/raid1/www/Hosts/bankrupt/TCR_Public/060629.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, June 29, 2006, Vol. 10, No. 153
Headlines
609 FANNIN: Houston's Magnolia Hotel Being Auctioned Tomorrow
ADELPHIA: Spars Anew with Keys Gate & M&H Homestead over Stay
AHPC HOLDINGS: Completes $3 Mil. M.A.G. Capital Equity Financing
ALION SCIENCE: S&P Junks Rating on Proposed $170 Million Facility
ALLEN ADKINS: Voluntary Chapter 11 Case Summary
ALLIED SECURITY: S&P Rates New $275 Million Term Loan at B
AMERICAN CELLULAR: Posts $4.9 Mil. Net Loss for Qtr. Ended Mar. 31
ANDREW CORP: Retains Communications Facility in North Carolina
APHTON CORP: Panel Taps NachmanHaysBrownstein as Financial Advisor
APO HEALTH: March 31 Balance Sheet Upside-Down by $305,290
APPLIEDTHEORY CORP: Court Denies Traxi LLC as Settlement Advisor
APX HOLDINGS: Taps XRoads CMS as Administrative Services Agent
ARADIGM CORPORATION: Receives Delisting Notice from Nasdaq
ARMANDO DUARTE: Case Summary & 20 Largest Unsecured Creditors
AVETA INC: S&P Assigns B Rating to Proposed $185 Million Term Loan
BALLY TOTAL: Affirms Filing of Financials Within Waiver Period
BALLY TOTAL: Discloses Inclusion in Russell 3000 Index
BAYWOOD INT'L: March 31 Balance Sheet Upside-Down by $2.3 Million
BLUE BEAR: Court Approves Amended Disclosure Statement
BOLTON PROPERTIES: Case Summary & 3 Largest Unsecured Creditors
BOYDS COLLECTION: Emerges From Bankruptcy as Private Company
BRADLEY JEFFERIES: Case Summary & 10 Largest Unsecured Creditors
BUFFALO COAL: Court Approves Robert B. Morrison as Accountant
CALPINE CORP: Equity Panel Taps Fried Frank as Bankruptcy Counsel
CALPINE CORP: Names John R. Moore Senior VP for Human Resources
CALPINE CORP: Court Approves Sirius Solutions as SOX Consultants
CALUMET SPECIALTY: Launches Public Offering of 3.3MM Common Units
CARDINAL COMMUNICATIONS: Jantaq Lawsuit Moved to C.D. California
CARRINGTON MORTGAGE: Moody's Rates Class M-10 Certificates at Ba1
CENTRAL FREIGHT: Responds to SEC's Comments on Merger Agreement
CERADYNE INC: Inks Multi-Year Joint Venture Deal with Alcan
CHESAPEAKE ENERGY: Prices $500 Million 6.25% Pref. Stock Offering
COEUR D'ALENE: Sells Coeur Silvery to U.S. Silver for $15 Million
COMPUTER LEARNING: Class Proof of Claim Filed Too Late
CONSULTRIX TECH: Voluntary Chapter 11 Case Summary
COVENTRY HEALTH: Florida Court Dismisses Remaining Shane Claims
CRESCENT JEWELERS: Court Approves 2nd Amended Disclosure Statement
CRYSTAL INT'L: April 30 Balance Sheet Upside-Down by $3.4 Million
DELPHI CORP: Inks Further Amendments to $2-Bil. DIP Loan Deal
DELPHI CORP: Fight Over GM Supply Contracts Rejection Continues
DHANRAJ IMPORTS: Case Summary & 25 Largest Unsecured Creditors
DND TECHNOLOGIES: Unit Wants to Void Payments Owed to Lam Research
EMMIS COMMS: Special Committee Retains Legal & Financial Advisors
ENRON CORP: Settles Dispute with Tacoma Power, FERC Trial Staff
ETOTALSOURCE INC: Reports $297,787 Net Loss in 2006 First Quarter
FARMLAND IND: JPMorgan Cuts Final Checks, Paying Creditors 104%
FERRIS LUCAS: Voluntary Chapter 11 Case Summary
FLEET AUTO: Case Summary & Five Largest Unsecured Creditors
FLINTKOTE CO: Dividend Recovery Litigation Counsel Team Approved
FOSS MFG: Court Fixes June 30 as Administrative Bar Date
GE-RAY FABRICS: Court Denies Wachovia Bank's Case Dismissal Motion
GLOBAL HOME: Court Okays Lowenstein Sandler as Committee's Counsel
GMAC MORTGAGE: Fitch Affirms Low-B Ratings Class B-1 & B-2 Issues
GREEN TREE: S&P Lifts Class B Certificates' Rating to BB+ from D
HAWS & TINGLE: Wants to Hire Weaver and Tidwell as Tax Consultant
HERTZ CORP: S&P Places BB- Corp. Credit Rating on Negative Watch
HUNTSMAN INTERNATIONAL: S&P Holds BB- Corp. Credit Rating on Watch
INDEPENDENCE TAX: March 31 Balance Sheet Upside-Down by $3.2 Mil.
INFOR GLOBAL: S&P Junks Rating on Proposed $1.675 Billion Facility
INTELSAT LTD: Intelsat Bermuda Prices $2.34 Billion Senior Notes
INT'L MGT: Chapter 11 Trustee Taps Deloitte to Recover Assets
INZON CORP: Posts $663,640 Net Loss in Quarter Ended March 31
ISLE OF CAPRI: Good Performance Prompts S&P's Stable Outlook
ITEN CHEVROLET: Case Summary & 20 Largest Unsecured Creditors
JACUZZI BRANDS: Additional Liquidity Cues Moody's to Lift Ratings
KAIRE HOLDINGS: Equity Deficit Tops $4.4 Million at March 31
KELLEE KARS: Case Summary & 10 Largest Unsecured Creditors
LEEWOOD PLACE: Case Summary & Four Largest Unsecured Creditors
LEVITZ HOME: Court Grants Assumption and Assignment of Leases
LEVITZ HOME: Wants to Assign 28 Designated Contracts to PLVTZ
LONDON FOG: Taps Gordon Bros. & Hilco for Store Closing Sales
MABL Holdings: Board Declares $80 Dividend Payable on July 6
MARSHALL MARTINEZ: Case Summary & 4 Largest Unsecured Creditors
MERIDIAN AUTOMOTIVE: 7 Parties Object to 1st Disclosure Statement
MERIDIAN AUTOMOTIVE: UST Objects to "Opt-Out" Provision in Ballot
MICHAEL SARVER: Voluntary Chapter 11 Case Summary
MORGAN STANLEY: S&P Cuts $3 Mil. Class A-6 Notes' Rating to B+
NES RENTALS: Credit Reduction Prompts Moody's to Lower Ratings
NEXIA HOLDINGS: Posts $232,948 Net Loss in Quarter Ended March 31
NORTHWEST AIRLINES: Inks Settlement with GOAA on Lease Agreement
NORTHWEST AIRLINES: Enters Stipulation to Cease Holiday Inn Pact
NORTHWEST AIRLINES: Has Until November 15 to Removal Civil Actions
OLIVE XXIII: Case Summary & Four Largest Unsecured Creditors
OMEGA HEALTHCARE: Fitch Upgrades Preferred Stock's Rating to B+
ON SEMICONDUCTOR: Commences Exchange Offer of $260 Million Notes
OZBURN-HESSEY: Acquisition Plans Cue S&P to Downgrade Rating to B
PRIMUS TELECOMMS: Issues $24.1 Mil. of 5% Senior Unsecured Notes
PROFILE TECH: March 31 Balance Sheet Upside-Down by $734,747
PTC ALLIANCE: Has Final Access to $70 Million DIP Financing
RENT-A-CENTER: S&P Rates Proposed $725 Mil. Credit Facility at BB+
SAMSONITE CORPORATION: Posts $400K Net Loss in 2006 First Quarter
SECUNDA INT'L: Launches $125 Million Floating Rate Notes Offering
SECUNDA INTERNATIONAL: S&P Holds B- Corp. Credit Rating on Watch
SEQUIAM CORP: March 31 Balance Sheet Upside-Down by $5.8 Million
SHACKLETON RE: S&P Rates Proposed $175 Million Term Loans at BB
SILICON GRAPHICS: Has Final Access to $130 Million DIP Financing
SILICON GRAPHICS: Enters Into Global Settlement Agreement
SIX FLAGS: Fitch Puts Notes & Pref. Stock's Junk Ratings on Watch
SORELL INC: Brings In $1 Million from New Securities Purchase Pact
STATER BROS: March 26 Balance Sheet Upside-Down by $22.6 Million
THERMADYNE HOLDINGS: Amends Agreements With GECC & Credit Suisse
TIER TECHNOLOGIES: Ronald Rossetti Replaces James Weaver as CEO
TRANSMONTAIGNE INC: Inks Merger Agreement with Morgan Stanley
TRIAD WIRELESS: Voluntary Chapter 11 Case Summary
TRIPATH TECH: March 31 Balance Sheet Upside-Down by $4.7 Million
UNITY VIRGINIA: Can Use Lender's Cash Collateral
UNITY VIRGINIA: Files Schedules of Assets and Liabilities
UNIVERSAL COMMS: Sells Israeli Subsidiary Assets for $750,000
UNIVISION COMM: Likely Leverage Rise Cues Moody's to Cut Ratings
USG CORP: Has Until July 30 to Remove State Court Actions
VALASSIS COMMS: Lower 2006 EPS Guidance Cues S&P's Negative Watch
VARIG S.A.: MatlinPatterson Unit Tenders $500MM Offer for Assets
VARIG S.A.: Foreign Reps Assert Compliance to ILFC Request
VARIG S.A.: TAM SA & Gol Call for Distribution of Domestic Routes
VERESTAR INC.: Ct. Rules on Motions to Dismiss Panel's Lawsuits
VIDEO WITHOUT: March 31 Balance Sheet Upside-Down by $3.3 Million
VITESSE SEMICONDUCTOR: Tennenbaum Extends $24 Million Loan
WORLDGATE COMM: March 31 Balance Sheet Upside-Down by $11 Million
WHITE RIVER: U.S. Trustee Appoints Seven-Member Creditors Panel
WHITE RIVER: Committee Taps McGuireWoods LLP as Bankruptcy Counsel
WINN-DIXIE: Sells Miami Outparcels to Edens and Avant for $1.8MM
WINN-DIXIE: Continues SH&B's Retention With David Gay's Employment
WERNER LADDER: Taps Loughlin Meghji as Restructuring Consultants
XEROX CORP: Palm Settles Patent Breach Suit for $22.5 Million
* Chapter 11 Cases with Assets & Liabilities Below $1,000,000
*********
609 FANNIN: Houston's Magnolia Hotel Being Auctioned Tomorrow
-------------------------------------------------------------
Because of a default by 609 Fannin Funding, Ltd., under the terms
of a note and security agreement dated May 2, 2001, New Haven
Mortgage, LP, the holder of the note and security agreement and
the indebtedness thereunder, will auction 690 Fannin's undivided
70% limited partnership interest in Holtze Houston LLLP, a
Colorado limited liability partnership.
The auction will take place at The Lakes on Post Oak Conference
Center, 3050 Post Oak Blvd., Suite 210, in Houston, Texas, at
10:00 a.m. tomorrow, June 30, 2006.
Holtze Houston, LLLP, is the owner of the Magnolia Hotel located
at 1100 Texas Avenue in downtown Houston. General information
about the hotel is available on-line at
http://www.magnoliahotelhouston.com/
Magnolia Hotels' Chief Executive Officer is:
Steve Holtze
Magnolia Hotels
818 Seventeenth Street
Denver, Colorado 80202
Telephone (303) 607-0707
For additional information about the auction, contact:
Joseph A. Kornfeld, Esq.
3050 Post Oak Blvd., Suite 1170
Houston, TX 77056
Telephone (713) 629-0670
ADELPHIA: Spars Anew with Keys Gate & M&H Homestead over Stay
-------------------------------------------------------------
In his March 31, 2006, decision, the Honorable Robert D. Gerber of
the U.S. Bankruptcy Court for the Southern District of New York
directed Adelphia Communications Corporation to settle an order in
accordance with his denial of Keys Gate Community Association,
Inc.'s request to lift the automatic stay. ACOM submitted to the
Court a proposed order on April 13, 2006.
Keys Gate and M&H Homestead, Ltd., immediately notified the Court
that they want the ACOM Debtors' proposed order modified.
W. James MacNaughton, Esq., in Woodbridge, New Jersey, notes that
Keys Gate's request to lift the stay contains two separate and
distinct property interests at issue:
-- ownership of the Facilities itself; and
-- if the Debtor owns the Facilities, then ACOM's right to
occupy.
Mr. MacNaughton relates that the Court has only decided the first
issue in the context of whether Debtor was in default under the
Contract. The Court expressly did not decide the second issue.
Among others, Keys Gate proposes that the ACOM Debtors' proposed
order on the denial of Keys Gate's lift stay request should
include a language to make clear that the automatic stay remains
only as to the wiring itself and not the right to occupy the land
where the wire is situated.
According to Mr. MacNaughton, the practical effect of the
distinction is nil but the legal effect may have sufficient
meaning to warrant the entry of Keys Gate's counter-order.
ACOM Debtors Talk Back
Brian E. O'Connor, Esq., at Willkie Farr & Gallagher LLP, in New
York, tells the Court that it appears that Keys Gate is now
attempting to construe the Court's rulings, through Keys Gate's
proposed counter-order, as already giving Keys Gate the right to
remove the ACOM Debtors' wires and equipment. In essence, the
only issue according to Keys Gate is ownership of the wires
themselves and not the right to maintain the wires on the Keys
Gate premises. That argument makes no sense, Mr. O'Connor says.
ACOM asserts that the Court did not intend to permit Keys Gate to
remove the ACOM Debtors' wire before a determination of the
remaining issues in the Adversary Proceeding.
Keys Gate Responds
Keys Gate asks the Court to strike Mr. O'Connor's statements as
it contains material that has not been properly introduced into
evidence in the proceeding.
Mr. Naughton notes that the ACOM Debtors are now claiming that it
has the open-ended right "to remove any such home run wiring
within [90] days of the issuance of a final order from the
Bankruptcy Court determining that [ACOM] has no legal right to
remain on the Keys Gate premises [on] the expiration of the
Agreement." That claimed right is not recognized in the
contract, he says.
According to Mr. Naughton, Keys Gate and M&H are prepared to
litigate all the issues in the proper time following the proper
procedures.
Keys Gate and M&H Homestead notifies the Bankruptcy Court that
they will take an appeal from Judge Gerber's denial of their
request to lift the automatic stay as applied to any and all
Facilities installed and currently used by Adelphia Communication
Corporation and the areas those Facilities occupy at the premises
managed by Keys Gate, to the U.S. District Court of the Southern
District of New York.
Based in Coudersport, Pa., Adelphia Communications Corporation
(OTC: ADELQ) -- http://www.adelphia.com/-- is the fifth-largest
cable television company in the country. Adelphia serves
customers in 30 states and Puerto Rico, and offers analog and
digital video services, high-speed Internet access and other
advanced services over its broadband networks. The Company and
its more than 200 affiliates filed for Chapter 11 protection in
the Southern District of New York on June 25, 2002. Those cases
are jointly administered under case number 02-41729. Willkie Farr
& Gallagher represents the ACOM Debtors. PricewaterhouseCoopers
serves as the Debtors' financial advisor. Kasowitz, Benson,
Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP
represent the Official Committee of Unsecured Creditors.
(Adelphia Bankruptcy News, Issue No. 133; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
AHPC HOLDINGS: Completes $3 Mil. M.A.G. Capital Equity Financing
----------------------------------------------------------------
AHPC Holdings, Inc. (Nasdaq: GLOV) closed a $3 million equity
financing with M.A.G. Capital, LLC. and affiliates on
June 20, 2006. The Company issued 30,000 shares of Series B
Convertible Preferred Stock at a price of $100 per share. The
Series B Preferred is convertible into shares of the Company's
Common Stock at a fixed conversion price of $1.60 per share.
The Series B Preferred will pay a dividend based on the higher of
the Prime Rate, as quoted in the Wall Street Journal, plus 1%, or
9% per annum, with a maximum of 12% per annum. In addition, the
Company issued Warrants to MAG to acquire an aggregate of
1,950,000 shares of Common Stock. Flagstone Securities, a St.
Louis, Missouri-based investment bank, acted as placement agent in
this transaction.
NASDAQ Determination
On April 25, 2006, the Company received a determination from the
Listing Qualifications Staff of The NASDAQ Stock Market, Inc.
indicating that the Company's securities were subject to delisting
from The NASDAQ Capital Market based upon the Company's failure to
satisfy the $2.5 million stockholders' equity requirement, as set
forth in NASDAQ Marketplace Rule 4310(c)(2)(B). The Company
requested a hearing before the NASDAQ Listing Qualifications Panel
to seek continued listing on The Nasdaq Capital Market pending the
completion of the Company's plan to regain compliance the NASDAQ
listing requirements.
On June 15, 2006, the Company attended the NASDAQ hearing and
presented its compliance plan, which was based in significant part
on the MAG private placement. With the closing of the MAG private
placement, the Company now believes that it has regained
compliance with the NASDAQ stockholders' equity requirement. The
Company has advised NASDAQ of the closing of the private placement
and is now awaiting the issuance of the Panel's hearing decision.
The Company's securities will remain listed on The NASDAQ Stock
Market pending the issuance of the Panel's decision; however,
there can be no assurance that the Panel will grant the Company's
request for continued listing.
About AHPC Holdings
Headquartered in Glendale Heights, AHPC Holdings, Inc. --
http://www.ahpc.com/-- markets disposable medical examination,
foodservice and retail gloves. The Company's wholly owned
subsidiary, American Health Products Corporation, supplies branded
and private label disposable gloves to the healthcare,
foodservice, retail and industrial markets nationwide.
Going Concern Doubt
As reported in the Troubled Company Reporter on Oct. 26, 2005,
Grant Thornton LLP expressed substantial doubt about American
Health Products Corporation's ability to continue as a going
concern after it audited the Company's financial statements for
the fiscal years ended June 30, 2005, and 2004. The auditing firm
points to the Company's recurring losses, including the $1,151,549
net loss incurred for the year ended June 30, 2005. AHPC
Holdings, Inc., fka WRP Corporation, operates through American
Health Products, its wholly owned subsidiary.
ALION SCIENCE: S&P Junks Rating on Proposed $170 Million Facility
-----------------------------------------------------------------
Standard & Poor's Ratings Services ratings services lowered its
corporate credit rating on McLean, Virginia-based Alion Science
and Technology Corp. to 'B' from 'B+' and removed the rating from
CreditWatch, where it was placed on June 12, 2006, with negative
implications.
At the same time, Standard & Poor's affirmed its 'B+' rating on
Alion's $310 million senior secured bank facility, which includes
a $50 million revolving credit facility and $260 million term loan
(including the proposed $50 million add-on), and revised its
recovery rating to '1' from '3'.
Standard & Poor's also assigned its 'CCC+' rating to Alion's
proposed $170 million senior unsecured bridge facility. The
outlook is stable.
The bank loan rating, which is one notch above the corporate
credit rating, along with the '1' recovery rating, reflect
Standard & Poor's expectation of full recovery of principal by
creditors in the event of a payment default. Proceeds from the
incremental term facility and the senior unsecured bridge loan,
along with a delayed draw of $21 million on the existing term
loan, will be used to purchase the contracts and certain other
assets comprising Anteon's program management and engineering
services business for approximately $225 million.
The ratings downgrade reflects the substantial increase to
Alion's operating lease-adjusted debt leverage, which will be
approximately 7.5x, including redeemable common stock warrants,
following this transaction.
"The ratings reflect Alion's second-tier position in the highly
competitive and consolidating government IT services market, an
acquisitive growth strategy, and high debt leverage," said
Standard & Poor's credit analyst Ben Bubeck.
A predictable revenue stream based upon a strong backlog and the
expectation that the government IT services sector will continue
to grow over the intermediate term are partial offsets to these
factors.
Alion is an R&D, engineering, and information technology company
that provides services and communications solutions primarily to
the federal government. Pro forma for the proposed transaction,
Alion will have approximately $511 million in total funded debt,
including redeemable common stock warrants, as of June 2006.
ALLEN ADKINS: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: Allen Lee Adkins
P.O. Box 81
Kula, Hawaii 96790
Bankruptcy Case No.: 06-00429
Chapter 11 Petition Date: June 26, 2006
Court: District of Hawaii (Honolulu)
Debtor's Counsel: Jerrold K. Guben, Esq.
Reinwald O'Connor & Playdon LLP
733 Bishop Street, 24th Floor
Honolulu, Hawaii 96813
Tel: (808) 524-8350
Fax: (808) 531-8628
Total Assets: $2,899,979
Total Debts: $1,992,884
The Debtor did not file a list of its 20 largest unsecured
creditors.
ALLIED SECURITY: S&P Rates New $275 Million Term Loan at B
----------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' rating to
security officer services provider Allied Security Holdings LLC's
new $275 million term loan D, with a recovery rating of '3'.
At the same time, Standard & Poor's affirmed the company's
'B' corporate credit rating. The outlook is stable.
"The ratings actions indicate that the investors could expect
meaningful (50%-80%) recovery of principal in the event of a
payment default or bankruptcy," said Standard & Poor's credit
analyst Mark Salierno. "The ratings are based on preliminary
terms and conditions and are subject to review upon final
documentation."
On June 9, 2006, Allied Security announced the acquisition of
Initial Security LLC, the U.S. contract guard operations
subsidiary of Rentokil Initial PLC (BBB/Stable/--), for a net
purchase price of about $73 million. The proposed acquisition
will be financed through an $85 million add-on to its existing
$190 million term loan. The aggregated $275 million term loan is
due in 2010. The acquisition is expected to close by the end of
July. To accommodate the transaction, Allied has initiated a
consent solicitation to amend its bond indenture and also plans to
amend covenants to its existing bank facility.
Pro forma for the incremental term loan debt, King of Prussia,
Pennsylvania-based Allied Security will have about $455.6 million
in total debt outstanding, excluding operating lease obligations.
The outlook is stable.
Although Standard & Poor's anticipates that the operating
environment will remain highly competitive, the rating agency
expects the company to apply its excess free cash flow to reduce
debt and to maintain credit protection measures that are
appropriate for the ratings. The ratings do not incorporate
additional debt-financed acquisitions of significant size in the
near term.
In the event that the loss of key contracts and rising labor costs
cause financial performance and profitability to weaken, or if
financial policy becomes more aggressive, either of which may
cause credit measures to weaken further, the outlook could be
revised to negative. Alternatively, although less likely in the
near term, in the event that the company improves operating
margins and strengthens credit measures on a sustainable basis,
the outlook could be revised to positive.
AMERICAN CELLULAR: Posts $4.9 Mil. Net Loss for Qtr. Ended Mar. 31
------------------------------------------------------------------
American Cellular Corporation reported a net loss of $4,969,409 on
a $116,304,341 total operating revenue for the three months ended
March 31, 2006.
The Company's balance sheet at March 31, 2006 showed total
stockholders' equity of $419,962,143 from $1,576,555,792 in
total assets and $1,156,593,649 in total liabilities.
The Company's balance sheet also showed total current assets of
105,991,185 and total current liabilities of 56,167,666.
A full-text copy of American Cellular's financial report for the
quarter ended March 31, 2006 is available for free at:
http://ResearchArchives.com/t/s?c34
Headquartered in Oklahoma City, American Cellular Corp.
(Nasdaq: DCEL) -- http://www.americancellular.net/-- is a rural
and suburban provider of wireless communications services in the
United States. The company provides wireless telephone service in
portions of Illinois, Kansas, Kentucky, Michigan, Minnesota, New
York, Ohio, Oklahoma, Pennsylvania, West Virginia and Wisconsin.
The company offers digital voice, data and other feature services
to subscribers through Global System for Mobile Communications,
General Packet Radio Service, Enhanced Data for GSM Evolution, and
Time Division Multiple Access, digital networks. At Dec. 31,
2005, the company's wireless telephone systems covered a total
population of 5.2 million and had approximately 669,700
subscribers with an aggregate market penetration of 13.0%.
* * *
On Apr. 20, 2006, Fitch assigned B+ rating to American Cellular's
senior unsecured debt, placed the Company's long-term issuer
default rating at B- and junked the Company's senior subordinated
debt rating. The ratings were placed with a stable outlook.
On Sept. 9, 2005, Moody's assigned American Cellular's senior
unsecured debt rating at B3 with a stable outlook.
The Company's long-term local and foreign issuer credits carry
Standard & Poor's B- rating with negative outlook.
ANDREW CORP: Retains Communications Facility in North Carolina
--------------------------------------------------------------
Andrew Corporation will retain its existing satellite
communications production facility in Smithfield, North Carolina,
after reaching a lease agreement in principle with the prospective
new owner of the property.
Andrew will utilize a 235,000 square foot section of the 750,000
square foot building -- about one-third of the space it now
occupies -- and will continue to operate stamping, molding, paint,
and packaging operations for its global satellite communications
business.
The facility is being purchased from the Channel Master bankruptcy
estate by Industrial Realty Group, a Downey, California-based
company. Andrew has extended its current lease through June 2007
and agreed in principle to long-term lease terms that will be
executed when IRG closes on the facility purchase next month.
Approval of economic development incentive grants also is required
from Johnston County and the town of Smithfield.
Andrew plans to invest in certain new manufacturing equipment and
facility improvements to improve workplace and operational
efficiencies.
"With this unexpected lease opportunity, we have been able to
develop a long-term plan that enables us to meet our business
objectives without relocating from our existing facility," said
Jude Panetta, group president, Satellite Communications, Andrew
Corporation. "This is very advantageous to our business and our
employees since we will not face the disruption of starting an
entirely new operation under a very aggressive schedule."
Andrew's existing lease was due to expire in December 2006 and,
with the bankruptcy court sale of the building expected to lead to
redevelopment into retail usage, the company explored options for
relocation. In December 2005, Andrew disclosed plans to build a
new smaller facility in nearby Wayne County, North Carolina, but
the pending sale of the building to IRG and its plans to retain
the building for industrial use created an unexpected and
compelling option to lease a portion of the facility. By avoiding
the high cost of equipment relocation and retaining the existing
utilities infrastructure at the Smithfield facility, the business
case for remaining in Smithfield became more attractive than
relocation.
"Officials from Wayne County, the city of Goldsboro, and Wayne
County Economic Development were extremely helpful and supportive
during the last several months," Mr. Panetta said. "We know that
this change in direction is a disappointment to them, but it is
welcome news for many others, especially our employees, customers,
and the Smithfield community. By staying in the same facility, we
are able to make changes that are needed to keep our business
competitive without the risks and complexity associated with a
relocation of our manufacturing operations."
IRG has been active for several decades in the business of re-
developing large industrial sites throughout the country. Among
its many portfolio properties is the 10 million square foot,
4,000-acre former McClellan Air Force Base in Sacramento,
California.
About Andrew Corporation
Headquartered in Westchester, Illinois, Andrew Corporation --
http://www.andrew.com/-- designs, manufactures, and delivers
innovative and essential equipment and solutions for the global
communications infrastructure market. The company serves
operators and equipment manufacturers from facilities in 35
countries. The Company is an S&P 500 company founded in 1937.
* * *
As reported in the Troubled Company Reporter on June 2, 2006,
Standard & Poor's Ratings Services placed its 'BB' corporate
credit rating and other ratings on Andrew Corp. on CreditWatch
with positive implications. The CreditWatch listing followed the
announcement that the company has agreed to be acquired by unrated
ADC Telecommunications Inc., in a transaction expected to close in
four to six months.
APHTON CORP: Panel Taps NachmanHaysBrownstein as Financial Advisor
------------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in Aphton
Corporation's chapter 11 case has retained NachmanHaysBrownstein,
Inc. as its Financial Advisor. The retention is subject to
approval of the U.S. Bankruptcy Court for the District of
Delaware.
NHB was retained by the Creditors Committee to assist it in
evaluating the Debtor's efforts to conduct a sale of its business
assets as part of its bankruptcy filing. The Committee retained
NHB to provide financial advisory services including, but not
limited to:
a) fact investigation and development concerning actions that
were or were not previously undertaken by the Debtor and
its Management and Board of Director in attempting to
maximize the sale process for the benefit of all parties-at-
interest;
b) the preparation of Sales Procedures and a Marketing Plan for
the sale;
c) providing ongoing assistance to the Committee and the
Committee's legal counsel.
Keith M. Northern, a Managing Director in NHB's Philadelphia
office and Edward T. Gavin, Managing Director of NHB's Wilmington
office will lead the Aphton engagement.
About NachmanHaysBrownstein
NachmanHaysBrownstein, Inc. -- http://www.nhbteam.com/-- is one
of the country's premier mid-market turnaround and crisis
management firms. NHB has its headquarters near Philadelphia and
has offices in New York, Boston, Wilmington and Atlanta.
About Aphton
Headquartered in Philadelphia, Pennsylvania, Aphton Corporation --
http://www.aphton.com/-- is a clinical stage biopharmaceutical
company focused on developing targeted immunotherapies for cancer.
Aphton's products seek to empower the body's own immune system to
fight disease. Aphton filed for chapter 11 protection on May 23,
2006. (Bankr. D. Del. Case No. 06-10510). Michael G. Busenkell,
Esq., at Eckert Seamans Cherin & Mellot, LLC, represents the
Debtor in its restructuring efforts. William J. Burnett, Esq., at
Flaster Greenberg, represents the Official Committee of Unsecured
Creditors. Aphton estimated its assets and debts at $1 million to
$10 million when it filed for protection from its creditors.
At Dec. 31, 2005, Aphton's balance sheet showed assets totaling
$6,775,858 and debts totaling $11,641,182.
APO HEALTH: March 31 Balance Sheet Upside-Down by $305,290
----------------------------------------------------------
APO Health, Inc.'s balance sheet at March 31, 2006 showed
$1,096,758 in total assets and $1,402,048 in total liabilities
resulting to a total stockholders' deficit of $305,290.
The Company's balance sheet also showed strained liquidity with
$1,088,170 in total current assets and $1,407,048 in total current
liabilities.
For the three months ended March 31, 2006, the Company reported
net income of $2,505 from a $1,891,053 revenue.
A full-text copy of the Company's financial report for the quarter
ended March 31, 2006 is available for free at:
http://ResearchArchives.com/t/s?c46
Going Concern Doubt
As reported in the Troubled Company Reporter on Jan. 19, 2006,
Linder & Linder CPAs expressed substantial doubt about APO Health,
Inc.'s ability to continue as a going concern after it audited the
Company's financial statements for the fiscal years ended Sept.
30, 2005 and 2004.
In its audit report submitted to the Company's stockholders on
Dec. 2, 2005, the auditing firm pointed to APO Health':
a) substantial losses over the past three fiscal years
caused by adverse economic conditions that have limited
the Company's ability to market its products at amounts
sufficient to recover its operation and administrative
costs;
b) violation of working capital and tangible net worth
covenants in its lending agreement, rendering its
obligations to the factor callable. The Company has
pledged all of its assets as collateral for the
obligations; and
c) involvement as a defendant in several lawsuits alleging
the sale of counterfeit products and the receipt of a
deemed preferential distribution in a bankruptcy
proceeding.
About APO Health
Based in Oceanside, New York, APO Health, Inc. --
http://www.apohealth.com/-- through its subsidiaries, operates as
a distributor and supplier of disposable medical, dental, and
veterinary supplies; health and beauty aids; and pharmaceuticals.
These products include medical and dental disposable items, such
as syringes, gauze, gowns, facemasks, and instruments. The
company sells its products directly, through mail order, and
through independent sales representatives in the United States,
principally on the East Coast.
APPLIEDTHEORY CORP: Court Denies Traxi LLC as Settlement Advisor
----------------------------------------------------------------
The Honorable Judge Robert E. Gerber of the U.S. Bankruptcy Court
for the Southern District of New York denied the request of the
Official Committee of Unsecured Creditors in AppliedTheory
Corporation and its debtor-affiliates' chapter 11 case, to employ
Traxi LLC as expert and settlement advisor, nunc pro tunc to March
1, 2006.
Traxi Retention
In relation to the application, the Committee had asked authority
from the Court to:
-- pay Traxi LLC a $50,000 post-petition retainer; and
-- grant a super-priority administrative expense status on
the Firm's compensation and additional expenses.
The Committee said that it was advised by firm that absent the
approval of that arrangement, the firm will not accept the
engagement.
The Settlement Motion
On January 17, 2005, Yann Geron, the Trustee appointed in the
Debtors' Chapter 11 cases, filed a Settlement Motion pursuant to
Bankruptcy Rule 9019, approving a stipulation:
-- settling and compromising all claims between the Debtors'
estates and its Lenders, composed of: Halifax Fund, L.P.,
Palladin Partners I, L.P., Palladin Overseas Fund, Ltd.,
Hatteras Partners, L.P., Spectrum Investment Partners, LP,
Elliot International, L.P., and Elliot Associates,
L.P.; and
-- authorizing distribution in respect to the Lenders'
claims; and
-- authorizing the dismissal of the Debtors' Chapter 11 cases.
The Committee served discovery requests upon the Trustee and
anticipates that the Settlement will give rise to a number of
issues that will require a trial and expert testimony. These
issues include:
a) whether the Settlement is reasonable, appropriate, prudent
and satisfies the standards enunciated under Bankruptcy
Rule 9019;
b) whether the Trustee has been prudent and exercised
appropriate business judgment in approving and supporting
the Settlement;
c) the amount of the Lenders' alleged super-priority
administrative expense claims which the Trustee asserts was
granted for adequate protection pursuant to the cash
collateral orders and the alleged diminution, if any, of
the Lenders' collateral; and
d) the amount and extent of surcharges against the Lenders'
collateral, among others.
The Committee determined that the Firm's expertise and
services are essential for the Committee's analysis of the
Settlement and the prosecution of its objection to the Settlement.
The Committee also expected that the Firm will testify at the
Settlement Hearing.
Trustee's Objection
However, the Trustee objected to the employment of the Firm as
advisor to the Committee. The Trustee asserts that the retention
of the Firm "is not a sound business judgment", and that there is
no conceivable substantive reason why an expert is required by the
Committee to review any aspect of the Settlement.
Mr. Geron assures the Court that the Committee and its qualified
counsel are fully capable of reviewing and evaluating the
Settlement without the assistance of an expert. The factual and
legal bases for the Trustee entering into the Settlement are
relatively simple, and are thoroughly detailed in the Settlement
Motion. Additionally, the Committee offered no support for its
"unorthodox and legally defective requests" that the Firm be paid
a $50,000 post-petition retainer with a super-priority status.
The Committee has questioned the Trustee's calculation of the
Lenders' super-priority administrative expense claims, whose
amount is stipulated by the Trustee to exhaust any otherwise
unencumbered assets of the Debtors' estate. The Trustee defended
himself on the issue, saying that the analysis is not premised
upon any "guesswork" as the value of non-cash assets, for which an
expert could have been necessary.
Lenders' Objection
The Debtors' Lenders also objected to Traxi LLC's application as
advisor. The Lenders assert that the Committee improperly seeks
to require them to pay for professional fees that are not only
utterly unnecessary, but also are directly associated with
"litigating against the Lenders." The Lenders say that the
Committee has no basis to use the Lenders' cash collateral to pay
the Firm, or deprive the Lenders of their superpriority
administrative expense claim.
The Lenders tell the Court that they are not willing to fund
litigation against themselves.
Moreover, the proposed services to be rendered by the Firm are
wholly unnecessary, the Lenders argue. The issues presented by
the Settlement are straightforward, and there are no complicated
economic or valuation issues requiring any significant financial
skill or expert testimony.
About AppliedTheory
AppliedTheory Corporation provides internet service for business
and government, including direct internet connectivity, internet
integration, web hosting and management service. The Company
filed for chapter 11 protection on April 17, 2002 (Bankr. S.D.N.Y.
Case No. 02-11868). Joshua Joseph Angel, Esq., and Leonard H.
Gerson, Esq., at Angel & Frankel, P.C., represent the Debtors in
their restructuring efforts. Andrew I. Silfen, Esq., and Leah M.
Eisenberg, Esq., at Arent Fox PLLC, represent the Debtors'
Official Committee of Unsecured Creditors. When the Company filed
for protection from its creditors, it listed $81,866,000 in total
assets and $84,128,000 in total debts.
APX HOLDINGS: Taps XRoads CMS as Administrative Services Agent
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
allowed APX Holdings, LLC and its debtor-affiliates to employ
XRoads Case Management Services, LLC, as their bankruptcy
administrative services agent.
XRoads CMS is expected to:
a) assist the Debtors and their counsel in the preparation of
the Debtors' Schedules of Assets and Liabilities and
Statements of Financial Affairs;
b) assist the Debtors and their counsel in the preparation of
the 7-Day Package required by the office of the United
States Trustee;
c) assist the Debtors and their counsel in the preparation of
Monthly Operating Reports; and
d) provide noticing and document management services including:
i) serving notices to parties-in-interest;
ii) maintaining all proofs of claim and interest filed and
received in the bankruptcy cases;
iii) maintaining and transmitting to the Clerk's office the
official claims register;
iv) maintaining current mailing lists of all entities that
have filed claims and notices of appearance;
v) providing the public access for examination of claims
at XRoads CMS' premises during regular business hours
and without charge; and
vi) recording all transfers received pursuant to Rule
3001(e) of the Federal Rules of Bankruptcy Procedure.
John Vander Hooven, managing director at XRoads CMS, discloses
that the firm's professionals bill:
Designation Hourly Rate
----------- -----------
Director/ Managing Director $225 - $325
Consultant/Senior Consultant $125 - $225
Accounting and Document Management $125 - $195
Programming and Technical Support $125 - $195
Clerical $40 - $65
Mr. Hooven assures the Court that his firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
Headquartered in Santa Fe Springs, California, APX Holdings LLC
-- http://www.shipapx.com/-- provides small parcel and freight
delivery services to high volume commercial customers. The Debtor
and eight of its affiliates filed for chapter 11 protection on
Mar. 16, 2006 (Bankr. C.D. Calif. Case No. 06-10875). Martin R.
Barash, Esq., at Klee, Tuchin, Bogdanoff & Stern LLP, represents
the Debtors in their restructuring efforts. David W. Meadows,
Esq., and Rodger M. Landau, Esq., represent the Official Committee
of Unsecured Creditors. When the Debtors filed for protection
from their creditors, they estimated assets and debts of more than
$100 million.
ARADIGM CORPORATION: Receives Delisting Notice from Nasdaq
----------------------------------------------------------
Aradigm Corporation (NASDAQ: ARDM) received a staff determination
letter from the Nasdaq Stock Market Inc. stating that the
Company's common stock is subject to delisting from the Nasdaq
Capital Market for not meeting specific listing criteria.
The Company has the right to a hearing and will be submitting a
request to the Nasdaq Listing Qualifications Panel on this matter.
This request will stay the delisting of the Company's securities
pending the hearing and a determination by the Panel with the
company continuing to trade its securities under the ticker symbol
"ARDM" on the Nasdaq board. There can be no assurance that the
Panel will grant the Company's request for a hearing.
The Company received a notice on May 18, 2006, indicating that it
had failed to comply with Marketplace Rule 4310(c)(2)(B) or
Marketplace Rule 4310(c)(2)(B)(ii) of the Nasdaq Stock Market,
requiring the Company either maintain a minimum market value or
shareholders' equity or meet certain net income levels.
"We are working diligently to address the factors that are within
our control to return the company to compliance, and if granted a
hearing, we will be provided with an opportunity to present our
plan to maintain a continued listing," Thomas Chesterman,
Aradigm's chief financial officer, said.
Aradigm Corporation (NASDAQ: ARDM) -- http://www.aradigm.com/--
create products that enable patients to comfortably self-
administer biopharmaceuticals and small molecule drugs. The
company's AERx(R) pulmonary and Intraject(R) needle-free delivery
technologies offer rapid delivery solutions for liquid drug
formulations. Current development programs and priorities focus
on the development of specific products, including partnered and
self-initiated programs in the areas of respiratory conditions,
neurological disorders, heart disorders, and smoking cessation.
In addition, Aradigm and its partner, Novo Nordisk, are in Phase 3
clinical trials of the AERx Diabetes Management System for the
treatment of Type 1 and Type 2 diabetes. More information about
Aradigm can be found at
At March 31, 2006, Aradigm Corporation's balance sheet showed a
$397,000 stockholders' deficit compared to a $7,171,000 positivt
equity at Dec. 31, 2005..
ARMANDO DUARTE: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Armando Duarte
Karen Duarte
16 Beverly Road
Hillsdale, New Jersey 07642
Tel: (201) 358-9201
Bankruptcy Case No.: 06-15788
Chapter 11 Petition Date: June 27, 2006
Court: District of New Jersey (Newark)
Debtors' Counsel: David Edelberg, Esq.
Nowell Amoroso Klein Bierman, P.A.
155 Polifly Road
Hackensack, New Jersey 07601
Tel: (201) 343-5001
Fax: (201) 343-5181
Total Assets: $1,365,980
Total Debts: $2,265,822
Debtors' 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Alec Nichols, Inc. $168,000
c/o Corporation Service Company
830 Bear Tavern Road
West Trenton, NJ 08628
Citimortgage $156,943
P.O. Box 183040
Columbus, OH 43218
NYU Medical Center $150,000
31st and First
New York, NY 10016
HSBC $110,024
MERS $109,914
HFC $109,000
Mike and Ed Casteli $70,000
Steven Severino $69,000
Thomas Law Offices $61,033
Phillips & Cohen, Assoc. $52,716
Red Line Recovery $48,125
MBNA America $48,125
Bronson and Migliaccio $35,671
American Express $30,071
Credigy Receivables, Inc. $28,392
Caridian Consulting $28,127
American Express $23,030
First National Collection Bur. $21,296
Howard P. Schiff $15,793
Palisades Collection, LLC $15,744
AVETA INC: S&P Assigns B Rating to Proposed $185 Million Term Loan
------------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' counterparty
credit ratings on Aveta Inc. and its affiliate companies (NAMM
Holdings Inc. and MMM Holdings Inc.) and removed them from
CreditWatch with negative implications, where they were placed on
May 12, 2006. The outlook on these companies is stable.
In addition, Standard & Poor's assigned its 'B' senior debt credit
rating to a proposed $185 million term loan due August 2011 to be
issued by Preferred Health Management Corp.
These rating actions follow Aveta's announced definitive agreement
to acquire Preferred Medicare Choice Inc., a licensed HMO, and
PHMC, a related medical management company, in a deal valued at
$250 million. The transaction includes contingent earn-out
provisions that could be paid out over a 24-month period following
deal closure.
"The ratings reflect the financial guarantee provided by MMM
Holdings Inc., the parent company to MMM Healthcare Inc. and
expected parent to PHMC," explained Standard & Poor's credit
analyust Joseph Marinucci. "Accordingly, the ratings also reflect
our assessment of MMM."
The rating on MMM continues to reflect its good earnings and
cash flow profile and established competitive position in its
core market. Offsetting factors include:
* its limited geographic diversity and narrow product scope;
* significant level of intangibles relative to equity; and
* weak statutory capitalization according to Standard & Poor's
model.
Standard & Poor's believes the primary deal risks (operations and
integration) are containable because both companies have very
similar core market profiles, use similar business platforms, and
follow similar business strategies.
Nevertheless, the transaction does moderately increase financial
risk for Aveta because total debt is expected to increase by 60%
to $485 million in conjunction with the levered nature of the
transaction. Standard & Poor's considers the increased financial
risk to have already been reflected in the existing rating and
tempered somewhat by Aveta's cash flow strength as well as its
prospective capacity and intent to meaningfully reduce outstanding
debt in the near to intermediate term.
The outlook reflects Standard & Poor's expectation for:
* sustained cash flow strength;
* no change in strategic focus;
* no material acquisitions (other than PMC and PHMC); and
* a sustained commitment to debt reduction.
If Aveta were to achieve Standard & Poor's earnings expectations,
debt to EBITDA and interest coverage would be considered
moderately conservative for the company's business and financial
profile.
The stable outlook reflects limited potential for a rating change
over the near to intermediate term. A key driver in this
assessment is our belief that Aveta is demonstrating increased
willingness to incur greater business risk by adopting a more
acquisition-oriented growth strategy to bolster its market
profile. Accordingly, the outlook could be revised to negative if
profitability were to materially erode or if the company enters
into another near-term (within one year) transaction that
significantly alters its capital structure.
Upon deal closure, Standard & Poor's expects to assign its 'B'
counterparty credit rating to PHMC. The new term loan is being
issued via the incremental facility provision of Aveta's current
credit agreement. The proceeds will be used to partially finance
the transaction.
BALLY TOTAL: Affirms Filing of Financials Within Waiver Period
--------------------------------------------------------------
Bally Total Fitness Holding Corporation (NYSE: BFT) confirmed it
will file its 2005 10-K report and first quarter 2006 10-Q report
with the SEC before the July 10, 2006 expiration of the waiver
period. The Company also confirmed that its strategic process
remains on track.
The waivers of financial reporting covenants, obtained in
April 2006 from senior secured lenders and bondholders, permit
Bally to file its second quarter 10-Q report by Sept. 11, 2006, or
to extend until Oct. 11, 2006. The Company will file its second
quarter 2006 10-Q report within the waiver period and its third
quarter 2006 10-Q report by Nov. 9, 2006, the SEC deadline.
Bally's new chief financial officer Ron Eidell, assisted by Tatum
LLC, implemented new accounting processes and technologies to
shorten the Company's financial statements preparation and filing
time. As precautionary measure, Bally will ask the lenders for an
extension of the cross default deadline from 10 days to 28 days
after receipt of financial reporting covenant default notice under
the Company's public bond indentures for its third quarter 10-Q
report.
Bally Total Fitness --- http://www.Ballyfitness.com--- is the
largest and only nationwide commercial operator of fitness
centers, with over 400 facilities located in 29 states, Mexico,
Canada, Korea, China and the Caribbean under the Bally Total
Fitness, Bally Sports Clubs and Sports Clubs of Canada brands.
Bally offers a unique platform for distribution of a wide range of
products and services targeted to active, fitness-conscious adult
consumers.
BALLY TOTAL: Discloses Inclusion in Russell 3000 Index
------------------------------------------------------
Bally Total Fitness Holding Corporation (NYSE: BFT) has been
selected to join the Russell 3000 Index when Russell Investment
Group reconstitutes its family of U.S. indexes on June 30, 2006,
according to a preliminary list of additions posted on
http://www.russell.com/
Membership in the Russell 3000 means automatic inclusion in the
large-cap Russell 1000 Index or small-cap Russell 2000 Index and
the appropriate growth and style indices. Russell determines
membership by objective measures such as market capitalization
rankings and style attributes.
"Inclusion in the Russell 3000 highlights Bally's unique position
as the leading player in the high-growth fitness, nutrition and
wellness industry in North America," said Paul Toback, Chairman,
President and CEO of Bally Total Fitness.
Russell indexes are widely used by investment managers and
institutional investors for index funds and benchmarks for both
passive and active investment strategies. $3.8 trillion in assets
are benchmarked to them. Investment managers purchase shares of
member stocks according to that company's weighting in the
particular index.
Annual reconstitution of Russell indexes captures the 3,000
largest U.S. stocks as of the end of May, ranked by total market
capitalization to create the Russell 3000. The largest 1,000
companies comprise the Russell 1000 and the remaining 2,000
companies become the widely used Russell 2000.
About Russell
Headquartered in Tacoma, Wash., Russell Investment Group ---
http://www.russell.com--- a global leader in multi-manager
investment services. Provides investment products and services in
44 countries. Russell manages more than $167 billion in assets
and advises clients worldwide representing $2.4 trillion. Founded
in 1936, Russell is a subsidiary of Northwestern Mutual with
additional offices in New York, Toronto, London, Paris, Singapore,
Sydney, Auckland and Tokyo.
About Bally Total
Bally Total Fitness --- http://www.Ballyfitness.com--- is the
largest and only nationwide commercial operator of fitness
centers, with over 400 facilities located in 29 states, Mexico,
Canada, Korea, China and the Caribbean under the Bally Total
Fitness, Bally Sports Clubs and Sports Clubs of Canada brands.
Bally offers a unique platform for distribution of a wide range of
products and services targeted to active, fitness-conscious adult
consumers.
BAYWOOD INT'L: March 31 Balance Sheet Upside-Down by $2.3 Million
-----------------------------------------------------------------
Baywood International, Inc., reported a $109,794 net loss for the
period ended March 31, 2006, compared to a net loss of $136,565
for the same period last year.
Net sales during the quarter ended March 31, 2006 were $316,491, a
decrease of 13.8% compared to net sales of $366,945 for the same
period last year. The overall decrease in net sales for the
three-month period is due to sales from Hong Kong Trustful
Pharmaceutical Company, or HKTPCO, that occurred in the three
months ended March 31, 2005 as compared to the same period this
year.
At March 31, the Company's balance sheet showed $288,736 in total
assets and $2,644,531 in total current liabilities, resulting in a
stockholders' deficit of $2,355,795.
A full-text copy of the Company's quarterly report is available
for free at http://ResearchArchives.com/t/s?c4a
Going Concern Doubt
Epstein, Weber & Conover, Plc, expressed substantial doubt about
Baywood International's ability to continue as a going concern
after auditing the Company's financial statements for the year
ended December 31, 2005. The auditing firm pointed to the
Company's material operating losses and had a net working capital
deficiency of $2,352,615 at December 31, 2005.
About Baywood
Baywood International -- http://www.bywd.com/-- is a consumer
products company specializing in the development, marketing and
distribution of its own brands of nutraceuticals. The company's
product lines are marketed under the brand names Baywood
PURECHOICE(R) Baywood SOLUTIONS(R), Baywood EVOLUTION(TM) and
Complete La Femme(R).
BLUE BEAR: Court Approves Amended Disclosure Statement
------------------------------------------------------
The U.S. Bankruptcy Court for the District of Colorado approved,
on June 22, 2006, the Amended Disclosure Statement explaining the
Amended Joint Plan of Reorganization filed by Blue Bear Funding,
LLC, fka 1st American Factoring, LLC.
The Court determined that the Disclosure Statement contained
adequate information -- the right amount of the right kind of
information necessary for creditors to make informed decisions --
required by Section 1125 of the Bankruptcy Code.
The Court authorized the Debtor to distribute copies of the
Disclosure Statement on or before June 30, 2006, to solicit votes
for the Plan.
Treatment of Claims
Under the Modified Plan, all allowed administrative claims other
than operating administrative claims, will be paid in full on
Sept. 3, 2006, the anticipated effective date of the Plan.
Priority tax claims, will also be paid in full on the plan's
effective date, unless Reorganized Blue Bear elects to pay any of
the priority tax claims in installments.
All allowed secured tax claims and priority wage claims will be
paid in full on the Effective Date. Cache Bank & Trust's Claim,
Robert and Joyce Clayton's DIP Claim and Other DIP Claims will be
paid pursuant to the loan documents currently in effect.
The nature, validity, extent and amount of the secured claims of
Silver Mountain Financial, LLC, and Business Resources, LLC, as
well as the claims of the Independent Factoring Companies will be
determined by the Court and treated under the Plan provisions.
Other secured Claims, if any, will receive, at the option of
Reorganized Blue Bear:
* the property subject to the security interest or lien,
* payment to the extent of the value of the Claim Holder's
interest in the property subject to the lien, or
* the amount applicable, whichever is lesser, or as otherwise
determined by the Court.
Unsecured Claims are divided into two classes:
1. administrative convenience class -- comprised of claimants
holding claims of under $4,000 in the aggregate or
claimants who elect to be part of this Class by reducing
their Claims to $4,000 or less; and
2. general unsecured class -- consists of all other Unsecured
Claims, including trade Claims and Investor Claims.
Allowed administrative convenience claims will be paid 20% of
their allowed claims in cash on the initial distribution date.
Allowed general unsecured claims will receive common stock in
Reorganized Blue Bear from the escrow established on the Effective
Date in accordance with the Modified Plan in exchange for the
surrender and cancellation of the Claims, with one share of common
stock for every $1,000 of their allowed claim. The common stock
will, however, be restricted and not freely tradable in any
market.
Current members of Debtor will receive nothing under the Plan on
account of their membership interests and these interests will be
cancelled.
Post-Confirmation Matters
On the Effective Date, Debtor will convert from a Colorado limited
liability company to a Colorado corporation under subchapter C of
the Internal Revenue Code, with the designees of the Committee
compromising all but one of the members of the initial Investor
Committee. The Investor Committee will be authorized but not
required to (a) liquidate Reorganized Blue Bear, in the event
certain financial and business development benchmarks are not met,
and (b) determine and make dividends to Stockholders upon review
of Reorganized Blue Bear's financial performance.
Stockholder Recovery Projections
Stockholders will receive dividends from Reorganized Blue Bear
from:
-- from operating profits on or about December 2010, based on
financial projections;
-- from litigation recoveries financed by the Creditors'
Litigation Fund -- a fund to be established with the
reserves of certain IFCs in accordance with a proposed
separate settlement agreement being negotiated among
Debtor, the Committee, certain Investors and such IFCs
-- once litigation recoveries exceed $1,500,000, net of any
fees and expenses; and
-- from time to time as determined by the Investor Committee,
the source of which may include recovery of bad debt,
litigation recoveries funded by sources other than the
Creditors' Litigation Fund and from operating profits.
In addition, the Plan provides for an early "cash-out" option, if
so determined by the Investor Committee.
The Projections do not include any litigation recoveries other
than recoveries from bad debt. Accordingly, based on the
Projections, the estimated discounted liquidation value available
to Stockholders is approximately 13.5% of their claims on or about
December 2010.
A full-text copy of the amended joint reorganization plan is
available for a fee at:
http://www.researcharchives.com/bin/download?id=060621204104
A full-text copy of the amended disclosure statement explaining
that Plan is available for a fee at:
http://www.researcharchives.com/bin/download?id=060621203909
The Court has set August 2, 2006 to consider confirmation of the
Debtor's plan.
About Blue Bear
Headquartered in Windsor, Colorado, Blue Bear Funding, LLC --
http://www.bluebearfunding.com/-- provides invoice factoring
services. The Company filed for chapter 11 protection on
Aug. 22, 2005 (Bankr. D. Colo. Case No. 05-31300). Alice A.
White, Esq., and Douglas W. Jessop, Esq., at Jessop & Company,
P.C., represent the Debtor in its restructuring efforts. Erin L.
Connor, Esq., represents the Official Committee of Unsecured
Creditors. When the Debtor filed for protection from its
creditors, it estimated assets between $1 million and $10 million
and debts between $10 million and $50 million.
BOLTON PROPERTIES: Case Summary & 3 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Bolton Properties Inc.
P.O. Box 10156
Raleigh, North Carolina 27605
Bankruptcy Case No.: 06-00936
Type of Business: The Debtor develops and manages real estate.
Chapter 11 Petition Date: June 26, 2006
Court: Eastern District of North Carolina (Raleigh)
Judge: A. Thomas Small
Debtor's Counsel: Gregory B. Crampton, Esq.
Nicholls & Crampton, P.A.
P.O. Box 18237
Raleigh, North Carolina 27619
Tel: (919) 781-1311
Fax: (919) 782-0465
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $100,000 to $500,000
Debtor's 3 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
A.T. Allen & Company $400
3733 National Drive, Suite 100
Raleigh, NC 27612
City of Raleigh $130
Public Utilities Department
219 Fayetteville Street Mall
Suite 620
Raleigh, NC 27601
Wake County Revenue Department For information Unknown
P.O. Box 2331 purposes
Raleigh, NC 27602
BOYDS COLLECTION: Emerges From Bankruptcy as Private Company
------------------------------------------------------------
The Boyds Collection, Ltd., has emerged from the Chapter 11
reorganization process. The Company concluded its reorganization
on June 28, 2006, after completing all required actions and
satisfying all remaining conditions to its Plan of Reorganization.
The U.S. Bankruptcy Court for the District of Maryland confirmed
Boyd's plan by order entered on June 13, 2006. Boyds is emerging
from Chapter 11 as a privately held Company.
"We are pleased to have completed this process and emerge from
Chapter 11 having accomplished all of our major goals. Boyds is
emerging as a financially stable company, and with this solid
foundation will be able to move forward as a viable business
poised for growth. We have secured $11 in exit financing, which
will provide the necessary assurance to our customer base that we
are financially sound," said Jan Murley, chief executive officer
and director. "We were able to complete this process on schedule
due to the overwhelming support of all our creditors and interest
holders."
As part of the emergence from Chapter 11, Ms. Murley is leaving
Boyds to pursue other interests. Robert Coccoluto, who served as
President and CFO of Boyds between 1998 and 2000, will act as CEO
following Ms. Murley's departure and Peter Frost will assume the
responsibilities as Chief Operating Officer. Michael A. Prager,
who is Boyds' Group Vice President, Wholesale, has assumed the
position of President, effective May 25, 2006.
"Boyds has emerged as a much more competitive Company," said
Robert Coccoluto, incoming chief executive officer. "Now that we
have taken the first steps of restructuring, I look forward to
working with our employees, collectors, customers, and business
partners to stabilize and grow our business."
Headquartered in McSherrystown, Pennsylvania, The Boyds
Collection, Ltd. -- http://www.boydsstuff.com/-- designs and
manufactures unique, whimsical and "Folksy with Attitude(SM)"
gifts and collectibles, known for their high quality and
affordable pricing. The Company and its debtor-affiliates filed
for chapter 11 protection on Oct. 16, 2005 (Bankr. Md. Lead Case
No. 05-43793). Matthew A. Cantor, Esq., at Kirkland & Ellis LLP
represents the Debtors in their restructuring efforts. Houlihan
Lokey Howard & Zukin Capital, Inc. serves as the Debtor's
financial advisors. The law firm Paul, Weiss, Rifkind, Wharton &
Garrison LLP, represents the Official Committee of Unsecured
Creditors. FTI Consulting serves as the Committee's financial
advisors. When Boyds filed for bankruptcy, it reported
$66.9 million in total assets and $101.7 million in total debts as
of June 30, 2005.
BRADLEY JEFFERIES: Case Summary & 10 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Bradley C. Jefferies
10717 Tulip Lane
Potomac, Maryland 20854
Bankruptcy Case No.: 06-13682
Chapter 11 Petition Date: June 26, 2006
Court: District of Maryland (Greenbelt)
Judge: Paul Mannes
Debtor's Counsel: Daniel M. Kennedy, III, Esq.
Barkley and Kennedy, Chartered
51 Monroe Street, Suite 1407
Rockville, Maryland 20850
Tel: (301) 251-6600
Fax: (301) 762-2606
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 10 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Folger Pratt v. B. Jefferies $220,000
9600 Blackwell Road, Suite 200
Rockville, MD 20850
Eleanor Biggs $50,000
1248 Orleans Drive
Knoxville, TN 37919
NCFU $32,406
P.O. Box 3100
Merrifield, VA 22119-3100
USAA $15,000
Department of Finance $14,847
Wells Fargo Financial $6,478
MBNA America $5,000
Department of Finance $4,000
Griffith Oil $750
Exxon Mobil $550
BUFFALO COAL: Court Approves Robert B. Morrison as Accountant
-------------------------------------------------------------
Buffalo Coal Company, Inc., obtained authority from the United
States Bankruptcy Court for the Northern District of West Virginia
to employ Robert B. Morrison as its accountant.
Mr. Morrison will:
a. prepare and file local, state and federal tax returns;
b. assist the Debtor in preparing and presenting accounting
information;
c. assist the Debtor in preparing monthly operating reports;
and
d. perform other related services.
The Debtor discloses that Mr. Morrison will bill $125 per hour for
this engagement.
The Debtor assures the Court that Mr. Morrison does not represent
any interest adverse to its estate.
Headquartered in Oakland, Maryland, Buffalo Coal Company, Inc., is
engaged in coal mining and processing services. The company filed
for chapter 11 protection on May 5, 2006 (Bankr. N.D. W.Va. Case
No. 06-00366). David A Hoyer, Esq., at Hoyer, Hoyer & Smith,
PLLC, represents the Debtor in its restructuring efforts. When
the Debtor filed for protection from its creditors, it listed
total assets of $119,323,183 and total debts of $105,887,321.
CALPINE CORP: Equity Panel Taps Fried Frank as Bankruptcy Counsel
-----------------------------------------------------------------
The Official Committee of Equity Security Holders of Calpine
Corporation and its debtor-affiliates asks permission from the
U.S. Bankruptcy Court for the Southern District of New York to
retain Fried, Frank, Harris, Shriver & Jacobson LLP as its
counsel, nunc pro tunc to May 11, 2006.
J.D. Kritser, chairman of the Equity Committee, notes that Fried
Frank has extensive experience and knowledge in the field of
debtors' and creditors' rights.
Specifically, Fried Frank will:
(a) provide legal advice with respect to the Equity
Committee's rights, powers and duties in the Debtors'
Chapter 11 Cases;
(b) assist the Equity Committee in analyzing and negotiating
any plan of reorganization and related corporate
documents;
(c) assist and advise the Equity Committee with respect to its
communications with the general equity body regarding
significant matters in the Chapter 11 Cases;
(d) review, analyze, and advise the Equity Committee with
respect to documents filed with the Court, and respond on
behalf of the Equity Committee to all pleading in
connection with the administration of the Debtors' estates
in the Chapter 11 Cases; and
(e) perform any other legal services requested by the Equity
Committee in connection with the Debtors' Chapter 11 Cases
and the confirmation and implementation of a plan
reorganization in these Chapter 11 Cases.
Matthew Gluck, Esq., a member of Fried Frank, discloses that the
Firm's professionals bill:
Professional Hourly Rates
------------ ------------
Partners $650 to $995
Counsel $550 to $850
Special Counsel $595 to $620
Associates $315 to $540
Legal Assistants $170 to $235
In addition, the Debtors will reimburse Fried Frank's reasonable
and necessary out-of-pocket expenses.
Mr. Gluck assures the Court that his firm does not hold or
represent any interest adverse to the Equity Committee or the
Debtors, and is a "disinterested person" as defined in Section
101(14) of the Bankruptcy Code.
Headquartered in San Jose, California, Calpine Corporation --
http://www.calpine.com/-- supplies customers and communities with
electricity from clean, efficient, natural gas-fired and
geothermal power plants. Calpine owns, leases and operates
integrated systems of plants in 21 U.S. states and in three
Canadian provinces. Its customized products and services include
wholesale and retail electricity, gas turbine components and
services, energy management and a wide range of power plant
engineering, construction and maintenance and operational
services. The Company filed for chapter 11 protection on
Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard
M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq.,
and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the
Debtors in their restructuring efforts. Michael S. Stamer, Esq.,
at Akin Gump Strauss Hauer & Feld LLP, represents the Official
Committee of Unsecured Creditors. As of Dec. 19, 2005, the
Debtors listed $26,628,755,663 in total assets and $22,535,577,121
in total liabilities. (Calpine Bankruptcy News, Issue No. 19;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
CALPINE CORP: Names John R. Moore Senior VP for Human Resources
---------------------------------------------------------------
Calpine Corporation (OTC Pink Sheets: CPNLQ) named John R. Moore
as Senior Vice President-Human Resources. Prior to joining
Calpine, he was Vice President Human Resources for Fleetwood
Enterprises. Mr. Moore will lead all aspects of Calpine's human
resources function, including staffing and training, leadership
development, industrial relations, and compensation and benefits.
"John Moore is an outstanding addition to our senior management
and human resources teams," Robert P. May, Calpine's Chief
Executive Officer, stated. "He has a proven track record for
creating and delivering value-added strategic programs. Over the
past six months, Calpine has made demonstrable progress in
advancing our restructuring program. This success would be
impossible without the experience, creativity and dedication of
our employees. With John's guidance, we will continue to attract
and retain the best talent to help ensure Calpine emerges from
Chapter 11 a profitable, competitive power company."
Mr. Moore, age 45, brings to Calpine more than 20 years of
experience in human resources. He previously served in senior
management positions for major corporations in a variety of
industries -- both domestic and international -- including
transportation, engineering services and aerospace manufacturing.
He most recently served as Vice President Human Resources for
Fleetwood Enterprises, where he was responsible for 13,000 union
and non-union employees in the United States and Canada.
Mr. Moore holds a Master's of Business Administration degree and a
Bachelor's of Business Administration degree from Midwestern State
University.
Headquartered in San Jose, California, Calpine Corporation --
http://www.calpine.com/-- supplies customers and communities with
electricity from clean, efficient, natural gas-fired and
geothermal power plants. Calpine owns, leases and operates
integrated systems of plants in 21 U.S. states and in three
Canadian provinces. Its customized products and services include
wholesale and retail electricity, gas turbine components and
services, energy management and a wide range of power plant
engineering, construction and maintenance and operational
services. The Company filed for chapter 11 protection on
Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard
M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq.,
and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the
Debtors in their restructuring efforts. Michael S. Stamer, Esq.,
at Akin Gump Strauss Hauer & Feld LLP, represents the Official
Committee of Unsecured Creditors. As of Dec. 19, 2005, the
Debtors listed $26,628,755,663 in total assets and $22,535,577,121
in total liabilities.
CALPINE CORP: Court Approves Sirius Solutions as SOX Consultants
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
gave Calpine Corp. and its debtor-affiliates authority to employ
Sirius Solutions LLP as their Sarbanes-Oxley Act consultants.
Sirius Solutions provided a number of prepetition services to
the Debtors, including consulting services in connection with the
Sarbanes-Oxley Act of 2002, financial reporting and transaction
support, risk management, management information and business
process and controls. Thus, Sirius is already familiar with the
Debtors' businesses, Matthew A. Cantor, Esq., at Kirkland & Ellis
LLP, in New York, says.
Sirius Solutions is expected to:
(a) review existing internal control documentation in
selected areas;
(b) conduct interviews with employees to understand their
current assessment of the internal controls in the
selected areas, the impact of any changes in relevant
processes and systems, and their redesign of controls in
response to any change;
(c) develop a baseline documentation related to any changed
processes and controls, which will be aligned to accepted
control model;
(d) review the internal control documentation in the selected
areas for completeness, measurement and accountability;
(e) perform a walkthrough of the internal control`
documentation in the selected areas;
(f) develop recommendations regarding potential enhancements
for the internal controls and related documentation in the
selected areas;
(g) assist management with remediation and enhancement of
internal controls as determined by management;
(h) perform tests of key controls that the Debtors designate
should be tested; and
(i) assist management in identifying controls within the
information systems being used that management has
determined are relevant for SOX compliance.
At the Debtors' request, Sirius Solutions may:
(1) provide interim resources to fill voids created by
voluntary or involuntary staff changes in the accounting,
financial, internal controls, information technology or
risk management support functions;
(2) provide project management resources or subject matter
advice in various areas including office processes and
controls, ISO operations accounting, wholesale accounting,
financial accounting, derivatives or other related
financial reporting and disclosure support;
(3) provide interim or temporary resources or project
management assistance in aggregating information for and
preparation of schedules, reports or other financial
information required by the Court, committees or
stakeholders, processing claims and litigation document
and response assistance; and
(4) continue prepetition evaluation of the proposed settlement
delivered by Rosetta and complete prepetition budgeting
and forecasting services.
Sirius Solutions is expected to produce:
(a) baseline documentation of identified processes, policies
and procedures aligned to an accepted control model;
(b) a risk and key controls matrix;
(c) an improvement plan for the selected areas to enhance
existing internal control documentation; and
(d) documentation of testing and walkthroughs performed.
Kristi Chickering, chief executive officer of Sirius Solutions
LLP, discloses that, in addition to reimbursement of reasonable
out-of-pocket expenses, the Firm's professionals bill:
Professional Hourly Rate
------------ -----------
Partner $225 to $250
Directors $150 to $195
Senior Consultants $130 to $145
Consultants $110 to $125
Ms. Chickering assures the Court that her firm is a "disinterested
person" as defined in Section 101(14) of the Bankruptcy Code, and
holds no interest adverse to the Debtors or their estates.
Headquartered in San Jose, California, Calpine Corporation --
http://www.calpine.com/-- supplies customers and communities with
electricity from clean, efficient, natural gas-fired and
geothermal power plants. Calpine owns, leases and operates
integrated systems of plants in 21 U.S. states and in three
Canadian provinces. Its customized products and services include
wholesale and retail electricity, gas turbine components and
services, energy management and a wide range of power plant
engineering, construction and maintenance and operational
services. The Company filed for chapter 11 protection on
Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard
M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq.,
and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the
Debtors in their restructuring efforts. Michael S. Stamer, Esq.,
at Akin Gump Strauss Hauer & Feld LLP, represents the Official
Committee of Unsecured Creditors. As of Dec. 19, 2005, the
Debtors listed $26,628,755,663 in total assets and $22,535,577,121
in total liabilities. (Calpine Bankruptcy News, Issue No. 19;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
CALUMET SPECIALTY: Launches Public Offering of 3.3MM Common Units
-----------------------------------------------------------------
Calumet Specialty Products Partners, L.P. (Nasdaq: CLMT) filed
with the Securities and Exchange Commission a registration
statement for an underwritten offering by the Partnership of
3,300,000 common units. To the extent that the underwriters sell
more than 3,300,000 common units in the offering, they have the
option to purchase up to an additional 495,000 common units.
The Partnership intends to use the net proceeds from the offering
to repay all of its borrowings outstanding under its revolving
credit facility, fund the construction and other start-up costs of
an expansion project at its Shreveport refinery and, to the extent
available, for general partnership purposes.
Goldman, Sachs & Co. will act as the book-running manager of the
offering. The co-managers for the offering are Deutsche Bank
Securities Inc. and Petrie Parkman & Co., Inc. A copy of the
preliminary prospectus, and, upon completion, the prospectus
relating to this offering may be obtained by contacting:
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Telephone 1-866-471-2526
Based in Indianapolis, Indiana, Calumet Specialty Products
Partners, L.P. is a leading independent producer of high quality,
specialty hydrocarbon products in North America. The Partnership
processes crude oil into customized lubricating oils, solvents and
waxes used in consumer, industrial and automotive products. The
Partnership also produces fuel products including gasoline, diesel
fuel and jet fuel. The Partnership is based in Indianapolis,
Indiana and has three refineries located in northwest Louisiana.
* * *
As reported in the Troubled Company Reporter on June 12, 2006,
Standard & Poor's Ratings Services raised its secured loan rating
on independent petroleum refiner Calumet Specialty Products
Partners LP's $175 million term loan to 'BB-' (two notches higher
than the 'B' corporate credit rating on the company) from 'B+'.
The recovery rating on the loan was affirmed at '1', indicating a
high expectation for full recovery of principal in the event of a
payment default.
All other existing ratings on Calumet were also affirmed,
including the 'B' corporate credit rating. The outlook is stable.
CARDINAL COMMUNICATIONS: Jantaq Lawsuit Moved to C.D. California
----------------------------------------------------------------
Cardinal Communications, Inc., disclosed that the proceeding
styled Jantaq, Inc. v. Cardinal Communications, Inc., originally
filed in Los Angeles County Superior Court on April 13, 2006, has
been removed to the U.S. District Court for the Central District
of California and is pending as Case No. CV-06-2900.
The complaint alleges breach of contract and fraud claims against
the Company and seeks $300,000 in damages together with interest
and attorney's fees.
On June 7, 2006 the Company filed an amended answer and asserted
counterclaims against Jantaq for misrepresentation, fraud, unfair
business practices, and insider trading. The allegations
supporting the Company's counterclaim involve a previously
undisclosed financial or control relationship between a former
Chairman and CEO and Jantaq. The Company intends to vigorously
defend the action and prosecute the counterclaims.
Headquartered in Broomfield, Colorado, Cardinal Communications,
Inc., fka USURF America, Inc. (OTCBB: CDNC) provides full-service
solutions for residential and business applications including the
delivery of next-generation voice, video, and data broadband
networks to communities and cities throughout the United States;
the construction and development of luxury single and multi-family
homes, condominiums and apartment communities; home finance, real
estate and title services.
Going Concern Doubt
As reported in the Troubled Company Reporter on May 15, 2006, AJ.
Robbins, PC, in Denver, Colorado, raised substantial doubt about
Cardinal Communications, Inc., fka USURF America, Inc.'s ability
to continue as a going concern after auditing the Company's
consolidated financial statements for the year ended Dec. 31,
2005. The auditor pointed to the Company's recurring losses,
negative cash flows from operations, and working capital and
stockholders' equity deficiencies.
CARRINGTON MORTGAGE: Moody's Rates Class M-10 Certificates at Ba1
-----------------------------------------------------------------
Moody's Investors Service assigned a Aaa rating to the senior
certificates issued by Carrington Mortgage Loan Trust, Series
2006-NC2, and ratings ranging from Aa1 to Ba1 to the subordinate
certificates in the deal.
The securitization is backed by New Century Mortgage Corporation
and Home123 Corporation originated, adjustable-rate and
fixed-rate, subprime mortgage loans acquired by Carrington
Securities, LP. The ratings are based primarily on the credit
quality of the loans, and on the protection from subordination,
excess spread, and overcollateralization. Moody's expects
collateral losses to range from 4.65% to 5.15%.
New Century Mortgage Corporation will service the loans. Moody's
has assigned New Century its servicer quality rating as a primary
servicer of subprime first-lien loans.
The complete rating actions:
Carrington Mortgage Loan Trust, Series 2006-NC2
Asset-Backed Pass-Through Certificates
* Cl. A-1, Assigned Aaa
* Cl. A-2, Assigned Aaa
* Cl. A-3, Assigned Aaa
* Cl. A-4, Assigned Aaa
* Cl. M-1, Assigned Aa1
* Cl. M-2, Assigned Aa2
* Cl. M-3, Assigned Aa3
* Cl. M-4, Assigned A1
* Cl. M-5, Assigned A2
* Cl. M-6, Assigned A3
* Cl. M-7, Assigned Baa1
* Cl. M-8, Assigned Baa2
* Cl. M-9, Assigned Baa3
* Cl. M-10, Assigned Ba1
CENTRAL FREIGHT: Responds to SEC's Comments on Merger Agreement
---------------------------------------------------------------
Central Freight Lines, Inc. has moved towards completion of its
merger transaction with Jerry Moyes' company by responding to
comments from the Securities and Exchange Commission. The Merger
Agreement provides that a company controlled by Jerry Moyes and
certain related parties would become the owners of Central, and
Central would cease to be a publicly traded company.
Bob Fasso, Central's Chief Executive Officer and President stated:
"We currently expect to mail the finalized definitive proxy
statement to stockholders in July. The proxy statement
will solicit proxies for voting on the Merger transaction at our
Annual Meeting, which will be held approximately 30 days from the
date the proxy statements are mailed to our stockholders."
Jerry Moyes added: "I am pleased with the progress made on the
Merger and look forward to closing the transaction as soon as
possible."
On January 30, 2006, Central announced that it had entered into an
Agreement and Plan of Merger, with North American Truck Lines, LLC
and Green Acquisition Company. Under the Merger Agreement,
Green will merge with and into Central, with Central continuing
as the surviving corporation. Both NATL and Green are controlled
by Mr. Moyes, with Green being a wholly owned subsidiary of NATL.
On April 17, 2006, Central filed a preliminary proxy statement
with the SEC for its 2006 Annual Meeting of Stockholders. On
May 16, 2006, Central received comments from the SEC, which
Central believes were addressed in the filing on June 19, 2006.
Once the SEC's review of the proxy statement is finalized, the
definitive proxy statement will be mailed to Central's
stockholders to solicit proxies for voting on the Merger and
other matters presented at the Annual Meeting.
Stockholders are urged to read the definitive proxy statement
carefully when it becomes available because it will contain
important information about Central, the merger transaction, and
related matters. Stockholders will be able to obtain free copies
of the proxy statement and other documents filed with the SEC by
Central through the SEC's web site at http://www.sec.gov/ In
addition, stockholders will be able to obtain free copies of the
definitive proxy statement from the company.
Central Freight Lines, Inc. -- http://www.centralfreight.com/--
is a regional less-than-truckload trucking company that has
operations in the Southwest, Midwest, and Northwest regions of the
United States. The Company offers inter-regional service between
operating regions and maintain alliances with other similar
companies to complete transportation of shipments outside the
Company's operating territory.
Going Concern Doubt
As reported in the Troubled Company Reporter on May 17, 2006,
McGladrey & Pullen, LLP, in Dallas, Texas, raised substantial
doubt about Central Freight Lines, Inc.'s ability to continue as a
going concern after auditing the Company's consolidated financial
statements for the year ended Dec. 31, 2005. The auditor pointed
to the Company's recurring losses from operations and negative
working capital.
CERADYNE INC: Inks Multi-Year Joint Venture Deal with Alcan
-----------------------------------------------------------
Ceradyne, Inc., and Alcan, Inc., signed a multi-year agreement to
fabricate and distribute a nuclear shielding boron
carbide/aluminum Metal Matrix Composite. Alcan's Dubuc Works and
Ceradyne's recently formed subsidiary, Ceradyne Canada, will
cooperate to produce state-of-the-art nuclear shielding
structures, which will be formed into nuclear waste containment
vessels. Ceradyne will be responsible for the ultimate
fabrication and distribution of these nuclear waste components.
In order to process and extrude aluminum/boron carbide components
using a state-of-the-art 2,750-ton short stroke press, Ceradyne
plans on establishing an 80,000 square-foot manufacturing facility
in Saguenay, Quebec, Canada,
This technology initially will be focused on the market for spent
nuclear fuel rods generated by nuclear power plants. However,
Ceradyne and Alcan also intend to develop other aluminum/ceramic
Metal Matrix Composites for a wide range of new applications,
including the Company's military vehicle armor program.
Joel Moskowitz, Ceradyne chief executive officer, commented: "We
are extremely excited about this Ceradyne/Alcan agreement. With
Alcan's encouragement and cooperation, we intend to be a positive
force in the Saguenay-Lac-Saint-Jean region. We expect to invest
significant resources in plant and equipment. Our intention is to
begin hiring people shortly and continue increasing our local
staff over the next nine months. Our ultimate goal is a stable but
growing workforce combined with the economic advantages of
Quebec."
About Alcan
Alcan Inc. (NYSE/TSX: AL) -- http://www.alcan.com/-- based in
Montreal, Quebec, is a leading worldwide materials company with
world-class technology and operations in bauxite mining, alumina
processing, primary metal smelting, power generation, aluminum
fabrication, engineered solutions, and flexible and specialty
packaging.
About Ceradyne
Ceradyne Inc. (Nasdaq: CRDN) -- http://www.ceradyne.com/--
develops, manufactures and markets advanced technical ceramic
products and components for defense, industrial, automotive/diesel
and commercial applications.
* * *
Ceradyne's $50 million revolving credit facility due 2009 carries
Standard & Poor's BB- rating. The company's credit rating is also
rated BB- by Standard & Poor's. Those ratings were assigned on
July 13, 2004.
CHESAPEAKE ENERGY: Prices $500 Million 6.25% Pref. Stock Offering
-----------------------------------------------------------------
Chesapeake Energy Corporation (NYSE: CHK) priced its public
offering of $500 million of a series of 6.25% mandatory
convertible preferred stock with a liquidation preference of
$250 per share. Chesapeake also granted the underwriters a 30-day
option to purchase a maximum of $75 million in additional shares
of mandatory convertible preferred stock. Chesapeake expects the
issuance and delivery of the shares to occur on June 30, 2006,
subject to customary closing conditions.
The annual dividend on each share of preferred stock is $15.625
and is payable quarterly when, as and if declared by the company,
in cash, common stock or a combination thereof, in arrears to
holders of record as of the first day of the payment month, each
March 15, June 15, Sept. 15 and Dec. 15 commencing Sept. 15, 2006.
The preferred stock is not redeemable.
The mandatory convertible preferred stock has a threshold
appreciation price of $34.86, which is 20% above the closing price
of the common stock on June 27, 2006. Each share will
automatically convert on June 15, 2009, subject to certain
adjustments, into no fewer than 7.1715 shares of Chesapeake's
common stock and no more than 8.6059 shares of Chesapeake's common
stock, depending on the then-prevailing market price of
Chesapeake's common stock. At any time prior to June 15, 2009,
the preferred stock may be converted at the option of the holders
or, under certain circumstances, by Chesapeake.
As reported in the Troubled Company Reporter on June 28, 2006,
Chesapeake intends to use the net proceeds from the offering,
together with proceeds from concurrent public offerings of senior
notes and common stock:
a) to fund its recently announced Barnett Shale acquisitions
for $932 million,
b) to repay outstanding indebtedness under its revolving credit
facility and
c) for general corporate purposes.
The offering is being made under a shelf registration statement
that became effective on Dec. 8, 2005.
Goldman, Sachs & Co., Banc of America Securities LLC, Credit
Suisse, Lehman Brothers Inc. and UBS Securities LLC are acting as
joint book-running managers for the offering.
The offering is being made only by means of a prospectus and
related prospectus supplement, copies of which may be obtained
from:
1) Goldman, Sachs & Co.
Attn: Prospectus Dept.
85 Broad Street
New York, NY 10004
Fax (212) 902-9316
2) Banc of America Securities LLC
Attn: Prospectus Department
100 West 33rd Street
New York, NY 10001
Fax (646) 733-4166
3) Credit Suisse
One Madison Avenue, Level 1B
New York, NY 10010
Fax (212) 325-2580
4) Lehman Brothers Inc.
c/o ADP Financial Services
Integrated Distribution Services
1155 Long Island Avenue
Edgewood, NY 11717
5) UBS Securities LLC
Prospectus Department
299 Park Avenue, 29th Floor
New York, NY 10171
Fax (212) 821-3000
About Chesapeake
Headquartered in Oklahoma City, Chesapeake Energy Corporation --
http://www.chkenergy.com/-- is the second largest independent
producer of natural gas in the U.S. The company's operations are
focused on exploratory and developmental drilling and corporate
and property acquisitions in the Mid-Continent, Permian Basin,
South Texas, Texas Gulf Coast, Barnett Shale, Ark-La-Tex and
Appalachian Basin regions of the United States.
* * *
As reported in the Troubled Company Reporter on June 28, 2006,
Moody's Investors Services assigned a Ba2 rating to Chesapeake
Energy's pending $500 million of senior unsecured notes and
confirmed its Ba2 corporate family, Ba2 senior unsecured note,
Baa3 secured hedging facility, and B2 preferred stock ratings,
with a stable outlook, and affirmed CHK's SGL-2 liquidity rating.
COEUR D'ALENE: Sells Coeur Silvery to U.S. Silver for $15 Million
-----------------------------------------------------------------
Coeur d'Alene Mines Corporation has completed the sale of 100% of
the shares of its wholly owned subsidiary, Coeur Silvery Valley,
to U.S. Silver Corporation for a total of $15 million in cash.
The Stock Purchase Agreement provides for a post-closing working
capital adjustment that is expected to be finalized in July 2006.
The Company anticipates that the transaction will result in a one-
time pre-tax gain of approximately $12 million in the quarter
ended June 30, 2006.
CSV owned and operated the Galena underground silver mine and
owned the adjacent Coeur underground silver mine. In addition,
CSV owned the Caladay Property that adjoins the Galena Mine and
had operating control of several contiguous exploration properties
in the Coeur d'Alene Silver Mining District of Idaho. CSV's
property consisted of 6,131 acres of Company-owned fee land,
patented mining claims and unpatented claims in addition to 4,800
acres of leased claims.
Coeur D'Alene Mines Corporation -- http://www.coeur.com/-- is the
world's largest primary silver producer, as well as a significant,
low-cost producer of gold. The Company has mining interests in
Nevada, Idaho, Alaska, Argentina, Chile, Bolivia and Australia.
* * *
Coeur D'Alene Mines Corp.'s 1.25% Convertible Senior Notes due
2024 carry Standard & Poor's B- rating.
COMPUTER LEARNING: Class Proof of Claim Filed Too Late
------------------------------------------------------
The Hon. Robert G. Mayer says that a motion for a determination of
the applicability, to the claims filing process in Computer
Learning Centers, Inc.'s bankruptcy proceeding, of a Rule 7023 of
the Federal Rules of Bankruptcy Procedure governing class action
proceedings in bankruptcy was not timely filed and should be
denied on that basis.
Joshua Ruiz, Eric Evangelista, Edwin Potts, Jr., and Frank
Seklecki, filed a proof of claim on behalf of themselves and a
prospective class consisting of all persons who, from May 5, 1992
through May 4, 1998, were enrolled in a course of study, education
or training provided by Computer Learning Centers, Inc., at its
New Jersey locations and suffered injury from its false claims,
misrepresentations or omissions regarding the nature and quality
of instruction provided by it; the quality and sufficiency of its
equipment; the qualifications, capability and quality of its
instructors; and its job placement services. They base their
claims on fraud, breach of contract and violation of New Jersey's
consumer fraud act. The chapter 7 trustee objected to the proof
of claim as a class proof of claim.
Judge Mayer observes that the former students waited more than
four years after commencement of the Chapter 7 case, and years
following expiration of the bar date set for filing proofs of
claim, after records bearing on the propriety of individual class
members claims' had been destroyed with the court's permission, at
a time when creditors were about to receive a distribution on
their claims, to file their motion. That delay, Judge Mayer says
in a Memorandum Opinion published at 2006 WL 1653361, is too long.
H. Jason Gold, Esq., at Gold Morrison & Laughlin PC in McLean,
Virginia, serves as the Chapter 7 Bankruptcy Trustee for the state
of Computer Learning Centers, Inc. CLC filed for bankruptcy on
January 26, 2001 (Bankr. E.D. Va. Case No. 01-80096).
CONSULTRIX TECH: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: Consultrix Technologies, Inc.
405 Legacy Park
Ridgeland, Mississippi 39157
Tel: (601) 956-8909
Fax: (601) 956-8409
Bankruptcy Case No.: 06-01107
Type of Business: The Debtor is a designs technology solutions
for business establishments. The Debtor
also provides consulting, hardware and
software-based networking, software engineering
and customization, and ongoing support services.
See http://www.consultrix.net/
Chapter 11 Petition Date: June 26, 2006
Court: Southern District of Mississippi (Jackson)
Judge: Neil P. Olack
Debtor's Counsel: Craig M. Geno, Esq.
Harris & Geno, PLLC
587 Highland Colony Parkway
P.O. Box 3380
Ridgeland, Mississippi 39157
Tel: (601) 427-0048
Fax: (601) 427-0050
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
The Debtor did not file a list of its 20 largest unsecured
creditors.
COVENTRY HEALTH: Florida Court Dismisses Remaining Shane Claims
---------------------------------------------------------------
U.S. District Judge Federico A. Moreno has issued a summary
judgment order in favor of Coventry Health Care, Inc. (NYSE: CVH)
dismissing all remaining claims filed against the Company as a
part of the Charles B. Shane., et al., vs. Humana, Inc., et al.,
litigation filed in the U.S. District Court for the Southern
District of Florida, Miami Division, Multi-District Litigation,
Case No. 1334.
The lawsuit was filed by a group of physicians as a class action
against Coventry and nine other companies in the managed care
industry. The Company said it is pleased with the outcome and
remains committed to operational excellence, including mutually-
beneficial relationships with physicians and other providers.
Based in Bethesda, Maryland, Coventry Health Care, Inc.
(NYSE: CVH) -- http://www.cvty.com/-- is a national managed
health care company operating health plans, insurance companies,
network rental/managed care and workers' compensation services
companies. Coventry provides a full range of risk and fee-based
managed care products and services, including HMO, PPO, POS,
Medicare Advantage, Medicare Prescription Drug Plans, Medicaid,
Workers' Compensation services and Network Rental to a broad cross
section of individuals, employer and government-funded groups,
government agencies, and other insurance carriers and
administrators in all 50 states as well as the District of
Columbia and Puerto Rico.
* * *
On January 27, 2005, Fitch assigned Coventry Health Care's bank
loan debt, senior unsecured debt, and long-term issuer default
ratings at BB with a stable outlook.
In December 2004, Moody's assigned the Company's bank loan debt,
senior unsecured debt and long-term corporate family ratings at
Ba1 with a stable outlook.
The Company's long-term local issuer credit carries Standard &
Poor's BBB- rating. The rating was placed in December 2004 with a
positive outlook.
CRESCENT JEWELERS: Court Approves 2nd Amended Disclosure Statement
------------------------------------------------------------------
The Edward D. Jellen of the U.S. Bankruptcy Court for the Northern
District of California approved the Second Amended Disclosure
Statement explaining Crescent Jewelers, Inc.'s Second Amended Plan
of Reorganization June 15, 1006.
The Court determined that the Disclosure Statement contained
adequate information -- the right amount of the right kind of
information necessary for the creditors to make an informed
decision -- required by Section 1125 of Bankruptcy Code.
The Debtor is now authorized to distribute copies of the
Disclosure Statement to solicit acceptances for the Plan.
Terms of the Plan
On the effective date, Harbinger Capital Partners Master Fund I,
Ltd., will cause certain investors to deposit the general
unsecured distribution amount in the plan trustee funding account.
The distributions to holders of general unsecured claims to be
made by the Plan Trustee in cash under the Plan, other than
distributions under the Plan of the estate litigation proceeds and
the post-effective date fund excess, will be satisfied from the
Plan Trustee Funding Account. Reorganized Crescent will make all
other distributions.
Treatment of Claims
Under the second amended plan, administrative claims and secured
tax claims will be paid in full.
Priority tax claims will be paid in full in five annual
installments.
Priority claims, other than priority tax claims, will be paid in
full, in cash, without interest.
The Debtor tells the Court that residual consignment inventory
claims consist of memo merchandise that remains unsold and in
Crescent's actual possession on the effective date. Holders of
these claims will receive, at Reorganized Crescent's option:
* return of the inventory, or
* payment in full and in cash of their allowed claims.
Holders of other secured claims, at Reorganized Crescent's option,
will:
a. receive payment of their claim in cash;
b. have the collateral securing the claim abandoned; or
c. have their legal, equitable, and contractual rights
reinstated.
General unsecured claimholders will receive, on the distribution
date, their pro rata share of the general unsecured distribution
amount. In addition, holders of general unsecured claims will be
entitled to their pro rata share, if any, of the Estate Litigation
proceeds and post-effective date fund excess.
Harbinger Capital and Friedman's Inc. will receive shares of the
Crescent's new common stock and will also be entitled to a share,
if any, of the estate litigation proceeds.
Holders of Crescent's stock claims, preferred stock claims and
claims subordinated under Section 510 of the Bankruptcy
Code, will not receive anything under the second amended plan.
Existing Crescent's stocks and subordinated interests will be
cancelled and holders of these interests will receive nothing
under the second amended plan.
A full-text copy of the Debtor's Second Amended Plan of
Reorganization is available for a fee at:
http://www.researcharchives.com/bin/download?id=060609215701
Judge Jellen set 10:00 a.m. on July 13, 2006, to consider
confirmation of the Debtor's plan.
About Crescent Jewelers
Headquartered in Oakland, California, Crescent Jewelers, Inc. --
http://www.crescentonline.com/-- sells jewelry and operates over
160 stores in six western states. The Company filed for chapter
11 protection on August 11, 2004 (Bankr. N.D. Cal. Case No. 04-
44416). Lee R. Bogdanoff, Esq. at Klee, Tuchin, Bogdanoff and
Stern represents the Debtor in its chapter 11 case. John D.
Fiero, Esq., Kenneth H. Brown, Esq., and Tobias S. Keller, Esq.,
at Pachulski, Stang, Ziehl, Young and Jones represent the Official
Committee of Unsecured Creditors. In its April 2006 Monthly
Operating Report, the Debtor reported $77,372,000 in total assets
and $134,972,000 in total debts.
CRYSTAL INT'L: April 30 Balance Sheet Upside-Down by $3.4 Million
-----------------------------------------------------------------
Crystal International Travel Group, Inc., filed its financial
statements for the three months ended April 30, 2006, with the
Securities and Exchange Commission on June 21, 2006.
The Company reported an $3,425,525 net loss with no revenues for
the three months ended April 30, 2006.
At April 30, 2006, the Company's balance sheet showed $4,950,661
in total assets and $6,394,654 in total liabilities resulting in
$3,479,384 stockholders' deficit.
The Company's April 30 balance sheet also showed strained
liquidity with $53,995 in total current assets available to pay
$2,035,391 in total current liabilities coming due within the next
12 months.
Merger
On April 17, 2006 the Company completed a reverse merger with
Crystal Hospitality Holding, Inc. The shareholders of Crystal
acquired approximately 60.4% of the voting shares of the Company
The consolidated financial statements include the results from
operations for CHH from Dec. 8, 2006, through April 30, 2006, and
the results from operations for Mobile Reach International, Inc.
for April 30, 2006, only.
A full-text copy of the regulatory filing is available for free
at http://ResearchArchives.com/t/s?c6c
Going Concern Doubt
Scharf Pera & Co., PLLC, in Charlotte, North Carolina, raised
substantial doubt about Crystal International Travel Group's to
continue as a going concern after auditing the Company's
consolidated financial statements for the year ended July. 31,
2005 and 2004. The auditor pointed to the Company's losses from
operations and stockholders' deficit.
About Crystal International
Crystal International Travel Group, Inc., fka Mobile Reach
International, Inc., offers on-line travel services including, but
not limited to, airline reservation and booking, hotel reservation
and car rental services.
DELPHI CORP: Inks Further Amendments to $2-Bil. DIP Loan Deal
-------------------------------------------------------------
Delphi Corporation and its debtor-affiliates entered into a Fourth
Amendment to its $2-billion Amended and Restated Revolving Credit,
Term Loan and Guaranty Agreement from a syndicate of lenders
arranged by J.P. Morgan Securities Inc. and Citigroup Global
Markets, Inc., for which JPMorgan Chase Bank, N.A. is the
administrative agent and Citicorp USA, Inc., is syndication
agent., on June 19, 2006.
The Debtors originally entered into the DIP financing agreement on
Nov. 21, 2005. The DIP facility consists of a $1,750,000,000
revolving facility and a $250,000,000 term loan facility. On May
26, 2006, Delphi entered into the Third Amendment to the DIP
facility
John D. Sheehan, Delphi vice president, chief restructuring
officer and chief accounting officer, relates that the Subsequent
Amendments provide Delphi with additional time to deliver audited
financial statements for the year ended December 31, 2005, and the
quarterly financial statements for the periods ended March 31,
2006, and June 30, 2006.
Under the Subsequent Amendments, the audited financial statements
for the year ended December 31, 2005, are now due by July 19,
2006.
The unaudited quarterly financial statements for the period ended
March 31, 2006, are due no later than the later to occur of:
(1) July 31, 2006; and
(2) 30 days after the date on which the 2005 Financial
Statements are delivered.
The unaudited quarterly financial statements for the period ended
June 30, 2006, are due no later than the later to occur of:
(1) the due date specified by the SEC; and
(2) 30 days after the date on which the 2005 Financial
Statements are delivered.
In addition, the Fourth Amendment permits Delphi to make cash
collateral deposits of up to $175,000,000 to satisfy its
obligations under the UAW Special Attrition Program Agreement and
similar obligations pursuant to comparable labor agreements.
A full-text copy of the Third Amendment is available for free at:
http://researcharchives.com/t/s?c20
A full-text copy of the Fourth Amendment is available for free
At http://researcharchives.com/t/s?c21
About Delphi Corp
Based in Troy, Mich., 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. 29; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
DELPHI CORP: Fight Over GM Supply Contracts Rejection Continues
---------------------------------------------------------------
Delphi Corporation and its debtor-affiliates ask the United States
Bankruptcy Court for the Southern District of New York to overrule
General Motors Corporation's objection to the Debtors' proposed
rejection of its supply agreements with GM.
John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher &
Flom LLP, notes that GM's central arguments miss the point and do
not address the Debtors' actual business judgment that the Court
must evaluate.
In its objection, GM asserts that the Debtors will be committing
financial suicide by discontinuing the production of parts at
issue in light of the fixed costs. GM assumes that rejection of
the GM Loss Contracts will result in the immediate shutdown of GM
plants, with catastrophic economic reverberations throughout North
America.
Contrary to this doomsday scenario, the Debtors have made it
clear that their goal is not to seek to disrupt delivery of parts
to GM. The Debtors are prepared to continue shipment under
reasonable and equitable price terms.
Mr. Butler points out that after rejecting the GM Loss Contracts,
GM will have every incentive to accept new terms under which
supply parts will continue until the Debtors are able to reduce
their labor costs and transition in an orderly fashion out of
non-core businesses.
"The only way a calamitous shutdown of GM can happen . . . is if
GM itself decides to reject equitable re-pricing terms offered by
Delphi and chooses to shut itself down," Mr. Butler argues. "For
a myriad of reasons, the Debtors and GM can be expected to act
rationally and to seek to avoid a shutdown."
According to Mr. Butler, GM's position is not surprising. It
wants to continue, for as long as possible, to receive parts from
its former parts division that do not compensate the Debtors'
estates for GM-inherited production costs. It would be
inequitable to allow GM to do so, to the detriment of the Debtors'
estates, creditors, and other stakeholders, Mr. Butler asserts.
GM must either voluntarily resolve this historical and continuing
inequity, or the Court should give the Debtors access to the tools
Congress provided in the Bankruptcy Code, so that the Debtors may
unilaterally address and seek to mitigate the present,
unsustainable state of affairs.
Creditors Committee Supports Debtors
GM, in its objection, blatantly attempts to distract the Court
from a broader picture, Robert J. Rosenberg, Esq., at Latham &
Watkins LLP, in New York, tells Judge Drain. GM paints a myopic
picture of the Debtors' rejection request in the hopes of being
able to distort the business rationale for that request, Mr.
Rosenberg says. GM looks to hide its responsibility for the
problems the Debtors are facing, in the hopes of forcing others
to bear the costs of those problems, he adds.
The Court should see through GM's disingenuous attempt to hide
the ball, asserts Mr. Rosenberg. The rejection request is a
critical part of the Debtors' efforts to obtain GM's contribution
to solve the problems that GM created. The Committee supports
the Debtors' efforts.
About Delphi Corp
Based in Troy, Mich., 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. 27; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
DHANRAJ IMPORTS: Case Summary & 25 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Dhanraj Imports Inc.
11731 Sterling Avenue, Suite F
Riverside, California 92503
Bankruptcy Case No.: 06-11592
Debtor-affiliate filing separate chapter 11 petition:
Entity Case No.
------ --------
M/s Dhanraj International 06-11593
Type of Business: The Debtors are international marketers of
clove and flavored cigarettes.
Chapter 11 Petition Date: June 26, 2006
Court: Central District Of California (Riverside)
Judge: Peter Carroll
Debtors' Counsel: Jeffrey D. Cawdrey, Esq.
Gordon & Rees LLP
101 West Broadway, Suite 1600
San Diego, California 92101
Tel: (619) 696-6700
Fax: (619) 696-7124
Total Assets Total Debts
------------ -----------
Dhanraj Imports Inc. $3,168,968 $16,495,969
M/s Dhanraj International $850,674 $8,984,228
A. Dhanraj Imports Inc.'s 6 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Independent Auditor to the MSA Payment $7,740,512
Master Settlement Agreement
Attn: Ryan B. Harrell
1201 Louisiana Street
Suite 2900
Houston, TX 77002
Resource Bank Loan $638,599
555 Bethany Road
DeKalb, IL 60115
U.S. Department of Agriculture Taxes $280,410
Form Services Agency
Tobacco Division, Stop 5016
1400 Independence Avenue, 5W
Washington, D.C. 20250
Bhanwani Cigarettes Pvt. Ltd. Trade Debt $50,811
Hitandra Shah Marketing Services $30,000
Dhanraj International Trade Debt $15,125
B. M/s Dhanraj International's 19 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Independent Auditor to the MSA Payment $7,740,512
Master Settlement Agreement
Attn: Ryan B. Harrell
1201 Louisiana Street
Suite 2900
Houston, TX 77002
State of California Complaint $750,000
Dennis Eckhart
Shari B. Posner
1515 Clay Street, 29th Floor
Oakland, CA 94162
Resource Bank Loan $638,599
555 Bethany Road
DeKalb, IL 60115
U.S. Department of Agriculture Taxes $280,410
Form Services Agency
Tobacco Division, Stop 5016
1400 Independence Avenue, 5W
Washington, D.C. 20250
Sima S. Patel Unsecured Loan $97,768
Bharat D. Amin Unsecured Loan $54,525
Bhanwani Cigarettes Pvt. Ltd. Trade Debt $50,811
Bharatbhai J. Parmar Unsecured Loan $43,150
Hitendra Shah Trade Debt $30,000
Mrs. Santosh Killa Unsecured Loan $19,648
Dhanraj International Trade Debt $15,125
Patel Centre Goods $2,516
Transline Air Cargo Services $2,410
Services Pvt. Ltd.
C.S. Jariwala & Co. Services $2,058
Rayagouda Bharamagouda Goods $1,582
Patil & Sons
Prabhat Offsets Goods $1,578
AirLift India Private Ltd. $1,143
C.S. Jariwala & Associates Services $1,082
Satishsingh S. Modi Unsecured Loan $942
DND TECHNOLOGIES: Unit Wants to Void Payments Owed to Lam Research
------------------------------------------------------------------
Aspect Systems, Inc., DND Technologies, Inc.'s wholly owned
subsidiary, filed a complaint in the Maricopa County, Arizona
Superior Court against Lam Research Corp. on June 6, 2006,
alleging breach of certain agreements by providing parts that were
inactive, obsolete, non-moving for years, excessive and otherwise
worthless and various misrepresentations by Lam as to the parts to
be provided, among other claims.
License Agreements
DND and ASI's License Agreement with Lam, dated November 8, 2002,
gave them a non-exclusive license to several of Lam's patents and
other intellectual property. Lam Research Corp. had informed ASI
on June 1 that it is terminating the licenses after ASI ceased
paying Lam fees due under the license deal.
ASI reports that it has paid approximately $2.6 million, comprised
of approximately $1 million for inventory and $1.6 million in
royalty payments, to Lam. ASI was required to pay approximately
$5.3 million at a rate of $56,000 per month with the final payment
being due on March 15, 2011. In addition, it was also required to
purchase approximately $2.2 million of inventory under the
agreement. Payment terms for this inventory were restructured
pursuant to a June 25, 2004 amendment.
The amendment, among other things, restructured the terms of
payment for the inventory purchases. Under the new terms, the
remaining balance due for a portion of the inventory was set at
$936,596, which was to be paid in 30 equal installment payments of
$28,220, which began on August 1, 2004 and were scheduled to end
January 1, 2007, with an additional payment of $90,000 that was
due and paid on September 30, 2004. Further, the remaining
balance on the other portion of the inventory was set at
approximately $170,000 and was to be repaid in 18 equal
installment payments of $9,404 per month. Approximately $400,000
remains outstanding on the revised inventory purchases.
ASI's Arguments
DND believes that Lam is in breach of the agreements, and wants to
write off the remaining amounts owed to Lam. It also wants Lam to
return amounts paid under the agreements. According to DND, its
liquidity will improve significantly if ASI is able to write off
all or a significant portion of the approximately $3.7 million due
under the agreement.
About DND Technologies
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.
Going Concern Doubt
As reported in the Troubled Company Reporter on May 22, 2006,
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.
EMMIS COMMS: Special Committee Retains Legal & Financial Advisors
-----------------------------------------------------------------
Emmis Communications Corporation's Special Committee of Board of
Directors has retained Davis Polk & Wardwell as its legal counsel,
Barnes & Thornburg LLP as its Indiana legal counsel and Morgan
Stanley & Co. Incorporated and Lazard Freres & Co. LLC as its
financial advisors.
The retentions relates to the proposal received by the Board of
Directors on May 8, 2006 from ECC Acquisition, Inc., an Indiana
corporation wholly owned by Jeffrey H. Smulyan, the Chairman,
Chief Executive Officer and controlling shareholder of Emmis, to
acquire the outstanding publicly held shares of Emmis for $15.25
per share in cash. No timetable has been set by Emmis or the
Special Committee to respond to the proposal.
According to the Company, there can be no assurance that any
agreement will be executed or that the proposed transaction or any
other transaction will be approved or completed. If and when the
parties reach a definitive agreement with respect to the proposal,
the parties will file appropriate materials with the Securities
and Exchange Commission and mail such materials to Emmis
shareholders. If any such materials are filed by Emmis,
shareholders and other interested parties should read them when
they become available because they will contain important
information.
Emmis' shareholders will be able to obtain the documents free of
charge at the SEC's web site -- http://www.sec.gov/-- or from
Emmis at One Emmis Plaza, 40 Monument Circle, Suite 700 in
Indianapolis, Indiana.
Emmis Communications Corporation (NASDAQ: EMMS) --
http://www.emmis.com/-- is an Indianapolis-based diversified
media firm with radio broadcasting, television broadcasting and
magazine publishing operations. Emmis owns 22 FM and 2 AM
domestic radio stations serving New York, Los Angeles and Chicago
as well as St. Louis, Austin, Indianapolis and Terre Haute, Ind.
In addition, Emmis owns a radio network, international radio
interests, two television stations, regional and specialty
magazines, and ancillary businesses in broadcast sales and
publishing.
In May 2005, Emmis planned to seek strategic alternatives for its
16 television stations, and the Company has sold or signed
definitive agreements to sell 14 of them. Earlier this month, the
Company agreed to sell Phoenix radio station KKFR-FM, subject to
FCC and other regulatory approvals.
* * *
On May 11, 2005, Standard & Poor's assigned B+ ratings to Emmis
Communications' long-term local and foreign issuer credits.
In August 2005, Moody's placed the Company's long-term corporate
family rating at Ba3 with a negative outlook.
ENRON CORP: Settles Dispute with Tacoma Power, FERC Trial Staff
---------------------------------------------------------------
Enron Corp. has reached an agreement to settle all civil and
contractual claims between the company and certain of its
subsidiaries and Tacoma, Washington on behalf of its Department of
Public Utilities, dba Tacoma Power. The agreement has been joined
by the Federal Energy Regulatory Commission Trial Staff, which has
allocated a portion of its consideration from its previous
settlement as a contribution to the compromise between the
parties.
Enron has also reached an agreement in principle to settle all
civil and contractual claims between the company (and certain of
its subsidiaries), and the Montana Attorney General, which
agreement has also been joined by FERC Trial Staff. The
settlements relate to natural gas and electricity transactions in
the Western United States from 1997-2003, including claims filed
by Tacoma and the Montana Attorney General in proceedings with
FERC.
"This is another substantial step in our efforts to resolve all
outstanding Western energy market issues on behalf of the Enron
estate," said Charles A. Moore, Enron's legal counsel.
In consideration of their dismissal and release of all claims
against Enron:
a) Tacoma will receive an allowed unsecured bankruptcy claim
of $2,288,519.71 and a $1 million allocated portion of the
unsecured FERC Trial Staff bankruptcy claim; and
b) the Montana Attorney General will receive a $300,000
allocated portion of the unsecured FERC Trial Staff
bankruptcy claim and a $1 million subordinated penalty
claim.
The settlement with the Montana AG is subject to the execution of
a mutually acceptable settlement agreement, and both settlements
are subject to the approval of the Bankruptcy Court for the
Southern District of New York and the FERC.
The settlements follow recent settlements with the FERC Trial
Staff, the City of Santa Clara, California, Valley Electric
Association, Inc. and Metropolitan Water District of Southern
California.
Enron Corp. is represented in this matter by Charles A. Moore of
LeBouef, Lamb, Greene and MacRae.
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.
ETOTALSOURCE INC: Reports $297,787 Net Loss in 2006 First Quarter
-----------------------------------------------------------------
eTotalSource, Inc., recognized a loss of $297,787 for the three
month period ended March 31, 2006, as compared with a loss of
$283,957 for the corresponding period ended March 31, 2005. The
net loss increase of $13,830 was attributable to the increase of
interest and decrease of payroll expenses.
Revenues for the three months ended March 31, 2006 were $12,819
versus $14,987 for the corresponding 2005 period, a decrease of
$2,168 or 14%. The decrease was attributable to fewer sales of
eTotalSource's CD training products.
The Company's balance sheet at March 31 showed total assets of
$24,276 and total liabilities of $3,687,080, resulting in total
stockholders' deficit of $3,662,805.
A full text-copy of the Company's quarterly report is available
for free at http://researcharchives.com/t/s?c4e
Going Concern Doubt
Gordon, Hughes & Banks, LLP, raised substantial doubt about
eTotalSource's ability to continue as a going concern after
auditing the Company's financial statements for the years ended
December 31, 2005, and 2004. The auditing firm pointed to the
Company's significant recurring losses and a liquidity shortage at
December 31, 2005.
About eTotalSource
eTotalSource, Inc. -- http://www.etotalsource.com/-- provides
multimedia training programming, employing its own proprietary
software, Presenta Pro(TM). Previous programming packages
utilizing the unique multi-panel production and delivery system
are used by the U.S. Department of Defense, Law Enforcement
Training Solutions, Defense Acquisition University, Rockwell
Collins, as well as many schools, hospitals, clinics and private
companies, offering the training packages to employees, students
and clients.
FARMLAND IND: JPMorgan Cuts Final Checks, Paying Creditors 104%
---------------------------------------------------------------
JPMorgan Bankruptcy & Settlement Services disclosed Wednesday that
it has distributed full payment totaling $891 million to unsecured
creditors in its role as the Liquidating Trustee for Farmland
Industries' bankruptcy.
JPMorgan reached the full payment mark this week, as it sent out
checks for $12 million. The payment means all unsecured creditors
will have received 104% of their claims allowed under the
bankruptcy plan. This payment is the sixth distribution of funds
from the Farmland Industries Liquidating Trust, bringing the total
to $891 million paid to creditors of Farmland Industries, the
former Fortune 500 company which was the largest farmer-owned
agricultural cooperative in North America.
"JPMorgan's ability to make unsecured creditors whole in two years
is a milestone, exceeds expectations, and is a clear indication of
our exceptional ability to maximize the value and recovery of
assets." Said Jeffrey Ayres, Vice President JPMorgan and the
Relationship Manager for the FI Liquidating Trust. "The high
volume of assets secured demonstrates the effectiveness of
JPMorgan's Bankruptcy & Settlement Services team and processes,
and its partnership with former employees of Farmland retained by
the Trust."
The payments are being made according to a confirmed plan approved
by the U.S. Bankruptcy Court for the Western District of Missouri
(Kansas City). The 104% recovery represents 100% of principal
plus the maximum amount of interest allowed under the plan.
JPMorgan was named administrator of the FI Liquidating Trust on
May 1, 2004 and will oversee liquidation of additional assets in
the Trust in the future, including potential recoveries from
pending litigation.
About JPMorgan
JPMorgan Bankruptcy & Settlement Services --
http://www.jpmorgan.com/info/bssmedia/-- offers a full range of
services from managing assets, investing proceeds, cash
management, claims administration, disbursement services,
liquidating trustee and plan administration. JPMorgan Bankruptcy
& Settlement Services is part of JPMorgan Worldwide Securities
Services.
JPMorgan Worldwide Securities Services, a division of JPMorgan
Chase Bank, N.A., is a global industry leader with $11.7 trillion
in assets under custody. JPMorgan provides innovative custody and
securities products and services to the world's largest
institutional investors and debt and equity issuers. JPMorgan
Worldwide Securities Services leverages its scale and capabilities
in more than 80 markets to help clients optimize efficiency,
mitigate risk and enhance revenue through custody and investor
services as well as securities clearance and trust services.
JPMorgan Chase & Co. (NYSE: JPM) -- http://www.jpmorganchase.com/
-- is a leading global financial services firm with assets of
$1.3 trillion and operations in more than 50 countries. The firm
is a leader in investment banking, financial services for
consumers, small business and commercial banking, financial
transaction processing, asset and wealth management, and private
equity. A component of the Dow Jones Industrial Average, JPMorgan
Chase serves millions of consumers in the United States and many
of the world's most prominent corporate, institutional and
government clients under its JPMorgan and Chase brands.
About Farmland Industries
Farmland Industries, Inc., was one of the largest agricultural
cooperatives in North America with about 600,000 members. The
firm operates in three principal business segments: fertilizer
production; pork processing, packing and marketing; and beef
processing, packing and marketing. The company, along with its
affiliates, filed for chapter 11 protection (Bankr. W.D. Mo.
Case No. 02-50557) on May 31, 2002 before the Honorable Jerry W.
Venters. The Debtors' Counsel is Laurence M. Frazen, Esq. of
Bryan Cave LLP. When the Debtors filed for chapter 11 protection,
they listed total assets of $2.7 billion and total debts of $1.9
billion. Pursuant to the Second Amended Joint Plan of
Reorganization filed by Farmland Industries, Inc. and its debtor-
affiliates, the court declared May 1, 2004, as the Effective Date
of the Plan.
FERRIS LUCAS: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: Ferris Edward Lucas, II
aka F.E.L. Classics
3769 Lake Front Street
Waterford, Michigan 48328
Bankruptcy Case No.: 06-48234
Chapter 11 Petition Date: June 26, 2006
Court: Eastern District of Michigan (Detroit)
Judge: Marci B. McIvor
Debtor's Counsel: Richard A. Roble, Esq.
Sullivan, Ward, Asher & Patton, P.C.
25800 Northwestern Highway, Suite 1000
Southfield, Michigan 48075-1000
Tel: (248) 746-2799
Fax: (248) 746-2760
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
The Debtor did not file a list of its 20 largest unsecured
creditors.
FLEET AUTO: Case Summary & Five Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Fleet Auto Rent, Inc.
9650 Nall Avenue
Overland Park, Kansas 66207
Bankruptcy Case No.: 06-20889
Type of Business: The Debtor leases cars, pickups, SUVs and
vans. See http://www.fleetautorent.com/
Chapter 11 Petition Date: June 27, 2006
Court: District of Kansas (Kansas City)
Debtor's Counsel: Jeffrey A. Peterson, Esq.
Woner Glenn Reeder Girard & Riordan, P.A.
5611 Southwest Barrington Court South
P.O. Box 67689
Topeka, Kansas 66667-0689
Tel: (785) 235-5330
Fax: (785) 235-1615
Estimated Assets: $500,000 to $1 Million
Estimated Debts: $1 Million to $10 Million
Debtor's Five Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Valley View Bank Loans $1,069,701
7500 West 95th
Overland Park, KS 66212
Bank of America Trade Debt $68,000
P.O. Box 2463
Spokane, WA 99210-0593
American Express Trade Debt $35,500
P.O. Box 2463
Spokane, WA 99210-0593
Chase Visa Trade Debt $6,500
Ford Motor Credit Co. Loan $5,000
FLINTKOTE CO: Dividend Recovery Litigation Counsel Team Approved
----------------------------------------------------------------
The Honorable Judith K. Fitzgerald of the U.S. Bankruptcy Court
for the District of Delaware authorize The Flintkote Company and
Flintkote Mines Limited to employ a team of lawyers as special
litigation counsel, nunc pro tunc to Feb. 27, 2006.
The law firms and lawyers, who will be known as the Dividend
Recovery Litigation Counsel, are:
(a) Snyder, Miller & Orton LLP;
(b) Morgenstein & Jubelirer;
(c) Alan D. Pedlar, Esq., and his successor professional
corporation, if any; and
(d) Kelly C. Wooster, Esq.
Judge Fitzgerald also authorized Stutman Treister & Glatt, P.C.,
with whom Mr. Pedlar practiced law until his resignation effective
March 13, 2006, to submit a single request for payment for the
period from Feb. 27, 2006, through March 12, 2006.
The Estate Representatives, composed of the Debtors, the Official
Committee of Asbestos Personal Injury Claimants and the Legal
Representative for Future Asbestos Personal Injury Claimants, in
consultation with the DRLC, determined that it was in the Estates'
best interest to refrain from filing this motion until they
received confirmation that the complaint had been filed in the
Superior Court and served on the Defendants. The Estate
Representatives said that this was done so as not to prematurely
disclose litigation strategy or identify potential defendants or
causes of action.
The PI Asbestos Committee and the Futures Representative supported
this motion.
Dividend Recovery Litigation
On April 5, 2006, Flintkote and an individual asbestos claimant
(not named in the motion) jointly filed a complaint against
Imperial Tobacco Canada Limited fka Imasco Limited, Sullivan &
Cromwell LLP and Does 1 through 100 in the Superior Court of
California, County of San Francisco (Case No. CGC 06450944).
The Complaint:
(a) asserts claims arising out of or related to certain
dividends ultimately received by Imasco, the former parent
of Flintkote;
(b) asserts alter ego, veil piercing and similar theories of
recoveries against Imasco; and
(c) requests declaratory relief.
The claims arise from two dividends totaling $525 million
ultimately received by Imasco in 1986 and 1987. The Debtors said
the dividends were paid as part of an orchestrated scheme, whereby
Imasco acquired Flintkote's parent company in a hostile takeover
which caused Flintkote to:
-- separate its operating assets from its asbestos liabilities
by forming subsidiary corporations;
-- sell off these operating subsidiaries;
-- pay Imasco $525 million of the proceeds from those sales;
and
-- become an asbestos claims paying facility.
The Debtors' said that Flintkote's asbestos creditors funded a
substantial portion of Imasco's hostile acquisition.
Sullivan & Cromwell represented Imasco. The Debtors said that at
Imasco's instigation, S&C represented Imasco and Flintkote in the
dividend transaction and S&C erroneously and negligently advised
Flintkote and its Board.
As part of the dividend transaction, Imasco agreed to repay
Flintkote monies due to Flintkote's creditors, up to the full
amount of the dividends, including asbestos personal injury
claimants, that cannot be satisfied out of the assets of
Flintkote, if a court finally determines that the dividends were
improperly paid to Imasco.
The experts (not named in the motion) retained by the PI Asbestos
Committee and the Futures Representative agree that Flintkote's
current and future asbestos liabilities are estimated to exceed
$3 billion. The Debtors said their liabilities materially exceed
their assets.
DRLC Services
The Dividend Recovery Litigation Counsel will:
(a) serve as co-trial counsel in the Dividend Recovery
Litigation;
(b) advise the Estate Representatives with respect to claims,
asserted defenses and strategies in respect of the Dividend
Recovery Litigation;
(c) take necessary action to vindicate the Estates' rights with
respect to the Dividend Recovery Litigation;
(d) conduct and respond to discovery in respect of the Dividend
Recovery Litigation;
(e) negotiate with the defendants in the Dividend Recovery
Litigation and other adverse parties;
(f) manage the Dividend Recovery Litigation in accordance with
instructions and guidance provided by the Estate
Representatives under the Joint Prosecution Agreement;
(g) take other necessary actions to maximize the value of the
Estates' interest in respect of the Dividend Recovery
Litigation;
(h) appear before the Bankruptcy Court in respect of matters
related to the Dividend Recovery Litigation; and
(i) render all other services with respect to the Dividend
Recovery Litigation as may be agreed upon by the Estate
Representatives.
The Debtors said the skills and expertise of the DRLC members are
not duplicative but complimentary. The Debtors said that each
member is necessary given the scope and potential duration of the
litigation.
The DRLC core team will bill:
Professional Law Firm Hourly Rate
------------ -------- -----------
Stephen M. Snyder, Esq. Snyder, Miller & Orton $600
James L. Miller, Esq. Snyder, Miller & Orton $500
Eliot S. Jubelirer, Esq. Morgenstein & Jubelirer $425
Jean Bertrand, Esq. Morgenstein & Jubelirer $425
Alan D. Pedlar, Esq. Individual $650
Kelly C. Wooster, Esq. Individual $600
The team members will charge 40% of their rates and hourly rates
are capped at $200 per hour.
In addition to the discounted rates, the Debtors agree to pay DRLC
result-based compensation if and when there is a Net Recovery in
the Dividend Recovery Litigation.
Net Recovery means gross recovery, including cash and non-cash
consideration, less costs and fees previously paid to DRLC.
The Estates will pay 35% of the Net Recovery to DRLC for services
rendered and billed to the Debtors, which would result in DRLC
members' full payment. If a Net Recovery does not result in full
payment to each DRLC member, the Estates will pay, out of that Net
Recovery, each member ratably based on the total dollar amount of
their services.
When and after DRLC members will be paid in full and there is
excess to the Net Recovery, the Estates will pay from Net
Recovery, a contingency fee:
-- 0%, if further Net Recovery is less than $32.5 million;
-- 20%, if further Net Recovery is from $32.5 million through
$132.5 million;
-- 15%, if further Net Recovery is above $132.5 million.
The Debtors received declarations from the DRLC members stating
that they do not hold nor represent any interest adverse to the
Debtors and their estates with respect to the Dividend Recovery
Litigation. The Debtors said the DRLC members are in compliance
with Bankruptcy Rule 2014 and Delaware Local Bankruptcy Rule
2014-1.
Headquartered in San Francisco, California, The Flintkote Company
is engaged in the business of manufacturing, processing and
distributing building materials. The Company and its affiliate,
Flintkote Mines Limited, filed for chapter 11 protection on
April 30, 2004 (Bankr. D. Del. Case No. 04-11300). James E.
O'Neill, Esq., Laura Davis Jones, Esq., and Sandra G. McLamb,
Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub P.C.,
represent the Debtors in their restructuring efforts. The
Bankruptcy Court appointed James J. McMonagle as the Legal
Representative for Future Asbestos Personal Injury Claimants for
Flintkote and Mines on Aug. 26, 2004, and Sept. 9, 2004,
respectively. When the Debtors filed for protection from their
creditors, they estimated assets and debts of more than
$100 million.
FOSS MFG: Court Fixes June 30 as Administrative Bar Date
--------------------------------------------------------
The Honorable J. Michael Deasy of the U.S. Bankruptcy Court for
the District of New Hampshire in Manchester established June 30,
2006, as the deadline for all professional persons to file proofs
of claims owed money by Foss Manufacturing Company, Inc., on
account of fees and expenses incurred from Sept. 16, 2005, to Feb.
28, 2006.
Creditors must file written proofs of claim on or before the June
30 Administrative Bar Date and those forms must be delivered to:
Clerk of the Bankruptcy Court
U.S. Bankruptcy Court
District of New Hampshire
Norris Cotton Federal Building
275 Chestnut Street, Room 404
Manchester, NH 03101-2411
Headquartered in Hampton, New Hampshire, Foss Manufacturing
Company, Inc. -- http://www.fossmfg.com/-- is a producer of
engineered, non-woven fabrics and specialty synthetic fibers, for
a variety of applications and markets. The Company filed for
chapter 11 protection on Sept. 16, 2005 (Bankr. D. N.H. Case No.
05-13724). Andrew Z. Schwartz, Esq., at Foley Hoag LLP
represented the Debtor. Beth E. Levine, Esq., at Pachlski, Stang,
Zieh, Young, Jones & Weintraub represents the Official Committee
of Unsecured Creditors. The Court appointed Patrick J. O'Malley
as the Debtor's Chapter 11 Trustee and lawyers from Hanify & King,
Perkins, Smith & Cohen, LLP, and Mintz, Levin, Cohn, Ferris
represent the Chapter 11 Trustee. When the Debtor filed for
protection from its creditors, it listed $49,846,456 in assets and
$53,419,673 in debts.
GE-RAY FABRICS: Court Denies Wachovia Bank's Case Dismissal Motion
------------------------------------------------------------------
The Hon. Robert D. Drain of the U.S. Bankruptcy Court for the
Southern District of New York denied the request of Wachovia Bank,
National Association to dismiss Ge-Ray Fabrics, Inc., and its
debtor-affiliate's chapter 11 cases or convert them to chapter 7
liquidation proceedings.
The Court determined that neither conversion nor dismissal of the
Debtors' cases is in the best interests of the estates at this
time.
Rosenthal & Rosenthal, Inc., one of the Debtors' largest secured
and unsecured creditors, believes that the continuation of the
Debtors' cases is in the best interests of all unsecured
creditors.
As reported in the Troubled Company Reporter on March 22, 2006,
Jantra Van Roy, Esq., at Zeichner, Ellman & Krause LLP, told the
Court that the Debtors are now in monetary default of their
obligations to Wachovia. On Nov. 1, 2005, the Indenture Trustee
drew down a letter of credit issued by Wachovia to fund a
scheduled principal payment.
The Debtors failed to reimburse Wachovia, giving rise to another
event of default under the reimbursement agreement with Wachovia,
and causing further erosion of estate assets
Headquartered in Manhattan, Ge-Ray Fabrics, Inc. --
http://www.geray.com/-- supplies circular knitted fabrics to the
apparel industry. The fabrics include cottons and synthetics,
with and without spandex, and range from basic jersey to high
fashion knits. Lustar Dyeing & Finishing, Inc., its subsidiary,
is a dyeing & finishing processing plant for textile fabrics. The
Debtors filed for chapter 11 on April 4, 2005, (Bankr. S.D.N.Y.
Case Nos. 05-12201 & 05-12207). Avrom R. Vann, Esq., at Avrom R.
Vann, P.C., represents the Debtors in their restructuring efforts.
David A. Matthews, Esq., and David M. Groganm, Esq., at Shumaker,
Loop & Kendrick, LLP, represent the Official Committe of Unsecured
Creditors. When they filed for bankruptcy, the Debtors reported
assets and debts totaling between $10 million to $50 million.
GLOBAL HOME: Court Okays Lowenstein Sandler as Committee's Counsel
------------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in Global
Home Products, LLC, and its debtor-affiliates' chapter 11 cases,
obtained authority from the U.S. Bankruptcy Court for the District
of Delaware for to employ Lowenstein Sandler PC as its bankruptcy
counsel.
As reported in the Troubled Company Reporter on June 6, 2006,
Lowenstein Sandler is expected to:
a. provide legal advice as necessary with respect to the
Committee's powers and duties as an official committee
appointed under Section 1102 of the Bankruptcy Code;
b. assist the Committee in investigating the acts, conduct,
assets, liabilities, and financial condition of the
Debtors, the operation of the Debtors' business, potential
claims, and any other matters relevant to the cases or to
the formulation of a plan of reorganization;
c. participate in the formulation of a plan;
d. provide legal advice as necessary with respect to any
disclosure statement and plan filed in the Debtors' chapter
11 cases and with respect to the process for approving or
disapproving a disclosure statement and confirming or
denying confirmation of a plan;
e. prepare on behalf of the Committee, as necessary,
applications, motions, complaints, answers, orders,
agreements and other legal papers;
f. appear in Court to present necessary motions, applications,
and pleading, and otherwise protect the interest of those
represented by the Committee;
g. assist the Committee in requesting the appointment of a
trustee or examiner should an action be necessary; and
h. perform other legal services as may be required and are in
the interest of the Committee and creditors.
Kenneth A. Rosen, Esq., a member at Lowenstein Sandler, tells the
Court that the Firm's professionals bill:
Professional Hourly Rate
------------ -----------
Partners $320 - $595
Counsel $265 - $425
Associates $165 - $300
Legal Assistants $75 - $150
Mr. Rosen assures the Court that his firm is disinterested as that
term is defined in Section 101(14) of the Bankruptcy Code.
Headquartered in Westerville, Ohio, Global Home Products, LLC
-- http://www.anchorhocking.com/and http://www.burnesgroup.com/
-- sells houseware and home products and manufactures high
quality glass products for consumers and the food services
industry. The company also designs and markets photo frames,
photo albums and related home decor products. The company and
16 of its affiliates , including Burnes Puerto Rico, Inc., and
Mirro Puerto Rico, Inc., filed for Chapter 11 protection on
Apr. 10, 2006 (Bankr. D. Del. Case No. 06-10340). Laura Davis
Jones, Esq., Bruce Grohsgal, Esq., James E. O'Neill, Esq., and
Sandra G.M. Selzer, Esq., at Pachulski, Stang, Ziehl, Young, Jones
& Weintraub LLP, represent the Debtors. Bruce Buechler, Esq., at
Lowenstein Sandler P.C., represents the Official Committee Of
Unsecured Creditors. When the company filed for protection from
their creditors, they estimated assets between $50 million and
$100 million and estimated debts of more than $100 million.
GMAC MORTGAGE: Fitch Affirms Low-B Ratings Class B-1 & B-2 Issues
-----------------------------------------------------------------
Fitch Ratings affirmed these GMAC Mortgage Corporation home equity
issues:
GMAC Mortgage, series 2005-AF1:
-- Class A at 'AAA'
-- Class M-1 at 'AA'
-- Class M-2 at 'A'
-- Class M-3 at 'BBB'
-- Class B-1 at 'BB'
-- Class B-2 at 'B'
GMAC Mortgage, series 2005-AR2:
-- Class A at 'AAA'
-- Class M-1 at 'AA'
-- Class M-2 at 'A'
-- Class M-3 at 'BBB'
The affirmations reflect satisfactory credit enhancement
relationships to future loss expectations and affect approximately
$672.33 million of outstanding certificates as detailed above.
There has been no cumulative losses experience to date and the CE
for each class has increased nominally since closing.
The underlying collateral consists of both fixed-rate and hybrid
adjustable-rate mortgage loans secured by first liens on one- to
four-family residential properties.
As of the May 2006 distribution date, series 2005-AF1 is 11 months
seasoned and series 2005-AR2 is 12 months seasoned. The pool
factors (current mortgage loan principal outstanding as a
percentage of the initial pool) are 80% and 85%, respectively.
The loans were sold by GMACM to Residential Asset Mortgage
Products, the depositor. The depositor, a special purpose
corporation, deposited the loans in the trust, which then issued
the certificates.
GMAC Mortgage Corporation, the servicer for the aforementioned
transactions, is rated a 'RPS1' by Fitch.
GREEN TREE: S&P Lifts Class B Certificates' Rating to BB+ from D
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its rating to 'BB+' from
'D' on the class B certificates for home improvement loans from
Green Tree Finance Corp.'s Home Improvement Loan Trust 1995-A.
The rating had been lowered to 'D' on Feb. 20, 2003, when the
class suffered a principal loss resulting from the removal of the
limited guarantee formerly provided by Conseco Finance Corp.
Since that time, the principal loss has been repaid in full, and
there are no unpaid interest shortfalls or principal losses
outstanding.
The raised rating reflects increased actual and projected credit
support percentages. As of the June 15, 2006, distribution
report, the class B certificates have approximately $78,800 in
overcollateralization, plus an estimated $30,000 in expected
monthly excess spread over the coming 12 months.
Currently, these certificates have more than the original loss
coverage levels associated with the raised rating (approximately
11% current support, compared with a 9.50% original level for a
'BB+' rating), and the remaining credit support should be
sufficient for the higher rating. Cumulative realized losses
represent 6.47% (approximately $5.7 million) of the original pool
balance. Total delinquencies represent 1.68% of the current pool
balance, while 60-plus-days delinquent loans represent 0.72% of
the current pool balance.
Credit support is currently provided by overcollateralization and
excess spread, as the limited guarantee formerly provided by
Conseco Finance Corp. has been unavailable since the company
became insolvent in December 2002. The collateral consists
primarily of home improvement contracts and promissory notes
secured by first-, second-, or third-priority liens on the related
improved real estate. The contracts at issuance consisted of
5,901 conventional and 682 FHA-insured home improvement contracts
and promissory notes. Now the number of loans remaining has been
reduced to 127, and the average loan balance is approximately
$7,545.
HAWS & TINGLE: Wants to Hire Weaver and Tidwell as Tax Consultant
-----------------------------------------------------------------
Haws & Tingle, Ltd., asks the United States Bankruptcy Court for
the Northern District of Texas for permission to hire Weaver and
Tidwell, L.L.P., as tax consultant.
The Debtors needs Weaver and Tidwell to assist it in preparing tax
returns for the Estate. Weaver and Tidwell and the Debtor have
reached an agreement that the fees due to Weaver and Tidwell for
their services in preparation of the required tax returns would be
capped at $7,500.
Clint Siddons, a partner at the firm, assured the Court that the
firm and its partners do not hold material interest adverse to the
Debtor's estate and are disinterested as defined in Section
101(14) of the Bankruptcy Code.
Headquartered in Fort Worth, Texas, Haws & Tingle, Ltd., is a
building contractor. The Debtor filed for chapter 11 protection
on October 6, 2005 (Bankr. N.D. Tex. Case No. 05-82478). Mark
Edward Andrews, Esq., and Omar J. Alaniz, Esq., at Neligan Tarpley
Andrews & Foley LLP represent the Debtor in its restructuring
efforts. No Official Committee of Unsecured Creditors has been
appointed in this case. When the Debtor filed for protection from
its creditors, it estimated assets and debts between $10 million
to $50 million.
HERTZ CORP: S&P Places BB- Corp. Credit Rating on Negative Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on Hertz
Corp., including the 'BB-' corporate credit rating, on CreditWatch
with negative implications.
"The CreditWatch placement is based on potential incremental debt
at Hertz, the sole operating entity of Hertz Global Holdings Inc.,
as well as on a more aggressive financial policy," said Standard &
Poor's credit analyst Betsy Snyder.
The June 23, 2006, announcement that Hertz Global Holdings, the
indirect parent company of Hertz, has received a credit commitment
from various financial institutions for up to $1 billion, proceeds
of which would be used to pay a dividend to Hertz Global Holdings,
comes just six months after Hertz's acquisition. Standard &
Poor's will review Hertz's operational and financial prospects to
resolve the CreditWatch.
The ratings on Park, Ridge, New Jersey-based Hertz Corp. reflect a
weakened financial profile after the successful completion of its
$14 billion acquisition, reduced financial flexibility, and the
price-competitive nature of on-airport car rentals and equipment
rentals.
Ratings also incorporate the company's position as the largest
global car rental company and the strong cash flow its businesses
generate. Hertz was acquired from Ford Motor Co. by Clayton,
Dubilier & Rice Inc., The Carlyle Group, and Merrill Lynch Global
Private Equity in December 2005. The acquisition, which added
over $2 billion of debt to Hertz's balance sheet, has resulted in
an increase in its borrowing costs, and credit ratios have
weakened from their previous relatively healthy levels.
In addition, the company's historically strong financial
flexibility has declined somewhat, with around two-thirds of its
tangible assets now secured, compared to around 10% previously.
Hertz, the largest global car rental company, participates
primarily in the on-airport segment of the car rental industry.
This segment, which generates approximately 69% of Hertz's
consolidated revenues, is heavily reliant on airline traffic.
Demand tends to be cyclical, and can also be affected by global
events such as wars, terrorism, and disease outbreaks. Hertz has
also grown its off-airport business (12% of consolidated
revenues), the segment of the car rental business that is less
cyclical and more profitable, but which is dominated by 'A-' rated
Enterprise Rent-A-Car Co.
Through its Hertz Equipment Rental Corp. subsidiary (HERC, 18% of
consolidated revenues), Hertz also operates one of the larger
industrial and construction equipment renters in the U.S., along
with some European locations. This market had been depressed for
several years due to the weak economy and overexpansion by several
market participants, but has experienced improving trends since
2004 as market participants reduced their capacity growth and
demand strengthened.
HUNTSMAN INTERNATIONAL: S&P Holds BB- Corp. Credit Rating on Watch
------------------------------------------------------------------
Standard & Poor's Ratings Services held its 'BB-' rating and '2'
recovery rating on Huntsman International LLC's term loan B due
2012 remain on CreditWatch with developing implications. The
$2.2 billion term loan includes a proposed $100 million add-on.
The 'BB-' rating is the same as the corporate credit rating; this
and the '2' recovery rating reflect the expectation for a
substantial (80%-100%) recovery of principal in the event of a
payment default. All ratings on Huntsman Corp., and its
subsidiary, Huntsman International LLC, are on CreditWatch with
developing implications.
The proceeds from the proposed facility add-on will be used,
together with cash on hand, to fund the repurchase of $100 million
of senior floating-rate notes and for fees and expenses associated
with the transaction.
The CreditWatch placement on March 2, 2006, followed the company's
announcement that it is undertaking a review of its corporate
structure that could result in the spin-off to shareholders of its
$6 billion base chemicals and polymers operations. The Salt Lake
City, Utah-based chemical company has cited frustration with the
valuation of its shares since the time of the February 2005 IPO as
the reason for the proposed transaction. As of March 31, 2006,
Huntsman reported approximately $4.9 billion of debt, excluding
adjustments for unfunded postretirement benefit obligations.
The CreditWatch developing indicates that the corporate credit and
issue ratings could be raised, lowered or affirmed following such
a transaction, depending upon a review of key elements of the
proposal.
"If Huntsman pursues a spin-off to shareholders, key factors for
review will include the amount of debt to be placed on each
business, disclosure of the legal entities that will hold the
respective assets of each business, and any contractual or
structural changes that will affect the existing debt obligations
remaining in place," said Standard & Poor's credit analyst Kyle
Loughlin.
Huntsman Corp. is a holding company with diverse chemical
operations generating annual sales of approximately $13 billion.
Despite a strategic emphasis on growing the performance chemicals
business, nearly half of Huntsman's total revenue is currently
still derived from commodity product categories, consisting of the
domestic petrochemical assets and a large basic petrochemical
complex at Wilton, U.K., and a No. 3 position in the global
titanium dioxide business.
INDEPENDENCE TAX: March 31 Balance Sheet Upside-Down by $3.2 Mil.
-----------------------------------------------------------------
Independence Tax Credit Plus, L.P. II, filed its consolidated
financial statements for the fiscal year ended March 31, 2006,
with the Securities and Exchange Commission on June 21, 2006.
The Company's March 31 balance sheet showed $78,547,380 in total
assets and $82,812,7888in total liabilities resulting in a
$3,216,953 stockholders' deficit.
The Company reported a $4,915,583 net loss on $10,023,797 of total
revenues for the year ended Dec. 31, 2005.
The Company's March 31 balance sheet also showed strained
liquidity with $78,547,380 in total current assets available to
pay $82,812,788 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?c6d
About Independence Tax
Independence Tax Credit Plus is a limited partnership formed under
the laws of Delaware on February 11, 1992. Its partner Related
Independence Associates L.P. is and affiliate of CharterMac
Capital LLC.
INFOR GLOBAL: S&P Junks Rating on Proposed $1.675 Billion Facility
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Alpharetta, Georgia-based Infor Global Solutions
Holdings Ltd. (formerly known as Infor Global Solutions AG) to
'B-' from 'B', and removed the rating from CreditWatch, where it
was placed with negative implications on May 15, 2006. The
outlook is positive.
At the same time, Standard & Poor's assigned its 'B' rating (one
notch above the corporate credit rating) and '1' recovery rating
to Infor's proposed $2.15 billion first-lien senior secured bank
facility, indicating high expectation for full recovery of
principal in the event of a payment default.
Standard & Poor's also assigned its 'CCC' rating (two notches
below the corporate credit rating) and '5' recovery rating to
Infor's proposed $1.675 billion senior secured subordinated bridge
facility, indicating expectation for negligible (0%-25%) recovery
of principal in the event of a payment default.
Proceeds from the facilities, along with about $192 million of
balance sheet cash, will be used to finance the acquisitions of
SSA Global Technologies Inc. and Systems Union Group PLC for a
total of approximately $2.1 billion, including existing debt at
each company, and to refinance both Infor and Extensity S.a.r.l.'s
existing debt.
The lowering of the corporate credit rating reflects significant
execution risk given the size and scope of the proposed
acquisitions and a highly leveraged financial profile, even
assuming that Infor achieves significant cost synergies. The
positive outlook reflects Standard & Poor's belief that the
ratings have upside over the longer term if the company is able to
successfully execute on its near- and intermediate-term challenges
and improve its debt leverage profile.
The ratings reflect Infor's limited track record following a very
aggressive acquisition strategy, and its high debt leverage.
These factors are only partially offset by:
* a leading presence in its selected mid-market niche within
the enterprise resource planning market;
* a largely recurring revenue base; and
* a diverse customer base.
Infor is a global provider of enterprise software applications
and services designed to increase operating efficiency and
productivity by automating key business processes. The company is
focused primarily on mid-market customers within the discrete
manufacturing, process manufacturing, and distribution verticals.
Pro forma for the proposed transaction, the company will have
$3.675 billion in total funded debt.
INTELSAT LTD: Intelsat Bermuda Prices $2.34 Billion Senior Notes
----------------------------------------------------------------
Intelsat, Ltd.'s wholly owned subsidiary, Intelsat Bermuda, Ltd.,
priced approximately $2.34 billion aggregate principal amount of
senior notes due 2013 and 2016 in connection with its contemplated
acquisition of PanAmSat Holding Corporation.
The senior notes consist of $750 million 9-1/4% Senior Notes due
2016 that will be guaranteed by certain subsidiaries of Intelsat
Bermuda, $260 million of Floating Rate Notes due 2013 and $1,330
million of 11-1/4% Senior Notes due 2016. The Floating Rate notes
will bear interest at LIBOR plus 600 basis points.
In addition, PanAmSat Corporation has priced approximately $575
million aggregate principal amount of 9% Senior Notes due 2016.
The net proceeds from the offerings will be used, together with
cash on hand and amounts drawn under a new $600 million senior
unsecured credit facility at Intelsat Bermuda, to consummate the
Acquisition and to fund the purchase of certain outstanding notes
of PanAmSat.
The notes offerings and the Acquisition are expected to close on
July 3, 2006, subject to the satisfaction or waiver of closing
conditions.
Intelsat, Ltd. -- http://www.intelsat.com/-- offers telephony,
corporate network, video and Internet solutions around the globe
via capacity on 25 geosynchronous satellites in prime orbital
locations. Customers in approximately 200 countries rely on
Intelsat's global satellite, teleport and fiber network for high-
quality connections, global reach and reliability.
* * *
As reported in the Troubled Company Reporter on June 19, 2006,
Fitch upgraded the Issuer Default Rating for Intelsat to 'B'
from 'B-' pro forma for its pending acquisition of PanAmSat.
The ratings were also removed from Rating Watch Negative, where
they had originally been placed on Aug. 30, 2005. Fitch said the
Rating Outlook is Stable.
As reported in the Troubled Company Reporter on June 13, 2006,
Moody's Investors Service affirmed the B2 corporate family rating
of Intelsat, Ltd., and downgraded the corporate family rating of
PanAmSat Corporation to B2, given the greater clarity regarding
the final capital structure and the near-term completion of the
PanAmSat acquisition by Intelsat.
INT'L MGT: Chapter 11 Trustee Taps Deloitte to Recover Assets
-------------------------------------------------------------
William F. Perkins, the chapter 11 trustee appointed in the
bankruptcy cases of International Management Associates, LLC, and
its debtor-affiliates asks the U.S. Bankruptcy Court for the
Northern District of Georgia for permission to hire Deloitte
Financial Advisory Services LLP to provide investigative and
analytic and forensic technology services nunc pro tunc to
April 30, 2006.
The Chapter 11 Trustee wants Deloitte Financial to look for the
Debtors' assets and recover them.
Simon Charlton, a principal at the firm, disclosed that his firm's
personnel charge these hourly rates:
Personnel Classification Hourly Billing Rates
------------------------ --------------------
Partner, Principal, or Director $450
Senior Manager $350
Manager $335
Senior Associate $250
Associate $200
Staff $150
Mr. Charlton assures the Court that his firm and its principals do
not hold material interest adverse to the Debtors' estates and are
disinterested as defined in Section 101(14) of the Bankruptcy
Code.
Headquartered in Atlanta, Georgia, International Management
Associates, LLC -- http://www.imafinance.com/-- managed hedge
funds for investors. The company and nine of its affiliates filed
for chapter 11 protection on Mar. 16, 2006 (Bankr. N.D. Ga. Case
No. 06-62966). David A. Geiger, Esq., and Dennis S. Meir, Esq.,
at Kilpatrick Stockton LLP, represent the Debtors in their
restructuring efforts. James R. Sacca, Esq., at Greenberg
Traurig, LLP, and Mark S. Kaufman, Esq., at McKenna Long &
Aldridge, LLP, represent the Official Committee of Unsecured
Creditors. When the Debtors filed for protection from their
creditors, they did not state their total assets but estimated
total debts to be more than $100 million.
INZON CORP: Posts $663,640 Net Loss in Quarter Ended March 31
-------------------------------------------------------------
InZon Corporation reported a net loss of $663,640 for the three-
month period ending March 31, 2006. This compares to a net loss
of $153,626 for the same period in the prior year. The increased
loss was due primarily to the increase cost of the operation to
support the sales level reached for the periods.
The Company reported revenues of $1,673,266 for the period ended
March 31, 2006 as compared to zero revenues for the period ending
March 31, 2005.
At March 31, 2006, InZon's balance sheet showed total assets of
$1,478,203 and total Liabilities of $2,176,357, resulting in a
stockholders' deficit of $698,154.
George Brenner, CPA, A Professional Corporation, reviewed InZon's
financial statements for the six months ended March 31, 2006 and
2005 and raised substantial doubt about the Company's ability to
continue as a going concern. The auditing firm pointed to the
Company's $2,639,329 accumulated deficit at March 31.
On March 31, 2006, InZon entered into a Securities Purchase
Agreement, which is effective March 27, 2006, in the principal
amount of $5,000,000 with Macenta Group, LLC, which is to be
funded to the Company during the period from March 31, 2006,
through May 8, 2006, in multiple closings of not less than
$1,000,000 each. In connection with the offering, the Company
will issue a quantity of warrants to purchase common stock at
rates to be determined by reference to the prices to be paid by
the Purchaser at each closing, subject to normal and ordinary
anti-dilution adjustments.
A full-text copy of the Company's quarterly report is available
for free at http://researcharchives.com/t/s?c4b
About InZon
Based in Delray Beach, Florida, InZon Corporation provides
telecommunication services in the United States. The company
offers voice over Internet protocol services to tier 1 and tier 2
carriers. Its VoIP technology provides voice, fax, data,
conference call, and Internet services over a private Internet
protocol network to international carriers and other communication
service providers.
ISLE OF CAPRI: Good Performance Prompts S&P's Stable Outlook
------------------------------------------------------------
Standard & Poor's Rating Services revised its outlook on Biloxi,
Mississippi-based Isle of Capri Casinos Inc. to stable from
negative due to improved operating performance for the fourth
quarter and fiscal year ended April 30, 2006.
In addition, Standard & Poor's affirmed its 'BB-' corporate credit
rating and other ratings on the company. Total debt outstanding
at April 30, 2006, was approximately $1.2 billion.
EBITDA increased 10% year-over-year for fiscal 2006 on strength of
Isle's Mississippi properties, where combined EBITDA almost
doubled compared to fiscal 2005 due to limited gaming competition
in Biloxi, population shifts benefiting Natchez, and more
efficient management of expenses in Lula.
ITEN CHEVROLET: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Iten Chevrolet Company, Inc.
6701 Brooklyn Boulevard
Brooklyn Center, Minnesota 55429
Bankruptcy Case No.: 06-41259
Type of Business: The Debtor operates a General Motors
Corporation automobile dealerships in
Minnesota. See http://www.gmbuypower.com/
Chapter 11 Petition Date: June 28, 2006
Court: District of Minnesota (Minneapolis)
Judge: Nancy C. Dreher
Debtor's Counsel: Mary Jo A. Jensen-Carter, Esq.
Buckley and Jensen
1339 East County Road D
Vadnais Heights, Minnesota 55109
Tel: (651) 486-7475
Fax: (651) 486-7468
Total Assets: $16,083,417
Total Debts: $17,703,249
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Crysteel Truck Equipment Truck Bodies $36,370
1130 73rd Avenue Northeast
Fridley, MN 55432-3511
Lube Tech Gasoline & Oil $31,893
P.O. Box 1654
Minneapolis, MN 55480-1654
GM Parts/Parts Purchases Parts $29,791
6060 West Bristol Road
Flint, MI 48554-0001
Reynolds & Reynolds Computer System $29,356
Star Tribune Advertising $22,174
ELEAD Internet System $18,241
Leads
Killmer Electric Electric Repair $16,487
Utilimaster Corp. Truck Bodies $15,606
Lupient Buick Pont GMC Parts $14,827
Delta Waseca Truck Bodies $14,102
Minnesota Collision Centers Auto Body Repair $13,305
Friendly Chevrolet Parts $12,100
Corporate Billing Inc. Delivery Service $11,746
Who's Calling Phone Tracking $10,575
PAM Companies Oil $10,443
Enterprise Leasing Co. Car Rental $8,210
G&K Services Uniforms $7,862
Dent Impressions Dent Removal $7,682
Village Chevrolet Parts $7,660
Xcel Energy Utilities $7,268
JACUZZI BRANDS: Additional Liquidity Cues Moody's to Lift Ratings
-----------------------------------------------------------------
Moody's Investors Service upgraded Jacuzzi's corporate family
rating to B2, and its $380 million senior secured notes to B2.
The ratings upgrade reflects the company's positive free cash flow
generation, additional liquidity afforded by the sale of various
business units, significant cash position, and the expectation
that the company should be able to pass on the majority of its raw
material price increases. The stable outlook reflects the
expectation that the company should be able to generate positive
free cash flow for 2006 and 2007 unless the homebuilding market
contracts significantly.
These ratings were affected:
* $380 million senior secured notes upgraded to B2 from B3;
* Corporate family rating upgraded to B2 from B3.
* The ratings outlook is stable.
The ratings upgrade reflects Moody's expectation that Jacuzzi
should report positive free cash flow from operations for 2006.
This belief reflects the expectation that the company should be
able to recover the majority of raw material cost increases, and
that its balance sheet has improved in recent years as it has
divested various businesses including Eljer Plumbingware, a
company that incurred losses for several years and Rexair.
Additionally, the company has over $80 million of cash on its
balance sheet as a result of its asset sales.
The stable ratings outlook reflects the expectation that the
company will be able to leverage its brand name and distribution
network to reduce the negative effects of the current slowdown in
homebuilding and remodeling.
The rating and/or outlook could improve if the company's free cash
flow to total debt rises above 8% on a sustainable basis and
achieved total debt to EBITDA of under 3.75 times that is
projected to improve. Further clarification on the company's
asbestos liabilities that suggest the company is well insulated
from its asbestos liabilities could also provide upwards ratings
pressure.
The ratings could deteriorate if the company were to experience
negative free cash flow. The company's performance is highly
seasonal because of weather patterns. As a result, one or two bad
quarters can result in a weak year. For this reason, even
slightly negative free cash flow, were it projected on an
annualized basis, would likely result in a ratings downgrade. Of
course, the company's liquidity and performance relative to its
covenants would also be considered. An inability to pass on
higher raw material prices would be a significant concern.
Negative news regarding its asbestos claims could result in
downwards ratings pressure.
Jacuzzi Brands, Inc., headquartered in West Palm Beach, Florida,
manufactures a broad range of products through operating
subsidiaries in two business segments, bath products and plumbing
products. Sales for the first half of 2006, excluding Rexair,
totaled $845 million.
KAIRE HOLDINGS: Equity Deficit Tops $4.4 Million at March 31
------------------------------------------------------------
Kaire Holdings Inc. incurred a $573,144 net loss during the
quarter ended March 31, 2006, compared to a $407,354 net loss for
the same period in the prior year.
For the three months ended March 31, 2006 and 2005, revenues were
approximately $286,086 and $430,764 respectively, or a decrease of
$144,678 or 33.6%. The decrease in revenue is a result of the
discontinued servicing of two related 100 bed skilled nursing
facilities, one of which was very costly to service due to its
distant location and service requirements.
On March 31, 2006 Kaire had total assets of $306,136 compared to
$246,422 on December 31, 2005, an increase of $59,714 or 24.2%.
The Company had a total stockholder's deficit of $4,414,044 on
March 31, 2006, compared to a stockholders deficit of $3,855,876
on December 31, 2005, an increase of $558,168 or 14.5%.
As of March 31, 2006 the Company's working capital position
decreased by $552,215 or 14.2% from a working capital deficit of
$3,897,422 at December 31, 2005 to a working capital deficit of
$4,449,637 at March 31, 2006.
A full-text copy of the Company's quarterly report is available
for free at http://researcharchives.com/t/s?c4f
Going Concern Doubt
As reported in the Troubled Company Reporter on May 12, 2006,
Pohl, McNabola, Berg & Company, LLP, expressed substantial doubt
about Kaire Holdings, Inc.'s ability to continue as a going
concern after it audited the company's financial statements for
the year ended Dec. 31, 2005. The auditing firm pointed to the
company's incurred substantial net losses, utilization of
substantial amounts of cash in its operating activities over the
past several years, accumulated deficit and stockholders' deficit.
About Kaire Holdings
Kaire Holdings Inc. provides pharmacy marketing and support
services for long-term care facilities. The company helps
patients with medication compliance, monitors for adverse drug
reactions, and supports health care providers in monitoring
patients' progress. Kaire Holdings also provides patients with
monthly cycle medications, as well as offers long-term care
providers with training and drug education. In addition, the
company provides specialized products such as mobile medication
carts and emergency medication kits.
KELLEE KARS: Case Summary & 10 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Kellee Kars, Inc.
2993 Veterans Memorial Highway
Austell, Georgia 30168
Bankruptcy Case No.: 06-95003
Type of Business: The Debtor operates a car dealership
company. See http://www.kelleekars.com/
Chapter 11 Petition Date: June 23, 2006
Court: Northern District of Georgia (Atlanta)
Judge: Mary Grace Diehl
Debtor's Counsel: Brad A. Baldwin, Esq.
Powell Goldstein LLP
One Atlantic Center, 14th Floor
1201 West Peachtree Street, Northwest
Atlanta, Georgia 30309-3488
Tel: (404) 572-6761
Fax: (404) 572-6999
Estimated Assets: $500,000 to $1 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 10 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Georgia Department of Revenue Taxes $3,406,661
Bankruptcy Compliance Division
P.O. Box 161108
Atlanta, GA 30321
Internal Revenue Service Taxes $903,987
Bankruptcy Section
401 West Peachtree Street
Stop 335-D
Atlanta, GA 30308
Adesa Atlanta Trade Debt $61,170
5055 Oakley Industrial Boulevard
Fairburn, GA 30213
Georgia Dealer's Auto Auction Trade Debt $52,710
Veronika Krstec howell Judgment $50,000
Red Top Auto Auction Trade Debt $32,990
Brooks Hardee Trade Debt $24,614
Atlanta Auto Auction Trade Debt $16,195
Bank of America Credit Line $15,155
AETNA US Healthcare Insurance Premiums $11,278
LEEWOOD PLACE: Case Summary & Four Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Leewood Place II LLC
P.O. Box 460
Brooks, Kentucky 40109
Bankruptcy Case No.: 06-31578
Chapter 11 Petition Date: June 27, 2006
Court: Western District of Kentucky (Louisville)
Debtor's Counsel: David M. Cantor, Esq.
Seiller Waterman LLC
462 South 4th Street, Suite 2200
Louisville, Kentucky 40202
Tel: (502) 584-7400
Estimated Assets: $500,000 to $1 Million
Estimated Debts: $1 Million to $10 Million
Debtor's Four Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Peoples Bank of Bullitt County 165 North Buckman $955,204
c/o John W. Wooldridge, Esq. Building DE&F
P.O. Box 670
200 South Buckman Street
2nd Floor
Shepherdsville, KY 40165
Commonwealth of Kentucky 165 North Buckman $10,828
c/o Paul Parsley Building DE&F
Bullitt County Sheriff
P.O. Box 205
Shepherdsville, KY 40165
LG&E $1,600
P.O. Box 32000
Louisville, KY 40232
Wachovia Custodian for Unknown
Sass Muni. V. Str.
123 South Broad Street 1328-S
Philadelphia, PA 19109
LEVITZ HOME: Court Grants Assumption and Assignment of Leases
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorized Levitz Home Furnishings, Inc., and its debtor-
affiliates to assume and assign its leases for Store Nos. 10903
and 30204.
The leases refer to:
Store# Address Landlord
------ ------- --------
30204 San Dimas, R&W San Dimas, LLC
California
10903 Valley Stream, Green Acers Mall, L.L.C.
New York
According to Judge Lifland:
* The $135,802 cure amount for Store No. 10903 is approved.
nothing will be construed as a waiver of, prejudice to, or
otherwise limit the ability of Green Acers Mall, L.L.C., to
assert its rights under the Lease with respect to any
mechanics liens filed against the Premises, to the extent
that those mechanics liens relate to claims arising from
relocation work performed before June 8, 2006, and are in
excess of the aggregate amount that Green Acers agreed to
reimburse the Debtors for the work pursuant to the Lease
Modification Agreement dated July 29, 2005; and
* The $41,464 cure amount for Store No. 30204 is approved.
PLVTZ will perform, and continue to perform, all clean-up
and maintenance obligations required by the Lease for Store
No. 30204.
The Court also grants the Debtors' request as it relates to the
leases for Store Nos. 40506, 30402 and 30206 at these cure
amounts:
(a) $55,828 for Store No. 40506;
(b) $98,570 for Store No. 30402; and
(c) $106,942 for Store No. 30206.
The leases refer to:
Store# Address Landlord
------ ------- --------
40506 Tempe, Arizona Commercial Net Lease
Realty, Inc.
30402 Huntington Freeway Industrial Park
Beach, Huntley Associates
California
30206 Newhall, Glendon Way Associates &
California PETsMART, Inc.
With respect to Store No. 10304, Judge Lifland rules that:
(a) PLVTZ will pay the bank fee and interest, at 9%, in
connection with obtaining bonds on mechanic's liens
asserted for Store No. 10304 from the date the Bonds were
obtained until the date the Bonds are released and Richard
Sachs is in receipt of the proceeds of the released Bonds.
If the Bonds are not released by the bonding agent or
agents due to non-release of mechanic's liens, Richard
Sachs reserves its right to seek reimbursement from PLVTZ
for the Bonds for $65,738.
(b) PLVTZ will pay $1,279 to Richard Sachs in penalty and
interest on certain New York City real estate taxes
incurred by Richard Sachs between January 1 and 17, 2006.
PLVTZ will also pay Richard Sachs interest at the rate of
9% per annum computed from January 17 to, and including,
January 23, 2006, on the $12,244 paid by Richard Sachs on
January 17, 2006, for the real estate taxes.
(c) PLVTZ will pay $37,000 in attorneys' fees to Richard
Sachs.
(d) All payments will be paid from the $130,000 currently
being held by the Debtors in a segregated account to cover
the Disputed Cure Claim, with PLVTZ retaining the balance
of the account on payment of the amounts.
(e) The Debtors will fully cooperate with and assist PLVTZ, in
complying with its obligations under the order.
(f) The prior Assignment Order for Store No. 10304 remains in
full force and effect, and the Court's ruling will not
interfere with any provisions of the Assignment Order.
Ruling on Store No. 40401
Judge Lifland issued a bench ruling finding that the Debtors
properly exercised an option to extend the term of the lease for
Store No. 40401 located in Concord, California. The lease refers
to:
Store# Address Landlord
------ ------- --------
40401 Concord, R&B Heritage Investors,
California LP, and Marina Square
Partners, LP, c/o Reynolds
& Brown
Debtors, et al., Duel with R&B on Store 40401
(A) Debtors and PLVTZ
As previously reported, R&B Heritage Investors, L.P., and Marina
Square Partners, L.P., the lessors to Macy's West, Inc., asked
the Court to deny the proposed assumption and assignment of their
lease, as amended, with respect to Store No. 40401 located in
Concord, California. The Master Landlords pointed to, among
other things:
-- inadequacy of time left on the term of the Lease; and
-- an enormous maintenance and repair obligation in default
under the Lease.
The Debtors and PLVTZ, LLC, contest both points. Until the Court
determines whether the term of the Lease may be extended, the
request to assume Store No. 40401 should be adjourned, the
Debtors and PLVTZ argue.
D.J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in
New York, relates that on January 14, 2005, Levitz Furniture
Corporation timely notified Macy's of its desire to extend its
occupancy for Store No. 40401.
During that time, Levitz Furniture was not in, nor have the
Master Landlords alleged, default of either the Sublease or the
Lease, Mr. Baker asserts. Consequently, Levitz Furniture and
Macy's properly perfected their right to extend the Lease term
for a six-year period following July 31, 2006.
The Debtors and PLVTZ tell the Court that, pursuant to the Lease,
the Master Landlords' specific contentions do not render the
January Option Notice ineffective or preclude Levitz Furniture
from extending the Lease term.
Specifically, the Master Landlords pointed to:
* an impasse by the parties regarding fair market rent for the
First Extended Term;
* the failure by the parties to execute an amendment to the
Lease;
* the failure to provide the Master Landlords with a
satisfactory guaranty from its parent, Levitz Home
Furnishings, Inc.; and
* Levitz Furniture's and Macy's default under the Lease with
respect to their repair and maintenance obligations.
Among others, the Debtors and PLVTZ argue that the January Option
Notice was, by itself, sufficient to exercise the option to
extend the Lease term. Even though the parties ultimately must
agree to the Fair Market Rent for the First Extended Term,
nothing required them to agree to it during the Master Landlords'
filing of objection. Likewise, the Debtors and PLVTZ argue that
their supposed failure to provide the Master Landlords with a
satisfactory guaranty from its parent, LHFI, is premature.
Moreover, Levitz Furniture notified the Master Landlords that it
had determined to pursue the appraisal process under the Lease.
Hence, it is premature for the Court to address the assumption
request for Store No. 40401 because it may be rendered moot by
the outcome of the appraiser's decision regarding Fair Market
Rent.
Additionally, PLVTZ will deliver a security deposit for one
month's Fair Market Rent for the First Extended Term if the
conditions for the delivery of the security deposit are
satisfied, and will cure all defaults upon assumption and
assignment of the Lease.
Accordingly, the Debtors and PLVTZ asked the Court to:
(a) adjourn the hearing or otherwise grant the request for
assumption as it relates to the Lease; and
(b) hold that the January Option Notice was effective in
extending Levitz Furniture's occupancy.
(B) R&B Heritage
R&B Heritage and Marina Square assert that Levitz Furniture
failed to strictly comply with the terms of their Lease in
connection with the option to renew the Lease beyond July 31,
2006.
James A. Tiemstra, Esq., in Oakland, California, asserts that
under California law -- made applicable by the terms of the
Lease -- an option to renew a lease constitutes an irrevocable
offer capable of acceptance by strict compliance with the terms
of the offer. While Levitz Furniture began the process for
renewing the Lease, that process was never completed and
certainly not on the terms required by the Lease, Mr. Tiemstra
notes.
Mr. Tiemstra tells the Court that an argument that Levitz
Furniture has or can comply with the requirements of the Lease to
renew the term for six years will greatly harm and prejudice the
Master Landlords who have been threatened with rejection of the
Lease and were entitled to the identification of a tenant over a
year ago.
The Master Landlords note that the "adequate assurances" of
future performance presented by Levitz Furniture do not include
the bargained for option requirements of a parental guarantee and
security deposit. The "adequate assurances" that are provided
are not only completely disclaimed, but are pure conjecture,
unsupported by any history of financial performance whatsoever.
In addition, both Macy's and Levitz Furniture are in serious
default of the repair and maintenance obligations of the Lease
with estimated costs to cure exceeding $475,000. Neither Levitz
Furniture nor PLVTZ have committed to cure the default, the Mater
Landlords tell the Court.
Thus, under the circumstances presented, the Master Landlords
submit that denying the Debtors' request with respect to Store
No. 40401 is appropriate.
(C) Macy's
Macy's Department Stores, Inc., formerly-known-as Macy's West,
Inc., asserts that it does not object to the assumption and
assignment of the Lease and Sublease, as extended, provided that
the Debtors or PLVTZ cure all defaults relating to repair and
maintenance obligations. Consequently, Macy's disputes any
contention that it is in default of the Lease with respect to
maintenance or in any other respect.
Macy's tells the Court that it was timely notified by Levitz
Furniture's of its exercising the option to renew the Lease, and
to which Macy's timely communicated to the Master Landlords. At
that point, Macy's obligations in connection with the Lease
extension ended.
Macy's submits that the Lease and Sublease documents explicitly
provide that negotiations and the mechanisms for resolving any
dispute concerning the new monthly rent should be directly
between the Master Landlords and Levitz Furniture. It adds that
neither the Lease nor the Sublease call on Macy's to take further
action until it is notified that the new rent has been set.
By that time, all of the parties are required to execute an
amendment to the Lease that memorializes the direct lease between
the Master Landlords and Levitz Furniture and the new monthly
rent, and confirms the release of Macy's, which is not a party to
the extended Lease.
Macy's reiterates that it has taken all of the actions required
of it under the Lease and the Sublease, and is not in default
under those documents.
Accordingly, Macy's asked the Court that any ruling authorizing
the assumption and assignment of the Lease and the Sublease must
provide that the defaults are the only defaults under the Lease
and the Sublease, that the defaults will be cured by PLVTZ, and
that Macy's has no liability for the cure of any defaults under
the Lease and the Sublease.
About Levitz Home
Headquartered in Woodbury, New York, Levitz Home Furnishings, Inc.
-- http://www.levitz.com/-- is a leading specialty retailer of
furniture in the United States with 121 locations in major
metropolitan areas principally the Northeast and on the West Coast
of the United States. The Company and its 12 affiliates filed for
chapter 11 protection on Oct. 11, 2005 (Bank. S.D.N.Y. Lead Case
No. 05-45189). David G. Heiman, Esq., and Richard Engman, Esq.,
at Jones Day, represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they reported $245 million in assets and $456 million
in debts. Jay R. Indyke, Esq., at Kronish Lieb Weiner & Hellman
LLP represents the Official Committee of Unsecured Creditors.
Levitz sold substantially all of its assets to Prentice Capital on
Dec. 19, 2005. (Levitz Bankruptcy News, Issue No. 15; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
LEVITZ HOME: Wants to Assign 28 Designated Contracts to PLVTZ
-------------------------------------------------------------
Levitz Home Furnishings, Inc. and its debtor-affiliates ask the
U.S. Bankruptcy Court for the Southern District of New York to
approve the assumption and assignment of the 28 Designated
Contracts to PLVTZ, LLC.
Among other things, the order allowing the Debtors to sell
substantially all of their assets to PLVTZ and the Pride Capital
Group, authorized the sale and transfer of all of the Debtors'
rights to designate the ultimate assignee of all their right,
title and interest in, and to, certain executory contracts.
On May 30, 2006, the Purchasers provided the Debtors with a
Contract Assumption Notice designating the assumption and
assignment 28 executory contracts to PLVTZ:
Counterparty Designated Contract Cure Amount
------------ ------------------- -----------
Gers, Inc. Sales and License Agreement; and $0
Institute Membership Agreement
AT&T K-II Consortium Agreement $3,634
TALX Unemployment Compensation $122
Corporation Hearings Services Agreement
Hewlet-Packard Mainframe Support Services $0
Agreement
Lan Logics Printers Maintenance and Repair $0
Agreement
Demand Software License Agreement $0
Solutions
Vsa*Fax (Esker) Software Agreement for Fax $0
Esker Inc. Messages
Stile Import, Customs and Freight Agreement $0
Associates Ltd.
National Check Check Guaranty Services Contract $0
Trust
Alliance Data Terminal Services Agreement and $27,751
Sytems, Inc. Customer Agreement
First National Internet Credit Card Processor $0
Merchant Agreement
Services
Visa Bankcard Agreement through $0
Alliance Data Systems, Inc.
Mastercard Bankcard Agreement through $0
Alliance Data Systems, Inc.
UBS Agreement for 401(k) Support $0
Services
Al Rossy Agreement for Security $0
Investigations Investigations
Nextira One Three Agreements for Phone $4,612
System Maintenance
Inovis USA Inc. Amended Managed Services $5,144
Agreement
Kronos (Time Sales, Software and License $7,058
Keeper Agreement
International)
ADP, Inc. Master Services Agreement $0
Discover Card Merchant Services Agreement $0
William J. Furniture Repair Services $0
Conlon & Sons Contract
Inc.
MFS Agreement for 401(k) Support $0
Services
HSBC Amended and Restated Merchant $0
(Household) Agreement
Oracle Amended License and Services $6,170
Agreement
Townsend Computer and Printer Maintenance $704
Computer Contract
Technologies LLC
Rhodes, Inc. License Agreement for Use of $0
Service Mark
West Agreement for Automated Outbound $46,253
Interactive Confirmation Calls
Corporation
Furnishnet, Retail Support and Services $0
Inc. Agreement
A full text copy of the chart indicating the 28 Designated
Contracts is available for free at:
http://ResearchArchives.com/t/s?c7f
According to Nicholas M. Miller, Esq., at Jones Day, in Cleveland,
Ohio, the Designated Contracts Chart shows evidence of PLVTZ's
ability to provide adequate assurance of future performance, as
well as contact information for a person from whom additional
evidence of PLVTZ's ability to provide adequate assurance of
future performance may be obtained.
Moreover, PLVTZ can readily demonstrate to any interested party
its financial health and experience in managing the type of
property assigned. PLVTZ has already provided financial
information demonstrating its ability to perform under the
Designated Contracts on a prospective basis, Mr. Miller says.
About Levitz Home
Headquartered in Woodbury, New York, Levitz Home Furnishings, Inc.
-- http://www.levitz.com/-- is a leading specialty retailer of
furniture in the United States with 121 locations in major
metropolitan areas principally the Northeast and on the West Coast
of the United States. The Company and its 12 affiliates filed for
chapter 11 protection on Oct. 11, 2005 (Bank. S.D.N.Y. Lead Case
No. 05-45189). David G. Heiman, Esq., and Richard Engman, Esq.,
at Jones Day, represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they reported $245 million in assets and $456 million
in debts. Jay R. Indyke, Esq., at Kronish Lieb Weiner & Hellman
LLP represents the Official Committee of Unsecured Creditors.
Levitz sold substantially all of its assets to Prentice Capital on
Dec. 19, 2005. (Levitz Bankruptcy News, Issue No. 15; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
LONDON FOG: Taps Gordon Bros. & Hilco for Store Closing Sales
-------------------------------------------------------------
The Honorable Bruce A. Markell of the U.S. Bankruptcy Court for
the District of Nevada allowed London Fog Group, Inc., and its
debtor-affiliates to hire Gordon Brothers Retail Partners, LLC and
Hilco Merchant Resources LLC to sell the Debtors' inventory and
leasehold assets in several going-out-of-business sales.
Stephen R. Harris, Esq., at Belding, Harris & Petroni, Ltd., told
the Court that the GOB stores sales would provide an efficient
means for Debtors to dispose of the merchandise, furniture,
fixtures and equipment, and other assets located at their stores
and distribution centers.
The Debtors distribute their products widely throughout the United
States through a variety of channels, including approximately
10,000 locations operated by numerous major retailers and
wholesalers including the most recognizable department stores,
discount retailers, wholesalers and wholesale clubs. The Debtors
also sell products at approximately 33 Debtor-operated factory
outlet stores.
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.
MABL Holdings: Board Declares $80 Dividend Payable on July 6
------------------------------------------------------------
The Board of Directors of MABL Holdings Ltd. (The former Medical
Arts Building Limited) have declared a special dividend of $80 per
share payable on July 6, 2006, to common shareholders of record as
of July 4, 2006.
The sale of all of the assets of the Company closed on April 1,
2006, and this special dividend represents the majority portion of
those proceeds.
The Company intends to issue a subsequent special dividend when
the Company has been wound-up, which will include delisting.
Based in Winnipeg, Manitoba, Canada, MABL Holdings Ltd. fka
Medical Arts Building Limited (TSX: MBGH) operated and managed a
professional office building and parking facilities.
In its Dec. 31, 2005 filings, the Company discloses $6,169,809 in
total assets, $5,318,591 in total liabilities, and $851,218 in
total shareholders' equity.
MARSHALL MARTINEZ: Case Summary & 4 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Marshall Martinez
Rosemary Martinez
dba Dedicated Medical Imaging Center
1040 Tropicana Way
La Habra, California 90631
Bankruptcy Case No.: 06-10990
Chapter 11 Petition Date: June 26, 2006
Court: Central District Of California (Santa Ana)
Judge: Erithe A. Smith
Debtors' Counsel: Todd B. Becker, Esq.
3750 East Anaheim Street, Suite 100
Long Beach, California 90804
Tel: (562) 495-1500
Fax: (562) 494-8904
Total Assets: $1,900,375
Total Debts: $2,540,104
Debtors' 4 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Siemens Financial Services, Inc. $726,987
c/o Danning, Gill, Diamond & Kollitz
2029 Century Park East, Third Floor
Los Angeles, CA 90067
Yellow Cab $6,000
1619 East Lincoln Avenue
Anaheim, CA 92805
Storage USA $2,687
511 South Grand Avenue
Santa Ana, CA 92705
Ford Motor Credit $1,625
P.O. Box 239801
Las Vegas, NV 89123-0040
MERIDIAN AUTOMOTIVE: 7 Parties Object to 1st Disclosure Statement
-----------------------------------------------------------------
Seven parties have filed written objections to Meridian Automotive
Systems, Inc., and its debtor-affiliates' motion for approval of
the Disclosure Statement explaining their First Amended Joint Plan
of Reorganization:
1. Pension Benefit Guaranty Corporation
2. General Capital Corporation and Gelco Corporation, doing
business as GE Capital Fleet Services
3. Office of the United States Trustee
4. New York Department of Environmental Conservation
5. United Steel, Paper and Forestry, Rubber, Manufacturing,
Energy, Allied Industrial and Service Workers International
Union
6. Credit Suisse, Cayman Islands Branch
7. Enamelite Industries, Inc.
The Debtors also received informal comments on the Disclosure
Statement from Goldman Sachs Capital Markets and the Bureau of
Workers' and Unemployment Compensation, State of Michigan.
The PBGC argues that the Disclosure Statement should:
-- inform creditors of a number of facts regarding the
Debtors' pension obligations that may affect the value of
creditors' claims and the feasibility of the proposed Plan
of Reorganization;
-- provide a description of the Debtors' Pension Plans,
including an explanation of the requirement to fund the
Pension Plans under ERISA and the Internal Revenue Code;
-- clearly indicate the extent of the costs associated with
continuing any or all of the Pension Plans post-bankruptcy,
including the periodic Minimum Funding Contributions
mandated by ERISA and the Internal Revenue Code;
-- state that, as provided by ERISA, the Debtors and each
member of the Debtors' controlled group are jointly and
severally responsible for any Unfunded Benefit Liabilities,
for any due and unpaid contributions to the Plans, and for
any unpaid premiums; and
-- indicate that the proposed substantive consolidation of the
Debtors' estates would operate to nullify the statutory
right of Pension Benefit to enforce joint and several
liability against each Debtor/controlled group member.
GE Capital complains that the Disclosure Statement fails to
provide adequate information regarding:
(1) which unexpired leases and executory contracts will be
rejected or assumed pursuant to the Plan;
(2) the Avoidance Actions, the Reserved Actions and the
Contingent Value Payment, which will fund the payments to
be made to unsecured creditors pursuant to the Plan;
(3) the Debtors' Proposed Substantive Consolidation; and
(4) Plan Releases.
GE Capital adds it cannot determine whether the proposed
substantive consolidation of the Debtors will result in it
receiving a greater or lesser distribution than if there was no
substantive consolidation.
The State of New York Department of Environmental Conservation
objects to the proposed Disclosure Statement and Plan of
Reorganization because they do not contain adequate information
to assess the environmental problems associated with Debtors'
facility at 111 North Street, city of Canandaigua, New York.
The USW is the collective bargaining agent of the 320 hourly
employees of the Debtors' Jackson, Ohio facility.
Representing the Union, Susan E. Kaufman, Esq., at Heiman, Gouge
& Kaufman, LLP, in Wilmington, Delaware, argues that the
Disclosure Statement, among others:
(1) falsely provides that the Debtors have not experienced
any significant work stoppages at their facilities;
(2) fails to describe the consequences of the National Labor
Relations Board finding merit to USW's unfair labor
practice charge against the Debtors;
(3) fails to describe the savings, if any, associated with the
modifications to the retiree benefit programs, and fails
to reflect the risk that an arbitrator or a court of
competent jurisdiction would not sustain the modifications
that the Debtors have imposed; and
(4) fails to reflect operational conditions at the Jackson,
Ohio plant in the consolidated financial projections and
the liquidation analysis.
Accordingly, the USW asserts, the Disclosure Statement should be
disapproved unless it is amended to reflect the true state of
affairs in the Jackson, Ohio facility.
Credit Suisse, Cayman Islands Branch, and the Debtors are parties
to these agreements dated April 28, 2004:
-- the Prepetition First Lien Credit Agreement;
-- a senior Intercreditor Agreement; and
-- a junior Intercreditor Agreement.
Credit Suisse seeks to preserve the rights of the First Lien
Lenders under the Intercreditor Agreements.
Victoria W. Counihan, Esq., at Greenberg Traurig, LLP, in
Wilmington, Delaware, argues that:
(1) the Intercreditor Agreements are enforceable pursuant to
Section 510(a) of the Bankruptcy Code;
(2) the Intercreditor rights of dissenting holders cannot be
extinguished pursuant Section 1129(b)(1); and
(3) a compelled waiver of the Intercreditor Rights amounts to
an impermissible release under the Bankruptcy Code or
applicable case law of non-Debtor parties.
The Prepetition First Lien Lenders may not be deemed to have
waived and relinquished their rights under the Intercreditor
Agreements without an express agreement to do so, Ms. Counihan
contends.
Section 1129(b)(1) of the Bankruptcy Code does not permit forcing
the First Lien Lenders involuntarily to waive and relinquish
their rights against non-debtor entities.
Accordingly, Credit Suisse says, the Disclosure Statement
describes a Plan that may not be confirmed and should not be
approved.
Enamelite Industries did not explain why it objects to the
Debtors' Disclosure Statement. In a one-page letter to the
Court, Enamelite asserted that the Debtors have a "bad debit" of
$29,947 and attached copies of invoices relating to the "bad
debit".
The U.S. Trustee notes that Class 3 is impaired under the Plan
and is entitled to vote. Under the Plan, the Debtors are
providing Class 3 creditors with a menu of treatment options to
choose from if Class 3 rejects the Plan. If Class 3 rejects the
plan and the Plan Proponents proceed to request confirmation of
the Plan under Section 1129(b)(1) of the Bankruptcy Code, the
fact that one or more Class 3 creditors elected specific options
from the "rejection menu" should not obviate or otherwise affect
the Plan Proponents' obligation to establish that each menu
option satisfies the requirements of Section 1129(b)(2), the U.S.
Trustee asserts.
In addition, the U.S. Trustee contends, Class 3 creditors' rights
to object to the Plan under Section 1129(b)(2) and other grounds
notwithstanding their selection from the "rejection menu" should
be reserved.
Debtors Respond
The Debtors assert that their Disclosure Statement contains
"adequate information" within the meaning of Section 1125 of the
Bankruptcy Code and therefore should be approved.
The Debtors filed a Second Amended Disclosure Statement and Plan
of Reorganization on June 23, 2006, to address the Objections
filed by various parties-in-interest.
To the extent the remaining Objections are not resolved through
the inclusion of additional information, the Debtors tell the
Court, those objections should be overruled.
The PBGC, Goldman Sachs, and the Michigan BWUC have informed the
Debtors that the inclusion of the additional disclosures with
respect to the pension plans, Goldman Sachs' claims, and employee
compensation and benefit programs resolve their Objections.
The Debtors have also added information regarding the unfair
labor practice charge that the USW is pursuing against the
Debtors and the Debtors' modification of certain retiree benefits
at the Jackson, Ohio facility. The Debtors contend that the
added language provides more than adequate information regarding
the matters the USW raised.
Nevertheless, the Debtors relate, the USW has also demanded that
the Debtors include additional information in the Disclosure
Statement regarding the impact of the lockout on the Debtors'
financial projections. The Debtors believe this information is
insignificant. The USW further wants the Debtors to clarify
"whether the Plant will continue to operate with a reduced,
inexperienced and unskilled replacement workforce." The Debtors
assert that this additional disclosure has absolutely no bearing
on a hypothetical creditor's decision whether to accept or reject
the Plan.
The Debtors provided additional information regarding
environmental liabilities at a manufacturing facility they
previously operated in Canandaigua, New York. The Debtors submit
this disclosure provides more than adequate information to
address NYDEC's Objection.
According to the Debtors, they are currently engaged in good
faith discussions with GE Capital to resolve GE Capital's
Objection and the parties anticipate that GE Capital's Objection
will be resolved before the Disclosure Statement hearing.
The Debtors note that the U.S. Trustee and the Prepetition First
Lien Agent have raised substantive objections regarding certain
aspects of the Plan. The Debtors ask the Court to defer until
the Confirmation Hearing any objections to the Plan's
confirmation that are disguised as objections to approval of the
Disclosure Statement.
About Meridian Automotive
Headquartered in Dearborn, Mich., Meridian Automotive Systems,
Inc. -- http://www.meridianautosystems.com/-- supplies
technologically advanced front and rear end modules, lighting,
exterior composites, console modules, instrument panels and other
interior systems to automobile and truck manufacturers. Meridian
operates 22 plants in the United States, Canada and Mexico,
supplying Original Equipment Manufacturers and major Tier One
parts suppliers. The Company and its debtor-affiliates filed for
chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos.
05-11168 through 05-11176). James F. Conlan, Esq., Larry J.
Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at
Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon
L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks,
Esq., at Young Conaway Stargatt & Taylor, LLP, represent the
Debtors in their restructuring efforts. Eric E. Sagerman, Esq.,
at Winston & Strawn LLP represents the Official Committee of
Unsecured Creditors. The Committee also hired Ian Connor
Bifferato, Esq., at Bifferato, Gentilotti, Biden & Balick, P.A.,
to prosecute an adversary proceeding against Meridian's First Lien
Lenders and Second Lien Lenders to invalidate their liens. When
the Debtors filed for protection from their creditors, they listed
$530 million in total assets and approximately $815 million in
total liabilities. (Meridian Bankruptcy News, Issue No. 31;
Bankruptcy Creditors' Service, Inc., 215/945-7000).
MERIDIAN AUTOMOTIVE: UST Objects to "Opt-Out" Provision in Ballot
-----------------------------------------------------------------
Kelly Beaudin Stapleton, the United States Trustee for Region 3,
notes that Section 10.3(b) of Meridian Automotive Systems, Inc.,
and its debtor-affiliates' Plan of Reorganization provides for a
broad release of claims held by the Debtors' creditors and
interest holders against certain parties. The Debtors propose
that creditors voting on the Plan be bound by the broad release
contained in that subsection unless they "opt out" of the release
provision by checking the appropriate box in the Ballot.
While the U.S. Trustee recognizes that the question of whether
the release provision in Section 10.3(b) comports with applicable
law will be addressed at the confirmation hearing, the question
of how to best use the ballot as a vehicle to determine whether a
party "affirmatively agreed" to the release provision is a
question for today, Joseph J. McMahon, Jr., Esq., trial attorney
for the U.S. Trustee, says.
Mr. McMahon says an "opt-in" provision on the ballot would
provide better evidence of consent than the "opt-out" provision
proposed by the Debtors. In an "opt-out" situation, Mr. McMahon
explains, the Court would be resigned to drawing an inference
from the absence of a check mark in the specified place on the
returned ballot that the creditor consented to the release, as
there would be no "affirmative" evidence of consent.
The U.S. Trustee contends that the Court should require that the
Debtors change their proposed form of ballot to provide for an
"opt-in" provision with respect to the Section 10.3(b) release.
Mr. McMahon also argues that voting creditors need sufficient
notice of the objection to file a motion under Rule 3018(a) of
the Federal Rules of Bankruptcy Procedure to have their claims
allowed for voting purposes. The deadline set for filing a Rule
3018(a) motion is "not less than ten (10) days before the Voting
Deadline," or July 31, 2006. The U.S. Trustee asserts that the
Court should set a deadline for filing claims objections, which
provides ample notice for affected creditors to take appropriate
action.
The U.S. Trustee adds that any and all supplemental documents
should be executed and filed with the Court by a date well in
advance of the Voting Deadline to afford interested parties
sufficient time to review the documents and take appropriate
action.
Debtors Respond
To address the U.S. Trustee's objection, the Debtors have
proposed that they will have until the later of July 17, 2006, or
14 days prior to the deadline for submitting motions pursuant to
Rule 3018 of the Federal Rules of Bankruptcy Procedure, to file
objections to Claims for purposes of voting on the Plan.
The Debtors have also agreed to file the Plan Supplement at least
10 days prior to the Voting Deadline to give all parties-in-
interest sufficient time to review the Plan Supplement.
Although the Debtors believe that the proposed forms of ballots
are consistent with applicable precedent and accepted practices
in Delaware, the Debtors have contacted the U.S. Trustee with
suggestions for possible modifications to the "opt-out" release
provision that should alleviate the U.S. Trustee's concerns over
the proposed forms of ballots.
The Debtors are hopeful that these issues will be resolved prior
to the Disclosure Statement hearing.
About Meridian Automotive
Headquartered in Dearborn, Mich., Meridian Automotive Systems,
Inc. -- http://www.meridianautosystems.com/-- supplies
technologically advanced front and rear end modules, lighting,
exterior composites, console modules, instrument panels and other
interior systems to automobile and truck manufacturers. Meridian
operates 22 plants in the United States, Canada and Mexico,
supplying Original Equipment Manufacturers and major Tier One
parts suppliers. The Company and its debtor-affiliates filed for
chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos.
05-11168 through 05-11176). James F. Conlan, Esq., Larry J.
Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at
Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon
L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks,
Esq., at Young Conaway Stargatt & Taylor, LLP, represent the
Debtors in their restructuring efforts. Eric E. Sagerman, Esq.,
at Winston & Strawn LLP represents the Official Committee of
Unsecured Creditors. The Committee also hired Ian Connor
Bifferato, Esq., at Bifferato, Gentilotti, Biden & Balick, P.A.,
to prosecute an adversary proceeding against Meridian's First Lien
Lenders and Second Lien Lenders to invalidate their liens. When
the Debtors filed for protection from their creditors, they listed
$530 million in total assets and approximately $815 million in
total liabilities. (Meridian Bankruptcy News, Issue No. 31;
Bankruptcy Creditors' Service, Inc., 215/945-7000).
MICHAEL SARVER: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: Michael Fred Sarver
3721 North State Road
161 Richland, Indiana 47634
Bankruptcy Case No.: 06-70472
Chapter 11 Petition Date: June 27, 2006
Court: Southern District of Indiana (Evansville)
Debtor's Counsel: David R. Krebs, Esq.
Hostetler & Kowalik P.C.
101 West Ohio Street, Suite 2100
Indianapolis, Indiana 46204
Tel: (317) 262-1001
Fax: (317) 262-1010
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
The Debtor did not file a list of its 20 largest unsecured
creditors.
MORGAN STANLEY: S&P Cuts $3 Mil. Class A-6 Notes' Rating to B+
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on Morgan
Stanley ACES SPC's $3 million class A-6 secured fixed-rate notes
from series 2006-8 to 'B+' from 'BB-' and removed it from
CreditWatch, where it was placed with negative implications March
22, 2006. There is no impact on the outstanding ratings on all
other classes from this transaction.
The rating action reflects the June 16, 2006, lowering of the
rating on the underlying securities, the $250 million 7.625%
senior debentures issued by Millennium America Inc., and its
removal from CreditWatch with negative implications.
Morgan Stanley ACES SPC's $46 million secured fixed-rate notes
series 2006-8 is a swap-independent synthetic transaction that is
weak-linked to the reference obligations on the underlying
collateral for each class.
NES RENTALS: Credit Reduction Prompts Moody's to Lower Ratings
--------------------------------------------------------------
Moody's Investors Service downgraded the ratings of NES Rentals
Holdings, Inc. -- Corporate Family Rating to B3 from B2 and second
lien senior secured bank credit facility to Caa1 from B3. The
speculative grade liquidity rating remains at SGL-3. The rating
agency also assigned a Caa1 rating to the company's proposed
second lien senior secured bank credit facility. The rating
outlook is Stable.
Moody's said that the downgrade of NES Corporate Family Rating to
B3 reflects the reduction in credit metrics that will result from
Diamond Castle Holdings, LLC's leveraged buyout of the company,
which will increase adjusted debt by $265 million. In addition,
NES will continue to face important operational and financial
challenges. These challenges include:
1) the ongoing cyclicality of the equipment rental sector;
2) the need to fund renewal of its rental fleet; and,
3) weakened credit metrics.
Key credit metrics for the LTM to March 2006 will likely erode in
the following manner on a pro forma basis: EBIT/interest to about
0.7 times from 1 times; EBITDA/interest to approximately
2.9 times from 3.6 times; and, Debt/EBITDA to 4.5 times from 3.1
times. These credit metrics position NES as one of the more
leveraged companies in the universe of rated equipment rental
companies. The Corporate Family Rating is further constrained by
the potential for NES to pursue growth initiatives which could
require incremental capital investments. Borrowings under the
senior secured credit facility beyond what is projected would
further stress the company's credit metrics.
Despite these operational and financial challenges, Moody's
believes that NES has some significant strengths including:
1) participation by the company in the robust non-residential
construction market; and
2) NES' multi-regional branch network and broad customer base.
These strengths in addition to the company's cost cutting program,
improved internal efficiencies, and a commitment to maintain ample
liquidity should enable the company to strengthen debt protection
measures through the intermediate term.
The stable outlook reflects Moody's belief that NES' debt
protection measures should improve over the intermediate term and
better position the company within the B3 rating. NES should be
able to weather future cyclical downturns much better than in the
past due to its cost cutting program, improved internal
efficiencies, multi-regional branch network, and a commitment to
maintain ample liquidity.
The Caa1 on the second lien senior secured $430 million term loan
is rated one notch below the Corporate Family Rating due to the
junior position of this facility relative to the security interest
of the $450 million senior secured, asset based revolving credit
facility. Maturity of the second lien senior secured term loan
will be mid-2013. The rating of the existing second lien senior
secured term loan will be withdrawn once the proposed senior
secured credit facility has closed.
The SGL-3 Speculative Grade Liquidity Rating reflects Moody's view
that NES will maintain a adequate liquidity profile over the next
12-month period. The SGL rating reflects Moody's expectation that
NES' operating cash flow generation combined availability under
its committed revolving credit facility and cash on hand, should
be sufficient to fund the company's normal operating requirements
and capital spending over the next 12 months. The SGL rating will
be withdrawn once the leveraged buyout is completed since NES will
no longer provide public financial reports.
NES Rentals Holdings, Inc., based in Chicago, Illinois, is one of
the largest equipment rental companies in the US.
NEXIA HOLDINGS: Posts $232,948 Net Loss in Quarter Ended March 31
-----------------------------------------------------------------
Nexia Holdings Inc. recorded net losses of $232,948 for the three-
month period ended March 31, 2006, as compared to net losses of
$419,114 for the comparable period in 2005. The decrease in the
three month net losses of $190,444, or 45%, compared to the same
period in 2005, is attributable primarily to the revenue
recognized from the Landis Salon operations, reporting $83,571 in
unrealized gain related to the adjustment of a derivative
liability to the fair value of the underlying security and reduced
expenses.
Gross revenues for the three-month period ended March 31, 2006,
were $325,350 as compared to $96,636 for the same period in 2005.
The 237% increase in revenue is due to inclusion of sales revenue
from the operation of the Landis Salon in the sum of $265,241.
Landis began operations in November 2005.
At March 31, 2006, the Company's balance sheet showed $4,086,612
in total assets, $3,133,152 in total liabilities, minority
interest of $237,282, and total stockholders' equity of $716,178
A full-text copy of the Company's quarterly report is available
for free at http://researcharchives.com/t/s?c4c
Diversified Financial Settlement
Nexia disclosed on June 6 that its subsidiary, Diversified
Holdings I, Inc., entered into a Settlement Agreement and Release
with Diversified Financial Resources Corporation whereby in
exchange for the release of all claims that remain from the June
30, 2003 Stock Purchase Agreement between the parties DHI will
receive 25 million shares of DVFN common stock and 937,500 shares
of restricted common stock.
DVFN has agreed that it will not object to the issuance of the 25
million shares without restrictive legend as settlement of the
claims from 2003. Nexia anticipates that a portion of these
shares will generate sufficient proceeds to fully satisfy the
remaining receivable outstanding from DVFN and provide additional
operating capital for Nexia's real estate operations and potential
acquisitions of new property.
Richard Surber, Nexia's president stated "I am pleased that
Diversified Financial has resolved this outstanding obligation
with Nexia. The acquisition and plans that have been announced
with Jiang Xi Tai N Guo Ye You Xian Gong Si are positive actions
that will hopefully lead to the future growth and development of
their combined corporations."
About Nexia Holdings
Headquartered in Salt Lake City, Utah, Nexia Holdings Inc. (OTCBB:
NEXH) -- http://www.nexiaholdings.com/-- through its
subsidiaries, engages in the acquisition, lease, management, and
sale of real estate properties in the continental United States.
It operates, owns, or has interests in a portfolio of commercial,
industrial, and residential properties. The company's commercial
properties comprise Wallace-Bennett Building, and a one-story
retail building in Salt Lake City, Utah; and an office building in
Kearns, Utah. Its residential property comprises a condominium
unit located in close proximity to Brian Head Ski Resort and the
surrounding resort town in southern Utah. The company's
industrial property includes Parkersburg Terminal in Parkersburg,
West Virginia. It also owns parcels of undeveloped land in Utah
and Kansas.
Going Concern Doubt
As reported in the Troubled Company Reporter on Dec. 6, 2005, HJ &
Associates, LLC, expressed substantial doubt about the Company's
ability to continue as a going concern after it audited the
Company's financial statements for the year ended Dec. 31,
2004. The auditing firm pointed to the Company's significant
losses from operations, accumulated deficit and working capital
deficit. At March 31, 2006, the Company reported an operating
loss of $289,466; an accumulated deficit of $13,508,547; and a
working capital deficit of $1,266,397.
NORTHWEST AIRLINES: Inks Settlement with GOAA on Lease Agreement
----------------------------------------------------------------
As reported in the Troubled Company Reporter on March 14, 2006,
the Greater Orlando Aviation Authority asked the U.S. Bankruptcy
Court for the Southern District of New York to compel Northwest
Airlines Corp. and its debtor-affiliates to immediately reject or
assume the Airport Lease Agreement.
The GOAA told the Court that it owns and operates the facilities
at the Orlando International Airport and before the Petition Date,
certain of the Debtors and GOAA entered into the Orlando Airline-
Airport Lease and Use Agreement, dated Apr. 30, 1980, and certain
related agreements.
In a Court-approved stipulation, the Debtors and Greater Orlando
Aviation Authority agree that:
a. GOAA withdraws without prejudice its request to compel the
Debtors to reject or assume the Orlando Airline-Airport
Lease and Use Agreement, dated April 30, 1980, and certain
related agreements;
b. $45,185 of the Credits will be applied to future
contractual charges under the Airport Lease Agreement;
c. the automatic stay will be lifted for GOAA to exercise, at
its election, its right under non-bankruptcy law to set off
$419,428 of the Credits against the Debtors' prepetition
debt provided that they reserve all rights with respect to
that set-off;
d. in the event the Court determines that a right of set-off
does not exist with respect to the amount at issue, GOAA
will return the Debtors' estate to the status quo ante as
of the date prior to the execution of the Stipulation;
e. the remaining $849,064 in Credits will be applied to future
contractual charges under the Airport Lease Agreement and
will be conditioned on a full reservation of rights,
pending the Debtors' election to assume or reject the
Agreement; and
f. if the Debtors reject the Airport Lease Agreement, in the
event the Court determines there are rejection damages and
that a right of set-off exists with respect to some or all
of the Credits, GOAA will have an administrative claim
under Section 503(b) of the Bankruptcy Code in an amount to
be determined by the Court.
About Northwest Airlines
Northwest Airlines Corporation (OTC: NWACQ) -- http://www.nwa.com/
-- is the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and
approximately 1,400 daily departures. Northwest is a member of
SkyTeam, an airline alliance that offers customers one of the
world's most extensive global networks. Northwest and its travel
partners serve more than 900 cities in excess of 160 countries on
six continents. The Company and 12 affiliates filed for chapter
11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No.
05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq.,
at Cadwalader, Wickersham & Taft LLP in New York, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in
Washington represent the Debtors in their restructuring efforts.
The Official Committee of Unsecured Creditors has retained Akin
Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the
Debtors' chapter 11 cases. When the Debtors filed for protection
from their creditors, they listed $14.4 billion in total assets
and $17.9 billion in total debts. (Northwest Airlines Bankruptcy
News, Issue No. 29; Bankruptcy Creditors' Service, Inc.,
215/945-7000).
NORTHWEST AIRLINES: Enters Stipulation to Cease Holiday Inn Pact
----------------------------------------------------------------
Pursuant to a prepetition Hotel Services Agreement Contract No.
BH50606, Holiday Inn Golden Gateway agreed to provide room
accommodations and other services for Northwest Airlines, Inc.'s
flight crews, other employees, and contractors in exchange for
consideration paid at agreed rates.
Holiday Inn is seeking modification the stay to allow it to
exercise its rights to terminate the Hotel Services Agreement in
accordance with its terms and conditions.
The parties agree to resolve the Holiday Inn's request without
making any admissions with respect to whether Holiday Inn is
entitled to relief from stay to terminate the Hotel Services
Agreement.
They stipulate that:
(a) the Hotel Services Agreement will be deemed terminated on
the later of:
-- the date the Court approves the Stipulation, or
-- June 30, 2006 with no further action required by the
parties;
(b) Northwest Airlines consents to the modification of the
automatic stay solely for the purpose of allowing Holiday
Inn to terminate the Agreement; and
(c) the parties will mutually release each other from all
liabilities, provided that the parties' indemnification
and other rights and obligations under the Agreement will
survive termination to the extent that those rights arise
from events prior to termination.
Northwest Airlines Corporation (OTC: NWACQ) -- http://www.nwa.com/
-- is the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and
approximately 1,400 daily departures. Northwest is a member of
SkyTeam, an airline alliance that offers customers one of the
world's most extensive global networks. Northwest and its travel
partners serve more than 900 cities in excess of 160 countries on
six continents. The Company and 12 affiliates filed for chapter
11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No.
05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq.,
at Cadwalader, Wickersham & Taft LLP in New York, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in
Washington represent the Debtors in their restructuring efforts.
The Official Committee of Unsecured Creditors has retained Akin
Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the
Debtors' chapter 11 cases. When the Debtors filed for protection
from their creditors, they listed $14.4 billion in total assets
and $17.9 billion in total debts. (Northwest Airlines Bankruptcy
News, Issue No. 29; Bankruptcy Creditors' Service, Inc.,
215/945-7000).
NORTHWEST AIRLINES: Has Until November 15 to Removal Civil Actions
------------------------------------------------------------------
The United States Bankruptcy Court for the Southern District of
New York further extended the period within which Northwest
Airlines Corp. and its debtor-affiliates may remove civil actions
to the earlier of:
(a) November 15, 2006; or
(b) 30 days after entry of an order terminating the automatic
stay with respect to the particular action sought to be
removed.
As reported in the Troubled Company Reporter on June 8, 2006, the
Debtors relate that they are parties to numerous actions currently
pending before various federal and state courts and administrative
agencies. The civil actions involve a wide variety of claims
including breach of contract and personal injury claims.
The request is without prejudice to their right to seek a further
extension after notice and a hearing.
Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP,
in New York, explains that to determine whether to remove any of
the Civil Actions, the Debtors must:
-- conduct a comprehensive analysis of the Civil Actions and
evaluate various factors under, inter alia, 28 U.S.C.
Section 1452; and
-- determine whether the outcome of a Civil Action may alter
the Debtors' rights and liabilities and effect the
ultimate distribution to the Debtors' creditors.
Mr. Petrick relates that the Debtors, their management and
employees, and their professionals have not had sufficient time
to investigate fully the Civil Actions or evaluate completely the
merits of removing those actions because of the considerable time
and attention required to administer the Chapter 11 cases and to
operate their business.
Mr. Petrick explains that an extension will:
-- afford the Debtors a sufficient opportunity to make fully
informed decisions concerning removal of each Civil Action;
-- assure that the Debtors do not forfeit valuable rights of
removal under Section 1452; and
-- not prejudice the rights of the Debtors' adversaries.
If the Debtors are ultimately successful in removing any of the
Civil Actions, any party to that action may seek to have it
remanded back to the Court or relevant administrative agency from
which it came pursuant to Section 1452(b).
Therefore, the extension of time period during which the Civil
Actions may be removed will not prejudice the rights of other
parties, Mr. Petrick contends.
About Northwest Airlines
Northwest Airlines Corporation (OTC: NWACQ) -- http://www.nwa.com/
-- is the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and
approximately 1,400 daily departures. Northwest is a member of
SkyTeam, an airline alliance that offers customers one of the
world's most extensive global networks. Northwest and its travel
partners serve more than 900 cities in excess of 160 countries on
six continents. The Company and 12 affiliates filed for chapter
11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No.
05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq.,
at Cadwalader, Wickersham & Taft LLP in New York, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in
Washington represent the Debtors in their restructuring efforts.
The Official Committee of Unsecured Creditors has retained Akin
Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the
Debtors' chapter 11 cases. When the Debtors filed for protection
from their creditors, they listed $14.4 billion in total assets
and $17.9 billion in total debts. (Northwest Airlines Bankruptcy
News, Issue No. 29; Bankruptcy Creditors' Service, Inc.,
215/945-7000).
OLIVE XXIII: Case Summary & Four Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Olive XXIII, LLC
P.O. Box 908
El Centro, California 92244-0908
Bankruptcy Case No.: 06-01614
Type of Business: The Debtor previously filed for chapter 11
protection on October 7, 2003 (S.D. Calif.
Case No. 03-09209).
Chapter 11 Petition Date: June 27, 2006
Court: Southern District of California (San Diego)
Judge: John J. Hargrove
Debtor's Counsel: John F. Lenderman, Esq.
303 South 8th Street
P.O. Box 2540
El Centro, California 92244-2540
Tel: (760) 353-7949
Fax: (760) 353-6500
Estimated Assets: Less than $50,000
Estimated Debts: $1 Million to $10 Million
Debtor's 4 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Emvest Mortgage 1st DOT $1,151,000
c/o Foreclosure West
591 Cam. De la Reina, Suite 910
San Diego, CA 92108
Alta Consultants 2nd DOT $25,000
280 Avenida Campillo, Suite E
Calexico, CA 92231
Southland Geotechnical, Inc. Trade Debt $7,000
780 North 4th
El Centro, CA 92243
Dixieline Bld. Fund Fund Control Unknown
Control, Inc.
3250 Sports Arena Boulevard
San Diego, CA 92186
OMEGA HEALTHCARE: Fitch Upgrades Preferred Stock's Rating to B+
---------------------------------------------------------------
Fitch upgraded Omega Healthcare Investors:
-- Senior unsecured notes to 'BB' from 'BB-'
-- Preferred stock to 'B+' from 'B'
Additionally, Fitch assigns these rating:
-- Secured credit facility 'BB+'
The Outlook on all Ratings is Stable.
The ratings reflect Omega's ability to maintain solid coverage and
leverage metrics and improved operating performance in recent
quarters, while continuing to diversify its sources of income.
In general, the company's revenue and EBITDA has increased rather
steadily in the last two years and EBITDA margins and expense
ratios have remained sound and consistent over this time. OHI has
averaged 3.1x EBITDA coverage of interest during this timeframe.
Similarly, Omega's fixed charge coverage through this same period
has remained solid at 2.3x.
OHI has also sustained manageable debt levels as debt to
undepreciated book capital was 47.2% and debt plus preferred stock
to undepreciated book capital was 57.7% with both of these figures
right about average for healthcare REITs. Furthermore, operator
coverage metrics have particularly improved in the last two years
as EBITDAR and EBITDARM ratios have improved to 1.5x and 2.0x from
1.1x and 1.5x, respectively, providing additional comfort for the
improved underlying performance of the company's tenants.
In addition, Omega has very minimal near-term obligations as only
4.4% of its leases expire in the next five years and none of its
debt matures until 2010. OHI has continued to employ a varied
capital structure and has demonstrated its ability to access the
capital markets through unsecured note, preferred stock and equity
offerings over the last two years. In addition, the company
recently restructured its $200 million secured credit facility
with much improved borrowing costs. The company has fairly solid
geographic and asset diversification with 226 properties in 27
states, although has somewhat built up a recent substantial
presence (25% of investments) in Ohio.
The ratings are balanced by OHI's tenant concentration risk with
approximately 32% of the company's revenue derived from its top
two operators (Communicare - 17% and Sun Healthcare Group, Inc. -
15%). Omega has improved on this aspect of its portfolio in
recent quarters and Fitch looks for continued diversification
going forward.
In addition, the company has an almost exclusive focus on skilled
nursing facilities. This sector has experienced year to year
volatility in the past due to its dependence on federal (Medicare)
and state (Medicaid) reimbursements. These policies are adjusted
annually and Omega is particularly susceptible to potential
changes because of the nature of its properties and the fact that
its operators only receive 11% of their income from privately
paying resources. Furthermore, the company size of $985 million
in assets as of March 31, 2006, is a fair amount smaller than most
of its peers, making any possible problems that Omega confronts
have more of a potential impact on company operations.
Interest coverage and fixed charge coverage ratios of 2.8x and
2.3x, respectively, as of March 31, 2006, are adequate in
comparison with similarly rated real estate investment trusts.
Debt leverage stood at 47.2% of undepreciated book capitalization
and debt plus preferred was 57.7% of undepreciated book at the end
of first quarter 2006, which is also in line with other healthcare
REITs.
As of Dec. 31, 2005, the company had sufficient unencumbered asset
coverage of unsecured debt (estimated at 1.9x), based on the
company's filings and the extent to which its line of credit was
drawn.
Omega Healthcare Investors, Inc., headquartered in Timonium,
Maryland, is a $985 million (total assets as of March 31, 2006)
owner and mortgage holder of primarily skilled nursing facilities.
At the end of the first quarter 2006, the portfolio consisted of
226 properties containing approximately 25,000 beds located in 27
states.
ON SEMICONDUCTOR: Commences Exchange Offer of $260 Million Notes
----------------------------------------------------------------
ON Semiconductor Corp. has commenced an offer to exchange up to
$260 million principal amount of new notes with a "net share
settlement" mechanism, a cash acquisition make-whole feature and
modified contingent conversion events for its currently
outstanding zero coupon convertible senior subordinated notes due
2024.
Holders who exchange their old notes will receive new notes with
the modified terms plus an exchange fee of $2.50 per $1,000
principal amount of their old notes validly tendered and accepted
for exchange. The offer is contingent upon satisfaction or waiver
of certain conditions, including receipt of tenders of a minimum
of 70% in aggregate principal amount of the old notes.
The exchange offer will expire at 5:00 p.m., New York City time,
on July 19, 2006, unless extended or earlier terminated by ON
Semiconductor. Old notes must be tendered on or prior to the
expiration of the offer, and tendered old notes may be withdrawn
at anytime on or prior to the expiration of the offer.
Validly withdrawn old notes will be returned to the holder in
accordance with the terms of the offer. Following the expiration
of the offer and subject to the terms of the offer, ON
Semiconductor will accept all old notes validly tendered and not
validly withdrawn prior to the expiration of the offer and will
issue the new notes in exchange promptly thereafter.
Neither ON Semiconductor's Board of Directors nor any other person
makes any recommendation as to whether holders of old notes should
choose to tender and exchange their old notes for new notes, and
no one has been authorized to make such a recommendation.
The old notes may be tendered for exchange only in accordance with
the Offer to Exchange dated June 20, 2006 and the offer is subject
to risks. Investors and security holders may obtain the Offer to
Exchange, the related Letter of Transmittal and other related
offer materials through the information agent for the offer,
Georgeson Shareholder Communications, Inc., in New York at
telephone number (866)767-8989.
ON Semiconductor Corp. (NASDAQ: ONNN) -- http://www.onsemi.com/
-- supplies power solutions to engineers, purchasing
professionals, distributors and contract manufacturers in the
computer, cell phone, portable devices, automotive and industrial
markets.
* * *
Moody's assigned ON Semiconductor's bank loan debt and long-term
corporate family ratings at B2. The ratings were placed Dec. 15,
2005 with a positive outlook.
In June 2005, Standard & Poor's placed B+ rating on the Company's
long-term local and foreign issuer credits.
OZBURN-HESSEY: Acquisition Plans Cue S&P to Downgrade Rating to B
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Ozburn-Hessey Holding Co. LLC to 'B' from 'B+'. The
rating action follows the company's announcement that it plans to
make two acquisitions, which will be mainly debt financed.
At the same time, Standard & Poor's lowered its rating on the
company's bank loan to 'B' from 'B+'. The bank facility now
consists of a $40 million revolving credit facility that matures
in 2010, and a $237 million term loan that matures in 2012. The
company's term loan includes a new $140 million add-on.
OHL's bank facility has a recovery rating of '5', indicating the
expectation of negligible (0%-25%) recovery of principal in the
event of a payment default.
The outlook is now stable. The Nashville, Tennessee-based third-
party logistics company has over $450 million of lease-adjusted
debt.
"Ratings reflect OHL's competitive end markets, high debt
leverage, and aggressive acquisition strategy, partly offset by
favorable near- to intermediate-term industry fundamentals and
benefits accruing from the company's nationwide presence and good
technological capabilities," said Standard & Poor's credit analyst
Eric Ballantine.
OHL offers various third-party logistics services, including
warehousing (about 80% of revenues), transportation of goods
(10%), and other ancillary services.
The third-party logistics industry is very fragmented; competitors
include divisions of large integrated freight transportation
companies as well as other, smaller logistics providers. Demand
for third-party logistics has been growing at a compound average
growth rate of more than 10% over the past eight years and the
near- to intermediate-term outlook for the sector is favorable as
companies are expected to continue outsourcing these services to
reduce costs, lower capital expenditure requirements, and enhance
operating flexibility.
Despite the positive industry outlook, the sector is expected to
remain very competitive. Many of the companies competing with OHL
are financially stronger and more diversified.
OHL developed its current suite of logistics services, which
include warehousing, transportation, and other ancillary services,
through a series of acquisitions. The company is currently in the
process of closing on two transactions (and has not yet publicly
disclosed the names of the companies involved), two small niche
players in the logistics area.
Demand for third-party logistics is expected to remain healthy
over the next few years and OHL is likely to benefit from the
favorable industry environment. An aggressive acquisition
strategy and high leverage limit a positive outlook or rating
upgrade. Further acquisitions, without significant debt paydown
could lead to a negative outlook in the near term.
PRIMUS TELECOMMS: Issues $24.1 Mil. of 5% Senior Unsecured Notes
----------------------------------------------------------------
PRIMUS Telecommunications Group, Inc. has entered into agreements
with certain holders of the Company's 3-3/4% Convertible Senior
Notes due 2010 to exchange $32.2 million principal amount of new
5% Exchangeable Senior Notes due 2009 of Primus Telecommunications
Holding, Inc., its wholly-owned subsidiary, for $54.8 million
principal face amount of 3-3/4% Notes. The Company also entered
into agreements with the same holders to issue $24.1 million
principal amount of 5% Notes for $20.5 million in cash.
Cash proceeds from the sale of the 5% Notes will be used for
general corporate purposes, including the payment of certain
maturing 5-3/4% Convertible Subordinated Debentures due in
February 2007. After the exchange transaction, $77.3 million
principal amount of the 3-3/4% Notes will be outstanding.
The 5% Notes, which will be guaranteed by the Company, are
scheduled to mature on Sept. 15, 2009, subject to an extended
maturity to the fourth anniversary of the Closing Date,
approximately June 2010, if equity is increased in the aggregate
of $25 million during the three years following the Closing Date
pursuant to issuance, conversion and exchange transactions. The
holders of the 5% Notes will be entitled to receive the first two
semi-annual interest payments wholly in cash.
The 5% Notes are exchangeable into the Company's common stock at a
conversion price of $1.20 per share of common stock, subject to
customary adjustments for stock splits and other similar events.
The Company has certain rights to exchange such 5% Notes for
shares of the Company's common stock at the conversion price if
the Company's common stock trades at or above 150% of the
conversion price for specified periods, subject to certain
conditions.
Based in McLean, Virginia, PRIMUS Telecommunications Group,
Incorporated (NASDAQ: PRTL) -- http://www.primustel.com/-- is an
integrated communications services provider offering international
and domestic voice, voice-over-Internet protocol, Internet,
wireless, data and hosting services to business and residential
retail customers and other carriers located primarily in the
United States, Canada, Australia, the United Kingdom and western
Europe. PRIMUS provides services over its global network of owned
and leased transmission facilities, including approximately 350
points-of-presence throughout the world, ownership interests in
undersea fiber optic cable systems, 16 carrier-grade international
gateway and domestic switches, and a variety of operating
relationships that allow it to deliver traffic worldwide.
Going Concern Doubt
As reported in the Troubled Company Reporter on June 19, 2006,
Deloitte & Touche LLP expressed substantial doubt about PRIMUS
Telecommunications Group, Incorporated's ability to continue as a
going concern after auditing the Company's financial statements
for the fiscal year ended Dec. 31, 2005. The auditing firm
pointed to the Company's recurring losses from operations, the
maturity of $23.6 million of the 5-3/4% convertible subordinated
debentures due February 2007, negative working capital, and
stockholders' deficit.
* * *
As reported in the Troubled Company Reporter on April 7, 2006,
Standard & Poor's Ratings Services lowered its ratings on
McLean, Virginia-based international telecommunications carrier
PRIMUS Telecommunications Group Inc., including the corporate
credit rating, which was downgraded to 'CCC' from 'CCC+'. The
outlook is negative.
PROFILE TECH: March 31 Balance Sheet Upside-Down by $734,747
------------------------------------------------------------
Profile Technologies, Inc. has filed its financial statements on
Form 10-QSB with the Securities and Exchange Commission.
The Company's balance sheet at March 31, 2006 showed $519,487 in
total assets and $1,254,234 in total liabilities resulting to a
total stockholders' deficit of $734,747.
The Company's balance sheet also showed $1,254,122 in total
current liabilities out of $513,098 in total current assets.
For the three months ended March 31, 2006, the Company reported
a $228,043 net loss out of $0 revenue.
A full-text copy of Profile Technologies, Inc.'s financial report
for the three months ended March 31, 2006 is available for free at
http://researcharchives.com/t/s?c43
Going Concern Doubt
On Sept. 9, 2005, Peterson Sullivan expressed substantial doubt
about the Company's ability to continue as a going concern after
auditing the Company's financial statements for the year ended
June 30, 2005. The auditor pointed to the Company's cumulative
losses and negative working capital.
Profile Technologies, Inc.'s principal activities are to conduct
research and develop scanning process to test remotely buried,
encased and insulated pipelines for corrosion utilizing
electromagnetic waves. The Company's customers include large
petrochemical, utility and petroleum companies.
PTC ALLIANCE: Has Final Access to $70 Million DIP Financing
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Pennsylvania
issued a final order allowing PTC Alliance Corp. to secure up to
$70 million of debtor-in-possession loans from a group of lenders
headed by Black Diamond Commercial Finance LLC, as administrative
agent.
As reported in the Troubled Company Reporter on May 16, 2006, the
Debtor obtained interim approval from the Court to use
$35.3 million of the $70 million DIP credit facility from Black
Diamond.
The interim DIP financing was intended to provide the Company with
sufficient liquidity to continue operations without disruption,
and to meet its obligations to employees and suppliers. Access to
the remainder of the DIP facility will permit the Debtor to
continue the operations, satisfy working capital needs and pay
amounts arising from the termination of the Wells Fargo
Receivables Purchase Agreement.
The Debtor entered into the receivables purchase agreement with
Wells Fargo Business Credit LLC on November 2003 to obtain advance
funding on certain accounts receivable. Wells Fargo holds a
security interest on these receivables. The Debtor can opt to
terminate the factoring agreement with Wells Fargo by repurchasing
the receivables sold to Wells Fargo, subject to payment of certain
fees.
Superpriority Status
Pursuant to section 364(c) of the Bankruptcy Code, all obligations
under the DIP facility will have superpriority status over all
other claims against the Debtor. However, the DIP lenders'
superpriority claim is subject to a $500,000 carveout for payments
due to the U.S. Trustee and the Bankruptcy Court.
As security for the DIP obligations, the DIP lenders are granted
these liens and security interests:
a) a first priority senior security interests in and lien
upon all prepetition and postpetition property of the
Debtor not subject to a perfected and non-avoidable lien;
b) a valid and fully-perfected first priority senior priming
lien on all of the Debtors' assets that are subject to the
existing liens presently securing the Debtor's Prepetiton
Secured obligations; and
c) junior liens on and security interest in all other assets
subject to valid and unavoidable liens in existence
immediately prior to the petition date.
Use of Prepetition Lender's Cash Collateral
Apart from access to the DIP facility, the Court also authorized
PTC Alliance to use cash collateral securing repayment of
approximately $76.5 million in loans extended by its prepetition
secured lenders. Black Diamond also serves as administrative
agent for the prepetition lenders.
The prepetition lenders are entitled, pursuant to sections 361,
363(c)(2) and 363(e) of the Bankruptcy Code, to adequate
protection of their interests in an amount equal to the diminution
in value of their prepetition collateral. The prepetition lenders
are also granted a replacement security interests in and liens
upon all of their collateral.
About PTC Alliance
Headquartered in Wexford, Pennsylvania, PTC Alliance Corp. --
http://www.ptcalliance.com/-- manufactures and markets welded and
cold drawn mechanical steel tubing and tubular shapes, chrome-
plated bar products, fabricated parts, and precision components.
The company filed for chapter 11 protection on May 10, 2006
(Bankr. W.D. Pa. Case No. 06-22110). Eric A. Schaffer, Esq., at
Reed Smith LLP, represents the Debtor in its restructuring
efforts. No Official Committee of Unsecured Creditors has been
appointed in the Debtor's bankruptcy proceedings. When the Debtor
filed for protection from its creditors, it estimated assets and
debts of more than $100 million.
RENT-A-CENTER: S&P Rates Proposed $725 Mil. Credit Facility at BB+
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' rating to
Rent-A-Center Inc.'s proposed $725 million credit facility.
Standard & Poor's also assigned a recovery rating of '4' to the
facility, indicating the expectation for marginal (20%-50%)
recovery of principal in the event of a payment default. The
proposed loan comprises:
* a $400 million revolving credit facility due in 2011;
* a $200 million term loan A due in 2011; and
* a $125 million term loan B due in 2012.
The corporate credit rating on Rent-A-Center Inc. is 'BB+' with a
negative outlook.
Plano, Texas-based Rent-A-Center is the largest operator in the
retail rent-to-own industry, with a market share of about 40%
based on store count, compared with about 10% for both Aaron Rents
Inc. and Rent-Way Inc.
"The ratings on Rent-A-Center reflect the challenges of improving
operations for a mature store base and the vulnerability of its
customer to changes in disposable income," said Standard & Poor's
credit analyst Robert Lichtenstein.
The borrower on the loan is Rent-A-Center Inc. The loan is
guaranteed by each of the borrower's direct and indirect existing
domestic subsidiaries (excluding the existing insurance and
litigation subsidiaries). The facility is secured by a perfected
first-priority security interest in substantially all the tangible
and intangible assets and all of the capital stock of the borrower
and of each of the direct and indirect domestic subsidiaries of
borrower and 65% of the capital stock of the first-tier foreign
subsidiaries.
The term loan A will have quarterly amortizations of:
* $2.5 million through June 30, 2009;
* $5 million through June 30, 2010; and
* $37.5 million through June 30, 2011.
The term loan B will amortize quarterly at 1% per year on a
quarterly basis, with the balance due quarterly on the final year.
The facility has a 50% excess cash flow sweep provision.
SAMSONITE CORPORATION: Posts $400K Net Loss in 2006 First Quarter
-----------------------------------------------------------------
Samsonite Corporation reported revenue of $241 million, operating
income of $19.1 million and net loss to common stockholders of
$400,000, for the quarter ended April 30, 2006. These results
compare to revenue of $232.4 million, operating income of $22.2
million and net income to common stockholders of $3.9 million for
the first quarter of the prior year.
Adjusted EBITDA, a measure of core business cash flow, was $29.2
million for the first quarter compared to $29.1 million for the
first quarter of the prior year.
Fluctuations in the U.S. dollar translation rate for the Company's
European operations caused an unfavorable impact on the Company's
consolidated operating results for the quarter ended April 30,
2006 when compared to the prior year quarter. Using the fiscal
2006 first quarter translation rate to translate fiscal 2007
results (constant currency), sales would have increased by 8% and
Adjusted EBITDA would have increased by $1.7 million.
Chief Executive Officer, Marcello Bottoli, stated: "The Company
had a strong first quarter showing sales growth, improving margins
and good progress in working capital efficiency in every region of
operations. I am pleased with the progress we are making in
implementing our strategic plan."
Richard Wiley, Chief Financial Officer, commented: "The improved
operating performance is the result of increased sales in every
region and improved gross profit margins. We continue to make
good progress in net working capital reduction that, together with
the operating performance improvement, has resulted in our strong
liquidity position at the end of the quarter."
Samsonite Corporation (OTCBB: SAMC.OB) -- 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.
* * *
As reported in the Troubled Company Reporter on May 26, 2006,
Standard & Poor's Ratings Services raised its ratings on Samsonite
Corp. due to the company's continued improvement in operating
performance and its improved financial risk profile. The
corporate credit rating was raised to 'BB-' from 'B+'. The rating
outlook is stable.
SECUNDA INT'L: Launches $125 Million Floating Rate Notes Offering
-----------------------------------------------------------------
Secunda International Limited commenced a cash tender offer for
any and all of its outstanding $125,000,000 aggregate principal
amount of Senior Secured Floating Rate Notes due 2012 (CUSIP No.
81370FAB4).
The total consideration to be paid for each $1,000 principal
amount of Notes validly tendered and accepted in the offer,
including the consent payment referred to below, will be based on
a fixed spread of 50 basis points over the yield on the price
determination date of the 2.375% U.S. Treasury Note due Aug. 31,
2006. In order to receive the total consideration, holders are
required to tender their Notes prior to 5 p.m., New York City
time, on July 12, 2006, unless extended. The Price Determination
Date will be 2 p.m., New York City time, on July 14, 2006.
Holders who validly tender their Notes by the Consent Time will
receive the total consideration on the Initial Settlement Date,
which will be after the Consent Time but no earlier than July 20,
2006, as specified by the Company.
In connection with the tender offer, the Company is soliciting
consents to proposed amendments to the indenture governing the
Notes, which would eliminate substantially all of the restrictive
covenants and certain events of default in the indenture. The
Company is offering to make a consent payment of $30.00 per $1,000
principal amount of Notes to holders who validly tender their
Notes and deliver their consents on or prior to the Consent Time.
Holders may not tender their Notes without delivering consents,
and may not deliver consents without tendering their Notes.
The tender offer is scheduled to expire at 5 p.m., New York City
time, on July 28, 2006, unless extended or earlier terminated.
However, no consent payments will be made in respect of Notes
tendered after the Consent Time. Holders who tender their Notes
after the Consent Time but on or prior to the expiration date will
receive the total consideration referred to above per $1,000
principal amount of Notes validly tendered and not withdrawn, less
$30 per $1,000 principal amount. Tenders of Notes made prior to
the Consent Time may not be withdrawn and consents may not be
revoked after the Consent Time. The supplemental indenture to
effect the proposed amendments to the indenture governing the
notes will not be operative, however, until at least a majority of
the aggregate outstanding principal amount of the Notes whose
holders have delivered consents have been accepted for payment.
The tender offer and consent solicitation are subject to the
satisfaction of certain conditions, including the receipt of
tenders from holders of a majority in principal amount of the
outstanding Notes, entering into a new credit facility or another
financing vehicle that provides the Company with sufficient cash
to fund the tender offer and consent solicitation, the successful
pricing (as determined in the Company's sole discretion) of the
initial public offering of the Company's common shares in Canada,
and satisfaction of customary conditions.
The complete terms and conditions of the tender offer and consent
solicitation are described in the Offer to Purchase and Consent
Solicitation Statement of the Company dated June 27, 2006, copies
of which may be obtained by contacting the information agent for
the offer:
D.F. King and Co., Inc.
Telephone (212) 269-5550 (collect)
Toll Free (800) 758-5378
Banc of America Securities LLC is the exclusive dealer manager and
solicitation agent for the tender offer and consent solicitation.
Additional information concerning the tender offer and consent
solicitation may be obtained by contacting:
Banc of America Securities LLC
High Yield Special Products
Telephone (212) 847-5836 (collect)
Toll Free (888) 292-0070
Headquartered in Nova Scotia, Secunda International Limited --
http://www.secunda.com/-- is a wholly owned Canadian vessel
owner/ operator with locations in the UK and Barbados. Secunda is
the leading supplier of marine support services to oil and gas
companies in one of the world's harshest marine environments - off
the East Coast of Canada.
SECUNDA INTERNATIONAL: S&P Holds B- Corp. Credit Rating on Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services held its 'B-' long-term
corporate credit and senior secured debt ratings on offshore
support vessel provider Secunda International Inc. on CreditWatch
with positive implications, where they were placed Sept. 29, 2005.
The continued CreditWatch listing reflects Secunda's
discontinuation of its IPO registration process with the U.S. SEC
and the company's filing of a preliminary offering document with
Canadian Securities Administrators, in which it states its plan to
sell common stock, through an IPO.
Nova Scotia-based Secunda concurrently discontinued its IPO
registration process with the U.S. SEC and filed with the Canadian
Securities Administrators a preliminary offering document, stating
that the company plans to sell common stock through an IPO. Net
proceeds will be used to:
* fund the acquisition of an additional vessel;
* repay existing indebtedness; and
* for general corporate purposes.
The funds from the offering should provide the company with
additional liquidity as well as the added flexibility from the
company's access to the equity market. Furthermore, the equity
offering should provide Secunda with an ability to expand and
improve its fleet at the present time without any incremental
negative effects on its financial profile. The preliminary
prospectus filed in June 2006 included Secunda's financial results
for the quarter ended March 31, 2006, with the company reporting
an improvement in both revenues and internal cash flow generation
compared with the previous year.
"We expect Secunda will continue to improve its financial profile
through 2006, as costs related to its transition of vessels into
international markets incurred in 2005 will not be repeated and
market conditions for Secunda's services remain strong, resulting
in higher-than-historical utilization and day rates," said
Standard & Poor's credit analyst Jamie Koutsoukis.
The extent of any positive rating action will depend on Standard &
Poor's analysis of Secunda's planned uses of the proceeds and
amount of debt reduction the company will achieve as a result of
the offering. Standard & Poor's will resolve the CreditWatch
action after further consultation with Secunda's management and
the successful completion of the IPO.
SEQUIAM CORP: March 31 Balance Sheet Upside-Down by $5.8 Million
----------------------------------------------------------------
Sequiam Corporation filed its financial statements for the quarter
ended March 31, 2006, with the Securities and Exchange Commission.
The Company reported a $1,058,272 net loss on $146,939 of revenues
for the three months ended March 31, 2006, versus a $1,260,777 net
loss on $128,855 of revenues for the three months ended March 31,
2005.
At March 31, 2006, the Company's balance sheet showed $3,022,284
in total assets and $8,835,188 in total liabilities resulting in a
stockholders' deficit of $5,812,904.
A full-text copy of the Company's financial statements for the
quarter ended March 31, 2006 is available for free at:
http://ResearchArchives.com/t/s?c52
Going Concern Doubt
Tedder, James, Worden & Associates, P.A., expressed substantial
doubt about Sequiam Corp.'s ability to continue as a going concern
after it audited the Company's financial statements for the years
ended Dec. 31, 2005 and 2004. The auditing firm pointed to the
Company's recurring losses from operations, its working capital
deficit and its shareholders' deficiency. At March 31, 2006, the
Company reported a working capital deficit of $3,848,650 and an
accumulated deficit of $18,938,000.
About Sequiam
Headquartered in Orlando, Florida, Sequiam Corporation, through
its wholly owned subsidiaries, primarily develops, markets, and
supports a portfolio of biometric fingerprint unlocking devices
that enable users to gain access using their personal identity.
The Company also develops, markets and supports Internet and print
enterprise-wide software products that enable users to acquire,
manage, personalize, and present information. In addition, the
Company provides application service provider hosting of internet-
enabled solutions, internet service provider services including
internet access and hosting, consulting, application integration,
custom web development and software development services.
SHACKLETON RE: S&P Rates Proposed $175 Million Term Loans at BB
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' senior
secured debt rating to Shackleton Re Ltd.'s proposed $125 million
Tranche A term loan and $50 million Tranche B term loan.
Standard & Poor's also assigned its 'BB+' senior secured debt
rating to Shackleton's proposed $125 million Tranche C term loan.
Shackleton is a special-purpose Cayman Islands exempted company
licensed as a restricted Class B insurer in the Cayman Islands.
"The ratings are based on the modeled probability of attachment,"
said Standard & Poor's credit analyst Gary Martucci. "Risk
Management Solutions Inc.'s RiskLink Interim Model was used to
determine the probability of attachment of each tranche."
The reinsurance agreement, which is effectively supported by the
proceeds from the issuance of the loans, will provide Endurance
Specialty Insurance Ltd. (A-/Positive/--) with a source of index-
based catastrophe coverage for hurricane and earthquake events in
the covered area. For a hurricane event, the covered area is the
East and gulf coasts, along with the adjacent inland states. For
an earthquake event, the covered area is California. Endurance
and Shackleton will enter into a reinsurance agreement that will
establish the index-based coverage.
After Shackleton borrows under the loans, it will invest the
proceeds in high-quality permitted investments within collateral
accounts. There will be a separate collateral account for each
loan tranche. Shackleton will swap the total return of each
collateral account with Goldman Sachs International, which has
been guaranteed Goldman Sachs Group Inc. (A+/Positive/A-1), in
exchange for quarterly LIBOR-based payments minus a spread.
The premium received by Shackleton pursuant to the reinsurance
agreement -- combined with the payments received under the swap --
will be used to make the scheduled interest payments to the
lenders. If there is a covered event, assets will be sold from
the related collateral account with the proceeds being distributed
to Endurance. Principal on the loans will be paid at maturity
unless any covered event occurs.
Endurance will pay Shackleton an additional premium under the
reinsurance agreement that is intended to give Shackleton proceeds
to cover its up-front and ongoing expenses in connection with this
loan facility.
Standard & Poor's expects to affirm the ratings once the
transaction documents are received and reviewed and that there
will be no material changes to the modeled results as presented.
SILICON GRAPHICS: Has Final Access to $130 Million DIP Financing
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorizes Silicon Graphics, Inc., Silicon Graphics Federal, Inc.,
and Silicon Graphics World Trade Corporation to obtain senior
secured, superpriority, postpetition financing up to $130,000,000,
from Quadrangle Master, Watershed Technology, Encore Fund, Morgan
Stanley Senior Funding, Inc., as administrative agent, and Wells
Fargo Foothill, Inc., as collateral agent.
According to Judge Lifland, the DIP Loan Agreement, with the
modifications and agreements presented to the Court at the Final
Hearing and the modifications subsequently agreed to by the
Debtors, the DIP Lenders and the Creditors' Committee, is approved
on a final basis.
The DIP Loan Agreement and the other DIP Loan Documents --
including any agreements with respect to foreign exchange hedging
obligations as is customary in the ordinary course of business as
authorized in the DIP Loan -- constitute and are deemed to be the
legal, valid and binding obligations of the Debtors.
The $130,000,000 DIP Facility matures on November 10, 2006.
Objections that have not been withdrawn or resolved are overruled,
Judge Lifland says.
A full-text copy of the Final DIP Order is available for free at:
http://researcharchives.com/t/s?c67
Prior to the Court's order, Stephen A. Youngman, Esq., at Weil,
Gotshal & Manges LLP, in New York, asserts that contrary to the
Objectors' assertions, approval of the DIP Financing Motion does
not (i) lock in the terms of a plan or circumvent any rights under
the Bankruptcy Code, (ii) strip creditors of the plan protections
provided by the Bankruptcy Code, and (iii) constitute a "yes"
ruling by the Court on issues of best interests and absolute
priority at this time.
Mr. Youngman argues that the $130,000,000 postpetition financing
merits approval because the Debtors:
-- are heavily leveraged with outstanding secured debt of
$268,000,000;
-- have exhausted all available borrowings under their
Prepetition Credit Agreement; and
-- have pledged substantially all of their assets or
$267,000,000 to secure obligations to their Prepetition
Lenders and the holders of the Senior Secured Notes.
Mr. Youngman notes that the Debtors' Plan of Reorganization is the
culmination of the Debtors' efforts to explore all alternatives
for their restructuring. Although the $130,000,000 DIP Facility
is a critical part of the Debtors' restructuring efforts and the
next step toward achieving confirmation of their Plan, it is
simply false to suggest that approval of the DIP Financing
Arrangement is tantamount to approval of the Plan.
Mr. Youngman maintains that any argument concerning whether the
Plan is confirmable should be addressed in connection with
confirmation of the Plan.
The request filed by Lampe Conway & Co., LLC to modify the Final
DIP Order should also be denied because there is no provision in
the Order regarding marshaling and the Debtors have not waived any
arguments in that respect, if any even exist, Mr. Youngman
contends.
Ad Hoc Committee Supports Debtors' Request
Representing the ad hoc committee of certain holders of 6.50%
Senior Secured Convertible Notes, Allan S. Brilliant, Esq., at
Goodwin Procter LLP, in New York, relates that the terms of the
DIP financing are necessary, appropriate and proposed in good
faith.
Mr. Brilliant contends Lampe Conway's argument regarding the
marshaling provision in the Final DIP Order fails because (i)
Lampe Conway lacks standing to challenge any agreement between the
senior secured bank lenders or DIP Lenders and the Senior Secured
Noteholders regarding allocation of value among their common
collateral, (ii) the Intercreditor Agreement is inapplicable to
the relationship between the Senior Secured Noteholders and the
DIP Lenders, and (iii) even if the Intercreditor Agreement were
applicable to the so-called "waiver" contained in Section 6(h), it
does not contradict the language of the Final DIP Order.
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. 8; Bankruptcy Creditors' Service, Inc., 215/945-7000)
SILICON GRAPHICS: Enters Into Global Settlement Agreement
---------------------------------------------------------
On June 26, 2006, Silicon Graphics, Inc., disclosed that it
entered into a letter agreement on June 23 for the global
settlement of certain claims and disputes.
Gary T. Holtzer, Esq., at Weil, Gotshal & Manges LLP, in New
York, informs the U.S. Bankruptcy Court for the Southern District
of New York that:
(i) the Official Committee of Unsecured Creditors;
(ii) Quadrangle Master Funding Ltd., Watershed Technology
Holdings, LLC and Encore Fund, L.P., as lenders under the
Debtors' DIP Facility;
(iii) the holders of Senior Secured Convertible Notes party to
the Restructuring Agreement with Silicon Graphics, Inc.,
dated May 7, 2006 -- the 6.50% Plan Sponsors; and
(iv) Lampe Conway & Co., LLC,
support the Global Settlement.
Mr. Holtzer says the Global Settlement will be implemented through
confirmation of a plan of reorganization in accordance with a term
sheet.
A full-text copy of the Term Sheet is available for free at:
http://researcharchives.com/t/s?c5c
Settlement Terms
Under the Global Settlement, the Debtors, the Creditors'
Committee, the DIP Lenders, the 6.50% Plan Sponsors, and Lampe
Conway agree, among other things, that they will seek prompt
confirmation and consummation of the Plan. The Parties further
agree to take other actions and execute other documents necessary
to consummate the Plan, subject to the terms and conditions of the
Plan and related documents, including:
* the Restructuring Agreement filed with the Bankruptcy Court
on May 9, 2006;
* the Rights Offering Common Stock Purchase Agreement; and
* the Lampe Conway Rights Offering Common Stock Purchase
Agreement.
With respect the Restructuring Agreement, the Debtors and the
6.50% Plan Sponsors agree that the Agreement Termination Event as
to filing the Disclosure Statement has been extended to June 30,
2006, and the Agreement Termination Event as to Bankruptcy Court
approval of the Disclosure Statement has been extended to Aug. 1,
2006. The Debtors will not terminate the Restructuring Agreement
without Bankruptcy Court approval.
The Parties agree that they will not object to the Plan or take
any action directly or indirectly inconsistent with the terms and
conditions of the Global Settlement or that would unreasonably
delay confirmation or consummation of the Plan or approval of the
disclosure statement for the Plan.
The Creditors' Committee will, and the 6.50% Plan Sponsors will
use their reasonable best efforts to cause the Ad Hoc Committee of
Senior Secured Note holders to, include in the solicitation
materials accompanying the disclosure statement for the Plan,
letters supporting the Plan. Subject to prior receipt of a
disclosure statement approved by the Bankruptcy Court in respect
of the Plan, the 6.50% Plan Sponsors and Lampe Conway agree to
vote in favor of the Plan subject to the terms and conditions of
the Global Settlement, the Plan, and the Plan Documents. The
individual members of the Creditors' Committee are not obligated
to vote for, or against, the Plan.
The Ad Hoc Committee will provide a copy of the solicitation
letters to the other Parties prior to the letters' incorporation
into any solicitation package for reasonable comment.
Mr. Holtzer notes that the other terms of the Global Settlement
are:
(a) the Settlement and the rights and obligations of the
Parties under the Settlement will:
-- terminate if all of the Parties consent in writing to
the termination, or the Plan has not been confirmed by
October 31, 2006; or
-- be terminable by any non-breaching Party upon the
material breach of the Agreement, the Plan, or the Plan
Documents by any other Party;
(b) The Debtors' motion to determine the classification of
certain claims for purposes of their Joint Plan of
Reorganization is settled. In the event that the Plan is
not confirmed or the Settlement is terminated, the Parties
reserve all rights with respect to the Motion;
(c) The Creditors' Committee will withdraw their request to
transfer the venue of the Debtors' cases, without
prejudice;
(d) The Creditors' Committee and Lampe Conway withdraw their
objections to the Debtors' motion to approve the DIP
Facility;
(e) The Plan will not be modified or amended in any materially
adverse way to Lampe Conway or the holders of the Debtors'
Convertible Subordinated Debentures, which bear interest
at the rate of 6.125% per annum -- the Cray Unsecured
Debentures -- without the prior written consent of Lampe
Conway and the Creditors' Committee;
(f) The Debtors, with the prior consent of the 6.50% Plan
Sponsors, and upon notice to the Creditors' Committee and
Lampe Conway, may make non-material and non-adverse
changes to the Plan; and
(g) In the event of any modification or amendment to the Plan
to provide for a "permitted transaction," the Debtors will
reimburse the reasonable fees and expenses of legal and
financial advisors to Lampe Conway up to an additional
$100,000 for costs incurred in connection with the review
and documentation of the modification or amendment.
A "Permitted Transaction" may refer to the sale or transfer of
non-core assets to a separate legal entity, or the dissolution of
legal entities; the sale or transfer of New Common Stock for cash
to an unaffiliated third party including any sale or transfer
resulting in a Change of Control; or the repurchase or redemption
of New Common Stock or Rights to be issued under the Plan, among
others.
According to Mr. Holtzer, the Settlement Terms, including the
Term Sheet, supersedes all prior negotiations with respect to the
Global Settlement Agreement. Nothing in Settlement will affect
the terms and conditions of the Restructuring Agreement, which
will remain unchanged except the Plan Term Sheet which has been
replaced.
Cray Unsecured Debentures
Lampe Conway, as the beneficial owner of not less than
$30,000,000 aggregate principal amount of Cray Unsecured
Debentures, agrees that before any transfer or sale of any Lampe
Conway Debentures become effective, the transferee must agree in
writing to be bound by the terms of the Global Settlement.
The Global Settlement will in no way preclude Lampe Conway from
acquiring additional Cray Unsecured Debentures. However, any
Cray Unsecured Debentures acquired will automatically be deemed to
be subject to the terms of the Global Settlement.
All information furnished to Lampe Conway will be furnished to
Lampe Conway's advisors only, and Lampe Conway's advisors will be
subject to the provisions of the existing protective order between
SGI and Lampe Conway.
Nothing in the Global Settlement amends, modifies, waives, limits,
impairs or restricts the rights and remedies of the DIP Lenders
under (i) the Postpetition Loan and Security Agreement, dated as
of May 8, 2006, by and among the DIP Lenders and the Debtors, (ii)
the DIP Facility, (iii) any documents or agreements entered into
in connection with the Interim DIP Loan Agreement or the DIP
Facility, or (iv) any order approving the documents.
Mr. Holtzer informs Judge Lifland that the Global Settlement is
not, and will not be, deemed to be a solicitation for votes in
favor of the Plan. No vote will be solicited until each Party
entitled to vote has received the disclosure statement approved by
the Bankruptcy Court.
A full-text copy of the Global Settlement Agreement is available
for free at http://researcharchives.com/t/s?c59
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. 8; Bankruptcy Creditors' Service, Inc., 215/945-7000)
SIX FLAGS: Fitch Puts Notes & Pref. Stock's Junk Ratings on Watch
-----------------------------------------------------------------
Fitch Ratings placed these ratings of Six Flags, Inc. on Rating
Watch Negative:
Six Flags Theme Parks, Inc.:
-- Issuer default rating 'B-'
-- Bank credit facility 'BB-/RR1'
Six Flags, Inc.:
-- Issuer default rating 'B-'
-- Senior unsecured notes 'CCC+/RR5'
-- Preferred stock 'CCC-/RR6'
Approximately $2.6 billion of debt (including $287.5 million of
preferred stock stated at liquidation value and treated as debt)
is affected by these actions.
On June 22, 2006, Six Flags announced that the company is seeking
amendments to its credit facility financial covenants and will be
exploring strategic options regarding six additional theme parks.
Fitch's rating action reflects the heightened credit risk
associated with Six Flags' anticipated need to amend its bank
covenants, in addition to the company's reduced operating cash
flow resulting from additional expenses and asset dispositions,
and negative operating trends.
Six Flags is seeking to amend primarily its leverage and fixed
charge bank covenants. At the operating entity, Six Flags is
currently required to maintain a leverage ratio of 3.25x through
the second quarter of 2006, 3.0x through year-end 2006, and 2.5x
thereafter. Six Flags is also required to maintain fixed charge
coverage of 1.0x through the second quarter of 2006, 1.05x through
year-end 2006, scaling up to 1.25x after 2007. These operating
company covenants ignore holding company debt, including all of
its existing senior unsecured debt. Six Flags' weak operating
performance in the near-term and its pressured credit metrics will
necessitate amendments to its tightening financial covenants.
Six Flags recently sold the Astroworld theme park receiving net
proceeds of approximately $70 million, and has also received
multiple bids for its two Oklahoma City parks. The proceeds from
such asset sales and net cash proceeds from future asset sales are
expected to be used to delever the balance sheet toward the
company's stated debt target of $1.6 billion.
Fitch expects that the loss of operating cash flow from asset
sales will be somewhat mitigated by the accompanied reduction in
debt. From an operational standpoint, attendance trends are
negative year-to-date, offset by an increase in per capita
spending. In implementing its strategy of attracting families to
its theme parks, Six Flags is planning to spend about $15 million
more in operating expenses, further impacting its cash flow and
related financial ratios in the near term.
Coverage ratios have been pressured with interest coverage of
1.7x, and operating EBITDA to the sum of interest expense and
capital expenditures of approximately 0.9x, for the last 12 months
ended March 31, 2006.
In addition, LTM cash from continuing operations is less than 0.4x
capital expenditures, which Fitch considers extremely weak given
the capital intensive nature of the business. Six Flags' leverage
in the LTM, as defined by debt to operating EBITDA and FFO
adjusted leverage, was 8.1x and 11.7x, respectively. The company
does not have significant near-term debt maturities until 2008.
However, Six Flags is required to repay its entire outstanding
term loan, currently $643.5 million, on Dec. 31, 2008, if its
preferred stock is outstanding at that time.
Rating concerns are balanced somewhat by the company's leading
position as the largest regional theme park operator, with strong
brand awareness, broad geographic presence, and solid competitive
position due to the high barriers to entry and market leadership,
as well as significant real estate ownership underlying many of
its 29 parks.
The company has announced plans to:
* sell several theme parks;
* cut outlays for new rides;
* focus aggressively on the family market;
* increase marketing partnerships; and
* improve margins.
Successful execution of new management's stated strategy will be
a major consideration in any future positive ratings momentum.
However, Fitch believes that the significant equity ownership
positions of larger hedge funds could have some negative impact on
bondholders as it relates to influencing fiscal policy and
shareholder initiatives.
SORELL INC: Brings In $1 Million from New Securities Purchase Pact
------------------------------------------------------------------
Sorell Inc. realized gross proceeds of $1,000,000 through a
Securities Purchase Agreement with 23 accredited investors. Under
the agreement, the Company sold:
a) $1,000,000 principal amount of senior convertible notes;
and
b) warrants to purchase up to 2,000,000 shares of the
Company's common stock.
The sale of the Notes and Warrants was exempt from registration
requirements pursuant to Section 4(2) of the Securities Act of
1933, as amended, and Rule 506.
The Notes bear interest at 8% per annum payable quarterly, mature
one year from the date of issuance and are convertible into shares
of the Company's common stock at the investors' option at $0.50
per share, subject to adjustment.
If after the subscription date the Company completes a financing
transaction that results in gross proceeds of at least $5,000,000,
the Company is required to deliver written notice to the holders
of the Notes. The holders may require the Company to redeem the
Notes.
If at any time after the subscription date the Company completes a
financing transaction that results in gross proceeds of at least
$5,000,000 and the holders of the Notes do not require the Company
to redeem the Notes, the Company has the right to require the
holders to convert the Notes into common stock at the then
applicable conversion rate.
The Warrants are exercisable at a price of $0.75 per share until
five years from the date of issuance. The investors may exercise
the warrants on a cashless basis if the shares of common stock
underlying the warrants are not registered for sale pursuant to an
effective registration statement.
The Company may call the outstanding Warrants if:
a) the weighted average price per share of common stock has
been greater than $2.50 for a period of 15 consecutive
trading days immediately prior to the date of delivery of
a call notice;
b) the daily trading volume of the common stock has been
greater than 50,000 shares on each trading day during the
Call Notice Period;
c) trading in the common stock has not been suspended; and
d) the Company is in material compliance with the terms and
conditions of the Warrants and the other transaction
documents.
New York Global Securities, Inc. and its agents acted as placement
agent in connection with the sale of the Notes and related
Warrants. The firm was paid $120,000, or 12% of the gross
proceeds from the closing. It will also be issued placement agent
warrants to purchase 400,000 shares of the Company's common stock
exercisable at $0.50 per share until two years after the closing.
Full-text copies of the regulatory filing are available for free
at:
Securities Purchase
Agreement http://researcharchives.com/t/s?c54
Registration Rights
Agreement http://researcharchives.com/t/s?c55
About Sorell Inc
Sorell, Inc., fka NetMeasure Technology Inc. (OTCBB: SLII)
develops, manufactures, sells consumer electronics, which includes
mobile phones, MP3 players, MP3 CD players, portable media
players, mobile cameras and other devices. S-Cam Co., Ltd., based
in Korea, is an operating subsidiary of Sorell and a divestiture
from Samsung Electronics.
Going Concern Doubt
As reported in the Troubled Company Reporter on May 16, 2006,
SF Partnership, LLP, Chartered Accountants, in Toronto, Canada,
raised substantial doubt about Sorell, Inc., fka NetMeasure
Technology Inc.'s ability to continue as a going concern after
auditing the Company's consolidated financial statements for the
years ended Dec. 31, 2005, and 2004. The auditor pointed to the
Company's recurring losses.
STATER BROS: March 26 Balance Sheet Upside-Down by $22.6 Million
----------------------------------------------------------------
Stater Brothers Holdings Inc. has filed its financial report for
the quarterly period ended March 26, 2006 with the Securities and
Exchange Commission.
Stater Brothers' balance sheet at March 26, 2006 showed a
$22,637,000 total stockholder's deficit resulting from
$1,030,871,000 in total assets and $1,053,508,000 in total
liabilities.
The Company's balance sheet also showed $511,631,000 in total
current assets and $255,881,000 in total current liabilities.
For the quarterly period ended March 26, 2006, the Company
reported $6,176,000 of net income from total sales of
$863,545,000.
A full-text copy of the Company's financial report for the quarter
ended March 26, 2006 is available for free at:
http://researcharchives.com/t/s?c39
Based in Colton, California, Stater Brothers Holdings Inc.
-- http://www.staterbros.com/-- operates more than 160 full
service Stater Bros. Markets in the United States. The grocery
chain also owns and operates milk and juice processor Santee
Dairies aka Heartland Farms. Founded in 1936 by twin brothers Leo
and Cleo Stater, Stater Bros. is owned by La Cadena Investments, a
general partnership consisting of Stater Bros. chairman and CEO
Jack Brown.
* * *
Stater Brothers Holdings' long-term local and foreign issuer
credits carry Standard & Poor's B+ ratings. The ratings were
placed on June 20, 2006 with a stable outlook.
On Oct. 25, 1999, Moody's assigned the Company's long-term
corporate family rating at B1, unsecured debt rating at B2 and
subordinated debt rating at B3.
THERMADYNE HOLDINGS: Amends Agreements With GECC & Credit Suisse
----------------------------------------------------------------
Thermadyne Holdings Corporation, Thermadyne Industries, Inc.,
their domestic subsidiaries and certain of their foreign
subsidiaries amended on June 20, 2006:
-- the Second Amended and Restated Credit Agreement with
General Electric Capital Corporation as Agent and Lender,
and
-- the Second Lien Credit Agreement with Credit Suisse as
Administrative Agent and Collateral Agent
to extend the time for the Company to provide its annual audited
financial statements for the period ended Dec. 31, 2005, and
unaudited financial statements for the month ended March 31, 2006,
until July 15, 2006.
Full-text copies of the Agreements are available for free at:
GECC Amendment http://ResearchArchives.com/t/s?c70
Credit Suisse Amendment http://ResearchArchives.com/t/s?c71
Indenture Trustee Notice
The Company received on June 20, 2006, a notice from the Trustee
under the indenture for the Company's 9-1/4% Senior Subordinated
Notes Due 2014.
The notice said that if the Company does not file these financial
reports with the Securities and Exchange Commission on or before
July 19, 2006, unless that date is further extended, the failure
to file would become an event of default under the indenture.
The Company intends to file its reports prior to July 19, 2006.
Based in St. Louis, Missouri, Thermadyne Holdings Corporation
(Pink Sheets: THMD) -- http://www.Thermadyne.com/-- is a global
marketer of cutting and welding products and accessories under a
variety of brand names including Victor(R), Tweco(R), Arcair(R),
Thermal Dynamics(R), Thermal Arc(R), Stoody(R), and Cigweld(R).
* * *
As reported in the Troubled Company Reporter on March 21, 2006,
Moody's Investors Service placed Thermadyne Holdings Corporation's
Caa1 rating on $175 million 9.25% senior subordinated notes, due
2014, rated; and B2 Corporate Family Rating on review for possible
downgrade.
As reported in the Troubled Company Reporter on April 27, 2005,
Standard & Poor's Ratings Services lowered its corporate credit
rating on Thermadyne Holdings Corp. to 'B-' from 'B+', and
subordinated debt rating to 'CCC' from 'B-'. S&P assigned a
negative outlook at that time.
TIER TECHNOLOGIES: Ronald Rossetti Replaces James Weaver as CEO
---------------------------------------------------------------
James R. Weaver resigned as Chairman, Chief Executive Officer and
President of Tier Technologies, Inc., following a recommendation
by the Audit Committee of the Tier's Board of Directors that Mr.
Weaver's employment with the Company be terminated.
Ronald L. Rossetti, a member of the Company's Board of Directors
and Audit Committee, will serve as interim Chief Executive Officer
and Chairman. Samuel Cabot will replace Mr. Rossetti's post on
the Audit Committee.
Pursuant to a Separation Agreement, the Company has agreed to pay
to Mr. Weaver a total of $975,000 of severance. The Company is
also obligated to provide Mr. Weaver 18 months of COBRA-covered
benefits, as well as pay the premiums on other non-COBRA covered
insurance benefits up to $20,000. The Separation Agreement also
included a change of control clause, whereby Mr. Weaver would
receive $175,000 to $350,000 if a pre-defined reorganization event
occurs within two years. Finally, the Separation Agreement
accelerates and immediately vests all 330,000 of Mr. Weaver's
unvested options. The Separation Agreement provides that these
options and Mr. Weaver's 563,039 previously vested options will
expire the earlier of their original ten-year terms or on either
December 31, 2006 or May 31, 2008 based upon the options' exercise
price.
About Tier
Headquartered in Reston, Virginia, Tier Technologies, Inc. --
http://www.tier.com/-- provides transaction processing and
packaged software and systems integration services to more than
2,200 federal, state, and local governments, educational
institutions, utilities and commercial clients in the U.S. and
abroad. The Company, through its subsidiary, Official Payments
Corp. -- http://www.officialpayments.com/-- designs, installs and
maintains cutting-edge public sector software systems, and
delivers fast, secure and convenient financial transaction
processing solutions.
Defaults
As reported in the Troubled Company Reporter on March 21, 2006,
the expected restatement, the delayed availability of Tier
Technologies, Inc.'s financial statements for the fiscal year
ended Sept. 30, 2005, and the anticipated loss for the quarter
ended Sept. 30, 2005, constituted events of default under the
revolving credit agreement between the Company and its lender,
City National Bank. In addition, the Company incurred similar
events of default for the quarter ended Dec. 31, 2005.
TRANSMONTAIGNE INC: Inks Merger Agreement with Morgan Stanley
-------------------------------------------------------------
TransMontaigne Inc. has entered into a definitive merger agreement
with Morgan Stanley Capital Group Inc., pursuant to which all the
issued and outstanding shares of common stock of TransMontaigne,
including TransMontaigne's outstanding Series B Convertible
Preferred Stock, on an as-converted basis, will be exchanged for
$11.35 per share in cash.
The merger has been approved by TransMontaigne's Board of
Directors. Upon completion of the merger, TransMontaigne's common
stock will no longer be traded on the New York Stock Exchange.
Prior to entering into the definitive agreement with Morgan
Staley, TransMontaigne terminated the merger agreement it
previously entered into with SemGroup, L.P. and its affiliates, in
accordance with its terms.
Closing of the merger is subject to (i) the approval of a majority
of the outstanding shares of common stock and Series B Convertible
Preferred Stock of TransMontaigne, on an as-converted basis,
voting as a single class at a special meeting of TransMontaigne's
stockholders and (ii) the receipt of customary regulatory
approvals, including the expiration or termination of the
applicable waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976.
TransMontaigne will solicit stockholder approval by means of a
proxy statement, which will be mailed to all TransMontaigne
stockholders upon completion of the required Securities and
Exchange Commission filing and review process. TransMontaigne
currently expects the merger to close between mid-August and mid-
September 2006.
Prior to closing of the merger, TransMontaigne will make provision
to (i) either redeem or defease TransMontaigne's 91/8% Series B
Senior Subordinated Notes pursuant to the terms and conditions
thereof, or (ii) amend the terms and conditions of the Notes to
permit them to remain outstanding following the closing of the
merger.
TransMontaigne Partners L.P. (NYSE: TLP) will remain a public
company, subject to the periodic filing requirements with the
Securities and Exchange Commission, and its common units will
continue to be listed and traded on the New York Stock Exchange.
UBS Investment Bank acted as financial advisor and provided a
fairness opinion to TransMontaigne. Morrison & Foerster LLP served
as legal counsel to TransMontaigne, and Wachtell, Lipton, Rosen &
Katz served as legal counsel to Morgan Stanley.
About TransMontaigne Inc.
Headquartered in Denver, Colorado, TransMontaigne Inc. --
http://www.transmontaigne.com/-- is a refined petroleum products
marketing and distribution company with operations in the United
States, primarily in the Gulf Coast, Midwest and East Coast
regions. The Company's principal activities consist of (i)
terminal, pipeline, and tug and barge operations, (ii) marketing
and distribution, (iii) supply chain management services and (iv)
managing the activities of TransMontaigne Partners L.P. (NYSE:
TLP). The Company's customers include refiners, wholesalers,
distributors, marketers, and industrial and commercial end-users
of refined petroleum products.
* * *
On March 28, 2006, Standard & Poor's placed TransMontaigne's long-
term local and foreign issuer credit ratings at B+.
In May 2003, Moody's assigned the Company's long-term corporate
family rating at B1 and senior subordinate debt rating at B3 with
a negative outlook.
TRIAD WIRELESS: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: Triad Wireless Group, Inc.
1 Kimberly Road, Suite 101
East Brunswick, New Jersey 08816
Bankruptcy Case No.: 06-15719
Chapter 11 Petition Date: June 23, 2006
Court: District of New Jersey (Newark)
Judge: Rosemary Gambardella
Debtor's Counsel: Jeffrey A. Cooper, Esq.
Carella, Bryne, Bain, Gilfillan, Cecchi,
Stewart & Olstein
5 Becker Farm Road
Roseland, New Jersey 07068-1735
Tel: (973) 994-1700
Fax: (973) 994-1744
Estimated Assets: $100,000 to $500,000
Estimated Debts: $1 Million to $10 Million
The Debtor filed a partial list of its unsecured creditors showing
only Admit One at 1412 Broadway, Suite 1808 in New York with a
claim of $2,900.
TRIPATH TECH: March 31 Balance Sheet Upside-Down by $4.7 Million
----------------------------------------------------------------
Tripath Technology Inc. has filed its financial statements on Form
10-Q with the Securities and Exchange Commission.
Tripath Technology's balance sheet at March 31, 2006 showed
total stockholders' deficit of $4,788,000 resulting from
$10,598,000 in total assets and $15,386,000 in total liabilities.
The Company's balance sheet also showed strained liquidity with
$9,698,000 in total current assets and $14,831,000 in total
current liabilities.
For the three months ended March 31, 2006, the Company reported a
net loss of $4,527,000 from $3,501,000 in revenues.
A full-text copy of Tripath Technology's financial report for the
quarter ended March 31, 2006 is available for free at:
http://researcharchives.com/t/s?c44
About Tripath
Headquartered in San Jose, California, Tripath Technology Inc. --
http://www.tripath.com/-- is a fabless semiconductor company
which provides power amplification to the Flat Panel Television,
Home Theater, Automotive Audio and Consumer and PC Convergence
markets. Tripath owns the patented technology called Digital
Power Processing. Tripath markets audio amplifiers with DPP(R)
under the brand name Class-T(R). Tripath's current customers
include Alcatel, Alpine, Hitachi, JVC, Samsung, Sanyo, Sharp, Sony
and Toshiba.
Going Concern Doubt
As reported in the Troubled Company Reporter on Dec. 15, 2005,
Stonefield Josephson, Inc., expressed substantial doubt about
Tripath Technology Inc.'s ability to continue as a going concern
after it audited the Company's financial statements for the year
ended Sept. 30, 2005 and 2004. The auditing firm pointed to the
Company's recurring operating losses and accumulated deficit.
UNITY VIRGINIA: Can Use Lender's Cash Collateral
------------------------------------------------
The Honorable Harlin DeWayne Hale of the U.S. Bankruptcy Court for
the Northern District of Texas authorized Unity Virginia Holdings
LLC and its debtor-affiliates to use cash collateral securing
repayment of their obligations to their secured creditors,
PlainsCapital Bank and Prospect Energy Corporation.
The Debtors are authorized to use Cash Collateral for the specific
purposes and in the specific amounts identified in a court-
approved budget. A copy of this budget is available for free
at http://researcharchives.com/t/s?c53
Secured Prepetition Obligations
PlainsCapital holds approximately $3.3 million in aggregate claims
against the Debtor as of May 10, 2006, on account of a January 31,
2005 Revolving Credit and Term Loan Agreement. PCB's claims are
secured by properly perfected, first priority liens on and
security interests in substantially all of the Debtors' real and
personal properties.
Prospect Energy asserts valid, enforceable and allowable claims
against the Debtors of approximately $3.5 million as of the
petition date. Prospect's prepetition liens on and security
interests in the Prepetition Collateral are junior in priority to
PlainsCapital's first priority liens and security interests in the
Prepetition Collateral. The Prospect Claims are subordinated in
all respects to the prior payment in full of the PCB Claims.
Adequate Protection
As adequate protection of the Secured Creditors' respective
interests in the Cash Collateral and the Prepetition Collateral
securing their secured claims, in accordance with section 361 and
363(c)(2) and (e) of the Bankruptcy Code. PlainsCapital and
Prospect are granted continuing valid and perfected replacement
like-kind liens on and security interests to the extent of any
diminution in the value of their interests in the cash collateral.
The Debtors are also required to maintain insurance for the
secured lenders' collateral and, at PlainsCapital's request, are
required to deliver to the secured creditors evidence of the
maintenance of the insurance.
Superpriority Status
If the provided protection is not enough to adequately protect
against a diminution in the value of the secured portion of
PlainsCapital's claim, PlainsCapital is granted a superpriority
administrative expense claim. The superpriority claim will be
junior in priority to the payment in full of all administrative
expense claims of professionals employed by the Debtors under
section 327 of the Bankruptcy Code.
Prospect's is also granted a superpriority administrative expense
claim to the extent the adequate protection is insufficient to
protect the diminution in the value of its collateral. However,
the superpriority claim will be junior in priority to the
superpriority administrative expense claim granted as adequate
protection to PCB and all administrative expense claims of
professionals.
Headquartered in Dallas, Texas, Unity Virginia Holdings LLC,
operates a coal mining and processing company. The company filed
for chapter 11 protection on May 10, 2006 (Bankr. N.D. Tex. Case
No. 06-31937). James C. Jarret, Esq., and Arnaldo N. Cavazos,
Jr., Esq., at Cavazos, Hendricks & Poirot, P.C., represent the
Debtor in its restructuring efforts. When the Debtor filed for
protection from its creditors, it estimated assets and debts
between $10 million and $50 million.
Four of the Debtor's affiliates, Glamorgan Coal Resources LLC,
Glamorgan Processing LLC, Glamorgan Properties LLC, and Glamorgan
Refuse LLC, filed for chapter 11 protection on May 12, 2006
(Bankr. N.D. Tex. Case Nos. 06-31953 through 06-31956). Another
affiliate, Glamorgan OPerations, LLC, filed for chapter 11
protection on May 17, 2006 (Bankr. N.D. Tex. Case No. 06-31995).
No Official Committee of Unsecured Creditors has been appointed in
the Debtors cases.
UNITY VIRGINIA: Files Schedules of Assets and Liabilities
---------------------------------------------------------
Unity Virginia Holdings LLC, and its debtor-affiliate Glamorgan
Coal Resources LLC, delivered to the U.S. Bankruptcy Court for the
Northern District of Texas their schedules of assets and
liabilities, disclosing:
Unity Virginia Holdings LLC
---------------------------
Name of Schedule Assets Liabilities
---------------- ------ -----------
A. Real Property
B. Personal Property $81,489
C. Property Claimed
as Exempt
D. Creditors Holding
Secured Claims $7,929,642
E. Creditors Holding
Unsecured Priority Claims
F. Creditors Holding $6,137,266
Unsecured Nonpriority
Claims
------- -----------
Total $81,489 $14,066,908
Glamorgan Coal Resources LLC
----------------------------
Name of Schedule Assets Liabilities
---------------- ------ -----------
A. Real Property
B. Personal Property $3,749,599
C. Property Claimed
as Exempt
D. Creditors Holding
Secured Claims $7,944,642
E. Creditors Holding
Unsecured Priority Claims $60,224
F. Creditors Holding $10,692,051
Unsecured Nonpriority
Claims
---------- -----------
Total $3,749,599 $18,696,917
About Unity Virginia
Headquartered in Dallas, Texas, Unity Virginia Holdings LLC,
operates a coal mining and processing company. The company filed
for chapter 11 protection on May 10, 2006 (Bankr. N.D. Tex. Case
No. 06-31937). James C. Jarret, Esq., and Arnaldo N. Cavazos,
Jr., Esq., at Cavazos, Hendricks & Poirot, P.C., represent the
Debtor in its restructuring efforts. When the Debtor filed for
protection from its creditors, it estimated assets and debts
between $10 million and $50 million.
Four of the Debtor's affiliates, Glamorgan Coal Resources LLC,
Glamorgan Processing LLC, Glamorgan Properties LLC, and Glamorgan
Refuse LLC, filed for chapter 11 protection on May 12, 2006
(Bankr. N.D. Tex. Case Nos. 06-31953 through 06-31956). Another
affiliate, Glamorgan OPerations, LLC, filed for chapter 11
protection on May 17, 2006 (Bankr. N.D. Tex. Case No. 06-31995).
No Official Committee of Unsecured Creditors has been appointed in
the Debtors cases.
UNIVERSAL COMMS: Sells Israeli Subsidiary Assets for $750,000
-------------------------------------------------------------
Universal Communications Systems, Inc. sold 100% of the
outstanding capital stock and all assets related to the large-
scale photo-voltaic solar power installation business of its
wholly owned Israeli subsidiary, T.O.U. Millennium Electric, Ltd.
to Ami Elazari. Mr. Elazari formerly owned Millennium.
The agreement transferred Millennium to Mr. Elazari for a sales
price of $750,000. This price is comprised of:
* $300,000 in cash,
* $50,000 in the form of 2.2 million shares of the Company's
common stock,
* $50,000 in the form of a non-interest bearing promissory
note due November 7, 2006 and
* $350,000 in the form of a non-exclusive worldwide license to
exploit Millennium's patents, for a period of nine years.
The promissory note is payable at the buyer's sole discretion in
either cash or 2,200,000 shares of the Company's common stock.
This transaction is expected to result in a net gain of
approximately $171,000 that will be recorded in results of
operations in the third quarter of the current fiscal year, ending
September 30, 2006.
In connection with this transaction, inter-company debt in the
amount of $609,444 has been forgiven prior to the transaction's
consummation.
About Universal Communications
Universal Communications Systems, Inc. -- http://www.ucsy.com/--
and its subsidiaries are actively engaged worldwide in developing
and marketing solar energy systems, as well as systems for the
extraction of drinkable water from the air. Consolidated
subsidiaries include wholly-owned subsidiaries AirWater Corp.,
AirWater Patents Corp, Millennium Electric T.O.U. Ltd, Solar Style
(USA) Inc., Solar One Inc, Solar Style Ltd., and Misa Water
International, Inc, and majority-owned subsidiaries Atmospheric
Water Technologies and Millennium USA.
Prior to 2003, the Company was engaged in activities related to
advanced wireless communications, including the acquisition of
radio-frequency spectrum internationally. Currently, the
Company's activities related to advanced wireless communications
are conducted solely through its investment in Digital Way, S.A.,
a Peruvian communication company and former wholly owned
subsidiary.
Going Concern Doubt
As reported in the Troubled Company Reporter on Jan. 19, 2006,
Reuben E. Price & Co. expressed substantial doubt about
Universal's ability to continue as a going concern after it
audited the Company's financial statements for the fiscal years
ended Sept. 30, 2005 and 2004. The auditing firm pointed to the
Company's over $1.5 million working capital deficit and recurring
losses from operations.
UNIVISION COMM: Likely Leverage Rise Cues Moody's to Cut Ratings
----------------------------------------------------------------
Moody's Investors Service downgraded Univision Communications,
Inc.'s senior unsecured ratings to Baa3 and placed the ratings on
review for possible further downgrade in response to the company's
definitive agreement to sell the company for $12.3 billion in cash
to a group of private equity investors.
Downgrades:
Issuer: Univision Communications Inc
* Senior Unsecured Regular Bond/Debenture, Downgraded
to Baa3 from Baa2
* Senior Unsecured Shelf, Downgraded to (P)Baa3 from (P)Baa2
* Subordinated Shelf, Downgraded to (P)Ba1 from (P)Baa3
* Junior Subordinated Shelf, Downgraded to (P)Ba1 from (P)Baa3
* Preferred Stock Shelf, Downgraded to (P)Ba2 from (P)Ba1
* Senior Subordinated Shelf, Downgraded to (P)Ba1 from (P)Baa3
Outlook Actions:
Issuer: Univision Communications Inc
* Outlook, Changed To Rating Under Review From Developing
Withdrawals:
Issuer: Univision Communications Inc
* Senior Unsecured Bank Credit Facility, Withdrawn, previously
rated Baa2
The downgrade and the review reflects Moody's expectation that
leverage will increase substantially, commensurate with the likely
capital structure and ownership by private equity investors.
During the review process, Moody's will focus on the impact of the
transaction on Univision's credit metrics, including expectations
of adjusted total debt to EBITDA after the completion of the
buyout. A multi-notch downgrade by the conclusion of the process
is likely. Moody's will also review the strategic focus under the
new ownership structure and growth prospects of Univision.
Univision's bond indentures do not contain any provisions
requiring bondholder approval for a change of control. Under the
announced terms, the $1.2 billion of existing bonds will likely
remain outstanding after completion of the transaction. The
existing bank facilities will most likely be repaid in accordance
with the terms of the credit agreement. The sale is not
contingent on financing, but shareholder approval is still
pending. The transaction is expected to close in the fourth
quarter of 2006 or the first quarter of 2007.
Moody's withdraws the ratings of the company's recently refinanced
bank credit facilities.
Univision Communications Inc. is the premier Spanish-language
media company in the United States. The company is headquartered
in Los Angeles with television network operations in Miami and
television and radio stations and sales offices in major cities
throughout the United States.
USG CORP: Has Until July 30 to Remove State Court Actions
---------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware previously
enlarged the deadline within which USG Corporation and its
debtor-affiliates may file notices, pursuant to Rule 9027 of the
Federal Rules of Bankruptcy Procedure, to remove to the Bankruptcy
Court and the District Court:
(a) any prepetition asbestos-related actions brought against
U.S. Gypsum Company or any of the Debtors;
(b) prepetition non-asbestos actions brought against any of
the Debtors; and
(c) any asbestos-related or non-asbestos-related actions
brought postpetition against any of the Debtors.
Judge Fitzgerald extended the Removal Period through and
including the date that is 30 days after the effective date of a
Plan of Reorganization.
Following the confirmation of their First Amended Plan of
Reorganization on June 15, 2006, the Debtors have advised the
Court that their Amended Plan became effective June 20, 2006,
enabling them to formally emerge from Chapter 11.
As a result, the Debtors' Removal Period will expire
July 30, 2006.
About USG Corp.
Headquartered in Chicago, Illinois, USG Corporation --
http://www.usg.com/-- through its subsidiaries, is a leading
manufacturer and distributor of building materials producing a
wide range of products for use in new residential, new
nonresidential and repair and remodel construction, as well as
products used in certain industrial processes.
The Company filed for chapter 11 protection on June 25, 2001
(Bankr. Del. Case No. 01-02094). David G. Heiman, Esq., Gus
Kallergis, Esq., Brad B. Erens, Esq., Michelle M. Harner, Esq.,
Mark A. Cody, Esq., and Daniel B. Prieto, Esq., at Jones Day
represent the Debtors in their restructuring efforts.
Lewis Kruger, Esq., Kenneth Pasquale, Esq., and Denise Wildes,
Esq., represent the Official Committee of Unsecured Creditors.
Elihu Inselbuch, Esq., and peter Van N. Lockwood, Esq., at Caplin
& Drysdale, Chartered, represent the Official Committee of
Asbestos Personal Injury Claimants. Martin J. Bienenstock, Esq.,
Judy G. Z. Liu, Esq., Ralph I. Miller, Esq., and David A.
Hickerson, Esq., at Weil Gotshal & Manges LLP represent the
Statutory Committee of Equity Security Holders. Dean M. Trafelet
is the Future Claimants Representative. Michael J. Crames, Esq.,
and Andrew A. Kress, Esq., at Kaye Scholer, LLP, represent the
Future Claimants Representative. Scott Baena, Esq., and Jay
Sakalo, Esq., at Bilzen Sumberg Baena Price & Axelrod LLP,
represent the Asbestos Property Damage Claimants Committee.
When the Debtors filed for protection from their creditors, they
listed $3,252,000,000 in assets and $2,739,000,000 in debts. The
Debtors emerged from bankruptcy protection on June 20, 2006. (USG
Bankruptcy News, Issue No. 115; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
VALASSIS COMMS: Lower 2006 EPS Guidance Cues S&P's Negative Watch
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on
Livonia, Michigan-headquartered marketing services provider
Valassis Communications Inc. to 'BB+' from 'BBB-', and placed
them on CreditWatch with negative implications.
The downgrade and the CreditWatch listing reflect Valassis'
announcement that it has lowered its EPS guidance for 2006 by
more than 15% and suspended its share repurchase program pending
a review of strategic alternatives to enhance shareholder value.
The revised profitability guidance is the result of lower page
volumes sold by the company's Free Standing Insert and
Neighborhood Targeted business units.
In addition, pricing pressure remains in both business units. In
resolving the CreditWatch, Standard & Poor's will review
expectations for operating performance, in light of the current
competitive environment, and Valassis' strategic review that could
result in transactions raising debt leverage.
VARIG S.A.: MatlinPatterson Unit Tenders $500MM Offer for Assets
----------------------------------------------------------------
Volo Logistics Brasil offered to acquire VARIG, S.A.'s entire
operations for $500,000,000, after a Brazilian bankruptcy court
cancelled VARIG's sale to NV Participacoes.
Volo gave VARIG more than $3,000,000 on June 26, 2006, to help the
airline pay its bills and avert a shutdown, Bloomberg News
reports, citing a Brazilian bankruptcy court as source.
Volo is owned by U.S. equity fund MatlinPatterson Global Advisors
LLC and certain Brazilian investors.
Judge Luiz Roberto Ayoub of the 8th District Bankruptcy Court in
Rio de Janeiro, Brazil, called off the NVP transaction after NVP
failed to provide a $75,000,000 deposit on June 23, 2006.
NVP, a company formed by VARIG pilots and flight attendants,
offered to buy VARIG's entire air transportation operations for
$446,000,000. NVP was the lone bidder at the airline's June 8,
2006 auction.
Volo acquired VARIG's cargo transport unit, Varig Logistica S.A.,
in January 2006.
Judge Maria de Lourdes Coutinho Tavares of the 7th District Civil
Court in Rio de Janeiro, Brazil, initially blocked the VarigLog
sale for violating foreign-ownership requirements. Under the
country's civil aviation rules, foreign companies cannot own more
than 20% of an air carrier.
Brazil's National Civil Aviation Authority, however, cleared the
VarigLog deal on June 24, 2006, putting Volo in a position to buy
VARIG's assets, Pravda says.
Judge Ayoub will consider Volo's bid on June 29, 2006, according
to Bloomberg. Judge Ayoub has told CBN radio in Brazil that he
will likely order another auction, instead of directly approving a
deal with Volo, AP relates.
A spokesperson for Volo told Bloomberg that Volo will deliver
$20,000,000 to VARIG upon Court approval of the bid.
VARIG's shares rose to BRL2.39 at the close of trading on June 26
at the Sao Paulo Stock Exchange, up from BRL1.54 on June 23, after
Volvo announced its interest to buy the bankrupt carrier.
VARIG has already cancelled most of its flights. The U.S.
Bankruptcy Court for the Southern District of New York will
convene a hearing on June 28, 2006, to consider implementation of
a contingency plan for VARIG to return leased aircraft.
About VARIG
Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's
largest air carrier and the largest air carrier in Latin America.
VARIG's principal business is the transportation of passengers and
cargo by air on domestic routes within Brazil and on international
routes between Brazil and North and South America, Europe and
Asia. VARIG carries approximately 13 million passengers annually
and employs approximately 11,456 full-time employees, of which
approximately 133 are employed in the United States.
The Company, along with two affiliates, filed for a judicial
reorganization proceeding under the New Bankruptcy and
Restructuring Law of Brazil on June 17, 2005, due to a competitive
landscape, high fuel costs, cash flow deficit, and high operating
leverage. The Debtors may be the first case under the new law,
which took effect on June 9, 2005. Similar to a chapter 11
debtor-in-possession under the U.S. Bankruptcy Code, the Debtors
remain in possession and control of their estate pending the
Judicial Reorganization. Sergio Bermudes, Esq., at Escritorio de
Advocacia Sergio Bermudes, represents the carrier in Brazil.
Each of the Debtors' Boards of Directors authorized Vicente
Cervo as foreign representative. In this capacity, Mr. Cervo
filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case
Nos. 05-14400 and 05-14402). Rick B. Antonoff, Esq., at
Pillsbury Winthrop Shaw Pittman LLP represents Mr. Cervo in the
United States. As of March 31, 2005, the Debtors reported
BRL2,979,309,000 in total assets and BRL9,474,930,000 in total
debts. (VARIG Bankruptcy News, Issue No. 23; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
VARIG S.A.: Foreign Reps Assert Compliance to ILFC Request
----------------------------------------------------------
VARIG S.A. and its debtor-affiliates ask the Honorable Robert D.
Drain of the U.S. Bankruptcy Court for the Southern District of
New York to deny in its entirety an Order to Show Cause.
As reported in the Troubled Company Reporter on June 27, 2006,
Judge Drain directed the Foreign Debtors, Foreign Representative
Eduardo Zerwes, and VARIG's officers to appear before the U.S.
Bankruptcy Court for the Southern District of New York to show
cause why a contempt order should not be entered.
International Lease Finance Corporation has alleged that the
Contemnors did not follow the Court's orders to remove from
commercial service and ground ILFC's aircraft.
Rick B. Antonoff, Esq., at Pillsbury Winthrop Shaw Pittman LLP, in
New York, notes that pursuant to Paramedic Electromedicina
Comercial, Ltda. V. GE Medical Systems Information Technologies,
Inc., 369 F.3d 645, 654 (2d Cir. 2004), a court may hold a party
in civil contempt when there is a clear and unambiguous order, the
proof of noncompliance is clear and convincing, and the defendant
has not been reasonably diligent in attempting to comply with the
order.
The Foreign Representative believes that the Foreign Debtors have
used their best efforts to comply with the Bankruptcy Court's
prior orders. The Foreign Debtors have grounded all ILFC aircraft
to abide by the Court's rulings, Mr. Antonoff says.
When the Court directed VARIG on June 16, 2006, to ground all ILFC
Aircraft, it was too late since most of the aircraft had already
departed and were not located in Rio de Janeiro, Mr. Antonoff
explains. VARIG expected to be able to pay ILFC its owed amounts,
anticipating the receipt of the $75,000,000 that a bidder for the
airline's operations is required to deposit, which deposit did not
turn up.
According to Mr. Antonoff, VARIG President Marcelo Bottini
directed the immediate grounding of the ILFC Aircraft on June 19,
2006. To accomplish the grounding, flights to Munich, Germany;
Lima, Peru; Caracus, Venezuela; Mexico; Bogota, Columbia; and
Macapa, Brazil were cancelled. It took around 18 hours to ground
all the ILFC Aircraft.
During approximately the same period, VARIG was also required to
ground the aircraft of GATX, The Boeing Company and the engines of
Willis Engines Finance Co., which amounted to a total of more than
20 aircraft, 50% of the serviceable fleet being grounded during
the same short time-frame, Mr. Antonoff relates. VARIG asserts
that it undertook to comply with the ILFC Orders to the best of
its ability under the circumstances.
There can simply be no showing of VARIG's willful non-compliance
with the ILFC Orders, Mr. Antonoff argues.
About VARIG
Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's
largest air carrier and the largest air carrier in Latin America.
VARIG's principal business is the transportation of passengers and
cargo by air on domestic routes within Brazil and on international
routes between Brazil and North and South America, Europe and
Asia. VARIG carries approximately 13 million passengers annually
and employs approximately 11,456 full-time employees, of which
approximately 133 are employed in the United States.
The Company, along with two affiliates, filed for a judicial
reorganization proceeding under the New Bankruptcy and
Restructuring Law of Brazil on June 17, 2005, due to a competitive
landscape, high fuel costs, cash flow deficit, and high operating
leverage. The Debtors may be the first case under the new law,
which took effect on June 9, 2005. Similar to a chapter 11
debtor-in-possession under the U.S. Bankruptcy Code, the Debtors
remain in possession and control of their estate pending the
Judicial Reorganization. Sergio Bermudes, Esq., at Escritorio de
Advocacia Sergio Bermudes, represents the carrier in Brazil.
Each of the Debtors' Boards of Directors authorized Vicente
Cervo as foreign representative. In this capacity, Mr. Cervo
filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case
Nos. 05-14400 and 05-14402). Rick B. Antonoff, Esq., at
Pillsbury Winthrop Shaw Pittman LLP represents Mr. Cervo in the
United States. As of March 31, 2005, the Debtors reported
BRL2,979,309,000 in total assets and BRL9,474,930,000 in total
debts. (VARIG Bankruptcy News, Issue No. 23; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
VARIG S.A.: TAM SA & Gol Call for Distribution of Domestic Routes
-----------------------------------------------------------------
TAM SA and Gol Linhas Aereas SA asked Brazil's National Civil
Aviation Authority to distribute VARIG, S.A's domestic routes,
Bloomberg News reports, citing Valor Economico newspaper.
According to Valor, the two Brazilian carriers sought the
immediate distribution of routes on a permanent basis to secure
lease of new aircraft and investment.
VARIG canceled 118 domestic and international flights, more than
half its 208 flights, on June 20, 2006, according to Bloomberg,
citing O Estado de S. Paulo.
The Brazilian aviation authority asked local airlines, including
TAM and Gol, to honor VARIG tickets in exchange of taking over
some of VARIG's routes, Estado said.
About VARIG
Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's
largest air carrier and the largest air carrier in Latin America.
VARIG's principal business is the transportation of passengers and
cargo by air on domestic routes within Brazil and on international
routes between Brazil and North and South America, Europe and
Asia. VARIG carries approximately 13 million passengers annually
and employs approximately 11,456 full-time employees, of which
approximately 133 are employed in the United States.
The Company, along with two affiliates, filed for a judicial
reorganization proceeding under the New Bankruptcy and
Restructuring Law of Brazil on June 17, 2005, due to a competitive
landscape, high fuel costs, cash flow deficit, and high operating
leverage. The Debtors may be the first case under the new law,
which took effect on June 9, 2005. Similar to a chapter 11
debtor-in-possession under the U.S. Bankruptcy Code, the Debtors
remain in possession and control of their estate pending the
Judicial Reorganization. Sergio Bermudes, Esq., at Escritorio de
Advocacia Sergio Bermudes, represents the carrier in Brazil.
Each of the Debtors' Boards of Directors authorized Vicente
Cervo as foreign representative. In this capacity, Mr. Cervo
filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case
Nos. 05-14400 and 05-14402). Rick B. Antonoff, Esq., at
Pillsbury Winthrop Shaw Pittman LLP represents Mr. Cervo in the
United States. As of March 31, 2005, the Debtors reported
BRL2,979,309,000 in total assets and BRL9,474,930,000 in total
debts. (VARIG Bankruptcy News, Issue No. 23; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
VERESTAR INC.: Ct. Rules on Motions to Dismiss Panel's Lawsuits
---------------------------------------------------------------
The Official Committee of Unsecured Creditors of Verestar, Inc.,
and its debtor-affiliates sued:
-- American Tower Corporation, Verestar's parent corporation;
-- Bear Stearns & Co., Inc., financial advisor to American
Tower and Verestar;
-- two Bear Stearns' officers, Marc Layne and Scott Moskowitz;
and
-- former non-director Veristar officers Justin Benincasa,
Norman A. Bikales, Alan Box, Steven B. Dodge, David W.
Garrison, William H. Hess, David Kagan, Michael Milsom,
Steven Moskowitz, Raymond O'Brien, Matthew Petzold, David
Porte, Bradley E. Singer, and Joseph L. Wynn;
-- former ATC director Arnold Chavkin; and
-- ATC's president and CEO James Taiclet;
on July 8, 2005 (Bankr. S.D.N.Y. Adv. Pro. Nos. 05-03635 and
05-02259), asserting 21 claims for relief, including equitable
subordination, substantive consolidation, alter ego, breach of
fiduciary duty, conversion, aiding and abetting breach of
fiduciary duty and conversion, conspiracy, tortious interference
with prospective or existing business relations, deepening
insolvency, breach of contract, state law fraudulent transfer, ,
Bankruptcy Code fraudulent transfer, recovery of avoidable
transfers, turnover, and an accounting pursuant to Bankruptcy Code
Sec. 542(e).
The Facts as Alleged by the Committee
Verestar was founded in 1999 as a wholly owned subsidiary of ATC,
a telecommunications company, for the purpose of owning and
operating ATC's teleport business. ATC initially capitalized
Verestar with $1,000, an amount that the Committee asserts was
inadequate given the size and nature of the teleport business.
Verestar allegedly remained undercapitalized and dependent on ATC
for financing throughout its existence. The Committee asserts
that at all relevant times ATC treated Verestar as a mere division
and used Verestar to reap financial rewards from the teleport
business while attempting to shield itself from any associated
liability or risk.
ATC was Verestar's 100% shareholder, and according to the
Complaint, there was an almost complete overlap of its officers
and directors with those of Verestar, allowing ATC to dominate and
control Verestar's Board and all material business decisions,
including its teleport acquisitions and other transactions. As
evidence of control, the Committee asserts that (i) the majority
of Verestar's Board meetings were held on the same day as ATC's
board meetings at ATC's regional offices or headquarters in
Massachusetts, and not at Verestar's headquarters in Virginia;
(ii) ATC's officers and directors attended and directed Verestar
Board meetings and engaged in transactions on Verestar's behalf,
even though they did not hold positions at Verestar; and (iii) by
the end of 2001, Verestar did not have a properly constituted
board, due to the resignation of several board members and the
failure to fill vacancies as required by Verestar's by-laws.
ATC and its directors and officers also allegedly held out to
creditors and the public in general that Verestar was part of a
single operation with ATC, describing Verestar as a division of
ATC. As further evidence of ATC's dominion over Verestar, the
Committee asserts that ATC maintained Verestar's records and
controlled all of its core corporate functions. ATC provided
Verestar's corporate support services, including human resources,
accounts payable, accounts receivable, tax, internet and
information technology functions. Verestar employees were paid by
ATC with checks drawn on ATC accounts, and ATC provided employee
benefits and all forms of business insurance.
With respect to financing, the Committee alleges that Verestar's
main bank account was in the name of ATC, and ATC officers were
authorized signatories on all other ancillary Verestar accounts.
ATC used its control over Verestar to sweep funds from Verestar's
accounts on a daily basis and then co-mingled these funds with
those from its own operations without returning adequate
consideration to Verestar.
According to the Complaint, ATC also caused Verestar to engage in
an extremely aggressive acquisition strategy, secure in the belief
that in the event the teleport business failed, it could extract
the value of the business at the expense of Verestar's other
creditors. Between 1997 (before Verestar's separate
incorporation) and 2003, ATC allegedly pursued over thirteen
acquisitions and other transactions on Verestar's behalf without
regard to Verestar's purported separate legal existence and with
the result that its business was grossly over-expanded. These
transactions included, inter alia, (i) the acquisition of
InterPacket Networks, Inc., in December 2000, which was not
approved by the Verestar Board and was consummated despite ATC's
knowledge that the acquisition would generate substantial losses
for Verestar (ii) the purchase of additional satellite capacity
from PanAmSat International Systems, Inc., in March 2001, despite
the knowledge of ATC, the Bear Stearns Defendants and certain of
the Individual Defendants that Verestar would continue to incur
losses and not be able to meet its financial commitments; and
(iii) the acquisition of Integrated Systems Design, Inc., in
October 2001, which allegedly was neither considered nor approved
by the Verestar Board. Each of these transactions contributed to
Verestar's increased operating costs and major revenue and EBITDA
losses
The Committee alleges that in the spring of 2002, when it was
clear that Verestar would ultimately have to be liquidated, ATC's
and Verestar's officers and directors (mostly the same
individuals) and Bear Stearns agreed on a scheme entitled "Project
Harvest," a program to transfer as many of Verestar's assets and
as much of its value as possible to ATC before Verestar's
inevitable collapse. Bear Stearns, which was retained by Verestar
as the financial advisor for Project Harvest at the same time it
was serving as financial advisor to ATC, allegedly played a
leading role in the scheme through its managing director, Scott
Moskowitz, and one of its vice presidents, Marc Layne. Under
Project Harvest, ATC allegedly cut off new funding to Verestar and
began to siphon off its value. ATC also allegedly caused Verestar
to sell certain assets to ATC for little or no consideration and
to convey other assets to third parties and divert the proceeds to
ATC. The Committee identifies six transactions as steps taken to
carry out Project Harvest:
(1) Transfer of Tower Assets: In 2002 and 2003, ATC, Dodge,
Singer, Porte and Hess caused Verestar to transfer its
communication tower assets and surrounding land to ATC.
The Committee specifically alleges that ATC, Dodge, Singer
and Porte caused Verestar to transfer the Tower Assets in
San Bruno to ATC without appraisal and for substantially
less than fair market value. The Committee also alleges
that Dodge instructed Bear Stearns through Layne, as well
as Steven Moskowitz, Taiclet, Singer, Hess and Milsom, to
review Verestar's Tower Assets and determine how to
transfer them to ATC.
(2) Sale of MTN: ATC allegedly looted Verestar's subsidiary,
Micronet, Inc., the only profitable operating asset in
Verestar's portfolio. First, ATC helped its lenders
perfect their security interests in MTN so that the value
of the asset would be transferred to the lenders in the
event it was not sold before Verestar's bankruptcy filing.
This would prefer ATC because it was also liable on the
debt.
Second, ATC caused Verestar to engage Bear Stearns to
achieve a disposition of MTN beneficial to ATC. To
facilitate this process, Dodge, Singer, Porte and Hess
falsely represented to Verestar personnel that Verestar
would receive consideration from any sale of MTN.
Falconhead Capital, a private equity firm, offered to
purchase MTN for $30 million in 2002, at which time Kagan
was serving as Falconhead Capital's president and CEO.
ATC, through Dodge, Singer, Bikales, Hess and Milsom,
directed Bear Stearns to accept the offer, negotiated and
approved the final sale, and kept all the proceeds.
Dodge, Singer, Hess and O'Brien approved the transfer on
behalf of Verestar despite having knowledge that Verestar
would receive nothing in return.
(3) Sale of GenTel: Bear Stearns was also instructed to sell
another valuable Verestar subsidiary and teleport asset,
the General Telecom voice port business. ATC, Bear
Stearns, Layne, Dodge, Singer, Hess, O'Brien and Petzold
allegedly selected an offer that was less valuable to
Verestar and better suited to ATC's desire to maximize
value transferred to ATC prior to a Verestar bankruptcy.
Again, ATC received all of the sale proceeds, and Dodge,
Singer, Hess and O'Brien, in violation of their duties,
approved the transaction on behalf of Verestar after the
fact.
(4) The Credit Facility Seventh Amendment: In October 2002,
with Verestar's consent, ATC executed an amendment to its
credit facility that (i) removed Verestar as a borrower,
kept Verestar as a guarantor and left its assets pledged
to ATC's lenders; (ii) terminated Verestar's rights to a
portion of proceeds of the sale of any Verestar asset
pledged as collateral; (iii) capped additional ATC funding
for Verestar at $25 million; and (iv) eliminated certain
defenses Verestar and its creditors could assert against
claims by ATC's lenders in bankruptcy. The alleged dual
purpose of the amendment was to avoid the trigger of a
default when Verestar filed for bankruptcy and to siphon
off the value of Verestar's teleport assets that could not
be transferred to ATC in kind. By unanimous consent, the
Verestar Board authorized Petzold to execute the Seventh
Amendment on behalf of Verestar.
(5) Vendor Payments: ATC allegedly caused Verestar to withhold
substantial payments to vendors in order to increase
immediate cash available for "harvesting" to ATC. ATC
also allegedly caused Verestar to make misrepresentations
to these vendors concerning Verestar's financial situation
in order to obtain further concessions that would benefit
ATC. Dodge, Milsom, Singer, Hess, O'Brien, Petzold and
Bear Stearns were allegedly involved in the preparation
and communication of these misrepresentations.
(6) The $250 Million Note: The Committee alleges that ATC
officers and directors knew that ATC would be unable to
recover the funds that it had previously invested in
Verestar's teleport business by way of equity or
undocumented inter-company advances. Therefore, in 2002,
these parties created a $250 million promissory note
payable by Verestar to ATC that was back-dated to January
1, 2000, plus Verestar Board resolutions purporting to
consent to the debt and acknowledging loans in an almost
equal amount. Specifically, Hess prepared draft
resolutions and Dodge, Singer and Porte executed written
consents to the resolutions. The Committee asserts that
prior to the back-dated Note, there was no debt as such,
Verestar and ATC did not record any of its advances to
Verestar as loans, Verestar never paid interest to ATC on
any purported loans, and ATC never imposed on Verestar any
repayment terms, fixed any maturity dates, or required any
collateral from Verestar. Further, the Committee alleges
that (i) ATC had the Note fraudulently executed by Kagan,
who was an officer and director of MTN, a subsidiary of
Verestar that was later sold, (ii) Verestar Board approval
of the Note was not valid, and (iii) the debt was incurred
without consideration.
The Bankruptcy
On December 22, 2003, the Debtors filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code. The Committee was
appointed on January 2, 2004. On July 12, 2004, this Court
approved a stipulation, as amended on November 7, 2005, granting
the Committee standing to pursue claims on behalf of the Debtors
against the Defendants. The Debtors sold all of their remaining
assets in the Chapter 11 cases.
ATC has filed proofs of claim in the cases totaling $536 million
that, in total amount, dwarf all other claims, but it has (not
surprisingly) been unwilling to agree to a plan of reorganization
that is premised on lawsuits that would disallow its claims and
render it liable to pay all other debt. The Chapter 11 cases
have, accordingly, stalled, and the resolution of these adversary
proceedings remains the most significant open item in the cases.
Motions to Dismiss
The Defendants filed motions to dismiss the Committee's claims.
In a lengthy Memorandum Opinion published at 2006 WL 1620193, the
Honorable Allan L. Gropper rules on those summary judgment
motions, disposing of the Committee's claims as follows:
Target
Defendant Cause of Action Disposition on Summary Judgment
--------- --------------- -------------------------------
ATC Only Equitable Claim survives summary judgment
Subordination
ATC Only Substantive Claim dismissed on summary
judgment
Consolidation
ATC Only Alter Ego & Claim survives summary judgment
Veil Piercing
ATC Only Conversion of Claim dismissed on summary
judgment
Verestar's Cash
ATC Only Conversion of Claim dismissed on summary
judgment
MTN & GenTel
Proceeds
ATC Only Conversion of Claim survives summary judgment
Tower Assets
ATC Only Fraudulent Claim survives summary judgment
Transfer under
Bankruptcy Code
Sec. 548
ATC Only Fraudulent Claim dismissed on summary
judgment
Transfer under
Bankruptcy Code
Sec. 544(b) and
Unspecified
State Law
ATC Only Accounting Claim dismissed on summary
judgment
Veristar's Breach of Claims sounding in breach of the
Directors Fiduciary Duty duty of loyalty are sustained
& Officers against the officers and all
other
fiduciary duty claims are
dismissed
Veristar's Deepening As broadly pleaded by the
Committee,
Directors Insolvency this claim is dismissed as
precluded
& Officers by the exculpatory provision in
Verestar's charter relating to
the
duty of care or as duplicative
of
other claims stated in the
Complaint.
Bear Stearns Breach of Claims dismissed on summary
judgment
Contract,
Conspiracy &
Aiding and
Abetting
Scott Breach of Claims survive summary judgment;
Moskowitz Contract, the Committee's Complaint
contains
Conspiracy & sufficient allegations of lack
of
Aiding and independence and breach of a
duty
Abetting of loyalty during his period of
Board service
All
Defendants Aiding & Claim dismissed against all
Abetting Breach defendants on summary judgement
of Fiduciary except ATC
Duty
All Aiding & Claim survives summary judgment
Defendants Abetting
Conversion
All Conspiracy Claim dismissed on summary
judgment
Defendants
All Tortious Claim dismissed against all
Defendants Interference defendants on summary judgement
with Existing except ATC
or Prospective
Business
Relations
Headquartered in Fairfax, Virginia, Verestar, Inc. --
http://www.verestar.com/-- was a provider of satellite and
terrestrial-based network communication services prior to the sale
of substantially all of its assets. Verestar is a wholly owned
subsidiary of American Tower Corporation, a non-debtor. The
Company and two of its affiliates filed for chapter 11 protection
on December 22, 2003 (Bankr. S.D.N.Y. Case No. 03-18077). Matthew
Allen Feldman, Esq., at Willkie Farr & Gallagher LLP represents
the Debtors. When the Company filed for protection from its
creditors, it listed $114 million in assets and more than $635
million in debts. David S. Rosner, Esq., Cindy C. Kelly, Esq.,
Michael J. Bowe, Esq., Brian Condon, Esq., and Erin Zavalkoff,
Esq., at Kasowitz, Benson, Torres & Friedman LLP, represent the
Official Committee of Unsecured Creditors. Barry N. Seidel, Esq.,
and Scott E. Eckas, Esq., at King & Spalding LLP, represent
American Tower Corporation and the Individual Defendants. Barry
H. Berke, Esq., and Stephen M. Sinaiko, Esq., at Kramer, Levin,
Naftalis & Frankel, LLP, represent the Bear Stearns Defendants.
VIDEO WITHOUT: March 31 Balance Sheet Upside-Down by $3.3 Million
-----------------------------------------------------------------
Video Without Boundaries, Inc., filed its financial statements for
the quarter ended March 31, 2006, with the Securities and Exchange
Commission.
The Company reported a $568,772 net loss on $110,431 of net sales
for the three months ended March 31, 2006, versus a $454,182 net
loss on $21,089 of net sales for the three months ended March 31,
2005.
At March 31, 2006, the Company's balance sheet showed $323,235 in
total assets and $3,667,038 in total liabilities resulting in a
stockholders' deficit of $3,343,803.
A full-text copy of the Company's financial statements for the
quarter ended March 31, 2006, is available for free at:
http://ResearchArchives.com/t/s?c51
Going Concern Doubt
Baum & Company, PA, expressed substantial doubt about Video
Without Boundaries's ability to continue as a going concern after
it audited the Company's financial statements for the years ended
Dec. 31, 2005 and 2004. The auditing firm pointed to the
Company's recurring losses from operations and net capital
deficiency.
About Video Without Boundaries
Based in Fort Lauderdale, Florida, Video Without Boundaries, Inc.
-- http://www.vwbinc.com/-- provides products and services in the
converging digital media on demand, enhanced home entertainment
and emerging interactive consumer electronics markets. The
Company is focused on home entertainment media products and
solutions that enhance the consumer experience, while providing
new revenue opportunities for online music and movie content
providers. The Company is becoming a supplier of broadband
products, services and content including its ability to deliver
broadcast quality digital video and web interactivity at transfer
rates as low as 56K.
VITESSE SEMICONDUCTOR: Tennenbaum Extends $24 Million Loan
----------------------------------------------------------
Vitesse Semiconductor Corporation entered into a commitment
letter, dated June 4, 2006, with Tennenbaum Capital Partners, LLC
pursuant to which Tennenbaum agreed to lend to the Company,
through one or more funds managed by Tennenbaum or an affiliate
thereof, up to $24 million. In addition, Tennenbaum agreed, at
the request of the Company and upon the satisfaction of certain
conditions, to make an additional loan of up to $30 million to the
Company.
On June 7, 2006, Silicon Valley Bank assigned all outstanding
loans receivable from the Company and Vitesse International, Inc.
under the Second Amended and Restated Loan and Security Agreement,
dated March 2, 2006, to Special Value Expansion Fund, LLC and
Special Value Opportunities Fund, LLC, affiliates of Tennenbaum.
At the same time, the Company, Vitesse International, Vitesse
Manufacturing & Development Corporation and Vitesse Semiconductor
Sales Corporation and Obsidian, LLC, as agent and collateral
agent, entered into a Third Amended and Restated Loan Agreement.
The Initial Loan was made under the Loan Agreement in the amount
of approximately $22 million on June 7. The proceeds of the
Initial Loan were used to:
-- pay amounts owed to Silicon Valley Bank under the Original
Loan Agreement;
-- cash collateralize certain letters of credit issued by
Silicon Valley Bank;
-- pay fees and expenses in connection with the financing; and
-- provide a net $10 million for general corporate purposes.
The Loans will mature on July 15, 2010 and will have an interest
rate equal to LIBOR plus 4% per annum, payable in cash, plus 5%
per annum, payable in kind. Interest will be paid quarterly. The
Company may elect, at its sole option, each quarter to pay in kind
up to 400 basis points of the cash interest otherwise payable on
the Loan at this following ratio: for each 100 basis points of
cash interest the Company does not pay in cash, the Company will
pay 150 basis points of interest in kind. Thus, the Company may,
at its sole option, in any quarter pay interest in cash at LIBOR
and the remainder of the interest in kind. The Loans will be
secured by substantially all the assets of the Company.
The Loans may be repaid in whole or in part prior to maturity, but
if repaid:
a) prior to the second anniversary of the Initial Loan, a
"make-whole premium" on the amount repaid will be payable;
b) after the second anniversary of the Initial Loan and prior
to the third anniversary of the Initial Loan, at 108% of
the principal amount repaid; and
c) after the third anniversary and prior to maturity, at 104%
of the principal amount repaid.
At the closing of the Initial Loan, the Lenders received a fee
equal to 4% of the principal amount of the Initial Loan. The
Lenders will receive a similar 4% fee if and when an Additional
Loan is made. There are no maintenance or financial covenants in
the Loan Agreement.
About Vitesse
Vitesse Semiconductor Corporation (Nasdaq:VTSS) --
http://www.vitesse.com/-- designs, develops and markets a diverse
portfolio of high-performance, cost-competitive semiconductor
solutions for communications and storage networks worldwide.
Engineering excellence and dedicated customer service distinguish
Vitesse as an industry leader in Gigabit Ethernet LAN, Ethernet-
over-SONET, Advanced Switching, Fibre Channel, Serial Attached
SCSI, Optical Transport, and other applications.
* * *
Moody's Investors Service revised Vitesse Semiconductor
Corporation's outlook to stable from negative and affirmed all
existing ratings of the company's Senior Implied Rating at B1;
Long-Term Issuer Rating at B1; and $135.4 million 4% convertible
subordinated debentures due March 2005 at B3. These actions were
taken by Moody's in October 2004.
WORLDGATE COMM: March 31 Balance Sheet Upside-Down by $11 Million
-----------------------------------------------------------------
Worldgate Communications, Inc.'s balance sheet at March 31, 2006
showed $11,590,000 total stockholders' deficiency out of
$15,121,000 in total assets and $26,711,000 in total liabilities.
The Company's balance sheet also showed total current assets of
$13,403,000 and total current liabilities of $3,253,000.
For the three months ended March 31, 2006, the Company incurred
a $2,634,000 net loss on $509,000 of revenues.
A full-text copy of the Company's financial report for the quarter
ended March 31, 2006 is available for free at:
http://researcharchives.com/t/s?c3c
Headquartered in Trevose, Pennsylvania, WorldGate Communications,
Inc. -- http://www.wgate.com/-- designs, manufactures, and
distributes personal video phones. WorldGate's products is
marketed to consumers through cable, DSL, VoIP and satellite
service providers as well as through retail stores worldwide under
the Ojo brand name. WorldGate is traded on NASDAQ under the
symbol WGAT.
Going Concern Doubt
As reported in the Troubled Company Reporter on May 16, 2006,
Marcum & Kliegman LLP expressed substantial doubt about WorldGate
Communications, Inc.'s ability to continue as a going concern.
The accounting firm pointed to the Company's recurring losses from
operations and accumulated deficit of $229 million after auditing
its financial statements for the year ended Dec. 31, 2005.
Worldgate's balance sheet at Dec. 31, 2005 showed $21,229,000 in
total assets and $26,801,000 in total liabilities resulting to a
total stockholders' deficit of $5,572,000. The Company's balance
sheet also showed strained liquidity with $19,523,000 in total
current assets and $7,133,000 in total current liabilities.
For the 12 months ended Dec. 31, 2005, the Company incurred
a $6,851,000 net loss out of $1,558,000 in net revenues.
WHITE RIVER: U.S. Trustee Appoints Seven-Member Creditors Panel
---------------------------------------------------------------
The U.S. Trustee for Region 10 appointed seven creditors to serve
on an Official Committee of Unsecured Creditors in White River
Coal, Inc. and its debtor-affiliates' chapter 11 cases:
1. Mark Grimmett
Secretary
North American Rebuild Co., Inc.
P.O. Box 549
Smithers, Virginia 25186
Tel: (304) 442-5656
Fax: (304) 442-5679
2. Ron Bartunek
Assistant Treasurer
Joy Technologies, Inc.
dba Joy Mining Machine
2101 West Pike Street
Houston, Pennsylvania 15342
Tel: (724) 873-4325
Fax: (724) 873-4312
3. Deanna Ashby
President
Ashby Electric Company
P.O. Box 55
Sebree, Kentucky 42455
Tel: (270) 835-7534
Fax: (270) 835-2922
4. Lowell Cogar
President
Cogar Mine Supply, Inc.
P.O. Box 532
Beckley, West Virginia 25802
Tel: (304) 252-4435
Fax: (304) 252-4514
5. Dean Goldbeck
President
Gooding Rubber Company
10321 Werch Drive, Suite 200
Woodridge, Illinois 60517
Tel: (630) 685-2123
Fax: (630) 685-4111
6. Dennis Spahr
Senior Manager, Financial Services
Fairmont Supply Company
401 Technology Drive
Canonsburg, Pennsylvania 15317
Tel: (724) 514-3929
Fax: (724) 261-5313
7. Thomas M. Gregory
Director of Finance & Administration
WIN Energy REMC
P.O. Box 577
Vincennes, Indiana 47591
Tel: (812) 882-5140
Fax: (812) 886-0306
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtors'
expense. They may investigate the Debtors' business and financial
affairs. Importantly, official committees serve as fiduciaries to
the general population of creditors they represent. Those
committees will also attempt to negotiate the terms of a
consensual chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest. If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management with
an independent trustee. If the Committee concludes reorganization
of the Debtors is impossible, the Committee will urge the
Bankruptcy Court to convert the chapter 11 cases to a liquidation
proceeding.
Based in Hazleton, Indiana, White River Coal, Inc., operates a
mining company. The Company and its affiliates filed for chapter
11 protection on May 22, 2006 (Bankr. S.D. Ind. Case Nos. 06-70375
through 06-70379). C.R. Bowles, Jr., Esq., at Greenbaum Doll &
McDonald PLLC, represents the Debtors in their restructuring
efforts. When the Debtor filed for protection from their
creditors, they listed assets totaling $2 million and debts
totaling $35 million.
WHITE RIVER: Committee Taps McGuireWoods LLP as Bankruptcy Counsel
------------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in White
River Coal, Inc. and its debtor-affiliates chapter 11 cases, ask
the U.S. Bankruptcy Court for the Southern District of Indiana for
permission to employ McGuireWoods LLP, as its bankruptcy counsel,
nunc pro tunc to June 6, 2006.
McGuireWoods will:
(a) advise the Committee with respect to its powers and duties
under section 1103 of the Bankruptcy Code;
(b) take all necessary action to preserve, protect and
maximize the value of the Debtors' estates for the benefit
of the Debtors' unsecured creditors, including but not
limited to, investigating the acts, conduct, assets,
liabilities, and financial condition of the Debtors, the
operation of the Debtors' businesses and the desirability
of the continuance of such business, and any other matter
relevant to the case or to the formulation of a plan;
(c) prepare on behalf of the Committee motions, applications,
answers, orders, reports and papers that may be necessary
to the Committee's interests in these chapter 11 cases;
(d) participate in the formulation of a plan as may be in the
best interests of the Committee and the unsecured
creditors of the Debtors' estates;
(e) represent the Committee's interests with respect to the
Debtors' efforts to obtain postpetition secured financing;
(f) advise the Committee in connection with any potential sale
of assets;
(g) appear before the Court, any appellate courts, and protect
the interests of the Committee and the value of the
Debtors' estates before the courts;
(h) consult with the Debtors' counsel on behalf of the
Committee regarding tax, intellectual property, labor and
employment, real estate, corporate, litigation matters,
and general business operational issues; and
(i) perform all other necessary legal services and provide all
other necessary legal advice to the Committee in
connection with the Debtors' chapter 11 cases.
Mark E. Freedlander, Esq., a partner at McGuireWoods, tells the
Court that attorneys at the firm bill between $190 and $525 per
hour while paralegals bill $145 per hour.
Mr. Freedlander assures the Court that his firm is disinterested
as that term is defined in Section 101(14) of the Bankruptcy Code.
Based in Hazleton, Indiana, White River Coal, Inc., operates a
mining company. The Company and its affiliates filed for chapter
11 protection on May 22, 2006 (Bankr. S.D. Ind. Case Nos. 06-70375
through 06-70379). C.R. Bowles, Jr., Esq., at Greenbaum Doll &
McDonald PLLC, represents the Debtors in their restructuring
efforts. When the Debtor filed for protection from their
creditors, they listed assets totaling $2 million and debts
totaling $35 million.
WINN-DIXIE: Sells Miami Outparcels to Edens and Avant for $1.8MM
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
grants Winn-Dixie Stores, Inc., and its debtor-affiliates' request
to sell the property adjacent to Store No. 388 located in a
shopping center at 18300 SW 137th Avenue in Miami, Florida, and
related assets to the highest bidder, Edens and Avant Investments
Limited Partnership.
Edens and Avant offered $1,850,000 during the auction held on
June 14, 2006, outbidding Universal Holding Company, which
offered to buy the property for $1,400,000.
Judge Funk approves the Purchase Agreement between the Debtors,
and Edens and Avant; and authorizes the Debtors to consummate the
sale.
Edens and Avant delivered a non-refundable earnest money deposit
of $147,500 to Smith, Gambrell & Russell, LLP, as escrow agent.
At closing of the transaction, the deposit will be credited
against the purchase price, and the unpaid balance will be paid
in cash.
Net proceeds of the sale will be paid to the DIP Lender to the
extent required in accordance with the terms of the Final
Financing Order and the Loan Documents.
Other than the permitted encumbrances set forth in the Purchase
Agreement, Edens and Avant will have no responsibility for any
liability of the Debtors arising under or related to the Assets.
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. 41; Bankruptcy Creditors' Service, Inc., 215/945-7000).
WINN-DIXIE: Continues SH&B's Retention With David Gay's Employment
------------------------------------------------------------------
Smith Hulsey & Busey wants to employ David L. Gay, Esq., as an
associate lawyer who will render services to the Debtors in their
Chapter 11 cases.
Mr. Gay is a member of the Florida Bar and was employed by the
law firm of Held & Israel from August 1, 2005, to May 11, 2006.
Held & Israel represents several creditors in the Debtors'
Chapter 11 cases.
Mr. Gay has represented to Smith Hulsey that he did not acquire
and does not have any information protected by Rule 4-1.6 and
4-1.9(b) of the Rules Regulating The Florida Bar.
Thus, Smith Hulsey contends that if it were to employ Mr. Gay, it
would remain disinterested within the meaning of Section 327(a)
of the Bankruptcy Code because there is no actual conflict of
interest.
Winn-Dixie Stores, Inc., and its debtor-affiliates seek authority
from the U.S. Bankruptcy Court for the Middle District of Florida
to continue Smith Hulsey & Busey's employment as their co-counsel
in the event Mr. Gay is employed as an associate of Smith Hulsey
and renders services to the Debtors in their Chapter 11 cases.
The Court approves the Debtors' application.
Judge Funk prohibits Mr. Gay from rendering services to the
Debtors with respect to any matters involving any creditor for
which Held & Israel has filed a notice of appearance in the
Debtors' Chapter 11 cases.
The Court will fix Smith Hulsey & Busey's compensation for
professional services rendered and reimbursement for advanced
costs.
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. 41; Bankruptcy Creditors' Service, Inc., 215/945-7000).
WERNER LADDER: Taps Loughlin Meghji as Restructuring Consultants
----------------------------------------------------------------
Werner Holding Co. (DE), Inc., aka Werner Ladder Company, and its
debtor-affiliates ask permission from the U.S. Bankruptcy Court
for the District of Delaware to employ Loughlin Meghji + Company
as their restructuring consultants, nunc pro tunc at June 12,
2006.
Loughlin Meghji will:
(1) advise and assist the Debtors' management in analyzing and
implementing all aspects of its operational turnaround
plan, including:
(a) expansion of their manufacturing facilities in Juarez,
Mexico, customer-pricing strategies to improve
performance, product strategies including SKU reviews,
profitability analysis and procurement issues, and
(b) corporate-wide expense management and reduction
initiatives, vendor and other supplier issues and
employee related matters;
(2) monitor the progress being made to achieve the operational
restructuring plan and report the results to management;
(3) assist management in managing various projects and
initiatives that are underway;
(4) advise and assist management in developing the short-term
business plans and financial forecasts in areas of sales
plans by customer and product, manufacturing costs and
efficiency improvements, working capital requirements and
cash flow forecasts and analyses of various operating
scenarios;
(5) advise and assist management in preparing forecasts related
to the Debtors' chapter 11 financing requirements,
including preparing debtor-in-possession financing models,
reviewing and developing chapter 11 operating assumptions,
analyzing and quantifying potential customer and vendor
issues;
(6) advise and assist management in developing a long-term
strategic business plan and financial forecast, including
reviewing various operating alternatives and analyzing
alternative operating scenarios, developing customer and
product sales and margin plans, and assisting in presenting
the plans to the Debtors' various constituents;
(7) advise and assist management in all aspects of bankruptcy
planning and preparation, including:
(a) providing insight to the Debtors in developing cash
flow budgets and first day pleadings,
(b) working with the Debtors and their advisors to ensure a
smooth transition into and out of chapter 11
protection,
(c) developing appropriate programs relating to retention,
compensation and severance of key personnel, and
(d) assisting management in the claims reconciliation
process, advising the Debtors on various customer and
supplier issues, and assisting management in employee,
customer, vendor and creditor constituency
communications; and
(8) perform all other restructuring advisory services as may be
requested by the Debtors.
James J. Loughlin, Jr., a principal of Loughlin Meghji, is one of
the lead professionals of the firm performing services to the
Debtors. Mr. Loughlin states that his firm received a $150,000
retainer, and professional fees incurred by the firm will be
capped at $250,000 per month. Additionally, Loughlin will
receive a $500,000 value added fee upon completion of the
Debtors' restructuring.
Mr. Loughlin discloses that the Firm's professionals bill:
Professional Hourly Rate
----------- -----------
Partners $595
Managing Directors $475 - $575
Directors $375 - $450
Associates $295 - $350
Mr. Loughlin assures the Court that his firm is a disinterested
person as the term is defined in Section 101(14) of the
Bankruptcy Code, as modified by Section 1107(b). The firm
represents no interest adverse to the Debtors and their estates,
Mr. Loughlin says.
Headquartered in Greenville, Pennsylvania, Werner Co. --
http://www.wernerladder.com/-- manufactures and distributes
ladders, climbing equipment and ladder accessories. The company
and three of its affiliates filed for chapter 11 protection on
June 12, 2006 (Bankr. D. Del. Case No. 06-10578). Kara Hammond
Coyle, Esq., Matthew Barry Lunn, Esq., and Robert S. Brady, Esq.,
Young, Conaway, Stargatt & Taylor, LLP, serves as the Debtors'
counsel. The firm of Willkie Farr & Gallagher LLP represents the
Debtors as its co-counsel. The Debtors have retained Rothschild
Inc. as their financial advisor and investment banker. At March
31, 2006, the Debtors reported total assets of $201,042,000 and
total debts of $473,447,000. (Werner Ladder Bankruptcy News,
Issue No. 2; Bankruptcy Creditors' Service, Inc., 215/945-7000)
XEROX CORP: Palm Settles Patent Breach Suit for $22.5 Million
-------------------------------------------------------------
Palm, Inc., has settled a patent infringement lawsuit filed by
Xerox Corporation nine years ago. In April 1997, Xerox sued a
predecessor to Palm, Inc., claiming that the handwriting-
recognition technology marketed as Graffiti(R) and formerly used
in Palm OS(R) handheld devices infringed a Xerox patent known as
Unistrokes(R), received on Jan. 21, 1997.
Xerox said that the settlement serves to avoid further costs and
distractions from the protracted legal appeals.
Under the settlement, Palm will pay Xerox $22.5 million, which
includes licensing fees for Unistrokes and two other patents. The
agreement also calls for "patent peace," a seven-year mutual
covenant not to sue within mutually agreed fields of use.
Palm's co-defendants, including PalmSource, Inc., a wholly owned
subsidiary of ACCESS Co., Ltd., and 3Com Corp. will receive a full
and unconditional release from the litigation, and each is
entitled to a fully paid-up license to the Unistrokes patent.
Net proceeds of the agreement will be substantially offset in
Xerox's second-quarter net income by costs related to the expected
settlement of other legal matters.
About Palm, Inc.
Palm, Inc. (NASDAQ:PALM) -- http://www.palm.com/-- a leader in
mobile computing, strives to put the power of computing in
people's hands so they can access and share their most important
information. The company's products for consumers, mobile
professionals and businesses include Palm(R) Treo(TM) smartphones,
Palm handheld computers, and Palm LifeDrive(TM) mobile managers,
as well as software, services and accessories.
About Xerox
Headquartered in Stamford, Connecticut, Xerox Corporation
(NYSE: XRX) -- http://www.xerox.com-- develops, manufactures,
markets, services, and finances document equipment, software,
solutions, and services worldwide. It offers digital monochrome
and color systems for customers in the graphic communications
industry and enterprises, as well as various prepress and post-
press options. Xerox Corporation markets its products through
direct sales force, as well as through a network of independent
agents, dealers, value-added resellers, and systems integrators.
* * *
As reported in the Troubled Company Reporter on April 17, 2006,
Dominion Bond Rating Service changed the trend on the Issuer
Rating of Xerox Corporation and Xerox Canada Inc., to Positive
from Stable. The trend change recognizes the progress the Company
has made in strengthening its financial profile.
Trend Actions:
* Xerox Canada Inc. -- Issuer Rating BB (high)
Trend Changed to Positive
* Xerox Corporation -- Issuer Rating BB (high)
Trend Changed to Positive
As reported in the Troubled Company Reporter on March 3, 2006,
Standard & Poor's Ratings Services raised its corporate credit
rating on Stamford, Connecticut-based Xerox Corp. and related
entities to 'BB+' from 'BB-', and removed it from CreditWatch,
where it was placed with positive implications on Jan. 26, 2006.
The upgrade reflected substantial recent debt reductions, good
cash flow and growth in equipment sales. The outlook is stable.
As reported in the Troubled Company Reporter on Sept. 21, 2005,
Moody's Investors Service revised the rating outlook of Xerox
Corporation and supported subsidiaries to positive from stable.
Moody's previously raised the senior implied rating of Xerox and
its financially supported subsidiaries to Ba1 from Ba3. The
action was prompted by Xerox's significant debt and leverage
reduction over the last year, stable operating profit and free
cash flow generation, and the prospects for further strengthening
of its credit metrics and overall financial flexibility.
As reported in the Troubled Company Reporter on Aug. 23, 2005,
Fitch Ratings upgraded Xerox Corp. and its subsidiaries' senior
unsecured debt to 'BB+' from 'BB', trust preferred securities to
'BB-' from 'B+' and affirmed the senior secured bank credit
facility at 'BBB-'. The Rating Outlook remains Positive.
Approximately US$5.8 billion of securities were affected by
Fitch's action.
* Chapter 11 Cases with Assets & Liabilities Below $1,000,000
-------------------------------------------------------------
Recent chapter 11 cases filed with assets and liabilities below
$1,000,000:
In re Donald L. Yoder
Bankr. N.D. Ind. Case No. 06-10939
Chapter 11 Petition filed June 21, 2006
See http://bankrupt.com/misc/inb06-10939.pdf
In re Labor Power of America, Inc.
Bankr. S.D. Fla. Case No. 06-12717
Chapter 11 Petition filed June 21, 2006
See http://bankrupt.com/misc/flsb06-12717.pdf
In re NJM LLC
Bankr. E.D. N.Y. Case No. 06-42113
Chapter 11 Petition filed June 21, 2006
See http://bankrupt.com/misc/nyeb06-42113.pdf
In re William Lee Samples
Bankr. M.D. Tenn. Case No. 06-03113
Chapter 11 Petition filed June 21, 2006
See http://bankrupt.com/misc/tnmb06-03113.pdf
In re Bum Rogers, Inc.
Bankr. D. N.J. Case No. 06-15679
Chapter 11 Petition filed June 22, 2006
See http://bankrupt.com/misc/njb06-15679.pdf
In re James E. Anderson
Bankr. W.D. Wis. Case No. 06-11339
Chapter 11 Petition filed June 22, 2006
See http://bankrupt.com/misc/wiwb06-11339.pdf
In re Adam P. Boulay
Bankr. D. Mass. Case No. 06-11988
Chapter 11 Petition filed June 23, 2006
See http://bankrupt.com/misc/mab06-11988.pdf
In re Brandon Christiansen
Bankr. D. Colo. Case No. 06-13875
Chapter 11 Petition filed June 23, 2006
See http://bankrupt.com/misc/cob06-13875.pdf
In re Commonwealth Ambulance and Emergency Medical Service, Inc.
Bankr. D. Mass. Case No. 06-11973
Chapter 11 Petition filed June 23, 2006
See http://bankrupt.com/misc/mab06-11973.pdf
In re Eric Newberry
Bankr. E.D. Tex. Case No. 06-40934
Chapter 11 Petition filed June 23, 2006
See http://bankrupt.com/misc/txeb06-40934.pdf
In re Nicolae Sgaverdea
Bankr. D. N.M. Case No. 06-11063
Chapter 11 Petition filed June 23, 2006
See http://bankrupt.com/misc/nmb06-11063.pdf
In re Classy Chasis, Inc.
Bankr. E.D. Mich. Case No. 06-48179
Chapter 11 Petition filed June 25, 2006
See http://bankrupt.com/misc/mieb06-48179.pdf
In re Bowers Truck Service, Inc.
Bankr. W.D. Pa. Case No. 06-10718
Chapter 11 Petition filed June 26, 2006
See http://bankrupt.com/misc/pawb06-10718.pdf
In re Cameron D. Melton
Bankr. D. Idaho Case No. 06-00748
Chapter 11 Petition filed June 26, 2006
See http://bankrupt.com/misc/idb06-00748.pdf
In re L&L Tool Company, Inc.
Bankr. N.D. Miss. Case No. 06-11363
Chapter 11 Petition filed June 26, 2006
See http://bankrupt.com/misc/msnb06-11363.pdf
In re Maurice E. Smith
Bankr. N.D. Ga. Case No. 06-67241
Chapter 11 Petition filed June 26, 2006
See http://bankrupt.com/misc/ganb06-67241.pdf
In re Superior Powder Company, Inc.
Bankr. N.D. Miss. Case No. 06-11360
Chapter 11 Petition filed June 26, 2006
See http://bankrupt.com/misc/msnb06-11360.pdf
In re Clayton P. Gibson, Jr.
Bankr. S.D. Miss. Case No. 06-01114
Chapter 11 Petition filed June 27, 2006
See http://bankrupt.com/misc/mssb06-01114.pdf
In re Headline Sports, Inc.
Bankr. D. Hawaii Case No. 06-00430
Chapter 11 Petition filed June 27, 2006
See http://bankrupt.com/misc/hib06-00430.pdf
In re Hi-Fi Farm, Inc.
Bankr. W.D. Va. Case No. 06-70666
Chapter 11 Petition filed June 27, 2006
See http://bankrupt.com/misc/vawb06-70666.pdf
In re Hooray's Inc.
Bankr. W.D. Ky. Case No. 06-31588
Chapter 11 Petition filed June 27, 2006
See http://bankrupt.com/misc/kywb06-31588.pdf
In re Mid-America Building Science, Inc.
Bankr. E.D. Ark. Case No. 06-12640
Chapter 11 Petition filed June 27, 2006
See http://bankrupt.com/misc/areb06-12640.pdf
In re Port Silver L.P.
Bankr. N.D. Ill. Case No. 06-07538
Chapter 11 Petition filed June 27, 2006
See http://bankrupt.com/misc/ilnb06-07538.pdf
In re Steve F. Knopp
Bankr. W.D. Ky. Case No. 06-31591
Chapter 11 Petition filed June 27, 2006
See http://bankrupt.com/misc/kywb06-31591.pdf
In re Stratford Bakers, Inc.
Bankr. D. Conn. Case No. 06-30977
Chapter 11 Petition filed June 27, 2006
See http://bankrupt.com/misc/ctb06-30977.pdf
In re West 54th Street Food Corp.
Bankr. S.D.N.Y. Case No. 06-11445
Chapter 11 Petition filed June 27, 2006
See http://bankrupt.com/misc/nysb06-11445.pdf
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
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A list of Meetings, Conferences and Seminars appears in each
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related conferences are encouraged. Send announcements to
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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. Rizande B.
Delos Santos, Shimero Jainga, Joel Anthony G. Lopez, Tara Marie A.
Martin, Jason A. Nieva, Emi Rose S.R. Parcon, Lucilo M. Pinili,
Jr., Marie Therese V. Profetana, Robert Max Quiblat, Christian Q.
Salta, Cherry A. Soriano-Baaclo, and Peter A. Chapman, Editors.
Copyright 2006. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
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re-mailing and photocopying) is strictly prohibited without prior
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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-
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*** End of Transmission ***