/raid1/www/Hosts/bankrupt/TCR_Public/060828.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, August 28, 2006, Vol. 10, No. 204
Headlines
2135 GODBY: Legg Mason Says Insurance Proceeds Not Cash Collateral
360 GLOBAL: Balance Sheet Upside-Down by $56 Million at June 30
ADELPHIA COMMS: Paying $600MM in Cash & Stock to Restitution Fund
ADELPHIA COMMS: Sells Lots, Frame Tower & Timber for $412,731
AH-DH APARTMENTS: Cornerstone Fails to Cut Plan-Filing Period
AH-DH APARTMENTS: Court to Consider Lift-Stay Plea on September 18
ALLIANCE LEASING: Court Confirms Third Amended Plan of Liquidation
AMERICAN REAL: S&P Upgrades Senior Debt's Rating to BB+ from BB
ASARCO LLC: FFIC Objects to London Market Insurers Settlement Pact
ASARCO LLC: Asbestos Panel & FCR Want AMC's Tax Motion Denied
ASARCO LLC: Can Execute IRS Forms for Tax Refunds
AVANI INTERNATIONAL: June 30 Capital Deficit Widens to $128,775
ASIA PREMIUM: Balance Sheet Upside-Down by $2.7 Million at June 30
ASSOCIATED MATERIALS: Appoints Thomas Chieffe as President & CEO
BERTHEL GROWTH: Posts $130,238 Net Loss in Quarter Ended June 30
BNS HOLDING: Posts $94,000 Net Loss in Quarter Ended June 30
CATHOLIC CHURCH: Parties Object to Spokane's Indiana Settlement
CATHOLIC CHURCH: More Objections to Spokane & GICA's $5.25MM Pact
CHESAPEAKE VILLAGE: Case Summary & 13 Largest Unsecured Creditors
CKRUSH INC: June 30 Stockholders' Deficit Narrows to $11.4 Million
COLLINS & AIKMAN: Sees August 31 Plan of Reorganization Filing
COLLINS & AIKMAN: Wants to Defer Interest Payments to JPMorgan
COMVERSE TECH: Subsidiary to Acquire Netonomy(R) for $19 Million
CONGOLEUM CORP: Century Insurers to Buy Back Policies for $16.95MM
CONSOLIDATED CONTAINER: Fails to File 2nd Qtr. Financials on Time
COVENTRY HEALTH: Earns $135.5 Million in Quarter Ended June 30
CUMULUS MEDIA: Earns $4.6 Million in Quarter Ended June 30
DANA CORP: Sypris Wants Debtors to Decide on Two Purchase Pacts
DANA CORP: Court Okays Pact Allowing PBGC to Consolidate Claims
DELTA AIR: Wilmington Trust Says it Holds $5 Mil. of Admin. Claim
DELTA AIR: Wants Court's Nod on J. Aron Fuel Supply Agreement
DELTA AIR: Unit Selects IBM for IT Infrastructure Services
DEVELOPERS DIVERSIFIED: To Launch $250 Mil. Senior Notes Offering
DIRECTED ELECTRONICS: Polk Purchase Cues Moody's to Hold Ratings
DIVERSIFAX INC: May 31 Balance Sheet Upside-Down by $2.8 Million
DOUGHMAKERS LLC: Case Summary & 22 Largest Unsecured Creditors
DRESSER INC: Completes Consent Solicitation on 9-3/8% Term Loan
EVERGREEN INT'L: Extends 12% Senior Notes Offering to Sept. 5
FLYI INC: Judge Walrath Approves Incentive Program
FLYI INC: U.S. Trustee Wants Compliance on Section 345 Provisions
FRASER PAPERS: Operating Losses Cues Moody's to Junk Ratings
FRAWLEY CORP: June 30 Balance Sheet Upside-Down by $5 Million
GALVEX HOLDINGS: Wants Chapter 11 Cases Dismissed or Converted
GENOIL INC: Appoints H. Lombard as Director of Corporate Finance
GENTEK INC: Earns $4.2MM from Continuing Operations in 2nd Quarter
GLOBAL CROSSING: Balance Sheet Upside-Down by $86MM in 2nd Quarter
GLOBAL DOCUGRAPHIX: Court Approves Sale of Remaining Assets
GMAC COMMERCIAL: Fitch Lowers $19 Mil. Class M Loan's Rating to CC
GRUPO TMM: Inks $200MM Securitization Pact with Deutsche Bank
HARVEST ENERGY: North Atlantic Merger Cues S&P's Negative Watch
HEMOSOL CORP: CCAA Proceedings Stayed Until September 29
HERBALIFE LTD: Completes Redemption of $165 Million 9-1/2% Notes
HOLLINGER INT'L: June 30 Balance Sheet Upside-Down by $261 Mil.
HOLLYWOOD THEATERS: Moody's Holds Low-B Ratings on Sr. Sec. Loans
IMMUNE RESPONSE: Earns $104 Million in Quarter Ended June 30
IMMUNE RESPONSE: Restating 2006 1st Quarter Financial Statements
INGO KRIEG: Voluntary Chapter 11 Case Summary
INSIGHT COMMS: Earns $117.6 Million in 2006 Second Quarter
INTEGRATED HEALTH: Court OKs Stipulation on LaSalle's $556K Claim
INTERNATIONAL FITNESS: Case Summary & 11 Largest Unsec. Creditors
INTERSTATE BAKERIES: Wants ABA Employers to Follow PBGC Ruling
INTERSTATE BAKERIES: Court Lifts Stay on Sara Lee Litigation
ISTAR FINANIAL: Reports $90.4 Million Net Income in Second Quarter
JACOBS INDUSTRIES: U.S. Trustee Wants Case Converted to Ch. 7
LARRY'S MARKET: Food Markets Northwest Buys Queen Anne Location
LE GOURMET: Sells Business to NACCO Industries' Subsidiary
LIBERTY TAX III: June 30 Balance Sheet Upside-Down by $100 Mil.
LOS OSOS: Files Chapter 9 Petition to Protect Fiscal Integrity
LOS OSOS: Case Summary & 20 Largest Unsecured Creditors
MAB GROUP: Case Summary & 20 Largest Unsecured Creditors
MASSEY ENERGY: Earns $3.2 Million in Second Quarter Ended June 30
MICROISLET INC: Posts $5.9 Mil. Net Loss in Period Ended June 30
MIRANT CORP: Gregorys Want Sugar Creek's $42-Mil. Claims Allowed
MIRANT CORP: Lovett Unit Gets Court Approval on New York DEC Order
NATIONAL ENERGY: Court Bars Adam Mirick from Filing Late Claim
NEOPLAN USA: Organizational Meeting Set at 2:00 p.m. Tomorrow
NEOPLAN USA: Case Summary & 24 Largest Unsecured Creditors
NORTHWEST AIRLINES: Flight Attendants' Strike Temporarily Blocked
NORTHWEST AIRLINES: Comments on Judge Marrero's Strike Injunction
OMNICARE INC: Moody's Holds Ba2 Corporate Family Rating
PAPERCLIP SOFTWARE: June 30 Balance Sheet Upside-Down by $1.5 MM
PELTS & SKINS: Section 341(a) Meeting Scheduled on September 19
PHILLIPS-VAN HEUSEN: Earns $29 Million in Second Fiscal Quarter
PIONEER NATURAL: To Pay $32 Mil. As Royalty Owner Suit Settlement
PLASTECH ENGINEERED: Moody's Junks $50 Million Sr. Loan's Rating
PLATFORM LEARNING: Wants to Walk Away from Seven Property Leases
PREDIWAVE CORP: Has Until to November 10 to Decide on Leases
PROFESSIONAL INVESTORS: Wants John P. Lewis as Bankruptcy Counsel
R.F. CUNNINGHAM: Disclosure Statement Hearing Slated for Sept. 27
RADNOR HOLDINGS: Organizational Meeting Scheduled on Wednesday
REFCO INC: Chapter 7 Trustee Authorized to Wind Down Refco Trading
REFCO INC: Chap. 7 Trustee Wants Court OK on Document Sharing Pact
REUNION INDUSTRIES: June 30 Equity Deficit Narrows to $19.7 Mil.
ROYAL PEAK: Voluntary Chapter 11 Case Summary
SAINT VINCENTS: Inks Sublease Agreement with Massey Knakal Realty
SAINT VINCENTS: Moves to Reject Diagnostic Medical MRI Contract
SANTA FE INN: Voluntary Chapter 11 Case Summary
SATCON TECH: Posts $3.4 Million Net Loss in Quarter Ended July 1
SATELITES MEXICANOS: Seeks Bankr. Court Nod to Pay Taxes and Fees
SECOND CHANCE: Court OKs Cox Hodgman as Debtor's Special Counsel
SECOND CHANCE: Selects Jaffe Raitt as Counsel in Insurance Suits
SPECTRUM BRANDS: High Leverage Cues Fitch to Assign Junk Ratings
STANDARD PACIFIC: Reports $96.5 Mil. Net Income in Second Quarter
STERLING FINANCIAL: Inks $30 Mil. Credit Facility with Wells Fargo
SUPERCONDUCTOR TECH: Posts $22MM Net Loss in Quarter Ended July 1
TELOS CORPORATION: Equity Deficit Widens to $119 Mil. at June 30
TFS ELECTRONIC: Plans to Pay Unsecured Creditors 73% of Claims
THINKPATH INC: Posts $960,000 Net Loss in Quarter Ended June 30
TOWER AUTOMOTIVE: Asks Court to Reject UAW & IUE-CWA Settlement
TOWER AUTOMOTIVE: Unions Approve New Labor Agreements
TOWER RECORDS: Organizational Meeting Set at 10:00 a.m. Tomorrow
UNIVERSAL COMMS: Earns $1.4 Million in Quarter Ended June 30
URBAN HOTELS: Plan Confirmation Hearing Moved to August 30
USG CORP: Settling with Asbestos Property Damage Claimants
USG CORP: NYSE Delists Pref. Stock Rights & Berkshire Ups Stake
VARIG S.A.: Domestic Market Share Slips to 3.54% in July
VARIG S.A.: ILFC Continues to Harp over Unpaid Aircraft Leases
VESTA INSURANCE: Moves to Reject Four Real Property Leases
VESTA INSURANCE: Wants to Transfer Accounts to Texas Commissioner
WEST VIRGINIA: Section 341(a) Meeting Set for September 19
WINN-DIXIE: Wants Court to Approve Brookshire Grocery Stipulation
WINN-DIXIE: Wants to Reject Store No. 1059's Lease as of Aug. 31
WORLD HEART: Posts $3.9 Million Net Loss in Second Quarter of 2006
* BOND PRICING: For the week of August 21 -- August 25, 2006
*********
2135 GODBY: Legg Mason Says Insurance Proceeds Not Cash Collateral
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Legg Mason Real Estate Holdings, VI, Inc., a secured creditor of
2135 Godby Property, LLC, dba Quail Creek Apartments, objects to
the Debtor's use of a portion of its cash collateral to pay
Disaster Services, Inc., for repair work in the Debtor's property.
Gary W. Marsh, Esq., at McKenna Long & Aldridge LLP, in Atlanta,
Georgia, tells the Court that under a May 2005 Deed to Secure Debt
and Security Agreement, Legg Mason is the designated loss payee on
the Debtor's property insurance policies. The insurance proceeds
is not cash collateral, Mr. Marsh contends.
Because under the terms of the loan document, the insurance
proceeds are required to be paid to Legg Mason, and because the
Debtor has no right to use any portion of those proceeds, Legg
Mason argues that it owns those proceeds, rather than just being a
security interest holder on the property.
According to Mr. Marsh, even if the insurance proceeds were found
to be cash collateral, there is no authority under the Bankruptcy
Code for the Debtor to pay Disaster Services, an unsecured
creditor, on a prepetition claim, absent a plan of reorganization.
Legg Mason also disputes the assertion that it has a sizeable
equity cushion. Legg Mason wouldn't be adequately protected if
those proceeds will be used, Mr. Marsh argues.
Headquartered in Calabasas, California, 2135 Godby Property, LLC,
dba Quail Creek Apartments, owns and operates a 486-unit apartment
in 2135 Godby Road, College Park, Georgia. The company filed for
chapter 11 protection on May 1, 2006 (Bankr. N.D. Ga. Case No.
06-65007). Todd E. Hennings, Esq., at Macey, Wilensky, Kessler,
Howick & Westfall, LLP, represents the Debtor in its restructuring
efforts. No Committee of Unsecured Creditors has been appointed
in the Debtor's case. When the Debtor filed for protection from
its creditors, it estimated assets and debts between $10 million
and $50 million.
360 GLOBAL: Balance Sheet Upside-Down by $56 Million at June 30
---------------------------------------------------------------
360 Global Wine Company filed its financial statements for the
second quarter ended June 30, 2006, on Form 10-Q, with the
Securities and Exchange Commission on Aug. 23, 2006.
Revenues for the second quarter ended June 30, 2006 increased by
approximately $4.2 million, to $4.3 million as compared to $84,335
for the fiscal quarter ended June 30, 2005.
The Company disclosed that in the second quarter of 2006, all of
the revenue resulted from its 2005 acquisition of Viansa Winery
and that during the three-month period in 2005, it had brokerage
fee revenue that did not recur in the 2006 second quarter.
Net income for the quarter ended June 30, 2006, was $25.5 million
compared to a net gain of $259,073 for the quarter ended June 30,
2005. The favorable result was caused by the recalculation of the
Company's derivatives at quarter-end. The Company also reported
gross profit of $1.7 million in the second quarter of 2006
compared with gross profit of $77,756 in the prior year's second
quarter.
At June 30, 2006, the Company's balance sheet showed total assets
of $43 million and total liabilities of $99 million resulting in a
total shareholders' deficit of $56 million.
During the second quarter of 2006, the Company recorded an
operating loss of $1.4 million, of which $231,500 resulted from
non-cash items, comprised of stock-based compensation of $191,250
to employees and members of the board of directors and general and
administrative and consulting expenses of $40,250, which were paid
with the Company's common stock.
The Company also disclosed that its acquisition of the Viansa
Winery has resulted in revenues for the six months ended
June 30, 2006, of approximately $8 million as compared to
approximately $244,377 for the six months ended June 30, 2005.
Gross profit was reported to be at approximately $3 million for
the first six months ended June 30, 2006, compared to
approximately $203,922 in the prior year's first six months.
During the first six months of 2006, the Company recorded an
Operating Loss of $24 million, of which, approximately $21.8
million resulted from non-cash items, comprised of stock-based
compensation of employees and members of the board of directors of
$13.3 million, marketing sponsorships of $4.5 million and general
and administrative and consulting expenses of $4 million.
For the six months ended June 30, 2006, the Company disclosed that
loss on discontinued operations was $2.5 million, relative to the
KKLLC discontinued operation. The loss on the disposal of a
discontinued operation of $900,000 was the result of the Springer
Mining transaction.
A text-copy of 360 Global Wine may be viewed at no charge
at http://ResearchArchives.com/t/s?106e
360 Global Wine Company, through its subsidiaries, markets and
distributes alcohol beverages in the wine category. The company
offers various wines produced by Viansa and Kirkland
Knightsbridge, LLC. Also it market products through retail
locations and wine distributors.
Going Concern Doubt
David S. Hall, P.C., in Dallas, Texas, raised substantial doubt
about 360 Global Wine Company's ability to continue as a going
concern after auditing the Company's consolidated financial
statements for the year ended Dec. 31, 2005. The auditor pointed
to the Company's operating losses since inception.
ADELPHIA COMMS: Paying $600MM in Cash & Stock to Restitution Fund
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In its Form 10-Q filed with the Securities and Exchange Commission
on Aug. 14, 2006, Adelphia Communications Corporation disclosed
that as a result of the ACOM Debtors' sale of substantially all of
their assets to Time Warner NY Cable, LLC, and Comcast
Corporation, ACOM's contribution to the Restitution Fund will
consist of $600,000,000 in cash and stock, with at least
$200,000,000 in cash, and 50% of the first $230,000,000 of future
proceeds, if any, from certain litigation against third parties
who injured ACOM.
The restitution fund is for the benefit of defrauded Adelphia
investors.
ACOM's Chief Financial Officer Vanessa A. Wittman relates that
unless extended on consent of the U.S. Attorney and the Securities
and Exchange Commission, which consent may not be unreasonably
withheld, ACOM must make those payments on or before the earlier
of:
(i) October 15, 2006;
(ii) 120 days after confirmation of a stand-alone plan of
reorganization; or
(iii) seven days after the first distribution of stock or cash
to creditors under any plan of reorganization.
ACOM recorded charges of $425,000,000 and $175,000,000 during 2004
and 2002, related to the Non-Prosecution Agreement.
Pursuant to letter agreements with Time Warner NY and Comcast, the
U.S. Attorney has agreed, notwithstanding ACOM's failure to comply
with the Non-Prosecution Agreement, that it will not criminally
prosecute any of the joint venture entities or their subsidiaries
purchased from ACOM by Time Warner NY or Comcast pursuant to the
asset purchase agreements dated April 20, 2005, as amended.
Under those letter agreements, Ms. Wittman says, each of Time
Warner NY and Comcast have agreed that following the closing of
the Sale Transaction, they will cooperate with the relevant
governmental authorities' requests for information about ACOM's
operations, finances and corporate governance between 1997 and
confirmation of the Debtors' plan of reorganization.
The sole and exclusive remedy against Time Warner NY or Comcast
for breach of any obligation in the letter agreements is a civil
action for breach of contract seeking specific performance of such
obligations. In addition, Time Warner NY and Comcast entered into
letter agreements with the SEC agreeing that upon and after the
closing of the Sale Transaction, Time Warner NY, Comcast and their
affiliates will not be subject to, or have any obligation under,
the final judgment consented to by ACOM in the SEC Civil Action.
About Adelphia Communications
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 Cablevision Associates of Radnor, L.P., and 20 of its
affiliates, collectively known as Rigas Manged Entities, are
entities that were previously held or controlled by members of the
Rigas family. In March 2006, the rights and titles to these
entities were transferred to certain subsidiaries of Adelphia
Cablevision, LLC. The RME Debtors filed for chapter 11 protection
on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through
06-10642). Their cases are jointly administered under Adelphia
Communications and its debtor-affiliates chapter 11 cases.
(Adelphia Bankruptcy News, Issue Nos. 146; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000)
ADELPHIA COMMS: Sells Lots, Frame Tower & Timber for $412,731
-------------------------------------------------------------
Pursuant to the Excess Assets Sale Procedures approved by the U.S.
Bankruptcy Court for the Southern District of New York, Adelphia
Communications Corp. and its debtor-affiliates inform the Court
that they will sell these assets for $412,731:
1. Asset: Real Property in Township of Allegany,
County of Potter, and Commonwealth of
Pennsylvania, with approximately 170
acres on tax arcel nos. 020-3-20 and
020-3-44-8
Purchaser: Michael Menard and Gary Kelsey
Purchase Price: $136,200
Agent: Acker & Larsen, P.C.
Deposit: $5,000
Appraised Value: No appraisal was conducted
2. Asset: Real Property in Township of Allegany,
County of Potter, and Commonwealth of
Pennsylvania, with approximately 32.5
acres on tax parcel nos. 020-3-22A
Purchaser: Bradley T. Hutzell
Purchase Price: $142,000
Agent: Acker & Larsen, P.C.
Deposit: $5,000
Appraised Value: No appraisal was conducted
3. Asset: 35'x3'x8' frame tower with a 20'x20'
fencing enclosure
Purchaser: Lake San Marcos Community Association
Purchase Price: $1
Agent: (none mentioned)
Deposit: none
Appraised Value: No appraisal was conducted
4. Asset: Real Property at Coudersport,
Pennsylvania
Purchaser: Cindy S. Welt
Purchase Price: $26,500
Agent: Trail's End Realty
Deposit: $1,000
Appraised Value: $26,500
5. Asset: Timber and trees on tax parcel 020-3-17A,
in Potter County, Pennsylvania
Purchaser: Patterson Lumber Co. Inc.
Purchase Price: $108,030
Agent: Acker & Larsen, P.C.
Deposit: $10,000
Appraised Value: No appraisal was conducted
About Adelphia Communications
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 Cablevision Associates of Radnor, L.P., and 20 of its
affiliates, collectively known as Rigas Manged Entities, are
entities that were previously held or controlled by members of the
Rigas family. In March 2006, the rights and titles to these
entities were transferred to certain subsidiaries of Adelphia
Cablevision, LLC. The RME Debtors filed for chapter 11 protection
on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through
06-10642). Their cases are jointly administered under Adelphia
Communications and its debtor-affiliates chapter 11 cases.
(Adelphia Bankruptcy News, Issue Nos. 146; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000)
AH-DH APARTMENTS: Cornerstone Fails to Cut Plan-Filing Period
-------------------------------------------------------------
The Honorable Brenda T. Rhoades of the U.S. Bankruptcy Court for
the Eastern District of Texas, Sherman Division, denied
Cornerstone Capital Consulting, Inc.'s request to terminate the
exclusive plan-filing period of AH-DH Apartments, Ltd., and its
debtor-affiliates.
In an order dated Aug. 18, 2006, Judge Rhoades ruled that cause
does not exist to terminate the Debtors' exclusivity. The Debtors
submitted their Plan or Reorganization on July 3 but they have not
submitted a Disclosure Statement to explain the Plan. Their
exclusive plan-filing period ends on Sept. 18, 2006.
Cornerstone is a party in interest in the Debtors cases by virtue
of the assignment to Cornerstone of at least one scheduled
unsecured claim against each of the Debtors. Cornerstone sought
to terminate the Debtors' exclusivity so that it can submit a
competing Reorganization Plan.
As reported in the Troubled Company Reporter on July 26, 2006,
Cornerstone complained that the Debtors' plan relies on a capital
infusion from Vintage Capital Group, LLC, but neglects to provide
information regarding Vintage's ability to fund the infusion.
Cornerstone also complained that the Plan does not disclose how
unsecured creditors will be paid or give any detail regarding the
reorganization of Debtor Shadow Creek Apartments, Ltd.
Cornerstone further pointed to Citigroup Global Markets Realty
Corporation's recent request to lift the automatic stay so it can
foreclose on its collateral. Citigroup has alleged that the
Debtors' Plan is not in the process of confirmation but is only a
place holder, seeking to hold creditors at bay.
Citigroup opposed Cornerstone's move to terminate the Debtors'
exclusivity to the extent that it seeks to limit Citigroup's
ability to terminate the automatic stay. Citigroup told the Court
that Cornerstone should not be allowed to derail its efforts to
protect its collateral especially since Cornerstone had scheduled
unsecured claims totaling a mere $545.58.
About AH-DH Apartments
Headquartered in Plano, Texas, AH-DH Apartments, Ltd., owns 16
apartment complexes. The company and three of its affiliates
filed for chapter 11 protection on Mar. 22, 2006 (Bank. E.D. Tex.
Case No. 06-40355). J. Mark Chevallier, Esq., at McGuire Craddock
& Strother, P.C., represents the Debtors. When the Debtors filed
for protection from their creditors, they estimated assets and
debts between $50 million and $100 million.
DH Holdings Limited Partnership and DH Holdings GP, Inc., filed
for chapter 11 protection on Apr. 8, 2006 (Bankr. E.D. Tex. Case
Nos. 06-40479 and 06-40480). Another affiliate, DB Holdings, LLC,
filed for chapter 11 protection on Apr. 10, 2006 (Bankr. E.D. Tex.
Case No. 06-40484). The Debtors' chapter 11 cases are jointly
administered under Case No. 06-40355.
AH-DH APARTMENTS: Court to Consider Lift-Stay Plea on September 18
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The U.S. Bankruptcy Court for the Eastern District of Texas,
Sherman Division, will continue the hearing, at 10:00 a.m., on
Sept. 18, 2006, on Citigroup Global Market Realty Corporation, fka
Salomon Brothers Realty Corporation's request for permission to
foreclose on its liens and security interests in the properties of
AH-DH Apartments, Ltd., and its debtor-affiliates.
Citigroup wants the Court to lift the automatic stay so it can
foreclose on the Debtors' properties in order to prevent the
alleged further erosion of the value of its collateral.
Citigroup Obligations
The Debtors owe Citigroup approximately $154 million on account of
five notes executed between August 2001 and December 2003. The
notes were secured by various multifamily real estate complexes
located in Houston and Austin, Texas.
Citigroup claims that the properties securing the notes were
supposed to be sold shortly after the notes were executed.
According to Citigroup, no sale has occurred despite the Debtors'
promises to work on the disposition of the properties.
Citigroup also argues the Debtors no longer have any equity on the
collateral in view of its over $149 million claim and the
$163 million appraised value of the properties less $24 million in
deferred maintenance charges.
Debtors Respond
The Debtors maintain that they have equity in the properties and
that these properties are necessary to their successful
reorganization.
Mark Chevallier, Esq., at McGuire Craddock & Strother, PC, tells
the Court there is no "cause" to lift the stay at this time since
Citigroup is adequately protected, inter alia, because:
a) Citigroup is over-secured;
b) the Debtors have made, and continue to make, significant
adequate protection payments pursuant to its cash
collateral budgets with Citigroup;
c) the properties are properly insured and regularly
maintained;
d) all taxes due are paid or escrowed; and
e) the Debtors are diligently pursuing a Plan supported by a
proposed $25 million equity infusion from Vintage Capital
Group, LLC.
About AH-DH Apartments
Headquartered in Plano, Texas, AH-DH Apartments, Ltd., owns 16
apartment complexes. The company and three of its affiliates
filed for chapter 11 protection on Mar. 22, 2006 (Bank. E.D. Tex.
Case No. 06-40355). J. Mark Chevallier, Esq., at McGuire Craddock
& Strother, P.C., represents the Debtors. When the Debtors filed
for protection from their creditors, they estimated assets and
debts between $50 million and $100 million.
DH Holdings Limited Partnership and DH Holdings GP, Inc., filed
for chapter 11 protection on Apr. 8, 2006 (Bankr. E.D. Tex. Case
Nos. 06-40479 and 06-40480). Another affiliate, DB Holdings, LLC,
filed for chapter 11 protection on Apr. 10, 2006 (Bankr. E.D. Tex.
Case No. 06-40484). The Debtors' chapter 11 cases are jointly
administered under Case No. 06-40355.
ALLIANCE LEASING: Court Confirms Third Amended Plan of Liquidation
------------------------------------------------------------------
The Honorable George C. Paine of the U.S. Bankruptcy Court for the
Middle District of Tennessee confirmed the Third Amended Plan of
Liquidation of Alliance Leasing Corporation.
The Court determined that the Plan satisfies the 13 requirements
stated in Section 1129(a) of the Bankruptcy Code.
Treatment of Claims
Total claims filed against the Debtor consists of $23.3 million of
secured claims, $1.8 million of priority unsecured claims and
$1.6 million of general unsecured claims.
Allowed Administrative Claims will be paid in full on the
Effective Date of the Plan.
Holders of priority unsecured claims and other priority claims
will be get a pro-rata share of the estate cash after
Administrative Claims and Priority Tax Claims are paid in full.
Holders of residual claims on the leased vehicles will retain
their liens and will receive the proceeds from the liquidation of
the collateral subject to that lien.
The alleged Trust Fund Claimants will receive pro rata payments if
funds are available after Administrative Claims, Priority Tax
Claims, and other priority claims are paid in full.
General unsecured claimholders who are not insiders will receive
pro rata payments if funds are available after Administrative
Claims, Priority Tax Claims, other priority claims, and trust
claims are paid in full. Insiders will receive pro rata payments
after the non-insider General unsecured claimholders receive full
payment of their claims.
Equity interest holders will receive pro rata payment after all
other claims are paid in full.
Headquartered in Franklin, Tennessee, Alliance Leasing
Corporation, filed for chapter 11 protection on Feb. 28, 2005
(Bankr. M.D. Tenn. Case No. 05-02397). Steven L. Lefkovitz, Esq.,
at Law Offices Lefkovitz & Lefkovitz represents the Debtor in its
restructuring efforts. Michael Collins, Esq., serves as the
Debtor's Chapter 11 Trustee. The law firm of Manier & Herod
represents Mr. Collins. When the Debtor filed for protection from
its creditors, it listed total assets of $24,190,072 and total
debts of $29,147,788.
AMERICAN REAL: S&P Upgrades Senior Debt's Rating to BB+ from BB
---------------------------------------------------------------
Standard & Poor's Rating Services raised its ratings on senior
debt issued by New York City-based American Real Estate Partners
L.P. to 'BB+' from 'BB.' The outlook is stable.
Standard & Poor's also assigned a rating to AREP's new
$150 million senior secured revolving credit facility. This
facility is rated 'BBB' (two notches higher than the counterparty
credit rating).
Finally, the rating agency assigned a recovery rating of '1',
indicating a high expectation of full recovery of principal in the
event of payment default.
The counterparty credit rating reflects:
* the firm's sustained good liquidity at the parent level;
* execution of turnaround strategies at key affiliates;
* increasingly diversified portfolio of businesses; and
* the proven investing track record of dominant shareholder
Carl Icahn.
Offsetting factors include:
* increasing financial leverage at the portfolio companie;
* a restricted ability of these companies to upstream dividends
to the parent holding company; and
* the high degree of dependence on the investment prowess of
one person-Carl Icahn.
Standard & Poor's view of the firm's creditworthiness has improved
as its mix of investments evolved from primarily real estate-based
to being more diversified. AREP's strategy is to invest and
cultivate value in underperforming businesses by improving
operational effectiveness or combining properties to achieve
competitive advantage. AREP has assembled significant investments
in four sectors:
* oil & gas,
* gaming,
* real estate, and
* home fashion.
The stable outlook is predicated on AREP's stable funding profile,
adequate liquidity, and the stable overall operating results from
its portfolio of investments. Standard & Poor's will monitor the
firm's leverage metrics, cash cushion, and profitability. The
rating agency will also keep an eye on the evolution of the firm's
investment mix and the drain that turnaround investments may place
on cash flow.
An upgrade could result if the firm realizes a significant cash
gain upon exiting one of its four major investments, and if
Standard & Poor's is able to ascertain that proceeds would be used
in a manner that resulted in a stronger, more stable capital
position. Downward pressure on the rating could result from
losses or deteriorating leverage metrics.
The decision to rate the bank loan two notches higher than the
counterparty rating reflects Standard & Poor's view that the $1.4
billion in collateral distributed across AREP's moderately
diversified portfolio is more than adequate to protect creditors
providing the $150 million bank facility.
ASARCO LLC: FFIC Objects to London Market Insurers Settlement Pact
------------------------------------------------------------------
Fireman's Fund Insurance Company asks the U.S. Bankruptcy Court
for the Southern District of Texas in Corpus Christi to deny the
London Market Insurers Settlement Agreement.
Fireman's Fund Insurance Company, along with the participating
London Market Insurers, are defendants in the Texas Coverage
Litigation. FFIC has appealed the Court order remanding the
Texas Coverage Litigation to the state court, Anthony S. Cox,
Esq., at Hermes Sargent Bates, in Dallas, Texas, relates.
Mr. Cox tells the Court that FFIC's insurance policies are more
than those issued by certain Participating LMI. FFIC's
obligations under the insurance policies are, in part, dependent
on coverage provided by policies issued by the Participating LMI.
FFIC objects to the LMI Settlement Agreement to the extent that:
-- it creates any prejudice or impairments of its state law
rights under its policies or otherwise under applicable
law;
-- it effects any pre-emption of a full adjudication of its
rights, claims and defenses in the Texas Coverage
Litigation; and
-- it deprives FFIC of its rights to assert any possible state
law contribution, indemnity and similar claims against any
Participating LMI without providing an indubitably
equivalent economic replacement ready.
FFIC seeks an adequate opportunity to complete meaningful
discovery, so that it can adequately prepare for the evidentiary
hearing on the Motion. If necessary, FFIC reserves the right to
ask the Court to defer the hearing on the Motion until it can
complete its discovery.
Without the inclusion in any order approving the Settlement
Agreement of appropriate provisions for adequate protection,
insurer neutrality and other limiting language, Mr. Cox asserts
that the Settlement Agreement will:
(a) result in an unlawful expansion and creation of greater
rights in ASARCO's prepetition insurance contracts;
(b) violate the mandatory requirement under Section 363(e) of
the Bankruptcy Code to provide adequate protection of
FFIC's claims and interests;
(c) effect an unconstitutional taking against any
Participating LMI; and
(d) lack good faith that will preclude the requested finding
under Section 363(m).
Headquartered in Tucson, Arizona, ASARCO LLC --
http://www.asarco.com/-- is an integrated copper mining,
smelting and refining company. Grupo Mexico S.A. de C.V. is
ASARCO's ultimate parent. The Company filed for chapter 11
protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207).
James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A.
Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter
Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq.,
at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor
in its restructuring efforts. Lehman Brothers Inc. provides the
ASARCO with financial advisory services and investment banking
services. Paul M. Singer, Esq., James C. McCarroll, Esq., and
Derek J. Baker, Esq., at Reed Smith LLP give legal advice to
the Official Committee of Unsecured Creditors and David J.
Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee. When the Debtor filed for protection
from its creditors, it listed $600 million in total assets and
$1 billion in total debts.
The Debtor has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521
through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO
Pipe Company, Inc., Cement Asbestos Products Company, Lake
Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about
their asbestos-driven chapter 11 filings have appeared in the
Troubled Company Reporter since Apr. 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No.
05-21346) also filed for chapter 11 protection, and ASARCO has
asked that the three subsidiary cases be jointly administered
with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case
was converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7
Trustee. (ASARCO Bankruptcy News, Issue No. 27; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/
or 215/945-7000)
ASARCO LLC: Asbestos Panel & FCR Want AMC's Tax Motion Denied
-------------------------------------------------------------
The Official Committee of Unsecured Creditors for the Asbestos
Subsidiary Debtors and Robert C. Pate, the future claims
representative, asks the U.S. Bankruptcy Court for the Southern
District of Texas in Corpus Christi to deny Americas Mining
Corporation's request to compel the ASARCO LLC and its debtor-
affiliates to decide whether to assume or reject the Tax Sharing
Agreement and the Tax Sharing Amendment.
The Asbestos Committee and the FCR have preliminarily reviewed
both the Tax Sharing Agreement and the Tax Sharing Amendment.
The Asbestos Committee and the FCR believe that an understanding
of the effect of assumption or rejection requires an analysis of
numerous provisions of the Internal Revenue Code of 1986 and of
the Debtors' operations and finances.
Jacob L. Newton, Esq., at Stutzman, Bromberg, Esserman & Plifka,
in Dallas, Texas, informs the Court that the Debtors have not yet
provided the Asbestos Committee and the FCR with any analysis
demonstrating the desirability or undesirability of assumption or
rejection of the two agreements in question and the effect on not
only the Debtors' bankruptcy estates, but on the Asbestos
Debtors' estates.
Mr. Newton notes that the Tax Sharing Amendment appears to have
been entered into within the time periods set forth in Sections
547 and 548 of the Bankruptcy Code. The Debtors should not be
compelled to assume or reject either the Tax Sharing Agreement or
the Tax Sharing Amendment until an analysis is completed as to
the effect of those Bankruptcy Code provisions on the Taxing
Agreements, Mr. Newton asserts.
Headquartered in Tucson, Arizona, ASARCO LLC --
http://www.asarco.com/-- is an integrated copper mining,
smelting and refining company. Grupo Mexico S.A. de C.V. is
ASARCO's ultimate parent. The Company filed for chapter 11
protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207).
James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A.
Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter
Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq.,
at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor
in its restructuring efforts. Lehman Brothers Inc. provides the
ASARCO with financial advisory services and investment banking
services. Paul M. Singer, Esq., James C. McCarroll, Esq., and
Derek J. Baker, Esq., at Reed Smith LLP give legal advice to
the Official Committee of Unsecured Creditors and David J.
Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee. When the Debtor filed for protection
from its creditors, it listed $600 million in total assets and
$1 billion in total debts.
The Debtor has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521
through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO
Pipe Company, Inc., Cement Asbestos Products Company, Lake
Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about
their asbestos-driven chapter 11 filings have appeared in the
Troubled Company Reporter since Apr. 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No.
05-21346) also filed for chapter 11 protection, and ASARCO has
asked that the three subsidiary cases be jointly administered
with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case
was converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7
Trustee. (ASARCO Bankruptcy News, Issue No. 27; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/
or 215/945-7000)
ASARCO LLC: Can Execute IRS Forms for Tax Refunds
-------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas in
Corpus Christi authorized ASARCO LLC to execute the Internal
Revenue Service forms.
As reported in the Troubled Company Reporter on July 20, 2006,
ASARCO Incorporated filed tax refund claims for $70,160,199 with
the Internal Revenue Service on May 15, 2003. Pursuant to a
merger deal between ASARCO, Inc., and ASARCO LLC in February
2005, the Refund Claims is property of ASARCO LLC's bankruptcy
estate, James R. Prince, Esq., at Baker Botts LLP, in Dallas,
Texas, said.
The Refund Claims are based on the carry-back of specified
liability losses from:
(a) tax years ending on Dec. 31, 1994, and 1995 to the tax
year ending on Dec. 31, 1987;
(b) tax year ending on Dec. 31, 1998, to the tax year
ending on Dec. 31, 1988; and
(c) tax year ending on Dec. 31, 1999, to the tax year
ending on Dec. 31, 1989.
ASARCO particularly asserted that the environmental and workmen's
expenditures it incurred qualified as specified liability losses
under Section 172(f) of the Internal Revenue Code.
The IRS disputed ASARCO's assertions and maintained that the
environmental expenditures did not qualify as SLLs. The IRS
required ASARCO to provide documents supporting its argument.
In the last quarter of 2005, the IRS agreed to use statistical
sampling to determine the portion of ASARCO's environmental
expenditures that would be classified as SLLs, Mr. Prince
relates. Based on the statistical sampling, the IRS tentatively
agreed to allow $40,479,421 of the Refund Claims.
In May 2006, the Congressional Joint Committee on Taxation
approved the allowance of $40,479,421 of the Refund Claims. The
IRS notified ASARCO of the allowance, and indicated that the
balance of the Refund Claim is disallowed. Attached with the
IRS' notice are:
(i) IRS Form 870 -- Offer of Waiver of Restrictions on
Assessment and Collection of Deficiency in Tax and of
Acceptance of Overassessment; and
(ii) IRS Form 3363 -- Acceptance of Proposed Disallowance of
Claim for Refund or Credit.
For the IRS to pay the allowed Refund Claims, ASARCO is required
to first execute the IRS Forms. If ASARCO does not sign the IRS
Forms, the Refund Claims will be disputed and referred to the IRS
Appeals Division. The IRS further warned ASARCO that no portion
of the Tax Refund would be paid until the dispute is resolved and
approved by the Joint Committee on Taxation.
Mr. Prince notes that if ASARCO signs the IRS Forms, ASARCO would
waive its right to have the IRS reconsider the Refund Claims as
part of the current administrative proceedings. However, a
reconsideration of the disallowed Refund Claims would unlikely
result in a more favorable resolution of the Claims, Mr. Prince
says.
By signing the IRS forms, ASARCO would not in any way waive its
right to pursue litigation for any disallowed portion of the
Refund Claims either in the District Court or in the Claims Court,
Mr. Prince added.
By executing the IRS forms, ASARCO will avoid additional expenses
with respect to the Tax Refund. By separating the allowed amount
from the disputed amount, ASARCO narrowed the focus of future
litigation, Mr. Prince pointed out.
Headquartered in Tucson, Arizona, ASARCO LLC --
http://www.asarco.com/-- is an integrated copper mining,
smelting and refining company. Grupo Mexico S.A. de C.V. is
ASARCO's ultimate parent. The Company filed for chapter 11
protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207).
James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A.
Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter
Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq.,
at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor
in its restructuring efforts. Lehman Brothers Inc. provides the
ASARCO with financial advisory services and investment banking
services. Paul M. Singer, Esq., James C. McCarroll, Esq., and
Derek J. Baker, Esq., at Reed Smith LLP give legal advice to
the Official Committee of Unsecured Creditors and David J.
Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee. When the Debtor filed for protection
from its creditors, it listed $600 million in total assets and
$1 billion in total debts.
The Debtor has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521
through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO
Pipe Company, Inc., Cement Asbestos Products Company, Lake
Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about
their asbestos-driven chapter 11 filings have appeared in the
Troubled Company Reporter since Apr. 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No.
05-21346) also filed for chapter 11 protection, and ASARCO has
asked that the three subsidiary cases be jointly administered
with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case
was converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7
Trustee. (ASARCO Bankruptcy News, Issue No. 27; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/
or 215/945-7000)
AVANI INTERNATIONAL: June 30 Capital Deficit Widens to $128,775
---------------------------------------------------------------
Avani International Group Inc. filed its second quarter financial
statements for the three months ended June 30, 2006, with the
Securities and Exchange Commission on Aug. 11, 2006.
At June 30, 2006, the Company's balance sheet showed $1,140,878 in
total assets and $1,269,653 in total liabilities, resulting in a
$128,775 capital deficit. The Company reported a $32,167 deficit
at Dec. 31, 2005.
Avani reported a $19,026 net loss on $84,827 of total revenues for
the three months ended June 30, 2006, compared with a $103,785 net
loss on $474,224 of total revenues for the same period in 2005.
Revenues for the six months ended June 30, 2006, were $101,093
representing a decrease of $761,552 or 88.28% from revenues of
$853,319 for the same period in 2005. The significant decrease in
revenues reflects the deterioration and ultimately the termination
of the business relationship with Avani O2, as well as the
de-consolidation of Avani O2 as a VIE, all of which occurred
during the 2005 period. Revenues for the 2005 period also
included $9,326 in cooler rentals and sales. The Company sold its
cooler rental and sales business in July 2005, and thus had no
corresponding revenue for the 2006 period.
Cost of revenue, which includes depreciation for the six-month
period in 2006 totaled $191,163, a decrease of $328,740 or 63.2%
from $519,903 for the same period in 2005.
Cost of revenue for the six-month period ended June 30, 2006,
consisted of costs of goods sold consisting of $142,950 in bottled
water, supplies, coolers, and related equipment, and delivery
costs (a decrease of $288,587 or 66.9% from $431,537 for the prior
period) and $48,366 in depreciation (a decrease of $40,153 or
45.4% from $88,366 for the same period in prior year).
The decrease in cost of goods sold for the 2006 period compared
with the prior period is due mainly to lower material and labor
costs associated with the reduced production levels.
The reduction in depreciation for the 2006 period is due to the
write off of the Malaysian equipment held by Avani O2 in July
2005.
Gross loss for the six-month period ended June 30, 2006, was
$90,070, a decrease of $252,672 or 126% from gross profit of
$342,742 for the same period in 2005.
Operating expenses, which includes marketing expenses, and general
and administrative expenses for the six-month period ended
June 30, 2006, totaled $24,750, a decrease of $1,535 or 5.8% from
$26,285 for the same period in 2005.
General and administrative costs were $284,172 in 2006, a decrease
of $91,650 or 24.45% from $375,822 in the prior period. The
decrease is due principally to reduced employees and payroll,
which resulted from sale of 5-gallon business.
Marketing expenses totaled $26,285 for the six-month period in
2006 representing a decrease of $1,535 or 5.8% from $26,285 for
the prior period.
The relatively constant marketing expenses reflect the Company's
decision in the fourth quarter of 2004 to reduce overall
international marketing expenses, particularly in Malaysia.
During 2005, the Company wrote off a receivable from Avani O2 in
the amount of $1,240,811. There was no write off for the 2006
period.
The Company experienced a foreign exchange loss of $32,386 in 2006
compared with a gain of $7,202 in 2005 due to a reduction in the
volume of currency exchange transactions and limited fluctuation
of the exchange rates between U.S. currency and Canadian currency
compared to the same period of prior year.
For the 2006 period, the Company experienced a gain in the amount
of $252,230 on the sale of its real estate assets.
Loss from operations for the 2006 period is $179,148 compared with
a loss of $1,292,974 for the comparable period 2005.
During the 2006 period, the Company recorded interest on debts
payable of $3,514 compared with $3,238 for the 2005 period.
Miscellaneous income was $0 in 2006 compared with $2,278 in 2005,
which principally represents taxes paid by Avani O2.
Comprehensive loss for the 2006 period was $121,608 compared with
a loss of $311,139 for the same period in 2005.
Liquidity and Capital Resources
As of June 30, 2006, the Company had working capital of $78,882.
Working capital deficit as of Dec. 31, 2005, was $689,799. The
increase in working capital is principally a result of the gain
experienced on the sale of the Company's real estate, partially
offset by the consolidated loss of the Company for the first
fiscal quarter of 2006.
Property, plant and equipment, net of accumulated depreciation,
totaled $52,878 on June 30, 2006. Property, plant and equipment,
net of accumulated depreciation, totaled $916,246 on Dec. 31,
2005.
The Company has entered into an agreement to sell its real estate
located in Canada and intend to re-locate is water manufacturing
business to Malaysia. The Company intends to use the proceeds
from the sale of its real estate to fund re-location efforts, and
to fund in initial operating capital.
Sale of Assets
On June 15, 2006, the Company sold its real property including
land, building and building improvements, for proceeds of
approximately $1,018,895. The net book value of its real property
was approximately $766,665 on June 15, 2006, and the sale
generated a gain of $252,230. After the sale of its real
property, its production of water was discontinued.
Full-text copies of the Company's second quarter financials are
available for free at http://ResearchArchives.com/t/s?1071
Going Concern Doubt
As reported in the Troubled Company Reporter on April 26, 2006,
Jeffrey Tsang & Co. in Hong Kong raised substantial doubt about
Avani International Group Inc.'s ability to continue as a going
concern after auditing the company's consolidated financial
statements for the year ended Dec. 31, 2005. The auditors pointed
to the company's recurring losses from operations.
About Avani International Group
Avani International Group Inc. -- http://www.avaniwater.com/--
produces, markets, and sells purified, oxygen enriched water under
the brand name Avani Water. The Company utilizes a technology,
which injects oxygen into purified water. The Company sells its
product in the greater Vancouver metropolitan area and
internationally in the United States, Taiwan, Korea, Hong Kong,
Malaysia, Japan, and Australia. The company has two wholly owned
subsidiaries: Avani Oxygen Water Corporation fka Avani Water
Corporation, and Avani International Marketing Corporation.
ASIA PREMIUM: Balance Sheet Upside-Down by $2.7 Million at June 30
------------------------------------------------------------------
Asia Premium Television Group, Inc., earned $580,654 of net income
on $20,491,876 of revenues on the second quarter ending June 30,
2006, the Company disclosed on a Form 10-Q filing delivered to the
Securities and Exchange Commission on Aug. 11, 2006.
As of June 30, 2006, the Asia Premium's balance sheet showed
$21,467,223 in assets and $23,585,978 in liabilities. The
Company's equity deficit narrowed to $2,118,755 as of June 30,
2006, from a $2,702,824 equity deficit at Dec. 31, 2005. The
Company had $20,507,372 in current assets at June 30, 2006,
available to pay off $23,518,441 of debts due in the next 12
months.
The Company's net cash provided by operating activities increased
to $3.4 million for the three months ended June 30, 2006, compared
to $1.6 million for the three months ended June 30, 2005. This
increase was primarily due to an increase in accounts payable and
other payables.
Net cash used by investing activities increased to $200,000 for
the three months ended June 30, 2006, compared to net cash used by
investing activities of $100,000 for the three months ended
June 30, 2005, due primarily to increases in payments for property
and equipment and a note receivable.
Net cash used by financing activities was $50,000 in the three
months ended June 30, 2006, as compared to $10,000 during the
three months ended June 30, 2005. This change was primarily due
to a decrease in advances payable to related parties in the three
months ended June 30, 2006, as compared to the same period in
2005.
Going Concern Doubt
The Company's management expressed substantial doubt about the
Company's ability to continue as a going concern due to liquidity
problems. However, management believes the going concern is
mitigated because of these factors:
a) convertible notes payable in the amount of $4,000,000 is
included in current liabilities but the note is held by a
significant shareholder and will be repaid by conversion
into common stock;
b) the Company has shown a net profit in each of the two most
recent fiscal years and expects the trend to continue; and
c) the Company has generated positive cash flows in each of the
two most recent fiscal years and expects the trend to
continue.
A full-text copy of the regulatory filing is available for free at
http://ResearchArchives.com/t/s?106a
Asia Premium Television Group, Inc., provides marketing, brand
management, advertising, media planning, public relations and
direct marketing services to clients in the People's Republic of
China. The Company's primary operating activities are Publishing
advertisements as agents for clients; Media consulting services;
and Advertising production.
ASSOCIATED MATERIALS: Appoints Thomas Chieffe as President & CEO
----------------------------------------------------------------
Associated Materials Incorporated disclosed that Thomas N. Chieffe
has been appointed President and Chief Executive Officer effective
Oct. 2, 2006.
Mr. Chieffe will replace Dana Snyder, who had been serving as
president and chief executive officer of the Company for an
interim period. Mr. Chieffe joins the Company from Kraftmaid
Cabinetry, Inc., where he served as president and chief executive
officer. Mr. Chieffe has over 25 years of experience in various
operating disciplines, including leadership roles in manufacturing
and finance.
In a joint statement, Chris Stadler, Managing Director of
Investcorp and Ira Kleinman, Managing Director of Harvest
Partners, said, "After our thorough search process, we are pleased
that Tom has accepted this position. At Kraftmaid, Tom drove
substantial revenue growth utilizing a multiple brand strategy
through various distribution channels. He also improved
profitability by focusing on cost and quality improvement. We are
confident that Tom's strategic leadership and operating skills
will help drive improvements in AMI's performance in the future."
The Company is a wholly owned subsidiary of Associated Materials
Holdings Inc., which is a wholly owned subsidiary of AMH Holdings,
Inc. AMH is a wholly owned subsidiary of AMH Holdings II, Inc.
which is controlled by affiliates of Investcorp S.A. and Harvest
Partners, Inc. Holdings, AMH and AMH II do not have material
assets or operations other than a direct or indirect ownership of
the common stock of the Company.
About Investcorp
Investcorp -- http://www.investcorp.com/-- is a global asset
management firm specializing in alternative investments with
offices in New York, London and Bahrain. The firm has four
products: private equity, hedge funds, real estate investment and
venture capital. It was established in 1982 and currently manages
total investments in alternative assets of around $10 billion.
About Harvest Partners
Harvest Partners -- at http://www.harvpart.com/-- is a private
equity investment firm. Founded in 1981, Harvest Partners has
approximately $1 billion of invested capital under management.
Headquartered in Akron, Ohio, Associated Materials Incorporated
-- http://www.associatedmaterials.com/-- manufactures exterior
residential building products, which are distributed through
company-owned distribution centers and independent distributors
across North America. AMI produces a broad range of vinyl
windows, vinyl siding, aluminum trim coil, aluminum and steel
siding and accessories, as well as vinyl fencing, decking and
railing. AMI is a privately held, wholly owned subsidiary of
Associated Materials Holdings Inc., a wholly owned subsidiary of
AMH, a wholly owned subsidiary of AMH II, which is controlled by
affiliates of Harvest Partners, Inc., and Investcorp S.A.
* * *
Moody's downgraded the ratings of Associated Materials Inc. and
its holding company AMH Holdings, Inc. AMH Holdings' corporate
family rating and ratings on the AMI's senior secured credit
facilities were downgraded to B3 from B2, effective Jan. 19, 2006.
Moody's said the ratings outlook is stable.
BERTHEL GROWTH: Posts $130,238 Net Loss in Quarter Ended June 30
----------------------------------------------------------------
For the three months ended June 30, 2006, Berthel Growth & Income
Trust I incurred net investment loss of $130,238 from total
revenues of $36,626.
At June 30, 2006, the Company reported total net liabilities of
$5,016,429 from total assets of $6,405,161 and total liabilities
of $11,421,590.
A full-text copy of the Company's financial report for the three
months ended June 30, 2006 is available for free at:
http://researcharchives.com/t/s?1049
Headquartered in Marion, Iowa, Berthel Fisher & Company Inc. --
http://www.berthel.com/-- provides full-service securities
brokerage services for investors, investment banking services for
mature companies and entrepreneurs, leases and loans for growing
businesses, and a full array of insurance products.
BNS HOLDING: Posts $94,000 Net Loss in Quarter Ended June 30
------------------------------------------------------------
BNS Holding Inc. incurred net loss of $94,000 for the three months
ended June 30, 2006. Its operating loss for the three months
ended June 30, 2006 of $329,000 was $94,000 lower than the three
months ended June 30, 2005, while its operating loss for the six
months ended June 30, 2006 was $646,000 higher than the six months
ended June 30, 2005.
The Company states that while it has continued to reduce corporate
level administration expenses over last year, management believes
there is little opportunity for further reduction without the
acquisition of an operating business.
The Company says that its operating losses for 2006 and 2005
include legal and professional costs incurred in connection with
ongoing litigation, and the sale of assets and exploration of
strategic alternatives.
For the Company's other income, the net amounted to $235,000 and
$439,000 for the three and six months ended June 30, 2006,
respectively, compared with $67,000 and $106,000 for the three and
six months ended June 30, 2005. Other income, net for all periods
consists primarily of interest income.
BNS Holding's balance sheet at June 30, 2006 showed total assets
of $20,834,000, total liabilities of $1,047,000, and total
shareowners' equity of $19,787,000.
A full-text copy of the Company's financial report for the three
months ended June 30, 2006 is available for free at:
http://researcharchives.com/t/s?1042
Going Concern Doubt
As reported in the Troubled Company Reporter on Mar. 17, 2006,
Ernst & Young LLP expressed substantial doubt about BNS Holding,
Inc.'s ability to continue as a going concern after auditing the
Company's financial statements for the year ended Dec. 31, 2005.
The auditing firm pointed to the fact that BNS Holding presently
has no active trade or business operations.
Headquartered in Middletown, Rhode Island, BNS Holding Inc. is
the parent of BNS Company. BNS Co. was engaged in the Metrology
Business and in the design, manufacture and sale of precision
measuring tools and instruments and manual and computer controlled
measuring machines. The Company at present has no active trade or
business operations but is searching for a suitable business to
acquire.
CATHOLIC CHURCH: Parties Object to Spokane's Indiana Settlement
---------------------------------------------------------------
The Catholic Diocese of Spokane asked the U.S. Bankruptcy Court
for the Eastern District of Washington to approve a Settlement,
Release and Policy Buyback Agreement with Indiana Insurance
Company, as reported in the Troubled Company Reporter on
Aug. 11, 2006.
The principal terms of the Settlement Agreement were:
(a) Indiana will pay $2,750,000 to the Diocese;
(b) The Diocese will use the settlement amount solely for
indemnity payments for Tort Claims related to individuals
alleging injury;
(c) The Diocese and Indiana will execute mutual releases,
including that:
-- The Diocese will dismiss, with prejudice, its claims
against Indiana in the Coverage Action and sell the
Policies back to Indiana free and clear of all liens,
claims, encumbrances and other interests, with the sole
exception of the rights, if any, held by Morning Star;
and
-- Indiana will release all claims for reimbursement of
the $325,000 in defense and indemnity claims already
paid for Tort Claims against the Diocese; and
(d) If the Diocese proposes a plan of reorganization that
channels Tort Claims to a trust, it will use its best
efforts to include a channeling injunction that protects
Indiana against the assertion of Tort Claims.
Objections
(A) Tort Committee
George E. Frasier, Esq., at Riddell Williams P.S., in Seattle,
Washington, asserts that the Catholic Spokane's proposed
settlement agreement with Indiana Insurance Company
inappropriately predetermines important provisions of any plan of
reorganization.
The language of the Settlement, Mr. Frasier says, is ambiguous
since payment of "indemnity for Tort Claims" on its face seems to
contemplate payment to a third party which has itself paid tort
claims, instead of direct payment of tort claims to tort
claimants.
Even if the Settlement provision permits direct payment to tort
claimants, Mr. Frasier contends, it appears to prohibit payment of
expenses of a claims resolution facility.
Additionally, Mr. Frasier says the Settlement Agreement also
appears to release Indiana Insurance before the settlement funds
are paid to the Diocese.
For these reasons, the Official Committee of Tort Claimants asks
the U.S. Bankruptcy Court for the Eastern District of Washington
to deny the Diocese's request.
(B) Tort Litigants Committee
Iain A.W. Nasatir, Esq., at Pachulski, Stang, Ziehl, Young, Jones
& Weintraub, LLP, in Los Angeles, California, contends that
Indiana Insurance is being released from a $5,000,000 potential
exposure by merely paying $2,750,000.
Mr. Nasatir relates that there is evidence that an excess policy
was issued to the Diocese for the 1977 and 1978 policy periods,
providing an additional $2,000,000 in coverage for each year.
While it is unclear from the documents supplied by the Diocese who
issued the policy, Mr. Nasatir says the Settlement Agreement
covers not just the primary policy, but any and all insurance
policies of any kind ever actually or allegedly entered into
between the Diocese and Indiana Insurance.
Mr. Nasatir contends that the fairness or reasonableness of the
Settlement Agreement cannot be properly assessed because:
(1) the declarations of the Diocese's attorneys regarding
reasonableness and fairness of the Settlement Agreement
are unsupported. Many questions remain about why
$2,750,000 is a justifiable settlement of the Indiana
Insurance's policy proceeds;
(2) the Settlement Motion is devoid of any information as to
how the $2,750,000 settlement amount compares to the
maximum and minimum range of recoveries the Diocese has
concluded the victims within the 1977 and 1978 coverage
years could be entitled to;
(3) it is very difficult to understand what value to ascribe
to the release of Indiana Insurance from any obligations
under policies whose limits are not even addressed;
(4) the Settlement Agreement and the Proposed Order are
inconsistent in describing how the settlement sum can be
used;
(5) there is a tendency for other claimants who are not
victims claiming against the Diocese for sexual or
physical abuse to share in the settlement proceeds simply
because of the manner in which the Settlement Agreement
defines Tort Claims; and
(6) the Settlement Agreement and Proposed Order contain
provisions that may be illegal or unenforceable, or both.
(C) FCR
Gayle E. Bush, in his capacity as Future Claims Representative,
says the settlement agreement with Indiana provides no assurance
that the interests of Future Tort Claimants are protected in case
of a sale of the insurance policies.
Specifically, Mr. Bush objects to the provision regarding the
restricted use of the settlement funds. In addition, the
Settlement Agreement does not explain or discuss the Diocese's
inclusion of a provision that the Bankruptcy Court make a finding
that all claims held by "causal link" claimants whose interests
are represented by the Future Claims Representative, are "claims"
as the term is defined in Section 101(5) of the Bankruptcy Code.
Mr. Bush, therefore, asks the Court to deny the Diocese's request
unless the proposed changes and clarifications or assurances are
effected.
(D) Association of Parishes
John D. Munding, Esq., at Crumb & Munding, P.S., in Spokane,
Washington, tells Judge Williams that the Association of Parishes
does not oppose the settlement with respect to the Coverage Action
pending in the District Court.
However, to the extent the Settlement purports to prevent any use
of the proceeds of the settlement for the defense and
indemnification of parishes, and intends to "earmark" the proceeds
for the payment of sexual abuse tort claims in the bankruptcy
proceeding, then the terms and conditions impair the parishes'
ability to assert their rights to the proceeds of the proposed
settlement, Mr. Munding points out.
Accordingly, the Association of Parishes wants any order approving
the Settlement to reserve the parishes' right to make legal claim
to the insurance settlement proceeds, if and when the parishes'
rights to defense and indemnity are ever implicated.
The AOP represents the individual parishes located in the Spokane
Diocese. The parishes are unincorporated associations under
applicable Washington law, hence, are capable of bringing suit or
being sued.
Mr. Munding says there is a possibility that individual parishes
at which abuse took place may, at least in theory, be sued. To
the extent a parish may be sued, the parish has a legally
protected interest in each of the insurance policies that are
covered by the Indiana Settlement, and in the normal course of
events, should any lawsuit occur within a coverage period that is
within either the coverage period, that lawsuit would be tendered
for defense and indemnification as is normally the case,
Mr. Munding says. All funds used to pay the premiums for the
policies originated or came from the 82 parishes, he points out.
(E) Morning Star Boys' Ranch
The Morning Star Boys' Ranch takes no position with respect to the
$2,750,000 "buy back" sum with Indiana Insurance, but objects to
any conclusion, finding, or order that those:
(a) amounts in any way affect either of Indiana's duty to
defend or to provide a defense on behalf of Morning Star
in existing and future sexual abuse claims; or
(b) settlements in any way affect or limit the indemnity
coverage available to Morning Star for pending or
threatened or future sexual abuse claims.
Christopher J. Kerley, Esq., at Keefe, King & Bowman, P.S., in
Spokane, Washington, relates that Morning Star has been
individually named as a defendant in proceedings arising from
alleged sexual abuse involving priests or clergy affiliated or
associated with the Spokane Bishop, his predecessors, or the
Spokane Diocese.
Mr. Kerley adds that Morning Star paid for and is entitled to all
benefits under the insurance coverage afforded under each policy,
is or may be an additional named insured under each policy, and is
an intended beneficiary under any and all relevant and applicable
policies issued by Indiana Insurance.
It is conceivable that other sexual abuse claims may be made
against Morning Star Boys' Ranch in the future, Mr. Kerley points
out. None of the pending sexual abuse claimants have reduced
their claims to judgment. Nonetheless, Morning Star Boys has a
legally protected interest in each insurance policy.
Mr. Kerley says the Indiana Settlement is silent or otherwise
inconclusive with respect to Morning Star's rights in the policies
and coverages for claims arising under the policies.
To the extent that there are any pending claims against Morning
Star covered under the policies, Mr. Kerley contends that Morning
Star is entitled to coverage under the policy including:
* coverage for payment of reasonable attorney's fees for
defenses and costs of litigation against the claims asserted
by third parties; and
* indemnity pursuant to the terms and conditions of the policy
for any judgments or recoveries obtained or for settlements
reached.
The Roman Catholic Church of the Diocese of Spokane filed for
chapter 11 protection (Bankr. E.D. Wash. Case No. 04-08822) on
Dec. 6, 2004. Michael J. Paukert, Esq., at Paine, Hamblen,
Coffin, Brooke & Miller, LLP, represents the Spokane Diocese in
its restructuring efforts. When the Debtor filed for protection
from its creditors, it listed $11,162,938 in total assets and
$81,364,055 in total debts. (Catholic Church Bankruptcy News,
Issue No. 67; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
CATHOLIC CHURCH: More Objections to Spokane & GICA's $5.25MM Pact
-----------------------------------------------------------------
The Diocese of Spokane and General Insurance Company of America
entered into a settlement agreement to resolve their disputes, as
reported in the Troubled Company Reporter on July 12, 2006.
The Diocese asked the U.S. Bankruptcy Court for the Eastern
District of Washington to:
(i) approve the Settlement Agreement with GICA;
(ii) permit the Diocese to sell back the GICA Policies
pursuant to the terms of the Settlement Agreement, free
and clear of liens, claims, encumbrances, and other
interests, other than the alleged rights, claims, or
interest of Morning Star Boys' Ranch, if any;
(iii) find that claims held by "causal link" claimants are
"claims" as that term is defined in Section 101(5) of
the Bankruptcy Code; and
(iv) find that GICA is a good faith purchaser entitled
to the protections of Section 363(m).
Additional Objections
(A) Tort Committee
Joseph E. Shickich, Jr., Esq., at Riddell Williams P.S., in
Seattle, Washington, points out that the proposed settlement
agreement with General Insurance Company of America:
(a) denies the Catholic Diocese of Spokane access to the
settlement funds until October 1, 2007; and
(b) prohibits the use of the funds for any purpose other than
payment of indemnity for tort claims without apparent
business purpose and apparently in furtherance of
Spokane's already disapproved settlement with 75 tort
claimants represented by certain tort lawyers.
The Settlement provisions, Mr. Shickich says, inappropriately
predetermine important provisions of any plan of reorganization.
The proposed Settlement Agreement also appear to release GICA
before the settlement funds become the property of the Diocese
and at a time when the funds may revert to GICA.
(B) Tort Litigants Committee
The Official Committee of Tort Litigants says many questions
remain about why the $5,250,000 is a justifiable settlement of
all insurance policy proceeds when, based on the policy terms,
GICA has a $28,000,000 potential maximum exposure to the Diocese.
Iain A.W. Nasatir, Esq., at Pachulski, Stang, Ziehl, Young, Jones
& Weintraub, LLP, in Los Angeles, California, explains that the
$28,000,000 potential maximum exposure represents 14 consecutive
years of liability coverage, from 1958 to 1972. From the
Diocese's documents, GICA had a $200,000 potential exposure per
claim with a $2,000,000 maximum exposure. Fourteen years
multiplied by the $2,000,000 yearly cap is $28,000,000 in
potential maximum exposure.
The Settlement Motion, Mr. Nasatir asserts, does not provide
evidence sufficient to assess whether the Settlement Agreement is
fair or reasonable:
* The Settlement Motion is devoid of any information as to how
the $5,250,000 settlement amount compares to the maximum and
minimum range of recoveries the Diocese has concluded the
victims could be entitled to within 14 years of GICA's
coverage;
* There are inconsistencies and confusion regarding how the
$5,250,000 can be used because it is unclear to whom the
proceeds are to be paid and for what; and
* There exists a possibility for one of the named insureds --
like a school or any association affiliated with the Diocese
-- to make a claim against GICA.
If any of those insureds claimants come forward, Mr. Nasatir says
GICA, at the very least, could make an administrative claim
against Spokane for attorney's fees. This potential burden on
the estate, Mr. Nasatir points out, does not only affect
distributions to creditor, but might even affect the $5,250,000
settlement sum which, according to the Settlement Agreement, can
be utilized presumably paying administrative claims ahead of
unsecured creditor claims.
Mr. Nasatir also notes the Settlement Agreement and its proposed
order contain provisions that may be illegal or unenforceable:
(1) The sale of GICA policies and the proposed "buy back"
may violate Section 48.18.320 of the Revised Code of
Washington; and
(2) The proposed Bar Order may violate case and statutory law
because it constitutes an impermissible permanent
injunction enjoining non-debtor third parties from bringing
actions against other non-debtor third parties.
For these reasons, the Tort Litigants Committee asks Judge
Williams to deny the Diocese's Settlement Motion.
The Roman Catholic Church of the Diocese of Spokane filed for
chapter 11 protection (Bankr. E.D. Wash. Case No. 04-08822) on
Dec. 6, 2004. Michael J. Paukert, Esq., at Paine, Hamblen,
Coffin, Brooke & Miller, LLP, represents the Spokane Diocese in
its restructuring efforts. When the Debtor filed for protection
from its creditors, it listed $11,162,938 in total assets and
$81,364,055 in total debts. (Catholic Church Bankruptcy News,
Issue No. 67; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
CHESAPEAKE VILLAGE: Case Summary & 13 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Chesapeake Village, LLC
7 West Ridgely Road, Suite 100
Lutherville Timonium, MD 21093
Bankruptcy Case No.: 06-15094
Chapter 11 Petition Date: August 24, 2006
Court: District of Maryland (Baltimore)
Judge: Robert A. Gordon
Debtor's Counsel: Ronald J. Drescher, Esq.
Drescher & Associates
4 Reservoir Circle, Suite 107
Baltimore, MD 21208
Tel: (410) 484-9000
Fax: (410) 484-8120
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 13 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Susquehanna Bank $2,400,000
100 West Road, Suite 101
Towson, MD 21204
NVR, Inc. $800,000
7939 Honeygo Boulevard, Suite 100
Nottingham, MD 21236
Quillen Development, Inc. $300,000
7 West Ridgely Road, Suite 100
Lutherville Timonium, MD 21093
Campbell Nolan & Associates $200,000
215 Bynum Road
Forest Hill, MD 21050
H.G. Young, Jr. $200,000
c/o Jacy C. Emrey, III, Esq.
Baker, Thomey and Emrey, P.A.
153 East Main Street
Elkton, MD 21921
Fred Brandt $69,000
Whiteford, Taylor & Preston $45,000
Treasurer - Cecil County, Maryland $15,000
C.J. Johnston, Inc. $10,000
Inside Out Designs $10,000
Treasurer - Town of Chesapeake City $6,000
Gore Brothers Reporting $1,100
URS Corp. Unknown
CKRUSH INC: June 30 Stockholders' Deficit Narrows to $11.4 Million
------------------------------------------------------------------
Ckrush, Inc., filed its second quarter consolidated financial
statements for the three months ended June 30, 2006, with the
Securities and Exchange Commission on Aug. 11, 2006.
The Company reported a $5,443,831 net loss on $15,250 of net
revenue for the three months ended June 30, 2006, compared with a
$1,653,509 net loss on $226,691 of net revenue for the same period
in 2005.
At June 30, 2006, the Company's balance sheet showed $5,037,282 in
total assets, $11,171,862 in total liabilities and $5,305,525 in
minority interests, resulting in an $11,440,105 stockholders'
deficit. The Company reported a $12,302,502 deficit at Dec. 31,
2005.
Full-text copies of the Company's second quarter financials are
available for free at http://ResearchArchives.com/t/s?1072
Going Concern Doubt
As reported in the Troubled Company Reporter on April 26, 2006,
Rosenberg Rich Baker Berman & Company in Bridgewater, New Jersey,
raised substantial doubt about Ckrush, 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
auditors pointed to the company's operating losses and working
capital deficiency.
About Ckrush
Headquartered in New York City, Ckrush, Inc. (CKRH) --
http://www.ckrush.net/-- is an independent producer of
entertainment and sports content for distribution to all media
platforms. The company produce programming for pay-per-view,
video-on-demand, international markets, as well as, for retail and
direct response sale. The company also produces televised sports
events and hold promotional rights to professional boxers.
COLLINS & AIKMAN: Sees August 31 Plan of Reorganization Filing
--------------------------------------------------------------
Collins & Aikman Corporation and its debtor-affiliates report that
negotiations regarding the terms of a plan of reorganization with
their major constituencies and potential investors have
intensified in recent weeks.
As a result, the Debtors expect to file on Aug. 31, 2006, a plan
of reorganization and accompanying disclosure statement supported
by the members of the Steering Committee for their senior, secured
prepetition lenders.
The Plan contemplates that prepetition lenders will receive equity
in Reorganized Collins & Aikman as primary consideration for the
great majority of their claims.
The Debtors, however, note that an agreement regarding the
treatment of unsecured claims has not yet been reached with the
Official Committee of Unsecured Creditors and the Steering
Committee. Discussions among the parties are ongoing, and the
Debtors are hopeful that a mutually agreeable settlement may be
reached.
The Debtors believe that the Plan will allow them to save
thousands of jobs and emerge from Chapter 11 as a substantially
de-leveraged and competitive going concern enterprise.
Headquartered in Troy, Michigan, Collins & Aikman Corporation
-- http://www.collinsaikman.com/-- is a global leader in cockpit
modules and automotive floor and acoustic systems and is a leading
supplier of instrument panels, automotive fabric, plastic-based
trim, and convertible top systems. The Company has a workforce of
approximately 23,000 and a network of more than 100 technical
centers, sales offices and manufacturing sites in 17 countries
throughout the world. The Company and its debtor-affiliates filed
for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case
No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP,
represents C&A in its restructuring. Lazard Freres & Co., LLC,
provides the Debtor with investment banking services. Michael S.
Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents
the Official Committee of Unsecured Creditors Committee. When the
Debtors filed for protection from their creditors, they listed
$3,196,700,000 in total assets and $2,856,600,000 in total debts.
(Collins & Aikman Bankruptcy News, Issue No. 38; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
COLLINS & AIKMAN: Wants to Defer Interest Payments to JPMorgan
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Michigan
will convene a hearing at 2:00 p.m. today to consider Collins &
Aikman Corporation and its debtor-affiliates' request to defer
their obligation to pay certain postpetition interest.
Before they filed for bankruptcy, the Debtors borrowed money on a
secured basis under a Credit Agreement, dated Dec. 30, 2001, as
amended and restated as of Sept. 1, 2004, among Collins & Aikman
Products Co., certain lenders and JPMorgan Chase Bank, N.A., as
administrative agent.
As of the Petition Date, the Debtors owed their Prepetition
Lenders $686,776,384 in respect of loans made and $61,223,616 in
respect of letters of credit issued, exclusive of interest and
fees. To secure repayment of their obligations, the Debtors
granted their Lenders liens and security interests on all of
their cash, proceeds, and cash equivalents.
The Court has authorized the Debtors to use Cash Collateral in
which their Prepetition Lenders have an interest and grant
adequate protection to their Lenders with respect to the use of
the Cash Collateral and all use and diminution in the value of the
Collateral.
The Debtors were authorized to, among other things, pay in full,
in cash to JPMorgan, as prepetition agent, on the first business
day of each month, all accrued but unpaid interest on the
Prepetition Debt at the prevailing LIBOR rate.
Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in Chicago,
Illinois, relates that postpetition interest payments and letter
of credit fees payable to the Prepetition Lenders are about
$7.2 million per month. Next payments are due on Sept. 1, 2006.
Mr. Schrock reports that negotiations with major constituencies
and potential investors concerning the terms of a plan of
reorganization have intensified in recent weeks. The Debtors
intend to file a plan of reorganization -- which will have the
support of the members of the steering committee for their senior,
secured prepetition lenders -- on Aug. 31, 2006.
According to Mr. Schrock, the Debtors and the members of the
Steering Committee have agreed that the Debtors will propose a
Plan that contemplates the Prepetition Lenders receiving
consideration other than cash -- namely equity in reorganized
Collins & Aikman -- as the primary consideration for the great
majority of their claims.
In light of the imminent Plan filing, the Prepetition Lenders'
proposed treatment in that Plan and the Debtors' current
liquidity position, the Debtors ask the Court to allow them to
defer their obligation to pay postpetition interest that would
otherwise be due on the 1st business day of the month for the
months of September, October, November and December 2006.
JPMorgan and the members of the Steering Committee have consented
to the deferral of the postpetition interest payments.
Headquartered in Troy, Michigan, Collins & Aikman Corporation
-- http://www.collinsaikman.com/-- is a global leader in cockpit
modules and automotive floor and acoustic systems and is a leading
supplier of instrument panels, automotive fabric, plastic-based
trim, and convertible top systems. The Company has a workforce of
approximately 23,000 and a network of more than 100 technical
centers, sales offices and manufacturing sites in 17 countries
throughout the world. The Company and its debtor-affiliates filed
for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case
No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP,
represents C&A in its restructuring. Lazard Freres & Co., LLC,
provides the Debtor with investment banking services. Michael S.
Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents
the Official Committee of Unsecured Creditors Committee. When the
Debtors filed for protection from their creditors, they listed
$3,196,700,000 in total assets and $2,856,600,000 in total debts.
(Collins & Aikman Bankruptcy News, Issue No. 38; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
COMVERSE TECH: Subsidiary to Acquire Netonomy(R) for $19 Million
----------------------------------------------------------------
Comverse, a subsidiary of Comverse Technology, Inc., has signed
a definitive agreement to acquire privately-held Netonomy for
approximately $19 million in cash.
"This acquisition is in line with our strategic efforts to
continually enhance Comverse's Total Communication Product
Portfolio's ability to generate revenues, strengthen customer
loyalty and improve operational efficiency for communication
service providers," Raz Alon, interim CEO of Comverse Technology,
said.
"Joining Comverse was a natural move," said John Ball, CEO of
Netonomy. "Service providers need to accelerate the adoption of
direct self-service quicker than ever to lower their cost of
acquisition and service, regardless of market segment. Web access
to select and change plans and features also improves customer
satisfaction and loyalty, while reducing operational costs."
About Comverse Technology
Comverse Technology, Inc. (NASDAQ: CMVT) --
http://www.comverse.com/-- provides software and systems that
enable network-based multimedia enhanced communication and billing
services. Over 450 communication and content service providers in
more than 120 countries use Comverse products to generate
revenues, strengthen customer loyalty and improve operational
efficiency.
* * *
As reported in the Troubled Company Reporter on May 4, 2006,
Standard & Poor's Ratings Services held its ratings on Comverse
Technology Inc. on CreditWatch with negative implications, where
they were placed on March 15, 2006, on the disclosure that the
board of directors at Comverse had created a special committee to
review matters relating to the company's stock option grants and
the likely need to restate prior-period financial results.
As reported in the Troubled Company Reporter on March 17, 2006,
Standard & Poor's placed its corporate credit and senior unsecured
debt ratings on Comverse Technology on CreditWatch with negative
implications. The company has S&P's 'BB-' corporate credit and
senior unsecured debt ratings.
CONGOLEUM CORP: Century Insurers to Buy Back Policies for $16.95MM
------------------------------------------------------------------
Congoleum Corp. and its debtor-affiliates ask the U.S. Bankruptcy
Court for the District of New Jersey to approve their settlement
and policy buyback agreement with Century Indemnity Company on
behalf of all of Century's affiliates.
The Century Entities issued certain insurance policies under which
the Debtors are insureds or claim to be entitled to insurance.
Congoleum and the Century Entities dispute whether, and to what
extent, those policies afford coverage for:
(1) all asbestos claims that may be subject to a claimant
agreement;
(2) all other asbestos claims; and
(3) all non asbestos-related claims such as environmental and
other general liability claims.
In addition, Century has asserted counterclaims for affirmative
relief. The policies issued by Century at issue in the coverage
dispute are those that Congoleum contends afford it coverage for
asbestos-related claims, and those policies are a subset of the
group of policies.
To resolve the Coverage Dispute, as well as all of the other
contested matters the Debtors' chapter 11 cases, the parties have
entered into the Settlement and Buyback Agreement. The Official
Representative for Future Asbestos Claimants and the Asbestos
Creditors Committee participated in the negotiations of the
Settlement and Buyback Agreement and support its approval.
To settle the outstanding disputes and to purchase the Debtors'
interests in the policies, Century agrees to pay $16.95 million to
a Plan Trust to be created to pay asbestos claimants.
A full-text copy of the Debtors' Plan Trust Agreement is available
for free at http://ResearchArchives.com/t/s?9f0
A copy of the Debtors' Plan Trust Distribution Procedures is
available for free at http://ResearchArchives.com/t/s?9f1
About Congoleum Corporation
Based in Mercerville, New Jersey, Congoleum Corporation (AMEX:CGM)
-- http://www.congoleum.com/-- manufactures and sells resilient
sheet and tile floor covering products with a wide variety of
product features, designs and colors. The Company filed for
chapter 11 protection on Dec. 31, 2003 (Bankr. N.J. Case No.
03-51524) as a means to resolve claims asserted against it related
to the use of asbestos in its products decades ago.
Richard L. Epling, Esq., Robin L. Spear, Esq., and Kerry A.
Brennanat, Esq., at Pillsbury Winthrop Shaw Pittman LLP represent
the Debtors in their restructuring efforts. Elihu Insulbuch,
Esq., at Caplin & Drysdale, Chartered, represents the Asbestos
Claimants' Committee. R. Scott Williams serves as the Futures
Representative, and is represented by lawyers at Orrick,
Herrington & Sutcliffe LLP, and Ravin Greenberg PC. Michael S.
Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the
Official Committee of Unsecured Bondholders. When Congoleum filed
for protection from its creditors, it listed $187,126,000 in total
assets and $205,940,000 in total debts.
At June 30, 2006. Congoleum Corporation's balance sheet showed
a $44,013,000 stockholders' deficit compared to a $44,960,000
deficit at Dec. 31, 2005. Congoleum is a 55% owned subsidiary of
American Biltrite Inc. (AMEX: ABL).
CONSOLIDATED CONTAINER: Fails to File 2nd Qtr. Financials on Time
-----------------------------------------------------------------
Consolidated Container Company LLC has informed the Securities and
Exchange that it will be unable to finalize and file its Form 10-Q
for the quarter ended June 30, 2006, until it completes the
evaluation of a settlement.
The Company is in the process of evaluating the accounting
implications of an expected settlement with a customer that
relates to supply contracts and covers matters arising prior to
July 1, 2006.
Consolidated says, at this point, it is still unable to determine
if there will be any significant change in results of operations
for the corresponding period in the last fiscal year that will be
reflected by the earnings statements to be included in the second
quarter Form 10-Q.
Headquartered in Atlanta, Georgia, Consolidated Container Company
LLC -- http://www.cccllc.com/-- which was created in 1999,
develops, manufactures and markets rigid plastic containers for
many of the largest branded consumer products and beverage
companies in the world. CCC has long-term customer relationships
with many blue-chip companies including Dean Foods, DS Waters of
America, The Kroger Company, Nestle Waters North America, National
Dairy Holdings, The Procter & Gamble Company, Coca-Cola North
America, Quaker Oats, Scotts and Colgate-Palmolive. CCC serves
its customers with a wide range of manufacturing capabilities and
services through a nationwide network of 61 strategically located
manufacturing facilities and a research, development and
engineering center. Additionally, the company has 4 international
manufacturing facilities in Canada, Mexico and Puerto Rico.
Consolidated Container Company LLC's March 31, 2006, balance sheet
showed $685.4 million in total assets and $769.9 million in total
liabilities, resulting in a $84.5 million equity deficit.
COVENTRY HEALTH: Earns $135.5 Million in Quarter Ended June 30
--------------------------------------------------------------
Coventry Health Care, Inc., reported operating revenues of
$1.94 billion for the quarter ended June 30, 2006, with net
earnings of $135.5 million. Revenues were up 17.7% over the prior
year quarter.
"We continue to be pleased with the results from our diverse
businesses, including Medicare Part D," said Dale B. Wolf, chief
executive officer of Coventry. "The strong cash flow from our
businesses allows us to make investments to fuel future Company
growth and to provide shareholder value through deployment of
capital."
The Company recorded GAAP cash flows from operations of $170.8
million or 126% of net income in the quarter, with year-to-date
cash flows from operations of $661.4 million or 258% of net
income.
As of June 30, 2006, Coventry had total health plan membership of
2.54 million members. This represented an increase of 75,000
members over the prior year quarter driven by growth in commercial
membership and a decrease of 8,000 members from the prior quarter
driven primarily by losses in Medicaid membership resulting from
the Missouri eligibility re-certification process impacting the
Company in 2005 and the first half of 2006.
Commercial premium yields showed a favorable price-to-cost spread
in the second quarter. Reported commercial yields rose to $258.43
PMPM (per member per month) in the quarter, an increase of 5.9%
over the prior year quarter. Reported commercial medical expense
was $199.43 PMPM in the quarter, an increase of 2.2% over the
prior year quarter.
Health Plan Medical Loss Ratio was 78.6%, a 150 basis point
improvement over the prior year quarter. Commercial MLR of 77.2%
improved 280 basis points, Medicare MLR of 79.5% increased 140
basis points, and Medicaid MLR of 86.0% increased 370 basis points
from the prior year quarter.
Health plan Net Premium Accounts Receivable of $91.2 million
represent 5.3 days of sales outstanding. Health plan Days in
Claims Payable for the quarter were 53.8, down 1.4 days from the
prior quarter of 55.2 and down 0.9 days from the prior year
quarter.
Coventry expects Total revenues of $1.90 billion to $1.95 billion
for the 2006 third quarter with earnings per share on a diluted
basis of $0.90 to $0.92. For the full year 2006, the Company
expects:
-- Health plan membership growth toward the low end of the
previously disclosed range of 1.0% to 3.0%;
-- Risk revenues of $6.8 billion to $6.9 billion;
-- Management services revenues of $900.0 million to $925
million;
-- Consolidated revenues of $7.70 billion to $7.825 billion;
and
-- Consolidated medical loss ratio of 79.7% to 80.0%;
A full-text copy of the Company's quarterly report is available
for free at http://researcharchives.com/t/s?105b
About Coventry
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.
CUMULUS MEDIA: Earns $4.6 Million in Quarter Ended June 30
----------------------------------------------------------
Cumulus Media Inc.'s net revenues for the second quarter ended
June 30, 2006, decreased slightly from $87.4 million in 2005 to
$87.3 million, a 0.1% decrease, resulting from the contribution
the Company's Houston and Kansas City stations to its affiliate,
Cumulus Media Partners, LLC, on May 3, 2006.
The Company earned $4,696,000 for the 2006 second quarter, in
contrast to a $4,974,000 net loss for the same period in 2005.
Station operating expenses increased from $54.7 million to
$55.2 million, an increase of 0.8% from the second quarter of
2005, the result of general expense increases across the Company's
station platform. Station operating income decreased from $32.7
million to $32.2 million in the second quarter of 2006, a decrease
of 1.7% from the second quarter of 2005.
On a pro forma basis, which excludes the May-June 2005 results of
the stations contributed to CMP, net revenues for the three months
ended June 30, 2006 increased $1.4 million to $87.3 million, an
increase of 1.6% from the same period in 2005, due to organic
growth across the station platform. Pro forma station operating
income decreased 1.9% from the same period in 2005, the result of
general expense increases across the station platform.
A full-text copy of the Company's quarterly report is available
for free at http://researcharchives.com/t/s?105c
Stock Repurchase
In June, 2006, the Company successfully completed a self-tender
offer and purchased 11.5 million shares of its outstanding Class A
Common Stock at a price per share of $11.50, for approximately
$132.3 million. In conjunction with the tender offer, the Company
purchased 5 million shares of Class B Common Stock from affiliates
f Banc of America at a price of $11.50 per share, or approximately
$57.5 million. In addition, during July, 2006, pursuant to a
previously announced Board-approved share repurchase program, the
Company bought 327,500 shares on the open market. As of July 31,
2006, 43,150,857 shares of common stock were outstanding.
New $850 Million Credit Facility
Cumulus Media entered into a new $850 million credit facility on
June 7, 2006. The new facility provides for a $100 million six-
year revolving credit facility and a seven-year $750 million term
loan facility in the aggregate principal amount of $750 million.
The proceeds were used by the Company to repay all amounts
outstanding under its existing credit facilities of approximately
$588.2 million and to purchase the shares of Class A Common Stock
pursuant to the tender offer and Class B Common Stock pursuant to
the agreement with the affiliates of Banc of America Capital
Investors.
Susquehanna Radio Acquisition
On May 5, 2006, the Cumulus Media Partners LLC completed its
acquisition of the radio broadcasting business of Susquehanna
Pfaltzgraff Co. The purchase price was approximately
$1.2 billion.
Susquehanna Radio's radio broadcasting business consisted of 33
radio stations in 8 markets including: San Francisco, Dallas,
Houston, Atlanta, Cincinnati, Kansas City, Indianapolis and York,
Pennsylvania.
CMP is a private partnership created by the Company, Bain Capital
Partners, The Blackstone Group and Thomas H. Lee Partners to
acquire the radio broadcasting business of Susquehanna
Pfaltzgraff.
Concurrent with the consummation of the acquisition, the Company
entered into a management agreement with a subsidiary of CMP,
pursuant to which the Company's management will manage the
operations of CMP's subsidiaries. The agreement provides for the
Company to receive a management fee that is expected to be
approximately 1% of the subsidiaries' annual EBITDA or $4 million,
whichever is greater.
About Cumulus Media
Based in Atlanta, Georgia, Cumulus Media Inc. (NASDAQ:CMLS) --
http://www.cumulus.com/-- is the second-largest radio company in
the United States based on station count. Giving effect to the
completion of all pending acquisitions and divestitures, Cumulus
Media Inc., directly and through its investment in Cumulus Media
Partners, will own and operate 343 radio stations in 67 U.S. media
markets.
* * *
As reported in the Troubled Company Reporter on May 26, 2006,
Standard & Poor's Ratings Services lowered its ratings on Cumulus
Media Inc., including lowering the corporate credit rating to 'B'
from 'B+'. The ratings were removed from CreditWatch, where they
were placed with negative implications on May 11, 2006. The
outlook is stable.
As reported in the Troubled Company Reporter on May 24, 2006,
Moody's Investors Service downgraded Cumulus Media, Inc.'s
corporate family rating to a Ba3 from a Ba2. Additionally,
Moody's assigned Ba3 ratings to the company's $850 million in
amended senior secured credit facilities.
DANA CORP: Sypris Wants Debtors to Decide on Two Purchase Pacts
---------------------------------------------------------------
Sypris Technologies Inc. asks the U.S. Bankruptcy Court for the
Southern District of New York to compel Dana Corporation and its
debtor-affiliates to assume or reject, on or before Oct. 3, 2006:
(a) an Asset Purchase Agreement relating to the Debtors' plant
in Marion, Ohio, and an interrelated supply agreement; and
(b) Asset Purchase Agreements relating to the Debtors'
Morganton, Toluca and Glasgow & Humboldt Plants, and
interrelated supply agreements.
Pursuant to the Agreements, Sypris has raised and committed more
than $100,000,000 in capital over the last five years primarily
to:
* acquire assets under the Agreements,
* modernize and repair the Plants and businesses,
* substantially increase productive capacity, and
* re-engineer the Plants into an integrated system.
An integral part of the Agreements was granting Sypris the
exclusive right to supply 100% of Dana's North America
requirements for more than 1,000 component part designs through
2014, Tracy L. Klestadt, Esq., at Klestadt & Winters, LLP, in New
York, tells the Court.
Without the exclusive right to supply, Sypris would not have
purchased the Debtors' non-competitive assets, Ms. Klestadt
notes. The exclusive long-term right was the cornerstone of the
Debtors' and Sypris' relationship.
According to Ms. Klestadt, the Agreements are by far the most
significant transactions in Sypris' 22-year history and have
transformed the company into one of the largest Tier 2 component
suppliers to the North American heavy truck market. Dana
represents more than $200,000,000 of Sypris' annual revenues.
Sypris is Dana's largest component supplier and Dana is Sypris'
largest customer, Ms. Klestadt avers.
As of Aug. 15, 2006, the Debtors have not yet decided whether
to assume or reject the Agreements with Sypris.
Ms. Klestadt asserts that Sypris' request is warranted for these
reasons:
(a) The sheer size of Sypris' productive capacity is important
to the ongoing operation of the Debtors' estate. Sypris
cannot continue to attract and retain the capital
resources or the key employees it needs while its core
business remains under a cloud of uncertainty. In turn,
the Debtors' ability to satisfy its OEM customers would be
harmed.
(b) The ongoing expenditures and costs that Sypris incurs to
perform under the Agreements, including capital
expenditures and the long-term union contracts, are quite
significant;
(c) The Debtors have limited options as to the Agreements; and
(d) The Debtors continue to breach of the Agreements. Dana
repudiate any further responsibility to conduct
remediation activities in the Marion Plant when the
Agreements require the Debtors to indemnify Sypris for
ongoing environmental issues. The transfer of certain
lines of business to Sypris has still not taken place.
The decision to assume or reject the Agreements will require very
little analysis, and thus can be made easily by October 3, 2006,
Ms. Klestadt states. Rejection of the Agreements will not
benefit the Debtors' estate, Ms. Klestadt adds.
Ms. Klestadt notes that if rejected, the Agreements will allow
Sypris to enjoin the Debtors from purchasing any of their
requirements for certain commodities other than from Sypris
through 2014. Thus, the customary benefits of rejecting a supply
contract are unavailable.
Moreover, rejection of the Agreements would effectively require
the Debtors to exit from the markets served by their commercial
vehicle services division, among others, for lack of essential
components, Ms. Klestadt adds.
"In essence, the only assessment required is whether the Debtors
desire to stay in the heavy truck business," Ms. Klestadt says.
Indeed, the Debtors can only reject the Agreements if it intends
to stop using all of the Parts purchased from Sypris under the
Agreements.
About Dana Corporation
Toledo, OH-based Dana Corp. -- http://www.dana.com/-- designs and
manufactures products for every major vehicle producer in the
world, and supplies drivetrain, chassis, structural, and engine
technologies to those companies. Dana employs 46,000 people in 28
countries. Dana is focused on being an essential partner to
automotive, commercial, and off-highway vehicle customers, which
collectively produce more than 60 million vehicles annually. The
company and its affiliates filed for chapter 11 protection on
Mar. 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). Corinne Ball,
Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and
Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black,
Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio,
represent the Debtors. Henry S. Miller at Miller Buckfire & Co.,
LLC, serves as the Debtors' financial advisor and investment
banker. Ted Stenger from AlixPartners serves as Dana's Chief
Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel LLP, represents the Official Committee of
Unsecured Creditors. When the Debtors filed for protection from
their creditors, they listed $7.9 billion in assets and $6.8
billion in liabilities as of Sept. 30, 2005. (Dana Corporation
Bankruptcy News, Issue No. 19; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
DANA CORP: Court Okays Pact Allowing PBGC to Consolidate Claims
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approved a stipulation between Dana Corporation and its debtor-
affiliates and Pension Benefit Guaranty Corporation allowing
the PBGC to file one or more consolidated proofs of claim in the
Debtors' Chapter 11 Cases.
In the Stipulation, the parties also agreed that:
(a) the Stipulation is intended solely for the purpose of
administrative convenience; and
(c) the Stipulation will apply to any amended proofs of claim
that PBGC may file with respect to the Pension Plans.
As reported in the Troubled Company Reporter on Aug. 23, 2006,
the Debtors sponsor 34 defined benefit pension plans covered by
Title IV of the Employee Retirement Income Security Act of 1974.
PBGC administers the Debtors' defined pension plan termination
insurance program under Title IV.
PBGC asserted that each of the Debtors may either be a
contributing sponsor of one or more of the Pension Plans or a
member of the contributing sponsor's controlled group.
PBGC also asserted that it is entitled to at least three
separate claims regarding each Pension Plan for:
(a) unpaid minimum funding contributions required under
Section 412 of the Internal Revenue Code and Sections 1082
and 1362 of the Labor Code;
(b) unpaid premiums owed to it; and
(c) contingent termination liability to it.
Each of the PBGC claims will be filed against each of the
Debtors for joint and several liabilities. PBGC explained that if
it were to separately file three proofs of claim with respect to
each of the 34 Pension Plans against each of the 41 Debtors, PBGC
would file a total 4,182 claims and that filing voluminous and
duplicative claims would impose undue administrative burden on the
Debtors, PBGC and the Debtors' claims agent.
About Dana Corporation
Toledo, OH-based Dana Corp. -- http://www.dana.com/-- designs and
manufactures products for every major vehicle producer in the
world, and supplies drivetrain, chassis, structural, and engine
technologies to those companies. Dana employs 46,000 people in 28
countries. Dana is focused on being an essential partner to
automotive, commercial, and off-highway vehicle customers, which
collectively produce more than 60 million vehicles annually. The
company and its affiliates filed for chapter 11 protection on
Mar. 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). Corinne Ball,
Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and
Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black,
Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio,
represent the Debtors. Henry S. Miller at Miller Buckfire & Co.,
LLC, serves as the Debtors' financial advisor and investment
banker. Ted Stenger from AlixPartners serves as Dana's Chief
Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel LLP, represents the Official Committee of
Unsecured Creditors. When the Debtors filed for protection from
their creditors, they listed $7.9 billion in assets and $6.8
billion in liabilities as of Sept. 30, 2005. (Dana Corporation
Bankruptcy News, Issue No. 19; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
DELTA AIR: Wilmington Trust Says it Holds $5 Mil. of Admin. Claim
------------------------------------------------------------------
Delta Air Lines, Inc., as lessee, and Wilmington Trust Company,
as owner trustee, in connection with the leveraged lease of two
MD-88 aircraft, bearing FAA Registration Nos. N972DL and N973DL,
are parties to a Participation Agreement dated Sept. 1, 1991, as
amended or supplemented, with:
-- UnionBanCal Leasing Corporation, as owner participant;
-- Trust Company Bank, as original loan participant;
-- NationsBank of Georgia, National Association, predecessor-
in-interest to Bank of New York as indenture trustee;
-- NationsBank of South Carolina, National Association, as
pass through trustee; and
-- First Security Bank of Idaho, as voting trustee.
Wilmington Trust informs the Court that it is asserting an
administrative claim under Sections 503(b) and 507 of the
Bankruptcy Code against the Debtors for, among others, expenses,
claims, postpetition rent or ordinary charges and fees that may
have been incurred or accrued pursuant to the Participation
Agreement, statutory law, common law or otherwise.
Wilmington Trust informs the Court that as of August 21, 2006, it
is still reviewing any and all postpetition claims it has against
Delta to quantify the amount of its administrative claim against
Delta of up to $5,000,000 in aggregate.
Wilmington Trust also asserts, without limitation, these
additional claims:
(1) the right to assert and amend claims for administrative
expenses of any nature;
(2) the right to assert and amend or supplement tax indemnity
claims;
(3) interest, attorneys' fees and costs which continue to
accrue and to be incurred;
(4) rights to estimate contingent claims and assert additional
claims if contingent claims are estimated or liquidated;
(5) any other claims that it may have against the Debtors
relating or incidental to their obligations;
(6) any claims that may arise pursuant to or as a result of
the violation or breach of the surrender and return
provisions as it concerns the aircraft contained in any
and all of the operative documents; and
(7) any and all postpetition rent and ordinary use charges
that may have been incurred or accrued.
About Delta Air Lines
Headquartered in Atlanta, Georgia, Delta Air Lines --
http://www.delta.com/-- is the world's second-largest airline in
terms of passengers carried and the leading U.S. carrier across
the Atlantic, offering daily flights to 502 destinations in 88
countries on Delta, Song, Delta Shuttle, the Delta Connection
carriers and its worldwide partners. The Company and 18
affiliates filed for chapter 11 protection on Sept. 14, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner,
Esq., at Davis Polk & Wardwell, represents the Debtors in their
restructuring efforts. Timothy R. Coleman at The Blackstone Group
L.P. provides the Debtors with financial advice. Daniel H.
Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss
Hauer & Feld LLP, provide the Official Committee of Unsecured
Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey
Howard & Zukin Capital and James S. Feltman at Mesirow Financial
Consulting, LLC, serve as the Committee's financial advisors. As
of June 30, 2005, the Company's balance sheet showed $21.5 billion
in assets and $28.5 billion in liabilities. (Delta Air Lines
Bankruptcy News, Issue No. 41; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
DELTA AIR: Wants Court's Nod on J. Aron Fuel Supply Agreement
-------------------------------------------------------------
Delta Air Lines, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York to
authorize Delta Air Lines, Inc., and Epsilon Trading, Inc., to
enter into a jet fuel supply agreement with J. Aron & Company.
Epsilon, a debtor-subsidiary of Delta, operates a jet fuel supply
business. Epsilon purchases jet fuel from various suppliers and
supplies the fuel to Delta and certain of its subsidiaries, as
well as to unaffiliated Delta Connection Carriers and SkyTeam
Partners. The supply operation requires the Debtors to maintain
more than $100,000,000 in working capital at any given time,
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, in New York,
relates.
The Debtors, according to Mr. Huebner, began assessing ways to
preserve the benefits of their fuel strategy while reducing their
working capital requirements. The Debtors invited several
parties, including oil companies, fuel sellers and fuel traders,
to submit proposals for the Debtors' consideration.
Based on their evaluation of the proposals, the Debtors
determined that entering into an arrangement with Aron was the
best of the available alternatives.
Pursuant to the Jet Fuel Supply Agreement, Aron agrees to
purchase, at a prevailing market price that will result in
aggregate proceeds of approximately $90,000,000 to $100,000,000,
(i) all of the Debtors' jet fuel held at certain specified
storage facilities; and
(ii) certain rights to additional quantities of jet fuel for
which Delta has prepaid.
Aron's purchase of the fuel will be free and clear of all liens,
claims and encumbrances.
For the life of the Supply Agreement, Aron agrees to sell fuel to
the Debtors at six airports in the United States:
* Hartsfield-Jackson Atlanta International Airport,
* Cincinnati/North Kentucky International Airport,
* Newark Liberty International Airport,
* Nashville International Airport,
* LaGuardia Airport, and
* John F. Kennedy International Airport.
In addition, Aron will:
-- accept temporary assignment of the Debtors' rights and
obligations under various agreements with third-party fuel
suppliers, and work with the suppliers to amend those
agreements to the extent appropriate to allow Aron to
purchase fuel supplied to the Debtors; and
-- accept temporary assignment of, and enter into amendments
to, existing agreements and enter into new agreements with
various pipeline and storage operators, in which Aron will
be entitled to use fuel storage and pipeline capacity
historically allocated to and used by the Debtors.
The Supply Agreement will be effective for an initial term of six
months, and will be automatically extended for additional six-
month terms up to a maximum of three years unless any party
elects to exercise its option to terminate the Agreement.
Upon expiration or termination of the Supply Agreement, all fuel
agreements, pipeline and supply agreements, inventory and
infrastructure will revert to the Debtors, and a special
termination payment in an amount equal to the value of the
inventory purchased by the Debtors on the termination date will
be payable to Aron, subject to certain adjustments.
Mr. Huebner discloses that the jet fuel Inventory and the
Quantity Rights that Aron will purchase on the commencement date
of the Supply Agreement are subject to a lien or security
interest in favor of:
(i) the agent on behalf of the lenders to secure on a first-
priority basis the Debtors' obligations under a General
Electric Capital Corporation Credit Facility dated
March 27, 2006, as amended, supplemented, restated or
otherwise modified; and
(ii) American Express Travel Related Services Company, Inc.,
and certain of its affiliates to secure on a second-
priority basis the Debtors' obligations under the Amex
Credit Facility.
Prior to the commencement date of the Supply Agreement, the
Debtors, according to Mr. Huebner, will obtain an amendment to
the DIP Credit Facilities that will, inter alia, permit them to
sell the Commencement Date Inventory and the Transition Quantity
Rights. Pursuant to the terms of each DIP Credit Facility, the
liens on the Commencement Date Inventory and the Transition
Quantity Rights in favor of GE Capital, as agent, and Amex will
be automatically released upon a permitted sale of the fuel.
The entry of into the Supply Agreement will reduce the Debtors'
working capital requirements and will maintain a secure and ready
supply of jet fuel at a competitive cost to the Debtors,
Mr. Huebner tells Judge Hardin.
About Delta Air Lines
Headquartered in Atlanta, Georgia, Delta Air Lines --
http://www.delta.com/-- is the world's second-largest airline in
terms of passengers carried and the leading U.S. carrier across
the Atlantic, offering daily flights to 502 destinations in 88
countries on Delta, Song, Delta Shuttle, the Delta Connection
carriers and its worldwide partners. The Company and 18
affiliates filed for chapter 11 protection on Sept. 14, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner,
Esq., at Davis Polk & Wardwell, represents the Debtors in their
restructuring efforts. Timothy R. Coleman at The Blackstone Group
L.P. provides the Debtors with financial advice. Daniel H.
Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss
Hauer & Feld LLP, provide the Official Committee of Unsecured
Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey
Howard & Zukin Capital and James S. Feltman at Mesirow Financial
Consulting, LLC, serve as the Committee's financial advisors. As
of June 30, 2005, the Company's balance sheet showed $21.5 billion
in assets and $28.5 billion in liabilities. (Delta Air Lines
Bankruptcy News, Issue No. 41; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
DELTA AIR: Unit Selects IBM for IT Infrastructure Services
----------------------------------------------------------
Delta Air Lines, Delta Technology, Delta's wholly-owned
subsidiary, and IBM reported a seven year, Information Technology
infrastructure services agreement to help support the airline's
ongoing IT needs as it restructures its operations and progresses
toward emergence from bankruptcy in the first half of 2007.
Under the agreement, IBM will partner with Delta Technology to
provide Delta with comprehensive IT mainframe and mid-range
services. By outsourcing the airline's IT infrastructure
management, Delta will realize significant cost savings over the
term of the agreement.
"Delta and Delta Technology are partnering with IBM to provide the
airline with a flexible, responsive and cost-effective service
delivery model," said Shirley Bridges, Chief Information Officer
of Delta Air Lines. "IBM demonstrated that it has the industry
knowledge and technical expertise to meet the demands of a major
airline. By working together, we will achieve our goal to reduce
costs on a long-term basis while ensuring a positive customer
experience."
"Leading companies such as Delta are increasingly using strategic
outsourcing to transform their IT infrastructure into an
environment that enables both efficient cost management and a high
standard of customer service and satisfaction," said Dwayne
Ingram, Vice President Travel & Transportation, IBM Global
Technology Services. "By working with IBM, Delta gains access to
our extensive experience in the airline industry and can leverage
state-of-the-art computing capabilities to bring innovative
solutions to safely transport passengers and cargo."
Delta has sought bankruptcy court approval of the agreement.
About IBM
Headquartered in Armonk, New York, IBM Corp. (NYSE: IBM) --
http://www.ibm.com/-- is in the business of invention,
development and manufacture of advanced information technologies,
including computer systems, software, storage systems and
microelectronics.
About Delta Air Lines
Headquartered in Atlanta, Georgia, Delta Air Lines --
http://www.delta.com/-- is the world's second-largest airline in
terms of passengers carried and the leading U.S. carrier across
the Atlantic, offering daily flights to 502 destinations in 88
countries on Delta, Song, Delta Shuttle, the Delta Connection
carriers and its worldwide partners. The Company and 18
affiliates filed for chapter 11 protection on Sept. 14, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner,
Esq., at Davis Polk & Wardwell, represents the Debtors in their
restructuring efforts. Timothy R. Coleman at The Blackstone Group
L.P. provides the Debtors with financial advice. Daniel H.
Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss
Hauer & Feld LLP, provide the Official Committee of Unsecured
Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey
Howard & Zukin Capital and James S. Feltman at Mesirow Financial
Consulting, LLC, serve as the Committee's financial advisors. As
of June 30, 2005, the Company's balance sheet showed $21.5 billion
in assets and $28.5 billion in liabilities.
DEVELOPERS DIVERSIFIED: To Launch $250 Mil. Senior Notes Offering
-----------------------------------------------------------------
Developers Diversified Realty Corporation intends to offer,
subject to market and other conditions, $250 million aggregate
principal amount of convertible senior notes due 2011 through an
offering to qualified institutional buyers in accordance with Rule
144A under the Securities Act of 1933, as amended.
The notes will be convertible into cash up to their principal
amount and Developers Diversified common shares in respect of the
remainder, if any, of the conversion value in excess of such
principal amount. The interest rate, conversion rate and other
terms of the notes will be determined by negotiations between
Developers Diversified and the initial purchasers of the notes.
Developers Diversified expects to grant to the initial purchasers
an option to purchase up to an additional $37.5 million aggregate
principal amount of notes to cover over-allotments.
In connection with the offering, Developers Diversified expects to
enter into a convertible note hedge transaction with an affiliate
of an initial purchaser of the notes to substantially increase the
effective conversion premium of the notes. This transaction is
also intended to reduce the potential dilution upon future
conversion of the notes. In connection with the transaction, the
counterparty has advised Developers Diversified that it or its
affiliates expect to enter into various derivative transactions
with respect to Developers Diversified common shares
simultaneously with or shortly after the pricing of the notes.
In addition, following pricing of the notes, the counterparty or
its affiliates may enter into or unwind various derivatives and/or
continue to purchase or sell Developers Diversified common shares
in secondary market transactions, including during the observation
period relating to any conversion of the notes.
Developers Diversified expects to use the net proceeds from the
offering to repurchase approximately $50 million of its common
shares, for the repayment of outstanding debt under its senior
unsecured credit facility and for other general business purposes.
Developers Diversified also expects to use a portion of the net
proceeds from the offering to fund the cost of the convertible
note hedge transaction.
About Developers Diversified
Based in Beachwood, Ohio, Developers Diversified Realty Corp.
(NYSE: DDR) -- http://www.ddr.com/-- currently owns and manages
approximately 500 retail operating and development properties in
44 states, plus Puerto Rico, comprising 114 million square feet of
real estate. Developers Diversified Realty is a self-administered
and self-managed real estate investment trust operating as a fully
integrated real estate company, which acquires, develops, leases
and manages shopping centers.
* * *
Developers Diversified Realty Corp's Preferred stock currently has
Fitch Ratings' BB+' rating assigned in March 2003.
DIRECTED ELECTRONICS: Polk Purchase Cues Moody's to Hold Ratings
----------------------------------------------------------------
Moody's Investors Service affirmed Directed Electronics, Inc.'s B1
corporate family rating and its B1 senior secured credit facility
ratings following the proposed $136 million debt financed
acquisition of Polk Audio. The rating outlook remains stable.
Ratings affirmed:
* Corporate family rating at B1;
* Senior secured term loan ($307 million), due 2011, at B1;
* Senior secured revolver ($100 million), due 2010, at B1;
Polk Audio principally develops, designs and markets a broad range
of home and car speakers. The proposed acquisition will
significantly increase Directed's home speaker market share and
further diversify the company's product mix. The $136 million
purchase price represents roughly a 7.5x multiple based on Polk's
LTM June 2006 EBITDA. Concurrent with the closing of the
acquisition, Directed's senior secured credit facility will be
amended to provide for an additional $141 million term loan plus a
doubling of the amount currently available under its revolving
credit facility for seasonal borrowings to $100 million; the
company will have more than $300 million in term loans outstanding
following the acquisition.
The stable ratings outlook reflects Moody's expectation that sales
will continue to increase and that operating margins will improve
because of the greater product diversification and higher margin
Polk business, while acknowledging the decreased level of
financial flexibility and cushion as evidenced by the increase in
leverage to about 4.5x and the decrease in interest coverage to
just over 2x following the proposed acquisition using Moody's
standard analytic adjustments.
The stable outlook also reflects the integration risks associated
with the proposed merger, although we do not believe such risks
are very significant as the company is currently not expecting
many integration synergies. Moody's expects management to sustain
its current strategic direction, which is centered on growing its
core categories and distribution channels with further penetration
of security and entertainment categories and continued growth of
its Sirius satellite radio products.
Directed's ratings are constrained by its limited financial
flexibility following the proposed Polk Audio acquisition coupled
with growing uncertainty regarding discretionary consumer spending
trends at this time. This limited financial flexibility could
become more challenging as the company continues to invest in its
various business initiatives. Moody's believes that expected
working capital requirements will lead to a modest increase in
leverage in the second half of 2006. In addition, the material
weaknesses in internal controls over financial reporting are also
factored into the ratings as is the company's high sales
concentration with Circuit City and Best Buy.
Directed's ratings are supported by relatively strong operating
margins and cash flow and by the expected growth and product
diversification opportunities associated with Directed's exclusive
supply agreement with SIRIUS satellite radio plus the greater
anticipated market share in home and car speakers afforded by its
proposed acquisition of Polk Audio.
The B1 rating on the amended senior secured credit facilities
reflects its priority in the capital structure as supported by
domestic subsidiary and parent company guarantees and collateral
pledges comprising substantially all of the assets of the borrower
and guarantors. Despite these benefits, the ratings on the
facilities are at the same level as the corporate family rating
due to minimal unsecured obligations that could provide a benefit
to the secured creditors and the significant portion of the debt
structure that is comprised by the senior secured asset class.
The amended credit agreement contains financial covenants
governing maximum total leverage, minimum fixed charge coverage,
and maximum capital expenditures.
Directed Electronics, Inc., with corporate headquarters in
Vista, California, is a designer and marketer of consumer branded
vehicle security and convenience systems and a supplier of audio,
mobile audio and video and satellite radio products. The
company's recognized brands, include Viper, Clifford, Python and
Definitive Technology, which are sold through a diverse
distribution network that includes over 3,200 retailers including
Best Buy and Circuit City. Sales for the LTM ended June 2006
approximated $350 million.
DIVERSIFAX INC: May 31 Balance Sheet Upside-Down by $2.8 Million
----------------------------------------------------------------
At May 31, 2006, Diversifax, Inc., reported total stockholders'
deficit of $2,842,377 from total assets of $123,504 and total
liabilities of $2,965,881.
The Company's balance sheet also showed strained liquidity with
$91,770 in total current assets and $2,957,652 total current
liabilities.
For the three months ended May 31, 2006, the Company reported
net income of $63,136 from total sales of $164,662.
A full-text copy of the Company's financial report for the three
months ended May 31, 2006, is available for free at:
http://researcharchives.com/t/s?1046
Going Concern Doubt
As reported in the Troubled Company Reporter on Apr. 21, 2006,
Pender Newkirk & Company LLP expressed substantial doubt about
DiversiFax, Inc.'s ability to continue as a going concern after it
audited the Company's financial statements for the fiscal years
ended Nov. 30, 2005 and 2004. The auditing firm pointed to the
Company's $14 million accumulated deficit and negative working
capital at Nov. 30, 2005. The Company also has significant
indebtedness to an officer and shareholder.
Headquartered in Sarasota, Florida, DiversiFax, Inc. --
http://www.diversifax.com/-- owns and operates coin and debit
card pay-per-copy photocopy machines, microfilm reader-printers,
and accessory equipment. The company, through its subsidiary,
IMSG Systems, Inc., provides self-service coin and card reader
operated photocopy machines in colleges, universities, libraries,
courthouses, government agencies, pharmacies, and other retail
establishments throughout the eastern United States. Another
wholly owned subsidiary, DiversiFax Information Services, Inc.,
provided the Smart Switch(TM), a computerized switching device
used in the public facsimile business.
DOUGHMAKERS LLC: Case Summary & 22 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Doughmakers, LLC
P.O. Box 10034
Terre Haute, IN 47801-0034
Bankruptcy Case No.: 06-80656
Debtor-affiliate filing separate chapter 11 petition:
Entity Case No.
------ --------
Rebel Enterprises, LLC 06-80655
Type of Business: The Debtors manufacture baking pans and
utensils. See http://www.doughmakers.com/
and http://www.thebakersplace.com/
Chapter 11 Petition Date: August 25, 2006
Court: Southern District of Indiana (Terre Haute)
Debtors' Counsel: Thomas Joseph Chowning, Esq.
19 South 6th Street, Suite 1100
Terre Haute, IN 47807
Tel: (812) 232-4080
Fax: (812) 232-6694
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
A. Doughmakers, LLC's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
SPCP Group, LLC $2,400,000
Silver Point Capital, B+BT
Laureate Capital (1,851,500
200 South College Street Secured)
Charlotte, NC 28202
Esquire International Corp. $90,000
5F., No. 32, SC 1
Chung Chen Road
Shih Lin, Taipei, Taiwan
John Fenoglio $60,000
925 East Hazel Bluff Road
Clinton, IN 47842
Polsinelli, Shalton, Welte & Suelthous $52,000
700 West 47th Street, Suite 1000
Kansas City, MO 64112-1802
Archbold Container Corp. $17,800
P.O. Box 10
Archbold, OH 43502
The McLendon Company $14,700
U.S. Bank VISA $12,700
Corus Aluminum Roled Products-Lockbox $11,950
Norwest Marketing $8,400
HarperCollinsPublishers $7,000
LJ Marketing & Associates $6,700
Leveltek Processing LLC $6,300
FFB Visa 1670 FFB, N.A. $5,000
Ben Tally & Associates, Inc. $4,200
Alice Kerr & Assoc., Inc. $4,150
Holzmeyer Die & Mold Mfg. Corp. $4,000
Adam Industries, Inc. $3,700
Fox Run Craftsman $3,700
David Juell Enterprises $2,900
Pitney Bowes Purchase Power $2,100
B. Rebel Enterprises, LLC's Two Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
C.H. Garmong & Son, Inc. $120,000
3050 Poplar Street
Terre Haute, IN 47803
CitiBusiness Card $5,000
P.O. Box 6309
The Lakes, NV 88901-6309
DRESSER INC: Completes Consent Solicitation on 9-3/8% Term Loan
---------------------------------------------------------------
Dresser, Inc., received the requisite consents under its senior
unsecured term loan to extend the deadlines for providing
financial statements to dates consistent with the deadlines
required by the indenture governing the company's 9-3/8% senior
subordinated notes.
The deadline for providing the company's audited financial
statements for the fiscal year ended Dec. 31, 2005, has been
extended from Sept. 30, 2006, to Dec. 31, 2006, and for providing
its 2006 quarterly financial statements from Sept. 30, 2006, to
March 31, 2007.
The company is reportedly extending the date on which consents are
due for its previously announced amendment process under its
senior secured credit facility to 5:00 p.m. on Sept. 8, 2006, New
York City time.
About Dresser
Based in Addison, Texas, Dresser, Inc. -- http://www.dresser.com/
-- designs, manufactures and markets equipment and services sold
primarily to customers in the flow control, measurement systems,
and compression and power systems segments of the energy industry.
The Company has a comprehensive global presence, with over 8,500
employees and a sales presence in over 100 countries worldwide.
* * *
As reported in the Troubled Company Reporter on Aug. 3, 2006,
Moody's Investors Service downgraded Dresser, Inc.'s ratings.
Moody's said the rating outlook is negative.
Dresser's Corporate Family Rating was downgraded to B1 from Ba3.
The rating for the Company's Senior Secured Tranche C Term Loan
maturing 2009 was downgraded to B1 from Ba3. Moody's also
downgraded the rating for the Company's Senior Unsecured Term Loan
maturing 2010 to B2 from B1. The Company's Senior Subordinated
Notes maturing 2011 was downgraded to B3 from B2.
EVERGREEN INT'L: Extends 12% Senior Notes Offering to Sept. 5
-------------------------------------------------------------
Evergreen International Aviation, Inc., an Oregon corporation,
disclosed that its pending offer to purchase any and all of its
outstanding 12% Senior Second Secured Notes Due 2010 (CUSIP No.
30024DAF7) scheduled to expire at 5:00 p.m., New York City time,
on Aug. 21, 2006, has been extended until 5:00 p.m., New York City
time, on Sept. 5, 2006, unless otherwise extended or earlier
terminated. Except for the above change, all terms and conditions
of the tender offer are unchanged and remain in full force and
effect.
Holders of approximately 97.94% of the outstanding principal
amount of the Notes have tendered and consented to the proposed
amendments to the indenture governing the Notes. Subject to the
satisfaction or waiver of the remaining conditions (including the
consummation of a new Senior Secured Credit Facility by Evergreen)
set forth in the Offer to Purchase and Consent Solicitation
Statement dated July 20, 2006, Evergreen currently intends to
accept the entire amount of Notes tendered pursuant to the tender
offer and consent solicitation.
Credit Suisse Securities (USA) LLC is serving as the exclusive
Dealer Manager and Solicitation Agent for the tender offer and
consent solicitation. Questions regarding the terms of the tender
offer or consent solicitation should be directed to:
Credit Suisse Securities (USA) LLC
Attn: Liability Management Group
Telephone (212) 325-7596 or (800) 820-1653
The Tender Agent and Information Agent is D.F. King & Co., Inc.
Any questions or requests for assistance or additional copies of
documents may be directed to the Information Agent toll free at
(800) 290-6426 (bankers and brokers call collect at (212) 269-
5550).
Based in McMinnville, Oregon, Evergreen International Aviation,
Inc. -- http://www.evergreenaviation.com/-- is a privately held
global aviation services company that is active through several
subsidiary companies.
* * *
As reported in the Troubled Company Reporter on Aug. 11, 2006,
Standard & Poor's Ratings Services raised its rating on Evergreen
International Aviation Inc.'s first-lien bank loan rating to 'B+'
from 'B' and changed the recovery rating to '1' from '2'. The
rating action reflects a change in the structure of the proposed
credit facility.
FLYI INC: Judge Walrath Approves Incentive Program
--------------------------------------------------
The Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the
District of Delaware approves FLYi, Inc., and debtor-affiliates'
Incentive Program. The Debtors are authorized to file the
salaries and bonuses to be paid under the Employee Program Motion
under seal.
The Court rules that with regards to all Remaining Employees
other than Mr. Rick Kennedy:
(a) If the Debtors terminate a Remaining Employee without
cause effective on or prior to October 31, 2006, the Bonus
to which the Remaining Employee is entitled is equal to
150% of the base compensation that would have accrued for
the employee from July 8, 2006, through and including
October 31, 2006;
(b) If the Debtors terminate the Remaining Employee without
cause effective after October 31, 2006, the Bonus to which
the Remaining Employee is entitled is equal to his Four-
Month Bonus plus a prorated Bonus based on the number
of days he was employed starting on November 1, 2006, and
ending on December 29, 2006.
If a Remaining Employee voluntarily terminates employment
with the Debtors effective after October 31, 2006, the
Employee will not be entitled to a Bonus other than the
Four-Month Bonus;
(c) All Remaining Employees employed with the Debtors on
October 31, 2006, will earn a Four Month Bonus on that
date, and the Debtors are authorized to pay Four-Month
Bonuses to the employees on or after October 31, 2006;
(d) If a Remaining Employee is not employed with the Debtors
on October 31, 2006, other than as a result of a
termination of employment by the Debtors without cause, or
in the event of death, disability or medical or certain
other approved leaves of absence, the Employee is not
entitled to a Bonus;
(e) Remaining Employees will be provided at least two weeks'
written notice of termination without cause. Otherwise,
the Debtors will pay them for the two-week period;
(f) The Debtors retain the right to execute employment letters
with Remaining Employees that provide that the expected
employment term of the Remaining Employees is through a
date prior to December 29, 2006.
If the termination date of employment described in the
letter is prior to October 31, 2006:
(1) the Remaining Employee is only entitled to a prorated
Bonus based on the employment term described in the
letter; and
(2) the prorated Bonus is only payable if the Remaining
Employee is employed with the Debtors as of the
termination date or has been terminated prior to that
time without cause.
As reported in the Troubled Company Reporter on Aug. 2, 2006, the
Debtors asked the Court to approve an Incentive Program pursuant
to Sections 105(a), 363(b) and 503 of the Bankruptcy Code. The
Debtors had previously obtained the approval to implement a
Wind-Down Employee Plan. The Wind-Down Employee Plan, which
commenced on January 5, 2006, expired on July 7, 2006.
About FLYi Inc.
Headquartered in Dulles, Virginia, FLYi, Inc., aka Atlantic Coast
Airlines Holdings, Inc. -- http://www.flyi.com/-- is the parent
of Independence Air Inc., a small airline based at Washington
Dulles International Airport. The Debtor and its six affiliates
filed for chapter 11 protection on Nov. 7, 2005 (Bankr. D. Del.
Case Nos. 05-20011 through 05-20017). Brendan Linehan Shannon,
Esq., M. Blake Cleary, Esq., and Matthew Barry Lunn, Esq., at
Young, Conaway, Stargatt & Taylor, represent the Debtors in their
restructuring efforts. Brett H. Miller, Esq., at Otterbourg,
Steindler, Houston & Rosen, P.C., represents the Official
Committee of Unsecured Creditors. As of Sept. 30, 2005, the
Debtors listed assets totaling $378,500,000 and debts totaling
$455,400,000. (FLYi Bankruptcy News, Issue No. 23; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
FLYI INC: U.S. Trustee Wants Compliance on Section 345 Provisions
-----------------------------------------------------------------
Section 345 of the Bankruptcy Code provides for the protection of
creditors and requires the debtor-in-possession to deposit or
invest the money of the estate in a way that results in the
"maximum reasonable net return."
As part of their first day motions, FLYi, Inc., and debtor-
affiliates received a temporary waiver of the requirements of
Section 345. Kelly Beaudin Stapleton, the U.S. Trustee for Region
3, notes that the waiver has expired.
The U.S. Trustee informs the U.S. Bankruptcy Court for the
District of Delaware that despite repeated requests for the
Debtors to comply with the Section 345 statute, they have
failed to do so.
On the other hand, the Debtors respond that Wachovia Bank, NA,
has not complied with their repeated requests to forward an
original signed copy of a Collateralization Agreement to the
Office of the U.S. Trustee.
The Bank maintains a bond with the U.S. Trustee for other cases
filed in the district. As of August 11, 2006, the U.S. Trustee
relates that the bond is $61 million. "[The bond] would
adequately cover the Debtors' estates but for Wachovia's failure
to execute a collateralization agreement applicable to these
cases," the U.S. Trustee asserts.
Accordingly, the U.S. Trustee asks the Court to direct the
Debtors to move their accounts that, at any time, may contain
funds in an amount that exceeds $100,000, to an institution that
will provide it with the required collateralization agreement.
About FLYi Inc.
Headquartered in Dulles, Virginia, FLYi, Inc., aka Atlantic Coast
Airlines Holdings, Inc. -- http://www.flyi.com/-- is the parent
of Independence Air Inc., a small airline based at Washington
Dulles International Airport. The Debtor and its six affiliates
filed for chapter 11 protection on Nov. 7, 2005 (Bankr. D. Del.
Case Nos. 05-20011 through 05-20017). Brendan Linehan Shannon,
Esq., M. Blake Cleary, Esq., and Matthew Barry Lunn, Esq., at
Young, Conaway, Stargatt & Taylor, represent the Debtors in their
restructuring efforts. Brett H. Miller, Esq., at Otterbourg,
Steindler, Houston & Rosen, P.C., represents the Official
Committee of Unsecured Creditors. As of Sept. 30, 2005, the
Debtors listed assets totaling $378,500,000 and debts totaling
$455,400,000. (FLYi Bankruptcy News, Issue No. 23; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
FRASER PAPERS: Operating Losses Cues Moody's to Junk Ratings
------------------------------------------------------------
Moody's Investors Service lowered Fraser Papers Inc.'s corporate
family rating to Caa1 and its senior unsecured rating to Caa2.
The outlook was revised to stable from negative. At the same time
the SGL-3 speculative grade liquidity rating was affirmed.
The revision in rating reflects the company's ongoing incurrence
of operating losses and negative cash flow, and the uncertainty as
to when these may improve given that the company has been unable
to receive meaningful price increases or to benefit from those
received. The rating also considers the possibility that the
company will exercise its option to purchase the Katahdin mill,
taking on more debt. The stable outlook reflects the fact that
the company's cash on hand at June 30, 2006, was $49 million,
equal to approximately 58% of its notes.
The Caa1 corporate family rating considers Fraser Papers' negative
operating earnings and cash flow, high operating cost base,
exposure to the Canadian dollar, very high underfunded pension
obligation, small size and lack of diversity. The Caa1 rating
does consider the company's reduced external debt burden, having
used proceeds from asset sales to reduce its senior unsecured
notes from $150 million to $84 million in the first half of the
year. The $84 million of notes outstanding includes $16 million
held by Fraser Papers.
Moody's last rating action on Fraser Papers was the lowering of
the outlook to negative in October 2005.
Fraser Papers Inc., headquartered in Toronto, Ontario is engaged
in the fine papers, pulp and lumber segments of the forest
products industry and had sales of $918 million in 2005.
FRAWLEY CORP: June 30 Balance Sheet Upside-Down by $5 Million
-------------------------------------------------------------
At June 30, 2006, Frawley Corporation reported total stockholders'
deficit of $5,007,000 from total assets of $501,000 and total
liabilities of 5,508,000.
The Company's balance sheet at June 30 also showed strained
liquidity with $28,000 in total current assets and $4,438,000
in total current liabilities.
For the three months ended June 30, 2006, the Company incurred a
net loss of $90,000 on net revenue of $2,000.
A full-text copy of the Company's financial report for the three
months ended June 30, 2006 is available for free at:
http://researcharchives.com/t/s?1044
Headquartered in Agoura Hills, California, Frawley Corporation
develops real estate. The Company's real estate investment
consists of approximately 52 acres of largely undeveloped land in
the Santa Monica Mountains, northwest of Los Angeles. The Company
is continuing to pursue various options with respect to selling a
significant portion of its real estate.
GALVEX HOLDINGS: Wants Chapter 11 Cases Dismissed or Converted
--------------------------------------------------------------
Galvex Holdings Limited asks the U.S. Bankruptcy Court for the
Southern District of New York to dismiss its chapter 11 case or,
in the alternative, convert its case to a chapter 7 liquidation
proceeding.
Lori R. Fife, Esq., at at Weil, Gotshal & Manges, LLP, relates
that Galvex is "hopelessly" insolvent, has no assets remaining to
reorganize or sell, and has no ability to file and confirm a plan
of liquidation or pay any administrative expenses.
As reported in the Troubled Company Reporter on May 30, 2006, the
Court authorized Galvex and its debtor-affiliates to sell
substantially all of their assets to SPCP Group LLC. The purchase
was effected in exchange for the discharge of the Debtors'
$192 million debt to SPCP. SPCP acquired the shares of Galvex's
subsidiaries:
-- Galvex Estonia;
-- Galvex Intertrade; and
-- Galvex Trade.
In accordance with the sale order, the Court further ruled that
the Chapter 11 cases of the three debtor-subsidiaries will be
dismissed effective upon the closing of the sale.
The Official Committee of Unsecured Creditors supports Galvex's
request only to the extent that the Motion seeks conversion of the
Debtor's case to a case under chapter 7 of the Bankruptcy Code.
The Court will consider the Debtor's conversion or dismissal
request at a hearing scheduled today, Aug. 28, at 10:00 a.m.
About Galvex Holdings
Headquartered in New York City, New York, Galvex Holdings
Limited -- http://www.galvex.com/-- and its affiliates operate
the largest independent galvanizing line in Europe. The Debtors
have offices in New York, Tallinn, Bermuda, Finland, Ukraine,
Germany and the United Kingdom. The company and four of its
affiliates filed for chapter 11 protection on Jan. 17, 2006
(Bankr. S.D.N.Y. Lead Case No. 06-10082). Galvex Capital, LLC,
is represented by David Neier, Esq., at Winston & Strawn LLP,
and Gerard DiConza, Esq., at DiConza Law, P.C. Galvex Holdings
Ltd. and the other debtor-affiliates are represented by David
Neier, Esq., at Winston & Strawn LLP, and Lori R. Fife, Esq.,
Marcia L. Goldstein, Esq., and Shai Waisman, Esq., at Weil,
Gotshal & Manges, LLP. John P. McNicholas, Esq., and Thomas R.
Califano, Esq., at DLA Piper Rudnick Gray Cary US LLP, 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.
GENOIL INC: Appoints H. Lombard as Director of Corporate Finance
----------------------------------------------------------------
Hendrik Lombard, C.A., C.F.A, has been appointed as Controller and
Director of Corporate Finance of Genoil Inc. For more than 10
years, Mr. Lombard has been involved in accounting and
consolidations, corporate finance, cash management, international
trade, mergers and acquisitions, portfolio management and internal
control implementation.
Mr. Lombard will report to the Corporation's CFO and will manage
Genoil's financial accounting processes and systems. Mr. Lombard
will be responsible for the Corporation's financial reporting, its
compliance with exchange listing requirements and audit
preparation.
Mr. Lombard holds a Bachelor of Accounting degree from the
University of Stellenbosch, South Africa, and an Honours B.Com.
degree from the University of South Africa. Mr. Lombard obtained
his Chartered Accountant designation from the SA Institute of
Chartered Accountants in 1994 and from the Canadian Institute of
Chartered Accountants in 2004, and also obtained his Chartered
Financial Analyst designation in 2003. Mr. Lombard's background
includes senior financial and management roles with
entrepreneurial and established companies in the securities and
other industries in Canada and Namibia.
Before joining Genoil, Mr. Lombard was a consultant providing
financial reporting, taxation, accounting and auditing services.
From 1998 to 2002, Mr. Lombard was Managing Partner at Lexus
Securities, where he was instrumental in the start-up of this
brokerage company. In this position Mr. Lombard developed a new
money market system, implemented all accounting, settlement and
compliance systems and directed research, portfolio management,
corporate finance and trading. Prior to that, Mr. Lombard was
Senior Executive at Namib Mills, the largest grain processing
company in Namibia, Africa. Mr. Lombard started as Assistant to
the CEO of this entity and was promoted to CFO after five months.
While in the position of CFO, Mr. Lombard had a key role in the
negotiations for the takeover and integration of Namib Mill's
major competitor. He also directed Namib Mill's Finance,
Personnel and IT departments, and designed and implemented new
production, distribution and payroll systems for 550 employees.
Mr. Lombard also served with KPMG early in his career and was in
administrative positions at ABN Amro Bank and other mid-sized
firms in the late 1990s.
In connection with Mr. Lombard's employment, the Company's Board
has approved the granting of 250,000 options with an exercise
price of CDN$0.73 per share that will vest over a four year period
in pro rated annual increments from the date of issuance.
About Genoil Inc.
Headquartered in Calgary, ALberta, Genoil Inc. (TSX VENTURE:
GNO)(OTCBB: GNOLF) -- http://www.genoil.net/-- is a technology
development and engineering company providing environmentally
sound solutions to the oil and gas industry through the use of
proprietary technologies. The Genoil Hydroconversion Upgrader is
designed to economically convert heavy crude oil into more
valuable light upgraded crude, high in yields of transport fuels,
while significantly reducing the sulfur, nitrogen and other
contaminants.
Going Concern Doubt
As reported in the Troubled Company Reporter on Aug. 18, 2006, BDO
Dunwoody LLP expressed substantial doubt about Genoil Inc's
ability to continue as a going concern after auditing the
Company's financial statements for the year ended Dec. 31, 2005.
The auditing firm pointed to the Company's working capital
deficiency and accumulated losses.
GENTEK INC: Earns $4.2MM from Continuing Operations in 2nd Quarter
------------------------------------------------------------------
GenTek Inc. generated $223 million of revenues for the second
quarter ended June 30, 2006, and operating profit of $16.8
million. This compares to revenues of $202.2 million and operating
profit of $12.3 million in the prior-year period.
The Company's manufacturing and performance chemicals businesses
both contributed to the 10% sales increase, of which 6% was due to
increased copper prices. Both businesses contributed to the 36%
increase in operating profit.
The Company recorded income from continuing operations of $4.2
million, compared to an income from continuing operations of
$1.3 million in the second quarter of 2005.
For the six months ended June 30 2006, GenTek had revenues
totaling $437.8 million and operating profit of $29.9 million.
This compares to revenues of $402.4 million and operating profit
of $17.2 million for 2005. The Company had income from continuing
operations of $8.7 million in 2006, compared to income from
continuing operations of $1.5 million in the comparable prior-year
period.
The increase in revenues in 2006 is attributable to the growth in
the performance chemical and the wire-harness businesses. Year
over year operating profit improvement has been achieved in both
performance chemicals and manufacturing, driven by margin
improvements and reductions in selling, general and administrative
expenses.
The Company had $11.9 million of cash and $337 million of debt
outstanding as of June 30, 2006, and no borrowing outstanding
under its revolving credit facility.
"We are pleased with our current operating momentum and look to
build on this with our recently announced accretive acquisitions
in General Chemical and GT Technologies" said William E. Redmond,
Jr., GenTek's president and CEO.
A full-text copy of the Company's quarterly report is available
for free at http://researcharchives.com/t/s?105e
About GenTek
GenTek Inc. -- http://www.gentek-global.com/-- provides specialty
inorganic chemical products and services for treating water and
wastewater, petroleum refining, and the manufacture of personal-
care products, valve-train systems and components for automotive
engines and wire harnesses for large home appliance and automotive
suppliers. GenTek operates over 60 manufacturing facilities and
technical centers and has approximately 6,900 employees
* * *
In February 2005, Moody's Investors Service placed a B2 rating on
GenTek's $60 million senior secured revolving credit facility, due
2010, $235 million senior secured term loan B, due 2011.
GLOBAL CROSSING: Balance Sheet Upside-Down by $86MM in 2nd Quarter
------------------------------------------------------------------
Global Crossing Ltd.'s balance sheet at June 30, 2006, showed
$1.87 billion in total assets and $1.95 billion in total
liabilities, resulting in a stockholders' deficit of $86 million.
The Company reported a $173 million stockholders' deficit on
Dec. 31, 2005.
"We have performed for the past seven quarters leading to the
achievement of our major goals, including generating positive
adjusted EBITDA in June," said John Legere, Global Crossing's
CEO. "After transforming the business and intentionally reducing
revenues to focus on more profitable services such as IP-based
carrier data and enterprise services, we're pleased to report
that consolidated revenue grew sequentially for the first time
in three years. This growth validates our strategy and shows that
the future looks extremely promising for Global Crossing."
Management reaffirmed that the company will begin to generate cash
at some point in the second half of the year, marking significant
financial milestones.
Global Crossing's consolidated revenue grew from $456 million in
the first quarter of 2006 to $461 million in the second quarter of
2006.
Consolidated loss applicable to common shareholders was
$77 million, compared with a loss of $109 million in the first
quarter of 2006.
Global Crossing also reported customer successes during the second
quarter, including a new contract with the U.S. General Services
Administration, an inter-carrier agreement with Broadwing to
expand their converged Internet Protocol offerings globally and a
new agreement with Banco Santander International for IP
convergence solutions. Responding to rapid growth in IP traffic,
Global Crossing announced investments in its core network during
the quarter. IP traffic grew 19 percent sequentially during the
second quarter and 102 percent year over year.
Adjusted EBITDA improved 62 percent sequentially and was a loss
of $17 million in the second quarter of 2006, compared with a
loss of $45 million in the first quarter of 2006. Adjusted EBITDA
excluding non-cash stock compensation was a loss of $10 million in
the second quarter, compared with a loss of $33 million in the
first quarter of 2006.
As of June 30, 2006, unrestricted cash and cash equivalents
totaled $456 million. Restricted cash was $21 million. Excluding
net cash impact from second quarter financings (including the
purchase of U.S. treasury securities related to the offerings and
interest received from such offerings), Global Crossing used
$52 million of cash in the second quarter.
As required by the indenture governing its senior notes, GCUK
offered approximately $26 million to tender a portion of the notes
at par in the second quarter. There were no valid tenders of
either the U.S. dollar- or British pounds sterling-denominated
notes.
On May 10, 2006, the company signed a revolving credit facility
with Bank of America in the face amount of $55 million, with an
initial maximum availability of $35 million. Initial advances
under the facility are subject to certain state regulatory
approvals, which are expected by the beginning of the fourth
quarter of 2006, and to customary closing conditions.
On May 30, 2006, Global Crossing closed two concurrent public
offerings, generating $384 million in gross proceeds. The
offerings included 12 million common shares for gross proceeds
of $240 million and $144 million in senior convertible notes.
After deducting underwriters' discounts and other direct fees
expected to be paid by the end of 2006, net proceeds from the
public offerings will be approximately $371 million.
Approximately $20 million of the net proceeds was used to purchase
a portfolio of U.S. treasury securities to fund the first six
interest payments on such notes related to the offerings.
A full-text copy of the Company's quarterly report is available
for free at http://researcharchives.com/t/s?105f
About Global Crossing
Headquartered in Florham Park, New Jersey, Global Crossing Ltd. --
http://www.globalcrossing.com/-- provides telecommunications
solutions over the world's first integrated global IP-based
network, which reaches 27 countries and more than 200 major cities
around the globe. Global Crossing serves many of the world's
largest corporations, providing a full range of managed data and
voice products and services. The Company filed for chapter 11
protection on January 28, 2002 (Bankr. S.D.N.Y. Case No. 02-
40188). When the Debtors filed for protection from their
creditors, they listed $25,511,000,000 in total assets and
$15,467,000,000 in total debts. Global Crossing emerged from
chapter 11 on Dec. 9, 2003.
GLOBAL DOCUGRAPHIX: Court Approves Sale of Remaining Assets
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas
approved the request of Global DocuGraphix, Inc., and Global
DocuGraphix USA, Inc., to sell their remaining assets free and
clear of liens.
The Court also approved the procedures governing the sale of those
assets. A copy of the proposed procedures is available for free
at http://ResearchArchives.com/t/s?100d
As reported in the Troubled Company Reporter on Aug. 23, 2006,
Michael P. Cooley, Esq., at Gardere Wynne Sewell LLP, in Dallas,
Texas, reminded the Court that after an extensive marketing
process and court-approved auction, the Court approved the sale of
a substantial portion of the Debtors' assets to various buyers on
Aug. 1, 2006. In the aggregate, approximately $10.1 million in
inventory, receivables, furniture, fixture and equipment and the
capital stock of TopForm Software, Inc., were sold for total cash
proceeds of approximately $9.1 million. All sales closed on
Aug. 7, 2006.
To complete the orderly liquidation of the Debtors' estates,
approximately $3 million in assets remain to be sold. These
assets, excluding the stock of Document Imaging, Inc., dba GDX
Data, include:
(1) $2 million in accounts receivable;
(2) $500,000 in inventory; and
(3) an unknown (but relatively minimal) quantity of furniture,
fixtures and equipment, vehicles and other miscellaneous
assets.
Headquartered in Plano, Texas, Global DocuGraphix, Inc. --
http://www.gdxinc.com/-- is a commercial printing company
offering products and solutions for printing, advertising,
marketing, office, and document management. The Company and its
subsidiary, Global DocuGraphix USA, Inc., filed for chapter 11
protection on July 18, 2006 (Bankr. N.D. Tex. Case No. 06-32889)
Holland N. O'Neil, Esq., and Richard McCoy Roberson, Esq., at
Gardere, Wynne and Sewell LLP represent the Debtors in their
restructuring efforts. When the Debtors filed for bankruptcy,
they reported assets and debts totaling between $10 million and
$50 million.
GMAC COMMERCIAL: Fitch Lowers $19 Mil. Class M Loan's Rating to CC
------------------------------------------------------------------
Fitch Ratings downgraded GMAC Commercial Mortgage Securities,
Inc., series 1998-C2:
-- $19.0 million class M to 'CC'/'DR4' from 'CCC'/'DR4'
Fitch also upgraded this class:
-- $88.6 million class F to 'AA-' from 'A+'
In addition, Fitch affirmed these classes:
-- $1.3 billion class A-2 at 'AAA'
-- Interest Only class X at 'AAA'
-- $126.5 million class B at 'AAA'
-- $113.9 million class C at 'AAA'
-- $164.5 million class D at 'AAA'
-- $38.0 million class E at 'AAA'
-- $44.3 million class G at 'BBB+
-- $19.0 million class H at 'BB+'
-- $19.0 million class J at 'BB-'
-- $19.0 million class K at 'B+'
-- $25.3 million class L at 'B-'
Class A-1 has paid in full. The $2.2 million class N is not rated
by Fitch.
The downgrade is a result of an increase in Fitch expected losses
on the six specially serviced loans. The upgrade is a result of
defeasance and an increase subordination levels due to additional
loan amortization and prepayments since Fitch's last review.
A total of 67 loans (27.5%) have defeased since issuance. As of
the August 2006 distribution date, the transaction's principal
balance decreased 23.2% to $1.94 billion compared to $2.53 billion
at issuance. To date, the pool has realized losses in the amount
of $16.8 million.
Fitch expects losses on the six specially serviced loans (1.6%) to
deplete the principal balance of the non-rated class N and
significantly impact the principal balance of class M. The
largest of these loans (0.8%) is in foreclosure and is secured by
a 420-unit multifamily property in West Des Moines, Iowa.
The second largest specially serviced asset (0.2%) is REO and is
secured by a 467-pad mobile home property in Saginaw, Michigan.
There are 220 vacant pads at the site which do not meet current
code. The property manager is working on obtaining estimates for
bringing the vacant pad sites up to code.
Fitch reviewed operating statement analysis reports and other
performance information provided by the master servicer. The
Fitch stressed debt service coverage ratio for the loan is
calculated based on a Fitch adjusted net cash flow and a stressed
debt service based on the current loan balance and a hypothetical
mortgage constant.
Five credit assessed loans (27.2%) are in the pool. One loan, the
Arden Realty Inc. loan (6.6%), has defeased since Fitch's last
rating action.
The OPERS Factory Outlet Portfolio (9.1%) is secured by 12 cross-
collateralized and cross defaulted outlet properties within nine
centers. Occupancy remains stable at 94% as of December 2005, a
2.8% decrease from 96.7% at issuance. The year-end 2005 Fitch
stressed debt service coverage ratio was 2.50x compared to 1.68x
at issuance. The loan maintains an investment grade credit
assessment.
The two remaining investment grade credit assessed loans, South
Towne Center & Marketplace (3.3%) and Grove Property Trust (3.2%),
have performed at or better than expected at issuance. The loans
maintain investment grade credit assessments.
The Boykin Portfolio (4.9%) remains below investment grade.
GRUPO TMM: Inks $200MM Securitization Pact with Deutsche Bank
-------------------------------------------------------------
Grupo TMM, SA, a Mexican multi-modal transportation and logistics
firm, and some of its subsidiaries have entered into an agreement
for the securitization of $200 million with Deutsche Bank AG,
London. The transaction was approved at Grupo TMM's Shareholders'
Meeting on Aug. 18, 2006, and is subject to customary closing
conditions, including but not limited to, no material adverse
changes in market conditions or the financial situation of the
company.
Once the closing conditions are met, Grupo TMM will use the
proceeds from the transaction to refinance existing indebtedness
and for capital investments in future projects.
Deutsche Bank, who acted as structuring agent of this facility,
will provide funding for the transaction. The Bank of New York
will be the trustee for the certificates issued under this
facility.
Javier Segovia, the president of Grupo TMM, said, "This
transaction not only extends our debt maturity, eliminating any
refinancing risk in 2007, but also gives the company added
financial flexibility and provides us with the resources to
implement our business strategy."
Headquartered in Mexico City, Grupo TMM S.A. (NYSE: TMM)(MEX
VALORIS: TMMA) -- http://www.grupotmm.com/-- is a Latin American
multimodal transportation and logistics company. Through its
branch offices and network of subsidiary companies, TMM provides a
dynamic combination of ocean and land transportation services.
* * *
Standard & Poor's Ratings Services raised its corporate credit
rating on Grupo TMM S.A. to 'B-' from 'CCC.' The rating was
removed from Creditwatch, where it was placed on Dec. 15, 2004.
S&P said the outlook is positive.
HARVEST ENERGY: North Atlantic Merger Cues S&P's Negative Watch
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'B+' long-term
corporate credit rating on Harvest Energy Trust and 'B-' senior
unsecured debt rating on Harvest Operations Corp., a wholly owned
subsidiary of Harvest Energy, on CreditWatch with negative
implications, following the company's announcement of a CDN$1.6
billion acquisition of North Atlantic Refining Ltd. in
Newfoundland.
"The negative CreditWatch placement reflects our concerns
regarding the scale of the transaction, the increase in debt
levels, and the acquisition being a departure from the company's
business experience both in terms of geography and operations,"
said Standard & Poor's credit analyst Jamie Koutsoukis.
"Debt levels will increase upon closing of the acquisition as it
is expected to be funded 75% through debt; although the trust's
financial profile will be considerably weaker than it was before
the transaction, we expect Harvest Energy's financial profile will
remain within the 'B+' category. The rating outcome is, however,
dependent on our assessment of the change in the business profile
as a result of the introduction of the refinery operations, as the
refinery industry historically has been volatile," Ms. Koutsoukis
added.
Standard & Poor's does not expect to resolve the CreditWatch
placement until the transaction closes (which is projected to
occur in October of this year) and the rating agency is able to
fully assess the effect the refinery acquisition has on the
trust's business and financial profile and its expectations for
financial performance and credit metrics with the incorporation of
the refinery into Harvest Energy's business.
HEMOSOL CORP: CCAA Proceedings Stayed Until September 29
--------------------------------------------------------
The Superior Court of Justice of Ontario issued an order extending
the stay of proceedings against Hemosol Corp. and its affiliates
Hemosol LP in Hemosol's Companies' Creditors Arrangement Act
(Canada) proceedings until Sept. 29, 2006.
PricewaterhouseCoopers Inc., in its capacity as interim receiver
of the assets, property and undertaking of Hemosol, brought a
motion to the Court requesting additional time to allow for the
waiver or satisfaction of the conditions contained in the plan
sponsorship agreement entered into between the Receiver and
2092248 Ontario Inc. Additional time is also required as a result
of the litigation proceedings in which the Receiver and the Plan
Sponsor is engaged with ProMetic Bioscience Ltd., which are the
subject of a sealing order of the Court. The proceedings relate
to issues involving the license agreement between Hemosol and
ProMetic. A trial of the issues is currently taking place and it
is anticipated that the Court will issue its decision in the last
week of August.
The Sponsorship Agreement continues to be conditional upon
obtaining the approval of Hemosol's creditors and the Court on a
proposed CCAA plan of compromise, and, unless waived by the Plan
Sponsor, a plan of arrangement under the OBCA, which, if
implemented, will result in a substantial dilution of the equity
of Hemosol held by the shareholders existing at the time of
implementation. Consequently, at this time there is no certainty
as to the outcome of the marketing and sales process.
About Hemosol
Hemosol Corp. (NASDAQ: HMSLQ, TSX: HML) -- http://www.hemosol.com/
-- is an integrated biopharmaceutical developer and manufacturer
of biologics, particularly blood-related protein based
therapeutics. Information on Hemosol's restructuring is available
at http://www.pwc.com/ca/eng/about/svcs/brs/hemosol.html
Hemosol Corp and Hemosol LP filed a Notice of Intention to Make
a Proposal Pursuant to section 50.4 (1) of the Bankruptcy and
Insolvency Act on Nov. 24, 2005. The Company had defaulted in
the payment of interest under its $20 million credit facility.
Hemosol said that it would require additional capital to
continue as a going concern and is in discussions with its
secured creditors with respect to its current financial position.
On Dec. 5, 2005, PricewaterhouseCoopers Inc. was appointed interim
receiver of the Companies.
HERBALIFE LTD: Completes Redemption of $165 Million 9-1/2% Notes
----------------------------------------------------------------
Herbalife Ltd. completed the redemption of its outstanding
$165 million aggregate principal amount of 9 1/2% Notes due 2011.
The Company disclosed, it used the proceeds from its new
$200 million term loan to fund the redemption at the mandatory
price of approximately $110.07 per $100 aggregate principal amount
of Notes and to pay closing costs.
The Company has advised the Bank of New York of its election to
redeem the Notes in connection with the refinancing of its former
senior secured credit facility. The Company also disclosed that
it expects to incur an after-tax one-time charge of approximately
$14 million related to the refinancing, representing the call
premium on the Notes and the write-off of unamortized deferred
financing costs. The Company's new debt structure is comprised of
a $300 million senior secured credit facility, consisting of a
$200 million, seven-year term loan and a $100 million, six-year
revolving credit facility.
"This recapitalization is just another step towards strengthening
our overall capital structure, by improving our flexibility to
repay debt and reducing our annual interest expense," Rich Goudis,
chief financial officer, said.
The Company expects to realize the accretive benefit of the
recapitalization beginning in the fourth quarter of 2006.
Herbalife Ltd. (NYSE: HLF) -- http://www.herbalife.com/-- is a
global network marketing company that sells weight-management,
nutritional supplements and personal care products intended to
support a healthy lifestyle. Herbalife products are sold in 62
countries through a network of more than one million independent
distributors. The company supports the Herbalife Family
Foundation -- http://www.herbalifefamily.org/-- and its Casa
Herbalife program to bring good nutrition to children.
* * *
Standard & Poor's Ratings Services rated Herbalife Ltd.'s long-
term foreign and local issuer credit ratings at BB+.
HOLLINGER INT'L: June 30 Balance Sheet Upside-Down by $261 Mil.
---------------------------------------------------------------
Hollinger International Inc., nka Sun-Times Media Group, Inc.,
reported total assets of $964,667,000 and total liabilities of
$1,225,784,000 at June 30, 2006, resulting in a stockholders'
deficit of $261,117,000. The Company had reported a $197,737,000
equity deficit at March 31, 2006.
At June 30, 2006, working capital, excluding current debt
obligations and restricted cash and escrow deposits and assets and
liabilities of operations to be disposed of, was a deficiency of
$347.7 million compared to a deficiency of $369.6 million at
Dec. 31, 2005.
Earnings from continuing operations in the second quarter of 2006
amounted to $20.1 million, compared to a loss of $20.4 million in
the second quarter of 2005. The improvement in earnings from
continuing operations in the second quarter of 2006 as compared to
2005 is largely due to a $47.6 million improvement in income taxes
largely due to the reversal of certain contingent tax liabilities
no longer deemed necessary amounting to $43 million.
Excluding the impact of income taxes, the decrease in earnings
from continuing operations for the quarter of $7 million is
largely due to a decline in operating revenue of $10.3 million
somewhat offset by lower costs of $4.6 million with respect to the
Special Committee and its investigation and related litigation.
The loss from continuing operations for the six months ended
June 30, 2006 was $6.4 million, compared with a loss of
$40.9 million for the six months ended June 30, 2005.
A full-text copy of the Company's quarterly report is available
for free at http://researcharchives.com/t/s?1060
Hollinger International Inc., nka Sun-Times Media Group, Inc --
http://www.hollingerinternational.com/-- is a newspaper publisher
whose assets include The Chicago Sun-Times and a large number of
community newspapers in the Chicago area.
HOLLYWOOD THEATERS: Moody's Holds Low-B Ratings on Sr. Sec. Loans
-----------------------------------------------------------------
Moody's Investors Service affirmed the B2 corporate family rating
and all other ratings of Hollywood Theaters, Inc., in light of the
company's proposed bank amendment, which enhances flexibility
under its bank covenants. The outlook remains stable.
A summary of ratings actions:
* Affirmed B2 Corporate Family Rating
* Affirmed B2 First Lien Senior Secured Bank Credit Facility
Rating
* Affirmed B3 Second Lien Senior Secured Bank Credit Facility
Rating
* Outlook: Stable
Hollywood's B2 corporate family rating continues to reflect its
high financial risk, lack of scale, sensitivity to product from
movie studios, and a weak industry growth profile. Financial risk
includes leverage of 6.3 times debt-to-EBITDA, fixed charge
coverage of 0.6 times, and modestly negative free cash flow
from operations. Hollywood's growing base of better performing
stadium theaters and limited competition in its midsize markets,
coupled with Moody's expectations for a return to modestly
positive free cash flow from operations in 2007 support the
rating.
Although Hollywood has repeatedly underperformed its growth
projections, some of the shortfall has come from a scaled back new
build program and consequently lower capital expenditures.
Hollywood has historically funded its expansion with cash
generated from operations, as evidenced by the company's modest
levels of positive free cash flow over the past several years. In
2006, Moody's expects Hollywood to consume a modest amount of cash
after capital expenditures and to fund this shortfall with its
$25 million revolver. Moody's anticipates Hollywood will return
to its historic pattern and generate modestly positive free cash
flow in 2007.
Hollywood Theater Holdings, Inc., is a regional theater exhibition
company operating approximately 50 theaters and 500 screens
located primarily in the southwest and on the west coast, with
several joint ventures in the American territories in the South
Pacific. The company maintains its headquarters in Portland,
Oregon, and has annual revenue of approximately $120 million.
IMMUNE RESPONSE: Earns $104 Million in Quarter Ended June 30
------------------------------------------------------------
The Immune Response Corporation reported a $104,000,000 net income
on 3,944,000 of net revenue for the three months ended June 30,
2006, in contrast to a $5,146,000 net loss on $3,572,000 of net
revenue for the same period in 2005. The 2006 second quarter net
income includes a $111,521,000 gain on warrant liability marked to
fair value.
At June 30, 2006, the Company's balance sheet showed $11,481,000
in total assets and $24,289,000 in total liabilities, resulting in
a $12,808,000 stockholders' deficit. As of June 30, 2006, the
Company had an accumulated deficit of $149,142,000. At March 31,
2006, the Company reported a $134.7 million equity deficit.
A full-text copy of the Company's quarterly report is available
for free at http://researcharchives.com/t/s?106d
Going Concern Doubt
As reported in the Troubled Company Reporter on June 8, 2006,
Levitz, Zacks & Ciceric expressed substantial doubt about The
Immune Response's ability to continue as a going concern after
auditing the company's financial statements for the years ended
Dec. 31, 2005 and 2004. The auditing firm pointed to the
Company's stockholders' deficit and comprehensive loss for each of
the years in the two-year period ended Dec. 31, 2005.
About Immune Response
Headquartered in Carlsbad, California, The Immune Response
Corporation (OTCBB:IMNR) -- http://www.imnr.com/-- is an
immuno-pharmaceutical company focused on developing products to
treat autoimmune and infectious diseases. The Company's lead
immune-based therapeutic product candidates are NeuroVax(TM) for
the treatment of multiple sclerosis and IR103 for the treatment of
Human Immunodeficiency Virus infection. Both of these therapies
are in Phase II clinical development and are designed to stimulate
pathogen-specific immune responses aimed at slowing or halting the
rate of disease progression.
IMMUNE RESPONSE: Restating 2006 1st Quarter Financial Statements
----------------------------------------------------------------
The Immune Response Corporation will restate its first quarter
financial statements to add approximately $100 million of phantom
income, which has nothing to do with the Company's operations.
Also, there will be additional phantom income of similar magnitude
in the second quarter of 2006. These items do not reflect any
change in the Company's results of operations or cash position,
but are required under a recent clarification of Generally
Accepted Accounting Principles.
The restatement relates to a requirement to reflect in first
quarter income a fair market value adjustment for common shares
underlying the warrants issued in the Company's 2006 private
placement. The requirement arose because, when it issued those
warrants, the Company did not have enough authorized common stock
to honor exercises of the warrants. In determining the
adjustment, the Company was required to estimate the fair market
value of the Company's common stock on March 7, 2006, when most of
the private placement securities were issued. On March 7, the
closing market price of Company common stock was $0.24. The
market, however, did not possess the information that the Company
was issuing these many warrants (exercisable at $0.02 per share)
and notes (convertible at $0.02 per share). When this information
was publicly disclosed, the market price naturally fell; on March
8 and 9, the two days of trading after the public disclosure, the
average closing price was $0.13.
The Company believed, and still believes, that if the market had
known this information on March 7, the March 7 closing price would
have been approximately $0.13, and that therefore the "true" fair
market value on March 7 was $0.13 per share. The Company used the
$0.13 figure in preparing its first quarter financial statements
and reported, under a GAAP rule known as EITF No. 2000-19, a
phantom gain of $12,300,000.
Under the new clarification, using the $0.24 figure is mandatory.
Accordingly, the Company will restate its first quarter financial
statements to show a phantom EITF No. 2000-19 gain of
approximately $115 million rather than of $12.3 million.
On April 11, 2006, the Company increased its authorized number of
shares of common stock to 3,500,000,000 and is now able to cover
all warrant exercises.
Under a different aspect of EITF No. 2000-19, the Company will be
required to report an additional phantom gain of approximately
$111 million in its second quarter financial statements. Under
the terms of a registration rights agreement the Company entered
into as part of the 2006 private placement, if the Company
defaulted under the agreement it might be required to pay damages
in the form of stock - more stock, theoretically, than the
Company's charter authorizes it to issue - if the investor chose
to receive damages in the form of stock. This, together with the
decline in the Company's stock value over the course of the second
quarter, requires the additional phantom gain to be posted.
Nonetheless, the Company is not in default under the registration
rights agreement and does not anticipate any such default.
Immune Response CFO Michael Green said, "These are extreme
examples of how GAAP sometimes fails to reflect companies'
financial realities. We had wanted to apply EITF No. 2000-19
pragmatically to avoid showing such a strange amount of truly
phantom income in the first quarter; that can only tend to confuse
investors. However, the SEC has clarified that GAAP requires us
to do exactly that, and so we will issue a restatement."
Mr. Green continued, "We emphasize to investors that there is no
economic substance behind either the $115 million first quarter
phantom gain or the $111 million phantom gain which we will report
for the 2006 second quarter. We are a development-stage immuno-
pharmaceutical company and our operations have never been
profitable. Rational investors should pay no heed to the phantom
gains, and should evaluate our Company only on its true scientific
and business merits."
The filing of the Company's second quarter Form 10-Q will be
delayed by a few days to enable it to be redrafted to reflect this
matter and to enable the related amended first quarter Form 10-Q
to be prepared.
About Immune Response
Headquartered in Carlsbad, California, The Immune Response
Corporation (OTCBB:IMNR) -- http://www.imnr.com/-- is an
immuno-pharmaceutical company focused on developing products to
treat autoimmune and infectious diseases. The Company's lead
immune-based therapeutic product candidates are NeuroVax(TM) for
the treatment of multiple sclerosis (MS) and IR103 for the
treatment of Human Immunodeficiency Virus (HIV) infection. Both
of these therapies are in Phase II clinical development and are
designed to stimulate pathogen-specific immune responses aimed at
slowing or halting the rate of disease progression.
Going Concern Doubt
As reported in the Troubled Company Reporter on June 8, 2006,
Levitz, Zacks & Ciceric expressed substantial doubt about The
Immune Response's ability to continue as a going concern after
auditing the company's financial statements for the years ended
Dec. 31, 2005 and 2004. The auditing firm pointed to the
Company's stockholders' deficit and comprehensive loss for each of
the years in the two-year period ended Dec. 31, 2005.
INGO KRIEG: Voluntary Chapter 11 Case Summary
---------------------------------------------
Debtor: Ingo Krieg
aka Mecklenburg Farm
4155 Lakeside Drive
Jacksonville, FL 32210
Bankruptcy Case No.: 06-02594
Chapter 11 Petition Date: August 24, 2006
Court: Middle District of Florida (Jacksonville)
Judge: George L. Proctor
Debtor's Counsel: Michael T. Bowlus, Esq.
Ford, Bowlus, Duss, Morgan, Kenney,
Safer & Hampton P.A.
10110 San Jose Boulevard
Jacksonville, FL 32257
Tel: (904) 268-7227
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.
INSIGHT COMMS: Earns $117.6 Million in 2006 Second Quarter
----------------------------------------------------------
Insight Communications Company reported a $117.6 million adjusted
Operating Income before depreciation and amortization for the
quarter ended June 30, 2006, a decrease of 4% over the second
quarter of 2005.
Revenue for the three months ended June 30, 2006, totaled
$311.7 million, an increase of 12% over the prior year, due
primarily to customer gains in all services, as well as video rate
increases.
High-speed Internet service revenue increased 27% over the prior
year, which was attributable to an increased customer base and was
partially offset by lower average revenue per customer due to
promotional discounts. Insight added a net 19,700 high-speed
Internet customers during the quarter to end at 534,500 customers.
Basic cable service revenue increased 7% due to an increased
customer base and video rate increases, partially offset by
promotional discounts. Historically, Insight has experienced a
seasonal decline in basic customers during the second quarter
primarily as a result of students leaving the university
communities Insight serves. In addition, digital service revenue
increased 23% over the prior year due to an increased customer
base. Insight added a net 11,700 digital customers during the
quarter to end at 572,200 customers.
Average monthly revenue per basic customer was $79.65 for the
three months ended June 30, 2006, compared to $73.64 for the three
months ended June 30, 2005. This primarily reflects the continued
growth of high-speed Internet and digital product offerings in all
markets, as well as video rate increases.
"Our double-digit revenue growth and record second quarter RGU
growth are a reflection of the successful investments we've been
making in our sales, marketing and growth capabilities, " said
Michael Willner, CEO. "Although our expenses and operating cash
flow might seem to be out of line with our top-line growth, they
indeed are right in line with our Q2 budget. We had some one-time
credits last year, which resulted in OIBDA growth of 15% in Q2
2005, making a difficult year-over-year comparison. In addition,
since the third quarter of last year, we have been building up our
growth capability and operations in anticipation of an aggressive
IP telephony launch, slated to begin next month. As a result, we
are very comfortable that we will resume quarterly OIBDA growth in
Q3 and will continue our strong RGU growth as telephony launches
commence."
Cash provided by operations for the six months ended June 30, 2006
and 2005 was $133.3 million and $143.2 million. The decrease was
primarily attributable to an increase in our net loss partially
offset by the timing of cash receipts and payments related to the
Company's working capital accounts.
Cash used in investing activities for the six months ended
June 30, 2006 and 2005 was $141.8 million and $92.9 million. Cash
used in financing activities for the six months ended
June 31, 2006 and 2005 was $16.7 million and $41.8 million.
Insight believes that the Insight Midwest Holdings credit
facility, cash on-hand and cash flow from operations are
sufficient to support the company's current operating plan.
Insight had the ability to draw upon $231.4 million of unused
availability under the Insight Midwest Holdings credit facility as
of June 30, 2006, to fund any shortfall resulting from the
inability of Insight Midwest's cash from operations to fund its
capital expenditures, meet its debt service requirements,
including mandatory redemptions, or otherwise fund its operations.
A full-text copy of the Company's Quarterly Report is available
for free at http://researcharchives.com/t/s?1061
Insight Communications (NASDAQ: ICCI) is the 9th largest cable
operator in the United States, serving approximately 1.3 million
customers in the four contiguous states of Illinois, Indiana,
Ohio, and Kentucky. Insight specializes in offering bundled,
state-of-the-art services in mid-sized communities, delivering
analog and digital video, high-speed Internet, and voice telephony
in selected markets to its customers.
* * *
Insight carries Fitch Ratings' B+ Issuer Default Rating. Fitch
also rates the Company's senior unsecured notes at 'CCC+'.
Approximately $2.8 billion of debt is affected by Fitch's ratings.
INTEGRATED HEALTH: Court OKs Stipulation on LaSalle's $556K Claim
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved
the stipulation between IHS Liquidating LLC and LaSalle Bank,
N.A., formerly known as LaSalle National Bank.
As reported in the Troubled Company Reporter on July 12, 2006,
LaSalle asserted Claim No. 13180 for $639,175 arising from
Integrated Health Services, Inc., and its debtor-affiliates'
rejection of a lease agreement between them.
The parties agreed that:
(1) the Claim will be allowed for $556,000 as a nonpriority
general unsecured claim; and
(2) LaSalle will release all other claims or causes of action
against IHS Liquidating, the Debtors and their estates.
Integrated Health Services, Inc. -- http://www.ihs-inc.com/--
operated local and regional networks that provide post-acute care
from 1,500 locations in 47 states. The Company and its
437 debtor-affiliates filed for chapter 11 protection on
February 2, 2000 (Bankr. Del. Case No. 00-00389). Rotech Medical
Corporation and its direct and indirect debtor-subsidiaries broke
away from IHS and emerged under their own plan of reorganization
on March 26, 2002. Abe Briarwood Corp. bought substantially all
of IHS' assets in 2003. The Court confirmed IHS' Chapter 11 Plan
on May 12, 2003, and that plan took effect September 9, 2003.
Michael J. Crames, Esq., Arthur Steinberg, Esq., and Mark D.
Rosenberg, Esq., at Kaye, Scholer, Fierman, Hays & Handler, LLP,
represent the IHS Debtors. On September 30, 1999, the Debtors
listed $3,595,614,000 in consolidated assets and $4,123,876,000 in
consolidated debts. (Integrated Health Bankruptcy News, Issue
No. 107; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
INTERNATIONAL FITNESS: Case Summary & 11 Largest Unsec. Creditors
-----------------------------------------------------------------
Debtor: International Fitness Professionals Association, Inc.
14509 University Point Place
Tampa, FL 33613
Bankruptcy Case No.: 06-04388
Type of Business: The Debtor is a professional association
offering education and certification for fitness
professionals. The group has approximately
65,000 members.
See http://www.ifpa-fitness.com/
Chapter 11 Petition Date: August 23, 2006
Court: Middle District of Florida (Tampa)
Judge: Paul M. Glenn
Debtor's Counsel: Buddy D. Ford, Esq.
Buddy D. Ford, P.A.
115 North MacDill Avenue
Tampa, FL 33609
Tel: (813) 877-4669
Fax: (813) 877-5543
Total Assets: $1,151,729
Total Debts: $607,009
Debtor's 11 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Great America Leasing Corp. Xerox Copiers $22,800
P.O. Box 609 (Lease w/ Buyout
Cedar Rapids, IA 52406 Option)
Hasler M9000 $15,000
Folder Inserter
Internal Revenue Service 941 Taxes for $20,707
3848 West Columbus Drive December 2005
Group 2200 Stop 5222
Tampa, FL 33607 941 Taxes for $17,834
September 2005
941 Taxes for $13,449
March 2006
941 Taxes for $6,341
June 2005
American Express Credit Card $19,187
P.O. Box 360001
Fort Lauderdale, FL 33336
Doug Belden, Hillsborough 2005 Real Estate Taxes $15,238
P.O. Box 172920
Tampa, FL 33672-0920
Staples Credit Plan Credit Card $11,361
Department 83-0000393107
P.O. Box 689020
Des Moines, IA 50368
Bank of America Credit Card $10,687
Platinum Plus for Business Credit Card $10,147
C&D Printing Co. Services $2,623
Sharp & Harrison, P.A. Services $2,495
Marriott-Renaissance Tampa Services $2,309
Hotel International Plaza
Franklin's Printing Purchases $1,830
INTERSTATE BAKERIES: Wants ABA Employers to Follow PBGC Ruling
--------------------------------------------------------------
Interstate Bakeries Corporation and its debtor-affiliates ask the
U.S. Bankruptcy Court for the Western District of Missouri to:
(a) direct the ABA Plan and the Plan Trustees to administer
and operate the Plan as a multiple employer plan in
accordance with the PBGC Ruling;
(b) require the Participating Employers to follow the PBGC
Ruling in their dealings with the ABA Plan, and calculate
the ABA Plan Claim in accordance with the PBGC Ruling; and
(c) sustain their objection to the ABA Plan Claim.
The Pension Benefit Guaranty Corporation has ruled, among other
things, that the American Bakers Association Retirement Plan is a
multiple employer plan, J. Eric Ivester, Esq., at Skadden Arps
Slate Meagher & Flom LLP, in Chicago, Illinois, relates.
In connection with the PBGC Ruling, the Debtors filed a verified
complaint against:
1. the ABA Retirement Plan,
2. the ABA Retirement Trust,
3. the four trustees of the ABA Trust, and
4. other participating employers in the ABA Plan:
* American Bakeries Company,
* American Bakers Association,
* Bedford Bakery Corporation,
* Dexco, Inc.,
* Eagle Snacks Inc.,
* Flowers Bakeries, Inc.,
* Ozark Empire Distributors, Inc.,
* Holsum Baking Co.,
* Jenny Lee Bakery, Inc.,
* Chicago Baking Company,
* Sara Lee Bakery Group, Inc.,
* Sara Lee Corporation,
* Schotts Bakery, Inc.,
* Southern Bakery, Inc., and
* White Baking Co.
The Verified Complaint seeks injunctive relief enforcing the
final ruling issued by the PBGC.
Kettering Baking Company is a named defendant in the Verified
Complaint because it supported the Debtors' contention that the
ABA Plan is a multiple employer plan before the PBGC Ruling, Mr.
Ivester says.
Mr. Ivester asserts that the Plan Trustees should:
-- be enjoined from continuing to assess the Plan under a
single employer plan methodology;
-- withdraw prior assessments made on the single employer
theory; and
-- revoke any plan to cut off benefit accruals for the
Debtors' active participants as a result of non-payment
based on the erroneous assessments.
Mr. Ivester tells the Court that the Plan's erroneous calculation
of assessments and cessation of future benefit accruals by the
Debtors' active Plan-participants would irreparably injure the
Debtors. Indeed, a disruption of employees' pension benefits
would cause major unrest for the Debtors' businesses at an
integral stage in their reorganization proceedings.
The failure to implement the PBGC Ruling will make it much more
difficult for the Debtors to formulate a go-forward
reorganization plan, Mr. Ivester maintains.
Conversely, Mr. Ivester contends that the Defendants will suffer
no harm if the Plan is operated as a multiple employer plan.
The ABA Plan Claim
The Debtors object to the ABA Plan Claim to the extent that:
(a) any portion of the claim is based on a characterization
that the ABA Plan is an aggregate of single employer
plans;
(b) the ABA Plan seeks minimum funding assessments from the
Debtors that are based on the assumption that the Plan is
an aggregate of single employer plans; and
(c) the ABA Plan seeks future contributions based on the
assumption that the assumption that the Plan is an
aggregate of single employer plans.
"The Court should adjudicate the ABA Plan Claim in manner
consistent with the PBGC Ruling," Mr. Ivester reiterates.
The Debtors reserve their rights to amend their Objection and
file additional objections to any proofs of claim that may be
asserted against them.
Headquartered in Kansas City, Missouri, Interstate Bakeries
Corporation is a wholesale baker and distributor of fresh baked
bread and sweet goods, under various national brand names,
including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R),
Merita(R) and Drake's(R). The Company employs approximately
32,000 in 54 bakeries, more than 1,000 distribution centers and
1,200 thrift stores throughout the U.S. The Company and seven of
its debtor-affiliates filed for chapter 11 protection on
September 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric
Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate,
Meagher & Flom LLP, represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they listed $1,626,425,000 in total assets and
$1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior
subordinated convertible notes due August 15, 2014 on August 12,
2004) in total debts. (Interstate Bakeries Bankruptcy News, Issue
No. 46; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
INTERSTATE BAKERIES: Court Lifts Stay on Sara Lee Litigation
------------------------------------------------------------
Sara Lee Corporation, on behalf of its employee-participants in
the American Bakers Association Retirement Plan, asserts that the
Debtors are attempting to use the Pension Benefit Guaranty
Corporation's lack of response as a pretext for effecting an
improper and potentially indefinite stay of the Sara Lee
litigation.
The Debtors neither provide any legal basis for effecting the stay
nor suggest any discernable benefit resulting from the stay, John
W. McClelland, Esq., at Armstrong Teasdale, LLP, in Kansas City,
Missouri, points out.
Mr. McClelland adds that the eventual PBGC determination will not
resolve the subject matter of the Sara Lee Litigation, which is
whether the ABA Plan and the Plan Trustees have violated the terms
of the ABA Plan by improperly using Sara Lee's contributions to
the ABA Plan trust to provide benefits for employee-participants
of other participating employers.
Mr. McClelland asserts that if the PBGC grants the Debtors'
request to revisit the existing administrative determination that
the ABA Plan is an aggregate of single employer pension plans,
Sara Lee will still be entitled to prosecute its litigation
against the ABA Plan and the Plan Trustees to vindicate the
statutory rights of its employee-participants under Section
502(a)(3) of the Employee Retirement Income Security Act of 1974
and adjudicate the issue whether the PBGC's new determination is
correct.
Sara Lee employee-participants will continue to suffer prejudice
so long as the ABA Plan and the Plan Trustees remain in breach of
the terms of ABA Plan and the employee-participants are stayed
from prosecuting their claims under ERISA, Mr. McClelland
emphasizes.
Accordingly, Sara Lee asks the Court to deny the Debtors' request
for further delay and the Debtors' request to enjoin the
continued prosecution of the Sara Lee Litigation.
Debtors Talk Back
The Debtors inform the Court that the PBGC issued a ruling on
Aug. 8, 2006, finding, among others, that the ABA Plan is a
multiple employer plan and not, as contended by Sara Lee and the
ABA Plan, an aggregate of single employer plans.
A 17-page copy of the PBGC Ruling is available for free
at http://ResearchArchives.com/t/s?1063
J. Eric Ivester, Esq., at Skadden Arps Slate Meagher & Flom LLP,
in Chicago, Illinois, asserts that the PBGC Ruling effectively
mooted the Sara Lee Litigation, as the proper determination of the
ABA Plan is at the crux of the Sara Lee Litigation.
Mr. Ivester adds that the PBGC Ruling will provide more certainty
regarding issues that will have a substantial impact on their
reorganization process because the PBGC Ruling will allow them to
resolve the ABA Plan.
Without clarity regarding the ABA Plan's status, the Debtors would
have difficulty resolving the ABA Plan Claim, which is significant
to both the overall claims-resolution process and the
reorganization process, Mr. Ivester says. The determination that
the ABA Plan is a multiple employer plan results in a $40,000,000
decrease in the Debtors' liabilities to the Plan.
In addition, Mr. Ivester says the PBGC Ruling is instrumental in
determining the overall funding of the ABA Plan and the allocation
of assets to Plan-participants of withdrawing employers like Sara
Lee.
Based on the PBGC Ruling that the ABA Plan is a multiple employer
plan, approximately $71,000,000 of the ABA Plan's assets is
arguably allocable to Sara Lee's Plan-participants, an amount
that the ABA Plan has already transferred to a stand-alone Sara
Lee sponsored plan. Mr. Ivester says the amount is $27,000,000
less than the assets that would be allocable to Sara Lee's Plan-
participants if the Plan were an aggregate of single employer
plans.
Thus, the Debtors assert that all Participating Employers must
also follow the PBGC Ruling.
Hence, the Debtors ask the Court to dismiss the Sara Lee
Litigation.
Court Order
For reasons stated in open court, Judge Venters of the U.S.
Bankruptcy Court for the Western District of Missouri denies
Interstate Bakeries Corporation and its debtor-affiliates' request
to enforce the automatic stay against the Sara Lee Litigation.
The Court notes that the Debtors have filed an adversary seeking
injunctive relief against ABA Plan Trustees and Sara Lee, among
others.
Accordingly, the Court terminates the interim order staying the
Sara Lee Litigation.
Headquartered in Kansas City, Missouri, Interstate Bakeries
Corporation is a wholesale baker and distributor of fresh baked
bread and sweet goods, under various national brand names,
including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R),
Merita(R) and Drake's(R). The Company employs approximately
32,000 in 54 bakeries, more than 1,000 distribution centers and
1,200 thrift stores throughout the U.S. The Company and seven of
its debtor-affiliates filed for chapter 11 protection on
September 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric
Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate,
Meagher & Flom LLP, represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they listed $1,626,425,000 in total assets and
$1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior
subordinated convertible notes due August 15, 2014 on August 12,
2004) in total debts. (Interstate Bakeries Bankruptcy News, Issue
No. 46; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
ISTAR FINANIAL: Reports $90.4 Million Net Income in Second Quarter
------------------------------------------------------------------
iStar Financial Inc. generated $90.4 million of net income on
$236.8 million of net revenues for the three months ended June 30,
2006, compared to $78.7 million of net income on $196.6 million of
net revenues in 2005.
Net income allocable to common shareholders for the second quarter
was $79.9 million compared to $68.2 million for the second quarter
2005.
Net investment income for the quarter was $111.3 million, compared
to $95.2 million for the second quarter of 2005, primarily due to
year-over-year growth of the Company's loan portfolio.
Included in this quarter's earnings was an early termination fee
associated with a multi-asset lease within the Company's corporate
tenant lease portfolio, which was partially offset by an
impairment charge related to certain assets within the lease. The
net effect was a one-time positive impact to earnings of $4
million, for the quarter.
The Company announced that during the second quarter, it closed 29
new financing commitments, for a total of $1.63 billion, up 57%
year-over-year. Of that amount, $709 million was funded during
the second quarter. In addition, the Company funded $140 million
under pre-existing commitments and received $481 million in
principal repayments. Additionally, the Company completed the
sale of a non-core office and warehouse facility for $12.8 million
net of costs, resulting in a net book gain of approximately $2.4
million. Cumulative repeat customer business totaled $9.9 billion
at June 30, 2006.
For the quarter ended June 30, 2006, the Company generated return
on average common book equity of 20.9%. The Company's debt to
book equity plus accumulated depreciation/depletion and loan loss
reserves, all as determined in accordance with GAAP, was 2.2x at
quarter end.
As of June 30, 2006, the Company's weighted average GAAP yield on
its structured finance assets and corporate tenant lease assets
was 10.38% and 9.66%, respectively. The Company's net finance
margin, calculated as the rate of return on assets less the cost
of debt, was 3.38% for the quarter.
About iStar
iStar Financial (NYSE: SFI) -- http://www.istarfinancial.com/--
is the leading publicly traded finance company focused on the
commercial real estate industry. The Company provides custom-
tailored financing to high-end private and corporate owners of
real estate nationwide, including senior and junior mortgage debt,
senior and mezzanine corporate capital, and corporate net lease
financing. The Company, which is taxed as a real estate
investment trust, seeks to deliver a strong dividend and superior
risk-adjusted returns on equity to shareholders by providing the
highest quality financing solutions to its customers.
* * *
Moody's Investors Service upgraded iStar Financial Inc.'s
preferred stock rating to Ba1 from Ba2, with a stable outlook.
Fitch Ratings also raised the Company's preferred stock rating to
'BB+' from 'BB' in January 2006. Fitch said the Rating Outlook is
Stable.
JACOBS INDUSTRIES: U.S. Trustee Wants Case Converted to Ch. 7
-------------------------------------------------------------
The U.S. Trustee of Region 9 asks the U.S. Bankruptcy Court for
the Eastern District of Michigan to convert Jacobs Industries,
Inc.'s chapter 11 case to a chapter 7 liquidation proceeding.
Claretta Evans, Esq., of the U.S. Trustee's Office, tells the
Court that despite being notified of its duties under the U.S.
Trustee's Operating Instructions and Reporting Requirements, the
Debtor has not filed monthly profit and loss statements since it
filed for bankruptcy and monthly affirmations of its ability to
maintain proper insurance coverage on its assets, and pay taxes
when they become due. Ms. Evans adds that the Debtor also failed
to pay quarterly U.S. Trustee fees, which has now amounted to
around $20,000.
According to Ms. Evans, the Debtor and the Official Committee of
Unsecured Creditors do not have the ability to effectuate
substantial consummation of the Second Amended Combined
Liquidating Plan of Reorganization confirmed by the Court on
July 5, 2006,
Headquartered in Fraser, Michigan, Jacobs Industries, Inc.,
manufactures automotive interiors in roll forming and channel,
stampings and assembled product. The company along with its three
affiliates filed for chapter 11 protection on Sept. 26, 2005
(Bankr. E.D. Mich. Case No. 05-72613). Charles J. Taunt, Esq.,
and Erika D. Hart, Esq., at Charles J. Taunt & Associates,
P.L.L.C., represents the Debtors in their restructuring. Deborah
Kovsky-Apap, Esq., at Pepper Hamilton LLP represents the Official
Committee of Unsecured Creditors. When the Debtor filed for
protection from its creditors, it listed $19,513,913 in total
assets and $21,413,576 in total debts.
LARRY'S MARKET: Food Markets Northwest Buys Queen Anne Location
---------------------------------------------------------------
Food Markets Northwest has acquired the Queen Anne location of
Larry's Market at 100 Mercer Street North, assuming the store's
lease, equipment and inventory effective Sept. 1.
The decision was handed down at a hearing in U. S. Bankruptcy
Court, following an auction of the Larry's Market chain.
"I have always admired the McKinney family's supermarket story.
The greater Seattle area was treated to a food retailer that was
ahead of the rest of the country, and their dedication to bringing
the best products to the market was second to none," Terry
Halverson, Food Markets NW chief executive officer, said.
"They assembled a staff that provided a high level of service and
enjoyed the food that they sold," Terry Halverson said. "We are
excited to have this opportunity to serve Larry's loyal customer
base, and plan to continue to offer the hard to find food products
that they became known for, along with many new items from
Metropolitan Market. We are also excited about the wonderful
staff of foodies at Larry's and hope to add many of them to our
team."
The current Metropolitan Market store on top of Queen Anne has a
lease extension secured through early January 2008.
"It's an exciting time of growth for Metropolitan Market, and
we're pleased to continue to serve the greater Queen Anne
community and plan to operate both stores concurrently for the
foreseeable future, offering a full-service Larry's Market for
lower Queen Anne, Uptown, Denny, Belltown, South Lake Union, and
Interbay neighborhoods," Terry Halverson said.
About Food Markets Northwest
Food Markets Northwest -- http://www.metropolitan-market.com--
owns and operates five Metropolitan Market locations including
Queen Anne, Admiral, Proctor, Sand Point and Dash Point. A sixth
Metropolitan Market location, Greenlake, is slated to open in
2009.
About Larry's Markets, Inc.
Headquartered in Kirkland, Washington, Larry's Markets, Inc.,
-- http://www.larrysmarkets.com/-- operates several supermarkets
and department stores in the U.S. Northwest. The company filed
for chapter 11 protection on May 7, 2006 (Bankr. W.D. Wash. Case
No. 06-11378). Armand J. Kornfeld, Esq., at Bush Strout &
Kornfeld, represents the Debtor. The Official Committee of
Unsecured Creditors has selected Marc L. Barreca, Esq., and
Michael J. Gearin, Esq., at Preston Gates & Ellis LLP, to
represent it in the Debtor's case. When the Debtor filed for
protection from its creditors, it listed total assets of
$12,574,695 and total debts of $21,489,800.
LE GOURMET: Sells Business to NACCO Industries' Subsidiary
----------------------------------------------------------
The Kitchen Collection, Inc., a subsidiary of NACCO Industries,
Inc., will acquire the business of Le Gourmet Chef, Inc. The
transaction is scheduled to close on or before Sept. 1, 2006.
Le Gourmet Chef, which filed for Chapter 11 bankruptcy protection
on Aug. 8, 2006, operates 77 retail kitchen goods stores across
the United States, including 53 stores located in factory outlet
malls and 24 stores in traditional malls.
Over the past several years, Kitchen Collection has indicated its
intent to develop a new, more upscale store format, complementary
to its Kitchen Collection format, for both outlet malls and
traditional malls where Kitchen Collection currently has less of a
presence. The addition of the Le Gourmet Chef stores, which offer
a wide variety of gourmet foods, cookware, bakeware and home
entertaining products, will complement Kitchen Collection's format
and provide Kitchen Collection with increased flexibility to serve
multiple customer segments across a wider range of retail
environments, particularly the traditional mall environment.
About NACCO
Based in Cleveland, Ohio, NACCO Industries, Inc. (NYSE: NC) --
http://www.nacco.com/-- is an operating holding company with
three principal businesses: lift trucks, housewares and mining.
NACCO Materials Handling Group, Inc. designs, engineers,
manufactures, sells, services and leases a comprehensive line of
lift trucks and aftermarket parts marketed globally under the
Hyster and Yale brand names. NACCO Housewares Group consists of
Hamilton Beach/Proctor-Silex, Inc., a designer, marketer and
distributor of small electric kitchen and household appliances,
and commercial products for restaurants, bars and hotels, and The
Kitchen Collection, Inc., a national specialty retailer of brand-
name kitchenware, small electric appliances and related
accessories. The North American Coal Corporation mines and
markets lignite coal primarily as fuel for power generation and
provides selected value-added mining services for other natural
resources companies.
About Le Gourmet Chef
Headquartered in Shrewsbury, New Jersey, Le Gourmet Chef, Inc., --
http://www.legourmetchef.com/-- is a retailer specializing in
solutions for entertaining and gift giving. The Company filed for
bankruptcy on Aug. 8, 2006 (Bankr. D. N.J. Case No. 06-17364).
John DiIorio, Esq., at Shapiro & Croland, and Wendy G. Marcari,
Esq., at Traub, Bonacquist, & Fox, LLP, represent the Debtor.
When the Debtor filed for bankruptcy, the Debtor estimated its
assets and debts at $10 million to $50 million.
LIBERTY TAX III: June 30 Balance Sheet Upside-Down by $100 Mil.
---------------------------------------------------------------
At June 30, 2006, Liberty Tax Credit Plus III L.P. reported total
partners' deficit of $100,295,439 from total assets of
$133,467,982 and total liabilities of $233,763,421.
For the three months ended June 30, 2006, the Company reported
net income of $2,781,146 on total revenues of $5,225,736.
A full-text copy of the Company's financial report for the three
months ended June 30, 2006 is available for free at:
http://researcharchives.com/t/s?1045
Headquartered in New York City, Liberty Tax Credit Plus III L.P.
is a limited partnership, which was formed under the laws of the
State of Delaware on Nov. 17, 1988. Liberty Tax Credit's general
partners are Related Credit Properties III L.P., a Delaware
limited partnership, and Liberty GP III Inc., a Delaware
corporation.
Liberty Tax Credit was formed to invest, as a limited partner, in
other limited partnerships each of which owns one or more
leveraged low-income multifamily residential complexes that are
eligible for the low-income housing tax credit enacted in the Tax
Reform Act of 1986, and some of which may also be eligible for the
historic rehabilitation tax credit.
Some of the Apartment Complexes benefit from one or more other
forms of federal or state housing assistance. Liberty Tax
Credit's investment in each Local Partnership represents from 27%
to 98% of the partnership interests in the Local Partnership.
Liberty Tax Credit does not anticipate making any additional
investments. As of March 31, 2006, Liberty Tax Credit has
disposed of nineteen of its 62 original properties.
LOS OSOS: Files Chapter 9 Petition to Protect Fiscal Integrity
--------------------------------------------------------------
The Los Osos Community Services District filed a Chapter 9
petition with the U.S. Bankruptcy Court for the Central District
of California in Santa Barbara on August 25, 2006. Los Osos CSD
filed for bankruptcy in order to give the District the opportunity
to prepare a plan to resolve outstanding claims against the
District so that creditors may be paid and the organization can
continue to provide public services. The filing also gives the
District broad discretion as to how to address existing debts and
creditors.
The District has faced an onslaught of litigation and other legal
actions intended to prevent the Board majority that was elected in
a recall election nearly a year ago from moving a planned
wastewater treatment plant out of the center of the Los Osos
Community at a site commonly known as "Tri-W." The new board
opposed the project for health, safety, aesthetic, environmental,
economic and technical reasons, and supported a more holistic and
sustainable water/wastewater out-of-town solution instead.
Taxpayers Watch, an organization led by some of the recalled
members of the prior Board, filed numerous lawsuits against the
District in an effort to overturn a voter approved initiative that
makes it illegal to build the proposed wastewater treatment plant
at the downtown Tri-W site. The litigation is now on appeal.
Taxpayers Watch also filed a petition with the Local Agency
Formation Commission seeking dissolution of the District. The
hearing for this petition has been continued to Sept. 21, 2006.
In addition to the Taxpayers Watch suits, the State Water
Resources Control Board has made claims against the District.
SWRCB cross-claimed against the District in a "breach of contract"
claim, seeking a refund of $6.5 million that was disbursed for
reimbursement of design costs and project contingencies. The
$6.5 million was used instead to advance payments to contractors
in a rush to start construction prior to the recall election.
Contractors for building the downtown Tri-W facility also made
claims seeking payment for work completed and for projected loss
of profits.
As a result of these actions, critical funds have been frozen by
the court further crippling the District.
Other actions by the Regional Water Quality Control Board have
resulted in administrative fines being imposed of more than
$6 million and individual prosecution of citizens on a random
basis in an effort to mandate costly bimonthly pumping of septic
systems. Defense of the District's interest in these actions has
been time consuming and costly.
Lisa Shicker, President of the Board, said, "This move is
essential to protect the fiscal integrity of the Los Osos CSD and
to assures continued local control over important public services.
Given the repeated assaults by Taxpayers Watch and the
unwillingness of the Water Board to work cooperatively with the
District in addressing our mutual water quality concerns during
this past year, the decision to file was inevitable and the
district simply had no choice. We carefully considered all
options before authorizing the filing, but this seemed like the
responsible was to proceed. It will help stabilize our financial
position and will give the district some sense of breathing room
while a court approved plan is created to pay back creditors. It
protects our other district operations and our employees.
Our most important goals continue to be delivering a basin-wide,
sustainable water and wastewater project for the community as soon
as possible, and to preserve the voice of our local government and
community."
The Los Osos Community Services District --
http://www.losososcsd.org/-- was created on Nov. 3, 1998, when
87% of the registered voters within the District overwhelmingly
supported formation. The District replaced the old County Service
Area 9 with Los Osos' first public agency governed by community
residents. District services include fire protection and
emergency response, storm water drainage management, water supply
for the Baywood area, parks and recreation, street lighting, and
wastewater management.
LOS OSOS: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------
Debtor: Los Osos Community Services District
2122 9th Street
Los Osos, CA 93402
Bankruptcy Case No.: 06-10548
Type of Business: The Los Osos Community Services District was
created on Nov. 3, 1998, when 87% of the
registered voters within the District
overwhelmingly supported formation.
The District replaced the old County Service
Area 9 with Los Osos' first public agency
governed by community residents. District
services include fire protection and emergency
response, storm water drainage management,
water supply for the Baywood area, parks and
recreation, street lighting, and wastewater
management. See http://www.losososcsd.org/
Chapter 9 Petition Date: August 25, 2006
Court: Central District Of California (Santa Barbara)
Debtors' Counsel: Jay L. Michaelson, Esq.
Michaelson Susi and Michaelson
7 West Figueroa Street, Second Floor
Santa Barbara, CA 93101-3191
Tel: (805) 965-1011
Fax: (805) 965-7351
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $500,000 to $1 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Stephen R. Onstot, Esq. Legal fees $287,098
Burke Williams & Sorensen LP
444 S. Flower Street
Suite 2400
Los Angeles, CA 90071
Citizens Affordable Safe Settlement $212,337
Environment
Attn: Al Barrow
700 El Morro
Los Osos, CA 93402
Ripley Pacific Company Engineering services $116,989
5820 Stoneridge Mall Road
Suite 100
Pleasanton, CA 94588-3275
WRA & Associates Services $93,567
Premium Assignment Corp. Services $70,660
Willdan Management Services $48,906
Raminha Construction Construction services $37,417
Wallace Group Engineering services $23,955
Van Blarcom Lebold Services $23,515
McClendon & Mann
Penfield & Smith Services $14,943
PG&E Utilities $14,160
Cleath & Associates Services $5,188
Shipsey & Seltz Services $4,306
Platinum Plus for Business Miscellaneous $4,071
purchases
Select Business Systems Services $2,000
Software Optimization Software $1,760
Specialists
SLO Country Public Works Services $1,144
County Government Center
State Water Resources Services $872
Control Board
Poor Richards Press Printing Services $807
San Luis Mailing Service Mailing services $666
MAB GROUP: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: The MAB Group LLC
7835 National Turnpike, Suite 190
Louisville, KY 40214
Bankruptcy Case No.: 06-32210
Type of Business: The Debtor manufactures glass and plastic
bottles for milk, water, and juice products.
See http://www.mabgroupllc.com/
Chapter 11 Petition Date: August 25, 2006
Court: Western District of Kentucky (Louisville)
Debtor's Counsel: William Stephen Reisz, Esq.
Foley Bryant & Holloway
500 West Jefferson Street, Suite 2450
Louisville, KY 40202
Tel: (502) 569-7550
Fax: (502) 561-0025
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Laudadio Polymers Trade Debt $70,000
449 Louisiana Parkway
Corpus Christi, TX 78404
Custom Metal Designs, Inc. Trade Debt $39,000
P.O. Box 783037
Winter Garden, FL 34778
Sparks Electric Trade Debt $34,259
289 Jeffers Lane
Taylorsville, KY 40071
All Star Dairy Association, Inc. Trade Debt $30,738
P.O. Box 632559
Cincinnati, OH 45263-2599
American Express Trade Debt $30,783
P.O. Box 5207
Fort Lauderdale, FL 33310-5207
Automation Ideas, Inc. Trade Debt $13,467
LG&E Trade Debt $11,974
Diversified Sheet Metal Trade Debt $9,062
LIT Industrial L.P. Trade Debt $9,060
BJK Flexible Packaging Trade Debt $6,509
Platinum Plus for Business Trade Debt $6,500
East & Westbrook Trade Debt $5,525
Win Wholesale Trade Debt $5,512
JB Hunt Trade Debt $5,397
Blackhawk Moulding Trade Debt $4,972
Hogle Sales & Manufacturing LLC Trade Debt $4,323
L. Goff & Sons Trade Debt $4,200
Construction Services Trade Debt $3,800
Portola Packaging, Inc. Trade Debt $3,495
Chemcentral Credit Group Trade Debt $3,078
MASSEY ENERGY: Earns $3.2 Million in Second Quarter Ended June 30
-----------------------------------------------------------------
Massey Energy Company reported net income of $3.2 million compared
to $37 million in 2005. The Company disclosed that produced coal
revenues for its second quarter ended June 30, 2006, increased to
$492.5 million from $487.1 million in the second quarter of 2005.
EBITDA was $77.5 million in the second quarter of 2006 compared to
$112.0 million in the second quarter of 2005.
The Company said that the second quarter volume and financial
results continued to be impacted by the fire-related idling of the
Aracoma longwall and the productivity performance that has
challenged Massey's room and pillar deep mines for several
quarters. "The good news is that the Aracoma longwall returned to
production July 19th and is operating normally," said Don L.
Blankenship, Massey Chairman and CEO. "I would like to personally
thank all the management staff and hourly personnel who worked so
tirelessly to return the Aracoma mine to production."
With the Aracoma longwall in operation again, the Company is
taking a fresh look at all other mining operations. Massey has
elected to idle four underground mining sections and to
discontinue production at the Rockhouse longwall after it
completes its current panel, in mid-August. The Company is also
reducing staff and new miner training at a number of other higher
cost mines to decrease costs at those operations.
"Central Appalachia coal mining has been, and continues to be,
under significant cost pressure," said Mr. Blankenship. "Labor,
productivity, environmental, and regulatory factors are
increasingly difficult to forecast. We are disappointed that
these pressures continue to impact our financial performance and
we are determined to implement a variety of cost reduction
initiatives."
Nevertheless, Massey continues to lead Central Appalachia in
produced and shipped tonnage and reserve holdings and believes it
continues to be the low cost producer. "Our focus continues to be
on enhancing shareholder value," said Mr. Blankenship. "The
restart of the Aracoma longwall and the start-up of the Twilight
dragline, along with the other steps we are taking to control
costs, should expand margins going forward."
Liquidity and Capital Resources
Massey ended the second quarter with available liquidity of
$303.5 million, including $69.5 million available on its asset-
based revolving credit facility and $234.0 million in cash. Total
debt at the end of the quarter was $1,107.6 million compared to
total debt of $1,113.3 million at Dec. 31, 2005.
Massey's total debt-to-book capitalization ratio increased to
61.1% at June 30, 2006 from 59.8% at Dec. 31, 2005. The
capitalization ratio for Dec. 31, 2005, has been adjusted to
reflect the impact of the non-cash adjustment to retained earnings
required by the adoption of Emerging Issues Task Force Issue 04-6
on Jan. 1, 2006. After deducting available cash of $234.0 million
and restricted cash of $105.0 million, which supports letters of
credit, net debt totaled $768.6 million. Total net debt-to-book
capitalization was 52.2% at June 30, 2006, compared to 48.0% at
Dec. 31, 2005, as adjusted.
Capital expenditures, which totaled $85.3 million in the second
quarter of 2006 compared to $111.8 million in the second quarter
of 2005, were $161.6 million in the first half of 2006 versus
$197.8 million in the first six months of 2005. Excluding
estimated lease buyouts of $28 million, capital spending is
expected to total between $260 and $270 million for 2006.
Depreciation, depletion and amortization (DD&A) was $57.2 million
in the second quarter of 2006 compared to $60.5 million in the
second quarter of 2005. For the year to date, DD&A totaled $113.9
million compared to $118.9 million for the first six months of
2005. DD&A is expected to total between $235 and $245 million for
the full year 2006.
Based in Richmond, Virginia, Massey Energy Company (NYSE: MEE) --
http://www.masseyenergyco.com/-- produces Central Appalachian
coal, with subsidiaries serving more than 125 utility, industrial
and metallurgical customers around the world.
* * *
As reported on the Troubled Company Reporter on Aug. 2, 2006,
Standard & Poor's Ratings Services lowered its corporate credit
rating on Richmond, Virginia-based Massey Energy Co. to 'B+' from
'BB-', reflecting its expectation of weaker-than-anticipated
financial performance; increased debt leverage; and concerns about
aggressive shareholders. The outlook is stable.
MICROISLET INC: Posts $5.9 Mil. Net Loss in Period Ended June 30
----------------------------------------------------------------
MicroIslet, Inc., filed its Quarterly Report on Form 10-QSB for
the quarter ended June 30, 2006, with the Securities and Exchange
Commission on Aug. 21, 2006.
The Company reported a net loss of $5.9 million for the first half
of 2006 compared to a net loss of $3.9 million in the first half
of 2005. Grant revenue was $154,000 and $295,000 for the three
and six months ended June 30, 2006, respectively, and consisted
entirely of research grants. No grant revenue was recognized for
the first half of 2005.
Research and development expenses increased to $1.7 million in the
second quarter of 2006 from $1.3 million in the second quarter of
2005, and increased to $3.6 million for the six months ended June
30, 2006, compared to $2.7 million for the same period in 2005.
These increases were due to increased costs from our collaboration
with the Mayo Foundation and UC Davis, an increase in headcount
for lab personnel, increases in materials and services relating to
testing of our technology in animals, and compensation expense
from the new accounting treatment for stock-based compensation,
SFAS 123(R), adopted by the Company on Jan. 1, 2006. General and
administrative expenses increased to $1.1 million in the second
quarter of 2006 from $600,000 in the second quarter of 2005 and
increased to $2.7 million for the six months ended June 30, 2006,
compared to $1.3 million for the same period in 2005. The
increases were due to higher salaries and fees paid to senior
management, fees for temporary consultants to fill open positions,
higher-than-normal legal expenses, stock issuances to certain
stockholders resulting from contractual liquidated damages owed
them, and compensation expense from the new accounting treatment
for stock-based compensation.
The Company undertook a review of its stock option award practices
and has now concluded that management used incorrect accounting
measurement dates for two stock option grants awarded in 2002 and
2003. The Company recorded the resulting adjustment in the
current period as it determined the amount of the adjustment to be
immaterial.
Going Concern Doubt
As reported in the Troubled Company Reporter on Aug. 1, 2006,
Deloitte & Touche LLP, in San Diego, California, raised
substantial doubt about MicroIslet '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 incurred substantial operating losses and
negative operating cash flows.
About MicroIslet
Headquartered in San Diego, California, MicroIslet, Inc.
(AMEX:MII) -- http://www.microislet.com-- engages in
Biotechnology research and development in the field of medicine
for people with diabetes. MicroIslet's patented islet
transplantation technology, licensed from Duke University,
includes methods for cryopreservation and microencapsulation.
MIRANT CORP: Gregorys Want Sugar Creek's $42-Mil. Claims Allowed
----------------------------------------------------------------
Vernon J. Gregory and Sandra Jolene Gregory filed in 2004 four
proofs of claim against Mirant Corp. and its debtor-affiliates for
$21,000,000 each:
Debtor Claim No.
------ ---------
Mirant Corporation 7994
Mirant Sugar Creek, L.L.C. 7991
Mirant Sugar Creek Ventures, Inc. 7992
Mirant Sugar Creek Holdings, Inc. 7993
The Debtors objected to the Gregorys' Claims, but later withdrew
their Objection.
On October 26, 2005, Mirant sought and obtained a Court order
lifting the automatic stay to allow liquidation of the Gregorys'
Claims in a court of appropriate jurisdiction.
For the purpose of voting to accept or reject the Debtors' Plan
and for objecting to the Plan's confirmation, Judge Lynn
temporarily allowed Claim No. 7994 as a general unsecured claim
for $21,000,000.
Pursuant to the Bankruptcy Court's Order, the Gregorys filed a
civil lawsuit against the four Mirant Debtors in the U.S.
District Court of the Southern District of Indiana.
While preparing service of process, the Gregorys were informed by
Jay Wilson, Mirant's registered agent, that service was not
permitted for Mirant Sugar Creek Ventures and Mirant Sugar Creek
Holdings because the two entities were merged into Mirant
Americas, Inc., and no longer exist. Mr. Wilson, instead,
advised the Gregorys to amend the complaint against Mirant
Americas.
The Gregorys responded that they do not have a claim against
Mirant Americas, and they cannot simply amend their complaint.
Paul J. Castronovo, Esq., in Hoffman Estates, Illinois, explains
that a motion to amend the Gregorys' civil complaint naming
Mirant Americas as a defendant, in its capacity as a successor-
in-interest to Mirant Sugar Creek Ventures and Mirant Sugar Creek
Holdings, must:
* be based on a Bankruptcy Court order; and
* not violate the Plan's discharge injunctions and Section
524(a)(2) of the Bankruptcy Code.
Mr. Castronovo asserts that the Debtors committed a fraudulent
act by not disclosing the mergers, and breached the Confirmation
Order. As a result, the Gregorys cannot liquidate their claims
against entities that no longer existed.
The Gregorys ask Judge Lynn to:
(a) allow Claim No. 7992 against Mirant Sugar Creek Ventures
and Claim No. 7993 against Mirant Sugar Creek Holdings for
$21,000,000 each; and
(b) direct the Reorganized Debtors' disbursing agent to make
the distributions.
Mr. Castronovo says the Gregorys have obtained prima facie status
for the validity of their Claims and amount of each Claim.
Headquartered in Atlanta, Georgia, Mirant Corporation (NYSE: MIR)
-- http://www.mirant.com/-- is an energy company that produces
and sells electricity in North America, the Caribbean, and the
Philippines. Mirant owns or leases more than 18,000 megawatts of
electric generating capacity globally. Mirant Corporation filed
for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-
46590), and emerged under the terms of a confirmed Second Amended
Plan on Jan. 3, 2006. Thomas E. Lauria, Esq., at White & Case
LLP, represented the Debtors in their successful restructuring.
When the Debtors filed for protection from their creditors, they
listed $20,574,000,000 in assets and $11,401,000,000 in debts.
The Debtors emerged from bankruptcy on Jan. 3, 2006. (Mirant
Bankruptcy News, Issue No. 103; Bankruptcy Creditors' Service
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
* * *
As reported in the Troubled Company Reporter on July 17, 2006,
Moody's Investors Service downgraded the ratings of Mirant
Corporation and its subsidiaries Mirant North America, LLC and
Mirant Americas Generation, LLC. The Ba2 rating for Mirant Mid-
Atlantic, LLC's secured pass through trust certificates was
affirmed. The rating outlook is stable for Mirant, MNA, MAG, and
MIRMA.
Moody's downgraded Mirant Americas Generation, LLC's Senior
Unsecured Regular Bond/Debenture, to B3 from B2. Moody's also
downgraded Mirant Corporation's Corporate Family Rating, to B2
from B1, and Speculative Grade Liquidity Rating, to SGL-2 from
SGL-1. Mirant North America, LLC's Senior Secured Bank Credit
Facility, was also downgraded to B1 from Ba3 and its Senior
Unsecured Regular Bond/Debenture, to B2 from B1.
As reported in the Troubled Company Reporter on July 13, 2006,
Fitch Ratings placed the ratings of Mirant Corp., including the
Issuer Default Rating of 'B+', and its subsidiaries on Rating
Watch Negative following its announced plans to buy back stock and
sell its Philippine and Caribbean assets.
Ratings affected are Mirant Corp.'s 'B+' Issuer Default Rating and
Mirant Mid-Atlantic LLC's 'B+' Issuer Default Rating and the Pass-
through certificates' 'BB+/Recovery Rating RR1'.
Fitch also placed Mirant North America, Inc.'s Issuer Default
Rating of 'B+', Senior secured bank debt's 'BB/RR1' rating, Senior
secured term loan's 'BB/RR1' rating, and Senior unsecured notes'
'BB-/RR1' rating on Rating Watch Negative. Mirant Americas
Generation, LLC's Issuer Default Rating of 'B+' and Senior
unsecured notes' 'B/RR5' rating was included as well.
Standard & Poor's Ratings Services also placed the 'B+' corporate
credit ratings on Mirant Corp. and its subsidiaries, Mirant North
American LLC, Mirant Americas Generating LLC, and Mirant Mid-
Atlantic LLC, on CreditWatch with negative implications.
MIRANT CORP: Lovett Unit Gets Court Approval on New York DEC Order
------------------------------------------------------------------
Mirant Lovett, LLC, a Mirant Corporation debtor-affiliate, owns
and operates the Lovett Coal Ash Management Facility located in
the town of Stony Point, New York. Mirant Lovett purchased the
Lovett Coal Ash Facility from Orange and Rockland Utilities, Inc.
In May 2005, the New York Department of Environmental
Conservation served an administrative Notice of Hearing and
Complaint on Mirant Lovett and Mirant New York, Inc., regarding
the Lovett Coal Ash Facility.
The DEC has the authority to enforce New York's environmental
laws, and has jurisdiction over the operation and closure of
solid waste management facilities.
The DEC Complaint alleged, among other things, that Mirant Lovett
failed to perform certain investigation and remediation or
restoration measures at the Lovett Coal Ash Facility in
compliance with New York's Department of Environmental
Conservation Rules and Regulations.
Based on the allegations in the DEC Complaint, Mirant Lovett
estimated that the cost of compliance with Title 6 Part 360 of
the New York Conservation Rules and Regulations will be more than
$1,000,000.
Additionally, the DEC may impose certain penalties for violation
of the NYCRR of up to $7,500 plus $1,500 per day, for each
violation of any rule or regulation promulgated or order issued.
The DEC Complaint sought a $100,000 penalty against Mirant
Lovett.
New York and the DEC filed administrative claims against the New
York Debtors, including claims against Mirant Lovett in
connection with the Lovett Coal Ash Facility under Section 503(b)
of the Bankruptcy Code.
In late May 2006, Mirant Lovett and the DEC entered into a
preliminary Consent Order resolving the administrative expense
claims asserted against the Lovett Coal Ash Facility.
The Honorable Michael D. Lynn of the approved the Order on Consent
and Compliance Schedule entered into with the Department of
Environmental Conservation dated June 2, 2006.
A full-text copy of the Consent Order between Mirant Lovett and
the New York DEC is available for free at
http://ResearchArchives.com/t/s?d27
The salient terms of the Consent Order and Compliance Schedule
are:
(a) Mirant Lovett will pay a $20,000 penalty to the DEC. Upon
payment of $5,000 of the $20,000, the requirement to pay
the remaining $15,000 will be suspended if Mirant Lovett
meets the terms of the Consent Order;
(b) The Consent Order will not constitute an admission of any
violation alleged in the DEC Complaint or Consent Order;
(c) Mirant Lovett's compliance with the Consent Order releases
and satisfies its obligations to the DEC under the
Complaint and Consent Order. However, that compliance
does not satisfy Mirant Lovett's prospective obligations
to the DEC;
(d) In accordance with a DEC-approved schedule, Mirant Lovett
will complete the construction or repair requirements of
the "Cap Stabilization Plan" in accordance with the DEC's
reasonable satisfaction; and
(e) The Compliance Schedule requires Mirant Lovett to, among
others:
i. continue to hold $4,200,000 in an escrow account with
Deutsche Bank Trust Company; and
ii. install certain flow meters and submit a revised
Cap Stabilization Plan.
Headquartered in Atlanta, Georgia, Mirant Corporation (NYSE: MIR)
-- http://www.mirant.com/-- is an energy company that produces
and sells electricity in North America, the Caribbean, and the
Philippines. Mirant owns or leases more than 18,000 megawatts of
electric generating capacity globally. Mirant Corporation filed
for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-
46590), and emerged under the terms of a confirmed Second Amended
Plan on Jan. 3, 2006. Thomas E. Lauria, Esq., at White & Case
LLP, represented the Debtors in their successful restructuring.
When the Debtors filed for protection from their creditors, they
listed $20,574,000,000 in assets and $11,401,000,000 in debts.
The Debtors emerged from bankruptcy on Jan. 3, 2006. (Mirant
Bankruptcy News, Issue No. 103; Bankruptcy Creditors' Service
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
* * *
As reported in the Troubled Company Reporter on July 17, 2006,
Moody's Investors Service downgraded the ratings of Mirant
Corporation and its subsidiaries Mirant North America, LLC and
Mirant Americas Generation, LLC. The Ba2 rating for Mirant Mid-
Atlantic, LLC's secured pass through trust certificates was
affirmed. The rating outlook is stable for Mirant, MNA, MAG, and
MIRMA.
Moody's downgraded Mirant Americas Generation, LLC's Senior
Unsecured Regular Bond/Debenture, to B3 from B2. Moody's also
downgraded Mirant Corporation's Corporate Family Rating, to B2
from B1, and Speculative Grade Liquidity Rating, to SGL-2 from
SGL-1. Mirant North America, LLC's Senior Secured Bank Credit
Facility, was also downgraded to B1 from Ba3 and its Senior
Unsecured Regular Bond/Debenture, to B2 from B1.
As reported in the Troubled Company Reporter on July 13, 2006,
Fitch Ratings placed the ratings of Mirant Corp., including the
Issuer Default Rating of 'B+', and its subsidiaries on Rating
Watch Negative following its announced plans to buy back stock and
sell its Philippine and Caribbean assets.
Ratings affected are Mirant Corp.'s 'B+' Issuer Default Rating and
Mirant Mid-Atlantic LLC's 'B+' Issuer Default Rating and the Pass-
through certificates' 'BB+/Recovery Rating RR1'.
Fitch also placed Mirant North America, Inc.'s Issuer Default
Rating of 'B+', Senior secured bank debt's 'BB/RR1' rating, Senior
secured term loan's 'BB/RR1' rating, and Senior unsecured notes'
'BB-/RR1' rating on Rating Watch Negative. Mirant Americas
Generation, LLC's Issuer Default Rating of 'B+' and Senior
unsecured notes' 'B/RR5' rating was included as well.
Standard & Poor's Ratings Services also placed the 'B+' corporate
credit ratings on Mirant Corp. and its subsidiaries, Mirant North
American LLC, Mirant Americas Generating LLC, and Mirant Mid-
Atlantic LLC, on CreditWatch with negative implications.
NATIONAL ENERGY: Court Bars Adam Mirick from Filing Late Claim
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Maryland
denied Adam Mirick's request to file a late claim against against
National Energy & Gas Transmission Inc.
In a May 9, 2006 hearing, the Court ruled against Mr. Mirick's
informal proof of claim theory as a matter of law and it adjourned
the hearing to a later date to give Mr. Mirick another chance to
adduce evidence in support of his motion.
As a condition to the adjournment, the Court required Mr. Mirick
to pay NEGT for the fees and expenses of its counsel incurred in
connection with its attendance at the May 9 hearing.
NEGT objected to the Claim contending that Mr. Mirick's counsel
did not present any admissible evidence of any kind,
notwithstanding that it is undisputed that the burden of
demonstrating excusable neglect lies with Mr. Mirick.
NEGT also argued that by failing to meet the condition imposed by
the Court, Mr. Mirick has forfeited the second chance the Court
granted to him.
Mr. Mirick sought Court-authority to file late claim against NEGT
contending that his failure to timely file a proof of claim was a
result of excusable neglect.
Mr. Mirick told the Court that it was only after the Jan. 9, 2004
bar date had expired that he became aware that the Chapter 11
cases of NEGT, and NEGT Energy Trading Holdings Corporation are
consolidated, and of other facts, which prove that NEGT is
directly liable to him for unpaid wages and compensation that he
earned while working at ET Holdings.
Mr. Mirick further told the Court that he did not know the extent
of NEGT's involvement in his employment by ET Holdings. However,
evidenced revealed only in discovery supports that NEGT actually
controlled ET Holdings' employment and compensation decisions,
serving as a "joint employer" as a matter of law.
Mr. Mirick worked as an energy trader at ET Holdings. He filed
Claim No. 77 for $7,859,478 against ET Holdings on March 14, 2003,
in connection with the termination of his employment.
About National Energy
Bethesda, MD-based PG&E National Energy Group Inc. nka National
Energy & Gas Transmission Inc. -- http://www.pge.com/--
develops, builds, owns and operates electric generating and
natural gas pipeline facilities and provides energy trading,
marketing and risk-management services. The Company and six of
its affiliates filed for Chapter 11 protection on July 8, 2003
(Bankr. D. Md. Case No. 03-30459). When the Company filed for
protection from its creditors, it listed $7,613,000,000 in assets
and $9,062,000,000 in debts. NEGT received bankruptcy court
approval of its reorganization plan in May 2004, and emerged from
bankruptcy on Oct. 29, 2004.
NEGT's affiliates -- NEGT Energy Trading Holdings Corp., NEGT
Energy Trading - Gas Corporation, NEGT ET Investments Corp., NEGT
Energy Trading - Power, L.P., Energy Services Ventures, Inc., and
Quantum Ventures -- filed their First Amended Plan and Disclosure
Statement on March 3, 2005, which was confirmed on Apr. 19, 2005.
Steven Wilamowsky, Esq., and Jessica S. Etra, Esq., at Willkie
Farr & Gallagher LLP represent the ET Debtors. (PG&E National
Bankruptcy News, Issue No. 64; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
NEOPLAN USA: Organizational Meeting Set at 2:00 p.m. Tomorrow
-------------------------------------------------------------
The U.S. Trustee for Region 3 will hold an organizational meeting
to appoint an official committee of unsecured creditors in Neoplan
USA Corporation and its debtor-affiliates' chapter 11 cases at
2:00 p.m., on Aug. 29, 2006, at Room 5209, J. Caleb Boggs Federal
Building, 844 King Street in Wilmington, Delaware.
The sole purpose of the meeting will be to form a committee or
committees of unsecured creditors in the Debtors' cases. The
meeting is not the meeting of creditors pursuant to Section 341
of the Bankruptcy Code. However, a representative of the Debtors
will attend and provide background information regarding the
cases.
Creditors interested in serving on a Committee should complete
and return to the U.S. Trustee a statement indicating their
willingness to serve on an official committee.
Official creditors' committees, constituted under Section 1102 of
the Bankruptcy Code, ordinarily consist of the seven largest
creditors who are willing to serve on a committee. In some
Chapter 11 cases, the U.S. Trustee is persuaded to appoint
multiple creditors' committees.
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 that the
reorganization of the Debtors is impossible, the Committee will
urge the Bankruptcy Court to convert the Chapter 11 cases to a
liquidation proceeding.
Headquartered in Denver, Colorado, Neoplan USA manufactures
standard floor buses, low floor buses, and articulated buses.
Neoplan USA licenses its designs from the German corporation,
Neoplan. Neoplan USA is entirely separate from Neoplan in
Germany.
NEOPLAN USA: Case Summary & 24 Largest Unsecured Creditors
----------------------------------------------------------
Lead Debtor: Neoplan USA Corporation
12051 East 46th Avenue, Suite 200
Denver, CO 80239-3116
Bankruptcy Case No.: 06-10872
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
IAP Acquisition Corporation 06-10871
IAP East Coast, Inc. 06-10873
IAP Intermodal LLC 06-10874
Type of Business: Neoplan USA manufactures standard floor buses,
low floor buses, and articulated buses.
Neoplan USA licenses its designs from the German
corporation, Neoplan. Neoplan USA is entirely
separate from Neoplan in Germany.
Chapter 11 Petition Date: August 17, 2006
Court: District of Delaware
Debtors' Counsel: Tobey M. Daluz, Esq.
Ballard Spahr Andrews & Ingersoll LLP
919 Market Street, 17th Floor
Wilmington, DE 19801
Tel: (302) 252-4465
Fax: (302) 252-4466
Total Assets Total Debts
------------ -----------
Neoplan USA Corporation $13,696,991 $59,009,471
IAP Acquisition Corporation $4,794,928 $17,990,193
IAP East Coast, Inc. $2,552,612 $19,981,785
IAP Intermodal LLC $0 $18,5220,262
A. Neoplan USA Corporation's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
The Bank of New York As agent for $17,937,581
600 Las Colinas Boulevard for prepetition
Suite 1300 secured lender
Irving, TX 75039
Detroit Diesel Corp. Goods purchased $3,086,433
13400 West Outer Drive
Speed Code N53
Detroit, MI 48239-4001
Caterpillar Inc. Goods purchased $3,013,194
P.O. Box 610
AC6025
Mossville, IL 61552-0610
Arvin Meritor Goods purchased $1,804,286
On-Highway Products
444 Hebron Road
Heath, OH 43056
Vapor Bus Goods purchased $1,367,353
1010 Johnson Drive
Buffalo Grove, IL 60089
San Francisco Muni Warranty credit $966,647
700 Pennsylvania Avenue
San Francisco, CA 94107
Thermo King Corporation Goods purchased $786,959
350 N. Orleans Street
Receipt & Dispatch 8th Floor
Chicago, IL 60654
Brownsville Economic Lease termination $750,000
Development Counsel
700 S. Minnesota Avenue
Brownsville, TX 78521-5721
Bodycote Ortech Inc. Services purchased $722,026
2395 Speakman Drive
Mississauga, Ontario
Canada L5K 1B3
Neoplan Germay Goods/License $709,737
Postfach 810340
Valhinger StraBe 118-122
Stuttgart, Germany
Colorado East Co-signed lease $670,122
P.O. Box 1016
Lamar, CO 81052
LACMTA Warranty credit $650,000
1 Gateway Plaza
Mail Stop: 30-2-1
Los Angeles, CA 90012
Luminator Goods purchased $572,344
One Towne Center
501 John James Audubon Pkwy.
Amherst, NY 14226-0810
General Dynamics/Lincoln Goods purchased $522,020
Composites
4300 Industrial Avenue
Lincoln, NE 68504-1197
Dynetek Industries LTD Goods purchased $501,400
4410-46th Avenue Southeast
Calgary, Alberta
Canada T2B 3N7
Kulzner Manufacturing Inc. Goods purchased $482,177
3255 Meetinghouse Road
Telford, PA 18969
Signature Funding LLC Lease termination/ $458,078
7950 South Lincoln Street settlement agreement
Suite 111 E
Littleton, CO 80122
Orbital Sciences Corp. Goods purchased $444,031
Transportation Mgm Systems
7160 Riverwood Drive
Columbia, MD 21046
Altek Systems, Inc. Goods purchased $422,365
P.O. Box 232
Lamar, Co 81052
SKODA ELECTRIC s.r.o Goods purchased $371,415
Tylova 1/57
316 00
Prague, Plzen
Czech Republic
B. IAP Intermodal LLC's 9 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
The Bank of New York As agent for $17,937,581
600 Las Colinas Boulevard for prepetition
Suite 1300 secured lender
Irving, TX 75039
Annemarie Chenoweth Undetermined Undetermined
440 Richards Lake percentage of net
Fort Collins, CO 80524 future revenues for
IAP Intermodal LLC
James Gaspard Undetermined Undetermined
3146 New Castle Drive percentage of net
Loveland, CO 80538 future revenues for
IAP Intermodal LLC
C. Largest Unsecured Creditor of:
-- IAP Acquisition Corporation
-- IAP East Coast, Inc.
Entity Nature of Claim Claim Amount
------ --------------- ------------
The Bank of New York As agent for $17,937,581
600 Las Colinas Boulevard for prepetition
Suite 1300 secured lender
Irving, TX 75039
NORTHWEST AIRLINES: Flight Attendants' Strike Temporarily Blocked
-----------------------------------------------------------------
A United States District Court judge temporarily blocked, on Aug.
25, 2006, a planned strike by Northwest flight attendants until he
has time to review the case. Judge Victor Marrero said a decision
could come as early as next week on whether to grant Northwest
Airlines an injunction that would prevent the flight attendants,
represented by the Association of Flight Attendants-CWA, from
striking in response to the company's rejection of their
collective bargaining agreement.
"Management and the courts can stall us, but they cannot defeat
us," said Mollie Reiley, Interim Master Executive Council
President. "Our crusade to protect our careers has only begun.
We will continue to fight for Northwest flight attendants and all
flight attendants who will walk in our footsteps."
On July 31, 2006, the company imposed terms outlined in a
tentative agreement that was overwhelmingly rejected by the flight
attendants months earlier. The terms consisted of over 40%
reductions in salary and benefits and as much as 25% additional
work hours. AFA-CWA issued the company notice of their intent to
strike as early as August 25, 2006, at 9:01 pm CDT. Under the
Railway Labor Act, any unilateral change in a contract triggers a
right to strike. Following the strike notice, the company quickly
filed for an injunction, but a federal bankruptcy court denied the
motion earlier this month.
While the judge considers his ruling, Northwest flight attendants
continue to count down for CHAOS(TM). CHAOS, or Create Havoc
Around Our System(TM), is AFA-CWA's trademarked strategy of
targeted work actions using random, unannounced strikes.
"We will continue to prepare ourselves and our members for CHAOS;
this is NOT over," said Ms. Reiley. "Something is terribly wrong
when a company that just made a quarterly operating profit of
nearly $200 million continues to insist on the same cuts it
demanded from flight attendants when it was losing money."
For over 60 years, the Association of Flight Attendants --
http://www.afanet.org/-- has been serving as the voice for flight
attendants in the workplace, in the aviation industry, in the
media and on Capitol Hill. More than 55,000 flight attendants at
20 airlines come together to form AFA-CWA, the world's largest
flight attendant union. AFA is part of the 700,000-member strong
Communications Workers of America, AFL-CIO.
About Northwest Airlines
Northwest Airlines Corp. (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: Comments on Judge Marrero's Strike Injunction
-----------------------------------------------------------------
The Honorable Victor Marrero of the United States District Court
for the Southern District of New York granted, on Aug. 25, 2006,
Northwest Airlines' request for a preliminary injunction to
prevent a threatened strike or work action by the company's flight
attendants, represented by the Association of Flight Attendants-
CWA.
The judge's ruling prevents AFA from taking any work action
against the company until the court rules on Northwest's appeal of
Bankruptcy Court Judge Allan Gropper's denial of the airline's
request for a preliminary injunction.
Commenting on Judge Marrero's decision, Doug Steenland, president
and chief executive officer, said, "We are pleased with Judge
Marrero's decision to grant the preliminary injunction. We remain
committed to negotiating a consensual agreement with our flight
attendants and hope to accomplish that goal in the near future."
"As always, we are committed to serving our customers
professionally and transporting them to their destinations safely
and reliably," Mr. Steenland added. "Customers can continue to
book the airline with confidence."
Northwest and two unions representing its flight attendants have
negotiated two tentative agreements. Last month, the flight
attendants rejected a tentative contract agreement Northwest had
negotiated with AFA that would have met the targeted $195 million
in annual labor cost savings. AFA endorsed that tentative
agreement and recommended its members vote in favor of it.
As a result of the contract rejection, and in accordance with a
previous decision of the bankruptcy court, Northwest implemented
contract terms and conditions for its flight attendants that met
the required $195 million of annual labor cost savings for that
group.
Northwest has reached agreements on permanent wage and benefit
reduction agreements with the Air Line Pilots Association, the
International Association of Machinists and Aerospace Workers,
Aircraft Technical Support Association, the Transport Workers
Union of America, and the Northwest Airlines Meteorologists
Association. Two rounds of salaried and management employee pay
and benefit cuts have also been instituted and the needed aircraft
maintenance employee labor cost savings have been achieved, which
allowed Northwest to meet its goal of achieving $1.4 billion in
annual labor savings.
About Northwest Airlines
Northwest Airlines Corp. (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.
OMNICARE INC: Moody's Holds Ba2 Corporate Family Rating
-------------------------------------------------------
Moody's Investor Service changed the rating outlook on Omnicare,
Inc.'s debt to negative from stable. At the same time, Moody's
affirmed all of the company's long-term debt ratings and
Speculative Grade Liquidity rating at SGL-1.
Ratings affirmed:
Omnicare, Inc.
* Corporate family rating at Ba2
* Senior subordinated notes at Ba3
* Convertible senior unsecured notes at B1
* Speculative Grade Liquidity rating at SGL-1
The change to a negative outlook is based on:
(1) cash flow is expected to be significantly lower during
2006 due to the UnitedHealth Group lawsuit as well as
higher working capital needs associated with the
implementation of Medicare Part D benefits;
(2) the company has not repaid any debt associated with its
2005 acquisitions;
(3) two pending Medicaid program settlements will further
reduce financial flexibility in the near term; and
(4) over the intermediate term, the company may be more
vulnerable to a reduction in the level of its rebates
because of disclosure requirements.
Omnicare's Ba2 corporate family rating reflects relatively high
financial leverage associated with last year's acquisition of
NeighborCare, as well as ongoing risks associated with the recent
implementation of Medicare Part D drug benefits. The ratings also
consider the company's scale and leading position in the sector,
which should allow it to continue to enjoy greater leverage when
negotiating with manufacturers as well as Prescription Drug Plans.
If it appears that improvements in cash flow will not materialize
because of negative outcomes related to the United lawsuit or
ongoing working capital demands, the ratings could be downgraded.
Additional developments related to federal and state
investigations or onerous disclosure requirements could also
provide greater pressure on the ratings. Moody's believes that
these trends could result in free cash flow to debt ratios that
are sustained at current levels.
If working capital needs reverse as Part D administrative issues
are resolved, the United dispute is settled in OCR's favor, and
details regarding disclosure requirements appear to limit downside
risk for OCR, the outlook could be changed to stable. Moody's
expects that favorable resolution of these matters could result in
free cash flow to debt ratios that can be sustained in the 12 to
15% range.
The affirmation of the SGL-1 rating reflects our view that OCR
should still maintain strong liquidity over the near-term, due in
part to the availability of an $800 million revolver. However, as
a result of cash flow constraints and potential litigation
settlements, the company's Speculative Grade Liquidity rating is
more weakly positioned within the SGL-1 category.
Refer to Moody's Credit Opinion and Speculative Grade Liquidity
Assessment on Omnicare.
Omnicare, Inc., headquartered in Covington, Kentucky, is the
leading provider of institutional pharmacy services to the long
term care sector.
PAPERCLIP SOFTWARE: June 30 Balance Sheet Upside-Down by $1.5 MM
----------------------------------------------------------------
At June 30, 2006, Paperclip Software Inc. reported total
stockholders' deficiency of $1,506,282 from total assets of
$381,314 and total liabilities of $1,887,596.
The Company's balance sheet at June 30 also showed strained
liquidity with $331,640 in total current assets and $998,924 in
total current liabilities.
For the three months ended June 30 2006, the Company reported
net income of $28,922 from net sales of $443,175.
A full-text copy of the Company's financial report for the three
months ended June 30, 2006 is available for free at:
http://researcharchives.com/t/s?104a
About Paperclip Software
Headquartered in Hackensack, New Jersey, PaperClip Software Inc.
-- http://www.paperclip.com/-- develops and markets software
products that organize, manage and communicate documents, images
and workflow for a wide range of users.
Going Concern Doubt
Sobel & Co., LLC, expressed substantial doubt about Paperclip
Software Inc.'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 significant losses from operations and working capital
deficit of $202,000.
PELTS & SKINS: Section 341(a) Meeting Scheduled on September 19
---------------------------------------------------------------
The U.S. Trustee of Region 5 will convene a meeting of Pelts &
Skins, LLC's creditors at 2:30 p.m., on Sept. 19, 2006, in
Suite 2112, Texaco Center at 400 Poydras Street in New Orleans,
Louisiana.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible officer of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Headquartered in Covington, Louisiana, Pelts & Skins, L.L.C.,
produces, processses, and sells alligator skins to tanneries. The
Company filed it chapter 11 protection on Aug. 1, 2006
(Bankr. E.D. La. Case No. 06-10742). Douglas S. Draper, Esq., at
Heller, Draper, Haydn, Patrick & Horn, L.L.C., represents the
Debtor. Pelts & Skins estimated its assets and debts at
$10 million to $50 million when it filed for protection from its
creditors.
PHILLIPS-VAN HEUSEN: Earns $29 Million in Second Fiscal Quarter
---------------------------------------------------------------
Phillips-Van Heusen Corporation reported second fiscal quarter
2006 GAAP net income of $29 million, compared with second fiscal
quarter 2005 GAAP net income of $23.5 million.
Total revenues in the second fiscal quarter of 2006 increased 3%
to $458.9 million from $443.5 million in the prior year. The
Company disclosed that the revenue growth was driven by a 13%
increase in the Calvin Klein Licensing business, the continued
strong performance of the Company's outlet retail business and
wholesale sportswear business, particularly Calvin Klein men's
better sportswear and Arrow.
The Company ended the quarter with $367.7 million in cash, an
increase of $196.6 million compared with the prior year's second
quarter. Its receivables and inventories were down 11% and 2%,
respectively, below prior year levels. The Company's higher year
over year cash position, coupled with higher investment rates of
return, resulted in a 40% decrease in net interest expense for the
current year's second quarter.
The Company also disclosed that its Series B preferred
stockholders voluntarily converted, in May 2006, all of their
remaining outstanding preferred stock into 11.6 million shares of
common stock and sold 10.1 million shares of such common stock in
a secondary offering. The transaction further strengthened the
Company's balance sheet, eliminated the most expensive component
of its capital structure and enhanced the liquidity of its common
stock.
Phillips-Van Heusen Corporation -- http://www.pvh.com/-- owns and
markets the Calvin Klein brand worldwide. It is a shirt company
that markets a variety of goods under its own brands: Van Heusen,
Calvin Klein, IZOD, Arrow, Bass and G.H. Bass & Co., Geoffrey
Beene, Kenneth Cole New York, Reaction Kenneth Cole, BCBG Max
Azria, BCBG Attitude, Sean John, MICHAEL by Michael Kors, Chaps
and Donald J. Trump Signature.
* * *
Phillips-Van Heusen's 7-3/4% Debentures due 2023 carry Moody's
Investors Service's Ba3 rating and Standard and Poor's BB+ rating.
PIONEER NATURAL: To Pay $32 Mil. As Royalty Owner Suit Settlement
-----------------------------------------------------------------
Pioneer Natural Resources Company reached an agreement to settle
claims made in the lawsuit John Steven Alford and Robert Larrabee,
individually and on behalf of a Plaintiff Class v. Pioneer Natural
Resources USA, Inc., which is pending in the 26th Judicial
District Court, Stevens County, Kansas. The plaintiffs in this
lawsuit are royalty owners in oil and gas properties located in
the Hugoton field, which are owned by Pioneer's subsidiary,
Pioneer Natural Resources USA, Inc. The plaintiffs sued a
predecessor company to Pioneer USA asserting various claims
relating to alleged improper deductions in the calculation of
royalties.
Under the terms of the agreement, Pioneer USA will make cash
payments to settle the plaintiffs' claims with respect to
production occurring on and before Dec. 31, 2005. Pioneer USA
also agreed to adjust the manner in which royalty payments to the
class members will be calculated for production occurring on and
after Jan. 1, 2006.
Pioneer's portion of the cash payment is expected to be
approximately $32 million. The cash portion will be paid in two
installments. Pioneer does not expect the settlement to impact
net income for its quarter ended Sept. 30, 2006, because Pioneer
has previously accrued sufficient contingency reserves associated
with this case. In addition, the change in the calculation of
future royalty payments is not expected to have a material effect
on Pioneer's liquidity, financial condition or future results of
operations.
The settlement agreement is subject to customary conditions,
including preliminary and final court approval.
Headquartered in Dallas, Texas, Pioneer Natural Resources Company
(NYSE:PXD) -- http://www.pxd.com/-- is an independent oil and gas
exploration and production company, with operations in the United
States, Canada and Africa.
* * *
As reported in the Troubled Company Reporter on May 1, 2006,
Fitch Ratings assigned a 'BB+' to Pioneer Natural Resources'
$450 million issuance of 6.875% senior unsecured notes due 2018.
Fitch currently rates Pioneer as Issuer Default Rating of 'BB+';
Senior unsecured debt rating of 'BB+'; and a Outlook Stable.
As reported in the Troubled Company Reporter on April 28, 2006,
Moody's assigned a Ba1 rating to Pioneer Natural Resources'
pending $450 million of 12-year senior unsecured notes and
affirmed its existing Ba1 corporate family. The rating outlook
remains negative. Note proceeds would fund redemption of PXD's
$350 million of 6.5% senior unsecured notes due 2008, repay bank
revolver borrowings, and for general corporate purposes.
PLASTECH ENGINEERED: Moody's Junks $50 Million Sr. Loan's Rating
----------------------------------------------------------------
Moody's Investors Service lowered the ratings of Plastech
Engineered Products, Inc. -- Corporate Family, to B3 from B2;
senior secured first-lien credit facilities to B3 from B2; senior
secured second-lien term loan, to Caa1 from B3. The downgrade
reflects the company's inability to maintain adequate coverage
under the fixed charge ratio test as defined in its senior secured
credit facilities, which has required the company to obtain a
suspension of this covenant test.
These ratings were lowered:
* Corporate Family Rating, to B3 from B2
* $465 million of guaranteed senior secured first-lien credit
facilities, to B3 from B2 consisting of:
* $100 million revolving credit facility due March 2009;
* $75 million term loan A facility due March 2009;
* $290 million term loan B facility due March 2010;
* $50 million guaranteed senior secured second-lien term loan
facility due March 2011, to Caa1 from B3
Plastech's last rating action was on Jan. 6, 2006 when the ratings
were lowered.
While the suspension agreement has been approved by the required
lenders of the senior secured credit facilities through
Oct. 31, 2006, the future compliance with this covenant and access
to liquidity remains uncertain given the current industry
conditions. The continuing review of the company's ratings for
possible downgrade considers that weak trends in the North
American passenger vehicle market could pose further challenges to
the company's operating performance and that a more permanent
resolution to the covenant compliance will be needed for the
company to maintain an adequate liquidity profile.
For the LTM period ending June 30, 2006 interest coverage was 1.3x
and leverage measured by debt to EBITDA was approximately 4.6x.
While LTM EBITDA has been stable compared the prior year-end,
these metrics are consistent with a low speculative grade rating
under Moody's rating methodology for auto parts suppliers. These
credit metrics could come under additional pressure following Ford
Motor Co. recent announcement of a 21% decline in production for
the fourth quarter of 2006. Plastech's direct revenue exposure to
Ford is approximately 28%. Plastech is evaluating transfer
opportunities from certain customers to offset potential declines
from lost production.
The review will consider the company's efforts to resolve the
liquidity prospects which have resulted in the company's attaining
a suspension of its fixed charge coverage covenant test. Moody's
will also consider the impact of the recent Ford announcement of
lower production for the fourth quarter of 2006, to the extent not
offset by transfer sales opportunities, on Plastech's operating
and liquidity position.
Factors that could result in lowered ratings include:
* further erosion of the company's liquidity profile;
* anticipated new business contracts not materializing in
sufficient amounts to offset customer pricedowns;
* continued increases in raw materials prices which are not
passed on to customers; and
* further volume shortfalls from current expectations.
Consideration for lower ratings would arise if any combination of
these factors were to result in leverage of over 5x and further
deterioration in EBIT coverage below 1x .
Factors that could contribute to a stabilized rating outlook
include:
* further diversification of Plastech's revenue base which
results in stabilized or improved operating margins;
* stabilized commodity prices; positive results of ongoing
discussions with JCI to fulfill purchase shortfalls;
* additional new business awards with solid margins sufficient
to offset OEM pricedowns; and
* improvements in prospective liquidity.
Consideration for an improved rating outlook or upward rating
migration would arise if any combination of these factors were to
reduce leverage consistently under 4.5x or increased EBIT coverage
consistently above 1.5x
Plastech Engineered Products, Inc., headquartered in Dearborn,
Michigan, is a leading designer and manufacturer of primarily
plastic automotive components and systems for OEM and Tier I
customers. These components and systems incorporate injection-
molded plastic parts, blow-molded plastic parts, and a small
percentage of stamped metal components. They are used for
interior, exterior and under-the-hood applications. Annual
revenues approximate $1 billion.
PLATFORM LEARNING: Wants to Walk Away from Seven Property Leases
----------------------------------------------------------------
Platform Learning Inc. asks the U.S. Bankruptcy Court for the
Southern District of New York for authority to:
i) reject nonresidential real property leases as of its
chapter 11 filing;
ii) abandon personal property pursuant to Section 554(a) of the
Bankruptcy Code; and
iii) set a bar date for the filing of the resulting rejection
damages claims.
The Debtor wants to reject the leases in an effort to prevent the
accumulation of unnecessary expense associated with its continued
performance under the leases.
The Debtor believes that its request is warranted because the
leases:
-- relate to the property that is unoccupied by the Debtor and
has largely been since the Debtor filed for bankruptcy;
-- don't provide any benefit to the Debtor's estate; and
-- are not necessary to the Debtor's ongoing operations.
The Debtor explains to the Court that since it has already
surrendered each of the properties back to the specific landlords,
it is appropriate to seek rejection of these leases:
Property Lessor Monthly Rent
-------- ------ ------------
45 Academy Street 45 Academy Street $2,880
Newark, NJ Associates, LLC
800 Cooper Street K.L. Holdings, LLC $3,671
Camden, NJ
645 Griswold Street CSFB 1998-P1 Griswold $2,157
Detroit, MI Office, LLC
815 W. Van Buren Plymouth Partners, LP $2,998
Chicago, IL
601 Brickell Key Drive FBEC-Brikell Key $6,444
Miami, FL Centere, LP
7674 West Lake Mead Family Investments LLC $6,951
Blvd.
Las Vegas, NV
650 E. Hospitality Lane RRFV Tri-City Limited $2,962
San Bernardino, CA Partnership
In addition, the expendable property associated with the rejected
premises is no longer valuable and beneficial to the Debtor's
estate since the properties were primarily vacant.
The Debtor determines that the abandonment of the expendable
property to the landlords of the properties' leases will be
effective as of the effective date of rejection of the applicable
lease.
About Platform Learning
Based in Broad Street, New York, Platform Learning Inc. --
http://www.platformlearning.com/-- provides supplemental
educational services through their Learn-to-Succeed tutoring
program to students attending public schools that are "in
need of improvement." The Debtor works together with parents,
schools, community organizations, and local educators to implement
their research-based program, which ensures that all children can
become successful students by providing appropriate support,
motivation and curriculum tailored to their individual needs.
The Company filed for chapter 11 protection on June 21, 2006
(Bankr. S.D.N.Y. Case No. 06-11391). Andrew C. Gold, Esq., Eric
W. Sleeper, Esq., Paul Rubin, Esq., David M. Bass, Esq., and John
M. August, Esq., at Herrick, Feinstein LLP, represent the Debtor
in its restructuring efforts. Blank Rome LLP represents the
Official Committee of Unsecured Creditors. When the Debtor filed
for protection from its creditors, it listed total assets of
$21,026,148, and total debts of $36,933,490.
PREDIWAVE CORP: Has Until to November 10 to Decide on Leases
------------------------------------------------------------
The Honorable Randall J. Newsome of the U.S. Bankruptcy Court for
the Northern District of California in Oakland extended, until
Nov. 10, 2006, PrediWave Corporation's period to assume, assume
and assign or reject six non-residential real property leases,
pursuant to Section 365(d)(4) of the Bankruptcy Code.
The six leases are:
-- the Debtor's research & development and technology
departments are housed in the largest of the four
facilities, in Fremont, Calif.;
-- the Debtor's administrative department;
-- the Debtor's accounting department;
-- the Debtor's translation services department. The domestic
leases are subject to separate lease agreements with
different lessors. The total monthly rent under these
domestic leases is approximately $22,300;
-- the Debtor's Japanese office has a $41,900 monthly rent
obligation; and
-- the Debtor's facility in Canada, which houses 15 engineers,
has a $5,250 monthly rent obligation.
As reported in the Troubled Company Reporter on July 13, 2006, the
Debtor sought for the extension because its new management team
and XRoads Solutions Group, LLC, have not had an opportunity to
evaluate and analyze the economics underlying each lease,
including whether those leases are necessary for the Debtor's
current operations or future business plans.
Headquartered in Fremont, Calif., PrediWave Corporation --
http://www.prediwave.com/-- provides cable and satellite
operators with end-to-end digital broadcast platforms, and offers
products like Video On Demand, Digital Video Recording,
interactive video shopping, and subscription services. The Debtor
filed for chapter 11 protection on April 14, 2006 (Bankr. N.D.
California Case No. 06-40547). Robert A. Klyman, Esq., at Latham
& Watkins, LLP, and Jonathan S. Shenson, Esq., at Klee, Tuchin,
Bogdanoff & Stern LLP represent the Debtor in its restructuring
efforts. John D. Fiero, Esq., at Pachulski, Stang, Ziehl, Young
and Jones represents the Official Committee Of Unsecured
Creditors. The Debtor's Schedules of Assets and Liabilities
showed $145,282,246 in total assets and $773,033,371 in total
liabilities.
PROFESSIONAL INVESTORS: Wants John P. Lewis as Bankruptcy Counsel
-----------------------------------------------------------------
Professional Investors Insurance Group, Inc., asks the U.S.
Bankruptcy Court for the Northern District of Texas to employ
John P. Lewis, Jr., Esq., as bankruptcy counsel.
Mr. Lewis is expected to:
a) help in the preparation of schedules and statement
of affairs and any amendments;
b) participate with the Debtor in its Section 341
meeting;
c) direct the Debtor concerning administrative and
reorganization issues; and
d) perform all other necessary legal services in
connection with these proceedings.
Mr. Lewis received a $16,000 retainer.
The Debtor says that Mr. Lewis will bill at $250 per hour for this
engagement.
Mr. Lewis assured the Court that he does not hold any interest
adverse to the Debtor, its creditors or the estate.
Mr. Lewis can be reached at:
John P. Lewis, Jr., Esq.
1412 Main Street, Suite 210
Dallas, Texas 5202
Tel: (214) 742-5925
Fax: (214) 742-5928
Headquartered in Plano, Texas, Professional Investors Insurance
Group, Inc., filed for chapter 11 protection on Aug. 9, 2006
(Bankr. Case No. 06-33278). John P. Lewis, Jr., Esq., represents
the Debtor. 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 between $10 million and $50 million and debts between
$1 million and $10 million.
R.F. CUNNINGHAM: Disclosure Statement Hearing Slated for Sept. 27
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of New York
will consider the adequacy of the Disclosure Statement explaining
R.F. Cunningham & Company's Chapter 11 Joint Plan of Liquidation
on Sept. 27, 2006.
The Debtor proposes to fund the Plan from the proceeds of the sale
of substantially all of its assets
Under the Plan, holders of these claims will be paid in full:
* administrative claims;
* Article 20 claims;
* secured claims;
* priority claims.
Holders of general unsecured claims will receive a pro rata share
of what's left from the sale proceeds after administrative,
Article 20 claims, secured claims and priority claims are fully
paid. The Debtor estimates that unsecured creditors will
aggregate $9,515,000.
Holders of Article 20 unsecured claims will receive a pro rata
share of what's left from the sale proceeds after administrative,
Article 20 claims, secured claims, priority claims and general
unsecured claims are fully paid.
Holders of equity interests will get nothing.
A full-text copy of the Disclosure Statement is available for a
fee at:
http://www.researcharchives.com/bin/download?id=060827231052
Headquartered in Smithtown, New York, R.F. Cunningham & Company,
is a grain dealer, licensed under the Agriculture and Markets Law
of New York. The company filed for chapter 11 protection on
June 13, 2005 (Bankr. E.D.N.Y. Case No. 05-84105). Harold S.
Berzow, Esq., at Ruskin Moscou Faltischek, P.C., represents the
Debtor in its restructuring efforts. Alan D. Halperin, Esq., and
Ethan D. Ganc, Esq., at Halperin Battaglia Raicht, LLP, represent
the Official Committee Of Unsecured Creditors. When The Debtor
filed for protection from its creditors, it listed $8,416,240 in
total assets and $10,218,229 in total debts.
RADNOR HOLDINGS: Organizational Meeting Scheduled on Wednesday
--------------------------------------------------------------
The U.S. Trustee for Region 3 will hold an organizational meeting
to appoint an official committee of unsecured creditors in Radnor
Holdings Corporation and its debtor-affiliates' chapter 11 cases
at 10:00 a.m., on Aug. 30, 2006, at Room 5209, J. Caleb Boggs
Federal Building, 844 King Street in Wilmington, Delaware.
The sole purpose of the meeting will be to form a committee or
committees of unsecured creditors in the Debtors' cases. The
meeting is not the meeting of creditors pursuant to Section 341
of the Bankruptcy Code. However, a representative of the Debtors
will attend and provide background information regarding the
cases.
Creditors interested in serving on a Committee should complete
and return to the U.S. Trustee a statement indicating their
willingness to serve on an official committee.
Official creditors' committees, constituted under Section 1102 of
the Bankruptcy Code, ordinarily consist of the seven largest
creditors who are willing to serve on a committee. In some
Chapter 11 cases, the U.S. Trustee is persuaded to appoint
multiple creditors' committees.
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 that the
reorganization of the Debtors is impossible, the Committee will
urge the Bankruptcy Court to convert the Chapter 11 cases to a
liquidation proceeding.
Headquartered in Radnor, Pennsylvania, Radnor Holdings Corporation
-- http://www.radnorholdings.com/-- manufactures and distributes
a broad line of disposable food service products in the United
States, and specialty chemicals worldwide. The Debtor and its
affiliates filed for chapter 11 protection on Aug. 21, 2006
(Bankr. D. Del. Case No. 06-10894). Gregg M. Galardi, Esq., and
Mark L. Desgrosseilliers, Esq., at Skadden, Arps, Slate, Meagher,
represent the Debtors. When the Debtors filed for protection from
their creditors, they listed total assets of $361,454,000 and
total debts of $325,300,000.
REFCO INC: Chapter 7 Trustee Authorized to Wind Down Refco Trading
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
gave Albert Togut, the Chapter 7 trustee for Refco, LLC's estate,
authority to complete a wind-down and dissolution of Refco Trading
Services, LLC's business operations in accordance with Delaware
laws.
As reported in the Troubled Company Reporter on Aug. 4, 2006,
Refco Trading was formed in 2003 when Refco, Inc., acquired
United Kingdom-based MacFutures, a day-trading business engaging
in commodity futures and options.
Refco Trading followed a similar model to MacFutures and became
Refco LLC's proprietary trading subsidiary. Most Refco Trading
employees traded using accounts funded by Refco LLC, and only a
few workers had any customer accounts.
Like the Refco Trading proprietary accounts, any third-party
customer accounts were settled on a daily basis to the extent that
the business day would rarely, if ever, end with Refco Trading
having any open trade positions, Scott E. Ratner, Esq., at Togut,
Segal & Segal LLP, in New York, relates.
Before the Petition Date, Refco Trading had over 100 employees and
business operations in Montreal, Canada; Chicago, Illinois; and
Miami, Florida. Refco Trading hired employees, trained them using
a proprietary training system, and provided an account with which
to trade. Most of the employees were paid a flat salary and traded
on an account that was settled on a daily basis.
The traders also received profit percentages of successful trades
as additional remuneration. Consistent with their Acquisition
Agreement, Man Financial, Inc., has hired most or all of Refco
Trading's former employees.
Refco Trading ceased all trading operations after the Petition
Date.
Refco Trading currently holds approximately $1,600,000 in cash.
The company's liabilities are uncertain, but Mr. Togut believes
that there may be intercompany obligations. Refco Trading
participated in an intercompany cash management system that paid
the company's obligations to outside sources and repaid the
obligations with intercompany receivables. Mr. Togut also
believes that there may be liabilities to Canadian taxing
authorities.
Specifically, Mr. Togut proposes to direct certain actions as are
necessary and appropriate to Refco Trading's dissolution and
wind-down, including:
(a) preparation of accounting reports, statements of receipts
and disbursements and income statements;
(b) preparation, signing, and filing of any tax returns in
the United States or Canada;
(c) appearances before any governmental authority as may be
necessary to effectuate a legal wind-down;
(d) adjudication and resolution of any claims asserted
against Refco Trading and authorization for payment of
any allowed claims from Refco Trading's assets to the
extent required by law; and
(e) performing any other related tasks as may be necessary to
effectuate a proper and legal wind-down and dissolution.
Mr. Togut also seeks to pay, without further Court order, all
necessary costs and expenses incurred in connection with the wind-
down, provided that any payments will be made from Refco Trading's
assets, and not those of Refco LLC's estate.
Furthermore, Mr. Togut asks Judge Drain for qualified immunity
from personal liability for his actions in furtherance of Refco
Trading's wind-down.
According to Mr. Togut, Refco LLC's ownership interest in Refco
Trading is an asset of its Chapter 7 estate. To the extent that
Refco Trading is solvent, its remaining assets will inure to Refco
LLC's benefit. Therefore, Refco Trading's wind-down and
dissolution pursuant to Delaware laws is consistent with Mr.
Togut's duty to "collect and reduce to money the property of the
estate" under Section 704(a)(1) of the Bankruptcy Code.
Considering that the scope of Refco Trading's assets and
liabilities are unknown, Mr. Togut insists that he must wind down
Refco Trading to determine whether there are any residual assets
that will flow to Refco LLC's estate.
About Refco Inc.
Based in New York, Refco Inc. -- http://www.refco.com/-- is a
diversified financial services organization with operations in
14 countries and an extensive global institutional and retail
client base. Refco's worldwide subsidiaries are members of
principal U.S. and international exchanges, and are among the most
active members of futures exchanges in Chicago, New York, London
and Singapore. In addition to its futures brokerage activities,
Refco is a major broker of cash market products, including foreign
exchange, foreign exchange options, government securities,
domestic and international equities, emerging market debt, and OTC
financial and commodity products. Refco is one of the largest
global clearing firms for derivatives.
The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts. Luc A.
Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents
the Official Committee of Unsecured Creditors. Refco reported
$16.5 billion in assets and $16.8 billion in debts to the
Bankruptcy Court on the first day of its chapter 11 cases.
Refco LLC, an affiliate, filed for chapter 7 protection on
Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC, is
a regulated commodity futures company that has businesses in the
United States, London, Asia and Canada. Refco, LLC, filed for
bankruptcy protection in order to consummate the sale of
substantially all of its assets to Man Financial Inc., a wholly
owned subsidiary of Man Group plc. Albert Togut, the chapter 7
trustee, is represented by Togut, Segal & Segal LLP.
On April 13, 2006, the Court appointed Marc S. Kirschner as Refco
Capital Markets Ltd.'s chapter 11 trustee. Mr. Kirschner is
represented by Bingham McCutchen LLP. RCM is Refco's operating
subsidiary based in Bermuda.
Three more affiliates of Refco, Westminster-Refco Management LLC,
Refco Managed Futures LLC, and Lind-Waldock Securities LLC, filed
for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y. Case
Nos. 06-11260 through 06-11262). (Refco Bankruptcy News, Issue
No. 39; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
REFCO INC: Chap. 7 Trustee Wants Court OK on Document Sharing Pact
------------------------------------------------------------------
Refco, Inc., and its debtor-affiliates and Man Financial Inc.
entered into an acquisition agreement, dated as of November 13,
2005, and related buyer transition services agreement and seller
transition services agreement, in connection with the sale of
Refco, LLC's futures commission merchant business to Man.
The Court's orders authorizing the Debtors to enter into the
Acquisition Agreement and the Transition Services Agreements
establish obligations and procedures relating to Man and Albert
Togut, the Chapter 7 trustee overseeing the liquidation of Refco
LLC's estate, to obtain access to data, information and documents
held by the other party relating to Refco LLC's business
purchased by Man.
Since the closing of the Sale, both the Refco LLC Trustee and Man
have followed the protocol established by the Transition Services
Agreements, and have reached other informal protocols, to obtain
access to data, information and documents held by the other party,
and both parties anticipate that they will continue to need access
for the foreseeable future.
The Transition Services Agreements are due to expire by their
terms on Aug. 22, 2006 -- 270 days after the closing of the Sale
on Nov. 25, 2005.
Mr. Togut and Man have negotiated a more permanent arrangement for
the parties to gain access to data, information and documents in
the possession of the other party after the expiration of the
Transition Services Agreements, and to formalize the protocols
under which the parties have been operating.
Mr. Togut seeks the Court's authority to enter into a facilities
management agreement with Man.
The salient terms of the Facilities Management Agreement are:
(a) The Trustee will maintain documents and other information
relating to Refco LLC's business prior to the Sale closing
that were not part of the Acquired Assets and are in the
possession or control of the Trustee, through the earlier
of:
(i) the date the Court enters an order or final decree
closing Refco LLC's case;
(ii) the date an Other Termination Event occurs; or
(iii) the date the Court enters an order otherwise
terminating the parties' obligations under the
Facilities Management Agreement;
(b) The Trustee will provide Man access to the Refco Records
for:
(i) the purpose of Man responding to any Information
Request directed to Man;
(ii) any other purpose reasonably related to Man's
operation of the business and assets acquired from
Refco LLC and its affiliates. The Trustee will
retrieve and provide to Man electronically copies
of Refco e-mail upon written request from Man.
(c) Man will maintain documents and other information relating
to Refco LLC's business that were part of the Acquired
Assets and are in the possession or control of Man through
the Termination Date;
(d) Man will provide the Trustee access to the Man Records for
purposes of the Trustee:
(i) responding to any Information Request directed to
the Trustee or Refco LLC; or
(ii) otherwise accessing, reviewing, retrieving or
photocopying Man Records as the Trustee determines
is necessary; and
(e) Man will provide "Information Retrieval Services" to the
Trustee to enable him to:
(i) respond to any Information Request directed to the
Trustee or Refco LLC; or
(ii) otherwise access, review, retrieve or photocopy
Records as the Trustee determines is necessary.
Each party will bear its own costs in obtaining access to the
party's Records. However, Refco LLC will reimburse Man for the
costs arising from Man's employees or independent contractors
performing Information Retrieval Services at the effective hourly
rates of the employees or contractors performing those services.
Man will reimburse Refco LLC for costs arising from the Chapter 7
Debtor's employees retrieving and providing electronic copies to
Man of Refco E-mail at the effective hourly rates of the
employees performing those services.
Jerry L. Switzer, Esq., at Jenner & Block LLP, in Chicago,
Illinois, explains that the Refco LLC Trustee will require access
to the Records for purposes of responding to Information Requests
served on the Trustee or Refco LLC, and otherwise administering
the Chapter 7 Debtor's estate for the foreseeable future.
Mr. Switzer notes that Mr. Togut needs Man to perform the
Information Retrieval Services because Refco LLC no longer has
any employees, except to the limited extent that employees of the
Chapter 11 Debtors are allocated on a part time basis to the
Chapter 7 Debtor.
About Refco Inc.
Based in New York, Refco Inc. -- http://www.refco.com/-- is a
diversified financial services organization with operations in
14 countries and an extensive global institutional and retail
client base. Refco's worldwide subsidiaries are members of
principal U.S. and international exchanges, and are among the most
active members of futures exchanges in Chicago, New York, London
and Singapore. In addition to its futures brokerage activities,
Refco is a major broker of cash market products, including foreign
exchange, foreign exchange options, government securities,
domestic and international equities, emerging market debt, and OTC
financial and commodity products. Refco is one of the largest
global clearing firms for derivatives.
The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts. Luc A.
Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents
the Official Committee of Unsecured Creditors. Refco reported
$16.5 billion in assets and $16.8 billion in debts to the
Bankruptcy Court on the first day of its chapter 11 cases.
Refco LLC, an affiliate, filed for chapter 7 protection on
Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC, is
a regulated commodity futures company that has businesses in the
United States, London, Asia and Canada. Refco, LLC, filed for
bankruptcy protection in order to consummate the sale of
substantially all of its assets to Man Financial Inc., a wholly
owned subsidiary of Man Group plc. Albert Togut, the chapter 7
trustee, is represented by Togut, Segal & Segal LLP.
On April 13, 2006, the Court appointed Marc S. Kirschner as Refco
Capital Markets Ltd.'s chapter 11 trustee. Mr. Kirschner is
represented by Bingham McCutchen LLP. RCM is Refco's operating
subsidiary based in Bermuda.
Three more affiliates of Refco, Westminster-Refco Management LLC,
Refco Managed Futures LLC, and Lind-Waldock Securities LLC, filed
for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y. Case
Nos. 06-11260 through 06-11262). (Refco Bankruptcy News, Issue
No. 39; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
REUNION INDUSTRIES: June 30 Equity Deficit Narrows to $19.7 Mil.
----------------------------------------------------------------
Reunion Industries, Inc., filed its financial statements for the
first quarter ended June 30, 2006, with the Securities and
Exchange Commission on Aug. 11, 2006.
For the three months ended June 30, 2006, the Company reported
$3.324 million of net income on $14.800 million of revenues,
compared with $252,000 of net income on $14.163 million of
revenues for the same period in 2005.
At June 30, 2006, the Company's balance sheet showed $49.024
million in total assets, $68.555 million in total liabilities, and
$196,000 in minority interest, resulting in a $19.727 million
stockholders' deficit. The Company reported $27.517 million
deficit at Dec. 31, 2005.
The Company's June 30 balance sheet also showed strained liquidity
with $26.655 million in total current assets available to pay
$64.621 million in total current liabilities coming due within the
next 12 months.
Sale of Oneida
During the 2005 year, the Company decided to exit the plastics
business. In January 2006, the Company signed an Asset Purchase
Agreement to sell substantially all of the assets of its Oneida
business to an unrelated entity.
On March 2, 2006, the Company completed the sale effective
March 1, 2006, for a purchase price of $11,573,000 subject to a
post-closing adjustment based on a closing balance sheet.
Of the net sale proceeds, after deducting $374,621 in related
expenses, $300,000 was put into a one-year escrow as security for
any claims by the buyer that may arise after the closing and is
included in current assets at June 30, 2006, $2,000,000 was used
to pay down a note payable to a private capital fund that is
secured by the real estate of the Company, $980,974 was used to
completely pay off the existing Wachovia term loan and the
remaining $7,917,405 was used to pay down the revolving credit
facility.
As a result, during the first quarter of 2006, the Company
recognized a gain on sale of $4.3 million, net of related expenses
of sale and estimated liabilities for future costs of $1.3
million.
Default Waiver
In connection with the sale of Oneida, the Company and Wachovia
entered into an amendment to the loan and security agreement
wherein Wachovia waived the October 2005 and November 2005
defaults for failure to meet the minimum monthly EBITDA amount,
waived the then existing defaults arising from the Company's
failure to make interest payments to the holders of the 13% Senior
Notes prior to March 1, 2006, and lowered the monthly minimum
EBITDA covenant requirement from $300,000 to $250,000 beginning in
March 2006.
A private capital fund, holder of a $3.5 million note from the
Company, also waived such cross defaults. As a result, as of
March 31, 2006, the Company was not in default on its Wachovia or
private capital fund debt. However, it was in default on such
debt at June 30, 2006.
In addition to its prior payment defaults, the Company failed to
make $700,000 quarterly interest payments on the Senior Notes that
were due on April 1 and July 1, 2006.
As a result, another event of default has occurred under the
Indenture under which the Senior Notes were issued. With an
Indenture Default, holders of more than 25% of the principal
amount of the Senior Notes may, by written notice to the Company
and to the Trustee, declare the principal of and accrued but
unpaid interest on all the Senior Notes to be immediately due and
payable.
However, under an Intercreditor and Subordination Agreement
entered into in December 2003 among Wachovia, the holders of the
Senior Notes and certain other lenders, the Senior Note holders
can not commence any action to enforce their liens on any
collateral for a 180 day period beginning after the date of
receipt by Wachovia, the senior secured lender, of a written
notice from the Senior Note holders informing Wachovia of such
Indenture Default and demanding
acceleration.
At this date, neither the Company nor Wachovia has received
written notice of any acceleration. Both the April 1 and July 1,
2006, defaults also constitute cross defaults under the Wachovia
loan agreement and under the documents securing the $3.5 million
loan from a private capital fund. The Senior Notes and all cross-
defaulted debt are shown as debt in default at June 30, 2006, and
Dec. 31, 2005.
Full-text copies of the Company's second quarter financials are
available for free at http://ResearchArchives.com/t/s?106f
Going Concern Doubt
Mahoney Cohen & Company, CPA, P.C., in New York, raised
substantial doubt about Reunion Industries' 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 loss from continuing
operations, and working capital and stockholders' equity
deficiencies.
About Reunion Industries
Headquartered in Pittsburgh, Pennsylvania, Reunion Industries,
Inc. -- http://www.reunionindustries.com/-- owns and operates
industrial manufacturing operations that design and manufacture
engineered, high-quality products for specific customer
requirements, such as large-diameter seamless pressure vessels,
hydraulic and pneumatic cylinders, grating and precision plastic
components.
ROYAL PEAK: Voluntary Chapter 11 Case Summary
---------------------------------------------
Debtor: Royal Peak Enterprises Inc.
1807 North Alexandria Avenue, Suite 8
Los Angeles, CA 90027
Bankruptcy Case No.: 06-14016
Chapter 11 Petition Date: Aug. 24, 2006
Court: Central District Of California (Los Angeles)
Judge: Richard M. Neiter
Debtor's Counsel: John F. Nicholson, Esq.
21243 Ventura Boulevard, Suite 226
Woodland Hills, CA 91364
Tel: (818) 348-3806
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
The Debtor does not have any creditors who are not insiders.
SAINT VINCENTS: Inks Sublease Agreement with Massey Knakal Realty
-----------------------------------------------------------------
Saint Vincents Catholic Medical Centers of New York and its
debtor-affiliates ask the U.S. Bankruptcy Court for the Southern
District of New York to approve SVMC's entry into a sublease
agreement with Massey Knakal Realty for nonresidential real
property located at 447 86th Street, 2nd Floor in Brooklyn, New
York.
The Debtors are selling a portion of the premises at which
St. Mary's Hospital in Brooklyn had been located that includes
Shevlin Hall, the current location of the administrative office
of SVCMC's home health care agency.
Andrew M. Troop, Esq., at Weil, Gotshal & Manges LLP, in New
York, tells the Court that in light of the asset disposition, the
Debtors must relocate various continuing services that will
continue to operate after the sale closes, including the Home
Care Office.
After arm's-length negotiations, the Debtors reached an agreement
in principle for the Sublease with Massey Knakal, as the Sub-
Landlord, and HSBC Bank USA, the over-landlord for the Premises,
pursuant to which:
* the Debtors will sublease approximately 4,000 square feet of
office space for a 17-month term with a three-month early
termination clause and an option to renew for an additional
five-year period;
* rent will be $97,900 per year or about $8,150 per month plus
utilities and real estate taxes; and
* no security deposit is required for the first 17-month term
of the Sublease.
Mr. Troop explains that the Sublease should be authorized in all
respects for the reasons that:
(1) entry into the Sublease will facilitate the continuous and
uninterrupted provision of home healthcare services;
(2) the Home Care Division contributes positively to the
Debtors' financial performance and enhances its chances of
reorganizing successfully;
(3) entry into the Sublease and relocation of the Home Care
Office will facilitate the transfer of St. Mary's to its
new owners, which is a precondition to closing on the sale
of the St. Mary's Campus to Backer Group, LLC;
(4) the terms of the Sublease are reasonable and at or below
market, especially in light of the renewal option and the
option for early termination; and
(5) the Premises will provide better and newer working
conditions for the Home Care Division's employees.
The Debtors have discussed the proposed Sublease with the Official
Committee of Unsecured Creditors, and anticipate no objection from
the creditors' panel.
Headquartered in New York, New York, Saint Vincents Catholic
Medical Centers of New York -- http://www.svcmc.org/-- the
largest Catholic healthcare providers in New York State, operate
hospitals, health centers, nursing homes and a home health agency.
The hospital group consists of seven hospitals located throughout
Brooklyn, Queens, Manhattan, and Staten Island, along with four
nursing homes and a home health care agency. The Company and six
of its affiliates filed for chapter 11 protection on July 5, 2005
(Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary
Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will &
Emery, LLP, filed the Debtors' chapter 11 cases. On Sept. 12,
2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took
over representing the Debtors in their restructuring efforts.
Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the
Official Committee of Unsecured Creditors.
As of Apr. 30, 2005, the Debtors listed $972 million in total
assets and $1 billion in total debts. (Saint Vincent Bankruptcy
News, Issue No. 32 Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
SAINT VINCENTS: Moves to Reject Diagnostic Medical MRI Contract
---------------------------------------------------------------
Saint Vincents Catholic Medical Centers of New York and its
debtor-affiliates want to walk away from their executory contract
with Diagnostic Medical Consultants, Inc., effective as of July 1,
2006. The Debtors believe that the contract with DMC is no longer
beneficial to their estates.
Under the Contract, DMC is obligated to provide to SVCMC:
* a Modular MRI Unit for use at St. Vincent's Hospital, Staten
Island; and
* a Mobile MRI Unit for use at Mary Immaculate Hospital,
Queens.
DMC also provides various services in connection with Saint
Vincent Catholic Medical Centers' use of the MRI Units. The term
of the MRI Contract with respect to each MRI Unit is five years
from the date a patient is first scanned on that MRI Unit.
For its part, SVCMC remits a minimum monthly payment of $96,000 to
DMC for use of the MRI Units, Andrew M. Troop, Esq., at Weil,
Gotshal & Manges LLP, in New York, relates.
Due to an increase in the number of competing facilities offering
MRI services, the demand for in-patient and out-patient MRI
examinations has declined. The amount managed care providers
reimburse hospitals for performing MRI examinations has also
continued to decrease.
As a result, the MRI Contract caused SVCMC to incur costs that
significantly outweigh any benefits to the Debtors' estates. The
Debtors have also recently sold Mary Immaculate and SVHSI as going
concerns, and the purchasers have not identified the MRI Contract
for assumption and assignment.
DMC Responds
Diagnostic Medical Consultants, Inc., has filed a timely claim for
rejection damages.
DMC objects to the Debtors' characterization of the contract to be
rejected and any potential attempt to use the description in the
Rejection Motion for ultimate claim resolution purposes.
Headquartered in New York, New York, Saint Vincents Catholic
Medical Centers of New York -- http://www.svcmc.org/-- the
largest Catholic healthcare providers in New York State, operate
hospitals, health centers, nursing homes and a home health agency.
The hospital group consists of seven hospitals located throughout
Brooklyn, Queens, Manhattan, and Staten Island, along with four
nursing homes and a home health care agency. The Company and six
of its affiliates filed for chapter 11 protection on July 5, 2005
(Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary
Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will &
Emery, LLP, filed the Debtors' chapter 11 cases. On Sept. 12,
2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took
over representing the Debtors in their restructuring efforts.
Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the
Official Committee of Unsecured Creditors.
As of Apr. 30, 2005, the Debtors listed $972 million in total
assets and $1 billion in total debts. (Saint Vincent Bankruptcy
News, Issue No. 32 Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
SANTA FE INN: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: Santa Fe Inn, LLC
938 Linden Avenue
P.O. Box 1027 South
San Francisco, CA 94083-1027
Tel: (650) 873-0120
Bankruptcy Case No.: 06-30746
Type of Business: The Debtor is a real estate investor and
developer. The Debtor's affiliate, Eoxan, LLC,
filed for chapter 11 protection on July 12, 2006
(Bankr. N.D. Calif. Case No. 06-30576).
Chapter 11 Petition Date: August 24, 2006
Court: Northern District of California (San Francisco)
Judge: Thomas E. Carlson
Debtor's Counsel: Randall Crane, Esq.
180 Grand Avenue, Suite 1550
Oakland, CA 94612
Tel: (510) 465-4606
Total Assets: $4,700,000
Total Debts: $2,640,000
The Debtor does not have any creditors who are not insiders.
SATCON TECH: Posts $3.4 Million Net Loss in Quarter Ended July 1
----------------------------------------------------------------
For the three months ended July 1, 2006, Satcon Technology
Corporation incurred a net loss of $3,486,455 from total revenue
of $8,103,157.
Satcon's balance sheet at July 1, 2006 showed total assets of
$22,937,827, total liabilities of $13,277,731 and total
stockholders' equity of $9,660,096.
A full-text copy of the Company's financial report for the three
months ended July 1, 2006, is available for free at:
http://researcharchives.com/t/s?1047
Going Concern Doubt
As reported in the Troubled Company Reporter on Jan. 9, 2006,
Grant Thornton LLP expressed substantial doubt about SatCon
Technology Corporation'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.
Grant Thornton pointed to the Company's recurring losses from
operations. In addition, the auditing firm noted the Company's
need to comply with certain restrictive covenants related to a
line of credit agreement.
Based in Boston, Massachusetts, SatCon Technology Corporation
(Nasdaq NM: SATC) -- http://www.satcon.com/-- develops and
manufactures electronics and motors for the Alternative Energy,
Hybrid-Electric Vehicle, Grid Support, High Reliability
Electronics and Advanced Power Technology markets.
SATELITES MEXICANOS: Seeks Bankr. Court Nod to Pay Taxes and Fees
-----------------------------------------------------------------
Satelites Mexicanos, S.A. de C.V., seeks authority from the U.S.
Bankruptcy Court for the Southern District of New York, to pay the
taxes and regulatory fees as and when they become due in the
ordinary course of its business.
In connection with the normal operations of its business, the
Debtor (i) collects, incurs and remits a variety of taxes, fees
and other charges to various Mexican taxing authorities, and (ii)
pays various regulatory fees, which are essential to the Debtor's
international operations, to both foreign and domestic regulatory
authorities or administrative agencies.
Payment of the prepetition taxes and regulatory fees is critical
to the Debtor's continued, uninterrupted operations. Non-payment
of the Taxes may cause the Taxing Authorities to take precipitous
action, including conducting audits, filing liens, seeking to
impose criminal liability against the Debtor and its directors and
officers, and revoking licenses and concessions the Debtor needs
to operate its satellites, Luc A. Despins, Esq., at Milbank,
Tweed, Hadley & McCloy LLP, in New York, explains. This would
disrupt the Debtor's day-to-day operations and could potentially
impose significant costs on the Debtor's estate, Mr. Despins says.
Mr. Despins relates that the Taxes are not property of the
Debtor's estate under Section 541 of the Bankruptcy Code. Many of
the Taxes are collected or withheld by the Debtor on behalf of the
applicable Taxing Authority and are held in trust by the Debtor
for the Taxing Authorities' benefit.
The Tax Obligations
(A) Employee Salaries
The Debtor employs 187 full-time and 19 part-time employees.
Other than the chief executive officer, who is employed directly
by the Debtor, all of the Debtor's Employees are employed through
its three non-debtor affiliates. Under Mexican law, the Debtor
and the Employee Affiliates are jointly liable for payment of each
Employee's wages and benefits.
The Debtor is obligated to pay withholding taxes to the Secretaria
de Hacienda y Credito Publico, Mexican Ministry of Finance and
Public Credit, relating to the salaries of its employees.
The Debtor's average monthly Withholding Tax obligation to its
Employees aggregates $241,800. As of the date of filing for
chapter 11 protection, the Debtor estimates that $258,000 in
Withholding Tax obligations was accrued but unpaid on account of
its Employees.
(B) Fees to Independent Service Providers
The Debtor is also obligated to pay withholding taxes to the MFPC
on the fees charged by independent contractors, like self-employed
accountants, attorneys and consultants, within the Mexican
territory. The Debtor's average monthly Withholding Tax
obligation to its Independent Service Providers aggregates $9,600.
As of the date of filing for chapter 11 protection, the Debtor
estimates that $6,226 in Withholding Tax obligations was accrued
but unpaid on account of its Independent Service Providers.
(C) Social Security
Mexican law requires that each Employee become affiliated to the
Instituto Mexicano del Seguro Social, Mexican Social Security
Institute, Mexico's social security program. The Debtor is
required to make monthly payments, through the applicable Employee
Affiliate, to IMSS on account of each Employee.
The Debtor's average yearly Social Security obligations aggregate
$1,100,000. As of the date of filing for chapter 11 protection,
the Debtor estimates that $74,000 in Social Security obligations
was accrued but unpaid.
In addition, each Employee is required to pay a quota to IMSS. The
Debtor makes quarterly payments to IMSS to cover the Employees'
quota obligation.
The aggregate annual cost to the Debtor of the Social Security
Quota Support benefit is $176,000. As of the date of filing for
chapter 11 protection, the Debtor estimates that $15,000 remains
outstanding for its Social Security Quota Support obligations.
(D) VAT and Other Withholding Taxes
The Debtor is obligated to pay value-added taxes to the MFPC on
the revenues it receives for certain goods and services it
provides as well as on the expenses it pays on certain goods and
services it receives. The Debtor's average monthly VAT
obligations relating to revenues, as reduced by VAT obligations
relating to expenses considered creditable pursuant to the VAT
Law, aggregate $27,200. As of the date of filing for chapter 11
protection, the Debtor estimates that $36,200 was accrued but
unpaid on account of VAT obligations on revenues.
The Debtor is also obligated to pay Withholding Taxes to the MFPC
on certain royalties paid in connection with the broadcast segment
of its business. The Debtor's average monthly Withholding Tax
obligations relating to the Royalties aggregate $7,400. As of the
date of filing for chapter 11 protection, the Debtor estimates
that $8,900 in Withholding Tax obligations was accrued but unpaid
on account of Royalties.
The Regulatory Fees
(A) Property Concessions
The Debtor's satellite operations are regulated by the Mexican
Government. The Debtor is required to pay property concessions to
Mexican Regulatory Authorities and Administrative Agencies every
two months in connection with the concession it received from the
Mexican Government that permits it to use its satellite control
centers, and the related land and buildings on which they are
located.
The Debtor's average bi-monthly Property Concession obligations
aggregate $70,000. As of the date of filing for chapter 11
protection, the Debtor estimates that $71,400 in Property
Concession obligations was accrued but unpaid.
(B) Landing Rights
The Debtor is required to obtain landing rights in the countries
where it seeks to operate, and the Regulatory Authorities and
Administrative Agencies in these countries impose charges on the
licenses the Debtor needs for its operations.
The Debtor's Landing Right obligations, which are generally paid
annually towards the end of the year, aggregated $39,200 for 2005.
The Debtor's Landing Right obligations for 2006 have increased
compared to previous years due to the recent launch of Satmex 6.
The Debtor estimates that its outstanding Landing Right
obligations for 2006, through and including December 31, 2006,
will total $97,545.
About Satelites Mexicanos
Satelites Mexicanos, S.A. de C.V., provides fixed satellite
services in Mexico. Satmex provides transponder capacity via its
satellites to customers for distribution of network and cable
television programming, direct-to-home television service, on-site
transmission of live news reports, sporting events and other video
feeds. Satmex also provides satellite transmission capacity to
telecommunications service providers for public telephone networks
in Mexico and elsewhere and to corporate customers for their
private business networks with data, voice and video applications.
Satmex also provides the government of the United Mexican States
with approximately 7% of its satellite capacity for national
security and public purposes without charge, under the terms of
the Orbital Concessions.
The Debtor filed for chapter 11 petition on August 11, 2006
(Bankr. S.D.N.Y. Case No. 06-11868). Luc A. Despins, Esq., at
Milbank, Tweed Hadley & McCloy LLP represents the Debtor in the
U.S. Bankruptcy proceedings. Attorneys from Galicia y Robles,
S.C., and Quijano Cortina Lopez y de la Torre give legal advice in
the Debtor's Mexican Bankrutpcy proceedings. UBS Securities LLC
and Valor Consultores, S.A. de C.V., give financial advice to the
Debtor. Steven Scheinman, Esq., Michael S. Stamer, Esq., and
Shuba Satyaprasad, Esq., at Akin Gump Strauss Hauer & Feld LLP
give legal advice to the Ad Hoc Existing Bondholders' Committee.
Dennis Jenkins, Esq., and George W. Shuster, Jr., Esq., at Wilmer
Cutler Pickering Hale and Dorr LLP give legal advice to Ad Hoc
Senior Secured Noteholders' Committee. As of July 24, 2006, the
Debtor has $905,953,928 in total assets and $743,473,721 in total
liabilities.
On May 25, 2005, certain holders of Satmex's Existing Bonds and
Senior Secured Notes filed an involuntary chapter 11 petition
against the Company (Bankr. S.D.N.Y. Case No. 05-13862).
On June 29, 2005, Satmex filed a voluntary petition for a Mexican
reorganization, known as a Concurso Mercantil, which was assigned
to the Second Federal District Court for Civil Matters for the
Federal District in Mexico City.
On August 4, 2005, Satmex filed a petition, pursuant to Section
304 of the Bankruptcy Code to commence a case ancillary to the
Concurso Proceeding and a motion for injunctive relief seeking,
among other things, to enjoin actions against Satmex or its assets
(Bankr. S.D.N.Y. Case No. 05-16103). (Satmex Bankruptcy News,
Issue No. 2; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
SECOND CHANCE: Court OKs Cox Hodgman as Debtor's Special Counsel
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Michigan
allowed James W. Boyd, Esq., the trustee overseeing the
liquidation of Second Chance Body Armor Inc., nka SCBA Liquidation
Inc., to employ Cox, Hodgman & Giarmaco PC as his special counsel,
nunc pro tunc to Nov. 22, 2005.
The Trustee needs Cox Hodgman to represent him in several pending
lawsuits against the Debtor concerning insurance coverage for
injuries caused by fireworks.
The attorney for Cox Hodgman who will be primarily responsible for
the fireworks insurance litigation is William H. Horton.
Mr. Horton charges an hourly rate of $210 for his services.
Other attorneys and paralegals may become involved in the
litigation or related issues from time to time at their ordinary
and customary hourly rates.
To the best of the Trustee's knowledge, Cox Hodgman does not hold
any interest adverse to the Debtor and is a "disinterested person"
pursuant to Sec. 101(14) of the Bankruptcy Code.
Based in Central Lake, Michigan, Second Chance Body Armor, Inc.
-- http://www.secondchance.com/-- manufactures wearable and soft
concealable body armor. The Company filed for chapter 11
protection on Oct. 17, 2004 (Bankr. W.D. Mich. Case No. 04-12515)
after recalling more than 130,000 vests made wholly of Zylon, but
it did not recall vests made of Zylon blended with other
protective fibers. Stephen B. Grow, Esq., at Warner Norcross &
Judd, LLP, represented the Debtor. Daniel F. Gosch, Esq., at
Dickinson Wright PLLC, represented the Official Committee of
Unsecured Creditors. The Debtor's case was converted into chapter
7 proceeding on Nov. 22, 2005 (Bankr. W.D. Mich. Case No. 04-
12515). James W. Boyd, Esq., serves as trustee to the Debtor's
assets and is represented by Ronald A. Schuknecht, Esq., at Lewis
Schuknecht & Keilitz PC. When the Debtor filed for protection
from its creditors, it listed estimated assets and liabilities of
$10 million to $50 million.
SECOND CHANCE: Selects Jaffe Raitt as Counsel in Insurance Suits
----------------------------------------------------------------
James W. Boyd, Esq., the trustee overseeing the liquidation of
Second Chance Body Armor Inc., nka SCBA Liquidation Inc., asks the
U.S. Bankruptcy Court for the Western District of Michigan to
employ Jaffe Raitt Heuer & Weiss as his special counsel, nunc pro
tunc to May 1, 2006.
Jaffe Raitt will represent the Trustee in lawsuits concerning
personal injuries suffered by users of the Debtor's products.
Specifically, the Firm will handle litigation of remaining
insurance coverage issues involving Royal Indemnity Company, the
Debtor's insurer contesting its insurance obligations with regards
to the lawsuits.
The attorneys from Jaffe Raitt who will be primarily responsible
for the insurance coverage issues are James J. Parks and Michael A
Rajt. Mr. Park charges $300 an hour and Mr. Rajt charges $325 and
hour for their services.
Other attorneys and paralegals may become involved in the
insurance coverage issues or related issues from time to time at
their ordinary and customary hourly rates.
Jaffe Raitt said it will need to retain local counsel should
insurance coverage issues arise in any of the lawsuits. The Firm
proposes to pay any local counsel it retains and submit any
amounts paid for reimbursement as an allowable expense on a
monthly basis.
To the best of the Trustee's knowledge, Jaffe Raitt does not hold
any interest adverse to the Debtor and is a "disinterested person"
pursuant to Sec. 101(14) of the Bankruptcy Code.
Based in Central Lake, Michigan, Second Chance Body Armor, Inc.
-- http://www.secondchance.com/-- manufactures wearable and soft
concealable body armor. The Company filed for chapter 11
protection on Oct. 17, 2004 (Bankr. W.D. Mich. Case No. 04-12515)
after recalling more than 130,000 vests made wholly of Zylon, but
it did not recall vests made of Zylon blended with other
protective fibers. Stephen B. Grow, Esq., at Warner Norcross &
Judd, LLP, represented the Debtor. Daniel F. Gosch, Esq., at
Dickinson Wright PLLC, represented the Official Committee of
Unsecured Creditors. The Debtor's case was converted into chapter
7 proceeding on Nov. 22, 2005 (Bankr. W.D. Mich. Case No. 04-
12515). James W. Boyd, Esq., serves as trustee to the Debtor's
assets and is represented by Ronald A. Schuknecht, Esq., at Lewis
Schuknecht & Keilitz PC. When the Debtor filed for protection
from its creditors, it listed estimated assets and liabilities of
$10 million to $50 million.
SPECTRUM BRANDS: High Leverage Cues Fitch to Assign Junk Ratings
----------------------------------------------------------------
Fitch Ratings initiated rating coverage of Spectrum Brands, Inc.:
-- Issuer Default Rating 'CCC'
-- Senior secured bank facility 'B/RR1'
-- Senior subordinated debentures 'CCC-/RR5'
The Rating Outlook is Stable. Approximately $2.3 billion of debt
is covered by these actions.
The rating reflects SPC's high leverage with FFO adjusted leverage
of 8.06x as well as debt/EBITDA of 7.68x for the last 12 months
ending July 2, 2006. Much of SPC's $2.3 billion in total debt was
the result of seven acquisitions completed since the fiscal year
ended Sept. 30, 2003, with the bulk occurring in 2005.
The acquisitions served to lessen the company's reliance on
essentially one product -- the Rayovac battery. However, poor
performance in batteries combined with high levels of acquisition-
related debt has hampered free cash flow which declined from
$163.5 million at the FYE Sept. 30, 2005, to $22 million at the
LTM ending July 2, 2006. There has also been a declining trend in
interest coverages since the 2005 acquisitions. EBITDA/interest
has fallen steadily from 3.09x at FYE03 to 1.75x at LTM July 2,
2006.
The company's high leverage provided little flexibility for a
myriad of issues over the past two years:
* competitive actions in grooming;
* a structural change in the European battery market;
* retailer inventory adjustments in batteries and lawn & garden
during 2005 and 2006 in North America; and
* escalating commodity costs which served to more than offset
restructuring savings and price increases.
SPC is a leading provider of private label batteries in its
Europe/Rest of World segment. Batteries represent 70% of this
segment and about half is private label. Private label is growing
rapidly, however margins are significantly less robust than SPC's
branded batteries and continues to be under pressure.
The Europe/ROW segment represented 29% of revenues and 30% of
operating income (before corporate overhead and restructuring and
related charges) for the nine months ending July 3, 2005, with a
nine month operating margin of 14.6%. For the comparable period
in 2006, revenues have declined 17% with operating profits down
43%. Part of the revenue decline was the company walking away
from $30 million in low-margined revenues.
SPC intends to remain a private-label participant. Given that the
pressure is expected to continue while the company works on
lowering its operating costs, profits from this key region is
expected to be a drag on the consolidated performance in the near
term.
Additionally, while the company has hedged it zinc exposure
through the first half of FYE07, the reset in light of expected
tightness in the zinc market and other energy related costs will
contribute to margin pressure as well. The current trajectory in
the near term appears negative without actions to provide
additional financial flexibility.
SPC's management has historically been able to achieve cost
savings ahead of schedule. The company is in the process of three
separate actions:
* acquisition integration;
* flattening the North American organization; and
* reorganizing its European operation.
These are expected to lead to cost savings of $150 million by
2008. The company reports that it is on track with all
initiatives. The ability to execute on cost savings and the
company's leading brands are also encompassed in the ratings.
The company has had to amend their financial covenants twice in
the past year to address declining operations. Thus, a concern is
that continued declines in Europe which will take several quarters
to address, potential competitive actions by participants who have
substantially more resources, as well as increased commodity costs
still exist and could continue to pressure margins and complying
with covenants. SPC reports that it should comply with its
covenants into the foreseeable future but the ratios appear to be
relatively tight. SPC's ability to continue working well with its
bank group is necessary.
The Rating Outlook is Stable as the company has announced their
discomfort with the present levels of leverage given
underperformance against forecast and has hired Goldman Sachs to
evaluate potential asset sales. The company's intent is to review
its line of business with a plan to begin executing asset sales by
next spring. Lines of businesses to be sold, cash flow lost and
amount of debt reduction is unknown at present. The goal to de-
leverage is viewed positively in light of recent performance
trends. Incorporated into the Stable Outlook is the expectation
that the company will be able to receive waivers, if needed, from
its debt-holders.
The Recovery Ratings and notching in the debt structure reflect
Fitch's recovery expectations under a scenario in which distressed
enterprise value is allocated to the various debt classes. The
recovery ratings for the bank facility ('RR1', reflecting 91%-100%
recovery) benefit from a substantial enterprise value which more
than covers maximum outstanding. There is also covenants and
conditions precedent to each loan which provides protection and
precludes sizeable amounts of debt without sizeable increases in
cash flow. The senior subordinated debentures ('RR5', reflecting
expected recovery of 10%-30%) reflect the expectation of below
average recovery prospects in a distressed case.
Virtually all of SPC's revenue growth from $573 million in FYE02
to the $2.359 billion in FYE05 was derived from acquisitions.
Revenues in the nine months ending July 2, 2006, also increased
13% to $1.943 billion benefiting from late FYE05 acquisitions. It
is to be noted however that if sales were adjusted to assume that
all acquisitions during 2005 were treated as if they had been
completed on the first day of fiscal 2005 (pro forma), net sales
for the nine months would have declined 6%.
On an as reported basis, FYE05's gross margin declined 480bps to
37.9% due to mix (320bps) and purchase accounting inventory value
charges (160bps) which increased costs of goods sold. A
normalized EBITDA margin with the 160bps added back would be 14%.
However, poor performance in batteries and escalating commodity
costs during the nine months ending July 2, 2006, reduced the
EBITDA margin to 11.5% -- 250bps below prior year. Thus while
leverage (debt/EBITDA) is down slightly to 7.7x from 7.9x at the
end of the fiscal year, LTM July 2, 2006 EBITDA/interest has
continued to weaken as the current fiscal year bears the full
brunt of the debt and interest rate increases as the financial
covenants were amended in December and May.
SPC is a global branded consumer products company with operations
in seven product categories: consumer batteries; lawn and garden;
pet supplies; electric shaving and grooming; household insect
control; electric personal care products, and portable lighting.
Today, batteries represent just 33% of global revenues from 90% in
2002 (41% derived internationally).
STANDARD PACIFIC: Reports $96.5 Mil. Net Income in Second Quarter
-----------------------------------------------------------------
Standard Pacific Corp. reported its 2006 second quarter operating
results. Net income for the quarter ended June 30, 2006, was
$96.5 million compared to $107.6 million in the year earlier
period. Homebuilding revenues were up 5% to a record $1 billion
for the 2006 second quarter versus $952 million last year.
Stephen J. Scarborough, Chairman and Chief Executive Officer,
stated, "The changing market tone that surfaced at the end of 2005
has continued to evolve during the first half of 2006, and we are
clearly facing an increasingly competitive environment in most of
our major markets across the country. We are impacted by growing
levels of both new and existing home inventories, a steadily
increasing interest rate environment, reduced affordability and
weaker homebuyer confidence. All of these conditions have
resulted in lower sales rates and higher levels of cancellations
which have given rise to a greater use of incentives and other
forms of discounting."
"It is difficult to predict when market conditions will stabilize
and improve in our primary markets. However, we are taking the
necessary steps to respond to the challenges that we all face
while positioning the Company for the future. We have intensified
our effort to manage our cash flows, including slowing our starts
and reducing our capital outlays for land. And while we have had
reasonable success during the first half of the year with the
introduction of a number of our new communities that are well
located and competitively priced, we have moderated our planned
openings for the balance of the year in response to the slowing
market environment that we face."
"Going forward, we will continue to adjust our new home pricing
strategy to balance our volume and margin objectives. During the
quarter we were able to generate a relatively strong gross margin
of 27.2% with a modest 2% reduction in unit deliveries year over
year. We are also working to realign our fixed cost structure to
match current activity levels and continue our efforts to reduce
our production costs while improving our cycle times."
Mr. Scarborough continued, "We have adjusted our business plan for
2006 to respond to these challenging market conditions and to
reflect our expectation of generally lower absorption rates on a
project-by-project basis going forward. We are targeting
approximately 10,400 deliveries, excluding 425 joint venture
homes, homebuilding revenues of approximately $4 billion, and
earnings of $5.10 to $5.40 per share. Our expectations for the
balance of the year are supported by our backlog of nearly 5,500
homes, valued at $2.1 billion, which, while subject to
cancellations, represents approximately 95% of our projected 2006
revenue target when combined with our first half results. For the
third quarter we are projecting approximately 2,275 deliveries,
excluding 50 joint venture homes, and homebuilding revenues of
approximately $850 million, with initial earnings guidance of
$0.80 to $0.85 per share."
"We continue to be focused on maintaining a sound balance sheet
and diversified capital structure. We ended the quarter with over
$1.8 billion in shareholders' equity, and leverage within our
targeted range. In addition, to further strengthen our balance
sheet and improve our liquidity during the quarter, we refinanced
$350 million of revolver borrowings with two new term loans,
increased our revolving credit facility commitment to $1.1 billion
and added a new $400 million accordion feature to the facility."
Mr. Scarborough concluded, "During the second quarter we
repurchased an additional 1.9 million shares, which brings our
year-to-date total to nearly 3.3 million shares, which depleted
our previous $100 million buyback authorization. Accordingly, our
Board approved a new $50 million repurchase limit for additional
buybacks. While we believe that share repurchases at current
prices are a sound use of our capital, we will be thoughtful about
the degree of future buybacks so as not to undermine the strength
of our balance sheet and our credit quality."
Homebuilding Operations
Homebuilding pretax income for the 2006 second quarter decreased
11% to $154.1 million from $172.4 million in the year earlier
period. The decrease in pretax income was driven by a 30 basis
point lower homebuilding gross margin percentage, a 130 basis
point increase in the Company's SG&A rate and a $15.8 million
decrease in other income. These negative factors were partially
offset by a 5% increase in homebuilding revenues and a $6.0
million increase in joint venture income.
Homebuilding revenues for the 2006 second quarter increased 5% to
$1,003.9 million from $952.3 million last year. The increase in
revenues was primarily attributable to an 8% increase in the
Company's consolidated average home price to $374,000, partially
offset by a 2% decrease in new home deliveries.
The 2% decrease in new home deliveries companywide was influenced
by these regional operations. During the 2006 second quarter, the
Company delivered 703 new homes in California (exclusive of joint
ventures), an 8% decrease from the 2005 second quarter.
Deliveries were up 12% in Southern California to 526 new homes
(excluding 16 joint venture deliveries) reflecting the rebound in
order activity last year. Deliveries were down 41% in Northern
California to 177 new homes (excluding 34 joint venture
deliveries), and primarily reflects the decrease in new home
orders we began to experience in the second half of 2005 resulting
from a slowdown in new home demand, coupled with a decrease in the
number of active selling communities during the same period,
particularly in the San Francisco Bay area. In Florida, the
Company delivered 756 new homes in the second quarter of 2006,
representing a 10% year-over-year decline. The lower Florida
delivery total was due to a modest decrease in net new orders in
the state last year combined with an increase in the state's
cancellation rate during the first half of 2006. The Company
delivered 275 homes (excluding 5 joint venture deliveries) during
the 2006 second quarter in Arizona, a 48% decrease from the 2005
second quarter. The lower level of new home deliveries was due to
a modest decline in net new orders in the state last year as well
as a significant jump in the Phoenix division's cancellation rate
during the second quarter of 2006. In the Carolinas, deliveries
were off 18% to 219 new homes driven primarily by a slight
reduction in the number of active selling communities this year,
coupled with a modest slowdown in order activity during the 2006
second quarter. New home deliveries were up 171% in Texas to 574
new homes, driven by improving market conditions in Dallas and
Austin, combined with the delivery of 303 homes from the Company's
new San Antonio division. Deliveries were up 21% in Colorado
to 150 new homes for the quarter.
During the 2006 second quarter, the Company's average home price
increased 8% to $374,000. The Company's regional average home
prices changed as follows. The Company's average home price in
California was $729,000 for the second quarter of 2006, a 10%
increase from the year earlier period. The higher average home
price was primarily due to a greater delivery mix of more
expensive homes from the Company's Orange County, Ventura, and San
Diego divisions in Southern California. The Company's average
price in Florida was up 16% from the year ago period to $271,000,
and primarily reflects the impact of general price increases
throughout the state experienced last year and, to a lesser
degree, a shift in product mix. The Company's average price in
Arizona was up 51% to $318,000, primarily reflecting the strong
level of price appreciation experienced in Phoenix during 2004 and
much of 2005. The Company's average price was up 21% in the
Carolinas and primarily reflected a change in delivery mix. The
Company's average price in Texas was down 15%, primarily
reflecting the addition of San Antonio last year, where its
average home price was $145,000. Companywide, Standard Pacific
expects that its full-year average new home price will increase
approximately $38,000, or 11%, to $385,000 in 2006. The Company
is projecting a 2006 third quarter average home price of $375,000,
up 11% over the 2005 third quarter average. The expected increase
in the 2006 third quarter and full year average home prices
primarily reflect the significant appreciation in new home prices
experienced in the Phoenix market in 2005 and the more moderate
level of price appreciation experienced in the California and
Florida markets over the same time period.
The Company's 2006 second quarter homebuilding gross margin
percentage was down 30 basis points year-over-year to 27.2%. The
slight decrease in the year-over-year gross margin percentage was
driven primarily by a lower gross margin in Southern California
offset, in part, by higher gross margins in Northern California,
Florida, and Arizona. In addition, margins in the Carolinas and
Texas continue to improve, but are still below its company-wide
average. The higher gross margin percentages in most of its
markets reflected its ability to raise home prices during much of
2005 as a result of healthy housing demand during the year. The
Company's homebuilding gross margin percentage for the 2006 third
quarter is expected to be in the 23.0% to 24.0% range, while its
margin for the full year is expected to be approximately 25.0% to
25.5%. While difficult to estimate under changing market
conditions, the Company's 2006 full year gross margin guidance
reflects its best estimate at this time for the level of
incentives needed in certain of its markets to sell homes.
Selling, general and administrative expenses (including corporate
G&A) for the 2006 second quarter increased 130 basis points to
12.3% of homebuilding revenues, which was at the low end of the
Company's guidance for the quarter, and compared to 11.0% last
year. The higher level of SG&A expenses as a percentage of
homebuilding revenues was primarily due to:
1) increased levels of sales and marketing expenses, including
outside sales commissions and advertising, as a result of
the general slowdown in new housing demand in the Company's
largest markets;
2) the shifting geographic mix of its deliveries, where the
Company's non-California operations generally incur higher
levels of SG&A expenses as a percentage of revenues;
3) an increase in equity-based compensation, including the cost
of expensing stock options and other share-based awards; and
4) overhead incurred in connection with the Company's start-up
operations in Bakersfield, the Central Valley of California
and Las Vegas.
The Company's projected SG&A rate for 2006 is expected to be
approximately 12.0% to 12.5%, while the 2006 third quarter rate is
expected to be approximately 13.5% to 14.0%.
Income from unconsolidated joint ventures was up $6 million for
the 2006 second quarter to $19.2 million. For the quarter,
$14 million of joint venture income was generated from land sales
to other builders while $5.4 million was generated from new home
deliveries. Deliveries from the Company's unconsolidated
homebuilding joint ventures totaled 55 new homes in the 2006
second quarter versus 109 last year. For 2006, the Company is
projecting approximately $60-$65 million in total joint venture
income of which $25 million is expected to be generated from
approximately 425 new home deliveries and approximately $40
million is projected from profits from joint venture land sales to
other builders. For the 2006 third quarter, the Company is
projecting $6 million in total venture income, of which $3 million
is expected to be generated from the delivery of approximately 50
joint venture homes and approximately $3 million is projected from
venture land sale income.
Headquartered in Irvine, California, Standard Pacific Corp. (NYSE:
SPF) -- http://www.standardpacifichomes.com-- has built homes for
more than 82,000 families during its 40-year history. One of the
nation's largest homebuilders, the Company constructs homes within
a wide range of price and size targeting a broad range of
homebuyers. Standard Pacific operates in some of the strongest
housing markets in the country with operations in major
metropolitan areas in California, Florida, Arizona, the Carolinas,
Texas, Colorado, and Nevada. The Company provides mortgage
financing and title services to its homebuyers through its
subsidiaries and joint ventures, Family Lending Services, WRT
Financial, Westfield Home Mortgage, Home First Funding, Universal
Land Title of South Florida and SPH Title.
* * *
Standard & Poor's Ratings Services affirmed its 'BB' corporate
credit rating on Standard Pacific Corp. At the same time, the
'BB' rating on the company's senior unsecured notes and the 'B+'
rating on its subordinated notes are also affirmed, affecting
$1.25 billion of rated securities. The outlook is positive.
STERLING FINANCIAL: Inks $30 Mil. Credit Facility with Wells Fargo
------------------------------------------------------------------
Sterling Financial Corporation has entered into a $30 million one-
year variable-rate revolving credit facility with Wells Fargo
Bank, National Association, replacing a $40 million credit
facility the Company had with Bank of Scotland.
The Bank of Scotland line expired in May of 2006, with a
$20 million outstanding draw, which was paid off using the
Company's cash reserves.
The facility will ensure that the Company has the working capital
and liquidity it needs as it continues to expand its franchise
footprint. The Company anticipates that borrowings under the
facility will be used for general corporate purposes.
Sterling Financial Corporation (Nasdaq: STSA) of Spokane,
Washington, is a bank holding company, the principal operating
subsidiary of which is Sterling Savings Bank. Sterling Savings
Bank is a Washington State-chartered, federally insured commercial
bank, which opened in April 1983 as a stock savings and loan
association. Sterling Savings Bank, based in Spokane, Washington,
has financial service centers throughout Washington, Oregon, Idaho
and Montana. Through Sterling Saving Bank's wholly owned
subsidiaries, Action Mortgage Company and INTERVEST-Mortgage
Investment Company, it operates loan production offices in the
western region. Sterling Savings Bank's subsidiary, Harbor
Financial Services, provides non-bank investments, including
mutual funds, variable annuities and tax- deferred annuities and
other investment products, through regional representatives
throughout Sterling Savings Bank's branch network.
* * *
Fitch Ratings affirmed Sterling Financial Corporation's BB+ long-
term issuer rating, B short-term issuer rating, and C individual
rating on June 22, 2005.
SUPERCONDUCTOR TECH: Posts $22MM Net Loss in Quarter Ended July 1
-----------------------------------------------------------------
For the quarter ended July 1, 2006, Superconductor Technologies
Inc. incurred a net loss of $22,659,000 on total net revenues of
$5,021,000.
The Company's balance sheet at July 1, 2006 showed total assets of
$25,696,000, total liabilities of $4,192,000, and total
stockholders' equity of $21,504,000.
A full-text copy of the Company's financial report for the three
months ended July 1, 2006, is available for free at:
http://researcharchives.com/t/s?1048
Going Concern Doubt
As reported in the Troubled Company Reporter on Mar. 20, 2006,
PricewaterhouseCoopers LLP expressed substantial doubt
Superconductor Technologies Inc.'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 and the $9,404,000 in
cash used for operations in 2005.
Headquartered in Santa Barbara, California, SuperConductor
Technologies Inc. -- http://www.suptech.com/-- develops,
manufactures and markets infrastructure products for wireless
voice and data applications. The Company's commercial products
are divided into three product offerings: SuperLink (high-
temperature superconducting filters); AmpLink (high performance,
ground-mounted amplifiers); and SuperPlex (high performance
multiplexers).
TELOS CORPORATION: Equity Deficit Widens to $119 Mil. at June 30
----------------------------------------------------------------
Telos Corporation filed its financial statements for the three
months ended June 30, 2006, on Form 10-Q, with the Securities and
Exchange Commission on Aug. 14, 2006.
The Company's balance sheet at June 30, 2006 showed total assets
of $41 million and total liabilities of $160 million resulting in
a total stockholders' deficit of $119 million. Its total
stockholders' deficit at Dec. 31, 2005, stood at $97 million.
Sales for the second quarter of 2006 were $35.8 million, an
increase of $11.2 million or 45.7%, compared to the second quarter
2005 sales of $24.5 million. The Company's gross profit for the
second quarter of 2006 increased by $2.2 million to $7 million
compared to the same period in 2005.
The Company's operating income for the second quarter of 2006 was
$14,000, compared to $3.2 million of operating loss in the same
period in 2005. It reported net loss for the second quarter of
2006 was $13.9 million, an increase of $8.6 million compared to
$5.3 million net loss in the same period in 2005.
The Company's sales for the six months ended June 30, 2006 were
$61 million, an increase of $1.4 million or 2.3%, compared to
sales of $59.6 million for the same period in 2005. Its gross
profit for the six months ended June 30, 2006 decreased by
$800,000 to $11.5 million compared to the same period in 2005.
Operating loss for the six months ended June 30, 2006 was $5.9
million, compared to $2.7 million of operating loss in the same
period in 2005. The Company's net loss for the six months ended
June 30, 2006 was $22 million, an increase of $16.1 million
compared to $5.9 million net loss in the same period in 2005.
At June 30, 2006, the Company had outstanding borrowings of
$11.5 million and unused borrowing availability of $2.5 million on
the Facility. The effective weighted average interest rates on
the outstanding borrowings under the Facility were 12.3% and 9.9%
for the six months ended June 30, 2006 and 2005, respectively.
For the six months ended June 30, 2006, the Company reported that
cash provided by continuing operating activities was $1.6 million.
The Company further reported that at June 30, 2006, it had
outstanding debt and long-term obligations of $120.4 million,
consisting of $11.5 million under the Facility, $5.2 million in
subordinated debt, $9.6 million in capital lease obligations and
$94.1 million in redeemable preferred stock.
A full text-copy of Telos Corp's Quarterly Report may be viewed at
no charge at http://ResearchArchives.com/t/s?1064
Telos Corporation is a systems integration and services company
addressing the information technology needs of U.S. Government
customers worldwide. The Company also owns all of the issued and
outstanding share capital of Xacta Corporation, a subsidiary that
develops, markets and sells U.S. Government-validated secure
enterprise solutions to federal, state and local government
agencies and to financial institutions.
TFS ELECTRONIC: Plans to Pay Unsecured Creditors 73% of Claims
--------------------------------------------------------------
The Honorable Redfield T. Baum, Sr., of the U.S. Bankruptcy Court
for the District of Arizona preliminarily approved the Disclosure
Statement explaining TFS Electronic Manufacturing Services, Inc.'s
Plan of Reorganization and ordered the Debtor to file an amended
Disclosure Statement.
As directed, the Debtor filed an Amended Disclosure Statement on
Aug. 15, 2006.
The Debtor contemplates an orderly liquidation of its remaining
assets and distribution of certain settlement funds. The Debtors
proposes to establish a liquidating trust that will be
administered by a Liquidating Trustee. On the effective date of
the Plan, the Debtor's remaining assets, including its available
cash will be transferred to the Liquidating Trust for the benefit
of creditors. After that, the Trust will be responsible for
liquidating all of the remaining assets and making distributions
to creditors. The Debtor currently holds $5.4 million in cash as
part of the proceeds of the sale of substantially all of its
assets to Applied Technical Services Corp. on Oct. 28, 2005. The
Debtor also has around and $200,000 in miscellaneous accounts
receivable.
Classification and Treatment of Claims
Holders of prepetition secured tax claims will retain their lien
on some assets. The claims will earn 6% interest annually until
paid in full.
Holders of secured claims will have either:
(a) their collateral; or
(b) a five-year note in the fair market value of the
collateral, earning 5% interest annually and payable in 60
equal installments of principal and interest.
Holders of claims below $300 or those who elect to reduce their
claims to $300 will be paid in full on the Effective Date.
Holders of general unsecured claims, aggregating around
$5 million, will each receive a pro rata share of a settlement
fund, except for Willows. Under a global settlement among the
Debtor, the Official Committee of Unsecured Creditors and the
Debtor's parent, Three-Five Systems, Inc., Willows is allowed a
$1,482,300 general unsecured claim but will be given a maximum
of $577,000 under that claim. Under that settlement, around
$3,125,000 will be used to fund distributions for unsecured
creditors. Estimated recovery for each unsecured creditor is 73%
Three-Five Systems holds an allowed $13,069,000 subordinated
claim. Three-Five Systems will be paid out of settlement funds
after deducting $3,125,000 for distribution to unsecured
creditors. Three-Five Systems will also receive funds recovered
from litigation against Topsearch Printed Circuits (HK), Ltd.
Three-Five Systems will also get all of the Debtor's unliquidated
assets and accounts receivable except avoidance actions.
Holders of equity interest will get nothing.
A copy of the Amended Disclosure Statement is available for a fee
at http://www.researcharchives.com/bin/download?id=060824055310
The Court will consider final approval of the Disclosure Statement
and confirmation of the Plan on Sept. 12, 2006. Ballots and
objections are due Sept. 7, 2006. The Debtor has until
Sept. 11, 2006, to reply to objection.
Headquartered in Redmond, Washington, TFS Electronic Manufacturing
Services, Inc., was an electronics manufacturing services facility
that specializes in New Product Introduction services, prototype
Development and low to medium-volume manufacturing. The Company
filed for chapter 11 protection on August 19, 2005 (Bankr. D.
Ariz. Case No. 05-15403). John R. Clemency, Esq., Keriann M.
Atencio, Esq., and Tajudeen O. Oladiran, Esq., at Greenberg
Traurig LLP, represent the Debtor in its restructuring efforts.
Brian N. Spector, Esq., at Jennings Strouss & Salmon, PLC,
represents the Official Committee of Unsecured Creditors. When
the Debtor filed for protections from its creditors, it estimated
assets between $1 million to $10 million and estimated debts
between $10 million to $50 million.
THINKPATH INC: Posts $960,000 Net Loss in Quarter Ended June 30
---------------------------------------------------------------
For the three months ended June 30, 2006, Thinkpath Inc. recorded
a net loss of $960,000, compared to a net loss of $800,000 for the
three months ended June 30, 2005. For the six months ended June
30, 2006, the company recorded a net loss of $1,340,000, compared
to a net loss of $940,000 for the three months ended June 30,
2005.
Thinkpath generated $3,790,000 of revenues for the quarter ended
June 30, 2006, a $190,000 or 5% increase compared to $3,600,000
for the three months ended June 30, 2005. This increase is
largely attributable to the acquisition of The Multitech Group
Inc. that contributed $750,000 in revenue since its effective date
of April 1, 2006.
Without the TMG contribution, revenue from original operations was
down $560,000. This decrease is a direct result of the decline in
sales of approximately $600,000 from one major customer located in
the United States who represented only 8% of the Company's
consolidated revenue for the three months ended June 30, 2006
compared to 25% for the three months ended June 30, 2005.
Gross profit for the three months ended June 30, 2006 increased by
$160,000 or 15% to $1,230,000 compared to $1,070,000 for the three
months ended June 30, 2005. This increase is due to the increase
in gross profit in Canada from 13% for the three months ended
June 30, 2005 to 32% for the three months ended June 30, 2006
resulting from the addition of several higher margin engineering
service projects and contract placements.
For the three months ended June 30, 2006, the company recorded a
loss from continuing operations of $960,000 compared to a loss of
$820,000 for the three months ended June 30, 2005. This loss can
be attributed to the increase in administrative and sales expenses
for the three months ended June 30, 2006 of approximately $230,000
and $130,000 respectively, related to the additional salaries and
overhead incurred as a result of the TMG acquisition since its
effective date of April 1, 2006.
In addition, depreciation and amortization costs for the three
months ended June 30, 2006, increased by $90,000 related to the
amortization of additional capital assets and other assets
including contracts and customer lists acquired with the TMG
acquisition.
Non-cash financing costs related to the company's debt with Laurus
Master Fund, Ltd. increased to $580,000 for the three months ended
June 30, 2006 compared to $5,000 for the same period last year.
At June 30, 2006, the company had a working capital deficiency of
$1,790,000 largely related to the new debt associated with the TMG
acquisition compared to a working capital deficiency of $780,000
at Dec. 31, 2005. At June 30, 2006 the company had stockholder's
equity of $2,400,000 compared to stockholder's equity of
$2,020,000 at December 31, 2005.
"We realize the second quarter results we are reporting are a
disappointment especially after the positive announcements made
bout the acquisition of TMG and our recent contract awards," said
Declan French, Chairman and Chief Executive Officer.
"Nonetheless, we are still confident that we have made a strong
acquisition that not only provides solid customers, increased
geographic scope and service offerings, but most importantly,
experienced management and staff. Unfortunately, the timing of
the acquisition coincided with what has historically been TMG's
weakest quarter as well as the delay of several major material
handling construction projects until the later part of the year.
"This, coupled with our own struggles to recoup the sales lost
from our major customer and the increased expenses associated with
the acquisition and investments into our sales team, resulted in
greater losses for the second quarter than anticipated. With
TMG's pipeline and the slow but gradual successes of our sales
team, we expect to see positive results in the later part of the
third quarter and fourth quarter of this year."
A full-text copy of the Company's quarterly report is available
for free at http://researcharchives.com/t/s?1069
Going Concern Doubt
As reported in the Troubled Company Reporter on May 16, 2006,
Schwartz Levitsky Feldman LLP, Chartered Accountants, in Toronto,
Ontario, Canada, raised substantial doubt about Thinkpath 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 from operations and negative working capital.
Thinkpath Inc. -- http://www.thinkpath.com/-- is a global
provider of technological solutions and services in engineering
knowledge management, including design, drafting, technical
publishing, and consulting. Thinkpath enables corporations to
reinvent themselves structurally; drive strategies of innovation,
speed to market, globalization and focus in new and bold ways.
TOWER AUTOMOTIVE: Asks Court to Reject UAW & IUE-CWA Settlement
---------------------------------------------------------------
Tower Automotive Inc. and its debtor-affiliates ask the U.S
Bankruptcy Court for the Southern District of New York to reject
their collective bargaining agreement with the Unions, and modify
retiree benefits pursuant to Sections 1113 and 1114 of the
Bankruptcy Code.
The Debtors ask the Court to:
(a) approve their settlement with various retirees from the
United Automobile, Aerospace and Agricultural Implement
Workers of America, and the IUE, the Industrial Division
of the Communication Workers of America AFL-CIO; and
(b) find that the Voluntary Retirees Beneficiary Association
Trusts established pursuant to the settlement agreement
with the UAW, the IUE-CWA, and Milwaukee Unions, do not
violate Section 186 of the Labor Code.
Prior to making the Section 113/114 proposals, an actuarial
valuation conducted by the Debtors' benefits consultants, Towers
Perrin, estimated the present value of the Debtors' retiree
welfare benefits as of September 30, 2005 -- the 2005 APBO --
at $178,000,000, of which:
$133,000,000 related to current retirees; and
$45,000,000 related to anticipated costs of future retirees.
Of the 2005 APBO, approximately $16,000,000 was attributed to
retirees represented by the UAW and the IUE-CWA. Projected
payment of retiree welfare benefits for the UAW and the IUE-CWA
for year 2006 is approximately $1,000,000.
In May 2006, the Court authorized the Debtors to enter into a
settlement agreement modifying retiree benefits with the
Milwaukee Unions and the Official Committee of Retired Employees.
The Milwaukee Unions and the Retiree Committee represent 90% of
the 2005 APBO and more than 90% of the projected 205 cash cost of
retiree welfare benefits.
The UAW and the IUE-CWA represent the last retirees that comprise
the 2005 APBO, and by entering into the Settlement with the UAW
and the IUE-CWA, the Debtors will have consensually modified the
remaining obligations without need for the Court to decide on the
Section 1113/1114 Motion, Anup Sathy, Esq., at Kirkland & Ellis
LLP, in Chicago, Illinois, explains.
Through good faith and arm's-length negotiations for over nine
months, the Debtors, the UAW and the IUE-CWA have reached the
Settlement, which addresses the remainder of the Debtors' retiree
welfare liability and gives the Debtors much-needed cash relief
going forward. Aside from certain minimal up-front cash funding
obligations, the Debtors will be freed from virtually all cash
obligations to the retirees represented by the UAW and the IUE-
CWA, Mr. Sathy tells the Court.
Furthermore, the Settlement resolves several ancillary issues,
including releasing the Debtors from all claims, causes of action
and other outstanding issues between the Debtors and the Unions.
Under the Settlement, the UAW agreed to act as the authorized
representative under Section 1114 for union retirees from three
facilities formerly operated by the Debtors or the Debtors'
predecessors:
(a) the Kalamazoo Facility, represented by UAW Local 740;
(b) the Active Tool & Manufacturing Company, Inc., facility,
represented by UAW Local 155; and
(c) the Masco Tech facility, represented by UAW Local 174.
The IUE-CWA represents the various current and future retirees
from the Debtors' Greenville, Michigan location.
Settlement Terms
According to Mr. Sathy, the Debtors' Settlement with the UAW and
the IUE-CWA is patterned after the settlements with the Milwaukee
Unions and the Retiree Committee.
The significant terms of the Settlement are:
* The life insurance coverage provided by the Debtors to
Union Retirees will be immediately reduced to the lowest
level of coverage for which each individual would ever be
eligible under the terms of the current retiree life
insurance program;
* The Greenville Retirees will collectively be granted a
$12,000,000 allowed general unsecured claim against R.J.
Tower Corporation, the distribution of which will be made
in cash or equity, in the Debtors' sole discretion;
* The Greenville Retirees will have a $12,000,000 allowed
general unsecured claim against the U.S. entities that are
debtors and operating subsidiaries of R.J. Tower, to be
allocated proportionally against entities that employed the
Greenville Retirees or previously acquired entities that
employed Greenville Retirees. The Debtors and the
Greenville Retirees agree to cooperate to allocate the
Greenville Domestic Claim among the Greenville Retirees.
Any unresolved dispute regarding allocation will be
resolved by the Bankruptcy Court. To the extent the
Disclosure Statement Value attributable to the Greenville
Claim is less than the Greenville Claim Floor Recovery, the
Debtors will provide additional recovery, in the form of
cash or equity, as necessary;
* The Debtors will continue making contributions to the cost
of retiree medical, life insurance, prescription drug and
dental coverage for current Greenville Retirees and
eligible dependents under the terms of existing plans,
including any supplemental, ancillary or "retiree benefits"
through and including August 31, 2006. By September 1, the
Debtors will cease to sponsor any medical, prescription
drug, dental or other health care coverage for the
Greenville Retirees;
* The Debtors will continue making contributions to the cost
of retiree medical, life insurance, prescription drug and
dental coverage for current UAW Retirees and eligible
dependents under the terms of existing plans, including any
supplemental, ancillary or "retiree benefits", through and
including September 30, 2006. By October 1, the Debtors
will cease to sponsor any medical, prescription drug,
dental or other health care coverage for the UAW Retirees;
* On September 1, 2006, the Debtors will make a $500,000 cash
distribution -- less any amounts paid by the Debtors for
Retiree Health Benefits for covered services received by
Greenville Retirees between July 1 and August 31 -- to the
Greenville VEBA. By October 1, the Debtors will make a
$125,000 cash distribution to the UAW Trust -- less any
amounts paid by the Debtors for Retiree Health Benefits for
covered services received by UAW Retirees between July 1
and September 30. On the earlier of (a) January 1, 2007,
and (b) the effective date of the Debtors' plan of
reorganization, and in lieu of any future payments, the
Debtors will make an additional distribution to the
Greenville VEBA of $1,106,000 in cash, a distribution of
$44,000 to certain IUE-CWA grievants, and an additional
$200,000 cash distribution to the UAW Trust;
* The Debtors will offer Union Retirees an opportunity to
elect Consolidated Omnibus Budget Reconciliation Act
continuation coverage for the lifetime of the Union
Retirees, and until 36 months after the death of the Union
Retirees for their eligible dependents; and
* The Debtors and the UAW Retirees and Greenville Retirees
agree to a broad, mutual release of claims, including
pending litigation, arbitration proceedings, NLRB
proceedings, grievances, and all other claims and causes of
actions relating to the Retiree Health Benefits from the
beginning of time through the date of the settlement.
A full-text copy of the Settlement is available for free at:
http://researcharchives.com/t/s?1074
The Settlement, which represents an extremely favorable outcome
to a difficult, but necessary negotiating process, resolves all
present or future claims or causes of action of the Union
Retirees, eliminates the need for arbitration and litigation
proceedings, and will result in substantial and immediate cash
savings, Mr. Sathy says.
Unless written objections are received by August 25, 2006, the
Debtors' request will be deemed granted without a hearing.
About Tower Automotive
Headquartered in Grand Rapids, Michigan, Tower Automotive, Inc.
-- http://www.towerautomotive.com/-- is a global designer and
producer of vehicle structural components and assemblies used by
every major automotive original equipment manufacturer, including
BMW, DaimlerChrysler, Fiat, Ford, GM, Honda, Hyundai/Kia, Nissan,
Toyota, Volkswagen and Volvo. Products include body structures
and assemblies, lower vehicle frames and structures, chassis
modules and systems, and suspension components. The Company and
25 of its debtor-affiliates filed voluntary chapter 11 petitions
on Feb. 2, 2005 (Bankr. S.D.N.Y. Case No. 05-10576 through
05-10601). James H.M. Sprayregen, Esq., Ryan B. Bennett, Esq.,
Anup Sathy, Esq., Jason D. Horwitz, Esq., and Ross M. Kwasteniet,
Esq., at Kirkland & Ellis, LLP, represent the Debtors in their
restructuring efforts. Ira S. Dizengoff, Esq., at Akin Gump
Strauss Hauer & Feld LLP, represents the Official Committee of
Unsecured Creditors. When the Debtors filed for protection from
their creditors, they listed $787,948,000 in total assets and
$1,306,949,000 in total debts. (Tower Automotive Bankruptcy News,
Issue No. 41; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
TOWER AUTOMOTIVE: Unions Approve New Labor Agreements
-----------------------------------------------------
Tower Automotive Inc. ratified contract agreements with the United
Auto Workers union and the United Steelworkers union covering
1,000 employees at Tower facilities in Michigan, Ohio and
Tennessee, on Aug. 25, 2006. The agreements, when combined with
agreements reached earlier with Tower's Milwaukee unions and its
retirees, along with the closing of the Greenville, Michigan,
plant later this year, will result in total annual cost savings of
more than $31 million. Achieving a reduction in labor costs has
been a key element in Tower's plan to improve its competitiveness
and allow it to emerge from Chapter 11 bankruptcy. The agreements
must be approved by the U.S. Bankruptcy Court overseeing Tower's
Chapter 11 case in order to take effect.
As part of the contracts, Tower plants in Elkton, Michigan, and
Bluffton, Ohio, agreed to increased health care contributions,
labor wage reductions and fewer holidays.
"The issues addressed in this agreement, while very difficult,
were strong and necessary steps for these plants to assure their
future viability," said Kathleen Ligocki, president and chief
executive officer of Tower. "The result will give us cost savings
critical to Tower's reorganization plan. I want to thank our
Tower colleagues for all their hard work and dedication that are
so important to our reorganization process."
Approval of the contract by the Bankruptcy Court will keep Tower
on track to file its Plan of Reorganization later this year. The
company intends to emerge from Chapter 11 before the end of 2006.
About Tower Automotive
Headquartered in Grand Rapids, Michigan, Tower Automotive, Inc.
(OTC Bulletin Board: TWRAQ.PK) -- http://www.towerautomotive.com/
-- is a global designer and producer of vehicle structural
components and assemblies used by every major automotive original
equipment manufacturer, including BMW, DaimlerChrysler, Fiat,
Ford, GM, Honda, Hyundai/Kia, Nissan, Toyota, Volkswagen and
Volvo. Products include body structures and assemblies, lower
vehicle frames and structures, chassis modules and systems, and
suspension components. The Company and 25 of its debtor-
affiliates filed voluntary chapter 11 petitions on Feb. 2, 2005
(Bankr. S.D.N.Y. Case No. 05-10576 through 05-10601). James H.M.
Sprayregen, Esq., Ryan B. Bennett, Esq., Anup Sathy, Esq., Jason
D. Horwitz, Esq., and Ross M. Kwasteniet, Esq., at Kirkland &
Ellis, LLP, represent the Debtors in their restructuring efforts.
Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld LLP,
represents the Official Committee of Unsecured Creditors. When
the Debtors filed for protection from their creditors, they listed
$787,948,000 in total assets and $1,306,949,000 in total debts.
TOWER RECORDS: Organizational Meeting Set at 10:00 a.m. Tomorrow
----------------------------------------------------------------
The U.S. Trustee for Region 3 will hold an organizational meeting
to appoint an official committee of unsecured creditors in MTS,
Inc., dba Tower Records' and its debtor-affiliates' chapter 11
cases at 10:00 a.m., tomorrow, Aug. 29, 2006, at Room 5209, J.
Caleb Boggs Federal Building, 844 King Street in Wilmington,
Delaware.
The sole purpose of the meeting will be to form a committee or
committees of unsecured creditors in the Debtors' cases. The
meeting is not the meeting of creditors pursuant to Section 341
of the Bankruptcy Code. However, a representative of the Debtors
will attend and provide background information regarding the
cases.
Creditors interested in serving on a Committee should complete
and return to the U.S. Trustee a statement indicating their
willingness to serve on an official committee.
Official creditors' committees, constituted under Section 1102 of
the Bankruptcy Code, ordinarily consist of the seven largest
creditors who are willing to serve on a committee. In some
Chapter 11 cases, the U.S. Trustee is persuaded to appoint
multiple creditors' committees.
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 that the
reorganization of the Debtors is impossible, the Committee will
urge the Bankruptcy Court to convert the Chapter 11 cases to a
liquidation proceeding.
Headquartered in West Sacramento, California, MTS, Inc., dba Tower
Records -- http://www.towerrecords.com/-- is a retailer of music
in the U.S., with nearly 100 company-owned music, book, and video
stores. The Company and seven of its affiliates filed for chapter
11 protection on Aug. 20, 2006 (Bankr. D. Del. Case Nos. 06-10886
through 06-10893). Mark D. Collins, Esq., at Richards Layton &
Finger, represents the Debtors. When the Debtors filed for
protection from their creditors, they estimated assets and debts
of more than $100 million.
The Company and its affiliates previously filed for chapter 11
protection on Feb. 9, 2004 (Bankr. D. Del. Lead Case No.
04-10394).
UNIVERSAL COMMS: Earns $1.4 Million in Quarter Ended June 30
------------------------------------------------------------
Universal Communications Systems, Inc., earned $1,499,535 of net
income on 254,227 of revenue for the quarter ended June 30, 2006,
compared to a $911,152 net loss for the same period in the prior
year.
Net income in the current quarter includes a $946,794 gain on the
write off of liabilities from discontinued operations of 2001 and
a $1,375,742 gain on sale of property & equipment.
At June 30, 2006, the Company's balance sheet showed $2,491,637 in
total assets and $4,045,767 in total liabilities, resulting in a
stockholders' deficit of $1,554,130. The Company recorded a
$2,452,598 stockholders' deficit at Sept. 30, 2005.
Universal Communications disclosed in its latest Form 10-Q filed
with the Securities and Exchange Commission that its $21,640 cash
position from continuing operations at June 30, 2006, is not
sufficient to provide for working capital needs.
The Company says it will rely on private placements of common
stock for short term funding needs. According to the Company, the
recently completed private placement funding of $1,250,000,
combined with anticipate sales of $2 million in Air Water products
and $2 million in Solar Style products over the next twelve months
would be sufficient to provide for its cash needs.
A full-text copy of the Company's quarterly report is available
for free at http://researcharchives.com/t/s?1068
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.
URBAN HOTELS: Plan Confirmation Hearing Moved to August 30
----------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
moved the hearing to consider confirmation of Urban Hotels Inc.'s
First Amended Plan of Reorganization to Aug. 30, 2006. The
confirmation hearing was first scheduled for Aug. 9, 2006.
AN Capital is the sole objector to the Plan, despite recovering
the principal amount of its loan to the Debtor. AN Capital wants
the Debtor to also pay its $392,000 attorney's fees.
The Debtor plans to fund the Plan from the net proceeds of
the $25.25-million sale of its hotel to EBUS, Inc. The
$13.559 million net proceeds have been placed in escrow in an
account at the City National Bank.
Administrative claims amounting to $221,000 will be paid on the
Plan's effective date.
First Credit Bank holds on escrow a $10-million payment from the
Debtor to satisfy its $10.515 million claim.
The Debtor is still disputing AN Capital's $4.345-million and
Specialty Finance's $2.711-million claims.
The county of Los Angeles' $1.089-million property tax claim has
already been paid.
Holders of unsecured non-priority claims totaling $1.558 million
will be paid on the Plan's effective date.
The insiders' $1.882-million claim and Roshan Bhakta's $500,000
claim will be paid in full on the Plan's effective date.
A copy of the redlined Court-approved First Amended Disclosure
Statement is available for a fee at:
http://www.researcharchives.com/bin/download?id=060825213156
Headquartered in Culver City, California, Urban Hotels Inc.,
operates Lax Plaza Hotel. The Company filed for chapter 11
protection on Nov. 29, 2005 (Bankr. C.D. Calif. Case No.
05-50140), to stop a foreclosure sale by AN Capital, Inc.
M. Jonathan Hayes, Esq., of Woodland Hills, California, represents
the Debtor in its restructuring efforts. Daniel H. Reiss, Esq.,
represents the Official Committee of Unsecured Creditors. When
the Debtor filed for protection from its creditors, it listed
$23,000,000 in assets and $20,000,000 in debts.
USG CORP: Settling with Asbestos Property Damage Claimants
----------------------------------------------------------
USG Corp. reports in a regulatory filing with the U.S. Securities
and Exchange Commission that they have reached agreements in
principle to settle asbestos-related property damage claims.
USG's confirmed Plan of Reorganization does not create a trust
for asbestos property damage claims. The Plan provides that
disputed asbestos property damage claims timely filed in the
bankruptcy proceeding will be resolved either in the Bankruptcy
Court or other court, where appropriate.
If it is determined that any amounts are owed for asbestos
property damage claims, the Plan provides that the Debtors will
pay amounts in full, with interest where required. Any settled
asbestos property damage claims will also be paid in full.
As a result of the bar date for filing asbestos property damage
claims in Debtors' Chapter 11 proceedings,
Approximately 1,400 asbestos property damage claims were filed by
the deadline for filing PD claims, and more than 70 PD claims
were filed after the bar date. USG reports that more than 950
claims were disallowed or withdrawn, leaving approximately 520
claims pending.
USG says three PD claims remain unresolved.
With respect to the settled claims, USG says there can be no
assurance that all agreements in principle will become final
agreements.
In the second quarter of 2006, USG reversed $27,000,000 of a
reserve for asbestos-related claims. This reversal was based on
USG's evaluation of the asbestos property damage settlements it
has reached in principle and the remaining unresolved asbestos
property damage claims.
USG relates that the estimated cost of resolving the pending PD
claims, including both the unresolved and the settled but unpaid
claims, is reflected in its $876,000,000 accrued expenses at
June 30, 2006.
About USG
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. 119; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000)
USG CORP: NYSE Delists Pref. Stock Rights & Berkshire Ups Stake
---------------------------------------------------------------
The New York Stock Exchange advises the U.S. Securities and
Exchange Commission that it has removed from listing and
registration the rights to purchase USG Corp. preferred stock, at
the opening of business on August 21, 2006, pursuant to 17 CFR
240.12d2-2(a)(4).
NYSE Director Paras Madho explains that all rights pertaining to
the entire class of preferred stock purchase rights were
extinguished on July 1, 2006. The Rights expired and became null
and void on July 1.
Trading of the preferred stock purchase rights was on July 3,
2006.
As reported in the Troubled Company Reporter on Aug. 4, 2006, the
Company disclosed that 37.95 million rights were exercised in the
company's recently concluded rights offering.
The company used a portion of the $1.8 billion gross proceeds from
the rights offering and the Berkshire Hathaway backstop commitment
to repay prepetition bank debt and senior notes, plus accrued
interest, as contemplated in USG's Plan of Reorganization.
Remaining proceeds, together with other available funds, will be
used as required to make the balance of the payments contemplated
by USG's Plan of Reorganization and for general corporate
purposes.
Berkshire Raises Equity Stake
In a Form 4 filing with the U.S. Securities and Exchange
Commission, Berkshire Hathaway Inc. reports that it now owns
15,569,092 shares, or 17.3%, of the Company's common stock.
From August 2 through August 9, 2006, Berkshire Hathaway's
National Indemnity Company acquired 1,390,600 shares of USG
Common Stock through open market purchases. On August 21, 2006,
NICO acquired another 567,218 shares.
Berkshire Hathaway received 6.97 million shares of USG stock on
August 2, 2006, as part of USG's rights offering and Berkshire's
commitment to purchase all of the shares offered pursuant to the
Rights Offering that were not issued pursuant to the exercise of
rights.
Those shares, USG reported in a Form 10-Q filing, include
6.5 million shares underlying rights distributed to Berkshire
Hathaway in connection with the shares it beneficially owned on
the record date and 470,000 shares underlying rights distributed
to other stockholders that were not exercised in the Rights
Offering.
NICO is a wholly owned subsidiary of OBH Inc., which is a wholly
owned subsidiary of Berkshire Hathaway.
Marc D. Hamburg, vice president of Berkshire, says the Shares
were acquired using internally generated funds of NICO for
$63,560,234 in the aggregate. No funds or consideration were
borrowed or obtained for purposes of acquiring the Shares.
As of August 2, 2006, 89,849,117 shares of USG's common stock
were outstanding.
About USG
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. 119; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000)
VARIG S.A.: Domestic Market Share Slips to 3.54% in July
--------------------------------------------------------
VARIG, S.A.'s domestic market share slid to 3.54% in July 2006,
after it suspended routes, Reuters reports citing data from
Brazil's National Civil Aviation Authority.
Domestic Market Share
---------------------
Company July 2006 July 2005
------- --------- ---------
TAM 51.22% 41.77%
Gol 36.00% 24.71%
BRA 4.38% 6.37%
VARIG 3.54% 24.79%
A decade back, VARIG controlled nearly 50% of the local market,
Reuters notes.
Additionally, VARIG's hold of the international routes slipped to
29.96% in July 2006, Reuters says.
International Market
---------------------
Company July 2006 July 2005
------- --------- ---------
TAM 52.64% 20.73%
VARIG 29.96% 74.84%
Gol 10.92% 2.00%
VARIG is currently flying 12 planes and a portion of its original
routes, The Associated Press reports. VARIG currently operates
flights in seven Brazilian cities -- Sao Paulo, Rio de Janeiro,
Porto Alegre, Fortaleza, Salvador, Recife and Manaus -- and in
Frankfurt, Germany; Buenos Aires, Argentina; Miami and New York,
in the U.S.
VARIG plans to expand its fleet to 45 planes by the end of the
year and up to 75 aircraft by 2008.
VARIG announced late in July that it would lay off 5,500
employees -- about 60% of its workforce in Brazil -- as part of
its judicial recovery plan. The airline said it would gradually
rehire the dismissed workers once it resumes growth.
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. 30; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
VARIG S.A.: ILFC Continues to Harp over Unpaid Aircraft Leases
--------------------------------------------------------------
International Lease Finance Corporation is currently seeking the
return of 11 leased aircraft from VARIG S.A.
ILFC relates in a regulatory filing with the U.S. Securities and
Exchange Commission that if VARIG returns the aircraft, ILFC will
be required to remarket those aircraft and may incur costs related
to re-leasing those aircraft.
"VARIG is still operating but is not currently meeting all rental
obligations under the leases," Alan H. Lund, ILFC director, vice
chairman, chief financial officer and chief accounting officer,
says.
ILFC has asked the U.S. Bankruptcy Court for the Southern District
of New York to enforce a stipulation it signed with VARIG to keep
the airline current on the leases or return the aircraft.
ILFC recorded $13,100,000 in revenues from rentals of flight
equipment for the quarter ended March 31, 2006, from VARIG.
Mr. Lund reports that ILFC took an $8,800,000 charge in the first
quarter of 2006 related to receivables of restructured rents from
VARIG. In 2005, ILFC took a $6,700,000 charge related to
receivables from VARIG.
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. 30; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
VESTA INSURANCE: Moves to Reject Four Real Property Leases
----------------------------------------------------------
Debtor J. Gordon Gaines Inc. asks the U.S. Bankruptcy Court for
the Northern District of Alabama for authority to reject four
unexpired non-residential real property leases, effective
Aug. 17, 2006.
The Leases relate to locations at which the Debtor ceased
operations prior to its bankruptcy filing and has vacated or
intends to vacate as soon as possible:
Premises Lease Description Counterparty
-------- ----------------- ------------
Pacific Plaza Office Building A-P Knight, LP
14100 San Pedro Lease dated May 2, (landlord)
Avenue, Suite 510 2005
San Antonio, TX MSB Pacific Plaza LP
(assignee of
landlord)
5788 Widewaters Office Lease 5788 Widewaters
Parkway dated April 28, Company (landlord)
DeWitt, NY 13214 2005
Hub Properties Trust
(assignee of
landlord)
One South Wacker Office Lease Metropolitan Life
Drive, Suite 2710 dated February 1, Insurance Company
Chicago, IL 60606 2002 (landlord)
Sublease Discover Re
Agreement dated Managers, Inc.
December 22, 2003 (tenant)
By rejecting the Leases, Gaines expects to reduce postpetition
administrative costs. According to Gaines, the Leases are costly
to maintain and unnecessary to its operations and business.
Gaines tells the Court that it has reviewed each of the Leases and
has determined that those Leases do not have any net value to its
estate.
About Vesta Insurance
Headquartered in Birmingham, Alabama, Vesta Insurance Group, Inc.
(Other OTC: VTAI.PK) -- http://www.vesta.com/-- is a holding
company for a group of insurance companies that primarily offer
property insurance in targeted states.
Wyatt R. Haskell, Luther S. Pate, UV, and Costa Brava Partnership
III, L.P., filed an involuntary chapter 7 petition against the
Company on July 18, 2006 (Bankr. N.D. Ala. Case No. 06-02517).
The case was converted to a voluntary chapter 11 case on Aug. 8,
2006 (Bankr. N.D. Ala. Case No. 06-02517). Eric W. Anderson,
Esq., at Parker Hudson Rainer & Dobbs, LLP, represents the Debtor.
R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker,
LLC, represents the petitioning creditors. At Dec. 31, 2004,
Vesta Insurance's balance sheet showed $1,764,247,000 in total
assets and $1,810,022,000 in total liabilities resulting in a
$45,775,000 stockholders' deficit.
J. Gordon Gaines, Inc., is a Vesta Insurance-owned unit that
manages the company's numerous insurance subsidiaries and employs
the headquarters workers. The Company filed for chapter 11
protection on Aug. 7, 2006 (Bankr. N.D. Ala. Case No. 06-02808).
Eric W. Anderson, Esq., at Parker Hudson Rainer & Dobbs, LLP,
represent the Debtor in its restructuring efforts. 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.
On Aug. 1, 2006, the District Court of Travis County, Texas
entered the Order appointing the Texas Commissioner of Insurance
as Liquidator of Vesta Insurance's Texas-domiciled subsidiaries:
Vesta Fire Insurance Corporation; The Shelby Insurance Company;
Shelby Casualty Insurance Corporation; Texas Select Lloyds
Insurance Company; and Select Insurance Services, Inc. (Vesta
Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
VESTA INSURANCE: Wants to Transfer Accounts to Texas Commissioner
-----------------------------------------------------------------
Debtor J. Gordon Gaines Inc. asks the U.S. Bankruptcy Court for
the Northern District of Alabama for authority to transfer claims
accounts to the Texas Commissioner of Insurance and authorize the
Texas Commissioner to continue to use the claims accounts for a
reasonable period of time pending the transfer for purpose of
processing the payment of insurance claims, which have been
submitted and approved for payment prior to the Debtor's
bankruptcy filing.
Before Gaines Inc. filed for bankruptcy, as part of the
administrative services the Debtor provides to Vesta Insurance
Group, the Debtor maintained accounts into which funds were
deposited for the payment of insurance claims approved for
payment by the insurance subsidiaries of Vesta Fire Insurance
Corporation. At the direction of the insurance subsidiaries,
Gaines disbursed funds from the Claims Accounts to the insureds
on their insurance claims:
Bank Name Account Title Account Number
--------- ------------- --------------
Compass Bank Control Account 00082-2945-7
Compass Bank General Fund ZBA 00001-3213-7
Wachovia/South Trust W.A.S. Claim Acct ZBA 2079900523522
AmSouth ACAP ZBA Acct. 0010023062
AmSouth SIS Refund & Comm 17982189
AmSouth SIS Claims 17982200
Compass Bank Claims Account ZBA 00001-3215-9
The Texas Commissioner continued to use the Claims Accounts for
the deposit and disbursement of funds and payment of insurance
claims prior to August 7, 2006.
The operating guidelines established by the Bankruptcy
Administrator for the Northern District of Alabama for debtors-
in-possession requires the establishment of an entirely new
mechanism for the payment of these insurance claims.
However, Rufus T. Dorsey, IV, Esq., at Parker, Hudson, Rainer &
Dobbs, LLP, in Atlanta, Georgia, complains that it will be
expensive and time-consuming, and may delay payment of these
insurance claims to the detriment of the insureds.
None of the funds deposited in the Claims Accounts and disbursed
to insurance claimants are property of the Debtor or its estate,
Mr. Dorsey points out.
About Vesta Insurance
Headquartered in Birmingham, Alabama, Vesta Insurance Group, Inc.
(Other OTC: VTAI.PK) -- http://www.vesta.com/-- is a holding
company for a group of insurance companies that primarily offer
property insurance in targeted states.
Wyatt R. Haskell, Luther S. Pate, UV, and Costa Brava Partnership
III, L.P., filed an involuntary chapter 7 petition against the
Company on July 18, 2006 (Bankr. N.D. Ala. Case No. 06-02517).
The case was converted to a voluntary chapter 11 case on Aug. 8,
2006 (Bankr. N.D. Ala. Case No. 06-02517). Eric W. Anderson,
Esq., at Parker Hudson Rainer & Dobbs, LLP, represents the Debtor.
R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker,
LLC, represents the petitioning creditors. At Dec. 31, 2004,
Vesta Insurance's balance sheet showed $1,764,247,000 in total
assets and $1,810,022,000 in total liabilities resulting in a
$45,775,000 stockholders' deficit.
J. Gordon Gaines, Inc., is a Vesta Insurance-owned unit that
manages the company's numerous insurance subsidiaries and employs
the headquarters workers. The Company filed for chapter 11
protection on Aug. 7, 2006 (Bankr. N.D. Ala. Case No. 06-02808).
Eric W. Anderson, Esq., at Parker Hudson Rainer & Dobbs, LLP,
represent the Debtor in its restructuring efforts. 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.
On Aug. 1, 2006, the District Court of Travis County, Texas
entered the Order appointing the Texas Commissioner of Insurance
as Liquidator of Vesta Insurance's Texas-domiciled subsidiaries:
Vesta Fire Insurance Corporation; The Shelby Insurance Company;
Shelby Casualty Insurance Corporation; Texas Select Lloyds
Insurance Company; and Select Insurance Services, Inc. (Vesta
Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
WEST VIRGINIA: Section 341(a) Meeting Set for September 19
----------------------------------------------------------
The U.S. Trustee of Region 4 will convene a meeting of West
Virginia Consumers for Justice's creditors at 10:00 a.m., on
Sept. 19, 2006, in Room 2009, Robert C. Byrd Courthouse at
300 Virginia Street East in Charleston, West Virgina.
This is the first meeting of creditors required under
Seciton 341(a) of the Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible officer of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Headquartered in Charleston, West Virginia, West Virginia
Consumers for Justice files its chapter 11 protection on
Aug. 10, 2006 (Bankr. S.D. W. Va. Case No 06-20478). Joseph
W. Caldwell, Esq., at Caldwell & Riffee represents the Debtor
in its restructuring efforts. West Virginia estimated its
assets at $1,534 debts at $300,062,129 when it filed for
protection from its creditors.
WINN-DIXIE: Wants Court to Approve Brookshire Grocery Stipulation
-----------------------------------------------------------------
Winn-Dixie Stores, Inc., and its debtor-affiliates and Brookshire
Grocery Company ask the U.S. Bankruptcy Court for the Middle
District of Florida to approve their stipulation.
Winn-Dixie Stores, Inc., and its debtor-affiliates and Brookshire
Grocery Company are parties to a lease for Store No. 2435. A
July 13, 2006, Court order authorized the Debtors to reject the
Lease.
On July 24, 2006, Brookshire filed proofs of claim against
Winn-Dixie Stores, Inc., and Winn-Dixie Montgomery, Inc., for
rejection damages. Both claims assert $456,100.
D.J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in
New York, relates that the Debtors and Brookshire have resolved
the allowance and treatment of the claims under the proposed
Joint Plan of Reorganization. The parties agree that:
(1) the Winn-Dixie Stores Claim will be allowed as a Class 13
Landlord Claim for $456,100;
(2) upon the effective of the Plan incorporating the
substantive consolidation compromise, the Winn-Dixie
Montgomery Claim will be deemed disallowed and expunged
without need for further Court order; and
(3) if the Plan is not confirmed or the effective date does
not occur, the two claims will not be disallowed, expunged
or otherwise prejudiced.
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 527 stores in Florida,
Alabama, Louisiana, Georgia, and Mississippi. 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. 50; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
WINN-DIXIE: Wants to Reject Store No. 1059's Lease as of Aug. 31
----------------------------------------------------------------
Winn-Dixie Stores, Inc., and its debtor-affiliates seek authority
from the U.S. Bankruptcy Court for the Middle District of Florida
to reject the Store No. 1059 Lease as of Aug. 31, 2006. They also
ask the Court to set a bar date for Windward to file any rejection
damage claim arising in connection with the Lease.
Winn-Dixie Stores, Inc., and Windward Partners IV, LP, are
parties to a lease dated July 29, 1994, for the Debtors' Store
No. 1059 located in Taylors, South Carolina. Pursuant to the
Lease, Winn-Dixie pays Windward $422,000 in rent each year.
In August 2003, Winn-Dixie subleased the Premises to Pro-Fit
Management, Inc. Under the Sublease, Pro-Fit is required to pay
Winn-Dixie monthly rent at graduated rates between $100,000 and
$250,000 a year.
After Winn-Dixie's bankruptcy filing, Pro-Fit failed to pay the
rent so Winn-Dixie terminated the Sublease effective August 8,
2006. However, Pro-Fit remains in possession of the Premises.
According to Cynthia C. Jackson, Esq., at Smith Hulsey & Busey,
in Jacksonville, Florida, the Debtors no longer need the store
and that even when paid by Pro-Fit, the rent is not sufficient to
cover the payments due under the Lease. Rejection of the Lease
will save the Debtors approximately $422,000 a year.
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 527 stores in Florida,
Alabama, Louisiana, Georgia, and Mississippi. 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. 50; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
WORLD HEART: Posts $3.9 Million Net Loss in Second Quarter of 2006
------------------------------------------------------------------
World Heart Corp. filed its second quarter financial statements
for the three months ended June 30, 2006, with the Securities and
Exchange Commission on Aug. 11, 2006.
Revenues for the second quarter ended June 30, 2006, were
$3 million, an increase of 22%, compared with revenues of $2.4
million reported in the second quarter ended June 30, 2005. For
the first six months of 2006, revenues were $6.3 million, an
increase of 7%, compared with revenues of $5.9 million for the
first six months of 2005.
The net loss for the 2006 second quarter was $3.9 million compared
with a net loss of $4.6 million in the prior year's second
quarter. The net loss for the six-month period ended
June 30, 2006, was $7.3 million compared with $8.6 million for the
six-month period ended June 30, 2005.
WorldHeart's cash and cash equivalents were $4.6 million at
June 30, 2006, a decrease of $2.7 million from March 31, 2006, and
a decrease of $6.1 million from Dec. 31, 2005. During the first
half of 2006, cash usage from operating activities was
$6.0 million. This represents a reduction of approximately
$1.4 million per quarter from average levels of cash usage in the
last two quarters of 2005.
The Company continues to aggressively explore, with the assistance
of investment banking advisors, all financing and strategic
alternatives, including equity financing or a possible sale of the
Company. The Company is taking steps to conserve cash pending a
definitive outcome of these activities. These measures include
reducing raw material purchases and manufacturing activities to
better align inventories with current commercial shipments and
curtailing discretionary spending.
For the three months ended June 30, 2006, gross margin as a
percent of revenue was 36%, compared with 13% for the three months
ended June 30, 2005. For the six months ended June 30, 2006,
gross margin as a percent of revenue was 47%, compared with 27%
for the six months ended June 30, 2005.
Significantly lower cost of goods sold during this year's three
and six month periods was due principally to more favorable
manufacturing variances when compared with the same periods last
year. In addition, there was a higher margin other-product
revenue mix this year.
Selling, general, and administrative expenses for the three months
ended June 30, 2006, were $2.3 million, a decrease of $700,000, or
25%, from the same period in 2005. For the six months ended
June 30, 2006, selling, general, and administrative expenses were
$4.7 million, a decrease of $1.7 million, or 27%, from the six
months ended June 30, 2005. These decreases were due to reduced
selling and administrative costs, including savings realized from
the consolidation of North American Novacor operations completed
in June 2005.
Research and development expenses for the three months ended
June 30, 2006, were $2.8 million, an increase of $1.5 million,
compared with the three months ended June 30, 2005. Research and
development expenses for the six months ended June 30, 2006, were
$5.7 million, an increase of $3.2 million, compared with the same
period last year. These increases were primarily due to the
MedQuest acquisition in July 2005 and the related development
costs of the WorldHeart Rotary ventricular assist device.
At June 30, 2006, the Company's balance sheet showed
$18.687 million in total assets, $5.221 million in total
liabilities, and $13.465 million in shareholders' equity.
Full-text copies of the Company's second quarter financials are
available for free at http://ResearchArchives.com/t/s?1070
Going Concern Doubt
As reported in the Troubled Company Reporter on May 12, 2006,
PricewaterhouseCoopers LLP, World Heart Corporation's auditor,
expressed substantial doubt about the Company's ability to
continue as a going concern after auditing the Company's financial
statements for the year ending Dec. 31, 2005. PwC pointed to the
Company's recurring losses.
About World Heart
Headquartered in Oakland, California, World Heart Corporation
(NASDAQ: WHRT, TSX: WHT) -- http://www.worldheart.com/--
develops, produces and sells ventricular assist devices. VADs are
mechanical assist devices that supplement the circulatory function
of the heart by re-routing blood flow through a mechanical pump
allowing for the restoration of normal blood circulation.
* BOND PRICING: For the week of August 21 -- August 25, 2006
------------------------------------------------------------
Issuer Coupon Maturity Price
------ ------ -------- -----
ABC Rail Product 10.500% 01/15/04 1
ABC Rail Product 10.500% 12/31/04 1
Adelphia Comm. 3.250% 05/01/21 1
Adelphia Comm. 6.000% 02/15/06 0
Adelphia Comm. 7.500% 01/15/04 58
Adelphia Comm. 7.750% 01/15/09 59
Adelphia Comm. 7.875% 05/01/09 59
Adelphia Comm. 8.125% 07/15/03 58
Adelphia Comm. 8.375% 02/01/08 60
Adelphia Comm. 9.250% 10/01/02 60
Adelphia Comm. 9.375% 11/15/09 60
Adelphia Comm. 9.500% 02/15/04 54
Adelphia Comm. 9.875% 03/01/05 60
Adelphia Comm. 9.875% 03/01/07 61
Adelphia Comm. 10.250% 06/15/11 63
Adelphia Comm. 10.250% 11/01/06 60
Adelphia Comm. 10.500% 07/15/04 58
Adelphia Comm. 10.875% 10/01/10 60
Allegiance Tel. 11.750% 02/15/08 47
Allegiance Tel. 12.875% 05/15/08 46
Amer & Forgn Pwr 5.000% 03/01/30 67
Amer Color Graph 10.000% 06/15/10 70
Ames Dept. Stores 10.000% 04/15/06 0
Antigenics 5.250% 02/01/25 64
Anvil Knitwear 10.875% 03/15/07 69
Armstrong World 6.350% 08/15/03 66
Armstrong World 6.500% 08/15/05 66
Armstrong World 7.450% 05/15/29 65
Armstrong World 9.000% 06/15/04 66
At Home Corp. 4.750% 12/15/06 0
ATA Holdings 12.125% 06/15/10 2
Atherogenics Inc 1.500% 02/01/12 72
Autocam Corp. 10.875% 06/15/14 61
Avado Brands Inc 11.750% 06/15/09 1
Bank New England 8.750% 04/01/99 5
Bank New England 9.500% 02/15/96 11
BBN Corp 6.000% 04/01/12 0
Big V Supermarkets 11.000% 02/15/04 0
Budget Group Inc 9.125% 04/01/06 0
Burlington North 3.200% 01/01/45 56
Calpine Corp 4.000% 12/26/06 25
Calpine Corp 4.750% 11/15/23 49
Calpine Corp 4.750% 11/15/23 50
Calpine Corp 6.000% 09/30/14 40
Calpine Corp 7.625% 04/15/06 74
Calpine Corp 7.750% 04/15/09 75
Calpine Corp 7.750% 06/01/15 38
Calpine Corp 7.875% 04/01/08 74
Calpine Corp 8.500% 02/15/11 51
Calpine Corp 8.625% 08/15/10 51
Calpine Corp 8.750% 07/15/07 74
Calpine Corp 10.500% 05/15/06 75
Charter Comm Hld 10.000% 05/15/11 70
Charter Comm Hld 11.125% 01/15/11 74
CIH 9.920% 04/01/14 64
CIH 10.000% 05/15/14 64
CIH 11.125% 01/15/14 67
Collins & Aikman 10.750% 12/31/11 7
Color Tile Inc 10.750% 12/15/01 0
Columbia/HCA 7.500% 11/15/95 73
Comcast Corp 2.000% 10/15/29 40
Cooper Standard 8.375% 12/15/14 75
Cray Research 6.125% 02/01/11 8
Curagen Corp 4.000% 02/15/11 73
Dal-Dflt09/05 9.000% 05/15/16 23
Dana Corp 5.850% 01/15/15 71
Dana Corp 7.000% 03/01/29 74
Decode Genetics 3.500% 04/15/11 75
Delco Remy Intl 9.375% 04/15/12 58
Delco Remy Intl 11.000% 05/01/09 61
Delphi Trust II 6.197% 11/15/33 67
Delta Air Lines 2.875% 02/18/24 24
Delta Air Lines 7.541% 10/11/11 38
Delta Air Lines 7.700% 12/15/05 23
Delta Air Lines 7.900% 12/15/09 24
Delta Air Lines 8.000% 06/03/23 25
Delta Air Lines 8.270% 09/23/07 75
Delta Air Lines 8.300% 12/15/29 24
Delta Air Lines 8.540% 01/02/07 73
Delta Air Lines 9.200% 09/23/14 73
Delta Air Lines 9.250% 03/15/22 23
Delta Air Lines 9.375% 09/11/07 63
Delta Air Lines 9.750% 05/15/21 24
Delta Air Lines 10.000% 06/01/11 58
Delta Air Lines 10.000% 06/05/13 74
Delta Air Lines 10.000% 08/15/08 24
Delta Air Lines 10.060% 01/02/16 73
Delta Air Lines 10.080% 06/16/07 65
Delta Air Lines 10.125% 05/15/10 25
Delta Air Lines 10.375% 02/01/11 24
Delta Air Lines 10.375% 12/15/22 24
Deutsche Bank NY 8.500% 11/15/16 68
Dov Pharmaceutic 2.500% 01/15/25 53
Dura Operating 8.625% 04/15/12 73
Dura Operating 9.000% 05/01/09 16
Dura Operating 9.000% 05/01/09 59
Eagle-Picher Inc 9.750% 09/01/13 74
Encysive Pharmac 2.500% 03/15/12 73
Epix Medical Inc. 3.000% 06/15/24 70
Fedders North AM 9.875% 03/01/14 71
Federal-Mogul Co. 7.375% 01/15/06 57
Federal-Mogul Co. 7.500% 01/15/09 57
Federal-Mogul Co. 8.160% 03/06/03 51
Federal-Mogul Co. 8.330% 11/15/01 58
Federal-Mogul Co. 8.370% 11/15/01 53
Federal-Mogul Co. 8.800% 04/15/07 56
Finova Group 7.500% 11/15/09 31
Ford Motor Co 6.500% 08/01/18 73
Ford Motor Co 6.625% 02/15/28 72
Ford Motor Co 7.125% 11/15/25 72
Ford Motor Co 7.400% 11/01/46 72
Ford Motor Co 7.500% 08/01/26 75
Ford Motor Co 7.700% 05/15/97 72
Ford Motor Co 7.750% 06/15/43 73
Ford Motor Cred 6.200% 03/20/15 75
GB Property Fndg 11.000% 09/29/05 51
Graftech Intl 1.625% 01/15/24 72
Gulf Mobile Ohio 5.000% 12/01/56 73
Gulf States Stl 13.500% 04/15/03 0
HNG Internorth 9.625% 03/15/06 36
Home Prod Intl 9.625% 05/15/08 67
Inland Fiber 9.625% 11/15/07 66
Insight Health 9.875% 11/01/11 48
Iridium LLC/CAP 10.875% 07/15/05 24
Iridium LLC/CAP 11.250% 07/15/05 24
Iridium LLC/CAP 13.000% 07/15/05 26
Iridium LLC/CAP 14.000% 07/15/05 24
Isolagen Inc. 3.500% 11/01/24 72
K&F Industries 9.625% 12/15/10 70
Kaiser Aluminum 9.875% 02/15/02 49
Kaiser Aluminum 12.750% 02/01/03 7
Kellstrom Inds 5.500% 06/15/03 0
Kmart Corp 8.540% 01/02/15 28
Kmart Corp 8.990% 07/05/10 4
Kmart Funding 8.800% 07/01/10 30
Liberty Media 3.750% 02/15/30 63
Liberty Media 4.000% 11/15/29 63
Lifecare Holding 9.250% 08/15/13 75
Macsaver Financl 7.600% 08/01/07 3
Macsaver Financl 7.875% 08/01/03 0
Merisant Co 9.500% 07/15/13 66
Merrill Lynch 10.000% 08/15/12 72
MHS Holdings Co 16.875% 09/22/04 0
Movie Gallery 11.000% 05/01/12 66
MSX Int'l Inc. 11.375% 01/15/08 70
Muzak LLC 9.875% 03/15/09 56
New Orl Grt N RR 5.000% 07/01/32 67
Northern Pacific RY 3.000% 01/01/47 56
Northern Pacific RY 3.000% 01/01/47 56
Northwest Airlines 6.625% 05/15/23 47
Northwest Airlines 7.248% 01/02/12 20
Northwest Airlines 7.625% 11/15/23 46
Northwest Airlines 7.875% 03/15/08 47
Northwest Airlines 8.700% 03/15/07 46
Northwest Airlines 8.875% 06/01/06 46
Northwest Airlines 9.179% 04/01/10 23
Northwest Airlines 9.875% 03/15/07 48
Northwest Airlines 10.000% 02/01/09 44
Northwest Stl&Wir 9.500% 06/15/01 0
NTK Holdings Inc 10.750% 03/01/14 67
Oakwood Homes 8.125% 03/01/09 7
Oscient Pharm 3.500% 04/15/11 68
Osu-Dflt10/05 13.375% 10/15/09 0
Outboard Marine 7.000% 07/01/02 0
Outboard Marine 10.750% 06/01/08 4
Overstock.com 3.750% 12/01/11 74
Owens Corning 7.000% 03/15/09 54
Owens Corning 7.500% 05/01/05 55
Owens Corning 7.500% 08/01/18 55
Owens Corning 7.700% 05/01/08 58
Owens-Corning Fiber 8.875% 06/01/02 55
Owens-Corning Fiber 9.375% 06/01/12 75
PCA LLC/PCA Fin 11.875% 08/01/09 21
Pegasus Satellite 9.625% 10/15/49 11
Pegasus Satellite 9.750% 12/01/06 12
Pegasus Satellite 12.375% 08/01/06 9
Pegasus Satellite 12.500% 08/01/07 12
Phar-mor Inc 11.720% 09/11/02 0
Piedmont Aviat 10.250% 01/15/49 1
Pixelworks Inc 1.750% 05/15/24 70
Plainwell Inc 11.000% 03/01/08 1
Pliant Corp 13.000% 07/15/10 41
Polaroid Corp. 6.750% 01/15/02 0
Polaroid Corp. 7.250% 01/15/07 0
Polaroid Corp. 11.500% 02/15/06 0
Primus Telecom 3.750% 09/15/10 50
Primus Telecom 8.000% 01/15/14 64
PSINET Inc 10.500% 12/01/06 0
Radnor Holdings 11.000% 03/15/10 32
Railworks Corp 11.500% 04/15/09 0
Read-Rite Corp. 6.500% 09/01/04 18
RJ Tower Corp. 12.000% 06/01/13 40
Rotech Healthcare 9.500% 04/01/12 68
Salton Inc 12.250% 04/15/08 74
Solectron Corp 0.500% 02/15/34 73
Tekni-Plex Inc. 12.750% 06/15/10 73
Tom's Foods Inc 10.500% 11/01/04 9
Toys R Us 7.375% 10/15/18 70
Tribune Co 2.000% 05/15/29 66
Triton Pcs Inc. 8.750% 11/15/11 70
Triton Pcs Inc. 9.375% 02/01/11 69
Twin Labs Inc. 10.250% 05/15/06 2
United Air Lines 7.270% 01/30/13 56
United Air Lines 7.870% 01/30/19 54
United Air Lines 9.020% 04/19/12 61
United Air Lines 9.560% 10/19/18 61
United Air Lines 10.020% 03/22/14 45
United Air Lines 10.125% 03/22/15 50
United Homes Inc 11.000% 03/15/05 0
US Air Inc. 10.250% 01/15/49 5
US Air Inc. 10.250% 01/15/49 11
US Air Inc. 10.300% 07/15/49 6
US Air Inc. 10.550% 01/15/49 45
US Air Inc. 10.680% 06/27/08 2
US Air Inc. 10.700% 01/01/49 22
US Air Inc. 10.700% 01/15/49 23
US Air Inc. 10.700% 01/15/49 44
US Air Inc. 10.700% 01/15/49 45
US Air Inc. 10.700% 01/15/49 45
US Air Inc. 10.700% 01/15/49 45
US Air Inc. 10.750% 01/01/49 0
US Air Inc. 10.750% 01/15/49 25
Venture Holdings 9.500% 07/01/05 1
Venture Holdings 11.000% 06/01/07 1
Vesta Insurance Group 8.750% 07/15/25 10
Werner Holdings 10.000% 11/15/07 22
Westpoint Steven 7.875% 06/15/05 0
Westpoint Steven 7.875% 06/15/08 0
Wheeling-Pitt St 6.000% 08/01/10 69
Winn-Dixie Store 8.875% 04/01/08 73
Winsloew Furniture 12.750% 08/15/07 26
Winstar Comm 14.000% 10/15/05 0
Xerox Corp. 0.570% 04/21/18 34
Ziff Davis Media 12.000% 07/15/10 40
*********
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'
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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
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delivered to nation's bankruptcy courts. The list includes links
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*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA. Marie Therese V. Profetana, Robert Max Victor M. Quiblat II,
Shimero R. Jainga, Joel Anthony G. Lopez, Emi Rose S.R. Parcon,
Rizande B. Delos Santos, Cherry A. Soriano-Baaclo, Christian Q.
Salta, Jason A. Nieva, Lucilo M. Pinili, Jr., Tara Marie A. Martin
and Peter A. Chapman, Editors.
Copyright 2006. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
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re-mailing and photocopying) is strictly prohibited without prior
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*** End of Transmission ***