Company:
-- Issuer Default Rating at 'B-'
-- Bank Credit Facility at 'BB-/RR1'
-- Senior secured notes due 2011 at 'BB-/RR1'
-- Senior unsecured notes due 2011 to 'B+/RR2' from 'B-/RR4'
-- Senior subordinate notes due 2013 at 'CCC/RR6'
HM Publishing Corp.:
-- Issuer Default Rating at 'B-'
-- Senior discount notes due 2013 at 'CCC-/RR6'
The rating and rating actions incorporate:
* Houghton Mifflin Company's increased debt load;
* weak credit metrics; and
* the risk that further capital extraction by the equity
sponsors could continue to pressure the company's financial
flexibility and bondholder protection measures.
The ratings continue to incorporate:
* the company's modest cash flow coverage;
* significant working capital swings; and
* heavy investment in advance of potential sales and cash flow.
In addition, mounting capital constraints may negatively affect
the company's capacity to compete with higher rated competitors
with greater financial resources. These concerns are balanced
somewhat by the predictable nature of education expenditures,
solid industry fundamentals -- which are expected to underlie low
single digit growth for the next several years -- and the
educational publishing industry structure characterized by
meaningful barriers to entry within the company's elementary
through high school (El-Hi) markets.
In addition, Fitch believes the company's equity sponsors have a
material financial incentive to help the company avoid financial
distress.
In the first quarter of 2006, the company experienced modest
revenue growth of 1.5%. For the full year 2005, the company's
operations benefited from a rebound in adoption spending following
a difficult 2004. Spending is projected to remain healthy through
2010 and should provide the opportunity for modest top line
growth.
The company's El-Hi segment (87.3% of EBITDA) experienced 8.9%
revenue growth while margins expanded over 200 basis points.
Solid adoptions of reading, social studies and math programs
bolstered performance in elementary education while social studies
and science program adoptions supported secondary education
spending.
Its College Publishing segment (15.8% of EBITDA) grew 3.4% with
margins expanding approximately 200 basis points on strong sales
of college textbooks and reference materials.
The smallest unit, the Trade and Reference Publishing division (1%
of EBITDA) had a 13.6% reduction in the top-line and experienced
contracting margins of over 500 basis points due to lower sales
tied to movie releases.
Fitch believes that adjusted operating EBITDA margins around 13.6%
(including pre-publication expenditures) could continue to expand
as revenues improve and the company keeps its focus on tight cost
controls. However, cashflow will be constrained as working
capital drains and capital expenditures negatively affect free
cashflow conversion of operating EBITDA at around 17%.
Adjusted financial metrics (calculated by deducting pre-
publication expenditures from EBITDA) have improved slightly as
operating EBITDA has increased due to modest top line growth and
tight cost controls. Debt increased modestly from 2003 through
Mar. 31, 2006, with the most meaningful increase being the new
$300 million new PIK issue. Pro forma debt to EBITDA is high for
the rating at 9.4x. The company is within its covenant ranges,
but Fitch is concerned that EBITDA less pre-publication
expenditures less capital expenditures to interest expense is
below 1x. Fitch recognizes that capital expenditures are
discretionary to an extent and could provide some flexibility in
severe distress scenario. Also, the PIK nature of the new debt
does not negatively affect the company's capacity to cover
interest costs.
At Mar. 31, 2006, internal liquidity in the form of $95.5 million
in cash and marketable securities was supplemented by $225.3
million in credit facility availability. Financial flexibility is
further supported by the tenor of the company's debt obligations,
with no debt maturing over the next four years.
The recovery ratings and notching reflect Fitch's recovery
expectations under a distress scenario. Fitch applied an
enterprise value analysis for these recovery ratings due to the
company's limited tangible asset base and the negligible recovery
prospects under the liquidation scenario. A more modest stress of
25% to adjusted EBITDA for the company was used given Fitch's
prior adjustments and the required stress necessary to trigger an
event of default under the company's interest coverage and total
leverage covenant.
In addition, the general stability of the educational publishing
business was considered, as there have only been a few instances
of companies in this industry experiencing significant distress.
The 'RR1' recovery rating for the company's bank facility and
senior secured notes reflects Fitch's belief that greater than 90%
recovery is realistic given their priority position. The 'RR2'
recovery rating for the senior unsecured Houghton Mifflin Company
debt reflects Fitch's estimate that 71-90% recovery is reasonable.
There were two key drivers behind this rating upgrade:
* the company downsized its revolver in late 2005, which makes
$75 million in additional enterprise value available for the
senior unsecured tranche; and
* even with a more severe EBITDA discount (25% compared to 20%
previously), increases in EBITDA resulted in approximately
$140 million in additional adjusted distressed enterprise
value available for creditors in distress.
The 'RR6' recovery rating for the Houghton Mifflin Company
subordinated notes, HM Publishing senior discount dotes and the
newly issued Houghton Mifflin LLC/Houghton Mifflin Finance Inc.
PIK notes reflects Fitch's estimate that negligible recovery would
be achievable due to their deep subordination to other securities
in the capital structure.
ILLINOIS POWER: Fitch Affirms BB+ Preferred Stock Rating
--------------------------------------------------------
Fitch affirms the ratings of Ameren Corp. and its subsidiaries:
* Union Electric Company (AmerenUE),
* Ameren Energy Generating (AmerenGen),
* Central Illinois Public Service Company (AmerenCIPS),
* CILCORP Inc.,
* Central Illinois Light Company (AmerenCIL), and
* Illinois Power Company (AmerenIP).
The Ratings Outlook for AmerenCIPS is revised to Negative from
Stable. The Ratings Outlook for the other companies is Stable.
The ratings of Ameren Corp. take into consideration the strong
earnings and cash flow from its regulated utilities and moderate
leverage. Ameren also benefits from its cost effective
centralized fuel procurement practices and management of
generation assets. Concerns exist relating to uncertainty of
the regulatory treatment of Ameren's three Illinois utility
subsidiaries.
Additionally, at this time the company's Missouri subsidiary,
AmerenUE, which accounts for roughly one-half of the company's
EBITDA, will be going through a financial review during the second
quarter of 2006 and expects to file a rate case by July 2006.
Fitch cannot predict the outcome of these proceeding, but notes
that the regulatory climate in Missouri has improved since the
company's most recent rate case settlement in 2002, which
decreased rates by $110 million and froze rates through June 30,
2006.
Ameren's wholesale generation operations, primarily at AmerenGen
and a subsidiary of AmerenCIL, are subject to commodity price
risk. However, the credit profiles of both companies are
appropriate for the ratings categories and cash from wholesale
energy sales are expected to improve as both entities have sizable
contracts expiring at the end of 2006 with prices 30% - 40% below
current market levels.
AmerenCIPS's Rating Outlook revision to Negative from Stable is
based upon the possibility of a less than favorable outcome from a
pending distribution rate case, compounded by continued
uncertainty relating to the treatment of future purchased power
costs. Given these risks, and as AmerenCIPS Debt-to-EBITDA was
3.5x at March 31, 2006, which is moderately high for the rating
category, a reduction in earnings or cash flow could put pressure
on ratings.
Since AmerenIP and AmerenCIL's financial profiles are strong for
their respective rating categories, less than favorable
distribution rate orders or moderate levels of energy cost
deferral and disallowance may not necessarily result in negative
rating actions.
In December 2005, AmerenCIPS, AmerenCIL and AmerenIP filed for
increases in distribution rates equivalent to 2%, 11.7% and 12.7%
of their respective bundled rates.
On April 27, 2006 the Illinois Commerce Commission staff
recommended rate increases less than one-half of the AmerenIP and
AmerenCIL requests as well as an $8 million rate decrease for
AmerenCIPS.
Additionally, Ameren's Illinois utility companies are currently
supplying the power for their standard offer customers under
contracts that will terminate at the end of this year. In
accordance with Illinois legislation, which mandates open access
effective in 2000, rates for native load customers are frozen
through 2006 in order to encourage competition. The generation
portion of the companies' standard offer rates is to be set
through an auction process and passed entirely through to
customers in rates beginning January 1, 2007.
The Illinois Governor, the Attorney General and the Citizens
Utility Board have contested the implementation of the auction as
they contend there isn't a competitive market in Illinois. Ameren
indicated that going to a full pass through of generation costs at
market prices would cause rates to increase up to 35% for some
customers.
The Illinois Commerce Commission affirmed the auction process in
January 2006. The AG and CUB have since appealed the ICC's
decision to state court. Ameren has indicated a willingness to
structure a phase-in of increased generation costs with the
deferral and eventual recovery of these costs in subsequent years.
While the outcome of these proceeding is uncertain and purchase
power costs disallowances for all three companies are possible,
Fitch anticipates that the parties will agree to a phased-in
approach with manageable deferral levels and the appropriate
subsequent recovery of costs.
Ameren Corp:
-- Issuer Default Rating 'A-'
-- Senior unsecured 'A-'
-- Short-term IDR 'F2'
-- Commercial Paper 'F2'
The Rating Outlook is Stable.
AmerenCIPS:
-- IDR 'BBB+'
-- Senior secured 'A'
-- Senior unsecured 'A-'
-- Preferred Stock 'BBB+'
-- Short-term IDR 'F2'
The Rating Outlook is revised to Negative from Stable.
AmerenCIL:
-- IDR 'BBB+'
-- Senior secured 'A'
-- Senior unsecured 'A-'
-- Preferred Stock 'BBB+'
-- Short-term IDR 'F2
The Rating Outlook is Stable
CILCORP:
-- IDR 'BBB+'
-- Senior unsecured 'BBB+'
The Rating Outlook is Stable
AmerenIP:
-- IDR 'BB+'
-- Senior secured 'BBB'
-- Senior unsecured 'BBB-'
-- Preferred Stock 'BB+'
The Rating Outlook is Stable.
AmerenUE:
-- IDR 'A-'
-- Senior secured 'A+'
-- Senior unsecured 'A'
-- Subordinate Debt 'A-'
-- Preferred Stock 'A-'
-- Short-term IDR 'F1'
-- CP 'F1'
The Rating Outlook is Stable.
AmerenGen:
-- IDR 'BBB+'
-- Senior unsecured 'BBB+'
The Rating Outlook is Stable.
INEX PHARMA: Court of Appeals Confirms Tekmira Spinout
------------------------------------------------------
On May 18, 2006, the British Columbia Court of Appeal unanimously
ruled in favor of Inex Pharmaceuticals Corporation.
The Court of Appeal hearing included Inex's appeal of the Supreme
Court of British Columbia's ruling that provided the holders of
Inex's outstanding convertible promissory notes the right to vote
on Inex's Plan of Arrangement to spin out its Targeted
Immunotherapy assets into a new company, Tekmira Pharmaceuticals
Corporation.
The Court of Appeal also heard an appeal from Stark Trading and
Shepherd Investments Ltd. As reported in the Troubled Company
Reporter on March 20, 2006, Stark appealed the Supreme Court of
British Columbia's decision to dismiss a bankruptcy petition and
the ruling that the spinout of Tekmira can take place given the
terms of the convertible debt.
The Appeal Court denied Stark's appeals and granted Inex's appeal.
As a result, the Court dismissed the bankruptcy petition brought
by Stark, confirmed that the spin-out of Tekmira can take place
given the terms of the convertible debt and has denied the
Noteholders' ability to vote on the Plan of Arrangement.
Stark is the majority holder of certain promissory notes issued by
Inex International Holdings, a subsidiary of Inex. The promissory
notes are not due until April 2007 and can be repaid in cash or in
shares, at Inex's option, at maturity.
About Inex
Inex Pharmaceuticals Corporation -- http://www.inexpharma.com/--
is a Canadian biopharmaceutical company developing and
commercializing proprietary drugs and drug delivery systems to
improve the treatment of cancer.
At Dec. 31, 2005, the Company's balance sheet showed CDN$21.4
million in total assets and CDN$42.9 million in total liabilities,
resulting in a CDN$21.4 million total shareholders' deficiency.
INTEGRATED DISABILITY: Can Access Cash Collateral on Final Basis
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas gave
Integrated DisAbility Resources, Inc., final authority to access
cash collateral securing repayment of approximately $3.4 million
of their prepetition debts from Reliance Standard Life Insurance
Company.
Reliance Standard holds a Promissory Note from the Debtor, under a
General Security Agreement dated Dec. 31, 2001, for an original
principal amount of $3.6 million.
To provide adequate protection for the use of its collateral, the
Debtor grants Reliance Standard valid and perfected, first
priority security interests in, and liens upon all present and
after-acquired property and assets of the Debtor, including,
without limitation, all Prepetition Collateral, all cash contained
in any account maintained by the Debtor and the proceeds of all
causes of action, whether pursuant to federal law or applicable
state law of the Debtor or its estate.
The Prepetition Lender's replacement liens on Postpetition
Collateral will be senior in priority to all other security
interests and liens in the Postpetition Collateral.
The Debtors will use the cash collateral in accordance with a
weekly budget. A copy of this budget is available for free at
http://researcharchives.com/t/s?6a7
Headquartered in Irving, Texas, Integrated DisAbility Resources,
Inc. -- http://www.myidr.com/-- provides disability plans and
ongoing health and productivity services to claimants and
employees. The Debtor filed for chapter 11 protection on Feb. 10,
2006 (Bankr. N.D. Tex. Case No. 06-30575). Cynthia Williams Cole,
Esq., and Vincent P. Slusher, Esq., at Godwin Pappas Langley
Ronquillo LLP, represent the Debtor in its restructuring efforts.
The United States Trustee for Region 6 was not able to form an
Official Committee of Unsecured Creditors due to lack of interest
and lack of attendance during the creditors' meeting on March 21,
2006. When the Debtor filed for protection from its creditors, it
estimated $1 million to $10 million in assets and $10 million to
$50 million in debts.
INTERFACE INC: S&P Puts B- Rating on Rule 415 Shelf Registration
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary 'B-'
senior unsecured debt rating to Interface Inc.'s Rule 415 shelf
registration of debt securities. The new shelf has an
indeterminate aggregate initial offering price or number of debt
securities. The company did not indicate specific uses for the
debt or equity issuances.
The corporate credit rating on Atlanta, Georgia-based carpet
manufacturer Interface is B-/Stable/--. The rating reflects its
weak credit measures and very competitive and cyclical market
conditions. The rating also incorporates the company's heavy
dependence on the corporate sector.
Although Interface has a major market share (35%) in the worldwide
modular carpet segment, depressed demand in the past few years in
the corporate sector, which represents about 65% of annual
revenues, resulted in revenue and margin pressures across all the
company's business segments, hurting its operating results and
weakening credit measures. Although revenue trends and margins
are better in recent periods, petroleum-based raw-material costs
have escalated, constraining margin improvement. Interface had
about $464 million of debt at April 2, 2006.
Ratings List:
Interface Inc.
Corporate credit rating: B-/Stable/--
Senior unsecured debt: B-
Subordinated debt: CCC
Rating Assigned
Rule 415 shelf registration (prelim.): B-
Rating Withdrawn:
$300 million shelf (prelim.): B-/CCC
INTERSTATE BAKERIES: Sells Dorchester Lot to Tenean for $3.55MM
---------------------------------------------------------------
Pursuant to Sections 105 and 363(f) of the Bankruptcy Code, the
U.S. Bankruptcy Court for the Western District of Missouri allowed
Interstate Bakeries Corporation and its debtor-affiliates to sell
their property located at 60 Tenean Street, in Dorchester,
Massachusetts, to Tenean Properties, LLC, for $3,550,000, free and
clear of all liens, claims and encumbrances, including, without
limitation, any lien related to:
(i) a Mortgage Deed and Security Agreement, dated March 23,
1994, and recorded on April 8, 1994; and
(ii) an Instrument of Taking recorded against the Dorchester
Property on December 13, 2005, with all valid and
enforceable liens, claims and encumbrances to attach to
the proceeds of the sale of the Property, in the same
relative priority as existed with respect to it.
The Dorchester Property is comprised of a 0.71-acre land with a
48,159-square foot building.
Hilco Industrial, LLC, and Hilco Real Estate, LLC, assisted the
Debtors in the sale and marketing of the Dorchester Property.
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)
JO-ANN STORES: Posts $6.6 Mil. Net Loss in Fiscal First Quarter
---------------------------------------------------------------
Jo-Ann Stores, Inc., reported a $6.6 million net loss for its
fiscal 2007 first quarter ended April 29, 2006, compared with net
income of $4.2 million in the prior year.
Net sales for the first quarter increased 1% to $424.7 million
from $420.7 million in the prior year. Same-store sales decreased
3.9% for the quarter, versus a same-store sales increase of 0.6%
in the first quarter last year.
Gross margins for the first quarter of fiscal 2007 decreased to
46.6% of net sales from 48.7% in the first quarter last year, due
to higher markdowns compared to last year. As expected, in an
effort to sell-through excess and discontinued inventory, the
first quarter gross margin rate performance was significantly
impacted.
Selling, general and administrative expenses increased to 44.7% of
sales in the first quarter of fiscal 2007 from 42.9% in the first
quarter last year. The increase in percentage is due to the lack
of leverage resulting from the same-store sales performance,
coupled with logistics costs related to the opening of the
distribution center in Opelika, Alabama, and increases in
operating expenses, primarily driven by increases in store fixed
expenses and advertising, resulting from the larger number of
superstores in our store base.
Alan Rosskamm, chairman and chief executive officer said, "As
expected, our sales growth and gross margin rate remain challenged
as we execute on our repair plan against a backdrop of soft
industry conditions with lower customer demand. Although not
evident in the numbers, we continue to make progress on our key
repair plan initiatives, particularly in the areas of inventory
reduction and expense control, as we implement better disciplines,
which we expect will benefit our results as we progress through
the year."
Mr. Rosskamm, continued, "Our new Opelika, Alabama distribution
center now serves approximately 170 of our stores, and we expect
it to enhance the performance of our logistics network. Also, we
are making substantial progress on our merchandise assortment
project. This project should be completed by the beginning of the
third quarter and will bring new, fresh merchandise to our stores
which should help drive the business improvement we expect in the
second half of fiscal 2007. I am confident that we are focused on
the correct initiatives, which I expect will enable us to end the
year as a more disciplined organization with a much stronger
balance sheet and a significantly reduced debt balance."
About Jo-Ann Stores
Hudson, Ohio-based Jo-Ann Stores, Inc. -- http://www.joann.com/--
is the leading U.S. fabric and craft retailer with locations in 47
states, operates 688 Jo-Ann Fabrics and Crafts traditional stores
and 154 Jo-Ann superstores.
* * *
As reported in the Troubled Company Reporter on April 11, 2006,
Standard & Poor's Ratings Services lowered its corporate credit
rating on Jo-Ann Stores to 'B-' from 'B+'. The subordinated debt
rating was lowered to 'CCC' from 'B-'. The outlook is negative.
All ratings were removed from CreditWatch, where they were placed
with negative implications on Oct. 6, 2005.
As reported in the Troubled Company Reporter on Feb. 17, 2006,
Moody's Investors Service lowered all ratings of Jo-Ann Stores,
Inc., including the rating on a $100 million issue of 7.5% senior
subordinated notes due 2012 to B3 from B2. The rating downgrade
was prompted by the adverse impact that weak merchandising
programs and a slowdown in several categories have had on sales,
cash flow, and working capital.
JUNIPER GROUP: Morgenstern Svoboda Raises Going Concern Doubt
-------------------------------------------------------------
Morgenstern, Svoboda & Baer, CPA's, P.C., expressed substantial
doubt about Juniper Group, 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 recurring losses from operations.
For the year ended Dec. 31, 2005, the company reported a
$4,881,793 net loss on $580,504 of total revenues. This compares
to a $2,203,152 net loss on $1,329,054 of total revenues for the
year ended Dec. 31, 2004.
At Dec. 31, 2005, the company's balance sheet showed $1,123,991 in
total assets and $2,001,412 in total liabilities, resulting in a
shareholders' deficit of $877,421.
The company's Dec. 31, 2005, balance sheet also showed strained
liquidity with current assets totaling $535,223 and current
liabilities totaling $1,701,412.
A full-text copy of the company's financial statement for the year
ended Dec. 31, 2005, is available for free at:
http://ResearchArchives.com/t/s?971
Headquartered in Boca Raton, Florida, Juniper Group, Inc., through
its subsidiaries, provides technology and entertainment services.
Its technology services include wireless and cable broadband
installation services. The company's entertainment services
comprise acquisition, exploitation, and distribution of rights to
films for various media, such as DVD, domestic and international,
satellite, home video, pay-per view, pay television, cable
television, networks, and independent syndicated television
stations.
JUNIPER GROUP: Mar. 31 Balance Sheet Upside-Down by $506,878
------------------------------------------------------------
Juniper Group, Inc., submitted its financial statement for the
quarter ended Mar. 31, 2006, on Form 10-Q, to the U.S. Securities
and Exchange Commission.
For the quarter ended Mar. 31, 2006, the company reported a net
loss of $381,659 on total revenues of $1,158,889. This compares
to a net loss of $407,396 on total revenues of $137,397 for the
quarter ended Mar. 31, 2000.
The company's Mar. 31, 2006, balance sheet showed total assets of
$1,983,768 and total liabilities of $2,492,646, resulting in a
shareholders' deficit of $506,878. At Mar. 31, 2006, the Company
had a working capital deficit of $833,000, compared to a working
capital deficit of $1,189,000 at Dec. 31, 2005.
A full-text copy of the company's quarterly report is available
for free at http://ResearchArchives.com/t/s?972
Headquartered in Boca Raton, Florida, Juniper Group, Inc., through
its subsidiaries, provides technology and entertainment services.
Its technology services include wireless and cable broadband
installation services. The company's entertainment services
comprise acquisition, exploitation, and distribution of rights to
films for various media, such as DVD, domestic and international,
satellite, home video, pay-per view, pay television, cable
television, networks, and independent syndicated television
stations.
KANSAS CITY SOUTHERN: S&P Puts Preferred Stock Ratings on Default
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its preferred stock
ratings on Kansas City Southern to 'D' from 'C' and removed the
ratings from CreditWatch where they were initially placed on
March 23, 2006; ratings were previously lowered on April 4 and May
1 and maintained on CreditWatch with negative implications.
Standard & Poor's other ratings on Kansas City Southern,
including its 'B' corporate credit rating, remain on CreditWatch
with negative implications, where they were initially placed
April 4, 2006. Ratings were lowered on April 10 and maintained on
CreditWatch.
"The downgrade on the preferred stock rating follows Kansas City
Southern's failure to make dividend payments due May 15, 2006,"
said Standard & Poor's credit analyst Lisa Jenkins.
The company was precluded from making the payments because of bond
indenture covenant restrictions.
At Dec. 31, 2005, Kansas City Southern failed to meet the
consolidated coverage ratio (EBITDA to interest expense) threshold
of 2.00:1 included in its bond indentures. The company has stated
that it expects to remain below this threshold until the end of
the third quarter of 2006. Failure to meet this threshold limits
the company's ability to pay cash dividends and to incur
additional debt (except to repay existing debt).
The corporate credit and other ratings on Kansas City Southern
remain on CreditWatch due to concerns over the railroad company's
liquidity position. Standard & Poor's will meet with management
to discuss the company's current liquidity situation and outlook.
The ratings on CreditWatch could be lowered further if it looks
like liquidity will not improve over the near to intermediate
term.
Ratings List:
Kansas City Southern:
* Corporate credit rating -- B/Watch Neg./--
Rating Lowered:
Kansas City Southern:
* Preferred stock Rating to D from C/Watch Neg.
KMART CORP: Settles Dispute Over Eleven Lease Rejection Claims
--------------------------------------------------------------
Three landlords filed lease rejection claims against Kmart
Corporation:
Landlord Store No. Claim No.
-------- --------- ---------
State of California 3605 56387
Public Employees' 3496 37809
Retirement System 7507 37810
5919 37808
48269
C.P. Holdings, Inc. 3605 52384
3496 40770
44153
7507 40771
44152
Barbara Goldsmith 5919 21855
Kmart objected to the claims.
Pursuant to separate agreed orders signed by Judge Sonderby,
Kmart and the Landlords agree that the claims will be allowed at
these agreed amounts, which will be satisfied in accordance with
the terms of Kmart's confirmed Plan of Reorganization:
-- Claim Nos. 56387 and 52384 will be allowed for $1,692,974;
-- Claim Nos. 37809, 40770 and 44153 will be allowed for
$1,000,791;
-- Claim Nos. 37810, 40771 and 44152 will be allowed for
$778,754; and
-- Claim Nos. 37808, 48269 and 21855 will be allowed for
$1,830,651.
The first distribution to be made on account of the Lease
Rejection Claims will be made at the next distribution date
pursuant to the terms of the Plan.
In addition:
* C.P. Holdings, Inc., will have a $53,502 allowed
Administrative Claim with respect to Store No. 3605; and
* Barbara Goldsmith will have a $559 allowed Administrative
Claim with respect to Store No. 5919.
Upon receipt of the payments, the Claims are deemed satisfied in
full.
Kmart and the Landlords are forever barred from asserting,
collecting, or seeking to collect any claims against each other or
their successors and assigns relating in any way to the Lease
Rejection Claims of the specified stores.
About Kmart Corp.
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)
LIBERTY MEDIA: S&P Holds BB+ Corp. Credit Rating on Negative Watch
------------------------------------------------------------------
Standard & Poor's Ratings Services held its ratings, including the
'BB+' corporate credit rating, on Englewood, Colorado-based
Liberty Media Corp. on CreditWatch, where they were placed with
negative implications on Nov. 10, 2005.
Liberty announced on May 16, 2006, that it entered into a binding
term sheet to acquire IDT Entertainment Inc. from IDT Corp. IDT
Entertainment is a creator of computer graphic animated and live
action programming.
"The CreditWatch listing continues to reflect uncertainty
surrounding Liberty's longer-term plan regarding its Liberty
Capital and Liberty Interactive tracking stocks, which may or may
not lead to a spin-off," said Standard & Poor's credit analyst
Andy Liu.
Liberty will need to own QVC Inc. (the largest operating asset
within Liberty Interactive) for five years in order to obtain tax-
free treatment of a spin-off to shareholders. Total debt
outstanding as of March 31, 2006, was $9.98 billion. Currently,
tax losses at Liberty Capital are sheltering income at Liberty
Interactive.
Liberty will exchange its interests in IDT, $186 million in cash,
and assume existing debt for IDT Entertainment.
LINN ENERGY: Expects to File 2005 Financials Before May 30
----------------------------------------------------------
Linn Energy, LLC, will not be able to file its Form 10-Q for the
period ended March 31, 2006, because additional time is needed to
complete the preparation of its financial statements.
The Company determined on March 31, 2006, that it will restate its
financial statements for the period:
-- from March 14, 2003 (inception) through Dec. 31, 2003, and
-- for the year ended Dec. 31, 2004.
The Company is currently preparing a Form 10-K for the year ended
Dec. 31, 2005, containing the restated financial statements for
those prior periods.
The 2005 Form 10-K must be filed prior to the filing of the Form
10-Q for the quarterly period ended March 31, 2006.
The Company is working diligently to complete the filing of the
2005 Form 10-K and the Form 10-Q for the quarter ended March 31,
2006; however, the Company will be unable to file a 10-Q by
May 15, 2006.
The Company estimates that it will file the 2005 Form 10-K on or
before May 30, 2006, and the Form 10-Q for the quarter ended
March 31, 2006, on or before June 15, 2006.
Headquartered in Pittsburgh, Pennsylvania, Linn Energy LLC --
http://www.linnenergy.com/-- is an independent natural gas
company focused on the development and acquisition of natural gas
properties in the Appalachian Basin, primarily in West Virginia,
Pennsylvania, New York and Virginia.
* * *
At Dec. 31, 2005, Linn Energy LLC had a $51 million working
capital deficit and a $45 million stockholders' deficit.
LONDON FOG: Court Okays Development Specialists as Consultants
--------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in London
Fog Group, Inc., and its debtor-affiliates' chapter 11 cases
obtained authority from the U.S. Bankruptcy Court for the District
of Nevada to employ Development Specialists, Inc., as its
financial consultants.
Development Specialists is expected to:
a. quantitatively analyze the post-petition financial and
operational performance of the Debtors, and as the
Committee deems necessary;
b. assist the Committee in evaluating any plans of
reorganization;
c. to the extent necessary, assist the Committee in its
actions against third parties for the benefit of the
estate; and
d. perform other necessary services as the Committee or its
counsel may request from time to time with respect to the
financial, business and economic issues that may arise in
the cases.
Bradley D. Sharp, a senior vice-president at Development
Specialists, tells the Court that the Firm's professionals bill:
Professional Hourly Rate
------------ -----------
Bradley D. Sharp $450
R. Brian Calvert $425
Clare Pierce $370
Matthew J. Braun $170
Mr. Sharp assures the Court that the Firm is "disinterested" as
that term is defined in Section 101(14) of the Bankruptcy Code.
Headquartered in Seattle, Washington, London Fog Group, Inc. --
http://londonfog.com/-- designs and retails the latest styles in
jackets and other professional apparel. The company and six of
its affiliates filed for chapter 11 protection on March 20, 2006
(Bankr. D. Nev. Case No. 06-50146). Stephen R. Harris, Esq., at
Belding, Harris & Petroni, Ltd., represents the Debtors in their
restructuring efforts. Avalon Group, Ltd., serves as the Debtors'
financial advisor. When the Debtors filed for protection from
their creditors, they estimated assets and debts between $50
million to $100 million.
MAGRUDER COLOR: New Jersey Court Approves Disclosure Statement
--------------------------------------------------------------
The Hon. Morris Stern of the U.S. Bankruptcy Court for the
District of New Jersey approved the Disclosure Statement
explaining the Plan of Reorganization filed by Magruder Color
Company and its debtor-affiliates.
Judge Stern determined that the Disclosure Statement contains
adequate information -- the right amount of the right kind -- for
creditors to make informed decisions when the Debtors ask them to
vote to accept the Plan.
The Court will convene a hearing at 10:00 a.m. on May 24, 2006, to
consider confirmation of the Debtors' Amended Plan of
Reorganization.
Treatment of Claims
Under the Debtors' Plan, Administrative Claims and Priority Tax
Claims will be paid in full and in cash, without interest.
Beal Bank's secured claim will be paid in full, in cash, with
interest at the contract rate, from the proceeds of the sale of
the Debtor and Non-Debtor Real Estate, after payment of:
(i) all costs and expenses associated with pursuing,
conducting, and closing those sales; and
(ii) all environmental remediation costs associated with both
the Debtor and Non-Debtor Real Estate.
Beal Bank will retain its mortgage liens until its Secured Claim
is paid in full.
Holders of Class 3 Unsecured Claims will receive a Pro Rata
distribution from:
a) $1.5 million to be paid from the Net Non-Debtor Real
Estate Proceeds after payment in full of the Beal Bank
Secured Claim;
b) 50% of the Net Debtor Real Estate Proceeds; and
c) the Net Avoidance Proceeds.
Holders of Maggyco Interests will retain their ownership interests
in Maggyco. To the extent there is no Available Cash or escrowed
amounts available, Holders of Maggyco Interests will fund the
payment of any real estate taxes, insurance, maintenance and other
costs associated with the Debtor Real Estate until the Debtor Real
Estate is sold.
Holders of Intercompany Claims and Class 6 Dissolved Debtors
Interests will receive no distribution under the Plan.
A full-text copy of the Plan is available for a fee at:
http://www.researcharchives.com/bin/download?id=060313204623
Headquartered in Elizabeth, New Jersey, Magruder Color Company --
http://www.magruder.com/-- and its affiliates manufacture basic
pigment and also supply quality products to the ink, paint, and
plastics industries. The Company and its debtor-affiliates filed
for chapter 11 protection on June 2, 2005 (Bankr. D.N.J. Case No.
05-28342). Bruce D. Buechler, Esq., at Lowenstein Sandler PC
represent the Debtors in their restructuring efforts. Brian L.,
Esq., and Howard S. Greenberg, Esq., at Baker Ravin Greenberg, PC,
represents the Official Committee of Unsecured Creditors. When
the Debtors filed protection from their creditors, they estimated
assets and debts of $10 million to $50 million.
MANITOWOC COMPANY: Earns $29.7 Million in Quarter Ended March 31
----------------------------------------------------------------
The Manitowoc Company, Inc., filed its financial statements for
the quarter ended March 31, 2006, with the Securities and Exchange
Commission on May 8, 2006.
The Company reported $29,700,000 of net income on $633,000,000 of
net sales for the three months ended March 31, 2006.
At March 31, 2006, the Company's balance sheet showed
$2,074,800,000 in total assets and $1,492,600,000 in total
liabilities resulting in a stockholders' equity of $582,200,000.
A full-text copy of the Company's financial statements for the
quarter ended March 31, 2006, is available at no charge at:
http://ResearchArchives.com/t/s?989
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.
MARATHON REAL: Fitch Puts B Rating on $26.7 Million Class K Notes
-----------------------------------------------------------------
Fitch assigns these ratings to Marathon Real Estate CDO 2006-1,
Ltd. and Marathon Real Estate CDO 2006-1 LLC:
-- $520,000,000 class A-1 senior secured floating-rate term
notes due 2046 'AAA';
-- $50,000,000 class A-2 second priority senior secured
floating- rate term notes due 2046 'AAA';
-- $99,000,000 class B third priority floating-rate term notes
due 2046 'AA';
-- $51,500,000 class C fourth priority floating-rate deferrable
interest term notes due 2046 'A+';
-- $16,000,000 class D fifth priority floating-rate deferrable
interest term notes due 2046 'A';
-- $14,000,000 class E sixth priority floating-rate deferrable
interest term notes due 2046 'A-';
-- $23,500,000 class F seventh priority floating-rate
deferrable interest term notes due 2046 'BBB+';
-- $15,500,000 class G eighth priority floating-rate deferrable
interest term notes due 2046 'BBB';
-- $26,000,000 class H ninth priority floating-rate deferrable
interest term notes due 2046 'BBB-';
-- $56,300,000 class J tenth priority floating-rate deferrable
interest term notes due 2046 'BB'; and
-- $26,700,000 class K eleventh priority floating-rate
deferrable interest term notes due 2046 'B'.
The ratings of the class A-1, A-2 and B notes address the
likelihood that investors will receive fully and timely payments
of interest, as per the governing documents, as well as the
aggregate outstanding amount of principal by the stated maturity
date. The ratings of the class C, D, E, F, G, H, J and K notes
address the likelihood that investors will receive ultimate
interest and capitalized interest payments, as per the governing
documents, as well as the aggregate outstanding amount of
principal by the stated maturity date.
The ratings are based upon the credit quality and mixture of the
underlying assets and credit enhancement provided to the capital
structure through subordination and excess spread.
Proceeds from the issuance will be invested in a portfolio of
primarily unrated commercial mortgage B-notes, mezzanine loans,
whole loans and bank loans, as well as commercial mortgage backed
securities, commercial real estate collateralized debt obligations
and credit tenant leases. Approximately 85% or $850.0 million of
the target portfolio was purchased at closing. The collateral was
selected and will be monitored by Marathon Asset Management, LLC
as the collateral manager. Marathon will have 270 days from the
closing date to ramp up the portfolio to the target amount of $1.0
billion. The notes have a stated maturity of 2046 and monthly
payments on the notes will begin in August 2006.
Marathon CDO will have a five-year reinvestment period, during
which principal proceeds may be used to invest in substitute
collateral subject to certain covenants and reinvestment
parameters outlined in the governing documents.
Marathon will be the collateral manager for Marathon CDO.
Marathon is a global alternative investment and asset management
company that manages $7 billion in capital and $12 million in
assets. The Company formed its Real Estate Finance Group in 2003
as an originator and investor in CRE debt and has made over $2
billion in investments. Fitch views favorably Marathon's plans to
use Wachovia Bank, National Association as the master servicer for
this transaction. Marathon will act as the special servicer.
Fitch finds Marathon to be an acceptable CREL CDO manager for
Marathon CDO.
Marathon Real Estate CDO 2006-1, Ltd. is a Cayman Islands exempted
company. Marathon Real Estate CDO 2006-1, LLC is a Delaware
limited liability company.
MARK IV: S&P Puts BB- Rating on Subsidiary's $170 Mil. Term Loan
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' bank loan
rating and a recovery rating of '1' to Mark IV Industries Inc.'s
borrowing subsidiary's $125 million term loan B add-on, indicating
a high expectation of full recovery of principal in the event of a
default.
At the same time, the rating agency assigned a 'BB-' rating and a
recovery rating of '1' to the firm's subsidiary's $170 million
senior secured second lien term loan. Proceeds will be used
primarily to repay the firm's $250 million 7.5% senior
subordinated notes, due 2007.
Standard & Poor's also raised the ratings on Mark IV's existing
senior secured bank credit facility to 'BB' from 'B+' and assigned
recovery ratings of '1'.
At the same time, Standard & Poor's affirmed its 'B+' corporate
credit rating on the Amherst, New York-based manufacturer of:
* power transmission,
* electronic toll collection equipment,
* small diesel engines, and
* other products.
The outlook is negative.
Mark IV had about $1 billion of outstanding debt at Feb. 28, 2006.
MASTERCRAFT INTERIORS: Wants to Hire Shulman Rogers as Counsel
--------------------------------------------------------------
Mastercraft Interiors, Ltd., and Kimels of Rockville, Inc., ask
the U.S. Bankruptcy Court for the District of Maryland for
permission to hire Shulman, Rogers, Gandal, Pordy & Ecker, P.A.,
as their bankruptcy counsel.
Shulman Rogers is a law firm of more than 90 attorneys, and
engages in the practice of law in substantive areas, including
bankruptcy and creditors' rights, corporate, litigation, real
estate, telecommunications and tax. Because of its expertise in
bankruptcy matters, together its prior representation of the
Debtors and its knowledge regarding the Debtors' business, the
Debtors believe that it is well qualified to represent them.
Shulman Rogers will:
a. provide the Debtors with legal advice with respect to their
powers and duties in the operation of their businesses and
the management of their properties pursuant to the
Bankruptcy Code;
b. prepare on behalf of the Debtors all necessary applications,
answers, orders, reports and other legal papers;
c. assist in analyses and representation with respect to
lawsuits to which the Debtors are or may be a party;
d. negotiate, prepare, file and seek confirmation of a plan
of reorganization;
e. represent the Debtors at all hearings, meetings of creditors
and other proceedings; and
f. perform all other legal services for the Debtors which may
be necessary to serve the Debtors' best interests.
Morton A. Faller, Esq., a shareholder at Shulman Rogers, tells the
Bankruptcy Court that his firm's professionals charge these hourly
rates:
Professional Hourly Rate
------------ -----------
Attorneys $195 to $425
Legal Assistants/Law Clerks $135 to $170
The firm's principal attorneys who will render material services
charge these hourly rates:
Attorneys Hourly Rate
------------ -----------
Morton A. Faller, Esq. $395
Michael J. Lichtenstein, Esq. $395
Stephen A. Metz, Esq. $245
The Debtors paid the firm a $100,000 retainer.
Mr. Faller assures the Court that his firm and its professionals
do not hold material interest adverse to the Debtors' interests
and are "disinterested" as defined in Section 101(14) of the
Bankruptcy Code.
Headquartered in Beltsville, Maryland, Mastercraft Interiors Ltd.,
-- http://www.mastercraftinteriors.com/-- manufactures high-
quality furniture and other home furnishings. The Company and its
subsidiary, Kimels of Rockville, Inc., filed for bankruptcy on
May 15, 2006, (Bankr. D. Md. Case No. 06-12769). When it filed
for bankruptcy, Mastercraft Interiors reported assets amounting to
$10,600,288 and debts amounting to $25,485,847. Kimels of
Rockville reported assets totaling $704,227 and debts amounting to
$10,341,704 during the bankruptcy filing.
MASTERCRAFT INTERIORS: Wants to Borrow $2.5 Million from BofA
-------------------------------------------------------------
Mastercraft Interiors, Ltd., and Kimels of Rockville, Inc., ask
the U.S. Bankruptcy Court for the District of Maryland for
permission to borrow up to $2.5 million from Bank of America,
N.A., under a debtor-in-possession financing agreement.
Currently, the Debtors have no funds to continue operating their
businesses. In the past two weeks, the Debtors have operated by
virtue of Bank of America's agreement to over-advance funds under
certain prepetition loan documents.
Morton A. Faller, Esq., at Shulman, Rogers, Gandal, Pordy & Ecker,
P.A., in Rockville, Maryland, informs the Court that before filing
for bankruptcy, the Debtors conducted an auction to choose a
liquidator and entered into an agency agreement with Planned
Furniture Promotions, Inc., and Great American Group, LLC to sell
the Debtors' inventory, together with augmented inventory, and to
conduct going out of business sales. The Debtors are also
negotiating with a real estate consultant to evaluate and sell
some or all of the Debtors' non-residential real property leases.
At this point, the Debtors have insufficient funds to continue to
operate until the commencement of the GOB sales, the sale of the
leases and to fund expenses on a going forward basis, Mr. Faller
points out.
The Debtors will pay a 1% per annum interest for the DIP loan.
Interest will accrue and be due and payable in full on maturity.
If the Debtors default on the loan, interest rate will increase to
the prime interest rate plus 3% per annum.
The Debtors proposes granting BofA super-priority liens on all of
their assets.
Headquartered in Beltsville, Maryland, Mastercraft Interiors Ltd.,
-- http://www.mastercraftinteriors.com/-- manufactures high-
quality furniture and other home furnishings. The Company and its
subsidiary, Kimels of Rockville, Inc., filed for bankruptcy on
May 15, 2006, (Bankr. D. Md. Case No. 06-12769). Morton A.
Faller, Esq., Michael J. Lichtenstein, Esq., and Stephen A. Metz,
Esq., at Shulman, Rogers, Gandal, Pordy & Ecker, P.A., represent
the Debtors in their restructuring efforts. When it filed for
bankruptcy, Mastercraft Interiors reported assets amounting to
$10,600,288 and debts amounting to $25,485,847. Kimels of
Rockville reported assets totaling $704,227 and debts amounting to
$10,341,704 during the bankruptcy filing.
MASTR ADJUSTABLE: S&P Raises Class B-4 Debt Rating to BB- from BB
-----------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on 13
classes from MASTR Adjustable Rate Mortgage Trust's series 2003-5,
2003-6, 2003-7, and 2004-1. Concurrently, the ratings on 402
classes from 30 MASTR Adjustable Rate Mortgage Trust transactions
(including the series with upgrades) are affirmed.
The upgrades for series 2003-5, 2003-6, and 2004-1 reflect
improved current and projected credit support percentages in the
form of subordination. The upgrades for series 2003-7 reflect
improved current and projected credit support percentages in the
form of overcollateralization, excess spread, and subordination.
Projected credit support percentages are at least 1.74x the
loss coverage levels associated with the higher ratings.
The affirmed ratings reflect loss coverage percentages that meet
or exceed the levels necessary to maintain the current ratings.
These transactions benefit from credit enhancement provided by
overcollateralization, excess spread, and subordination.
As of the April 2006 remittance date, total delinquencies ranged
from 0.24% (series 2004-13) to 8.31% (series 2002-3). Cumulative
losses, as a percentage of the original trust balances, ranged
from 0.00% (series 2003-5) to 0.03% (series 2004-2). The
outstanding pool balances ranged from 6.41% (series 2002-3) to
96.29% (series 2005-8) of their original sizes.
The loans for all of these transactions are secured by mortgages
or deeds of trust on primarily one- to four-family residential
properties, most of which have original terms to maturity of 30
years. The mortgage loans consist of prime, adjustable-rate, and
conventional mortgage loans.
Ratings Raised:
MASTR Adjustable Rate Mortgage Trust
Rating
Series Class To From
------ ----- -- ----
2003-5 B-1 AA+ AA
2003-5 B-2 A+ A
2003-5 B-3 BBB+ BBB
2003-5 B-4 BB+ BB
2003-6 B-1 AA+ AA
2003-6 B-2 A+ A
2003-7 B-1, M-1 AAA AA+
2003-7 B-2 AA- A+
2003-7 B-3 A- BBB+
2004-1 B-1, B-1X AA+ AA
2004-1 B-2 AA- A+
Ratings Affirmed:
MASTR Adjustable Rate Mortgage Trust
Series Class Rating
------ ----- ------
2002-3 1-A-1, 2-A-1, 3-A-1, 4-A-1, B-1 AAA
2002-3 B-2 AA+
2002-3 B-3 A-
2003-1 2-A-1, 2-A-2, 2-A-3, 2-A-IO, 3-A-1, 3-A-IO AAA
2003-1 4-A-1, 4-M-1 AAA
2003-1 B-1 AA+
2003-1 B-2, 4-M-2 AA
2003-1 B-3 A-
2003-1 4-B BBB
2003-2 1-A-1, 2-A-1, 3-A-1, 3-A-X, 4-A-1, 4-A-2 AAA
2003-2 4-A-X, 5-A-1, 5-A-2, 6-A-1, 6-A-X AAA
2003-2 B-1 AA
2003-2 B-2 A
2003-2 B-3 BBB
2003-3 1-A-1, 2-A-1, 3-A-3, 3-A-4, 3-A-X, 4-A-1 AAA
2003-3 B-1 AA
2003-3 B-2 A
2003-3 B-3 BBB
2003-3 B-4 BB
2003-3 B-5 B
2003-4 1-A-1, 2-A-1, 3-A-1 AAA
2003-4 B-1 AA
2003-4 B-2 A
2003-4 B-3 BBB
2003-4 B-4 BB
2003-4 B-5 B
2003-5 1-A-1, 1-A-2, 1-A-X, 2-A-1, 2-A-X, 3-A-1 AAA
2003-5 4-A-1, 4-A-2, 4-A-3, 4-A-X, 5-A-1, 6-A-1 AAA
2003-5 B-5 B
2003-6 1-A-2, 1-A-2X, 2-A-1, 2-A-2, 2-A-X, 3-A-1 AAA
2003-6 3-A-X, 4-A-1, 4-A-2, 4-A-X, 5-A-1, 5-A-X AAA
2003-6 6-A-1, 7-A-1, 7-A-1X, 7-A-2, 7-A-2X, 7-A-3 AAA
2003-6 8-A-1, 8-A-X AAA
2003-6 B-3 BBB
2003-6 B-4 BB
2003-6 B-5 B
2003-7 1-A-1, 1-A-X, 2-A-1, 2-A-X, 3-A-1, 3-A-X AAA
2003-7 4-A-1, 4-A-X, 5-A-1 AAA
2003-7 5-M-2 AA
2003-7 5-B A
2003-7 B-4 BB
2003-7 B-5 B
2004-1 1-A-1, 2-A-1, 2-A-X, 3-A-1, 3-A-2, 3-A-3 AAA
2004-1 3-A-X, 4-A-1, 4-A-2, 4-A-X, 5-A-1, 5-A-X AAA
2004-1 6-A-1 AAA
2004-1 B-3 BBB+
2004-1 B-4 BB
2004-1 B-5 B
2004-2 1-A-1, 1-A-2, 2-A-1, 3-A-1 AAA
2004-2 M-1 AA+
2004-2 M-2 AA
2004-2 M-3 AA-
2004-2 B A
2004-3 1-A-1, 1-A-X, 2-A-1, 2-A-X, 3-A-1, 3-A-2 AAA
2004-3 3-A-3, 3-A-4, 3-A-X, 4-A-1, 4-A-2, 4-A-X AAA
2004-3 5-A-1, 5-A-2, 5-A-X, 6-A-1, 6-A-X, 7-A-1 AAA
2004-3 7-A-X, 8-A-1, 8-A-2, 8-A-3, 8-A-4, 8-A-X AAA
2004-3 B-1, B-1-X AA
2004-3 B-2 A
2004-3 B-3 BBB+
2004-3 B-4 BB
2004-3 B-5 B
2004-4 1-A-1, 1-A-X, 2-A-1, 2-A-2, 2-A-3, 2-A-X AAA
2004-4 3-A-1, 3-A-X, 4-A-1, 4-A-2, 4-A-X, 5-A-1 AAA
2004-4 5-A-X AAA
2004-4 B-1 AA
2004-4 B-2 A
2004-4 B-3 BBB
2004-4 B-4 BB
2004-4 B-5 B
2004-5 1-A-1, 2-A-1, 2-A-X, 3-A-1, 4-A-1, 5-A-1 AAA
2004-5 6-A-1, 6-A-X, 7-A-1, 8-A-1, 9-A-1, 9-A-2 AAA
2004-5 9-A-X AAA
2004-5 B-1 AA+
2004-5 B-2 AA-
2004-5 B-3 A-
2004-5 B-4 BB
2004-5 B-5 B
2004-6 1-A-1, 2-A-1, 3-A-1, 4-A-2, 4-A-3, 4-A-4 AAA
2004-6 4-A-5, 4-A-6, 4-A-7, 4-A-8, 4-A-9, 5-A-1 AAA
2004-6 6-A-1 AAA
2004-6 B-1 AA
2004-6 B-2 A
2004-6 B-3 BBB+
2004-6 B-4 BB
2004-6 B-5 B
2004-7 1-A-1, 2-A-1, 3-A-1, 4-A-1, 4-A-2, 5-A-1 AAA
2004-7 6-A-1, 6-A-2 AAA
2004-7 6-M-1, B-1 AA
2004-7 B-2 A+
2004-7 6-M-2 A
2004-7 B-3 A-
2004-7 6-B-1 BBB+
2004-7 6-B-2 BBB-
2004-7 B-4 BB
2004-7 B-5 B
2004-9 1-A-1, 1-A-2, 1-A-3, 1-A-4, 1-A-5, 1-A-6 AAA
2004-9 2-A-1, 2-A-2, 2-A-3A, 2-A-3B AAA
2004-9 M-1 AA
2004-9 M-2 A
2004-9 B-1 BBB+
2004-9 B-2 BBB-
2004-10 1-A-1, 2-A-1, 2-A-2, 3-A-1, 3-A-2 AAA
2004-10 B-1 AA
2004-10 B-2 A
2004-10 B-3 BBB
2004-10 B-4 BB
2004-10 B-5 B
2004-11 1-A-1, 1-A-2, 1-A-3, 1-A-4, 2-A-1, 2-A-2 AAA
2004-11 M-1 AA
2004-11 M-2 A
2004-11 B-1 BBB+
2004-11 B-2 BBB-
2004-12 1-A-1, 2-A-1, 3-A-1, 4-A-1, 5-A-1, A-C-1 AAA
2004-12 B-1 AA
2004-12 B-2 A-
2004-12 B-3 BBB
2004-12 B-4 BB
2004-12 B-5 B
2004-13 1-A-1, 1-A-2, 2-A-1, 2-A-2, 2-A-3, 3-A-1 AAA
2004-13 3-A-1A, 3-A-1B, 3-A-1C, 3-A-2, 3-A-2A AAA
2004-13 3-A-3, 3-A-4, 3-A-5, 3-A-6, 3-A-7, 3-A-7A AAA
2004-13 3-A-7B, 3-A-8, 3-A-X, 4-A-1 AAA
2004-13 B-1 AA
2004-13 B-2 A-
2004-13 B-3 BBB
2004-13 B-4 BB
2004-13 B-5 B
2004-14 1-A-1, 1-A-2, 2-A-1, 2-A-2 AAA
2004-14 M-1 AA
2004-14 M-2 A
2004-14 B-1 BBB+
2004-14 B-2 BBB-
2005-1 1-A-1, 1-A-X, 2-A-1, 3-A-1, 4-A-1, 5-A-1 AAA
2005-1 6-A-1, 7-A-1, 7-A-2, 7-A-3, 8-A-1, 8-A-2 AAA
2005-1 9-A-1, 10-A-1 AAA
2005-1 B-1 AA
2005-1 B-2 A
2005-1 B-3 BBB
2005-1 B-4 BB
2005-1 B-5 B
2005-2 1-A-1, 2-A-1, 3-A-1, 4-A-1, 5-A-1, 6-A-1 AAA
2005-2 7-A-1, 7-A-2, 7-A-X AAA
2005-2 B-1 AA
2005-2 B-2 A
2005-2 B-3 BBB
2005-2 B-4 BB
2005-2 B-5 B
2005-3 1-A-1, 1-A-2, 1-A-X, 2-A-1, 3-A-1, 3-A-2 AAA
2005-3 3-A-X, 4-A-1, 5-A-1 AAA
2005-3 9-A-1, 10-A-1 AAA
2005-3 B-1 AA-
2005-3 B-2 A-
2005-3 B-3 BBB-
2005-3 B-4 BB
2005-3 B-5 B
2005-5 A-1, A-2, A-3, A-X AAA
2005-6 1-A-1, 1-A-X, 2-A-1, 2-A-X, 3-A-1, 3-A-2 AAA
2005-6 3-A-X, 4-A-1, 4-A-2, 5-A-1, 5-A-2, 5-A-X AAA
2005-6 6-A-1, 7-A-1 AAA
2005-6 B-1 AA
2005-6 B-2 A
2005-6 B-3 BBB
2005-6 B-4 BB
2005-6 B-5 B
2005-7 1-A-1, 1-A-2, 2-A-1, 2-A-2, 3-A-1, 3-A-2 AAA
2005-7 B-1 AA
2005-7 B-2 A
2005-7 B-3 BBB
2005-7 B-4 BB
2005-7 B-5 B
2005-8 A-1-A, 1-A-2, 2-A-1, 2-A-2, 3-A-1, 3-A-2 AAA
2005-8 B-1 AA+
2005-8 B-2 AA
2005-8 B-3 A+
2005-8 B-4, B-5 BBB+
2005-8 B-6 BB+
MD BEAUTY: S&P Downgrades Second-Lien Facility's Rating to CCC
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on MD Beauty Inc. to 'B-' from 'B'.
In addition, Standard & Poor's lowered its bank loan ratings on
the company:
* The first-lien facilities are now rated 'B-' (the same as the
corporate credit rating) with a recovery rating of '2',
indicating the expectation for substantial (80%-100%)
recovery of principal in the event of a payment default.
* The second-lien facility is now rated 'CCC' (two notches
below the corporate credit rating) with a recovery rating of
'5', indicating the expectation for negligible (0%-25%)
recovery of principal in the event of a payment default.
The outlook is stable.
About $637 million of total debt is expected at close.
"The downgrade reflects the company's very aggressive financial
policy, because it intends to use the proceeds from the planned
$175 million increase in its first and second lien term loans, in
addition to cash and a $75 million-$125 million payment-in-kind
note (unrated) held at the parent company, to pay a substantial
dividend to shareholders," said Standard & Poor's credit analyst
Alison Sullivan.
This dividend is in addition to two dividends issued in 2005;
cumulative dividends total over $500 million. The amended bank
facility will consist of:
* a $348 million first-priority-lien term loan maturing
in 2012; and
* a $214 million second priority lien term loan maturing
in 2013.
The $15 million revolving credit facility due 2011 will be
increased to $25 million. As a result, pro forma debt leverage
will increase to levels above the September 2005 transaction.
While the company's operations continue to trend favorably, Bare
Escentuals is in the process of enhancing its infrastructure with
newly retained management, expanded distribution facilities, and
new operating systems. Standard & Poor's views this transaction
as limiting the company's flexibility to withstand any significant
operating issue in the near term within the current rating
category.
Standard & Poor's ratings on MD Beauty reflect:
* its narrow product focus and participation in the highly
competitive and fragmented cosmetics industry;
* relatively small sales base;
* the risks associated with expanding and upgrading its
operating platforms; and
* a very aggressive financial policy.
The company has shown significant sales growth and operating
improvement during the past two years, and maintains good brand
loyalty in its niche health beauty and "cosmeceutical" segments.
MUSICLAND HOLDING: Deluxe's Lien Payment Motion Draws Fire
----------------------------------------------------------
As reported in the Troubled Company Reporter on Mar. 30, 2006,
Deluxe Media Services, Inc., asked the U.S. Bankruptcy Court for
the Southern District of New York to:
(a) enforce the Final DIP Order and direct Musicland Holding
Corp. and its debtor-affiliates to pay the Lien Amount to
Deluxe in satisfaction of the Prepetition Lien; or
(b) if the Debtors sell their assets prior to the resolution
of Deluxe's Motion, rule that the Prepetition Lien attach
to the proceeds of the that sale and that a portion of the
sale proceeds equal to the Lien Amount be placed into
escrow solely for the benefit if Deluxe, pending a final
determination on the merits of the Motion.
Deluxe Media Services, Inc., contends that the Debtors, the
Informal Committee of Secured Trade Vendors, and Wachovia Bank,
National Association, selectively quote from the operative
documents and ignore the simple undisputed facts to draft an
argument devoid of substance.
Thomas R. Califano, Esq., at DLA Piper Rudnick Gray Cary US LLP,
in New York City, argues that the Secured Lenders' Objection
contains no basis for denying the Lien Motion. Wachovia relies on
an agreement where Deluxe agreed to subordinate the Prepetition
Lien to the liens of the Debtors' prepetition secured lenders.
Wachovia also argues that the payment of the Prepetition Lien is
limited "as and to the extent permitted by the Budget."
Wachovia's argument is incomplete and designed to mislead the
Court, Mr. Califano asserts. The Final DIP Order provides that:
"Upon entry of the [Warehousemen Order], Deluxe shall be paid
the undisputed amounts of the [Prepetition Lien], up to an
aggregate amount not to exceed $4,142,931.31, within one (1)
business day of the entry of such order, as and to the extent
permitted by the Budget or other applicable order of this
Court."
Deluxe has shown that its equity cushion for the Prepetition Lien
is rapidly diminishing, Mr. Califano points out. "Accordingly,
Deluxe should be paid at this point."
The Debtors cite an agreement by and among Deluxe, MPC, and
Congress Financial Corp., as predecessor-in-interest to Wachovia,
dated March 4, 2004. Mr. Califano notes that the March 4
Agreement was entered into separately from the Logistics Services
Agreement and contains a waiver of certain of Deluxe's rights as
against Wachovia, not the Debtors. The March 4 Agreement was
executed along with the LSA to resolve the issue of potentially
competing liens in the relevant assets. "It is impossible to
construe this as a waiver of Deluxe's rights as against the
Debtors."
Mr. Califano further asserts that no waiver of the lien rights
exists in the LSA.
The Debtors' argument that the LSA constitutes an acknowledgement
that Deluxe has no warehouseman lien is absurd, Mr. Califano says.
Deluxe has never asserted ownership of the Inventory at any time.
The purpose behind the warehousemen's lien is to protect
warehousemen who are holding goods owned by another party. The
acknowledgement of who owns the goods in question in no way
vitiates the existence of the warehouseman's lien, Mr. Califano
points out.
The LSA clearly indicates the location of the Warehouse, Mr.
Califano states. The Debtors' attempt to assert that the LSA is
insufficient notice of the location of their goods is further
undermined by the Batch Reports, which clearly indicate that the
goods were received at the Warehouse in Pleasant Prairie. The
Batch Reports are submitted as EDI Files to the Debtors' computer
system. In the process of uploading the EDI Files to the
Debtors' computer system, the EDI Files are marked by Deluxe for
the purpose of authenticating the files and identifying the source
of the files in the computer system. Moreover, the LSA was
physically signed by representatives of Deluxe and the Debtors.
Mr. Califano contends that the Debtors fundamentally misunderstand
the concept of the lien arising under common law. The Debtors
appear to argue that Deluxe's compliance with the LSA necessarily
destroys Deluxe's common law lien.
Any release of postpetition liens has been protected by the
adequate protection language in the Final DIP Order. Any
Inventory shipped prepetition was not included in the calculation
of the amount of the Prepetition Lien. Mr. Califano notes that
the Debtors are inadvertently acknowledging the precise reason
Deluxe requires immediate payment of the Prepetition Lien -- if
the Prepetition Lien is not paid, it will be completely eliminated
by the Debtors' contemplated sale.
Deluxe asks the Court to grant its request and direct the Debtors
to pay it $4,142,931, together with interest and fees.
Debtors Seek Summary Judgment
In a letter to Judge Bernstein, the Debtors seek the Court's
permission to file a motion for partial summary judgment against
Deluxe, limiting its maximum statutory warehouse lien to
$618,360.
Andrew R. Running, Esq., at Kirkland & Ellis LLP, in Chicago,
Illinois, asserts that allowing the partial summary judgment
motion and staying discovery pending its resolution is in the best
interests of the parties and of judicial economy because:
-- it would resolve a threshold legal issue based on
undisputed facts, thus streamlining discovery and trial
preparation;
-- if granted, the motion would reduce a $4,200,000 dispute to
slightly more than $600,000, therefore increasing
likelihood of settlement; and
-- even if the motion were ultimately denied, it would not
prejudice Deluxe since the cost of the motion would be
modest and Deluxe's claim has been fully reserved.
Mr. Running states that the parties agree that Deluxe never gave
the Debtors the required notice for the assertion of a general
warehouse lien. Thus, Deluxe cannot assert a lien for storage
charges incurred in the goods that have left its possession. In
addition, Deluxe failed to state on its warehouse receipt that "a
lien is claimed for charges and expenses in relation to other
goods."
To calculate Deluxe's maximum statutory warehouse lien, the
Debtors need only to determine the percentage of their goods
delivered from September 2005 through January 22, 2006.
Mr. Running maintains that the Debtors' inventory records provide
the only evidence needed to prove the summary judgment motion.
Based on the inventory figures, the maximum specific liens that
Deluxe could potentially assert are:
Claimed % held by Deluxe
Month General Lien on 1/22/06 Specific Lien
----- ------------ ---------------- -------------
September 2005 $983,656 7.7% $75,741
October 2005 1,066,908 5.7 60,813
November 2005 1,144,477 16.8 192,272
December 2005 774,537 24.8 192,085
January 2006 234,248 41.6 97,447
(prepetition)
----------- ---------------- -------------
TOTAL $4,203,829 - $618,360
=========== ================ =============
The Debtors ask the Court to schedule a pre-motion conference.
About Musicland Holding
Headquartered in New York, New York, Musicland Holding Corp., is a
specialty retailer of music, movies and entertainment-related
products. The Debtor and 14 of its affiliates filed for chapter
11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No.
06-10064). James H.M. Sprayregen, Esq., at Kirkland & Ellis,
represents the Debtors in their restructuring efforts. Mark T.
Power, Esq., at Hahn & Hessen LLP, represents the Official
Committee of Unsecured Creditors. When the Debtors filed for
protection from their creditors, they estimated more than $100
million in assets and debts. (Musicland Bankruptcy News, Issue
No. 11; Bankruptcy Creditors' Service, Inc., 215/945-7000)
NATIONAL BEEF: S&P Affirms B+ Rating With Negative Outlook
----------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on
Kansas City, Missouri-based National Beef Packing Co. LLC,
including the 'B+' corporate credit rating.
All ratings were removed from CreditWatch with negative
implications, where they were placed March 13, 2006,
following the company's announcement of its proposed acquisition
of Brawley Beef LLC. The rating outlook is negative.
Approximately $353 million of debt was outstanding as of
Feb. 25, 2006.
The rating affirmation follows Standard & Poor's review of the
Brawley acquisition. Brawley is an alliance of cattle producers
in Arizona and California that supplies its meat-packing
operations with about 400,000 animals per year and produces custom
cuts to retail customers. The acquisition will provide for a
modest improvement in National Beef's business profile due to
greater geographic diversification of plant location and the
sourcing of cattle supply. The acquisition should also enhance
the company's cash flow and margins.
However, the successful integration and turnaround of Brawley's
cost structure will be critical to the company's ability to
realize these benefits. Although the terms and conditions of the
transaction have not been disclosed, Standard & Poor's does not
expect the acquisition to have a material effect on National
Beef's credit measures.
"The corporate credit rating reflects National Beef's debt levels,
which are high for a largely commodity-oriented protein processor
with low margins that operates in a very challenging environment,"
said Standard & Poor's credit analyst Ron Neysmith. "Somewhat
mitigating this are the company's broad customer base and
experienced management team, along with high barriers to entry for
industry competitors."
NTELOS INC: S&P Affirms Amended $665MM Debt Facility's B Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' bank
loan rating, the same as the corporate credit rating, on
Waynesboro, Virginia-based telecommunications provider NTELOS
Inc.'s amended and restated $665 million first-lien credit
facility and revised the recovery rating to '3' from '2'.
The ratings indicate expectations for a meaningful (50%-80%)
recovery of principal in the event of a payment default.
Standard & Poor's also affirmed the 'B' corporate credit ratings
on NTELOS Inc. and parent NTELOS Holdings Corp. (NTELOS), and
revised the outlook for both ratings to positive from stable.
"The outlook revision recognizes NTELOS's good operating
performance since emerging from bankruptcy in 2003, as well as our
expectations for a less-aggressive financial policy," said
Standard & Poor's credit analyst Susan Madison.
NTELOS Inc.'s amended credit facility is comprised of a $630
million term loan and a $35 million revolver. Incremental
proceeds from the larger facility will be used to repay the
company's $225 million second-lien loan. Upon the completion of
these transactions, the ratings on the second-lien facility will
be withdrawn. Total debt outstanding at March 31, 2006, pro forma
for the proposed transactions, was approximately $620 million.
Ratings for NTELOS reflect:
* the limited size and scale of the company's operations;
* its geographic concentration;
* the highly competitive nature of the telecom industry; and
* its aggressive, albeit moderating, financial profile.
Tempering factors include:
* the recent healthy performance of its wireless operations;
* a favorable contractual relationship with Sprint Nextel; and
* the diminishing influence of private equity sponsors on
financial policy.
OAM LLC: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------
Debtor: OAM, LLC
dba On A Mission
19061 San Ramon Cir
Villa Park, California 92861
Bankruptcy Case No.: 06-10727
Type of Business: The Debtor creates and distributes sporting and
athletic products.
Chapter 11 Petition Date: May 19, 2006
Court: Central District Of California (Santa Ana)
Judge: John E. Ryan
Debtor's Counsel: Richard L. Barnett, Esq.
Barnett & Rubin
Jeffrey Corporate Centre
5450 Tracbuco Road
Irvine, California 92620
Tel: (949) 261-9700
Fax: (949) 261-9799
Total Assets: $56,537
Total Debts: $1,314,332
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Centerpoint Development, Inc. Loans $218,446
22865 Lake Forest Drive
Lake Forest, CA 92630
Performance Engineered Fin Tooling $130,450
Products, Inc.
3270 Pomona Boulevard
Pomona, CA 91768
Zich Engineering Fin Engineering $42,960
18053 Tammerlane Way Services
San Clemente, CA 92672
Yuonler Industrial Co. Ltd. Pads in China $37,716
John O'Malley Loan $18,812
Mark LeDuc Loan $16,500
Kenneth Hovet, Esq. Legal Services $10,743
Surf More Leash Cuffs $8,067
Piazza, Donnelly & Marlette Accounting Services $5,850
Grant, Genovese & Baratta, LLP Attorney $5,755
Primedia Specialty Group Advertising $5,652
Eastern Surfing Products Storage Charges $3,850
CNA Insurance Business Insurance $3,412
Pak West Packaging Supplies $2,811
Helen Jolly Fin Sales Royalties $2,568
Roger L. Neu, Inc. Legal Services $2,095
Granger Larsen Team Rider Photo, Inc. $2,000
Daum Tooling Leash Ends $1,733
Employers Insurance Group Workers Compensation $1,600
Federal Express Shipping $1,411
OPEN DOOR: Case Summary & 11 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: An Open Door Church
dba Wee Care Child Development
dba AODC Christian Academy
dba An Open Door Church Bible College
7105 Hohman Avenue
Hammond, Indiana 46324
Tel: (219) 931-5747
Bankruptcy Case No.: 06-05791
Type of Business: The Debtor is a religious organization.
Chapter 11 Petition Date: May 19, 2006
Court: Northern District of Illinois (Chicago)
Judge: John H. Squires
Debtor's Counsel: Joseph E. Cohen, Esq.
Cohen & Krol
105 West Madison, Suite 1100
Chicago, Illinois 60602
Tel: (312) 368-0300
Fax: (312) 368-4559
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 11 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Hammond Center Associates Pending Suit $204,000
Law Offices of Ronald
Primack LLC
18401 Maple Creek Drive
Suite 100
Tinley Park, IL 60477
Advanta Bank Corp. Credit Card $28,813
P.O. Box 30715
Salt Lake City, UT 84130-0715
Nipsco Utility $9,256
P.O. Box 13007
Merrillville, IN 46411-3007
Kolnicki Peterson Wirth Services Rendered $4,800
Mercedes - Benz Financial Vehicle $3,555
Brotherhood Mutual Insurance Insurance $2,959
Workers Compensation $1,516
TJF Marketing and Marketing $2,400
Communications, Inc.
AT&T Utility $1,396
Fortis/Assurant Insurance Medical Insurance $1,276
Prudential Life Insurance Life Insurance $366
Verizon Wireless Cell Phone $75
ORCHARD AT HANSEN: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: Orchard at Hansen Park, LLC
c/o HSM-Kennewick LP, Manager
1100 Providence Towers West
5001 Spring Valley Road
Dallas, Texas 75244
Bankruptcy Case No.: 06-32016
Type of Business: The Debtor is an apartment community located in
Kennewick, Washington.
One of the Debtor's equity holders, HSM-
Kennewick, L.P., filed for chapter 11 protection
on March 3, 2006 (Bankr. N.D. Texas, Case No.
06-30900).
Chapter 11 Petition Date: May 19, 2006
Court: Northern District of Texas (Dallas)
Judge: Harlin DeWayne Hale
Debtor's Counsel: John Mark Chevallier, Esq.
McGuire, Craddock & Strother, P.C.
3550 Lincoln Plaza
500 North Akard Street
Dallas, Texas 75201
Tel: (214) 954-6800
Fax: (214) 954-6801
Estimated Assets: $10 Million to $50 Million
Estimated Debts: Unknown
The Debtor did not file the list of its 20 largest unsecured
creditors.
OVERSEAS SHIPHOLDING: Credit Facility Limit Raised to $1.8 Billion
------------------------------------------------------------------
On May 10, 2006, Overseas Shipholding Group, Inc., and its wholly
owned subsidiaries, OSG Bulk Ships, Inc. and OSG International,
Inc., entered into a second pooled assignment and amendment to
their credit agreement dated as of Feb. 9, 2006, with a group of
lenders and DnB NOR Bank ASA, New York Branch, as administrative
agent.
Pursuant to the Amendment, the amount that OSG and its
subsidiaries may borrow under the Credit Facility for the
seven-year term increased from $1.5 billion to $1.8 billion.
After five years, the maximum amount the Company may borrow under
the Credit Facility is reduced by $150 million. The amount will
be further reduced by an additional $150 million after six years.
The Amendment also designates Lloyds TSB Bank plc and Royal Bank
of Scotland as additional Lead Arrangers for the Credit Facility.
A full-text copy of the Second Pooled Assignment and Amendment is
available for free at http://researcharchives.com/t/s?970
About Overseas Shipholding
With offices in New York, Athens, London, Manila, Newcastle and
Singapore, Overseas Shipholding Group, Inc. (NYSE:OSG) --
http://www.osg.com/-- is widely recognized as one of the world's
most customer focused marine transportation companies providing
high quality tonnage and value-added services to major oil
companies and other major charterers around the globe. The
Company is focused on identifying and meeting the needs of our
partners and customers in a rapidly changing market.
* * *
As reported in the Troubled Company Reporter on Feb. 15, 2005,
Standard & Poor's Ratings Services affirmed its ratings, including
the 'BB+' corporate credit rating, on New York, New York-based
Overseas Shipholding Group Inc., and removed all ratings from
CreditWatch, where they were placed on Dec. 14, 2004. S&P's
CreditWatch placement followed the company's announcement that it
would acquire Stelmar Shipping Ltd. Overseas Shipholding
completed its $1.3 billion acquisition of Stelmar on
Jan. 20, 2005. S&P says the outlook is stable.
As reported in the Troubled Company Reporter on Feb. 10, 2005,
Moody's Investors Service confirmed Overseas Shipholding Group,
Inc.'s senior unsecured and senior implied ratings at Ba1. Moody's
also changed the rating outlook to negative from stable. This
completed Moody's ratings review opened on Dec. 13, 2004,
following the announcement by the company of its acquisition of
Stelmar Shipping (not rated) for $1.36 billion.
PAC NATIONAL: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: PAC National Communications, Inc.
fka NJP, Inc.
fka Advanced Technical Services
fka ATS Labor Services
fka PAC National Sign & Lighting, Inc.
48 Corliss Avenue
Johnson City, New York 13790
Bankruptcy Case No.: 06-61027
Chapter 11 Petition Date: May 21, 2006
Court: Northern District of New York (Utica)
Debtor's Counsel: Leslie N. Reizes, Esq.
Reizes Law Firm, Chartered
1177 George Bush Boulevard, Suite 308
Delray Beach, Florida 33483
Tel: (561) 276-2600
Fax: (561) 276-7300
Total Assets: $533,628
Total Debts: $1,738,662
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Arizona Department of Revenue TPT Taxes $505,794
1600 West Monroe Street
Phoenix, AZ 85007
Elaine L. Chao FLSA Proceeding $470,233
Secretary of Labor
200 Constitution Avenue
Northwest
Washington, D.C. 20210
Internal Revenue Service 941 Taxes $251,907
Insolvency Group 1
Niagara Center, 2nd Floor
130 South Elwood Avenue
Buffalo, NY 14202
Oregon Department of Revenue Withholding Taxes $27,300
California Employment Withholding Taxes $26,600
Development Department
CLP Industrial Properties, LLC Rental Lease $25,419
GE Capital Copier Lease $24,810
Arizona Department of Revenue Withholding Taxes $18,200
ALLTEL Communications Phone System $12,739
GE Capital Copier Lease $10,523
Gugino Law Firm, Chartered Legal Fees $7,074
Greenberg Traurig LLP Legal Fees $4,270
Tompkins and Peters CPA Accounting Fees $3,955
State of Nevada Security Systems $1,838
Department of Employment
ADT Security Systems Security Systems $1,838
Monster Inc. Employee Search Fee $1,581
Warren's Homework Moving/Storage Fees $1,308
Bancroft Susa & Galloway Legal Fees $1,305
DHL Express Shipping Fees $1,205
State of California Employment $919
PENN NATIONAL: Annual Shareholders' Meeting Set for June 1
----------------------------------------------------------
Penn National Gaming, Inc., will hold its 2006 Annual Meeting of
Shareholders at 10:00 a.m., on June 1, 2006, at Ballard Spahr
Andrews & Ingersoll, LLP, 1735 Market Street, 51st Floor, in
Philadelphia, Pennsylvania.
During the meeting shareholders will be asked to:
-- elect two Class I directors for a 3-year term and until
their successors are duly elected and qualified; and
-- consider and transact such other business as may properly
come before the Annual Meeting.
Only shareholders of record at the close of business on
April 7, 2006 are entitled to notice of and to vote at the Annual
Meeting.
A full-text copy of the Definitive Proxy Statement for the 2006
annual shareholders' meeting is available for free at:
http://researcharchives.com/t/s?980
About Penn National
Penn National Gaming, Inc. -- http://www.pngaming.com/-- owns and
operates casino and horse racing facilities with a focus on slot
machine entertainment. The Company presently operates fifteen
facilities in thirteen jurisdictions including Colorado, Illinois,
Indiana, Iowa, Louisiana, Maine, Mississippi, Missouri, New
Jersey, Ohio, Pennsylvania, West Virginia, and Ontario. In
aggregate, Penn National's facilities feature over 17,500 slot
machines, over 400 table games, over 2,000 hotel rooms and
approximately 575,000 square feet of gaming floor space. The
property statistics in this paragraph exclude two Argosy
properties which the company anticipates divesting, but are
inclusive of the Company's Casino Magic - Bay St. Louis, in Bay
St. Louis, Mississippi and the Boomtown Biloxi casino in Biloxi,
Mississippi, which remain closed following extensive damage
incurred as a result of Hurricane Katrina.
* * *
As reported in the Troubled Company Reporter on Feb. 2, 2006,
Moody's Investors Service raised the corporate family rating of
Penn National Gaming, Inc., to Ba2 from Ba3. Moody's also raised
its ratings on:
-- $750 million revolver due 2010, to Ba2 from Ba3;
-- $325 million term loan due 2011, to Ba2 from Ba3;
-- $1,650 million term loan B due 2012, to Ba2 from Ba3;
-- $175 million 8.875% guaranteed senior subordinated notes due
2010, to Ba3 from B2;
-- $200 million 6.875% guaranteed senior subordinated notes due
2011, to Ba3 from B2; and
-- $250 million 6.750% not guaranteed senior subordinated notes
due 2015, to B1 from B3.
PLIANT CORP: Inks $200 Mil. Revolving Facility with Merrill Lynch
-----------------------------------------------------------------
Pliant Corporation signed a commitment letter from Merrill Lynch
Commercial Finance Corp. relating to a proposed $200 million
revolving credit facility. This facility would replace Pliant's
existing prepetition revolver and debtor-in-possession credit
facility upon the company's emergence from Chapter 11, and is
subject to approval and implementation of Pliant's proposed plan
of reorganization, completion of definitive documentation, and
other customary closing conditions.
"This facility is a significant increase from Pliant's $140
million pre-petition credit facility," according to Bill Derrough,
Managing Director of Jefferies & Company, Inc., Pliant's financial
advisor. "It represents the accomplishment of another milestone
towards Pliant's emergence from Chapter 11 and reconfirms the
capital markets' support of Pliant's management and business
plan."
"We are pleased to have received this financing commitment from
Merrill Lynch Commercial Finance Corp," Harold Bevis, President
and CEO, said. "They are a premier partner and can help Pliant
achieve our financial goals. This $200 million commitment meets
our objectives. We believe the new credit facility will provide
liquidity and cash flows needed to execute our business plan and
enable Pliant to invest in its business on a sustained basis.
This is a great outcome for Pliant."
Headquartered in Schaumburg, Illinois, Pliant Corporation --
http://www.pliantcorp.com/-- produces value-added film and
flexible packaging products for personal care, medical, food,
industrial and agricultural markets. The Debtor and 10 of its
affiliates filed for chapter 11 protection on Jan. 3, 2006
(Bankr. D. Del. Lead Case No. 06-10001). James F. Conlan, Esq.,
at Sidley Austin LLP, and Edmon L. Morton, Esq., and Robert S.
Brady, Esq., at Young, Conaway, Stargatt & Taylor, represent the
Debtors in their restructuring efforts. The Debtors tapped
McMillan Binch Mendelsohn LLP, as their Canadian bankruptcy
counsel. The Ontario Superior Court of Justice named RSM
Richter, Inc., as the Debtors' information officer in their
restructuring proceeding under Companies Creditors Arrangement Act
in Canada. 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 CORP: Noteholders Want to Resolve Discovery Dispute
----------------------------------------------------------
As previously reported, the U.S. Bankruptcy Court for the District
of Delaware approved a discovery schedule, reflecting an agreement
of numerous parties, in connection with the Debtors' request to
have an expedited confirmation hearing.
David M. Stern, Esq., at Klee, Tuchin, Bogdanoff & Stern, LLP,
relates the Discovery Order contemplated limited discovery of
specific individuals -- those persons who were going to be
testifying at the Confirmation Hearing.
In late April 2006, the Debtors sent, but did not serve,
subpoenas and letters to two of the members of the Ad Hoc Group
of Holders of 11 1/8% Senior Secured Notes due 2009:
-- seeking a custodian of records deposition on May 12, 2006;
and
-- demanding production of a large universe of documents
falling into multiple and absurdly broad categories,
including trading history and trading information dating
back to January 2004, internal evaluations performed by
those institutions, and clearly privileged communications
between counsel to the Ad Hoc Committee and its members.
Much of the production sought is propriety and confidential, Mr.
Stern notes. Neither of the Ad Hoc Committee members, however,
has been designated, or will be designated, a witness by the Ad
Hoc Committee in connection with the upcoming Confirmation
Hearing.
Mr. Stern asserts that the Debtors therefore are seeking to
conduct highly unusual and broad discovery of persons who will
not be testifying at the Confirmation Hearing and are therefore
completely outside the purview of the Discovery Order.
The subpoenas are obviously designed to harass, intimidate and
deflect the Ad Hoc Committee and its members, Mr. Stern says.
Although the subpoenas were never served, the Committee
anticipates they will be and wants to bring the matter to the
Court at the earliest possible time.
In an effort to resolve the matter without the need for Court
intervention, the Ad Hoc Committee's counsel sent a letter to the
Debtors' counsel, which notes that:
(1) The Discovery Order does not cover the discovery of Ad Hoc
Committee members;
(2) Multiple depositions of persons in various states, who
will be witnesses at the Confirmation Hearing, are
scheduled to occur; and
(3) The time frame for discovery is inconsistent with the
expedited schedule for confirmation and the Federal Rules
of Civil Procedure.
"Had the Debtors stated on April 18th that they intended to
engage in such discovery," Mr. Stern says, "the Committee would
never have agreed to so expedited a limited schedule and would
have insisted on a much longer period between the solicitation of
votes on the Plan of Reorganization and the confirmation
hearing."
Moreover, Mr. Stern argues, the scope of the documents sought is
remarkably broad and unjustified. The Debtors seek documents
spanning numerous categories and periods of time from two Ad Hoc
Committee members who do not have access to the confidential
information.
Accordingly, the Ad Hoc Committee asks the Court to:
(a) preclude the Debtors from taking discovery not consistent
with the Discovery Order;
(b) continue the confirmation hearing for at least 45 days;
and
(c) fix the production date in connection with the subpoenas
for a minimum 30-day period from the date on which service
is effectuated.
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 Nod to Hire Mesirow as Financial Advisor
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware gave Pliant
Corporation and its debtor-affiliates permission to employ Mesirow
Financial Consulting, LLC, as their financial advisors nunc pro
tunc to February 20, 2006.
The Debtors need assistance in collecting and analyzing financial
and other information, as well as assistance in fulfilling their
reporting and disclosure requirements, Plaint Corp. VP and
General Counsel Stephen T. Auburn, said. The Debtors believe
that MFC has considerable experience with rendering those
services to debtors and other parties in numerous Chapter 11
cases.
As previously reported, the Debtors are seeking to employ
Jefferies & Company, Inc., as their financial advisor. The
Debtors assure Judge Walrath that MFC's services will not be
duplicative of those provided by Jefferies.
The Debtors will pay MFC for professional services rendered at
its normal and customary hourly rates. In the normal course of
business, the firm revises its hourly rates on April 1 of each
year. The firm's rates are:
Effective
Current 04/10/06
----------- ------------
Senior Managing Directors or
Managing Directors $590 - $650 $620 - $690
Senior Vice Presidents $480 - $570 $530 - $590
Vice Presidents $390 - $450 $430 - $490
Senior Associates $300 - $360 $330 - $390
Associates $190 - $270 $190 - $290
Para-professionals $140 $150
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. 10; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
PREMIUM PAPERS: Committee Taps Traxi LLC as Financial Advisor
-------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in Premium
Papers Holdco, LLC and its debtor-affiliates' chapter 11 cases
asks the U.S. Bankruptcy Court for the District of Delaware for
permission to employ Traxi LLC, as its financial advisor.
Traxi LLC will:
a. review all financial information prepared by the Debtor or
its consultants as requested by the Committee, including a
review of the Debtors' financial statements as of the
petition date, showing in detail all assets and liabilities
and priority and secured creditors;
b. monitor the Debtors' activities regarding cash
expenditures, receivable collections, asset sales and
projected cash requirements;
c. attend meetings with the Committee, the Debtors,
creditors, their attorneys and consultants, Federal and
state authorities, if required;
d. review the Debtors' periodic operating and cash flow
statements;
e. review the Debtors' books and records for related party
transactions, potential preferences, fraudulent conveyances
and other potential prepetition investigations;
f. conduct any investigation with respect to prepetition acts,
conduct, property liabilities and financial condition of
the Debtor, its management and financial condition of the
Debtor, its management, creditors including the operation
of its businesses, and as appropriate, avoidance actions;
g. review any business plans prepared by the Debtor or their
consultants;
h. review and analyze proposed transactions for which the
Debtor seeks Court approval;
i. assist in a sale process of the Debtor collectively or in
segments, parts or other delineations, if any;
j. assist the Committee in developing, evaluation, structuring
and negotiating the terms and conditions of all potential
plans of liquidation;
k. provide expert testimony on the results of the findings;
l. analyze potential divestitures of the Debtors'
operations;
m. assist the Committee in developing alternative plans
including contacting potential plan sponsors if
appropriate; and
n. provide the Committee with other and further financial
advisory services with respect to the Debtors, including
valuation, and advice with respect to financial, business
and economic issues, as may arise during the course of the
restructuring as requested by the Committee.
Perry M. Mandarino, a senior managing director and unit holder at
Traxi, tells the Court that the Firm's professionals bill:
Professional Hourly Rate
------------ -----------
Partners/Managing Directors $450 - $525
Managers/Directors $275 - $425
Associates/Analysts $125 - $275
Mr. Mandarino assures the Court that the Firm is "disinterested"
as that term is defined in Section 101(14) of the Bankruptcy Code.
Headquartered in Hamilton, Ohio, Premium Papers Holdco, LLC --
http://www.smartpapers.com-- manufactures and markets a wide
variety of premium coated and uncoated printing papers, such as
Kromekote, Knightkote, and Carnival. The Company and two of its
affiliates filed for chapter 11 protection on March 21, 2006
(Bankr. D. Del. Case No. 06-10269). Ian S. Fredericks, Esq., at
Young, Conaway, Stargatt & Taylor, LLP, represents the Debtors in
their restructuring efforts. The Official Committee of Unsecured
Creditors has retained Mary E. Seymour, Esq., at Lowenstein
Sandler PC, as its counsel. When the Debtors filed for protection
from their creditors, they did not disclose their total assets but
estimated debts between $10 million and $50 million.
PROTECTION ONE: Can Access $66.8 Mil. More from Credit Facility
---------------------------------------------------------------
Protection One Alarm Monitoring, Inc., and Protection One, Inc.,
entered into an Amended and Restated Credit Agreement, dated as of
April 26, 2006, with, Bear, Stearns & Co. Inc., as sole lead
arranger and sole bookrunner, LaSalle Bank National Association,
as syndication agent, Harris Nesbitt Financing, Inc., LaSalle Bank
National Association and U.S. Bank National Association, as co-
documentation agents, and Bear Stearns Corporate Lending Inc., as
administrative agent and certain other lender banks.
The Amended and Restated Credit Agreement provides for increased
borrowing capacity under the Company's term loan of up to $300
million, an increase of approximately $66.8 million compared to
the previously outstanding amount.
The maturity of the Company's amended term loan was extended by
approximately one year, to March 31, 2012, subject to earlier
maturity if the Company does not refinance its 8 1/8% senior
subordinated notes due 2009 before July 2008.
Letters of credit remain available to the Company under the
Amended and Restated Credit Agreement and will be issued by
LaSalle Bank National Association. Swingline loans are also
available to the Company under the Amended and Restated Credit
Agreement in an aggregate amount of up to $2,500,000 outstanding
at any time.
The incremental proceeds from the amended term loan, together with
excess cash, will be used to make an aggregate special cash
distribution of approximately $75.0 million, comprised of a
dividend to holders of POI's common stock and related payments to
members of management who hold options for POI's common stock.
Borrowings under the Amended and Restated Credit Agreement will
bear interest at a rate calculated according to a base rate or a
Eurodollar rate, at the Company's discretion, plus an applicable
margin. The applicable margin with respect to the amended term
loan was reduced by 0.5% to 1.5% for a base rate borrowing and
2.5% for a Eurodollar borrowing.
The Amended and Restated Credit Agreement contains covenants,
including, among other things, covenants that restrict the ability
of POI, the Company and its subsidiaries to incur certain
additional indebtedness, create or permit liens on assets, or
engage in mergers, consolidations or dispositions. The Amended
and Restated Credit Agreement also requires the Company to
maintain certain varying leverage and interest coverage ratios.
A full-text copy of the amended credit agreement is available for
free at http://researcharchives.com/t/s?983
About Protection One
Based in Wichita, Kansas, Protection One --
http://www.protectionone.com/-- provides installation,
maintenance and monitoring of these state-of-the-art, user-
friendly fire and burglar alarm systems. Network Multifamily, the
company's wholly owned subsidiary, is the largest and oldest
monitored security provider to the multifamily housing market.
Protection One's 2,300 professionals serve its customers from more
than 64 branch offices and three state-of-the-art monitoring
facilities.
* * *
As reported in the Troubled Company Reporter on April 18, 2006,
Fitch Ratings assigned a 'B+' rating as well as a recovery rating
of 'RR2' to Protection One Alarm Monitoring Inc.'s proposed add-on
senior secured term loan of $66.8 million, increasing the total
term loan to approximately $300 million.
Due to this expected debt increase as well as lower recovery
values for the secured bank debt, Fitch has downgraded the
company's senior secured bank facility to 'B+/RR2' (average
recovery value of 71%-90%) from 'BB-/RR1'.
As reported in the Troubled Company Reporter on April 13, 2006,
Moody's Investors Service assigned a B2 rating to Protection One
Alarm Monitoring, Inc.'s proposed $66.8 million term loan, and
affirmed the company's B2 corporate family rating, the B2 rating
senior secured credit facility rating, and the Caa1 senior
subordinated notes rating. The outlook remains stable.
At the same time, Standard & Poor's Ratings Services assigned its
'B+' senior secured debt rating, with a recovery rating of '2', to
Protection One Alarm Monitoring Inc.'s proposed $67 million add-on
senior secured term loan.
PUBLICARD INC: Balance Sheet Upside-Down By $7.6 Mil. at March 31
-----------------------------------------------------------------
PubliCARD, 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
$449,000 net loss on $749,000 of net revenues compared to a
$719,000 net loss on $751,000 of net revenues for the same period
in 2005.
At March 31, 2006, the company's balance sheet showed total assets
of $2.3 million and total debts of $9.9 million, resulting in a
$7.6 million stockholders' deficit. As of March 31, 2006, the
Company's accumulated deficit widened to $121 million from a
$120 million accumulated deficit at Dec. 31, 2005.
A full-text copy of PubliCARD, Inc.'s Quarterly Report is
available for free at http://researcharchives.com/t/s?96e
Going Concern Doubt
Deloitte & Touche LLP, expressed doubt about PubliCARD, Inc.'s
ability to continue as a going concern after auditing the
company's 2005 financial statements. The auditing firm pointed to
the company's recurring losses from operations, a substantial
decline in working capital and negative cash flows from
operations, and requires additional capital to meet its
obligations at Dec. 31, 2005.
Headquartered in New York, New York, PubliCARD, Inc. --
http://www.publicard.com/-- through its Infineer Ltd. subsidiary,
designs smart card solutions for educational and corporate sites.
RANGE RESOURCES: S&P Rates Planned $200 Mil. Sr. Sub. Notes at B
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' rating to oil
and gas exploration and production company Range Resources Corp.'s
(BB-/Positive/--) planned $200 million senior subordinated notes.
At the same time, Standard & Poor's affirmed its 'BB-' corporate
credit rating on Range.
The outlook remains positive. As of March 31, 2006, the Fort
Worth, Texas-based company had about $600 million of debt
outstanding.
"The affirmation reflects our assessment that the company's
business risk profile has strengthened sufficiently to warrant
ratings improvement in the near term, but the recent acquisition
of Stroud Energy Inc. dampens upward momentum," said Standard &
Poor's credit analyst Ben Tsocanos.
"We view the transaction, though partially funded with equity, as
aggressive due to the high cost on a proved reserve basis, the
associated development costs, and because it represents expansion
in the Barnett Shale, where the company is a relatively small
operator," said Mr. Tsocanos.
The ratings on Range reflect a weak but improving business risk
profile, largely due to the cyclical and capital-intensive nature
of the petroleum industry, combined with an aggressive financial
risk profile. The company pursues an acquire-and-exploit
strategy, the leverage effect of which has been softened
considerably by the partial use of equity to fund transactions.
The positive outlook on Range reflects the potential for
management to take advantage of an improved business risk profile
and a favorable commodity price environment to strengthen the
company's financial position. Potential for near-term improvement
is also tied to successful integration of the Stroud acquisition
and meeting the equity funding target for the purchase price.
The application of excess cash flow or asset sale proceeds to debt
reduction and the maintenance of capital spending within cash flow
could signal higher ratings. Conversely, failure to fund a
significant portion of future acquisition costs with equity would
likely result in an outlook revision to stable or a lower rating.
REFCO INC: Chapter 7 Trustee Hires Bridge Associates as Advisor
---------------------------------------------------------------
Albert Togut, the interim Chapter 7 trustee of the estate of
Refco, LLC, and its debtor-affiliates, obtained authority from the
United States Bankruptcy Court for the Southern District of New
York to employ Bridge Associates, LLC, as his financial advisors.
As reported in the Troubled Company Reporter on May 17, 2006, the
Chapter 7 Trustee needs Bridge Associates to assist him in
preparing monthly operating reports for Refco LLC and to otherwise
comply with other reporting requirements of the Bankruptcy Code,
the Bankruptcy Rules, the Local Rules and the operating guidelines
for bankruptcy trustees promulgated by the office of the U.S.
Trustee.
In addition, Mr. Togut needs Bridge Associates to:
-- communicate with the office of the U.S. Trustee concerning
any issues regarding monthly operating reports and related
matters;
-- review reports prepared by other parties-in-interest
regarding, among other things, the transactions between
Refco LLC and the Chapter 11 Debtors, including the
allocation of expenses among the entities pursuant to the
Bankruptcy Court Order approving the Debtors' Statement of
Overhead Allocation Methodology, dated February 1, 2006;
-- assist in the identification of supporting information for
collecting outstanding accounts receivable of Refco LLC;
and
-- perform other necessary services and provide other advice
in connection with Refco LLC's case.
Mr. Togut selected Bridge Associates because of its extensive and
diverse experience, knowledge, and reputation in bankruptcy
cases. Bridge Associates or its professionals have been involved
in numerous large Chapter 11 cases, including Tower Automotive,
Inc.; Wickes Inc.; Brill Media, LLC; United Air Lines, Inc.;
Agribiotech (n/k/a ABT Creditor Trust); and Three Five Systems,
Inc., as well as many other out-of-court restructurings.
Anthony H. N. Schnelling, a managing director at Bridge
Associates, assures the Court that the firm and its professionals
do not have any interest materially adverse to the interest of
the Chapter 7 Trustee, Refco LLC, any class of creditors or
equity security holders, any other party-in-interest, or their
attorneys and accountants. Bridge Associates is a "disinterested
person," as that phrase is defined in Section 101(14) of the
Bankruptcy Code, as modified by Section 1107(b).
Mr. Togut will pay Bridge Associates in accordance with its
ordinary and customary hourly rates. The firm's current hourly
billing rates for 2006 range from $300 to $450 for managing
directors, directors and senior consultants; $250 to $300 for
principals, senior associates and consultants; and $150 to $250
for associates and consultants.
About Refco Inc.
Based in New York, New York, Refco Inc. -- http://www.refco.com/-
- is a diversified financial services organization with operations
in 14 countries and an extensive global institutional and retail
client base. Refco's worldwide subsidiaries are members of
principal U.S. and international exchanges, and are among the most
active members of futures exchanges in Chicago, New York, London
and Singapore. In addition to its futures brokerage activities,
Refco is a major broker of cash market products, including foreign
exchange, foreign exchange options, government securities,
domestic and international equities, emerging market debt, and OTC
financial and commodity products. Refco is one of the largest
global clearing firms for derivatives.
The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts. Luc A.
Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents
the Official Committee of Unsecured Creditors. Refco reported
$16.5 billion in assets and $16.8 billion in debts to the
Bankruptcy Court on the first day of its chapter 11 cases.
Refco LLC, an affiliate, filed for chapter 7 protection on
Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC, is
a regulated commodity futures company that has businesses in the
United States, London, Asia and Canada. Refco, LLC, filed for
bankruptcy protection in order to consummate the sale of
substantially all of its assets to Man Financial Inc., a wholly
owned subsidiary of Man Group plc. (Refco Bankruptcy News, Issue
No. 30; Bankruptcy Creditors' Service, Inc., 215/945-7000)
REFCO INC: Court Adjourns Exclusive Periods Hearing to June 27
--------------------------------------------------------------
The Hon. Robert D. Drain of the U.S. Bankruptcy Court for the
SOuthern District of New York adjourned, to 10:00 a.m., on
June 27, 2006, the hearing to consider Refco Inc., and its debtor-
affiliates' request to extend their:
* Exclusive Plan Filing Period to Sept 1, 2006; and
* Exclusive Solicitation Period to Oct. 31, 2006.
Based in New York, New York, Refco Inc. -- http://www.refco.com/-
- is a diversified financial services organization with operations
in 14 countries and an extensive global institutional and retail
client base. Refco's worldwide subsidiaries are members of
principal U.S. and international exchanges, and are among the most
active members of futures exchanges in Chicago, New York, London
and Singapore. In addition to its futures brokerage activities,
Refco is a major broker of cash market products, including foreign
exchange, foreign exchange options, government securities,
domestic and international equities, emerging market debt, and OTC
financial and commodity products. Refco is one of the largest
global clearing firms for derivatives.
The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts. Luc A.
Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents
the Official Committee of Unsecured Creditors. Refco reported
$16.5 billion in assets and $16.8 billion in debts to the
Bankruptcy Court on the first day of its chapter 11 cases.
Refco LLC, an affiliate, filed for chapter 7 protection on
Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC, is
a regulated commodity futures company that has businesses in the
United States, London, Asia and Canada. Refco, LLC, filed for
bankruptcy protection in order to consummate the sale of
substantially all of its assets to Man Financial Inc., a wholly
owned subsidiary of Man Group plc. (Refco Bankruptcy News, Issue
No. 30; Bankruptcy Creditors' Service, Inc., 215/945-7000)
RIVERSTONE NETWORKS: Committee Hires Klehr Harrison as Co-Counsel
-----------------------------------------------------------------
The Official Committee of Equity Security Holders appointed in
Riverstone Networks, Inc., and its debtor-affiliate, Parsons Paper
Company, Inc.'s case, obtained approval from the U.S. Bankruptcy
Court for the District of Delaware to employ Klehr, Harrison,
Harvey, Branzburg & Ellers LLP as Delaware co-counsel.
Klehr Harrison is expected to:
a) assist and advise the Equity Committee in its discussions
with the Debtors and other parties-in-interest regarding the
overall administration of the Debtors' cases;
b) represent the Equity Committee at hearings to be held before
the Court and communicate with the Equity Committee
regarding the matters heard and the issues raised as well as
the decisions and considerations of the Court;
c) assist and advise the Equity Committee in its examination
and analyze the conduct of the Debtors' affairs;
d) review and analyze pleadings, orders, schedules, and other
documents filed and to be filed with the Court by interested
parties in these cases, advise the Equity Committee as to
the necessity, propriety, and impact of the foregoing upon
these cases, and consent or object to pleadings or orders on
behalf of the Equity Committee, as appropriate;
e) assist the Equity Committee in preparing applications,
motions, memoranda, proposed orders, and other pleadings as
may be required in support of positions taken by the Equity
Committee, including all trial preparation as may be
necessary;
f) confer with the professionals retained by the Debtor and
other parties-in-interest, as well as with other
professionals as may be selected and employed by the Equity
Committee;
g) coordinate the receipt and dissemination of information
prepared by and received from the Debtors' professionals, as
well as any information as may be received from
professionals engaged by the Equity Committee or other
parties-in-interest in these cases;
h) participate in examinations of the Debtors and other
witnesses as may be necessary in order to analyze and
determine, among other things, the Debtors' assets and
financial condition, whether the Debtors have made any
avoidable transfers of property, or whether causes of action
exist on behalf of the Debtors' estates;
i) negotiate and formulate a plan of reorganization for the
Debtors; and
j) assist the Equity Committee generally in performing other
services as may be required for the discharge of the Equity
Committee's duties pursuant to Section 1103 of the
Bankruptcy Code.
Steven K. Kortanek, Esq., a Klehr Harrison member, discloses that
he will bill $365 per hour in this engagment. Jennifer L.
Scoliard, Esq., an associate, will charge the Debtors $280 per
hour for her work. The Firm's other professionals bill:
Position Hourly Rate
-------- -----------
Attorney $170 - $600
Paraprofessionals $120 - $165
The Equity Committee believes that Klehr Harrison is a
"disinterested person", and does not hold or represent an interest
adverse to the Debtors' estates.
Based in Santa Clara, California, Riverstone Networks, Inc. --
http://www.riverstonenet.com/-- provides carrier Ethernet
infrastructure solutions for business and residential
communications services. The company and four of its affiliates
filed for chapter 11 protection on Feb. 7, 2006 (Bankr. D. Del.
Case Nos. 06-10110 through 06-10114). Edmon L. Morton, Esq., and
Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP,
represent the Debtors. Jeffrey S. Sabin, Esq., at Schulte Roth &
Zabel LLP represents the Official Committee of Unsecured
Creditors. As of Dec. 24, 2005, the Debtors reported assets
totaling $98,341,134 and debts totaling $130,071,947.
SFBC INTERNATIONAL: S&P Holds Neg. Watch on B+ Corp. Credit Rating
------------------------------------------------------------------
Standard & Poor's Ratings Services held its ratings on Princeton,
New Jersey-based contract research services provider SFBC
International Inc., including the 'B+' corporate credit rating,
under CreditWatch with negative implications, where they were
placed on May 11, 2006.
The CreditWatch update reflects the company's decision to cease
all operations in Florida, which consisted of early phase testing
facilities in Miami and Ft. Myers. Miami-Dade County officials
have refused to issue an extension to review SFBC's remediation
plan for its Miami facility. The company still faces other
challenges, and transitioning customers to SFBC's Canadian
facilities could be disruptive.
In the near term, Standard & Poor's will monitor SFBC's
performance and key credit metrics. There currently exists
limited cushion at the current rating level, and weak performance
in future quarters could remove this cushion and lead to a lower
rating. In addition, SFBC is operating under a covenant waiver
through June 30, 2006. Standard & Poor's will track whether the
company negotiates covenants on a more permanent basis and at what
levels any such covenants are set. In addition, it will meet with
management to get clearer indication as to the business and
financial costs of ceasing Florida operations.
SAMSONITE CORP: Jan. 31 Balance Sheet Upside-Down by $51.2 Million
------------------------------------------------------------------
Samsonite Corporation reported revenues and operating income for
the fourth fiscal quarter ended Jan. 31, 2006, of $249.3 million
and $25.9 million, respectively, compared to revenues of $243.5
million and operating income of $23 million in the prior year
quarter. Operating income for the prior year includes
restructuring charges of $1.8 million.
Net income to common stockholders was $2.5 million for the fourth
quarter compared to $3.2 million in the prior year quarter. Net
income to common stockholders for the fourth quarter ended Jan.
31, 2005, has been restated to reduce previously reported income
by $200,000 as a result of a restatement of the fiscal 2005
financial statements for an error in calculating the deferred tax
asset valuation allowance.
Revenues and operating income for the fiscal year ended
Jan. 31, 2006 were $966.9 million and $73.0 million, respectively,
which compares to $902.9 million and $65.7 million in the prior
year.
Revenues and operating earnings for fiscal 2006 include the
benefit of $3.2 million related to the sale of an apparel license
during the first quarter. Operating income for the current fiscal
year also includes restructuring charges and expenses of
$11.2 million and asset impairment charges of $5.4 million.
Operating income for the prior fiscal year includes restructuring
charges and expenses of $9 million and asset impairment charges of
$0.7 million.
Loss to common stockholders for the fiscal year was $1.5 million,
compared to $23.4 million in the prior fiscal year. Net loss to
common stockholders for the year ended Jan. 31, 2005 has been
restated to reduce previously reported income by $600,000 as a
result of a restatement of the fiscal 2005 financial statements
for an error in calculating the deferred tax asset valuation
allowance. Loss to common stockholders for the fiscal year ended
Jan. 31, 2005 includes expenses of $17.8 million related to the
refinancing of subordinated debt.
The Company's balance sheet at Jan. 31, 2006, showed $567,251,000
in total assets, $602,407,000 in total liabilities and $16,057,000
of minority interests in consolidated subsidiaries, resulting in
total stockholders' deficit of $51,213,000.
Adjusted EBITDA was $121.4 million for fiscal 2006 versus
$101.4 million for the prior fiscal year. Adjusted EBITDA was
$34.5 million for the fourth quarter compared to $31.7 million for
the fourth quarter of the prior year.
Chief Executive Officer, Marcello Bottoli, stated, "I am very
pleased with the progress the Company is making in executing our
strategic plan and the resulting financial performance for fiscal
year 2006. Our 7.1% growth in revenues and 250 basis point gross
margin improvement have allowed us to continue stepping up
spending behind our brands while posting a solid 19.7% increase in
EBITDA. The operational performance as well as our strong 300
basis point working capital efficiency reduction has, in turn,
allowed us to reduce our net debt to $221.8 million at January 31,
2006 from $298 million at January 31, 2005. The results stem
directly from efforts to improve our products, gross margins and
the quality and size of our brand investment, and from managing a
more focused, simplified range of products and a significantly
reduced level of working capital assets."
Richard Wiley, Chief Financial Officer, commented, "Fueled by
sales growth and improved gross profit margins, the Company
continues to strengthen its annual cash flow from operations. In
addition, management's strategy to focus on improving working
capital efficiency has also strengthened the Company's liquidity
position. The Company's leverage ratio improved to 1.83 based on
fiscal 2006 Adjusted EBITDA and debt net of cash at Jan. 31, 2006.
Working capital efficiency on a trailing twelve-month average
balance basis declined to 16.6% at year-end compared to 19.6% as
of the prior year-end. These improvements led to the Company's
ability to permanently retire $30.1 million of subordinated debt
during the year. Our expectations are that cash flow from
operations will continue to improve, benefiting from past
operational restructuring activities and that the Company will
maintain a strong liquidity position going forward."
A full-text copy of the Company's Fiscal 2006 annual report on
Form 10-K is available for free at:
http://researcharchives.com/t/s?98b
Samsonite Corporation -- http://www.samsonite.com-- designs,
manufactures and distributes luggage, casual bags, business cases
and travel related products throughout the world. The Company
also licenses its brand names and is involved with the design and
sale of apparel.
SANTIAGO ASSOCIATES: Case Summary & 14 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Santiago Associates, Inc.
5025 North Central Avenue, Suite 420
Phoenix, Arizona 85012
Tel: (602) 277-1188
Bankruptcy Case No.: 06-01454
Chapter 11 Petition Date: May 18, 2006
Court: District of Arizona (Phoenix)
Debtor's Counsel: Lawrence d. Hirsch, Esq.
Hirsch Law Office, P.C.
5020 East Shea Boulevard, Suite 150
Scottsdale, Arizona 85254
Tel: (602) 996-9544
Fax: (480) 505-9707
Estimated Assets: $10 Million to $50 Million
Estimated Debts: $10 Million to $50 Million
Debtor's 14 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
S.W. Companies General $500,000
17601 East 17th Street, #200 Contractor
Tustin, CA 92780
Orange County Treasurer General & Special $289,533
Tax Collector Real Estate Taxes
12 Civic Center Plaza
Room G58
P.O. Box 1980
Santa Ana, CA 92702
Lee Shankman Unsecured Loan $150,000
7475 East Raintree Court
Scottsdale, AZ 85258
J.C. Associates Inc. Unsecured Loan $30,000
Collamer & Associates Unsecured Loan $28,000
Carl Hunking Unsecured Loan $26,800
Lizeth Marble Design Granite & Marble $25,470
Royce International Consulting $18,300
and Consulting
California Heating & Air Air Conditioning $15,712
Modern Iron Works Wrought Iron $11,450
U.S. Air Conditioning Air Conditioning $8,678
and Distribution Parts
Hammond Wholesale Flagstone $7,844
Douglas Security Security & Audio $7,750
TIN Bender A.C. & Heating $7,034
SEARS HOLDINGS: Earns $180 Million in First Quarter of Fiscal 2006
------------------------------------------------------------------
Sears Holdings Corporation earned net income of $180 million for
the first quarter ended April 29, 2006, compared with a net loss
of $9 million for the first quarter ended April 30, 2005.
The prior year results include a $90 million charge due to the
cumulative effect of a change in accounting for certain indirect
overhead costs included in inventory. Excluding the change in
accounting, the prior year first quarter net income was
$81 million.
The improvement in first quarter 2006 earnings reflects improved
profitability at both Kmart and Sears Domestic, largely due to
reduced expenses.
"While we're pleased with the progress we're making, we continue
to look for ways to be more efficient and effective in our
business," Aylwin Lewis, Sears Holdings' chief executive officer
and president, said.
"With a goal of dramatically improving the customer experience at
all of Sears Holdings' touch points, we are starting with the
basics and working with our associates to drive the culture shift
necessary to become a great retail company," Mr. Lewis added.
The statements of operations for the 13 weeks ended April 29,
2006, are not comparable to the prior year period because the
prior year period includes the results of Sears, Roebuck and Co.
only for the period subsequent to March 24, 2005, the date of its
acquisition by Kmart Holding Corporation.
In order to provide a comparable performance measure for the
combined Company, pro forma results for the prior year period have
been presented as though Kmart and Sears had been combined as of
the beginning of fiscal 2004.
On a pro forma basis, the Company's income before the cumulative
effect of the accounting change in the first quarter of fiscal
2005 was $12 million.
First Quarter Revenues and Comparable Store Sales
Domestic comparable stores sales declined 4.8% in the aggregate,
with Sears Domestic comparable store sales declining 8.4% and
Kmart comparable store sales declining 0.2%.
The decline in Kmart comparable store sales for the quarter was
primarily due to lower transaction volumes within home goods
partially offset by increased sales in apparel and within food and
other consumable goods categories.
Sears Domestic comparable store sales results reflect declines
across all categories and formats except within home appliances,
which generated a modest comparable store sales increase.
Total revenues increased $4.4 billion to $12.0 billion for the
13 weeks ended April 29, 2006, as compared to total revenues of
$7.6 billion for the 13 weeks ended April 30, 2005.
The increase during the 13-week period ended April 29, 2006, was
primarily attributable to the inclusion of Sears for the full
13-week period ended April 29, 2006.
Sears revenues were $7.7 billion for the 13 weeks ended April 29,
2006, as compared to $3.1 billion for the 13 weeks ended April 30,
2005, which period only includes the results of Sears subsequent
to March 24, 2005, the date of its acquisition by Kmart.
Total revenues at Kmart declined $3 million as compared to the
prior year period, primarily reflecting a reduction in the total
number of Kmart stores in operation.
Operating Income
Operating income was $331 million for the 13 weeks ended April 29,
2006, as compared to $151 million for the 13 weeks ended April 30,
2005.
The increase in operating income was due to an increase of
$135 million of Sears Domestic operating income, as well as a
$47 million increase in Kmart operating income mainly due to lower
expenses as a result of realizing merger synergies and improved
expense management.
Financial Position
The Company's cash and cash equivalents balance is $3.2 billion at
April 29, 2006, as compared to $1.9 billion at April 30, 2005, and
$4.4 billion at Jan. 28, 2006.
The decline in cash from fiscal 2005 year-end is due to the
funding of seasonal working capital requirements and share
repurchases.
Holdings' inventory level at April 29, 2006, was approximately
$9.6 billion, as compared to $9.5 billion as of April 30, 2005.
The increase reflects higher inventory in Kmart apparel and Sears
Domestic hardlines businesses, partially offset by a reduction in
Sears apparel inventory.
Merchandise payables were $3.6 billion at April 29, 2006, as
compared to $3.7 billion as of April 30, 2005.
Share Repurchase
During the first quarter of 2006, the company repurchased
3.3 million common shares at a total cost of $413 million, or an
average price of $125.65 per share.
As of April 29, 2006, the Company had remaining authorization to
repurchase $497 million of common shares under its existing share
repurchase program approved by the board of directors.
The remaining shares may be purchased in the open market, through
self-tender offers or through privately negotiated transactions.
Timing will depend on prevailing market conditions, alternative
uses of capital and other factors.
Quarterly Report on Form 10-Q
The Company plans to file with the SEC its Quarterly Report on
Form 10-Q for the first quarter 2006 on or before June 8, 2006.
The Company elected to report its first quarter results in advance
of the filing of this report in order to provide information to
its shareholders closer to the quarter end.
Sears Holdings Corporation (NASDAQ: SHLD) --
http://www.searsholdings.com/-- is the nation's third largest
broadline retailer, with approximately $55 billion in annual
revenues, and with approximately 3,900 full-line and specialty
retail stores in the United States and Canada. Sears Holdings is
the leading home appliance retailer as well as one of the leading
retailers of tools, lawn and garden, home electronics and
automotive repair and maintenance. Key proprietary brands include
Kenmore, Craftsman and DieHard, and a broad apparel offering,
including well-known labels as Lands' End, Jaclyn Smith and Joe
Boxer, as well as the Apostrophe and Covington brands. It also
has Martha Stewart Everyday products, which are offered
exclusively in the U.S. by Kmart and in Canada by Sears Canada.
* * *
As reported in the Troubled Company Reporter on Dec. 30, 2005,
Moody's Investors Service assigned a speculative grade liquidity
rating of SGL-1 to Sears Holdings Corporation and affirmed the
long-term ratings of the company and its subsidiaries with a
stable rating outlook. Moody's also affirmed Sears Holdings
Corp.'s corporate family rating at Ba1; and Sears Roebuck
Acceptance Corp.'s senior secured bank facility at Baa3 and senior
unsecured notes at Ba1.
SILGAN HOLDINGS: S&P Rates Planned EUR200 Million Facility at BB+
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' bank loan
and '2' recovery ratings to Silgan Holdings Inc.'s proposed EUR200
million incremental term loan facility.
Standard & Poor's also assigned 'BB+' bank loan and '2' recovery
ratings to wholly owned subsidiary Silgan Plastics Canada Inc.'s
recent CDN$45 million term loan facility, which is guaranteed on a
secured basis by Silgan Holdings Inc. and substantially all its
U.S. subsidiaries. Both facilities represent new tranches under
an existing credit facility.
"These ratings indicate our expectation of substantial -- 80% to
100% -- recovery of principal in the event of a payment default,"
said Standard & Poor's credit analyst Cynthia Werneth.
At the same time, Standard & Poor's revised the recovery ratings
on the existing tranches of Silgan's credit facility to '2' from
'3'. The improved recovery prospects reflect the rating agency's
belief that the company's EBITDA in a simulated payment default
scenario and the emergence multiple following a reorganization
would be somewhat higher than previously thought. All other
ratings, including the 'BB+' corporate credit rating, were
affirmed.
Proceeds from the euro incremental term loan facility will be
used, together with some revolver borrowings, to fund the EUR230
million acquisition of the White Cap metal closures business from
Amcor Ltd.
Proceeds from the Canadian term loan facility were used to
repatriate earnings to the U.S. and reduce U.S. term loan
borrowings. Pro forma for the White Cap acquisition, Silgan will
have total debt of about $1.3 billion, including capitalized
operating leases and tax-effected, unfunded postretirement
obligations.
The ratings on Stamford, Connecticut-based Silgan are supported
by:
* its satisfactory business position as a major North American
producer of rigid consumer goods packaging;
* fairly steady earnings and free cash flow generation; and
* demonstrated commitment to maintaining a capital structure
consistent with the ratings.
These attributes are offset by still somewhat aggressive financial
policies that reflect the business and financial risks associated
with its strategy of growth via acquisitions. The White Cap
acquisition, the company's first foray outside North America, will
expand its position within an attractive market segment and should
permit it to capitalize on growth in emerging markets. Although
Silgan is likely to remain moderately acquisitive, Standard &
Poor's expects management to adhere to strict return criteria and
leverage discipline, thereby supporting credit quality.
With 2005 revenues of $2.5 billion, Silgan's business mix is about
three-quarters metal food cans and closures and one-quarter
plastic containers used primarily for personal care products.
SILICON GRAPHICS: Hires BSI LLC as Claims & Noticing Agent
----------------------------------------------------------
Silicon Graphics, Inc., and its debtor-affiliates obtained the
U.S. Bankruptcy Court for the Southern District of New York's
authority to employ Bankruptcy Services LLC as their claims and
noticing agent.
The Debtors estimate that there are approximately 50,000 creditors
in their Chapter 11 cases. Many of these creditors are expected
to file proofs of claim. Thus, the noticing, receiving, docketing
and maintenance of the proofs of claim would be unduly time-
consuming and burdensome for the Clerk of the Bankruptcy Court.
Barry Weinert, Esq., vice president, secretary and general counsel
of Silicon Graphics, Inc., relates that BSI is a nationally
recognized specialist in Chapter 11 administration and has vast
experience in noticing and claims administration in other large
Chapter 11 cases.
As the Debtors' claims and noticing agent, BSI will:
(a) notify all potential creditors of the filing of the
Chapter 11 petitions and of the setting of the first
meeting of creditors pursuant to Section 341(a) of the
Bankruptcy Code;
(b) maintain an official copy of the Debtors' Schedules of
Assets and Liabilities and Statements of Financial
Affairs, listing the Debtors' known creditors and the
amounts owed;
(c) maintain a copy service from which parties may obtain
copies of relevant documents of the Debtors' cases;
(d) notify all potential creditors of the existence and amount
of their claims as set forth in the Schedules;
(e) furnish a form for the filing of proofs of claim, after
approval of the notice and form by the Court;
(f) file with the Clerk, within 10 days of service, a copy of
the proof of claim notice, a list of persons to whom it
was mailed, and the date the notice was mailed;
(g) docket all claims received, maintain the official claims
registers for each Debtor on behalf of the Clerk, and
provide the Clerk with certified duplicate unofficial
Claims Registers on a monthly basis, unless otherwise
directed;
(h) specify in the applicable Claims Register these
information for each claim docketed:
(1) the claim number assigned;
(2) the date received;
(3) the name and address of the claimant and agent who
filed the claim; and
(4) the classification of the claim;
(i) relocate, by messenger, all of the actual proofs of claim
filed with the Court, if necessary to BSI, not less than
weekly;
(j) record all transfers of claims and provide any notices of
the transfers required by Rule 3001 of the Federal Rules
of Bankruptcy Procedure;
(k) make changes in the Claims Registers pursuant to Court
Order;
(l) upon completion of the docketing process for all claims
received to date by the Clerk's office, turn over to the
Clerk copies of the Claims Registers for the Clerk's
review;
(m) maintain the official mailing list for each Debtor of all
entities that have filed a proof of claim;
(n) assist with the solicitation and the calculation of votes
and the distribution as required in furtherance of
confirmation of plan(s) of reorganization; and
(o) 30 days prior to the close of the Chapter 11 cases,
submit an Order dismissing the Agent and terminating
the services of the Agent upon completion of its duties
and responsibilities and upon the closing of the Chapter
11 cases.
The Debtors will pay BSI pursuant to a Fee Schedule. A full-text
copy of that Fee Schedule is available for free at:
http://bankrupt.com/misc/silicon_BSIfeeschedule.pdf
Pursuant to that Fee Schedule, the firm's hourly rates for
consulting services are:
Senior Bankruptcy Consultant $191 to $251
* General Consulting
Bankruptcy Consultant $157 to $191
* General Consulting
* Document and Data Review
IT Programming Consultant $119 to $162
* IT and Custom Web site
Case Managers $106 to $149
* Document and Data Review
* Document Management
* Case Administration
Clerical $34 to $51
* Data Input
BSI reserves the right to reasonably increase its prices, charges
and rates annually on January 2nd of each year.
Ron Jacobs, president of BSI, assures the Court that his firm is a
"disinterested person" as defined in Section 101(14) of the
Bankruptcy Code and as modified by Section 1107(b) of the
Bankruptcy Code. BSI has represented to the Debtors that it will
not represent any entities or individuals other than the Debtors
in the Chapter 11 proceedings or in connection with any matters
that would be adverse to the Debtors' interests.
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 Pay Prepetition Taxes & Fees
-------------------------------------------------------
Silicon Graphics, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York's
permission to pay the Sales and Use Taxes, Business License Fees
and Other Excise Taxes to the Taxing Authorities.
In the ordinary course of business, the Debtors incur and collect
various taxes, fees, and charges for payment to various taxing and
licensing authorities. The taxes and fees are paid on a periodic
basis.
(a) Sales and Use Taxes
The Debtors estimate $247,000 in sales tax and use tax
liability incurred prepetition has not yet been paid.
(b) Business License Fees
The Debtors estimate that the amounts owed with respect to
business license fees prior to the Petition Date total
$66,000.
(c) Other Excise Taxes
As of the Petition Date, the Debtors collected an
estimated $2,353,000 in "Value Added" Tax and "Goods and
Services" Tax, offset by $366,000 input tax credits,
leaving a net payment of $1,987,000 owed prepetition to
the applicable foreign jurisdictions.
According to Gary T. Holtzer, Esq., at Weil, Gotshal & Manges
LLP, in New York, the failure to pay the Taxes and Fees could
disrupt the Debtors' day-to-day operations and impose significant
costs on the Debtors' estates. The Taxing Authorities may take
precipitous action, including:
-- filing liens,
-- preventing the Debtors from conducting business in the
applicable jurisdictions;
-- pursuing payment of Sales/Use and Other Excise Taxes from
the Debtors' directors, officers, and other employees; and
-- seeking to lift the automatic stay.
About Silicon Graphics
Headquartered in Mountain View, California, Silicon Graphics, Inc.
(OTC: SGID) -- http://www.sgi.com/-- offers high-performance
computing. SGI helps customers solve their computing challenges,
whether it's sharing images to aid in brain surgery, finding oil
more efficiently, studying global climate, providing technologies
for homeland security and defense, enabling the transition from
analog to digital broadcasting, or helping enterprises manage
large data. The Debtor and 13 of its affiliates filed for chapter
11 protection on May 8, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10977
through 06-10990). Gary Holtzer, Esq., and Shai Y. Waisman, Esq.,
at Weil Gotshal & Manges LLP, represent the Debtors in their
restructuring efforts. When the Debtors filed for protection from
their creditors, they listed total assets of $369,416,815 and
total debts of $664,268,602. (Silicon Graphics Bankruptcy News,
Issue No. 2; Bankruptcy Creditors' Service, Inc., 215/945-7000)
SILICON GRAPHICS: Can Continue Using Existing Business Forms
------------------------------------------------------------
The Hon. Allan L. Gropper allowed Silicon Graphics, Inc., and its
debtor-affiliates to continue using existing checks and business
forms, including purchase orders, multi-copy checks, letterheads,
and promotional materials, without reference to the Debtors'
status as debtors-in-possession, on an interim basis.
Pursuant to the operating guidelines established by the Office of
the United States Trustee for debtors-in-possession, the Debtors
are required to obtain checks that bear the designation "debtor in
possession" and reference the bankruptcy case number and the type
of account on those checks.
The Debtors also obtained the Court's permission to use their
existing check stock. As soon as practicable, the Debtors will
imprint the legend "Debtor-In-Possession" and the Debtors' chapter
11 case number on those checks.
According to Gary T. Holtzer, Esq., at Weil, Gotshal & Manges LLP,
in New York, with the nature and scope of the Debtors' business
operations and the large number of suppliers with whom the Debtors
deal on a regular basis, it is important that the Debtors be
permitted to continue to use their existing checks and other
business forms without alteration.
Mr. Holtzer tells the Court that denying the request would result
to prejudice, including:
-- disruption of the Debtors' ordinary financial affairs and
business operations;
-- delay in the administration of the Debtors' estates, and
-- cost to the estates to set up new systems and to print new
business forms.
Headquartered in Mountain View, California, Silicon Graphics, Inc.
(OTC: SGID) -- http://www.sgi.com/-- offers high-performance
computing. SGI helps customers solve their computing challenges,
whether it's sharing images to aid in brain surgery, finding oil
more efficiently, studying global climate, providing technologies
for homeland security and defense, enabling the transition from
analog to digital broadcasting, or helping enterprises manage
large data. The Debtor and 13 of its affiliates filed for chapter
11 protection on May 8, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10977
through 06-10990). Gary Holtzer, Esq., and Shai Y. Waisman, Esq.,
at Weil Gotshal & Manges LLP, represent the Debtors in their
restructuring efforts. When the Debtors filed for protection from
their creditors, they listed total assets of $369,416,815 and
total debts of $664,268,602. (Silicon Graphics Bankruptcy News,
Issue No. 2; Bankruptcy Creditors' Service, Inc., 215/945-7000)
STEVE'S SHOES: Wants to Hire Kane Mitchell as Accountants
---------------------------------------------------------
Steve's Shoes, Inc. asks the U.S. Bankruptcy Court for the
District of Kansas for permission to employ Kane, Mitchell & Co.
LLC, as its accountants.
The Debtor discloses that Kane Mitchell will prepare its
corporate, state, and city tax returns for the fiscal year ended
June 30, 2006, and the final tax returns for the fiscal corporate
year ended June 30, 2007.
Timothy W. Mitchell, a certified public accountant at Kane
Mitchell, tells the Court that the Firm's fees for preparing
corporate tax returns are:
Services Year Ended Rate
-------- ------------- -------
Corporate, State, and June 30, 2006 $12,500
City Tax Returns
Final Tax Returns June 30, 2007 $3,500
Mr. Mitchell assures the Court that the Firm is "disinterested" as
that term is defined in Section 101(14) of the Bankruptcy Code.
Headquartered in Lenexa, Kansas, Steve's Shoes, Inc. --
http://www.stevesshoes.com/-- is a shoe retailer. The
Company filed for chapter 11 protection on Jan. 6, 2006
(Bankr. D. Kans. Case No. 06-20015). Thomas M. Mullinix, Esq.,
and Joanne B. Stutz, Esq., Evans & Mullinix, P.A., represent
the Debtor in its restructuring efforts. Brent Weisenberg, Esq.,
and Jay R Indyke, Esq., at Kronish Lieb Weiner & Hellman LLP,
represent the Official Committee of Unsecured Creditors. When the
Debtor filed for protection from its creditors, it listed total
assets of $9,494,325 and total debts of $20,200,821.
SUNRISE CDO: Fitch Lowers $45.1 Mil. Class B Notes' Rating to C
---------------------------------------------------------------
Fitch Ratings downgraded these classes of notes issued by Sunrise
CDO I, Ltd.:
-- $119,575,629 class A notes downgrade to 'BB-' from 'BBB'
-- $45,100,000 class B notes downgrade to 'C/DR5' from 'B/DR4'
Sunrise I is a static-pool, collateralized debt obligation
structured by Credit Suisse First Boston. The CDO closed in
December 2001, to issue approximately $300 million in notes and
preference shares. The proceeds were utilized to purchase an
investment portfolio consisting primarily of:
* collateralized debt obligations,
* residential mortgage-backed securities,
* commercial mortgage-backed securities,
* asset-backed securities, and
* corporate debt securities.
As part of the review, Fitch conducted cash flow modeling
utilizing various default timing and interest rate scenarios to
measure the breakeven default rates going forward relative to the
minimum cumulative default rates required for the rated
liabilities.
This rating action is a result of the continuing deterioration of
the collateral credit quality and the potential impact of some
structural features of the deal described below. Fitch weighted
average rating factor increased to 52 ('B') as of April 30, 2006,
most recent trustee report available, from 46 ('BB'/'BB-') as of
June 30, 2005. While the continuing paydown of class A notes
caused class A overcollateralization and interest coverage ratios
to improve since last review, class B and C OC and IC ratios have
decreased.
At closing of the transaction, Sunrise I entered a cash flow swap
in which the swap counterparty would step in to pay interest
shortfall to A and B noteholders when principal and interest cash
flows from the collateral are insufficient. The deal would then
reimburse the swap counterparty out of either interest or
principal cash flows, when they become available.
The reimbursement payment and interest accrued on the previously
unpaid balance is senior to the payment of principal of class A
notes. Although not yet utilized in the past, the cash flow swap
is projected to be used in some of Fitch Ratings stress scenarios
in later years of the deal. In these scenarios, the principal
cash flows are used to pay current interest as well as reimburse
the cash flow swap counterparty.
As a result, in these scenarios, principal cash flows which
otherwise would be available to amortize class A notes are used to
pay class A and B interest. In addition, the deal also has a
basis swap, with the payments received from the swap counterparty
used to pay B interest. The payments paid by the deal to the
basis swap counterparty are senior to class A notes interest and
principal payments. This swap expires in January 2017.
The class C notes have been deferring since July 2004 and are not
expected to receive any payments for the remainder of the
transaction.
The ratings on the class A and class B notes address the timely
payment of interest and principal. The ratings on the class C
notes address the ultimate payment of interest and principal.
Fitch will continue to monitor and review this transaction for
future rating adjustments.
TRINITY MARKETING: Case Summary & 16 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Trinity Marketing Group Inc.
dba Catskill Mountain Ranch
540 Mount Vernon Road
Wurtsboro, New York 12790
Bankruptcy Case No.: 06-35486
Chapter 11 Petition Date: May 19, 2006
Court: Southern District of New York (Poughkeepsie)
Judge: Cecelia G. Morris
Debtor's Counsel: Michael L. Carey, Esq.
Jacobowitz & Gubits, LLP
158 Orange Avenue, P.O. Box 367
Walden, New York 12586
Tel: (845) 778-2121
Fax: (845) 778-5173
Total Assets: $325,000
Total Debts: $1,298,164
Debtor's 16 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
People's Vacation, Inc. Real Estate $1,062,593
c/o The Kleister Law Group
90 East Main Street
Washingtonville, NY 10992
Provident Bank Real Estate $100,000
400 Rella Boulevard
Montebello, NY 10901
Equipment Loan Unknown
County of Sullivan Real Estate $75,000
P.O. Box 5012
Monticello, NY 12701
Flexline $18,768
Silver Top Manufacturing Co. Mobile Home $8,716
Accessories
E*Trade Financial $7,238
Direct Merchant Bank Credit Card $6,281
Discover Credit Card $5,033
Lowe's Credit Card $4,422
CBJ Credit Recovery $3,009
Direct King Marketing $2,898
Chase Credit Card $1,775
GE Capital Colonial Pacific Equipment $1,541
Capital One Credit Card $891
Advanta Credit Card Unknown
AT&T Universal Card Credit Card Unknown
UAL CORP: Independence Air Holds $750 Mil. of Unsecured Claim
-------------------------------------------------------------
Independence Air, Inc., previously known as Atlantic Coast
Airlines, operated as a regional airline under code share
agreements with United Airlines, Inc., providing service as part
of the United Express program.
After UAL filed for bankruptcy, Independence Air said that it
intended to utilize its assets to operate as an independent
low-fare airline if United decides to reject the Independence
Agreements.
On April 5, 2004, Independence Air had reached an agreement with
United providing for a transition schedule and exit plan for all
of its United Express aircraft and related operations as a result
of United's decision to reject the Independence Agreements.
The UAL Court approved the Exit Plan Agreement and United
Airlines' rejection of the Independence Agreements.
In September 2004, FLYi, Inc., and Independence Air filed
rejection claims against United for more than $1,000,000,000.
United argued that the claim should be reduced to $300,000,000,
while the Official Committee of Unsecured Creditors asserted that
the claim should be disallowed in its entirety.
The UAL Court fixed the amount of the Rejection Damages Claims
against United at $500,000,000.
Independence Air filed for Chapter 11 bankruptcy protection
before the U.S. Bankruptcy Court for the District of Delaware in
November 2005.
According to M. Blake Cleary, Esq., at Young Conaway, Stargatt &
Taylor, LLP, in Wilmington, Delaware, Independence Air's counsel,
the Rejection Damages Claim is by far the largest asset in
Independence Air's Chapter 11 cases, and it is also fully
unencumbered.
Independence Air, United and the Committee all filed notices of
appeal of the Rejection Damages Claim Order.
Independence Air also filed an administrative claim against
United, based on its potential violations of state and federal
antitrust laws. Independence Air alleged that conduct by United
that might be anti-competitive and illegal under antitrust laws
negatively impacted its economic performance and was a factor to
the failure of its operations.
After extensive arm's-length negotiations, United and
Independence Air agreed to resolve all of the claims and disputes
among them. The Parties agree that:
(a) The Rejection Damages Claim will be allowed as a Class
2E-6 general unsecured claim for $750,000,000. United's
objection to the Rejection Damages Claim will be deemed
withdrawn, and the appeals from the Rejection Damages
Claim order will be dismissed;
(b) Pursuant to UAL's confirmed Chapter 11 Plan of
Reorganization, creditors with allowed claims in Class
2E-6, including Independence Air, are entitled to shares
of stock in reorganized UAL Corporation. Those shares are
distributed from a disputed claims reserve.
As a claim against United Airlines is allowed, it is
entitled to receive an initial distribution of New UAL
Common Stock and may receive additional shares of New UAL
Common Stock as other disputed claims subject to the
reserve subsequently are allowed. The initial
distribution will be no less than 3,266,250 shares of New
UAL Common Stock;
(c) The parties will mutually release each other from all
claims that arose prior to the date of the Settlement
Agreement, except for a certain subrogation claim; and
(d) The Settlement Agreement specifically preserves the
"Subrogation Claim", relating to an accident at the
Chicago O'Hare Airport involving United Airlines' bus and
Independence Air's airplane. The Subrogation Claim
consists of claims by Independence Air and its insurer
against United Airlines' insurer for economic and other
damages.
A full-text copy of the FLYi-UAL Settlement Agreement is
available for free at http://ResearchArchives.com/t/s?97e
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: Asks Court to Approve Post-97 Trust Cert. Settlement
--------------------------------------------------------------
As previously reported, United Airlines, Inc., and U.S. Bank, as
Trustee, among others, sought and obtained approval from the U.S.
Bankruptcy Court for the Northern District of Illinois of a global
settlement and related term sheets, providing for the
restructuring of the public debt issued in connection with over
20 prepetition aircraft financing transactions.
Since entry of the Term Sheet Order, United has executed
definitive documentation and closed on most of the transactions
as authorized and directed by the Term Sheet Order.
According to David A. Agay, Esq., at Kirkland & Ellis LLP, in
Chicago, Illinois, three of the remaining uncompleted
restructuring transactions relate to the Post-97 Enhanced
Equipment Trust Certificates Transactions, specifically:
-- the 2000-1 EETC,
-- the 2000-2 EETC, and
-- the 2001-1 EETC.
Until now, Mr. Agay says, United and U.S. Bank could not close on
the Post-97 EETC Transactions because of their disagreement over:
* whether the term sheets for the Post-97 EETC Transactions
provided for payment by United of a "make whole" if United
prepaid its obligations under the Post-97 EETC Transactions,
as restructured; and
* the applicable principal and interest breakdown for the
payments contemplated under the Term Sheets.
The parties' disagreement over these open issues devolved into
litigation in connection with United's exit from Chapter 11, Mr.
Agay relates.
On January 31, 2006, the Court entered an order allowing United's
Plan Effective Date to occur as scheduled on February 1, 2006.
The Court's order:
-- preserved the parties' rights as to their interpretation
of the Term Sheets;
-- extended the deadline to finalize definitive documentation
for the Post-97 EETC Transactions to February 9, 2006; and
-- allowed for additional briefing or proceedings if
necessary.
Subsequently, United and U.S. Bank agreed to several extensions
of the February 9 deadline, most recently until May 31, 2006, to
allow for continued discussions. In the meantime, the parties
and the Court agreed on a briefing and pretrial schedule for the
Court to resolve the Make Whole and principal-interest breakdown.
After extensive briefing, United and U.S. Bank reached a
settlement that will allow for finalization of definitive
documentation and closing of the restructuring of the Post-97
EETC Transactions.
Settlement Terms
In full and final settlement of the contested matter currently
pending before the Court, United and U.S. Bank have agreed to
amend the Term Sheets with respect the 2000-1 EETC, 2000-2 EETC,
and 2001-1 EETC Transactions.
The Amendments reflect that:
(a) Under each of the Term Sheets, United cannot prepay the
transactions prior to July 31, 2007, and that upon any
prepayment after July 31, United will pay certain
replacement Make Whole amounts set forth in the
Amendments;
(b) The Term Sheets will incorporate an additional exhibit
representing the parties' agreement on the allocation of
principal and interest for the "Restructured Equipment
Notes";
(c) The parties will use their "commercially reasonable
efforts" to obtain court approval of the Amendments and
complete definitive documentation for the restructuring of
the Post-97 EETC Transactions on or before May 31, 2006;
and
(d) United will not have any involvement or right to determine
or object to the process for payment or allocation of the
Replacement Make Whole to, or among, the holders of the
public debt certificates issued as part of the Post-97
EETC Transactions, which Allocation Process is to be
approved by the Controlling Holders in the Post-97 EETC
Transactions and the Court.
The Amendments also modify certain terms relating to the timing
and informational requirements for obtaining investment ratings
on the certificates held by the Public Debt Holders, Mr. Agay
explains.
A full-text copy of the Amended Term Sheet for the 2000-1 EETC is
available for free at http://ResearchArchives.com/t/s?979
A full-text copy of the Amended Term Sheet for the 2000-2 EETC is
available for free at http://ResearchArchives.com/t/s?97a
A full-text copy of the Amended Term Sheet for the 2001-1 EETC is
available for free at http://ResearchArchives.com/t/s?97b
Even though United believes that it can execute and consummate
the Restructuring Transactions as set out in the Term Sheets --
as amended -- and the settlement with U.S. Bank without further
Court approval, United and U.S. Bank seek the Court's sanction in
an abundance of caution because the Post-1997 Transactions
involve Public Debt Holders. According to United, the Term
Sheets, as amended, may implicate rights of Public Debt Holders
that may be affected by "Court approval to effect the
restructurings contemplated by the Term Sheets with respect to
each Post-1997 Transaction."
Settlement and Amendments Must be Approved
While not perfect from United's perspective, the Settlement and
Amendments are reasonable compromises of a bona fide dispute, Mr.
Agay tells Judge Wedoff.
Mr. Agay maintains that by entering into the Amendments, United
can close on the restructuring of the Post-97 EETC Transactions
and remove the lingering uncertainty in its operations from not
having consummated the Term Sheets.
Accordingly, United and U.S. Bank ask the Court to approve the
Settlement and the Amendments, and confirm the continuing
effectiveness of the Term Sheet Order, as supplemented.
U.S. Bank further asks the Court to:
(1) declare the Settlement to be fair to the Public Debt
Holders;
(2) authorize it to enter into the Amendments; and
(3) authorize and direct it and other parties to the
documents comprising each Post-1997 Transaction to execute
the documents, amendments and supplements, as may be
reasonably required, to implement the transactions
contemplated by the Term Sheet, as amended.
The parties seek immediate approval of the settlement and the
Amendments to forego the further costs and risks of continuing
the litigation, Mr. Agay adds.
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. 123; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
UAL CORP: Earns $23 Billion of Net Income in First Quarter
----------------------------------------------------------
UAL Corporation, the holding company whose primary subsidiary is
United Airlines, reported its combined first quarter 2006
financial results.
UAL reported combined first quarter net income of $23 billion
driven by $23 billion of primarily non-cash reorganization gains
largely due to the discharge of liabilities associated with the
company's exit from Chapter 11.
The company believes a better indicator of UAL's post-
reorganization financial performance is its results excluding
reorganization items. Excluding reorganization items, UAL
reported a net loss for the combined quarter of $306 million,
compared to a loss of $302 million a year ago. On an operating
basis, UAL reported a combined first quarter operating loss of
$171 million, a $79 million improvement over the same quarter last
year, as strong revenue more than offset a $314 million increase
in fuel expense for mainline and regional operations.
"The $23 billion gain is a reflection of the magnitude and
effectiveness of our restructuring. We are now applying the same
rigor and discipline to improving our operating and financial
performance," said Glenn Tilton, UAL's chairman, president and
CEO. "By simultaneously reducing our costs and realizing our full
revenue potential, we will drive continued margin improvement and
unlock the full value of our assets."
The company ended the quarter with an unrestricted cash balance
of $3.6 billion, and a restricted cash balance of $0.9 billion,
for a total cash balance of $4.5 billion. Unrestricted cash and
short-term investments increased by $1.8 billion during the
quarter as the company drew down $2.8 billion of exit financing.
UAL generated positive operating cash flow of over $400 million.
The contribution of regional affiliates improved by $94 million
compared with last year's quarter, as a result of restructured
regional carrier agreements, the company's network optimization
efforts and the strong revenue environment. Regional affiliates
revenue increased by 28 percent. Regional affiliates expense
increased by only 8 percent, despite a 13 percent increase in
capacity and 36 percent increase in fuel expense.
The company had an effective tax rate of zero for all periods
presented, which makes UAL's pre-tax results the same as its net
results.
EBITDAR excluding the non-cash stock based compensation expense is
on track with the business plan.
"The improved revenue environment essentially compensated for
record high fuel expense," said Jake Brace, UAL executive vice
president and chief financial officer. "With limited near-term
debt maturities, modest capital spending and no near-term aircraft
commitments, the company is on a solid financial footing."
Revenue Results
Compared to the same quarter last year, total revenue increased by
14 percent, with mainline revenue per available seat mile (RASM)
up 11 percent. Strong demand, industry capacity restraint, yield
improvements and our differentiated customer product strategy all
contributed to the revenue increase. Mainline traffic increased
by 3 percent on a 1 percent increase in capacity, resulting in a
1-point increase in load factor. Mainline yield was 9 percent
higher than last year. Domestic, Pacific and Atlantic regions all
posted strong unit revenue increases. Regional affiliate
passenger unit revenue was 13 percent higher than last year driven
by a 9 percent increase in yield and a 3-point increase in load
factor.
"In addition to an improved pricing environment, the strength of
our network and our evolving differentiated product strategy
contributed to revenue improvement," said John Tague, UAL's
executive vice president and chief revenue officer. "While these
revenue results are encouraging, they do not meet our expectations
or reflect the full potential of this airline. The work to get
there is clear and we continue to aggressively execute our plan."
Operating Expenses
During the combined first quarter, total operating expenses
increased 11 percent. Mainline operating cost per available seat
mile (CASM) increased by 11 percent from the year-ago quarter,
primarily driven by a 33 percent increase in mainline fuel
prices. Excluding fuel, mainline CASM increased 3 percent.
Combined first quarter results also reflected an increase of
$51 million or 5% in salaries and related expense, which included
the recognition of $69 million for stock-based compensation
expense for plans implemented in accordance with the company's
Plan of Reorganization. Purchased services expense increased
$69 million, or 19 percent compared with last year, driven
primarily by an increase in outsourcing, higher traffic-related
costs and post-bankruptcy professional fees. Aircraft maintenance
materials and outside repairs increased $40 million or 18 percent
primarily due to engine-related maintenance.
The company is engaged in a multi-year cost reduction program.
For 2006, United's business plan includes $300 million in
benefits over 2005. The company has committed to an additional
$400 million in cost savings starting in 2007 over and above what
is in the business plan.
"While partially driven by fresh-start accounting and the non-cash
charge for stock based compensation expense, our increase in
non-fuel CASM reinforces why our focus remains on our core
operations and why we are targeting additional cost savings in
2007," Mr. Brace said.
To generate additional cost savings in 2007 and beyond, the
company is focused on fundamental improvements to its core
business. As part of United's ongoing continuous improvement
efforts, the company is improving processes and driving
efficiencies that will enhance service to customers and reduce
costs. Savings will come from improvements in both major
processes, such as flight planning to reduce navigation fees, and
smaller processes, such as the consolidation of technology help
desks. In addition, the company will streamline operations and
corporate functions to further reduce overhead spending for
salaried and management personnel. United also expects to reduce
marketing and sales expenses.
These cost-savings efforts build on the company's accomplishments
during the restructuring. For example, the cargo division
implemented market management processes, invested in information
systems, and outsourced warehouses and call centers which improved
customer service and profitability.
The company is making targeted investments in people, tools and
technology infrastructure. These investments will support the
extension of continuous improvement efforts to the major work
processes that support the company and the customer. United
expects consistent delivery of its services to improve the
customer experience.
"We are committed to ongoing expense reduction, and the savings
programs will mitigate the inflationary cost pressure we face in
2006 and 2007," said Pete McDonald, UAL executive vice president
and chief operating officer. "We are driving consistency and
standardization to improve results, and are focused on achieving
our cost objectives while restoring the high levels of operational
performance posted in 2005."
Operations
The company continues to implement its resource optimization
efforts throughout the United system, resulting in an increase in
first quarter fleet utilization of 3 percent. The company intends
to further tighten turn times at Dulles and O'Hare this year. By
closing remote terminals in Los Angeles, San Francisco, and
Washington Dulles, the company has eliminated the need to bus
passengers between terminals in the entire United system. In
addition, employee productivity (available seat miles divided by
employee equivalents) was up 6 percent for the quarter compared
to the same period in 2005.
In the most recent data available from the U.S. Department of
Transportation, United was ranked second for the 12 months ending
March 2006 in on-time arrival performance and ranked second in the
least mishandled baggage among the six major network carriers.
Poor west coast weather, record high load factors and tighter turn
times put pressure on United's operational performance in the
first quarter. For the first quarter 2006, United was ranked
sixth in on-time arrival performance and ranked second in the
least mishandled baggage among the six major network carriers.
Fresh-Start Reporting
Upon emergence from its Chapter 11 proceedings in February 2006,
the company adopted fresh-start reporting in accordance with SOP
90-7 as of February 1, 2006. The company's emergence resulted in
a new reporting entity with no retained earnings or accumulated
deficit as of February 1, 2006. Accordingly, the company's
financial information shown for periods prior to February 1, 2006
is not comparable to consolidated financial statements presented
on or after February 1, 2006.
Outlook
United has issued the following capacity guidance for the second
quarter and full-year 2006:
Second Quarter Full Year
-------------- ---------
Capacity (ASM's)
Mainline +2.5% to 3.0% +2.5% to 3.0%
Regional Affiliates +8.0% to 9.0% +8.0% to 9.0%
Consolidated +3.0% to 3.5% +3.0% to 3.5%
Capacity increases are driven by higher aircraft utilization as a
result of the company's resource optimization efforts.
The company expects mainline fuel price to average $2.15 per
gallon for the second quarter and $2.06 per gallon for the full
year (including taxes). The company currently has no fuel hedges
in place for the remainder of 2006.
Excluding fuel, mainline CASM is expected to be up 3 to 4 percent
in the second quarter over the same period last year.
A full-text copy of UAL Corporation's First Quarter 2006 Results
on Form 10-Q Report is available for free at:
http://ResearchArchives.com/t/s?97c
Headquartered in Chicago, Illinois, UAL Corporation (NASDAQ:
UAUA) -- 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. 123;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
VERILINK CORP: Wants to Retain Grisanti Galef as Crisis Manager
---------------------------------------------------------------
Verilink Corporation and its debtor-affiliate Larscom, Inc.
obtained authority from the U.S. Bankruptcy Court for the Northern
District of Alabama to retain Grisanti, Galef & Goldress, as their
crisis manager.
Grisanti Galef is expected to:
a. develop and evaluate various restructuring alternatives as
well as develop overall strategic and business plans;
b. develop and monitor periodic cash flow forecasts and
financial reporting;
c. analyze cash enhancement opportunities including assisting
with cost reduction improvement initiatives;
d. assist with the preparation of regular reports required
by the Court, and with the preparation of the Debtors'
schedules and statements of financial affairs;
e. assist the Debtors in other business and financial aspects
of their chapter 11 case, including development of a
disclosure statement and a plan of reorganization;
f. assist the Debtors in selling the Debtors' assets or
sourcing capital as needed; and
g. assist the Debtors with other matters as may be mutually
agreed upon that fall within the Firm's expertise.
Lee N. Katz, a managing partner at Grisanti Galef, tells the Court
that the Firm's professionals charge:
Professional Designation Rate
------------ ----------- ----
Lee N. Katz Temporary President and $40,000
Chief Executive Officer per month
Katie S. Goodman Temporary Crisis Manager $275 per hour
Mr. Katz assures the Court that the Firm is "disinterested" as
that term is defined in Section 101(14) of the Bankruptcy Code.
Headquartered in Hunstville, Alabama, Verilink Corporation --
http://www.verilink.com/-- is a leading provider of next-
generation broadband access solutions for today's and tomorrow's
networks. The Company develops, manufactures and markets a broad
suite of products that enable carriers and enterprises to build
converged access networks to cost-effectively deliver next-
generation communications services to their end customers. The
Company and its debtor-affiliate, Larscom Inc., filed for chapter
11 protection on April 9, 2006 (Bankr. N.D. Ala. Case No. 06-80566
& 06-80567). Robert McCay Dearing Mercer, Esq., at Powell
Goldstein LLP, represents the Debtors. When the Debtors filed for
protection from their creditors, they listed total assets of
$37,221,000 and total debts of $23,913,000.
WESTERN OIL: Posts $21.6 Million Net Loss in 2006 First Quarter
---------------------------------------------------------------
Western Oil Sands Inc. generated net revenue of $139.2 million,
EBITDAX of $62.1 million, cash flow from operations of
$47.8 million and a net loss of $21.6 million in the first quarter
ended March 31, 2006.
By comparison, in the first quarter of 2005, Western generated net
revenue of $91.7 million, EBITDAX of $27.4 million, cash flow from
operations of $10.8 million and a net loss of $1.9 million.
The Company's 2006 first quarter net loss included $68.3 million
in unrealized foreign exchange and unrealized risk management
losses, compared to an unrealized foreign exchange loss of
$2.7 million for the first quarter of 2005. Excluding the impact
of risk management and foreign exchange losses each net of tax,
net earnings for the first quarter of 2006 would have equated to
$23.6 million compared to net earnings of $300,000 for the prior
year period.
Western's financial performance during the first quarter of 2006
was positively impacted by a 27% increase in West Texas
Intermediate prices and the absence of production volumes subject
to fixed-priced swap contracts. However, wider light to heavy
crude oil differentials, a strengthening Canadian dollar relative
to the US dollar compared to the first quarter of 2005, and a
production interruption associated with repairs to the conveyor
belt at the Mine had an adverse impact on the Company's results.
Western Oil is a Canadian oil sands corporation, which holds a 20%
undivided interest in the Athabasca Oil Sands Project together
with Shell Canada Limited (60%) and Chevron Canada Limited (20%).
Western Oil's 8-3/4% Senior Secured Notes due May 1, 2012, carry
Moody's Ba2 and Standard & Poor's BB+ Rating.
WESTPORT COMMUNITY: Taps Seigfreid Bingham as Bankruptcy Counsel
----------------------------------------------------------------
Wesport Community Secondary Schools, Inc., asks the U.S.
Bankruptcy Court for the Western District of Kansas for permission
to employ Seigfreid, Bingham, Levy, Selzer & Gee, P.C., as its
bankruptcy counsel.
Seigfreid Bingham will:
a. give the Debtor advice with respect to its duties, powers
and responsibilities in its chapter 11 case;
b. oversee any actions on behalf of the estate in order to
recover assets for or best enable the estate to reorganize
fairly;
c. represent the Debtor in its chapter 11 proceedings in an
effort to maximize the value of the assets available, and
to pursue confirmation of a successful Plan of
Reorganization; and
d. perform other legal services as required and in the
interest of the estate.
Gregory S. Gerstner, Esq., a shareholder at Seigfreid Bingham,
tells the Court that the Firm's professionals bill:
Professional Hourly Rate
------------ -----------
Partners $210 - $315
Associates $120 - $175
Paralegals $95 - $120
Mr. Gerstner discloses that the firm has received a $70,000
retainer for services to be rendered in the Debtor's chapter 11
case.
Mr. Gerstner assures the Court that his firm is "disinterested" as
that term is defined in Section 101(14) of the Bankruptcy Code.
Mr. Gerstner can be reached at:
Gregory S. Gerstner, Esq.
Seigfreid, Bingham, Levy, Selzer & Gee, P.C.
2800 Commerce Tower
911 Main Street
Kansas City, Missouri 64105
Tel: (816) 421-4460
Fax: (816) 474-3447
http://www.sblsg.com/
Based in Kansas City, Missouri, Westport Community Secondary
Schools, Inc., filed for chapter 11 protection on May 4, 2006
(Bankr. W.D. Mo. Case No. 06-41077). Gregory S. Gerstner, Esq.,
at Seigfreid, Bingham, Levy Selzer & Gee, P.C., represents the
Debtor. When the Debtor filed for protection from its creditors,
it listed total assets of $10,888,574 and total debts of
$8,200,000.
WESTPORT COMMUNITY: Taps Wyrsch Hobbs as Special Counsel
--------------------------------------------------------
Wesport Community Secondary Schools, Inc., asks the U.S.
Bankruptcy Court for the Western District of Kansas for permission
to employ Wyrsch Hobbs & Mirakian, P.C., as its special counsel.
Wyrsch Hobbs will represent the Debtor in connection with the
claims of the Debtor against The School District of Kansas City 33
and the Missouri Department of Elementary and Secondary Education.
Stephen J. Mirakian, Esq., a shareholder of Wyrsch Hobbs, tells
the Court that the firm will receive 33% of all amounts recovered
in excess of expenses.
Mr. Mirakian assures the Court that his firm is "disinterested" as
that term is defined in Section 101(14) of the Bankruptcy Code.
Mr. Mirakian can be reached at:
Stephen J. Mirakian, Esq.
Wyrsch Hobbs & Mirakian, P.C.
1000 Walnut Street, Suite 1600
Kansas City, Missouri 64106
Tel: (816) 221-0080
Fax: (816) 221-3280
http://www.whmllaw.com/
Based in Kansas City, Missouri, Westport Community Secondary
Schools, Inc., filed for chapter 11 protection on May 4, 2006
(Bankr. W.D. Mo. Case No. 06-41077). Gregory S. Gerstner, Esq.,
at Seigfreid, Bingham, Levy Selzer & Gee, P.C., represents the
Debtor. When the Debtor filed for protection from its creditors,
it listed total assets of $10,888,574 and total liabilities of
$8,200,000.
WHITEHALL JEWELLERS: PwC Raises Going Concern Doubt
---------------------------------------------------
PricewaterhouseCoopers LLP expressed substantial doubt about
Whitehall Jewellers, Inc.'s ability to continue as a going concern
after it audited the company's financial statements for the years
ended Jan. 31, 2006 and Jan. 31, 2005. The auditing firm pointed
to the company's operating performance and liquidity deficiencies.
For the year ended Jan. 31, 2006, the company reported a net loss
of $84,357,000 on $319,625,000 of net sales. This compares to net
losses of $9,883,000 for the year ended Jan. 31, 2005, and
$8,714,000, for the year ended Jan. 31, 2004.
At Jan 31. 2006, the company's balance sheet showed $186,332,000
in total assets, $169,621,000 in total liabilities, and
stockholders' equit of $16,711,000. The company's Jan. 31, 2006,
balance sheet also showed accumulated deficit of $54,929,000
compared to retained earnings of $29,428,000, at Jan. 31, 2005.
A full-text copy of the company's financial statements for the
years ended Jan. 31, 2006, and Jan. 31, 2005, is available for
free at http://ResearchArchives.com/t/s?975
Merger Update
On Feb. 1, 2006, the company entered in an Agreement and Plan of
Merger with Prentice Capital Management, LP, Holtzman Opportunity
Fund, L.P., WJ Holding Corp., and WJ Acquisition Corp.
Pursuant to the Agreement, the merger is the second and final step
in the acquisition of the company by Holtzman and Prentice. The
first sterp was a tender offer by WJ Acquisition for all of the
company's outstanding Common Shares at a price of $1.60 per Common
Share. In connection with the Merger Agreement, the parties
terminated the Purchase Agreement that the Company had previously
entered into with Holtzman and Prentice.
The company says that based on information provided by Continental
Stock Transfer & Trust Company, the depositary for the Offer, a
total of 8,432,249 Common Shares, representing approximately 50.3%
of the outstanding Common Shares, were validly tendered pursuant
to the Offer, including the subsequent offering period. Together
with Common Shares beneficially owned by the Investors, WJ
Acquisition owns an aggregate of 12,716,044 Common Shares,
representing approximately 76% of the outstanding Common Shares.
In connection with the Merger Agreement, Holtzman and Prentice
also made an additional $20 million loan to the company for
working capital and general corporate purposes.
Under the terms and conditions of the Merger Agreement, WJ
Acquisition will be merged with and into the company with the
company continuing as the surviving corporation. As a result of
the Merger, the company will become a wholly-owned subsidiary of
WJ Holding and the public will not have any continuing equity
interest in, and will not share in future earnings, dividends or
growth, if any, of the company.
About Whitehall Jewellers
Headquartered in Chicago, Illinois, Whitehall Jewellers, Inc. --
http://www.whitehalljewellers.com/-- is a national specialty
retailer of fine jewelry, operating 387 stores in 38 states. The
Company has announced that it intends to close a number of stores
in the near term. The Company operates stores in regional and
super regional shopping malls under the names Whitehall Co.
Jewellers, Lundstrom Jewelers and Marks Bros. Jewelers
WHITEHALL JEWELLERS: Special Stockholders' Meeting Set on June 8
----------------------------------------------------------------
Whitehall Jewellers, Inc., will hold a special meeting of
stockholders at 10:00 a.m., on June 8, 2006, at the Hotel Allegro,
171 West Randolph Street in Chicago, Illinois.
At the meeting, the Company's stockholders will vote on the
proposal to adopt the Agreement and Plan of Merger dated as of
Feb. 1, 2006 by and among the Company, Prentice Capital
Management, LP, a Delaware limited partnership, Holtzman
Opportunity Fund, L.P., WJ Holding Corp., an affiliate of Prentice
and Holtzman, and WJ Acquisition Corp., a wholly-owned subsidiary
of Holdco.
Holders of the Company's common stock, par value $0.001 per share,
or Class B common stock, par value $1.00 per share, of record at
the close of business on May 15, 2006, are entitled to vote at the
special meeting.
A full-text copy of the proxy statement for the June 8, special
stockholders' meeting is available for free at:
http://ResearchArchives.com/t/s?974
Headquartered in Chicago, Illinois, Whitehall Jewellers, Inc. --
http://www.whitehalljewellers.com/-- is a national specialty
retailer of fine jewelry, operating 387 stores in 38 states. The
Company has announced that it intends to close a number of stores
in the near term. The Company operates stores in regional and
super regional shopping malls under the names Whitehall Co.
Jewellers, Lundstrom Jewelers and Marks Bros. Jewelers
WILLIAM CODRINGTON: Case Summary & 15 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: William A. Codrington, Esq.
4550 Williamstown Drive
North Olmsted, Ohio 44070
Bankruptcy Case No.: 06-11932
Chapter 11 Petition Date: May 18, 2006
Court: Northern District of Ohio (Cleveland)
Judge: Arthur I. Harris
Debtor's Counsel: Stephanie J. Lane, Esq.
Schmeizer & Caterino
14818 Clifton Boulevard, Suite 403
Lakewood, Ohio 44107
Tel: (216) 227-9295
Fax: (216) 781-1776
Total Assets: $776,949
Total Debts: $1,473,202
Debtor's 15 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
First Merit Bank, N.A. Real Estate $172,386
1413 Golden Gate Boulevard
Cleveland, OH 44124
Chase Home Finance, LLC Home Mortgage $84,231
10790 Rancho Bernardo Road
San Diego, CA 92127
Charter One Mortgage Corp. Real Estate $52,097
10561 Telegraph Road
Glen Allen, VA 23059
Mortgage Deficiency $6,834
Mortgage Electronic Regis. Real Estate $38,356
System Inc.
Citibank South Dakota Real Estate $34,782
Chase N.A. Credit Card $28,567
Bank One Delaware, NA Real Estate $19,434
Fifth Third Bank Real Estate $15,427
Sherry Holland Judgment $9,000
Internal Revenue Service Income Taxes $8,053
THD/CBUSA Credit Purchases $5,500
Household Bank Atlantic Credit & $4,370
Finance Inc. Account
Discover Financial Credit Card $4,359
Services LLC
Cardinal Community Miscellaneous $3,457
Credit Union Credit Purchases
Amalgamated Bank of Chicago Credit Card $3,359
WINN-DIXIE: Posts $29.9 Million Net Loss in Third Fiscal Quarter
----------------------------------------------------------------
Winn-Dixie Stores, Inc., filed its quarterly report on Form 10-Q
with the Securities and Exchange Commission in which it reported
financial results for the third quarter and first 40 weeks of its
2006 fiscal year, which ended on April 5, 2006.
Winn-Dixie Stores, Inc., et al.
Unaudited Consolidated Balance Sheet
At April 5, 2006
(In thousands)
Assets
Current assets:
Cash and cash equivalents $131,714
Marketable securities 14,191
Trade and other receivables, net 159,604
Insurance claims receivable 52,356
Income tax receivable 30,382
Merchandise inventories, net 493,889
Prepaid expenses and other current assets 46,646
------------
Total current assets 928,782
Property, plant and equipment, net 530,625
Other assets, net 116,606
------------
Total assets $1,576,013
============
Liabilities and Shareholders' Deficit
Current liabilities:
Current borrowings under DIP Credit Facility $40,552
Current portion of long-term debt 228
Current obligations under capital leases 3,834
Accounts payable 225,492
Reserve for self-insurance liabilities 88,642
Accrued wages and salaries 77,871
Accrued rent 27,608
Accrued expenses 111,978
------------
Total current liabilities 576,205
Reserve for self-insurance liabilities 143,744
Long-term debt 204
Long-term borrowings under DIP Credit Facility -
Obligations under capital leases 4,788
Other liabilities 16,496
------------
Total liabilities not subject to compromise 741,437
Liabilities subject to compromise 1,119,138
------------
Total liabilities 1,860,575
Shareholders' deficit:
Common stock 141,872
Additional paid-in-capital 33,565
Accumulated deficit (425,367)
Accumulated other comprehensive loss (34,632)
------------
Total shareholders' deficit (284,562)
------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,576,013
============
Winn-Dixie Stores, Inc., and Subsidiaries
Consolidated Statement of Operations
For 12-weeks Ended April 5, 2006
(In thousands)
Net sales $1,766,591
Cost of sales 1,298,996
------------
Gross profit on sales 467,595
Other operating and administrative expenses 487,564
Impairment charges 2,126
Restructuring charges 365
------------
Operating loss (22,460)
Interest expense, net 1,587
------------
Loss before reorganization items and income taxes (24,047)
Reorganization items, net 11,362
Income tax expense -
------------
Net (loss) earnings from continuing operations (35,409)
Discontinued operations:
Loss from discontinued operations (4,265)
Gain on disposal of discontinued operations 9,695
Income tax expense -
------------
Net earnings (loss) from discontinued operations 5,430
------------
NET LOSS ($29,979)
============
Winn-Dixie Stores, Inc., and Subsidiaries
Consolidated Statement of Cash Flows
For 40-Weeks Ended April 5, 2006
(In thousands)
Cash flows from operating activities:
Net loss ($348,653)
Adjustments to reconcile net loss
to net cash provided by operating activities:
Gain on sales of assets, net (62,473)
Reorganization items, net (238,752)
Depreciation and amortization 87,654
Impairment charges 16,452
Deferred income taxes -
Stock compensation plans 1,096
Change in operating assets and liabilities:
Trade and other receivables 9,642
Merchandise inventories 304,525
Prepaid expenses and other current assets 32,939
Accounts payable 48,277
Lease liability on closed facilities 114,893
Income taxes payable/receivable 614
Defined benefit plan (1,277)
Reserve for self-insurance liabilities 5,897
Other accrued expenses 263,026
------------
Net cash provided by operating activities
before reorganization items 233,860
Cash effect of reorganization items (46,610)
------------
Net cash provided by operating activities 187,250
Cash flows from investing activities:
Purchases of property, plant and equipment (19,486)
Decrease (increase) in investments and other assets 1,008
Proceeds from sales of assets 100,449
Purchases of marketable securities (7,219)
Sales of marketable securities 12,043
Other 1,099
------------
Net cash provided by (used in) investing activities 87,894
Cash flows from financing activities:
Gross borrowings on DIP Credit Facility 696,874
Gross payments on DIP Credit Facility (901,325)
Principal payments on long-term debt (158)
Debt issuance costs (721)
Principal payments on capital lease obligations (1,254)
Other 1,013
------------
Net cash used in financing activities (205,571)
(Decrease) increase in cash and cash equivalents 69,573
Cash and cash equivalents at beginning of year 62,141
------------
Cash and cash equivalents at end of period $131,714
============
A full-text copy of Winn-Dixie's third fiscal quarter 2006 report
is available for free at:
http://ResearchArchives.com/t/s?958
Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc.
-- http://www.winn-dixie.com/-- is one of the nation's largest
food retailers. The Company operates stores across the
Southeastern United States and in the Bahamas and employs
approximately 90,000 people. The Company, along with 23 of its
U.S. subsidiaries, filed for chapter 11 protection on Feb. 21,
2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14,
2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840).
D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and
Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King &
Spalding LLP, represent the Debtors in their restructuring
efforts. Paul P. Huffard at The Blackstone Group, LP, gives
financial advisory services to the Debtors. Dennis F. Dunne,
Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B.
Macdonald, Esq., at Akerman Senterfitt give legal advice to the
Official Committee of Unsecured Creditors. Houlihan Lokey &
Zukin Capital gives financial advisory services to the
Committee. When the Debtors filed for protection from their
creditors, they listed $2,235,557,000 in total assets and
$1,870,785,000 in total debts. (Winn-Dixie Bankruptcy News,
Issue No. 38; Bankruptcy Creditors' Service, Inc., 215/945-7000).
WINN-DIXIE: Amended DIP Credit Deal Allows Stores Sale
------------------------------------------------------
Bennett L. Nussbaum, senior vice president and chief financial
officer of Winn-Dixie Stores, Inc., discloses, in a regulatory
filing with the Securities and Exchange Commission, that the
Company entered into an amendment of their DIP Credit Agreement
on March 17, 2006.
According to Mr. Nussbaum, the DIP Credit Facility was amended to
allow the Company to sell or liquidate certain locations.
Mr. Nussbaum relates that as of April 5, 2006, the Company
completed its plan to exit 326 stores and three distribution
centers in order to focus on its strongest stores and markets.
During the 12 weeks ended April 5, 2006, the Company:
(a) announced an expansion of its plan to include 35
additional stores and one distribution center;
(b) announced the pending sale of its interest in Bahamas
Supermarkets Limited, which owns 12 stores and a
distribution center located in The Bahamas; and
(c) closed all manufacturing operations except for two dairies
and the Chek beverage operation.
The Amendment replaces in its entirety Schedule VI --
Restructuring Plan -- to the Credit Agreement. The Amended
Restructuring Plan now provides:
FIRST PHASE -- The sale and closure of 329 retail stores
leased by Borrowers and Guarantors which are
located in non-core areas or are unprofitable,
including:
* the sale of 79 retail stores as going
concerns;
* the closure of the remaining retail stores
not sold as going concerns; and
* the sale and closure of manufacturing
facilities and distribution centers; and
* the liquidation of the Inventory, Pharmacy
Scripts, furniture, fixtures, equipment,
Leasehold Properties and other assets of
the Borrowers and Guarantors from the
closed retail stores and manufacturing
facilities not sold as going concerns.
SECOND PHASE -- The disposition of 35 retail stores leased by
Borrowers and Guarantors, which are located in
core areas and are unprofitable -- Bubble
Stores -- including;
* the liquidation of the Inventory, Pharmacy
Scripts, furniture, fixtures, equipment
and other assets of the Borrowers and
Guarantors from each of the Bubble Stores;
and
* the sale, assumption and assignment of the
Leasehold Properties with respect to
certain Bubble Stores and the rejection of
the Leasehold Properties with respect to
the remaining Bubble Stores.
A full-text copy of the March 17, 2006, Amendment to the Credit
Agreement is available for free at:
http://ResearchArchives.com/t/s?957
Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc.
-- http://www.winn-dixie.com/-- is one of the nation's largest
food retailers. The Company operates stores across the
Southeastern United States and in the Bahamas and employs
approximately 90,000 people. The Company, along with 23 of its
U.S. subsidiaries, filed for chapter 11 protection on Feb. 21,
2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14,
2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840).
D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and
Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King &
Spalding LLP, represent the Debtors in their restructuring
efforts. Paul P. Huffard at The Blackstone Group, LP, gives
financial advisory services to the Debtors. Dennis F. Dunne,
Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B.
Macdonald, Esq., at Akerman Senterfitt give legal advice to the
Official Committee of Unsecured Creditors. Houlihan Lokey &
Zukin Capital gives financial advisory services to the
Committee. When the Debtors filed for protection from their
creditors, they listed $2,235,557,000 in total assets and
$1,870,785,000 in total debts. (Winn-Dixie Bankruptcy News,
Issue No. 38; Bankruptcy Creditors' Service, Inc., 215/945-7000).
WINN-DIXIE: Sets June 2 as Special Bar Date for Add'l. Claimants
----------------------------------------------------------------
D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP,
in New York, advises the U.S. Bankruptcy Court for the Middle
District of Florida that June 2, 2006, is set as a special bar
date for 35 subsequently identified potential claimants who were
not identified in time to receive notice of the original bar date
established in the Winn-Dixie Stores, Inc., and its debtor-
affiliates' Chapter 11 cases.
Mr. Baker emphasizes that the Special Bar Date is applicable only
to the Subsequently Identified Claimants.
Mr. Baker relates that on May 2, 2006, each of the Subsequently
Identified Claimants was sent a copy of the notice establishing
the Special Bar Date.
Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc.
-- http://www.winn-dixie.com/-- is one of the nation's largest
food retailers. The Company operates stores across the
Southeastern United States and in the Bahamas and employs
approximately 90,000 people. The Company, along with 23 of its
U.S. subsidiaries, filed for chapter 11 protection on Feb. 21,
2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14,
2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840).
D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and
Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King &
Spalding LLP, represent the Debtors in their restructuring
efforts. Paul P. Huffard at The Blackstone Group, LP, gives
financial advisory services to the Debtors. Dennis F. Dunne,
Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B.
Macdonald, Esq., at Akerman Senterfitt give legal advice to the
Official Committee of Unsecured Creditors. Houlihan Lokey &
Zukin Capital gives financial advisory services to the
Committee. When the Debtors filed for protection from their
creditors, they listed $2,235,557,000 in total assets and
$1,870,785,000 in total debts. (Winn-Dixie Bankruptcy News,
Issue No. 38; Bankruptcy Creditors' Service, Inc., 215/945-7000).
WORLDCOM INC: Telnet Wants Amended Claim Dismissal Motion Denied
----------------------------------------------------------------
Telnet Communications, Inc., asks the U.S. Bankruptcy Court for
the Southern District of New York to:
(a) deny the Debtors' request to dismiss, with prejudice,
Amended Claim No. 8297 filed by Telnet; or
(b) in the alternative, if it identifies any pleading
deficiencies, allow Telnet leave to correct those
deficiencies by amendment.
In January 2005, Telnet filed a proof of claim for $16,000,000,
purporting to amend Claim No. 8297. Telnet also filed a Fourth
Amended Complaint of the 1998 lawsuit it filed in the United
States District Court for the Southern District of Texas,
asserting a claim for tortuous interference with prospective
business relations.
Telnet Objects
The Debtors' employment of the "filed rate" doctrine with regards
Telnet Communications, Inc.'s claims for tortious interference is
completely misplaced, Michael S. Etkin, Esq., at Lowenstein
Sandler PC, in New York, contends. The doctrine might be
applicable if Telnet's tortious interference claims were based on
nothing more than an alleged intentional refusal to provide
services to respondent in an amount or manner contrary to the
filed tariff. However, Telnet's tortious interference claims are
not based on that theory.
The Debtors' assertion of the limitation of liability, as a bar to
Telnet's tortious interference claim, is only applicable to
failures or defects in the telephone service provided by the
Debtors pursuant to its tariff. However, Mr. Etkin notes,
Telnet's tortious interference allegations address the Debtors'
misuse of Telnet's confidential and proprietary information and
have no relation to the quality of telephone service from the
Debtors.
To sustain a motion to dismiss, the Court must conclude that
Telnet can state no cause of action under any set of facts.
Instead, the Debtors seem to attempt to conflate a motion to
dismiss with a summary judgment, essentially arguing that no
evidence exists that Telnet has actually been damaged by the
Debtors' misconduct, Mr. Etkin says.
"For the Debtors to argue that as a matter of law, Telnet cannot
have been damaged because of other supervening misconduct of the
Debtors is at best a misplaced motion for summary judgment and at
worst a motion for summary judgment on the Debtors' affirmative
defense," Mr. Etkin tells Judge Gonzalez.
Debtors Respond
William P. Donovan, Jr., Esq., at DLA Piper Rudnick Gray Cary US
LLP, in New York, maintains that Telnet has admitted through its
own allegations that its sole remaining claim for tortious
interference with prospective contract is barred by the filed-rate
doctrine.
According to Mr. Donovan, Telnet's claim is not a typical, state
law interference claim. Instead, Telnet's claim stems from its
assertion that the Debtors were unable to provide the promised,
tarriffed services, thereby destroying Telnet's business.
Mr. Donovan asserts that Telnet's interference claim is tied to
and derivative of the provision of services and governed by the
tariff. Thus, it is barred by the filed-rate doctrine. Telnet's
other arguments are, therefore, immaterial.
About WorldCom
Headquartered in Clinton, Mississippi, WorldCom, Inc., now known
as MCI -- http://www.worldcom.com/-- is a pre-eminent global
communications provider, operating in more than 65 countries and
maintaining one of the most expansive IP networks in the world.
The Company filed for chapter 11 protection on July 21, 2002
(Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, the
Debtors listed $103,803,000,000 in assets and $45,897,000,000 in
debts. The Bankruptcy Court confirmed WorldCom's Plan on October
31, 2003, and on April 20, 2004, the company formally emerged from
U.S. Chapter 11 protection as MCI, Inc. (WorldCom Bankruptcy News,
Issue No. 117; Bankruptcy Creditors' Service, Inc., 215/945-7000)
* BOND PRICING: For the week of May 8 - May 12, 2006
----------------------------------------------------
Issuer Coupon Maturity Price
------ ------ -------- -----
ABC Rail Product 10.500% 01/15/04 0
ABC Rail Product 10.500% 12/31/04 0
Acme Metals Inc 10.875% 12/15/07 0
Adelphia Comm. 3.250% 05/01/21 2
Adelphia Comm. 6.000% 02/15/06 1
Adelphia Comm. 7.500% 01/15/04 50
Adelphia Comm. 7.750% 01/15/09 51
Adelphia Comm. 7.875% 05/01/09 50
Adelphia Comm. 8.125% 07/15/03 50
Adelphia Comm. 8.375% 02/01/08 50
Adelphia Comm. 9.250% 10/01/02 51
Adelphia Comm. 9.375% 11/15/09 53
Adelphia Comm. 9.500% 02/15/04 50
Adelphia Comm. 9.875% 03/01/05 47
Adelphia Comm. 9.875% 03/01/07 51
Adelphia Comm. 10.250% 06/15/11 55
Adelphia Comm. 10.250% 11/01/06 47
Adelphia Comm. 10.500% 07/15/04 50
Adelphia Comm. 10.875% 10/01/10 48
Aetna Industries 11.875% 10/01/06 8
Allegiance Tel. 11.750% 02/15/08 47
Allegiance Tel. 12.875% 05/15/08 45
Amer & Forgn Pwr 5.000% 03/01/30 68
Amer Color Graph 10.000% 06/15/10 68
Antigenics 5.250% 02/01/25 58
Anvil Knitwear 10.875% 03/15/07 53
Armstrong World 9.000% 04/17/01 62
Arvin Capital I 9.500% 02/01/27 70
At Home Corp. 0.525% 12/28/18 2
At Home Corp. 4.750% 12/15/06 4
Atlantic Coast 6.000% 02/15/34 21
Atlas Air Inc 8.010% 01/02/10 73
Atlas Air Inc 9.702% 01/02/08 74
Autocam Corp. 10.875% 06/15/14 58
Aviation Sales 8.125% 02/15/08 44
Avondale Mills 10.250% 07/01/13 58
Banctec Inc 7.500% 06/01/08 73
Bank New England 8.750% 04/01/99 8
BBN Corp 6.000% 04/01/12 0
Big V Supermkts 11.000% 02/15/04 0
Builders Transpt 6.500% 05/01/11 1
Burlington North 3.200% 01/01/45 53
CCH II/CCH II CP 10.250% 01/15/10 69
Cell Therapeutic 5.750% 06/15/08 62
Charter Comm Hld 10.000% 05/15/11 62
Charter Comm Hld 11.125% 01/15/11 65
Cherokee Int'l 5.250% 11/01/08 70
Chic East Ill RR 5.000% 01/01/54 61
CIH 9.920% 04/01/14 64
CIH 10.000% 05/15/14 63
CIH 11.125% 01/15/14 65
Ciphergen 4.500% 09/01/08 72
Clark Material 10.750% 11/15/06 0
CMI Industries 9.500% 10/01/03 0
Collins & Aikman 10.750% 12/31/11 34
Comcast Corp. 2.000% 10/15/29 41
Concentric Network 12.750% 12/15/07 0
CPNL-Dflt12/05 4.750% 11/15/23 31
CPNL-Dflt12/05 6.000% 09/30/14 26
CPNL-Dflt12/05 7.625% 04/15/06 56
CPNL-Dflt12/05 7.750% 04/15/09 53
CPNL-Dflt12/05 7.750% 06/01/15 25
CPNL-Dflt12/05 7.875% 04/01/08 58
CPNL-Dflt12/05 8.500% 02/15/11 37
CPNL-Dflt12/05 8.625% 08/15/10 38
CPNL-Dflt12/05 8.750% 07/15/07 58
CPNL-Dflt12/05 10.500% 05/15/06 58
Cray Research 6.125% 02/01/11 5
Curagen Corp. 4.000% 02/15/11 71
Curative Health 10.750% 05/01/11 61
Dal-Dflt09/05 9.000% 05/15/16 28
Delco Remy Intl 9.375% 04/15/12 50
Delco Remy Intl 11.000% 05/01/09 56
Delphi Trust II 6.197% 11/15/33 46
Delta Air Lines 2.875% 02/18/24 28
Delta Air Lines 7.541% 10/11/11 68
Delta Air Lines 7.700% 12/15/05 27
Delta Air Lines 7.900% 12/15/09 30
Delta Air Lines 8.000% 06/03/23 28
Delta Air Lines 8.187% 10/11/17 36
Delta Air Lines 8.270% 09/23/07 70
Delta Air Lines 8.300% 12/15/29 29
Delta Air Lines 8.540% 01/02/07 42
Delta Air Lines 8.540% 01/02/07 70
Delta Air Lines 8.950% 01/12/12 28
Delta Air Lines 9.200% 09/23/14 69
Delta Air Lines 9.250% 03/15/22 27
Delta Air Lines 9.300% 01/02/10 75
Delta Air Lines 9.320% 01/02/09 72
Delta Air Lines 9.375% 09/11/07 74
Delta Air Lines 9.480% 06/05/06 58
Delta Air Lines 9.590% 01/12/17 66
Delta Air Lines 9.750% 05/15/21 28
Delta Air Lines 9.950% 06/01/06 70
Delta Air Lines 9.950% 06/01/06 70
Delta Air Lines 10.000% 06/01/07 66
Delta Air Lines 10.000% 06/01/08 66
Delta Air Lines 10.000% 06/01/09 66
Delta Air Lines 10.000% 06/01/10 66
Delta Air Lines 10.000% 06/01/10 67
Delta Air Lines 10.000% 06/01/11 51
Delta Air Lines 10.000% 06/01/12 62
Delta Air Lines 10.000% 06/05/11 58
Delta Air Lines 10.000% 06/05/13 59
Delta Air Lines 10.000% 08/15/08 28
Delta Air Lines 10.060% 01/02/16 70
Delta Air Lines 10.080% 06/16/07 59
Delta Air Lines 10.125% 05/15/10 27
Delta Air Lines 10.125% 06/16/10 60
Delta Air Lines 10.375% 02/01/11 28
Delta Air Lines 10.375% 12/15/22 28
Delta Air Lines 10.500% 04/30/16 75
Deutsche Bank NY 8.500% 11/15/16 65
Diva Systems 12.625% 03/01/08 1
Dov Pharmaceutic 2.500% 01/15/25 72
Dura Operating 9.000% 05/01/09 57
DVI Inc 9.875% 02/01/04 13
Dyersburg Corp 9.750% 09/01/07 0
Eagle Family Food 8.750% 01/15/08 75
Eagle-Picher Inc 9.750% 09/01/13 60
Emergent Group 10.750% 09/15/04 0
Encysive Pharmacy 2.500% 03/15/12 68
Encysive Pharmacy 2.500% 03/15/12 68
Epix Medical Inc. 3.000% 06/15/24 70
Exodus Comm. Inc. 5.250% 02/15/08 0
Exodus Comm. Inc. 11.250% 07/01/08 0
Exodus Comm. Inc. 11.625% 07/15/10 0
Falcon Products 11.375% 06/15/09 2
Federal-Mogul Co. 7.375% 01/15/06 63
Federal-Mogul Co. 7.500% 01/15/09 61
Federal-Mogul Co. 8.160% 03/06/03 57
Federal-Mogul Co. 8.250% 03/03/05 53
Federal-Mogul Co. 8.330% 11/15/01 47
Federal-Mogul Co. 8.370% 11/15/01 62
Federal-Mogul Co. 8.370% 11/15/01 57
Federal-Mogul Co. 8.800% 04/15/07 64
Finova Group 7.500% 11/15/09 32
Ford Motor Co 6.500% 08/01/18 69
Ford Motor Co 6.625% 02/15/28 68
Ford Motor Co 7.125% 11/15/25 69
Ford Motor Co 7.400% 11/01/46 68
Ford Motor Co 7.500% 08/01/26 70
Ford Motor Co 7.700% 05/15/97 68
Ford Motor Co 7.750% 06/15/43 69
Ford Motor Cred 5.650% 01/21/14 74
Ford Motor Cred 5.750% 01/21/14 74
Ford Motor Cred 5.750% 02/20/14 73
Ford Motor Cred 5.750% 02/20/14 73
Ford Motor Cred 6.000% 01/21/14 74
Ford Motor Cred 6.000% 01/20/15 72
Ford Motor Cred 6.000% 02/20/15 72
Ford Motor Cred 6.000% 03/20/14 74
Ford Motor Cred 6.000% 03/20/14 74
Ford Motor Cred 6.000% 03/20/14 74
Ford Motor Cred 6.000% 11/20/14 73
Ford Motor Cred 6.000% 11/20/14 72
Ford Motor Cred 6.000% 11/20/14 72
Ford Motor Cred 6.050% 02/20/14 72
Ford Motor Cred 6.050% 02/20/15 72
Ford Motor Cred 6.050% 02/20/15 72
Ford Motor Cred 6.050% 04/21/14 74
Ford Motor Cred 6.050% 12/22/14 73
Ford Motor Cred 6.050% 12/22/14 74
Ford Motor Cred 6.050% 12/22/14 73
Ford Motor Cred 6.100% 02/20/15 73
Ford Motor Cred 6.150% 01/20/15 74
Ford Motor Cred 6.150% 12/22/14 74
Ford Motor Cred 6.200% 03/20/15 73
Ford Motor Cred 6.250% 12/20/13 74
Ford Motor Cred 6.250% 04/21/14 75
Ford Motor Cred 6.250% 01/20/15 75
Ford Motor Cred 6.250% 03/20/15 72
Ford Motor Cred 6.500% 03/20/15 75
Ford Motor Cred 7.500% 08/20/32 70
Gateway Inc. 2.000% 12/31/11 72
GB Property Fndg 11.000% 09/29/05 62
General Motors 7.400% 09/01/25 69
General Motors 7.700% 04/15/16 73
General Motors 8.100% 06/15/22 71
General Motors 8.250% 07/15/23 74
General Motors 8.800% 03/01/21 74
Glenoit Corp 11.000% 04/15/07 0
Global Health SC 11.000% 05/01/08 2
GMAC 5.900% 01/15/19 74
GMAC 5.900% 01/15/19 73
GMAC 5.900% 02/15/19 74
GMAC 5.900% 10/15/19 72
GMAC 6.000% 02/15/19 75
GMAC 6.000% 02/15/19 74
GMAC 6.000% 03/15/19 74
GMAC 6.000% 03/15/19 73
GMAC 6.000% 03/15/19 74
GMAC 6.000% 03/15/19 74
GMAC 6.000% 04/15/19 74
GMAC 6.000% 09/15/19 74
GMAC 6.000% 09/15/19 74
GMAC 6.050% 08/15/19 74
GMAC 6.050% 08/15/19 75
GMAC 6.100% 09/15/19 74
GMAC 6.150% 09/15/19 75
GMAC 6.250% 01/15/19 75
GMAC 6.350% 04/15/19 75
Graftech Intl 1.625% 01/15/24 74
GST Network Fndg 10.500% 05/01/08 0
Gulf Mobile Ohio 5.000% 12/01/56 74
HNG Internorth 9.625% 03/15/06 30
Imperial Credit 9.875% 01/15/07 0
Inland Fiber 9.625% 11/15/07 61
Insight Health 9.875% 11/01/11 48
Iridium LLC/CAP 10.875% 07/15/05 26
Iridium LLC/CAP 11.250% 07/15/05 30
Iridium LLC/CAP 13.000% 07/15/05 29
Iridium LLC/CAP 14.000% 07/15/05 30
Isolagen Inc. 3.500% 11/01/24 57
Isolagen Inc. 3.500% 11/01/24 56
JL French Auto 11.500% 06/01/09 0
Kaiser Aluminum & Chem. 9.875% 02/15/02 54
Kaiser Aluminum & Chem. 10.875% 10/15/06 55
Kaiser Aluminum & Chem. 10.875% 10/15/06 56
Kaiser Aluminum & Chem. 12.750% 02/01/03 7
Kellstrom Inds 5.750% 10/15/02 0
Kevco Inc 10.375% 12/01/07 0
Kmart Corp. 8.540% 01/02/15 16
Kmart Corp. 8.990% 07/05/10 7
Kmart Corp. 9.350% 01/02/20 7
Kmart Funding 8.800% 07/01/10 75
Kmart Funding 9.440% 07/01/18 43
Lehman Bros Hldg 10.000% 10/30/13 72
Liberty Media 3.750% 02/15/30 58
Liberty Media 4.000% 11/15/29 64
Lifecare Holding 9.250% 08/15/13 68
Macsaver Financl 7.400% 02/15/02 2
Macsaver Financl 7.600% 08/01/07 3
Macsaver Financl 7.875% 08/01/03 0
Merisant Co 9.500% 07/15/13 66
Metamor WorldWide 2.940% 08/15/04 1
Metricom Inc 13.000% 02/15/10 0
Missouri Pac RR 5.000% 01/01/45 74
Movie Gallery 11.000% 05/01/12 62
MSX Int'l Inc. 11.375% 01/15/08 64
Muzak LLC 9.875% 03/15/09 60
New Orl Grt N RR 5.000% 07/01/32 67
Northern Pacific RY 3.000% 01/01/47 53
Northern Pacific RY 3.000% 01/01/47 53
Northwest Airlines 6.625% 05/15/23 49
Northwest Airlines 7.039% 01/02/06 5
Northwest Airlines 7.625% 11/15/23 49
Northwest Airlines 7.875% 03/15/08 49
Northwest Airlines 8.130% 02/01/14 66
Northwest Airlines 8.700% 03/15/07 50
Northwest Airlines 8.875% 06/01/06 48
Northwest Airlines 8.970% 01/02/15 70
Northwest Airlines 9.875% 03/15/07 51
Northwest Airlines 10.000% 02/01/09 50
Northwest Airlines 10.500% 04/01/09 49
Northwest Stl&Wir 9.500% 06/15/01 0
Nutritional Src. 10.125% 08/01/09 65
NWA Trust 11.300% 12/21/12 69
O'Sullivan Ind 10.630% 10/01/08 60
Oakwood Homes 8.125% 03/01/09 10
Oscient Pharm 3.500% 04/15/11 74
Outboard Marine 10.750% 06/01/08 1
Overstock.com 3.750% 12/01/11 72
PCA LLC/PCA Fin 11.875% 08/01/09 21
Pegasus Satellite 9.625% 10/15/49 9
Pegasus Satellite 12.375% 08/01/06 10
Pegasus Satellite 12.500% 08/01/07 10
Phar-Mor Inc 11.720% 09/11/02 1
Piedmont Aviat 9.900% 11/08/06 0
Pixelworks Inc. 1.750% 05/15/24 71
Pliant-DFLT/06 13.000% 06/01/10 46
Pliant-DFLT/06 13.000% 06/01/10 48
Polaroid Corp. 6.750% 01/15/02 0
Polaroid Corp. 7.250% 01/15/07 0
Polaroid Corp. 11.500% 02/15/06 0
Primedex Health 11.500% 06/30/08 64
Primus Telecom 3.750% 09/15/10 50
Primus Telecom 8.000% 01/15/14 71
Radnor Holdings 11.000% 03/15/10 68
Read-Rite Corp. 6.500% 09/01/04 14
Reliance Group Holdings 9.000% 11/15/00 21
Reliance Group Holdings 9.750% 11/15/03 1
Salton Inc. 12.250% 04/15/08 68
Silicon Graphics 6.500% 06/01/09 51
Solectron Corp. 0.500% 02/15/34 70
Source Media Inc. 12.000% 11/01/04 0
Spinnaker Inds 10.750% 10/15/06 0
Summit Secs Inc 9.500% 09/15/05 0
Tekni-Plex Inc. 12.750% 06/15/10 74
Teligent Inc 11.500% 12/01/07 0
Tom's Foods Inc 10.500% 11/01/04 9
Transtexas Gas 15.000% 03/15/05 0
Tribune Co 2.000% 05/15/29 70
Trism Inc 12.000% 02/15/05 1
Triton Pcs Inc. 8.750% 11/15/11 74
Triton Pcs Inc. 9.375% 02/01/11 75
Tropical SportsW 11.000% 06/15/08 10
Twin Labs Inc 10.250% 05/15/06 2
United Air Lines 7.270% 01/30/13 50
United Air Lines 7.870% 01/30/19 55
United Air Lines 9.020% 04/19/12 56
United Air Lines 9.350% 04/07/16 29
United Air Lines 9.560% 10/19/18 56
United Air Lines 10.020% 03/22/14 44
United Air Lines 10.360% 11/13/12 5
Univ Health Svcs 0.426% 06/23/20 59
US Air Inc. 10.250% 01/15/49 6
US Air Inc. 10.250% 01/15/49 11
US Air Inc. 10.250% 01/15/49 6
US Air Inc. 10.250% 01/15/49 6
US Air Inc. 10.300% 01/15/49 1
US Air Inc. 10.550% 01/15/49 1
US Air Inc. 10.610% 06/27/07 0
US Air Inc. 10.680% 06/27/08 1
US Air Inc. 10.700% 01/01/49 20
US Air Inc. 10.850% 01/01/49 48
US Air Inc. 10.900% 01/01/49 6
Venture Hldgs 12.000% 06/01/09 0
Werner Holdings 10.000% 11/15/07 34
Westpoint Steven 7.875% 06/15/05 0
Westpoint Steven 7.875% 06/15/08 0
Winsloew Furniture 12.750% 08/15/07 20
Winstar Comm Inc 10.000% 03/15/08 4
World Access Inc. 4.500% 10/01/02 4
World Access Inc. 13.250% 01/15/08 4
*********
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.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $725 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same firm
for the term of the initial subscription or balance thereof are
$25 each. For subscription information, contact Christopher Beard
at 240/629-3300.
*** End of Transmission ***