/raid1/www/Hosts/bankrupt/TCR_Public/060926.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, September 26, 2006, Vol. 10, No. 229
Headlines
ACURA PHARMA: Bridge Lenders Extend Maturity Date to November 1
AINSWORTH LUMBER: S&P Affirms B+ Rating & Revises Outlook to Neg.
AMERICAN CREDIT: Taps McGladrey & Pullen as Accountants
AMERIQUEST MORTGAGE: Downgrades Ratings on Four Cert. Classes
AMSCAN HOLDINGS: Moody's Assigns Loss-Given-Default Rating
AMTROLO INC.: Moody's Withdraws Ca Rating on $97.8 Mil. Sr. Notes
ASARCO LLC: Mill Purchase Suit is Without Merit, Mercator Says
AVENTINE RENEWABLE: Credit Facility Availability Cut by $30 Mil.
B&G FOODS: Moody's Affirms $166 Mil. Sr. Notes' Caa1 Rating
BARR LABORATORIES: Moody's Assigns Loss-Given-Default Rating
BAYOU GROUP: Court Extends Removal Period to November 30
BAYOU GROUP: Wants Plan-Filing Period Extended to February 28
BERRY PLASTICS: Apollo & Graham Merger Cues S&P to Lower Rating
BIOVAIL CORP: Moody's Assigns Loss-Given-Default Ratings
BOMBARDIER INC: Sells 19 Jets to My Way Airlines for $702 Million
BRODERICK CDO: Moody's Assigns Ba1 Rating to $4.9MM Class E Notes
C-BASS MORTGAGE: Moody's Rates Class B-5 Certificates at Ba2
CATHOLIC CHURCH: Three Lawyers in Spokane's Case Struck by Illness
CENTURION CDO: Moody's Puts B3 Rated Notes on Watch
CHIQUITA BRANDS: Suspending Quarterly Dividend to Reduce Debt
CINRAM INT'L: Board Says No to Amaranth's Sale Advice
CINRAM INT'L: Paying Cash Distributions on October 16
CITIGROUP COMMERCIAL: Moody's Affirms Ba3 Rating on Class L Certs.
COLLEEN INC: Court Approves Zvi Guttman as Chapter 11 Trustee
COLLEEN INC: Selling Fifteen Store Locations to Three Buyers
COMMUNICATIONS CORPORATION: Taps Michael Nassif as Special Counsel
COMPLETE RETREATS: Selects CIT Capital as Real Estate Advisor
CONNACHER OIL: Moody's Rates $180 Mil. Secured Loans at B1
CONSTELLATION BRANDS: Moody's Assigns Loss-Given-Default Rating
CORE PROPERTIES: Case Summary & Four Largest Unsecured Creditors
COTT CORPORATION: Moody's Assigns Loss-Given-Default Rating
COTULLA STYLE: Voluntary Chapter 11 Case Summary
CRDENTIA CORP: Inks Agreement and Plan of Merger with iVOW Inc.
CREST 2003: Stable Performance Cues Moody's to Lift Ratings
CULLIGAN INTERNATIONAL: Moody's Assigns Loss-Given-Default Rating
DAEWOO CORPORATION: Chapter 15 Petition Summary
DATALOGIC INT'L: Unit Posts $109K Net Loss in Qtr. Ended June 30
DEAN FOODS: Moody's Assigns Loss-Given-Default Rating
DRAGON PHARMACEUTICAL: Incurs $320,997 Net Loss in Second Quarter
DS WATERS: Moody's Assigns Loss-Given-Default Rating
EASYLINK SERVICES: Cures Non-Compliance to Nasdaq Requirement
EMMIS COMMS: Subsidiary Commences Offer to Purchase 6-7/8% Notes
ELECTRIC CITY: Incurs $28 Mil. Net Loss in Quarter Ended June 30
ELECTRIC CITY: Launches New Name and Brand Image
EXIDE TECHNOLOGIES: Board OKs $345,232 in Wage Increase and Refund
EXIDE TECHNOLOGIES: Signs Managed Services Pact With BT Americas
EURAMAX INTERNATIONAL: S&P Lowers Corporate Credit Rating to B
FOAMEX INT'L: Foamex LP Wants to Assume Amended Shell Contract
FOAMEX INTERNATIONAL: Wants Court to Allow Reduced Tax Claims
GENERAL MILLS: Earns $267 Million in 2006 Fiscal First Quarter
GENERAL MOTORS: Nissan-Renault Alliance Talks Slow Down
GEO GROUP: Moody's Affirms B1 Sr. Notes Rating With Stable Outlook
GLOBAL REALTY: 2006 Second Quarter Net Loss Narrows to $1.2 Mil.
GRANT FOREST: S&P Affirms BB Rating & Revises Outlook to Negative
GSAMP TRUST: Moody's Assign Ba1 Rating on Class B-3 Certs.
GSMPS MORTGAGE: Moody's Junks Series 2005-LT1 Class B-3 to Caa3
GULFMARK OFFSHORE: Moody's Lifts Rating on $160MM Sr. Notes to B1
HEALTHY DIRECTIONS: Moody's Assigns Loss-Given-Default Rating
HERBALIFE INTERNATIONAL: Moody's Assigns Loss-Given-Default Rating
INCO LTD: Board Recommends Shareholders Accept CVRD Proposal
INDEPENDENCE III: $15MM Issued Notes Eyed for Upgrade by Moody's
INDYMAC HOME: Moody's Assigns Ba2 Rating to Class M-11 Notes
INNOVATIVE COMMS: Taps Shearman & Sterling as Bankruptcy Counsel
INNOVATIVE COMMS: Taps Dudley Clark as Bankruptcy Co-Counsel
INTELSAT LTD: Reports Anomaly on Intelsat 802 Satellite
INTERPHARM HOLDINGS: Closes $10MM Financing with Aisling Capital
ISLAMORADA CORP: Voluntary Chapter 11 Case Summary
IWT TESORO: Bank of America Credit Line Increased to $26.5 Mil.
IWORLD PROJECTS: Court Dismisses Chapter 7 Petition Filed by CEO
KING PHARMACEUTICALS: Moody's Assigns Loss-Given-Default Ratings
LE-NATURE'S INC: Moody's Assigns Loss-Given-Default Rating
LEAR CORP: Production Cuts to Lower 2006 Net Sales by $300 Million
LEINER HEALTH: Moody's Assigns Loss-Given-Default Rating
LOCATEPLUS HOLDINGS: Posts $1.3MM Net Loss in 2006 Second Quarter
MAFCO WORLDWIDE: Moody's Assigns Loss-Given-Default Rating
MARSH SUPERMARKETS: Shareholders Approve Merger Agreement
MEDCATH HOLDINGS: S&P Affirms B+ Rating & Alters Outlook to Stable
MERITAGE HOMES: Reports Sales and Closings for July & August 2006
METALDYNE CORP: S&P Holds B Corporate Credit Rating on Watch
METROPOLITAN ASSET: Moody's Cuts Rating on Class B-1 Cert. to Caa1
MORGAN STANLEY: Moody's Junks Rating on Class B-2 Certificates
MULTIPLAN INC: Moody's Assigns B2 Rating on $360 Mil. Sr. Loan
MYLAN LABORATORIES: Moody's Assigns Loss-Given-Default Rating
NBTY INC: Moody's Assigns Loss-Given-Default Rating
NEWPARK RESOURCES: Names James Braun as Vice President and CFO
NIGHTHAWK SYSTEMS: Posts $633,561 Net Loss in Qtr. Ended June 30
OHIO VALLEY: Fitch Affirms $27 Million Hospital Bonds' B+ Rating
ORIENTAL TRADING: Moody's Assigns Loss-Given-Default Rating
PHIBRO ANIMAL: Moody's Assigns Loss-Given-Default Rating
PIER 1 IMPORTS: Moody's Downgrades Corp. Family Rating to B3
QUINTILES TRANSNATIONAL: Moody's Assigns Loss-Given-Default Rating
RADIO SYSTEMS: Moody's Assigns B1 Rating to $195MM Sr. Sec. Loans
RADIO SYSTEMS: S&P Rates Proposed $195 Mil. Debt Facility at B
REVLON INC: Reveals Broad Organizational Streamlining
SEAENA INC: Losses Continue in 2006 Second Quarter
SEARCHHELP INC: Posts $923,311 Net Loss in 2006 Second Quarter
SENSE HOLDINGS: Posts $788,262 Net Loss in Quarter Ended June 30
SEVENTY-ONE FARM: Voluntary Chapter 11 Case Summary
SIERRA PACIFIC: S&P Upgrades Senior Unsecured Debt to B from B-
SIMMONS BEDDING: To Buy Simmons Canada from SCI for CDN$130 Mil.
SPOKANE RACEWAY: U.S. Trustee Unable to Form Creditors Committee
STRUCTURED ASSET: Weak Performance Cues Moody's to Lower Ratings
STRUCTURED ASSET: Moody's Lowers Rating on Class B-2 Certs. to Ba3
TARGUS GROUP: Moody's Assigns Loss-Given-Default Rating
TIX CORPORATION: Repays $1.1 Million Note Payable in Full
TRIBUNE CO: Fitch Downgrades Ratings to Double-Bs with Neg. Watch
TRIBUNE CO: S&P Lowers Corporate Credit Rating to BB+ from BBB-
TRIBUNE COMPANY: Moody's Affirms Ba2 Senior Sub. Ratings
TRM CORPORATION: Moody's Withdraws Caa1 Corp. Family Rating
UAL CORP: Hires Goldman Sachs to Look for Possible Merger Deal
VALEANT PHARMA: Moody's Assigns Loss-Given-Default Ratings
VERASUN ENERGY: Moody's Lifts Corp. Family Rating to B2 from B3
VILLAGEEDOCS INC: Has $4.1 Mil. Working Capital Deficit at June 30
VOICE MOBILITY: Incurs $883,439 Net Loss in 2006 Second Quarter
WARNING MANAGEMENT: Withdraws Offer for All Staffing Purchase
WIMBLEY GROUP: Case Summary & 20 Largest Unsecured Creditors
WIZZARD SOFTWARE: Posts $921,587 Net Loss in Quarter Ended June 30
ZALE CORP: SEC Terminates Investigation
* Large Companies with Insolvent Balance Sheets
*********
ACURA PHARMA: Bridge Lenders Extend Maturity Date to November 1
---------------------------------------------------------------
Acura Pharmaceuticals, Inc., secured gross proceeds of $489,000
under a term loan agreement with Essex Woodlands Health Ventures
V, L.P., Care Capital Investments II, L.P., Care Capital Offshore
Investments II, L.P., Galen Partners III, L.P., Galen Partners
International III, L.P. and Galen Employee Fund III, L.P.
Coincident with this Loan, the Bridge Lenders have agreed to
change the maturity date on all previous bridge loans to
Nov. 1, 2006 from Oct. 1, 2006. The Loan bears an annual interest
rate of 10%, is secured by a lien on all assets of the Company and
its subsidiary, matures on Nov. 1, 2006 and is senior to all other
Company debt. The Loan permits the funding of additional cash
amounts subject to agreement by the Company and the Bridge
Lenders. No assurance can be given, however, that any additional
funding will be advanced to the Company under the terms of the
Loan. In addition, the Bridge Lenders have agreed to accept in
satisfaction of the interest payment due Sept. 30, 2006, under the
bridge loans in the aggregate of approximately $133,000, a number
of shares of Common Stock of the Company based on the average of
the closing bid and asked prices of the Common Stock for the five
trading days ending Sept. 29, 2006.
Including the Loan, the Company has a total of $6.124 million in
bridge loans outstanding and due on Nov. 1, 2006, and the Company
has agreed that the lenders under its bridge loan agreements may
rollover all or any portion of the principal and accrued interest
outstanding under loans made under such agreements into the
Company's next equity financing of at least $10 million, subject
to certain exceptions.
The Company will utilize the net proceeds from the Loan to
continue funding product development and licensing activities
relating to OxyADF(TM) tablets and other product candidates
utilizing its Aversion(R) Technology.
Cash Reserves Update
The Company estimates that its current cash reserves, including
the net proceeds from the Loan, will fund product development and
licensing activities through mid-October 2006. To continue
operating thereafter, the Company must raise additional financing
or enter into appropriate collaboration agreements with third
parties providing for cash payments to the Company. No assurance
can be given that the Company will be successful in obtaining any
such financing or in securing collaborative agreements with third
parties on acceptable terms, if at all, or if secured, that such
financing or collaborative agreements will provide for payments to
the Company sufficient to continue funding operations. In the
absence of such financing or third-party collaborative agreements,
the Company will be required to scale back or terminate operations
and/or seek protection under applicable bankruptcy laws.
About Acura Pharmaceuticals
Headquartered in Palatine, Illinois, Acura Pharmaceuticals, Inc.
(OTCBB:ACUR) -- http://www.acurapharm.com/-- is a specialty
pharmaceutical company engaged in research, development and
manufacture of innovative and proprietary abuse deterrent, abuse
resistant and tamper resistant formulations intended for use in
orally administered opioid-containing prescription analgesic
products. Acura is actively collaborating with contract research
organizations for laboratory and clinical evaluation and testing
of product candidates formulated with its Aversion(R) Technology.
Going Concern Doubt
As reported in the Troubled Company Reporter on Aug. 8, 2006,
BDO Seidman, LLP, expressed substantial doubt about Acura
Pharmaceuticals' ability to continue as a going concern after
auditing the Company's 2005 financial statements. The auditing
firm pointed to the Company's recurring losses from operations and
net capital deficiency at Dec. 31, 2005.
AINSWORTH LUMBER: S&P Affirms B+ Rating & Revises Outlook to Neg.
-----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
Vancouver, B.C.-based Ainsworth Lumber Co. Ltd. to negative from
stable.
At the same time, Standard & Poor's affirmed all ratings,
including the 'B+' long-term corporate credit rating, on the
company.
"Ainsworth faces increased financial risk from a heavy capital
expenditure program into mid-2007 that is coinciding with a rapid
deterioration in market conditions for its main product, oriented
strand board," said Standard & Poor's credit analyst Donald
Marleau.
"The company experienced a sharp drop-off in EBITDA in second-
quarter 2006, contributing to successive quarters of negative free
cash flow," Mr. Marleau added.
With benchmark prices for OSB 25% lower in the third quarter to
date than in the second quarter, Ainsworth's cash burn could
accelerate. On the other hand, the company has adequate liquidity
to withstand several quarters of significant free cash drain,
although the availability under its credit facilities might become
constrained with lower inventory valuations and receivables
balances.
The ratings on Ainsworth reflect:
* the company's aggressive financial profile;
* its narrow product concentration;
* pricing volatility; and
* the risk of oversupply of OSB.
These risks are partially offset by the company's strong cost
position stemming from its:
* strong asset base;
* good market position; and
* adequate liquidity.
The negative outlook reflects the combination of weaker OSB
markets and heavy capital expenditures that will strain
Ainsworth's free cash flow in the next several quarters, which
could lead to a rapid deterioration of its credit quality.
The ratings on the company are becoming increasingly dependent on
volatile market conditions, which is normally indicative of a
lower rating. To retain the current rating, Ainsworth is expected
to preserve good liquidity to maintain its flexibility through
volatile market conditions for OSB and the heavy capital spending.
AMERICAN CREDIT: Taps McGladrey & Pullen as Accountants
-------------------------------------------------------
American Credit Company asks the U.S. Bankruptcy Court for the
Eastern District of North Carolina for permission to employ
McGladrey & Pullen, LLP, and RSM McGladrey, Inc., as its
accountants.
McGladrey will:
(a) prepare and file the Debtor's state and federal tax
returns;
(b) provide consulting services related to the sale or
valuation of the Debtor's loan portfolio, and provide
necessary tax advice relating to the Debtor's business
operations and proposed transactions;
(c) compile monthly financial statements of the Debtor,
provide payroll preparation and perform all other
accounting services for the Debtor which may be necessary
in its chapter 11 case; and
(d) provide other services as may be requested.
The Debtor tells the Court that RSM McGladrey and McGladrey &
Pullen's professionals bill:
Designation Hourly Rate
------------ -----------
Partner $350
Managing Director $350
Director $250
Manager $200
Supervisor $150
Senior $140
Staff 2 $125
Staff 1 $110
Client Service Representative $100
Morris R. Marshburn, a partner at McGladrey & Pullen and a
managing director of RSM McGladrey, assures the Court that the
firms are disinterested as that term is defined in Section 101(14)
of the Bankruptcy Code.
Headquartered in Greenville, North Carolina, American Credit
Company, aka Resident Lenders of North Carolina, Inc. is a
financial services company that provides consumer loans and auto
financing. The Debtor filed for chapter 11 protection on July 21,
2006 (Bankr. E.D. N.C. Case No. 06-02189). Gregory B. Crampton,
Esq., and Stephani W. Humrickhouse, Esq., at Nicholls & Crampton,
P.A., represent the Debtor. The Debtor's financial condition as
of May 31, 2006 showed total assets of $21,263,884 and total debts
of $18,075,640.
AMERIQUEST MORTGAGE: Downgrades Ratings on Four Cert. Classes
-------------------------------------------------------------
Moody's Investors Service downgraded four certificates from three
deals and placed under review for possible downgrade two
certificates from two deals originated by Ameriquest Mortgage
Company.
These rating actions were prompted by declines in
overcollateralization to below-target levels. Moody's analysis
considered current projected losses versus available support from
overcollateralization, excess spread, and subordination.
Collateral performance to date has been in line with original
expectations; however, excess spread compression has caused some
erosion of credit enhancement, impacting the junior-most tranches
in these deals.
These are Moody's complete rating actions:
Downgrades:
* Issuer: Ameriquest Mortgage Securities Inc.
-- Series 2002-2; Class M-4, downgraded from Baa3 to B1
-- Series 2002-4; Class M-4, downgraded from Baa3 to Ba2
-- Series 2003-AR2; Class M-3, downgraded from Baa1 to Ba1
-- Series 2003-AR2; Class M-4, downgraded from Baa3 to Ba3
Review for possible downgrade:
* Issuer: Ameriquest Mortgage Securities Inc.
-- Series 2002-3; Class M-4, current rating B3, under review
for possible downgrade
-- Quest Trust 2004-X3; Class M-7, current rating Ba2, under
review for possible downgrade
AMSCAN HOLDINGS: Moody's Assigns Loss-Given-Default Rating
----------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. toy company sector last week, the rating
agency confirmed its B2 Corporate Family Rating for Amscan
Holdings Inc.
Additionally, Moody's revised or held its probability-of-default
ratings and assigned loss-given-default ratings on these loans and
bond debt obligations:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
$85mm Gtd. Sr. Sec.
First Term Revolver
Due 2011 B1 Ba3 LGD2 27%
$325mm Gtd. Sr. Sec.
First Term Loan
Due 2012 B1 Ba3 LGD2 27%
$60mm Gtd. Sr.
Secured 2nd Lien
Term Loan Due 2013 B3 B3 LGD4 64%
$175mm 8.75%
Gtd. Sr. Sub. Notes
Due 2014 Caa1 Caa1 LGD5 85%
Moody's explains that current long-term credit ratings are
opinions about expected credit loss which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
About Amscan Holdings
Headquartered in Elmsford, New York, Amscan Holdings Inc. makes
more than 400 specially designed ensembles of party accessories
and novelties, including balloons, invitations, pi¤atas,
stationery, and tableware. Amscan sells to more than 40,000
retail outlets worldwide, mainly party goods superstores, mass
merchandisers, and other distributors. Party City accounted for
about 13% of sales before the firm bought it in 2005. Amscan
itself makes party items (which bring in about 60% of sales) and
buys the rest from other manufacturers, primarily in Asia. It has
production and distribution facilities in Asia, Australia, Europe,
and North America. Berkshire Partners and Weston Presidio are
Amscan's principal owners.
AMTROLO INC.: Moody's Withdraws Ca Rating on $97.8 Mil. Sr. Notes
-----------------------------------------------------------------
Moody's Investors Service withdrew its ratings for business
reasons on West Warwick, R.I.-based AMTROL Inc.
The following ratings were withdrawn:
* Corporate family rating - Caa1;
* $97.8 million (originally $115 million) of 10.625% senior
subordinated notes due 2006 - rated Ca.
AMTROL is a manufacturer of niche, predominantly high-end flow
control, fluid treatment, and gas-storage products. Substantially
all of the company's debt, including its $98 million 10.625%
senior subordinated notes, is due on or before Dec. 31, 2006. The
company's last public filing was on May 15, 2006. Moody's last
rating action on AMTROL was on May 1, 2006.
ASARCO LLC: Mill Purchase Suit is Without Merit, Mercator Says
--------------------------------------------------------------
On Sept. 22, 2006, ASARCO LLC filed a complaint against Mercator
Minerals Ltd.'s wholly owned subsidiary, Mineral Park, Inc., in
the U.S. Bankruptcy Court for the Southern District of Texas
seeking to void Mineral Park's July 2005 purchase of the mill
currently located at ASARCO's Mission Complex south of Tucson,
Arizona. Mercator purchased the Mission South Mill in 2005 and
had been dismantling it in anticipation of relocating the mill to
the Mineral Park mine site in order to expand Mercator's copper
operations at Mineral Park. Mercator believes the complaint has
no merit and that Mercator will prevail in this litigation.
"ASARCO's complaint in respect of the Mission South Mill came with
no warning," said Mike Surratt, President & CEO of Mercator
Minerals. "We paid ASARCO its asking price for the equipment in
an open sale process, and we see no legitimate reason for Asarco's
board now to come along more than a year later and attempt to undo
the transaction. If ASARCO believed the Mission South Mill was
worth more than we paid, they were under no obligation to sell it
to us. We will vigorously defend our ownership of the Mission
South Mill."
The ASARCO complaint will have no impact on current copper
operations at the Mineral Park Mine, which continue to generate
substantial operating cash flow. During the third quarter ending
Sept. 30, 2006, Mercator anticipates producing record pounds of
copper and record cash flow from the Mineral Park Mine.
ASARCO Litigation
At a hearing on Sept. 22, 2006 in Corpus Christi, Texas, notice of
which Mercator did not receive from ASARCO until late Sept. 21,
2006, Mercator agreed to temporarily suspend further dismantling
or removal of the Mission South Mill from the ASARCO site pending
an Oct. 24, 2006 hearing before the Court on ASARCO's request for
a preliminary injunction. The Court also set a schedule for
evidentiary discovery during this period. The October 24 hearing
is to determine if ASARCO is entitled to prevent Mercator from
relocating the Mission South Mill.
Mercator has engaged U.S. bankruptcy and litigation counsel and
believes that it has solid grounds to defeat the ASARCO litigation
and retain ownership of the Mill. Despite the delay in moving the
Mill, Mercator anticipates keeping to its overall schedule to
complete the Mineral Park expansion, should it prevail in the
litigation. Engineering, mine site work and infrastructure
upgrades will continue on schedule.
In its complaint, ASARCO primarily alleges that the Company failed
to pay "reasonably equivalent value" for the Mission South Mill
and that, under U.S. bankruptcy law, this voids the sale, since it
occurred within one year prior to the bankruptcy filing. In fact,
ASARCO had shut the Mission South Mill down in 2001 and invited
offers for purchase of the mill. Mercator was the successful
bidder in the sale process. It purchased the Mission South Mill
in July 2005 for $6 million, which was ASARCO's asking price.
ASARCO filed for bankruptcy in August 2005 and had, until late
last week, given no indication that it intended to challenge the
sale.
About Mercator Minerals
Mercator Minerals Ltd. (TSX:ML) -- http://www.mercatorminrals.com/
-- is a copper mining and exploration company that owns and
operates the Mineral Park SX/EW Copper Mine in Arizona, with a
corporate strategy focused on maximizing the production potential
of the Mineral Park copper-molybdenum deposit.
About ASARCO LLC
Based 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 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 Boudloche as Encycle/Texas, Inc.'s
d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement
Asbestos Products Chapter 7 Trustee. Michael B. Schmidt, Esq.,
and John Vardeman, Esq., at Law Offices of Michael B. Schmidt
represent the Chapter 7 Trustee.
AVENTINE RENEWABLE: Credit Facility Availability Cut by $30 Mil.
----------------------------------------------------------------
Aventine Renewable Energy, Inc., an indirect subsidiary of
Aventine Renewable Energy Holdings, Inc., has amended its secured
revolving credit facility with JPMorgan Chase Bank, N.A.
The amended facility makes available an aggregate amount of the
lesser of $30 million, or the sum of 75% of accounts receivable
plus 50% of inventory. The aggregate amount available may be used
for letters of credit issued on behalf of the Borrower, as well as
revolving loans. This is a $30 million reduction in availability
from the previous $60 million limit. However, with the reduced
availability, certain restrictive covenants and reporting
requirements in effect under the previous facility have been
eliminated. In addition, fees associated with the amended
facility have also been reduced.
"As a result of our recently completed initial public offering,
Aventine now has substantial amounts of cash on its balance
sheet," Ron Miller, Aventine's President and CEO said. "This
eliminated our immediate need for the larger facility. The
amendment to the revolving facility removes restrictive capital
expenditure covenants that did not reflect the Company's growth
plans, and also provides for lower interest rates, commitment
fees, and administrative fees."
Headquartered in Pekin, Illinois, Aventine Renewable Energy, Inc.
(NYSE:AVR) -- http://www.aventinerei.com/-- supplies more than
500 million gallons of the nation's growing ethanol needs as a
leading producer and marketer of ethanol in the United States.
The Company supplies much of the nation's ethanol needs through
its wholly owned plant in Pekin, Illinois, partially owned
Nebraska Energy plant in Aurora, Nebraska, and business
relationships and marketing alliances.
* * *
As reported in the Troubled Company Reporter on Sept. 20, 2006,
Moody's Investors Service upgrades its ratings for Aventine
Renewable Energy Holdings, Inc. to B2 from B3. A speculative
grade liquidity rating of SGL-1 was affirmed for the firm. The
outlook remains stable. Loss given default assessments were not
assigned, but will be assigned in September 2006, when loss given
default assessments are rolled out for the entire chemical
industry portfolio of companies rated by Moody's Investors
Service.
Aventine Renewable Energy Holdings, Inc.'s Corporate Family Rating
-- to B2 from B3 -- and Senior Notes due 2011 -- to B2 from B3 --
were changed.
As reported in the Troubled Company Reporter on July 26, 2006,
Standard & Poor's Ratings Services raised its corporate credit
rating on Aventine Renewable Energy Holdings Inc. to 'B+' from
'B-' after the company's successful completion of a tender offer
for all of its $160 million senior secured notes due in 2011.
Of the $160 million notes outstanding, $155 million were tendered
and accepted. The outlook is stable.
B&G FOODS: Moody's Affirms $166 Mil. Sr. Notes' Caa1 Rating
-----------------------------------------------------------
Moody's Investors Service took a number of rating actions in
relation to B&G Foods, Inc:
* assigned a Ba2 rating to B&G Foods, Inc.'s senior secured
bank credit facilities; upgraded its senior unsecured notes
to B1 from B2;
* affirmed its senior subordinated debt rating at Caa1, and
its corporate family rating at B2;
* and applied its new Probability of Default and Loss
Given Default rating methodology to all of the
company's long term ratings.
The outlook on all long term ratings is stable.
Ratings assigned:
* $25 million senior secured revolving credit facility,
maturing 2011 -- assigned Ba2 (LGD1, 3%);
* $25 million senior secured term loan, maturing 2011 --
assigned Ba2 (LGD1, 3%);
* Probability of default rating assigned B2.
Ratings upgraded:
* $240 million 8% senior unsecured notes maturing 2011 --
upgraded to B1 from B2 (LGD3, 37%).
Ratings affirmed:
* Corporate family rating-- affirmed at B2;
* $166 million senior subordinated notes, maturing 2016 --
affirmed at Caa1 (LGD5, 85%).
Moody's has applied its new Probability-of-Default and Loss-Given-
Default rating methodology to B&G and its subsidiaries. Moody's
current long-term credit ratings are opinions about expected
credit loss which incorporate both the likelihood of default and
the expected loss in the event of default. The LGD rating
methodology disaggregates these two key assessments in long-term
ratings. The LGD rating methodology also enhances the
consistency in Moody's notching practices across industries and
improves the transparency and accuracy of our ratings as our
research has shown that credit losses on bank loans have tended to
be lower than those for similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss on an a individual security is expressed as a
percent of principal and accrued interest at the resolution of the
default, with assessments ranging from LGD1 (loss anticipated to
be 0% - 9%) to LGD6 (loss anticipated to be 90% - 100%).
The assignment of Ba2 ratings to B&G's bank facilities, as well as
the rating actions taken in relation to its other debt securities,
reflects Moody's new methodology for assigning ratings to
individual securities and bank facilities rather than a change in
the characteristics of any debt security or bank facility or in
the company's fundamental credit profile.
The affirmation of B&G's B2 corporate family rating is supported
by B&G's relatively stable cash flow, good product
diversification, and EBITA margins in the mid-teens, all of which
are stronger than for a typical B2 company. These strengths are
offset by flat sales growth--partly reflecting a portfolio of
mature brands--high leverage, and a growth strategy that has
relied on leveraged acquisitions. In addition, the company's
capital structure is financially burdensome due primarily to the
enhanced income securities issued in 2004 in connection with an
IPO, that combine high dividends and a 12% coupon on the
subordinated notes. As a result the company has little or no free
cash flow to reduce debt and has limited flexibility.
B&G's ratings could come under downward pressure if operating cash
flow weakens or its liquidity becomes constrained. B&G's ratings
could be downgraded if LTM Debt/EBITDA approaches 7.0 times, or if
the company fails to generate positive free cash flow on an LTM
basis by the end of fiscal 2007. An upgrade would require B&G to
achieve LTM Debt/EBITDA approaching 5 times, and LTM EBIT/interest
approaching 2.0 times.
B&G Foods, Inc., based in Parsippany, New Jersey, is a
manufacturer and distributor of shelf-stable branded food
products. The company's 2005 net sales totaled $379 million.
BARR LABORATORIES: Moody's Assigns Loss-Given-Default Rating
------------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. pharmaceutical sector this week, the
rating agency confirmed its Ba1 Corporate Family Rating for Barr
Laboratories, Inc. Additionally, Moody's revised or held its
probability-of-default ratings and assigned loss-given-default
ratings on these loans and bond debt obligations:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
$300 Million
Revolving Credit
Facility due 2011 Ba1 Ba1 LGD4 50%
$2 Billion
Term Loan due 2011 Ba1 Ba1 LGD4 50%
$500 Million
Bank Credit
Facility due 2007 Ba1 Ba1 LGD4 50%
Moody's explains that current long-term credit ratings are
opinions about expected credit loss, which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
Based in Woodcliff Lake, NJ, Barr Pharmaceuticals, Inc. is one of
the five largest companies specializing in the U.S. generic
pharmaceutical market. The company reported $1.3 billion of net
revenues for the fiscal year ended June 30, 2006. Barr
Laboratories, Inc. is a wholly-owned subsidiary of the Company.
BAYOU GROUP: Court Extends Removal Period to November 30
--------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York in
White Plains extended Bayou Group, LLC, and its debtor-affiliates'
period to remove civil actions until:
a. Nov. 30, 2006, or
b. the day which is 30 days after entry of an order terminating
the automatic stay with respect to a particular action
sought to be removed.
The Debtors told the Court that they have been focused on various
matters, including:
-- reviewing and analyzing their financial operational history,
-- devising a litigation and business strategy, and
-- investigating possible causes of action on their behalf.
Because of those factors, the Debtors said they have not had an
opportunity to fully investigate and determine whether any pending
matters should be removed.
Headquartered in Chicago, Illinois, Bayou Group, LLC, operates and
manages hedge funds. The company and its affiliates filed for
chapter 11 protection on May 30, 2006 (Bankr. S.D.N.Y. Case No.
06-22306). Elise Scherr Frejka, Esq., at Dechert LLP, represents
the Debtors in their restructuring efforts. When the Debtors
filed for protection from their creditors, they estimated assets
and debts of more than $100 million.
BAYOU GROUP: Wants Plan-Filing Period Extended to February 28
-------------------------------------------------------------
The Bayou Group LLC and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York to extend,
until Feb. 28, 2007, the period within which they have the
exclusive right to file a Plan or Plans of Reorganization. The
Debtors also ask the Court to extend, until April 27, 2007, the
period within which they have the exclusive right to solicit
acceptances of their Plan.
The Debtors tell the Court that they are devoting a significant
amount of their time:
* commencing 123 adversary proceedings seeking to recover in
excess of $110 million for the benefit of defrauded
investors;
* coordinating the exchange of information about the Debtors'
financial and operational history by and between the U.S.
Attorney and the Debtors;
* establishing timeline goals for the course of and emergence
from these chapter 11 cases;
* understanding the fraudulent investment scheme operations by
the Debtors prior to the Petition Date; and
* establishing effective lines of communication with the
Committee, the U.S. Trustee and other parties in interest.
The Debtors also disclose that a number of contingencies exist
justifying the extension of the Debtors' exclusive periods
including the resolution of significant litigation necessary to
fund a plan; the establishment of a claims bar date; and the
development of a strategic plan.
The Debtors submit that the extension of the exclusive periods
requested will not harm the Debtors' creditors or other parties in
interest and will be used for a proper purpose -- to develop a
Plan that is feasible and in the best interests of all of the
Debtors' constituencies.
The Court will convene a hearing at 9:30 a.m. tomorrow, at
Courtroom 520, White Plains Office in New York City, to consider
the Debtors' request.
Headquartered in Chicago, Illinois, Bayou Group, LLC, operates and
manages hedge funds. The company and its affiliates filed for
chapter 11 protection on May 30, 2006 (Bankr. S.D.N.Y. Case No.
06-22306). Elise Scherr Frejka, Esq., at Dechert LLP, represents
the Debtors in their restructuring efforts. When the Debtors
filed for protection from their creditors, they estimated assets
and debts of more than $100 million.
BERRY PLASTICS: Apollo & Graham Merger Cues S&P to Lower Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Berry Plastics Holding Corp. to 'B' from 'B+' following
successful completion of the acquisition of the company by private
equity firms, Apollo Management L.P. and Graham Partners.
Standard & Poor's removed the ratings from CreditWatch, where they
were placed with negative implications on Aug. 3, 2006. The
outlook is stable.
Pro forma for the transaction, Evansville, Indiana-based Berry had
total debt outstanding of about $1.9 billion at July 1, 2006.
Berry Plastics Holding Corp. is the parent of Berry Plastics Corp.
"The ratings reflect Berry's highly leveraged financial profile
which is partially offset by the company's fair business profile
with large market shares in niche segments, a well-diversified
customer base, and strong customer relationships," said Standard &
Poor's credit analyst Liley Mehta.
With annual sales of about $1.4 billion, privately held Berry is a
leading manufacturer and supplier of plastic injection-molded and
thermoformed open-top containers, aerosol overcaps, drinking cups,
housewares, closures for the health care and food and beverage
segments, pharmaceutical bottles, and prescription vials.
The bulk of Berry's output is sold to dairy, food, beverage,
health care, and other consumer product segments, a relatively
recession-resistant customer base. Still, some of its key markets
are relatively small and mature.
The continuing conversion to plastic containers from paper and
other materials in the company's end markets is an important
growth driver.
In particular, Berry is expanding its thermoforming capacity to
meet the growing demand for thermoformed drink cups driven by
conversion from other materials.
About 60% of Berry's revenues are under contractual arrangements
that allow for passing through raw material price fluctuations
to customers. The company has successfully passed through
fluctuations in raw material prices (namely plastic resins such as
polypropylene, high-density polyethylene, and linear low-density
polyethylene) to customers with a few months' time lag, and
operating margins have been maintained in the still-attractive
high teens percentage area.
However, competitive pressures have limited the company's ability
to pass through higher raw material costs in the smaller
housewares segment.
Following completion of the transaction, Berry's total debt has
increased substantially and the company is very aggressively
leveraged. Pro forma total debt (adjusted for capitalized
operating leases) to EBITDA is above 7x for the 12 months ended
July 1, 2006.
Steady volume growth and operating margins remaining in the
high teens percentage area should support consistent free cash
generation, which is expected to be prioritized for debt reduction
in the near to intermediate term.
BIOVAIL CORP: Moody's Assigns Loss-Given-Default Ratings
--------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. pharmaceutical sector last week, the
rating agency confirmed its Ba3 Corporate Family Rating for
Biovail Corporation and its B1 rating on the company's
$400 million issue of second priority senior secured notes.
Additionally, Moody's assigned an LGD4 rating to those bonds,
suggesting noteholders will experience a 67% loss in the event of
a default.
Moody's explains that current long-term credit ratings are
opinions about expected credit loss, which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
Biovail Corporation -- http://www.biovail.com/-- is a specialty
pharmaceutical company, engaged in the formulation, clinical
testing, registration, manufacture and commercialization of
pharmaceutical products utilizing advanced drug-delivery
technologies.
BOMBARDIER INC: Sells 19 Jets to My Way Airlines for $702 Million
-----------------------------------------------------------------
Bombardier Aerospace Corp., a subsidiary of Bombardier Inc.,
disclosed that My Way Airlines of Vicenza, Italy has placed a firm
order for 19 CRJ900 aircraft. Should Bombardier launch its
CRJ900X program, 15 of these firm orders will be converted into
CRJ900X aircraft. In the event program launch does not proceed,
the firm order remains for 19 CRJ900 jets.
The value of the contract based on the CRJ900 aircraft list price
is approximately $702 million.
My Way Airlines serves scheduled destinations in Europe and the
Middle East with a fleet of five Airbus A320 jets, and its wholly
owned subsidiary, LTE, offers charter flights with its own fleet.
The Bombardier CRJ900 aircraft will be operated on domestic and
regional routes.
"We were attracted to the Bombardier CRJ900 aircraft because of
its low operating costs, quick turnaround times and outstanding
passenger comfort," said Professor Carlo Bernini, President, My
Way Airlines. "The CRJ900 jet is the ideal aircraft for our low-
cost operations."
"I also want to emphasize the environmentally friendly nature of
the CRJ900," Professor Bernini added. "Emissions and noise are
well below those permitted by international agreement, and fuel
consumption has been reduced considerably."
"My Way Airlines is the sixth European airline to recognize the
significant benefits provided by this state-of-the art regional
jet," said Steven Ridolfi, President, Bombardier Regional
Aircraft. "The Bombardier CRJ900 has the lowest operating costs
in its class, and independent surveys reveal strong praise from
passengers for its cabin comfort and amenities."
About Bombardier
Headquartered in Valcourt, Quebec, Bombardier Inc. (TSX: BBD) --
http://www.bombardier.com/-- manufactures innovative
transportation solutions, from regional aircraft and business jets
to rail transportation equipment.
* * *
As reported in the Troubled Company Reporter on May 25, 2006,
Moody's Investors Service assigned a Ba2 rating to Bombardier
Recreational Products' CDN$250 million senior secured revolver and
a B1 rating to BRP's CDN$880 million senior secured term loan. At
the same time, Moody's affirmed BRP's B1 corporate family rating
and revised the ratings outlook to negative from stable.
BRODERICK CDO: Moody's Assigns Ba1 Rating to $4.9MM Class E Notes
-----------------------------------------------------------------
Moody's Investors Service assigned ratings to notes issued by
Broderick CDO 2 Ltd.
The ratings assigned:
* Aaa to U.S.$876,000,000 Class A-1AD First Priority Senior
Secured Floating Rate Delayed Draw Notes due 2049;
* Aaa to U.S.$500,000,000 Class A-1AT First Priority Senior
Secured Floating Rate Notes due 2049;
* Aaa to U.S.$42,000,000 Class A-1B Second Priority Senior
Secured Floating Rate Notes due 2049;
* Aaa to U.S.$70,000,000 Class A-2 Third Priority Senior
Secured Floating Rate Notes due 2049;
* Aa2 to U.S.$67,600,000 Class B Fourth Priority Senior
Secured Floating Rate Notes due 2049;
* A2 to U.S.$23,500,000 Class C Fifth Priority Senior
Deferrable Secured Floating Rate Notes due 2049;
* Baa2 to U.S.$8,000,000 Class D Sixth Priority Mezzanine
Deferrable Secured Floating Rate Notes due 2049; and
* Ba1 to U.S.$4,900,000 Class E Seventh Priority Mezzanine
Deferrable Secured Floating Rate Notes due 2049.
Moody's ratings of the notes address the ultimate cash receipt of
all required interest and principal payments, as provided by the
notes' governing documents, and are based on the expected loss
posed to noteholders, relative to the promise of receiving the
present value of such payments.
C-BASS MORTGAGE: Moody's Rates Class B-5 Certificates at Ba2
------------------------------------------------------------
Moody's Investors Service has assigned an Aaa rating to the senior
certificates issued by C-BASS Mortgage Loan Asset-Backed
Certificates, Series 2006-SL1, and ratings ranging from Aa1 to Ba2
to the subordinate and mezzanine certificates in the deal.
The securitization is backed by Countrywide Home Loans, Inc
(73.25%), OwnIT Mortgage Solutions, Inc. (19.42%), and other
originators originated fixed-rate, second lien mortgage loans
acquired by Credit Based Asset Servicing and Securitization LLC.
The ratings are based primarily on the credit quality of the
loans, and on the protection from subordination, excess spread,
overcollateralization, and an interest rate cap agreement between
the trust and Goldman Sachs Mitsui Marine Derivative Products,
L.P. Moody's expects collateral losses to range from 12.35% to
12.90%.
Litton Loan Servicing LP (Litton) will service the loans. Moody's
has assigned Litton its top servicer quality rating of SQ1 as a
primary servicer of subprime loans, and SQ1 as a special servicer.
These are the complete ratings:
* C-BASS Mortgage Loan Asset-Backed Certificates, Series 2006-
SL1
Cl. A-1, Assigned Aaa
Cl. A-2, Assigned Aaa
Cl. A-3, Assigned Aaa
Cl. M-1, Assigned Aa1
Cl. M-2, Assigned Aa2
Cl. M-3, Assigned Aa3
Cl. M-4, Assigned A1
Cl. M-5, Assigned A2
Cl. M-6, Assigned A3
Cl. B-1, Assigned Baa1
Cl. B-2, Assigned Baa2
Cl. B-3, Assigned Baa3
Cl. B-4, Assigned Ba1
Cl. B-5, Assigned Ba2
CATHOLIC CHURCH: Three Lawyers in Spokane's Case Struck by Illness
------------------------------------------------------------------
Three lawyers working on the Diocese of Spokane's bankruptcy case
have suffered serious illnesses during the course of the case,
which required major surgeries:
(1) the Diocese's attorneys, Shaun M. Cross, Esq., and Michael
J. Paukert, Esq., at Paine, Hamblen, Coffin, Brooke &
Miller, LLP, in Spokane, Washington; and
(2) James I. Stang, Esq., at Pachulski, Stang, Ziehl, Young,
Jones & Weintraub LLP, in Los Angeles, California, counsel
for the Tort Litigants Committee.
John Stucke, staff writer for the SpokesmanReview.com, relates
that Mr. Paukert had his gall bladder removed after complaining of
pains. Mr. Stang underwent a quadruple bypass surgery. Mr. Cross
was rushed to the hospital where doctors discovered his appendix
had ruptured, SpokesmanReview adds.
Messrs. Cross and Paukert noted that their illnesses may generate
"a certain amount of glee among lawyer-bashers," Mr. Stucke says.
As previously reported, Judge Williams said she will "seriously"
entertain a motion to dismiss Spokane's Chapter 11 proceeding if
the case would celebrate its two-year anniversary without a
confirmed plan. The Diocese's second year anniversary will be on
Dec. 6, 2006. Spokane has yet to file an amended plan.
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. 69; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
CENTURION CDO: Moody's Puts B3 Rated Notes on Watch
---------------------------------------------------
Moody's Investors Service placed on watch for possible upgrade the
ratings on these notes issued in 2000 by Centurion CDO I, Limited;
a high yield collateralized debt obligation CDO issuer:
* The Class II-A Senior Secured Floating Rate Notes, Due 2012
-- Prior Rating: Baa1
--Current Rating: Baa1, on watch for possible upgrade
* The Class II-B Senior Secured Fixed Rate Notes, Due 2012
-- Prior Rating: Baa1
-- Current Rating: Baa1, on watch for possible upgrade
* The Class III-A Mezzanine Secured Floating Rate Notes, Due
2012
-- Prior Rating: B3
-- Current Rating: B3, on watch for possible upgrade
* The Class III-B Mezzanine Secured Floating Rate Notes, Due
2012
-- Prior Rating: B3
-- Current Rating: B3, on watch for possible upgrade
The rating actions reflect the improvement in the credit quality
of the transaction's underlying collateral portfolio, consisting
primarily of speculative grade corporate bonds, as well as the
ongoing delevering of the transaction, according to Moody's.
CHIQUITA BRANDS: Suspending Quarterly Dividend to Reduce Debt
-------------------------------------------------------------
Chiquita Brands International Inc. said it has come up with two
initiatives to enhance financial flexibility and reduce debt.
The two actions are the exploration of strategic alternatives for
the sale and long-term management of its shipping assets and
shipping-related logistics activities, and the suspension of its
quarterly dividend.
Exploring strategic alternatives for shipping-related assets
after several months of evaluation, Chiquita is launching a
process to explore strategic alternatives with respect to the sale
and long-term management of its overseas shipping assets and
shipping-related logistics operations. The Company will consider
various structures, including the sale and lease-back of the
company's owned ocean-going shipping fleet, the sale or
outsourcing of related ocean-shipping assets and container
operations, and entry into a long-term strategic partnership to
meet all of Chiquita's international cargo transportation needs.
Fernando Aguirre, the Company's chairman and chief executive
officer, said, "Our Great White Fleet has represented a strong
competitive advantage for Chiquita for many years, and continuing
to excel in cold-chain management -- delivering our high-quality
fresh products quickly and efficiently -- will remain critical to
our company. However, we believe there is an opportunity to
enhance shareholder value while maintaining high quality and
competitive long-term operating costs by partnering with an expert
shipping service provider that can grow with Chiquita. This would
allow us to focus our efforts and resources even more on
strengthening customer relationships and providing healthy, fresh
foods to consumers. In addition, an asset sale would generate
significant capital, which would be used primarily to reduce debt,
as well as to invest in new growth opportunities."
Chiquita has been working with Fortis Securities, a leading global
corporate and investment bank to the maritime industry, as a
financial advisor to support the exploration of strategic
alternatives. The Company does not expect to disclose
developments with respect to the process unless and until its
board of directors has approved a definitive transaction. There
can be no assurance that the activities will ultimately lead to an
agreement or a transaction.
Great White Fleet, a wholly owned subsidiary of Chiquita, manages
the Company's global ocean transportation and logistics
operations. Great White Fleet operates 12 owned refrigerated
cargo vessels and charters additional vessels for use principally
in the long-haul transportation of Chiquita's fresh fruit products
from Latin America to North America and Europe. The owned vessels
consist of eight reefer ships and four container ships, which
transport approximately 70 percent of Chiquita's banana volume
shipped to core markets in Europe and North America.
Suspending Dividend
Chiquita's board of directors has also voted to discontinue the
Company's quarterly cash dividend of $0.10 per share. Chiquita
intends to redirect the approximately $17 million in annual funds
that otherwise would have been allocated for dividends to reduce
debt and enhance financial flexibility.
Mr. Aguirre continued, "In the last two years, we have not only
significantly transformed our business, but the environment in
which we operate has also changed. We successfully completed the
strategic acquisition of Fresh Express last year, which has
diversified our business and provided new avenues for growth, but
also substantially increased our total debt. In light of our
obligations to lenders as well as the challenging current market
environment, we believe discontinuing the dividend is in the best
interest of our shareholders."
Business Update
Mr. Aguirre explained that the Company has been and will continue
to be negatively impacted by changes in the rules regarding banana
imports into the European Union. In the third quarter, Chiquita
has continued to experience markedly lower banana prices in both
core European and trading markets, as well as excess fruit supply.
Further, due to the current industry concerns regarding the safety
of fresh spinach in the United States, the Company's Fresh Express
operations are experiencing lower sales and unforeseen costs. The
company also will be investing additional funds to reinforce
consumer confidence in the quality of Fresh Express products and
food safety standards. As a result of these difficult market
conditions and continuing uncertainties, the Company's third
quarter 2006 financial results are expected to be significantly
impacted.
Mr. Aguirre concluded, "Despite the current market conditions and
near-term challenges, we remain committed to our long-term
strategy to be a leader in branded, healthy, fresh foods. While
we are disappointed with our expected third quarter results, we
believe the initiatives are prudent steps toward increasing our
financial flexibility to manage through the current market
environment and execute on our long-term plans."
About Chiquita Brands International
Headquartered in Cincinnati, Ohio, Chiquita Brands International,
Inc. (NYSE: CQB) -- http://www.chiquita.com/-- markets and
distributes fresh food products including bananas and nutritious
blends of green salads. The company markets its products under
the Chiquita(R) and Fresh Express(R) premium brands and other
related trademarks. Chiquita employs approximately 25,000 people
operating in more than 70 countries worldwide.
* * *
In June 2006, Standard & Poor's Ratings Services affirmed its
ratings on Chiquita Brands International Inc., including the 'B+'
corporate credit rating. The rating outlook was negative.
In the same month, Moody's Investors Service also affirmed the B1
rating on Chiquita Brands LLC's senior secured bank credit
facilities, the B3 rating on senior unsecured notes at Chiquita
Brands International Inc., as well as its B2 corporate family
rating.
CINRAM INT'L: Board Says No to Amaranth's Sale Advice
-----------------------------------------------------
Cinram International Income Fund informed Amaranth Advisors that
its Board of Directors has no intention of selling, or exploring
the possibility of selling, the Fund or any of its operating
subsidiaries or their respective businesses.
The statement came in response to a memorandum issued by Amaranth
Canada Trust urging Cinram to immediately retain financial
advisors to explore a sale of the Fund, including a going private
transaction.
Amaranth had issued the memorandum after the Amaranth investment
fund group announced significant trading losses in its natural gas
trading business. Following Amaranth's disclosure, the trust
units of Cinram came under intense selling pressure.
Amaranth Canada Trust has beneficial ownership of 8,000,000 trust
units of Cinram representing approximately 15.3% of the issued and
outstanding trust units, and is the largest equity holder in the
fund. Amaranth LLC indirectly beneficially owns all units
beneficially owned by Amaranth Canada Trust. In addition,
Amaranth has an economic interest in 2,654,895 units.
Henri Aboutboul, chairman of Cinram's board reminded Amaranth that
the selling pressure on the Fund's units last week was
attributable to problems within the Amaranth organization, and was
in no way caused by the Fund, which, he claims, remains on track
with its business plans.
Mr. Aboutboul said that the Board will continue to explore
opportunities and strategies for growth and value maximization,
with a view to protecting and furthering the long term interests
of the Fund and its unit holders, as well of those of its
operating subsidiaries and their employees, customers and other
stakeholders.
Gene Laverty at Bloomberg News reports that Cinram has turned to
the Credit Suisse Group for advice on certain acquisitions.
About Cinram
Cinram International Inc. (TSX: CRW.UN) - http://www.cinram.com/
-- an indirect wholly owned subsidiary Cinram International Income
Fund, provides pre-recorded multimedia products and related
logistics services. With facilities in North America and Europe,
Cinram International Inc. manufactures and distributes pre-
recorded DVDs, VHS video cassettes, audio CDs, audio cassettes and
CD-ROMs for motion picture studios, music labels, publishers and
computer software companies around the world.
* * *
As reported in the Troubled Company Reporter on Aug. 3, 2006,
Moody's Investors Service assigned a definitive B1 senior secured
rating to the $825 million credit facility of Cinram International
Inc. dated May 5, 2006, removing the provisional status from this
rating. Moody's also withdrew the B1 senior secured rating from
Cinram's prior credit facility, originally dated October 2003.
Cinram's Corporate Family Rating is B1 and the outlook is stable.
As reported in the Troubled Company Reporter on May 11, 2006,
Standard & Poor's Ratings Services lowered its corporate credit
rating on prerecorded multimedia manufacturer Cinram International
Inc. to 'BB-' from 'BB' following the company's announcement that
it had successfully converted into an income trust. The ratings
were removed from CreditWatch with negative implications, where
they were placed March 3, 2006.
CINRAM INT'L: Paying Cash Distributions on October 16
-----------------------------------------------------
Cinram International Income Fund has declared a cash distribution
of CDN$0.2708 per unit. This distribution will be paid on or
about Oct. 16, 2006, to unitholders of record at the close of
business on Sept. 29, 2006.
Cinram International Limited Partnership also announced that it
will be making a cash distribution of CDN$0.2708 per Class B
limited partnership unit. This distribution will also be paid on
or about Oct. 16, 2006 to unitholders of record at the close of
business on Sept. 29, 2006.
The distribution policy of both the Fund and the Partnership is
that unitholders of record at the close of business on the last
business day of each calendar month will receive a distribution on
or about the 15th day of the following month. The monthly
distribution will be CDN$0.2708 per unit, representing CDN$3.25
per unit on an annualized basis.
About Cinram
Cinram International Inc. (TSX: CRW.UN) - http://www.cinram.com/
-- an indirect wholly owned subsidiary Cinram International Income
Fund, provides pre-recorded multimedia products and related
logistics services. With facilities in North America and Europe,
Cinram International Inc. manufactures and distributes pre-
recorded DVDs, VHS video cassettes, audio CDs, audio cassettes and
CD-ROMs for motion picture studios, music labels, publishers and
computer software companies around the world.
* * *
As reported in the Troubled Company Reporter on Aug. 3, 2006,
Moody's Investors Service assigned a definitive B1 senior secured
rating to the $825 million credit facility of Cinram International
Inc. dated May 5, 2006, removing the provisional status from this
rating. Moody's also withdrew the B1 senior secured rating from
Cinram's prior credit facility, originally dated October 2003.
Cinram's Corporate Family Rating is B1 and the outlook is stable.
As reported in the Troubled Company Reporter on May 11, 2006,
Standard & Poor's Ratings Services lowered its corporate credit
rating on prerecorded multimedia manufacturer Cinram International
Inc. to 'BB-' from 'BB' following the company's announcement that
it had successfully converted into an income trust. The ratings
were removed from CreditWatch with negative implications, where
they were placed March 3, 2006.
CITIGROUP COMMERCIAL: Moody's Affirms Ba3 Rating on Class L Certs.
------------------------------------------------------------------
Moody's Investors Service affirmed the ratings of Citigroup
Commercial Mortgage Securities Inc., Commercial Mortgage Pass-
Through Certificates, Series 2005-EMG:
-- Class A-1, $130,771,655, Fixed, affirmed at Aaa
-- Class A-2, $115,939,000, Fixed, affirmed at Aaa
-- Class A-3, $42,513,000, Fixed, affirmed at Aaa
-- Class A-4, $199,016,000, Fixed, affirmed at Aaa
-- Class A-J, $46,036,000, Fixed, affirmed at Aaa
-- Class X, Notional, affirmed at Aaa
-- Class B, $7,222,000, Fixed, affirmed at Aa2
-- Class C, $2,708,000, Fixed, affirmed at Aa3
-- Class D, $5,416,000, Fixed, affirmed at A2
-- Class E, $1,805,000, Fixed, affirmed at A3
-- Class F, $3,611,000, Fixed, affirmed at Baa1
-- Class G, $1,805,000, Fixed, affirmed at Baa2
-- Class H, $3,611,000, Fixed, affirmed at Baa3
-- Class J, $8,124,000, Fixed, affirmed at Ba1
-- Class K, $2,708,000, Fixed, affirmed at Ba2
-- Class L, $1,806,000, Fixed, affirmed at Ba3
As of Aug. 22, 2006, the transaction's aggregate certificate
balance has decreased by approximately 20.4% to $574.9 million
from $722.1 million at securitization. The Certificates are
collateralized by 219 loans, ranging in size from less than 1.0%
to 5.2% of the pool, with the top ten loans representing 26.7% of
the pool. The pool includes eight shadow rated investment grade
loans, which represent 23.2% of the outstanding balance.
One loan has been liquidated from the pool resulting in a realized
loss of approximately $20,000 to Class M. Currently there are no
loans in special servicing. Fifteen loans, representing 3.6% of
the pool, are on the master servicer's watchlist.
Moody's was provided with partial or full year 2005 operating
results for 71.5% of the pool. Moody's weighted average loan to
value ratio for the conduit component is 46.2%, compared to 47.2%
at securitization, resulting in the affirmation of all classes.
The top three shadow rated loans represent 11.3% of the pool. The
largest shadow rated loan is the 240 Central Park South Loan
($30.0 million - 5.2%), which is secured by a 304-unit apartment
complex located in New York City. The property is 91.0% occupied,
compared to 89.5% at securitization and has benefited from
increased occupancy and rental income. The loan matures in
October 2012 and is interest only for its entire term. Moody's
current shadow rating is Baa2, compared to Baa3 at securitization.
The second largest shadow rated loan is the 52 Vanderbilt Avenue
Loan ($18.0 million - 3.1%), which is secured by a 184,000 square
foot Class B office/retail building located in midtown Manhattan,
New York City. The property was 86.8% occupied at securitization.
The loan matures in October 2010. Moody's current shadow rating
is Baa3, the same as at securitization.
The third largest shadow rated loan is the 17-19 West 34th Street
Loan ($17 million - 3.0%), which is secured by a 214,000 square
foot Class B office/retail building located in midtown Manhattan,
New York City. The property is 94.5% occupied, essentially the
same as at securitization. The loan matures in July 2010 and is
interest only for its entire term. Moody's current shadow rating
is Aaa, the same as at securitization.
The remaining five shadow rated loans represent 12.0% of the pool.
Moody's affirms the shadow ratings of three loans:
* 50 East 42nd Street ($15.0 million; 2.6%)
-- affirmed at Aa3;
* 1001 Central Park Avenue ($14.0 million; 2.5%)
-- affirmed at Aa2;
* and 295 Park Avenue South ($11.0 million; 1.9%)
-- affirmed at Aaa.
The shadow rating of the 6 West 32nd Street Loan ($12.7 million;
2.2%) is upgraded to Baa2 from Baa3.
The shadow rating of the 295 Madison Avenue Loan ($15.9 million;
2.8%) is downgraded to Baa3 from Baa2.
The pool's collateral is a mix of office and mixed use (40.3%),
multifamily (40.0%), retail (14.4%), lodging (2.9%), industrial
(1.9%) and healthcare (0.5%). Approximately 99.0% of the
properties are located in New York. The remaining properties are
located in New Jersey (0.7%) and Connecticut (0.3%). All of the
loans are fixed rate. The pool consists of seasoned loans
originated or acquired by Emigrant Savings Bank. At
securitization the average seasoning was 53 months.
COLLEEN INC: Court Approves Zvi Guttman as Chapter 11 Trustee
-------------------------------------------------------------
The Honorable Nancy V. Alquist of the U.S. Bankruptcy Court for
the District of Maryland in Baltimore has approved the U.S.
Trustee for Region Four's request to appoint a Chapter 11 Trustee
in Colleen, Inc.'s bankruptcy case.
The U.S. Trustee called for the appointment of Zvi Guttman as
Chapter 11 Trustee based on evidence of the Debtor's involvement
in pre-petition fraud, dishonesty and gross mismanagement as well
as the apparent lack of control of the Debtor's principal in the
Debtor's affairs after its bankruptcy filing.
Several banks and Global Express Money Orders have accused the
Debtor's principals, Brian and Alec Satisky, of defrauding them of
millions of dollars through a large-scale check-kiting scheme.
Just prior to the Debtor's bankruptcy filing, Alec Satisky
committed suicide. He owned 51% of the Debtor's shares while his
brother Brian, owns the remaining 49% of the shares.
The Debtor's schedules show that Baltimore County Federal Savings
Bank holds a $5,000,000 unsecured claim, Carrollton Bank has a
$5,000,000 unsecured claim, and Global Express Money Orders has a
$1,855,526.72 secured claim, all on account of the brother's
kiting scheme.
During the meeting of creditors, the U.S. trustee discovered that
Brian Satisky had no control over the Debtor's postpetition
operations and that his personal attorney, Howard Getlan, was the
sole signatory of the DIP accounts.
The U.S. Trustee argued that a hired professional has no business
making decisions that should be the responsibility of the
fiduciary of the estates. The Trustee asked the Court to approve
the appointment of a Chapter 11 trustee based on this argument.
Based in Baltimore, Maryland, Colleen, Inc., aka A & B Check
Cashing -- http://www.abcheckcashing.com/-- specializes in
cashing in all types of checks, and provides other financial
services. The Debtor filed for Chapter 11 protection on June 28,
2006 (Bankr. Dist. Md. Case No.: 06-13748). In August 2006, the
Court appointed Zvi Guttman as the Debtor's Chapter 11 Trustee.
Kristen B. Perry, Esq., and Brent C. Strickland, Esq., at
Whiteford, Taylor & Preston LLP, represents the Chapter 11
Trustee. When the Debtor sought protection from its creditors, it
disclosed assets of $467,000 and debts totaling $11,800,000.
COLLEEN INC: Selling Fifteen Store Locations to Three Buyers
------------------------------------------------------------
The Honorable Nancy V. Alquist of the U.S. Bankruptcy Court for
the District of Maryland in Baltimore authorized Zvi Guttman, the
Chapter 11 Trustee appointed in Colleen, Inc.'s bankruptcy case,
to sell equipment and assume and assign certain leases associated
with fifteen of the Debtor's store locations.
At the conclusion of the auction held on Sept. 13, 2006, Mr.
Guttman recognized these bids as the highest and best bids
received for the stores:
a) the $130,000 bid from Junal Group Financial Inc. for the
Debtor's store located at Frederick Road in Baltimore,
Maryland.
b) the $250,000 bid from SHRI Ram Sai, LLC, for these
store locations:
* 2135 W. Patpsco Ave.
Baltimore, MD;
* 5106 Ritchie Highway
Baltimore, MD;
* 3107 North Ave.
Baltimore, MD;
* 1 Center Place,
Dundalk, MD;
* 1700 Pennsylvania Ave.
Baltimore, MD;
* 2706 Pulaski Highway
Baltimore, MD;
* 3901 Hollins Ferry Rd.
Baltimore, MD;
* 3801 Eastern Ave.
Baltimore, MD; and
* 2101 E. Monument St.
Baltimore, MD; and
c) a bid from Moran Foods, Inc., for waiver of administrative
and lease cure claims and payment of $10,000 in exchange
for an agreement with the Trustee to assume and assign to
Moran Foods the leases for these locations:
* 6836 Reisterstown Rd.
Baltimore, MD;
* 1500-1516 Havenwood Rd.
Baltimore, MD;
* 717 Washington Blvd.
Baltimore, MD;
* 250 McMechen St.,
Baltimore, MD; and
* 2008 Maryland Ave.
Baltimore, MD
The highest and best back-up bid received was the $375,000 offer
from ITS Financial, LLC, for all of the store locations, except
the five locations that were leased from Moran Foods.
The stores will be sold free and clear of liens, with liens
attaching to the net proceeds of the sale. Global Express Money
Orders, Inc., holds a lien on the Debtor's leasehold interests as
intangible assets and the Debtor's furniture, fixtures, goodwill,
and equipment. The Debtor owed Global Express approximately $1.8
million when it filed for bankruptcy.
Based in Baltimore, Maryland, Colleen, Inc., aka A & B Check
Cashing -- http://www.abcheckcashing.com/-- specializes in
cashing in all types of checks, and provides other financial
services. The Debtor filed for Chapter 11 protection on June 28,
2006 (Bankr. Dist. Md. Case No.: 06-13748). In August 2006, the
Court appointed Zvi Guttman as the Debtor's Chapter 11 Trustee.
Kristen B. Perry, Esq., and Brent C. Strickland, Esq., at
Whiteford, Taylor & Preston LLP, represents the Chapter 11
Trustee. When the Debtor sought protection from its creditors, it
disclosed assets of $467,000 and debts totaling $11,800,000.
COMMUNICATIONS CORPORATION: Taps Michael Nassif as Special Counsel
------------------------------------------------------------------
Communications Corporation of America and its debtor-affiliates
ask the U.S. Bankruptcy Court for the Western District of
Louisiana for permission to employ Michael P. Nassif, Esq., as its
special counsel.
Mr. Nassif will:
a. advise and represent the Debtors with respect to all
aspects of matters arising from non-compete agreements,
contracts and commercial matters, including, but not
limited to, the enforcement of contracts and non-compete
agreements, and commercial litigation matters;
b. advise and represent the Debtors with respect to related
matters as they arise at the Debtors' request;
c. continue representation of the Debtors for matters pending
at the time of their bankruptcy filing for which Mr. Nassif
was already employed and matters which the Debtors sought
his legal counsel, including proceeding captioned
Communications Corporations of America, Inc. v. Retention
Resources, et al., Case No. 2005-25683 in the 164th
Judicial District Court of Harris County, Texas; and
Communications Corporation of Texas, Inc. vs. Nexstar
Broadcasting, Inc. et al. which will be filed in Texas and
the investigation of potential claims of certain identified
entities; and
d. assist the Debtors' reorganization attorneys from time to
time.
Mr. Nassif discloses that he will bill $170 per hour for this
engagement.
To the best of the Debtors' knowledge, Mr. Nassif does not hold
nor represent any interest adverse to their estates.
Headquartered in Lafayette, Louisiana, Communications Corporation
of America, is a media and broadcasting company. Along with media
company White Knight Holdings, Inc., it owns and operates around
23 TV stations in Indiana, Texas and Louisiana. Communications
Corporation and 10 of its affiliates filed for bankruptcy
protection on June 7, 2006 (Bankr. W.D. La. Case Nos. 06-50410
through 06-50421). Douglas S. Draper, Esq., William H. Patrick
III, Esq., and Tristan Manthey, Esq., at Heller, Draper, Hayden,
Patrick & Horn, LLC, represents Communications Corporation and its
debtor-affiliates. When Communications Corporation and its
debtor-affiliates filed for protection from their creditors, they
estimated assets and debts of more than $100 million.
COMPLETE RETREATS: Selects CIT Capital as Real Estate Advisor
-------------------------------------------------------------
Complete Retreats LLC and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Connecticut for permission to
employ CIT Capital USA, Inc., as their exclusive real estate
advisor and disposition agent, nunc pro tunc to Aug. 18, 2006.
The Debtors are exiting certain of their properties. In
connection with reorganization efforts, the Debtors hope to sell
the Properties in the near future. Holly Felder Etlin, the
Debtors' chief restructuring officer, relates that the Properties
are not popular with the Debtors' members and are often vacant.
Ms. Etlin notes that the Debtors do not have the internal
expertise, infrastructure, or staff necessary to analyze or
market the Properties competently and cost-effectively.
Members of CIT's Commercial Real Estate group have significant
experience in the disposal of real property assets, Ms. Etlin
tells the Court. Moreover, CIT has a good reputation, which will
lend credibility to the contemplated sale process.
The Debtors will employ CIT pursuant to the terms of a Letter
Agreement dated August 18, 2006, between the parties. The CIT
Letter Agreement is the result of arm's-length negotiations
between the Debtors and CIT. Ms. Etlin states that the Debtors
selected CIT only after considering several other candidates with
similar expertise.
Among others, CIT will:
-- provide an experienced team to value the Properties;
-- craft appropriate marketing, disposition, and auction
processes to sell the Properties;
-- hire local brokers to assist in the sale process and save
the Debtors from having to employ brokers under Section 327
of the Bankruptcy Code;
-- meet and negotiate with parties who are interested in
acquiring the Properties;
-- negotiate stalking horse sale contracts, as necessary; and
-- identify target buyers for the Properties.
CIT will also establish a "fast-track" disposition for the
Properties. Specifically, for certain properties in Nevis,
Abaco, the Dominican Republic, and the United States, CIT will
complete its due diligence, review the Debtors' objectives, and
market or auction those Properties within 120 days.
Upon the closing of a sale of each of the Properties, the Debtors
will pay CIT a Transaction Fee equal to 7% of the gross proceeds
from that sale. Any fees for local brokers retained will be
included in the Transaction Fee.
If the Debtors were to enter into a strategic partnership or
merger that does not include the sale of any Property, CIT will
be entitled to a $75,000 Incentive Fee for advisory services
performed.
The Debtors will also reimburse CIT for all its out-of-pocket
expenses, including marketing and travel expenses and reasonable
attorneys' fees.
The Debtors further ask the Court not to subject the Transaction
Fees to any holdbacks and not to require CIT to file and serve
detailed time reports or timesheets since the firm is not seeking
any monthly fees for its services.
Dennis R. Irvin, CIT's executive vice president, assures the
Court that the firm has no connection with, and holds no
interests adverse to, the Debtors, their creditors, or any other
party-in-interest. Accordingly, CIT is a "disinterested person"
as referenced in Section 327(a) of the Bankruptcy Code and as
defined by Sections 101(14) and 1107(b) of the Bankruptcy Code.
About Complete Retreats
Headquartered in Westport, Connecticut, Complete Retreats LLC
operates five-star hospitality and real estate management
businesses. In addition to its mainline destination club
business, the Debtor also operates an air travel program for
destination club members, a villa business, luxury car rental
services, wine sales services, fine art sales program, and other
amenity programs for members. Complete Retreats and its debtor-
affiliates filed for chapter 11 protection on July 23, 2006
(Bankr. D. Conn. Case No. 06-50245). Nicholas H. Mancuso, Esq.
and Jeffrey K. Daman, Esq. at Dechert LLP represent the Debtors in
their restructuring efforts. Michael J. Reilly, Esq., at Bingham
McCutchen LP, in Hartford, Connecticut, serves as counsel to the
Official Committee of Unsecured Creditors. No estimated assets
have been listed in the Debtors' schedules, however, the Debtors
disclosed $308,000,000 in total debts. (Complete Retreats
Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
CONNACHER OIL: Moody's Rates $180 Mil. Secured Loans at B1
----------------------------------------------------------
Moody's Investors Service assigned a B1 corporate family rating to
Connacher Finance Corporation and B1 ratings to its $180 million
senior secured 7-year term loan B and $15 million senior secured
bank revolver. The ratings are assigned subject to a review of
final terms and conditions confirming that lender protections
match those built into the rating. The outlook is stable.
CFC is an unrestricted wholly-owned subsidiary of Connacher Oil
and Gas Limited, a small exploration and production firm located
in Calgary, Alberta, Canada. CLL does not guarantee CFC debt. CFC
debt is non-recourse to CLL. CFC is developing a greenfield oil
sands project (Great Divide) involving steam assisted gravity
drainage production of bitumen and sale of diluted bitumen. Its
properties span 79,360 acres of oil sands leases 50 miles
southwest of Fort McMurray, Alberta, Canada. CFC also recently
acquired a small 8,400 barrel per day refinery in northern
Montana.
CLL identifies 6 pods of oil sands deposits with potential
commercial viability. The borrowing "Project" includes the
initial Great Divide Pod 1 project, the Montana refinery, and
undeveloped Pod 2, 3, 4, 5 and 6 acreage. Pod 1 development
received regulatory approval earlier this year and CFC may seek
Pod 2 and 4 approvals next year. The credit facilities are first
secured by CFC's (and its wholly-owned subsidiaries' and
partnerships') assets, lease acreage, contracts, and regulatory
permits.
Together with CDN$103 million of first-in Pod 1 cash equity from
CLL, the debt facilities will fund Project Costs totaling at least
US$289 million (CDN$318 million), including refinancing existing
CFC debt and assuming a fully drawn bank revolver. Defined costs
include
* the Pod 1 central plant and first 15 well pairs,
* refinancing US$51 million in debt incurred to acquire the
Montana refinery from Holly Corporation this year,
* a pre-completion debt service reserve and,
* financing transaction costs.
Third party engineer GLJ Petroleum Consultants estimates another
CDN$231 million in capital outlays, beginning in 2011, for 65 more
well pairs to fully produce Pod 1 probable reserves over the life
of the project. Subject to incurrence tests, assuming Pod 1 is on
plan and CFC submits sound project plans, third party engineering,
and forecasts, TLB permits another $150 million of pari passu debt
to develop the next pod.
GLJ views Pod 1 to have sufficient appraisal well, coring, and 3-D
seismic data to assign 71 million net barrels of probable (2P)
bitumen reserves valued at PV10 CDN$260 million, with its low case
being approximately 20% less than 71 million barrels. GLJ
estimates 98 million net barrels of Pod 1 probable and possible
(3P) reserves valued at PV10 CDN$331 million after CDN$542 million
in capital outlays to produce the reserves over the project life.
Insufficient data exists now for the other Pods on reservoir areal
extent, thickness, complexity, quality, and bitumen saturation,
relegating their resource estimates to speculative contingent and
prospective categories. GLJ's high estimate for commercial
recoverable resources is 406 million net barrels of potential
commercial resources, valued at PV10 CDN$1 billion after
CDN$2.8 billion in development capital over the life of the
project.
Moody's has not published an oil sands ratings methodology though
CFC's B1 rating maps to three preceding oil sands ratings (Western
Oil Sands, Ba2 senior secured; OPTI Canada, Ba3 senior secured;
MEG Energy, Ba3 senior secured). Each was also effectively a
project financing rated well in advance of completion, commercial
operation, and cash flow. Each is substantially larger and
farther along than CFC in total resource evaluation, each tends to
hold thicker oil sands pay, each is much more heavily capitalized
with equity in scale (though CFC's debt to capital approaches the
other projects), and each includes deep pocket shareholders and/or
deep pocket joint venture partners with a strategic interest in
project execution.
CLL believes it has greater Pod 1 reservoir homogeneity and is
less afflicted by permeability barriers difficult to detect by
3-D seismic imaging, heat-dissipating zones, or problematic
underlying water or overlying natural gas formations than other
SAGD projects. This needs to be borne out in performance. As
well, since Pod 1 design steam generation capacity approximates
27,000 bpd, CFC needs to achieve a very attractive 2.7 steam-to-
oil ratio to hit target 10,000 bpd of bitumen production. Given
experience in the region to date, we view that as aggressive and
premature to build into the B1 rating.
As for all oil sands financings, Moody's ran sensitivity cases.
These include price, production rate, diluent cost, steam-oil
ratio, steam capacity, natural gas and non-energy production
costs, project cost overrun, and delayed start up assumptions. If
CFC only achieves a steam-oil ratio of 3.0, with resulting
indicated bitumen production of 9,000 bpd, it still appears the
ratings could be supported if its other expected case assumptions
hold and West Texas Intermediate light sweet crude oil prices
exceed roughly $37/barrel. However, further sensitizing key
variables (CDN$260 of Pod 1 development costs, 20% higher unit
production costs, $7/mmbtu natural gas costs, $4/barrel Gulf Coast
crack spread), its ability to materially reduce debt and support
the ratings appears challenged at roughly $45/barrel WTI. Further
sensitizing for a steam-oil ratio of 3.5 and resulting indicated
7,700 bpd of production, CFC's ability to reduce debt and support
the ratings appears to be challenged at roughly $50/barrel WTI.
The rating outlook could be impacted if
* tight regional labor, supplier markets, or other factors
unduly harm project timing or costs,
* Pod 1 peak daily production, decline curves per well pair,
energy costs, or the key steam/oil ratio unduly impact
sustainable production, unit costs, or capital intensity per
unit of production,
* expected or realized prices do not stay historically high in
support of inherently high bitumen operating costs and deep
price discounts relative to light sweet oil prices, or
* Pod 2 financing and development costs overly burden debt
service capacity.
Generally, CFC's B1 ratings reflect the challenges and timing,
development and production cost, production and recovery rate, and
margin uncertainties of a leveraged greenfield SAGD project,
sponsored by a small though experienced firm, and in the face of
severe sector cost pressures; condensate (diluent) scarcity for
incremental sector bitumen production growth requiring the use of
more expensive synthetic crude oil as diluent or expensive diluent
import logistics costs; highly volatile and cyclical crude oil
prices that are currently softening; and deep bitumen price
differentials relative to light sweet crude oil.
Moody's observes expensive preliminary logistical costs for up to
two years for diluent delivery to the project and for movement of
diluted bitumen for sale until pipeline extensions and
interconnections are in place. Moody's anticipates ongoing
bitumen price pressure as sector production surges prior to
sufficient expansion of bitumen pipeline export capacity beyond
current fairly saturated marketing regions.
Partial risk mitigants include
* a 1-year interest reserve account;
* adequate third party engineered resource base for Pod 1
development and for asset coverage relative to the rating;
* a potential for an eventually large proven and probable
reserve base;
* and low reserve replacement risk (though oil sands quality,
reservoir homogeneity, bitumen production rates, total
recovery percentage, and cost and all-in economics will vary
across CFC's acreage).
-- The ratings benefit by the project's use of SAGD
technology more than 7 years into commercial status after
20 years of pilot project experience in the region;
-- the fact that SAGD project cost escalation has so far
been significantly less severe than mining and integrated
oil sands developments;
-- a degree of bitumen margin protection provided by the
Montana refinery that provides an imperfect hedge for
diluent costs and for price differentials between heavy
crude oil and light crude oil;
-- a natural gas price hedge at the sponsor level due to its
small natural gas reserve and production portfolio;
-- and potential strategic interest in the project by major
producers.
Further support of CFC's current ratings comes from tight
financing terms;
* adequate up-front cash equity funding; comprehensive third
party engineering and market evaluation studies by major
recognized consultants;
* adequate Pod 1 appraisal support from 3-D seismic and well
control from appraisal wells and corings;
* its attractive location in the midst of ample pipeline,
utilities, and road infrastructures;
* a seasoned, though lean, project management team, assisted
by a recognized oil sands project contractor;
* and a seasoned sponsor, with demonstrated access to equity
capital.
To a degree, the project benefits from cash flow from the Montana
refinery assuming volatile refining margins remain sound. The
refinery may also eventually become a source of diluent for Great
Divide in a diluent scarce market. Given an additional small
capital investment, under the existing refinery configuration, CLL
believes the refinery can produce in the range of 100% low sulfur
gasoline and approximately 50% low sulfur diesel. However, during
weak margin environments in the past, the refinery's comparatively
high unit costs and lower value product yield did render low
profitability and losses in below average to weak margin
environments under prior ownership.
Alternatively CFC's ratings are furthermore restrained by the
comparatively small scale of the sponsor; the fact that the great
majority of its market value is derived from Great Divide; no
material cash flow until 2008 at earliest; and considerable
uncertainty on realized bitumen prices during the 2008 to 2009
full ramp-up period. Regarding asset cover, the ratings also
reflect the very early stage of appraisal drilling across Pods 2,
3, 4, 5 and 6 and a potential for thin asset coverage if third
party engineer GLJ's low case reserve estimate turns out to be
more accurate than its expected case or high cases.
On review of CLL's project data and Shaw/Stone & Webster's and
GLJ's reports, Moody's adopted somewhat more conservative
assumptions on development costs, start-up date; time to full
production; daily production; steam-oil ratio; and expected total
recovered bitumen in place.
With key bitumen yield, steam production rate, steam-oil ratio,
development and production costs, price, pipeline interconnect,
start-up and ramp-up timing, and downtime assumptions, GLJ and CLL
expect Pod 1 to generate roughly 10,000 bpd (gross) of bitumen.
That would be first attained by completing the first 15 horizontal
well pairs and by subsurface conditions supporting permitting
steam chamber temperatures, dimensions, and bitumen yield adequate
to hit peak average well pair production of 700 bpd, sustain that
for 2 to 3 years, and decline gradually thereafter. Another 65
well pairs are needed, costing C$231 million by roughly 2011
through 2025, to sustain Pod 1 production at roughly 10,000 bpd
and fully produce 3P reserves.
Connacher Oil and Gas and Connacher Finance Corporation are
headquartered in Calgary, Alberta, Canada.
CONSTELLATION BRANDS: Moody's Assigns Loss-Given-Default Rating
---------------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. beverage company sector last week, the
rating agency affirmed its Ba2 Corporate Family Rating for
Constellation Brands Inc., and revised or held its probability-of-
default ratings and assigned loss-given-default ratings on these
loans and bond debt obligations:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
US$ 500M Sr. Sec.
Revolving Credit
Facility due
6/5/2011 Ba2 Ba2 LGD3 49%
US$ 1.2B Sr. Sec.
Tranche A Term
Loan due 6/5/2011 Ba2 Ba2 LGD3 49%
US$ 1.8B Sr. Sec.
Tranche B Term
Loan due 6/5/2013 Ba2 Ba2 LGD3 49%
8.5% Series B Sr.
Unsec. Notes due
11/15/2009 - Sterling
Series B Notes Ba2 Ba2 LGD3 49%
8.5% Series C Sr.
Unsec. Notes due
11/15/2009 - Sterling
Series C Notes Ba2 Ba2 LGD3 49%
US$ 200M 8% Sr.
Unsec. Notes due
2/15/2008 Ba2 Ba2 LGD3 49%
US$ 700M 7.25% Sr.
Unsec. Notes
due 9/1/2016 Ba2 Ba2 LGD3 49%
US$ 250M 8.125%
Sr. Sub. Notes
due 1/15/2012 Ba3 B1 LGD6 95%
Moody's explains that current long-term credit ratings are
opinions about expected credit loss which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
Headquartered in Fairport, New York, Constellation Brands Inc.
-- http://www.cbrands.com/-- engages in producing and marketing
beverage alcohol brands in wine, imported beer, and spirits
categories principally in the United States, the United Kingdom,
Australia, and New Zealand.
CORE PROPERTIES: Case Summary & Four Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Core Properties LLC
872 Oakwood Circle
Bountiful, UT 84010
Bankruptcy Case No.: 06-23643
Chapter 11 Petition Date: September 25, 2006
Court: District of Utah (Salt Lake City)
Debtor's Counsel: Tyler J. Jensen, Esq.
LeBaron & Jensen, P.C.
476 West Heritage Park Boulevard, Suite 200
Layton, UT 84041
Tel: (801) 773-9488
Fax: (801) 773-9489
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $500,000 to $1 Million
Debtor's Four Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Kimble Blackburn Loan $13,000
872 Oakwood Circle
Bountiful, UT 84010
Tel: (801) 502-6700
Jasdip, LLC Loan $23,000
6490 South McCarran Boulevard
Building D, Suite 32
Reno, NV 89509
Johnston Engineering Engineering Fees $26,800
40 South 100 West
Tremonton, UT
Jeremy Blackburn Loan $37,800
239 Business Center Drive
Pawleys Island, SC 29585
Tel: (843) 267-5510
COTT CORPORATION: Moody's Assigns Loss-Given-Default Rating
-----------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. beverage company sector last week, the
rating agency affirmed its Ba3 Corporate Family Rating for Cott
Corporation and its B1 rating on Cott Beverages Inc.'s -- the
company's subsidiary -- 8% Senior Subordinate Notes Due 2011.
Moody's assigned an LGD5 rating to those bonds, suggesting
noteholders will experience a 74% loss in the event of a default.
Moody's explains that current long-term credit ratings are
opinions about expected credit loss which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
Headquartered in Ontario, Canada, Cott Corporation produces store-
brand soft drinks in Canada, the UK, and the US. In addition to
soda, Cott makes and distributes bottled water, juices, iced teas,
and sports drinks. It produces private-label brands for
retailers, including Sainsbury Classic for UK grocer J Sainsbury,
Sam's American Choice (US) and Great Value (Canada) for Wal-Mart,
and Safeway Select for Safeway. Wal-Mart accounts for 40% of
Cott's sales.
COTULLA STYLE: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Cotulla Style Pit Bar B Q, Inc.
4502 McPherson Avenue
Laredo, TX 78041
Tel: (956) 724-5747
Bankruptcy Case No.: 06-50210
Type of Business: The Debtor operates a Mexican-themed restaurant.
See http://researcharchives.com/t/s?1251
Chapter 11 Petition Date: September 25, 2006
Court: Southern District of Texas (Laredo)
Judge: Wesley W. Steen
Debtor's Counsel: Argentina Cronfel-Meurer, Esq.
Cronfel-Meurer P.C.
1402 Victoria Street
Laredo, TX 78040
Tel: (956) 723-0461
Fax: (956) 723-4758
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.
CRDENTIA CORP: Inks Agreement and Plan of Merger with iVOW Inc.
---------------------------------------------------------------
Crdentia Corp. and iVOW, Inc., have executed the Agreement and
Plan of Merger and Interim Management Agreement associated with
the Company's acquisition of all outstanding shares of iVOW, Inc.
As reported in the Troubled Company Reporter on Sept. 8, 2006,
Crdentia signed a non-binding term sheet to acquire, for
approximately $3.5 million of the Company's common shares,
iVOW, Inc., a provider of disease management services for the
treatment of chronic and morbid obesity.
Both companies continue to expect that closing of the transaction
would occur in the fourth quarter of 2006, pending the receipt of
the requisite stockholder approvals. Each company's Board of
Directors has approved the execution of the Agreements.
Headquatered in Dallas, Texas, Crdentia Corp. (OTCBB: CRDT)
-- http://www.crdentia.com/-- provides healthcare staffing
services. Crdentia seeks to capitalize on an opportunity that
currently exists in the healthcare industry by targeting the
critical nursing shortage issue. There are many small, private
companies that are addressing the rapidly expanding needs of the
healthcare industry. Unfortunately, due to their relatively small
capitalization, they are unable to maximize their potential,
obtain outside capital or expand. By consolidating well-run small
private companies into a larger public entity, Crdentia intends to
facilitate access to capital, the acquisition of technology, and
expanded distribution that, in turn, drive internal growth.
Going Concern Doubt
KBA Group LLP, in Dallas, Texas, raised substantial doubt about
Crdentia Corp.'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 net losses of $6,268,503 and $33,702,854 for the years
ended Dec. 31, 2005 and 2004, respectively, and cash flows from
operating activities of $5,062,267 and $3,186,737 for the years
ended Dec. 31, 2005 and 2004, respectively. Additionally, the
Company's current liabilities exceed their current assets by
$6,493,181 at Dec. 31, 2005.
CREST 2003: Stable Performance Cues Moody's to Lift Ratings
-----------------------------------------------------------
Moody's Investors Service upgraded the ratings of eight classes
and affirmed the ratings of three classes of Crest 2003-2,
Collateralized Debt Obligations, Series 2003-2:
* Class A-1, $117,216,989, Floating, affirmed at Aaa
* Class A-2, $6,880,662, Fixed, affirmed at Aaa
* Class A-3, $20,000,000, Fixed, affirmed at Aaa
* Class B-1, $2,000,000, Floating, upgraded to Aaa from Aa2
* Class B-2, $46,750,000, Fixed, upgraded to Aaa from Aa2
* Class C-1, $2,000,000, Floating, upgraded to Aa2 from A3
* Class C-2, $27,250,000, Fixed, upgraded to Aa2 from A3
* Class D-1, $3,875,000, Floating, upgraded to A3 from Baa3
* Class D-2, $25,375,000, Fixed, upgraded to A3 from Baa3
* Class E-1 $250,000, Floating, upgraded to Ba1 from Ba3
* Class E-2, $17,625,000, Fixed, upgraded to Ba1 from Ba3
As of the Aug. 31, 2006 remittance statement, the transaction's
aggregate bond balance has decreased to $322.8 million from $325.0
million at securitization. The notes are collateralized by all or
a portion of 70 subordinate classes from 40 fixed rate CMBS pools
(86.9% of the transaction), debt securities from five REITs
(6.8%), ten CTL securities (4.8%) and one CDO certificate (1.5%).
The decrease in the note balance is primarily due to amortization
of the CTL securities.
Moody's is upgrading Classes B-1, B-2, C-1, C-2, D-1, D-2, E-1 and
E-2 due to seasoning and stable pool performance. Of the 49 CMBS
classes rated by Moody's, seven classes have been upgraded and
three classes downgraded since securitization. Moody's reviewed
the shadow ratings of the 21 CMBS classes not rated by Moody's and
upgraded the shadow rating of 13 classes and downgraded the shadow
rating of one class. The shadow rating of the CDO bond was
upgraded. The shadow ratings of the two CTL securities and the
one REIT security have been downgraded since securitization.
Moody's uses a weighted average rating factor as an overall
indicator of the credit quality of a CDO transaction. Based on
Moody's analysis, the current WARF has decreased slightly to
1,065, compared to 1,142 at securitization. The distribution of
ratings (actual and shadow ratings) is: Aaa - A3 (6.0% compared to
4.5% at securitization), Baa1 -- Baa3 (28.8% compared to 25.5%),
Ba1 - Ba3 (58.6% compared to 63.5%) and B1 - B3 (6.6% compared to
6.5%).
The CMBS certificates are from pools securitized between 1997 and
2003. The largest vintages are:
* 2003 (52.3%),
* 2002 (29.7%), and
* 2001 (9.8%).
The largest CMBS exposures are:
* GSMS 2003-C1 (4.1%),
* GMACC 2003-C2 (4.0%),
* WBCMT 2003-C5 (4.0%),
* JPMCC 2003-ML1A (4.0%), and
* LBUBS 2003-C1 (4.0%).
CULLIGAN INTERNATIONAL: Moody's Assigns Loss-Given-Default Rating
-----------------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. beverage company sector last week, the
rating agency affirmed its B1 Corporate Family Rating for Culligan
International Company, and raised its probability-of-default
ratings and assigned loss-given-default ratings on these loans
facilities:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
$110M Sr. Sec.
Revolving Credit
Facility due 2010 B1 Ba2 LGD2 20%
$215M Sr. Sec.
Term Loan B
due 2011 B1 Ba2 LGD2 20%
Additionally, Moody's confirmed its B3 rating on Culligan Finance
Corporation B.V.'s EUR185 million Senior Subirdinate Notes Due
2014. The notes were assigned an LGD5 rating suggesting a
projected loss-given default of 76%.
Moody's explains that current long-term credit ratings are
opinions about expected credit loss which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
Based in Northbrook, Illinois, Culligan International Company,
produces filters for tap water, household water softeners,
microfiltration products, desalination systems, and portable
deionization services for commercial and industrial users.
DAEWOO CORPORATION: Chapter 15 Petition Summary
-----------------------------------------------
Petitioner: Hyung-Ha Lee
Bankruptcy Trustee of Daewoo Corporation
Foreign Representative
Debtors: Daewoo Corporation
Daewoo Center Building 541, 5-ga
Namdaemunro, Chung-gu
Seoul, Korea
Case No.: 06-12242
Type of Business: The Debtor is a global trading and investment
company in the areas of international trade,
project organizing and overseas resource
developments. It provides trading in chemicals,
textiles, metals and steel.
See http://www.daewoo.com/
Chapter 15 Petition Date: September 25, 2006
Korean Court: Seoul Central District Court (12th Bankruptcy
Division)
U.S. Court: Southern District of New York (Manhattan)
U.S. Judge: Robert E. Gerber
Petitioner's Counsel: Paul H. Silverman, Esq.
Alston & Bird LLP
90 Park Avenue
New York, NY 10016
Tel: (212) 210-9562
Fax: (212) 210-9444
Estimated Assets: $50 Million to $100 Million
Estimated Debts: More than $100 Million
DATALOGIC INT'L: Unit Posts $109K Net Loss in Qtr. Ended June 30
----------------------------------------------------------------
DataLogic International, Inc.'s Consulting Segment posted a
$109,000 net loss for the three months ended June 30, 2006, as
compared to the net loss of $100,000 for the three months ended
June 30, 2005. The Company's consulting segment provides IT
outsourcing and consulting services to a broad range of U.S. and
international governmental agencies and commercial enterprises.
Consulting segment services include project management and systems
analysis, design, implementation, testing and maintenance.
The Company's Communications Segment reported a $16,000 net loss
for the three months ended June 30, 2006, as compared to the net
loss of $22,000 for the same period in the prior year. The
communications segment addresses the network, mobile asset
tracking and secured mobile communications. The Company's Panther
Trak mobile asset tracking device utilizes digital cellular
networks and the GPS to enable a broad range of customer-defined
options in keeping track of valuable vehicular assets.
Consulting Segment net revenues for the three months ended June
30, 2006 increased $77,000 or 2.3% to $3,390,000 as compared to
net revenues of $3,313,000 for the three months ended June 30,
2005. Communications Segment net revenues increased $512,000 to
$1,683,000 as compared to net revenues of $1,171,000 for the three
months ended June 30, 2005.
DataLogic's balance sheet at June 30, 2006, showed $5,451,866 in
total assets and $5,894,617 in total liabilities, resulting in a
$442,751 stockholders' deficit.
A full-text copy of the Company's quarterly report is available
for free at http://researcharchives.com/t/s?123b
Going Concern Doubt
As reported in the Troubled Company Reporter on May 17, 2006,
Corbin & Company, LLP, in Irvine, California, raised substantial
doubt about DataLogic's ability to continue as a going concern
after auditing the Company's consolidated financial statements for
the year ended Dec. 31, 2005. The auditor pointed to the
Company's recurring losses and need to establish profitable
operations.
About DataLogic
DataLogic International, Inc. -- http://www.dlgi.com/-- is a
technology and professional services company providing a wide
range of consulting services and communication solutions like GPS
based mobile asset tracking, secured mobile communications and
VoIP. The Company also provides Information Technology
outsourcing and private label communication solutions.
DataLogic's customers include U.S. and international governmental
agencies as well as a variety of international commercial
organizations.
DEAN FOODS: Moody's Assigns Loss-Given-Default Rating
-----------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. food and beverage company sector last
week, the rating agency confirmed its Ba1 Corporate Family Rating
for Dean Foods Company and its subsidiary, Dean Holding Company.
Additionally, Moody's revised or held its probability-of-default
ratings and assigned loss-given-default ratings on these loans and
bond debt obligations:
Issuer: Dean Foods Company
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
$1.5B Gtd. Sr.
Sec. Revloving
Credit Facility
due 2009 Ba1 Baa3 LGD3 37%
$1.5B Gtd. Sr.
Sec. Term Loan A
due 2009 Ba1 Baa3 LGD3 37%
$500M Sr. Unsec.
Notes due 2016 Ba2 Ba2 LGD5 85%
Issuer: Dean Holding Company
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
$250M 8.15% Sr.
Unsec. Notes
due 2007 Ba2 Ba2 LGD5 85%
$200M 6.625% Sr.
Unsec. Notes
due 2009 Ba2 Ba2 LGD5 85%
$150M 6.9% Sr.
Unsec. Notes
due 2017 Ba2 Ba2 LGD5 85%
Moody's explains that current long-term credit ratings are
opinions about expected credit loss which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
Headquartered in Dallas, Texas, Dean Foods Company --
http://www.deanfoods.com/-- manufactures, markets, and
distributes soy, dairy, and dairy-related products.
DRAGON PHARMACEUTICAL: Incurs $320,997 Net Loss in Second Quarter
-----------------------------------------------------------------
Dragon Pharmaceutical Inc. reported sales of $13.89 million for
the second quarter ended June 30, 2006, representing an increase
of 111% compared to the same period of 2005. The increase in
sales was mainly due to the growth of sales from the Chemical
Division, which increased by 144% to $11.92 million from $4.88
million for the same period in 2005.
Gross profit and gross margin were $2.39 million and 17.2% for the
second quarter of 2006, an improvement from $1 million and 15.2%
for the same period in 2005.
The Company's General Administration expenses and interest
expenses increased by $1.16 million compared to the same period of
last year, and include an increase of $250,000 in accounting and
auditing expenses, and an increase of $530,000 non-cash interest
expenses related to long-term account payables. The discontinued
operations recorded a profit of $546,000 during the second
quarter.
With the effect of these factors, Dragon reported a net loss of
$320,997 for the second quarter of 2006.
Since the second quarter of 2006, the Chinese pharmaceutical
industry has been facing significant uncertainties as a result of
series of market and industrial reforms by Chinese government,
including additional price controls, investigation of commercial
bribery in drug distribution and stricter quality and GMP
inspections. The operational results of Dragon revealed the anti-
risk capability of the business in the tough market situation.
Asset Sale
The Company said that market and industrial reform will adversely
affect the formulation business of direct drug sales to hospitals,
and management has successfully entered into a transaction to sell
the type of business and assets for $12.63 million with a gain of
$4.48 million. After this sale, the Company's remaining 30 drug
approvals are mostly cephalosporin active pharmaceutical
ingredients and powder for injection. The Company is going to
take advantage of upstream synergy to become one of the
significant suppliers in this more focused product market.
A full-text copy of Dragon Pharmaceutical's quarterly report is
available for free at http://researcharchives.com/t/s?123a
Going Concern Doubt
Webb & Company, P.A., in Boynton Beach, Florida, raised
substantial doubt about Dragon Pharmaceutical Inc.'s ability to
continue as a going concern after auditing the Company's
consolidated financial statements for the year ended
Dec. 31, 2005. The auditor pointed to the Company's recurring
working capital deficiency.
About Dragon Pharmaceutical
Dragon Pharmaceutical Inc. -- http://www.dragonpharma.com/-- is
an international pharmaceutical company headquartered in
Vancouver, Canada, with production facilities located in China.
The Company owns 37 drug approvals from SFDA and markets them in
China as well as internationally. These products are organized
under 3 distinct business divisions: a Pharma division for generic
chemical drugs, a Chemical division for bulk pharmaceutical
chemicals such as Clavulanic Acid and 7-ACA and a Biotech division
for EPO.
DS WATERS: Moody's Assigns Loss-Given-Default Rating
----------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. beverage company sector last week, the
rating agency junked DS Waters Enterprises LP's Corporate Family
Rating from B3.
Moody's also confirmed its B2 rating on the company's $80 million
Senior Secured Revolving Credit Facility Due 2008, and
$400 million Senior Secured Term Loan Due 2009. The bond debt
obligations were assigned an LGD2 rating suggesting lenders will
experience a 28% loss in the event of a default.
Moody's explains that current long-term credit ratings are
opinions about expected credit loss which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
Headquartered in Phoenix, Arizona, DS Waters Enterprises LP
manufactures bottled water.
EASYLINK SERVICES: Cures Non-Compliance to Nasdaq Requirement
-------------------------------------------------------------
EasyLink Services Corporation received notice from the Nasdaq
Stock Market, Inc. Listing Qualifications Staff that it had cured
its non-compliance with the minimum bid price requirement for the
NASDAQ Capital Market and that no hearing to review the matter was
required.
The Company disclosed that it is now in full compliance with all
Nasdaq Capital Market listing requirements and in connection with
its reverse stock split reported in the Troubled Company Reporter
on Aug. 29, 2006, the Company's common stock traded under the
symbol "EASYD" and will resume trading under the symbol "EASY" on
Sept. 26, 2006.
Headquartered in Piscataway, New Jersey, Easylink Services
Corporation (NASDAQ: EASY) -- http://www.EasyLink.com/-- provides
outsourced business process automation services to medium and
large enterprises, including 60 of the Fortune 100, to improve
productivity and competitiveness by transforming manual and paper-
based business processes into efficient electronic business
processes.
Going Concern Doubt
As reported in the Troubled Company Reporter on May 16, 2006,
Grant Thornton LLP expressed substantial doubt about Easylink's
ability to continue as a going concern after it audited the
Company's financial statement for the year ended Dec. 31, 2005.
The accounting firm pointed to the Company's history of operating
losses, accumulated deficit and negative working capital.
EMMIS COMMS: Subsidiary Commences Offer to Purchase 6-7/8% Notes
----------------------------------------------------------------
Emmis Operating Company, a subsidiary of Emmis Communications
Corporation, has commenced an offer to purchase, at par value, all
of the outstanding 6-7/8% Senior Subordinated Notes due 2012.
The Company is offering to purchase for $1,000 in cash per $1,000
principal amount of Notes up to $339.6 million in aggregate
principal amount of the outstanding Notes. In addition, the
Company is offering to purchase for $1,000 in cash per $1,000
principal amount of Notes the remaining $35.4 million in aggregate
principal amount of the outstanding Notes in a separate tender
offer. In connection with the Tender Offer, the Company is
soliciting consents from holders of the Notes to amendments to the
Indenture, which would eliminate substantially all of the
restrictive covenants and certain events of default.
The Company also disclosed that holders who tender Notes in the
Asset Sale Offer will be deemed to have tendered their Notes in
the Tender Offer as well, unless the holders affirmatively elect
otherwise, in which case the tenders will be subject to proration.
There is no condition that any minimum amount of Notes be tendered
in the Asset Sale Offer.
Holders who tender Notes in both the Asset Sale Offer and the
Tender Offer will be deemed to have delivered consents with
respect to all the Notes.
The Asset Sale Offer, the Tender Offer and the Consent
Solicitation will expire at 12:00 midnight, New York City time, on
Oct. 19, 2006. Tendered Notes, if accepted for payment, will
receive accrued and unpaid interest up to, but not including, the
payment date.
The Offers are being made upon the terms and conditions set forth
in the Notice of Offer to Purchase and Consent Solicitation
Statement dated Sept. 21, 2006. Copies of the Statement,
including the related letter of transmittal, can be obtained by
contacting Georgeson Shareholder Communications Inc., the
information agent, at (866) 628-6045 or (212) 440- 9800.
Banc of America Securities LLC and Deutsche Bank Securities are
the dealer managers for the Offers. Questions regarding the
Offers can be addressed to Banc of America Securities LLC at
(888) 292-0070 or (704) 387- 4206 and Deutsche Bank Securities at
(800) 553-2826 or (212) 250-7772.
Based in Indianapolis, Indiana, Emmis Communications Corporation
(NASDAQ: EMMS) -- http://www.emmis.com/-- is a diversified media
firm with radio broadcasting, television broadcasting and magazine
publishing operations. Emmis owns 21 FM and 2 AM domestic radio
stations serving New York, Los Angeles and Chicago as well as St.
Louis, Austin, Indianapolis and Terre Haute, Ind. In addition,
Emmis owns a radio network, international radio interests, two
television stations, regional and specialty magazines, and
ancillary businesses in broadcast sales and publishing.
* * *
As reported in the Troubled Company Reporter on Sept. 11, 2006
Standard & Poor's Ratings Services' ratings on Emmis
Communications Corp., including the 'B+' corporate credit rating,
remained on CreditWatch with negative implications, where they
were placed on May 11, 2005.
Indianapolis, Indiana-based Emmis had roughly $658 million of debt
outstanding as of May 31, 2006.
ELECTRIC CITY: Incurs $28 Mil. Net Loss in Quarter Ended June 30
----------------------------------------------------------------
Electric City Corporation, nka Lime Energy, reported revenue of
$1,334,818 for the three-month period ended June 30, 2006,
compared to $1,550,089 generated for the same period in the prior
year.
The operating loss for the second quarter of 2006 was $1,695,920
versus an operating loss of $1,473,626 for the same period in
2005. The net loss available to common shareholders for the
second quarter of 2006 was $28,392,253, as compared to a loss of
$2,163,634 for the second quarter of 2005. The second quarter net
loss available to common shareholders included $23,383,335 in non-
cash deemed dividends related to the adjustment in the conversion
prices of its Convertible Preferred Stock, interest expense and
adjustments in the exercise prices of certain warrants.
Revenue for the first six months of 2006 totaled $2,481,163 versus
$1,800,802 for the first six months of 2005. The operating loss
reported for the first six months of 2006 was $3,383,892 as
compared to an operating loss of $2,318,753 for the first six
months of 2005. The net loss available to common shareholders was
$30,964,148 for the first half of 2006 versus a net loss of
$3,173,692 for the same period in 2005.
A full-text copy of the Company's quarterly report is available
for free at http://researcharchives.com/t/s?1238
Significant events that occurred during the second quarter of 2006
include:
-- the acquisition of Parke P.A.N.D.A. Corporation, which
closed on June 30;
-- raising $17,875,000 thought the private placement of
common stock;
-- repayment of all of the Company's convertible term;
-- conversion of the Company's convertible revolver into
common stock;
-- conversion of the Company's Series E convertible preferred
stock to common stock, eliminating future dividends on the
Series E;
-- appointment of Daniel Parke as President and Chief
Operating Officer;
-- completion of the 1 for 15 reverse split of common stock;
-- the Company's move from the American Stock Exchange to the
OTC Bulletin Board.
"It was a very busy quarter for us," commented David Asplund,
Electric City's Chief Executive Officer. "Our top priority during
this period was to ensure that we successfully recapitalize the
company and complete the acquisition of Parke Industries. As
previously stated and as evidenced by some of our recent press
releases this acquisition represented a defining transaction and a
pivotal moment in our history. We were delighted that the
majority of our prior Series E Convertible Preferred Stockholders,
some of whom currently serve on our Board of Directors shared
Managements' vision for our Company and agreed to invest the vast
majority of the $17.875 Million funding which was necessary to
complete the transaction. In addition to the purchase of Parke
Industries, this large funding raise allowed us to completely pay
down all debt leaving us today with a very clean balance sheet and
in a strong position of roughly $9.5 million cash in the bank at
the end of the quarter that will greatly enhance our ability to
begin to scale our revenue growth towards future profitability. "
"Following the finalization of our acquisition of Parke Industries
we were happy to report to shareholders that the Company named Mr.
Dan Parke, founder and President of Park Industries to serve as
the President and Chief Operating Officer of Electric City. Dan
having already built a very successful energy services business in
California, will become the architect and driving force behind our
Company's push towards becoming the leading national energy
reduction platform public company. Dan was very busy during the
quarter planning for the eventual closing of the transaction and
the need to adequately enhance the size and strength of our sales
team. Upon closing of the acquisition Dan immediately hired
several new salespeople to join the existing team and began
extensive product and sales training."
"Of course while senior management and our board of directors
spent a tremendous amount of time during the quarter to negotiate
and finalize this pivotal transaction, it is important for our
shareholders to know that during this period the Company continued
to build new business opportunities and relationships with new and
existing customers. Recently we announced Naked Juice and Galpin
Motors as some examples of these business wins and with the
integration and cross training of our sales teams, we expect to
begin to deliver to our shareholders much larger and more frequent
examples of business transactions across all of our business lines
required for our future growth."
"We have said this before but it needs to be repeated and
reinforced: with the cost of electricity rising daily and threats
of power interruption across many key economic areas of our nation
prevalent, demand has never been greater for energy efficiency
solutions. The present market for our energy saving services and
technologies for lighting and HVAC systems is estimated to exceed
$200 billion. We have built the right team and possess the right
technologies to capitalize on this demand. With energy prices at
historical highs, legislators passing favorable rules and
regulations and utilities paying for demand response and offering
considerable incentives and rebates for energy efficiency and
demand side management programs, we could not ask for a better
opportunity to grow our business. As a result, having watched us
put this team and expanded business plan together we believe that
our shareholders will be rewarded as we build into a national
leading energy reduction platform public company," concluded Mr.
Asplund.
Going Concern Doubt
As reported in the Troubled Company Reporter on March 30, 2006,
BDO Seidman, LLP, expressed substantial doubt about Electric City
Corp.'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 recurring
losses from operations.
About Electric City
Headquartered in Elk Grove Village, Illinois, Electric City Corp,
nka Lime Energy -- http://www.lime-energy.com/-- develops,
manufactures and integrates energy savings technologies and
performance monitoring systems. Electric City is comprised of
three integrated operating companies that provide customers with
total energy solutions. With thousands of customer installations
across North America, Electric City has been reducing customers'
operating costs for over 20 years. By linking its customers'
sites, the Company is developing large-scale, dispatchable, demand
response systems we call Virtual Negawatt Power Plan. The Company
is developing its first VNPP(R) development - a 50-Megawatt
negative power system for ComEd in Northern Illinois, a second 27-
Megawatt system with PacifiCorp in the Salt Lake City area, and a
pilot program in Ontario, Canada with Enersource.
ELECTRIC CITY: Launches New Name and Brand Image
------------------------------------------------
Electric City Corp. has changed its name to Lime Energy, using
letters from its new energy savings corporate tagline, "Less Is
More Efficient."
"The name change and new Lime Energy brand reflects the image that
the company wishes to convey to our customers, shareholders and
the broader electricity and energy efficiency industry as we
progress toward our goal, stated Dan Parke, President and Chief
Operating Officer of Lime Energy. "The tagline itself, 'Less Is
More Efficient,' more accurately describes the "green" energy
efficiency technologies offered by Lime Energy, further
positioning us as a unique player in the energy market."
As part of the name change, Lime Energy, the parent company, will
encompass two operating subsidiaries; Parke Industries, which will
operate as Parke Industries, a Lime Energy company and Maximum
Performance Group, which will operate as Maximum Performance
Group, a Lime Energy company.
"The birth of Lime Energy is a result of the many positive changes
our company has gone through over the last eight months," stated
David Asplund, CEO of Lime Energy. "As a result of these changes
we are now positioned to be a world class sales and marketing
company offering our customers a broad array of energy saving
solutions for their lighting and HVAC systems. With our unique
and proprietary energy saving technologies, our solutions produce
immediate, substantial and recurring savings which go right to our
customers' bottom line. In addition, our customers are directly
helping to reduce the greenhouse gases which cause global
warming."
"We wanted a new brand name for our family of companies to
represent our new collective and growing enterprise," continued
Mr. Parke. "We chose Lime Energy because it's new, it's fresh, it
stirs questions, it creates interest, it provides a lasting,
memorable image with our clients and within the industry, it's
different, it's green, it conveys an environmental message, and
most importantly, like our company, it is unique. Today, our
company has a new attitude and this attitude touches every aspect
of our businesses. The new brand name, Lime Energy, will add
clarity, consistency, and excitement for our employees, our
customers and our shareholders."
Parke Industries is a Glendora (Los Angeles County), California,
energy services provider specializing in the design, engineering
and installation of energy efficient lighting upgrades for
commercial and industrial users.
MPG is a technology based energy and asset management provider
using web-based software and enabling hardware to assure optimal
performance of its customers' energy consuming assets. The
company maintains offices in New York and San Diego.
About Electric City
Headquartered in Elk Grove Village, Illinois, Electric City Corp,
nka Lime Energy -- http://www.lime-energy.com/-- develops,
manufactures and integrates energy savings technologies and
performance monitoring systems. Electric City is comprised of
three integrated operating companies that provide customers with
total energy solutions. With thousands of customer installations
across North America, Electric City has been reducing customers'
operating costs for over 20 years. By linking its customers'
sites, the Company is developing large-scale, dispatchable, demand
response systems we call Virtual Negawatt Power Plan. The Company
is developing its first VNPP(R) development - a 50-Megawatt
negative power system for ComEd in Northern Illinois, a second 27-
Megawatt system with PacifiCorp in the Salt Lake City area, and a
pilot program in Ontario, Canada with Enersource.
Going Concern Doubt
As reported in the Troubled Company Reporter on March 30, 2006,
BDO Seidman, LLP, expressed substantial doubt about Electric City
Corp.'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 recurring
losses from operations.
EXIDE TECHNOLOGIES: Board OKs $345,232 in Wage Increase and Refund
------------------------------------------------------------------
The Compensation Committee of Exide Technologies' Board of
Directors has approved:
* an increase in the base salary for Rodolphe Reverchon,
president of Transportation Europe and Rest of World, to
$275,000; and
* a $70,232 reimbursement for the loss of value of the
residence sold by Phillip A. Damaska, senior vice president
and corporate controller of Exide, as part of Mr. Damaska's
relocation to Alpharetta, Georgia.
As reported in the Troubled Company Reporter on Sept. 1, 2006, the
Board approved changes to the Company's director compensation
program set in 2004.
Specifically, the Board increased the annual cash retainer for:
* the Chair of the Compensation Committee from $10,000 to
$15,000;
* the Chair of the Nominating and Corporate Governance
Committee from $3,000 to $10,000; and
* the non-executive Chairman of the Board from $50,000 to
$90,000.
The annual cash retainers for the directors and the Chair of the
Audit Committee remain unchanged.
Francis M. Corby, Jr., the Company's executive vice president and
chief financial officer, said in a regulatory filing with the
Securities and Exchange Commission dated Aug. 23, 2006, that the
Board also approved amendments to the Oct. 13, 2005 Stock
Option and Restricted Shares Award Agreements for Mark C.
Demetree and Phillip M. Martineau. The amendments provide for
acceleration of vesting of each of their 4,036 restricted shares
and 5,673 stock options. Under the revisions, the shares vested
on the date their term as directors expired, which is Aug. 22,
2006.
Mr. Corby also said that Exide filed a further amendment to its
Amended and Restated Certificate of Incorporation on Aug. 23,
2006. The amendment increases the total number of shares of all
classes of capital stock that the Company will have authority to
issue to 101,000,000 shares, of which 100,000,000 shares will be
common stock and 1,000,000 shares will be preferred stock.
About Exide
Headquartered in Princeton, New Jersey, Exide Technologies
(NASDAQ: XIDE) -- http://www.exide.com/-- manufactures and
distributes lead acid batteries and other related electrical
energy storage products. The Company filed for chapter 11
protection on Apr. 14, 2002 (Bankr. Del. Case No. 02-11125).
Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland &
Ellis, represented the Debtors in their successful restructuring.
Exide's confirmed chapter 11 Plan took effect on May 5, 2004. On
April 14, 2002, the Debtors listed $2,073,238,000 in assets and
$2,524,448,000 in debts. (Exide Bankruptcy News, Issue No. 91;
Bankruptcy Creditors' Service, Inc., 215/945-7000,
http://bankrupt.com/newsstand/)
EXIDE TECHNOLOGIES: Signs Managed Services Pact With BT Americas
----------------------------------------------------------------
Exide Technologies and BT Americas Inc. have entered into a multi-
year, multi-million dollar managed services agreement, intended to
fully provide and manage a global wide area network and security
perimeter services infrastructure for Exide. BT Americas is a
regional entity of BT Global Services, one of BT's principal lines
of business.
Under the terms of the contract, BT will transform Exide's
existing information technology environment to a state-of-
the-art, Internet Protocol-based network to support Exide's
expanding business needs. BT's Multi-Protocol Label Switching
infrastructure solution will provide a flexible and secure
communications platform, one that will enable Exide to enhance
security protections and reduce its total cost of ownership
worldwide.
"For Exide, this IT solution delivers a robust network with
the speed, flexibility, security, management, and performance we
need to work effectively with our customers and suppliers," said
Carlos Cabrera, chief information officer, Exide Technologies.
"To be chosen by Exide Technologies to support its mission-
critical communications and security infrastructure is further
evidence of BT's leadership and capabilities in providing IT
solutions to our global customers," explained Chuck Pol, BT
Americas' president. "With our global reach, expertise in
managing networks and focus on providing excellent customer
service, we are committed to delivering sustained value with this
tailored IT solution for Exide."
About BT Americas Inc.
BT Americas Inc. -- http://www.bt.com/aboutbt/-- is a
communications solutions and services company with operations in
170 countries. Its principal activities include networked IT
services, local, national and international telecommunications
services, and broadband and internet products and services. BT
consists principally of four lines of business: BT Global
Services, Openreach, BT Retail and BT Wholesale.
British Telecommunications plc (BT) is a wholly owned subsidiary
of BT Group and encompasses virtually all businesses and assets of
the BT Group. BT Group plc is listed on stock exchanges in London
and New York.
About Exide
Headquartered in Princeton, New Jersey, Exide Technologies
(NASDAQ: XIDE) -- http://www.exide.com/-- manufactures and
distributes lead acid batteries and other related electrical
energy storage products. The Company filed for chapter 11
protection on Apr. 14, 2002 (Bankr. Del. Case No. 02-11125).
Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland &
Ellis, represented the Debtors in their successful restructuring.
Exide's confirmed chapter 11 Plan took effect on May 5, 2004. On
April 14, 2002, the Debtors listed $2,073,238,000 in assets and
$2,524,448,000 in debts. (Exide Bankruptcy News, Issue No. 91;
Bankruptcy Creditors' Service, Inc., 215/945-7000,
http://bankrupt.com/newsstand/)
EURAMAX INTERNATIONAL: S&P Lowers Corporate Credit Rating to B
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on
Norcross, Georgia-based Euramax International Inc., including
its corporate credit rating to 'B' from 'B+'.
At the same time, Standard & Poor's affirmed its recovery rating
of '2' for the first-lien facilities which include the proposed
$27 million add-on to be issued by the company in conjunction with
the acquisition of Jenisys Engineered Products. The company's
second-lien term loan recovery rating was lowered to '5' from '4'.
The outlook is stable.
"The downgrade reflects a weakening of the company's credit
metrics during the past few quarters and the expectation that
aggressive financial policies will limit the improvement in
leverage expected at the previous rating," said Standard & Poor's
credit analyst Dan Picciotto.
The credit metrics have been stretched due to some slowdown in the
home center and U.K. RV markets, which was most pronounced in the
second half of 2005. The acquisition of Jenisys, a manufacturer
of metal construction products, will delay debt reduction.
FOAMEX INT'L: Foamex LP Wants to Assume Amended Shell Contract
--------------------------------------------------------------
Pursuant to Section 365 of the Bankruptcy Code and Rule 6006 of
the Federal Rules of Bankruptcy Procedure, Foamex L.P. seeks the
U.S. Bankruptcy Court for the District of Delaware's consent to
assume its amended sales contract with Shell Chemical LP, doing
business as Shell Chemical Company.
Under the original contract, dated March 30, 2001, Shell sells and
supplies certain chemicals, including polyol, needed by Foamex in
the manufacture of its foam products.
Upon assumption of the amended contract, Shell will restore trade
terms that are comparable to the original trade terms in place
before it exercised its contractual right to reduce credit terms
to "net 15 day" terms.
Shell has also agreed to provide Foamex several weeks to pay the
cure amount totaling $8,378,169 for prepetition chemical purchases
under the original contract.
Pursuant to the amended contract, Foamex will pay the cure amount
in equal installments over eight consecutive weeks beginning on
the first Wednesday that is not less than two business days after
the Court approves this request.
Shell also agrees to file a notice with the Court withdrawing its
Claim No. 949 within 10 business days after the cure amount has
been paid in full.
Shell has conditioned the effectiveness of the contract amendment
on Foamex's immediate assumption of the amended contract.
Headquartered in Linwood, Pa., Foamex International Inc. --
http://www.foamex.com/-- is the world's leading producer of
comfort cushioning for bedding, furniture, carpet cushion and
automotive markets. The Company also manufactures high-
performance polymers for diverse applications in the industrial,
aerospace, defense, electronics and computer industries. The
Company and eight affiliates filed for chapter 11 protection on
Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693).
Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP,
represent the Debtors in their restructuring efforts. Houlihan,
Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the
ad hoc committee of Senior Secured Noteholders. Kenneth A. Rosen,
Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler PC and
Donald J. Detweiler, Esq., at Saul Ewings, LP, represent the
Official Committee of Unsecured Creditors. As of July 3,
2005, the Debtors reported $620,826,000 in total assets and
$744,757,000 in total debts. (Foamex International Bankruptcy
News, Issue No. 27; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
FOAMEX INTERNATIONAL: Wants Court to Allow Reduced Tax Claims
-------------------------------------------------------------
Foamex International Inc. and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware to reduce and allow
the tax claims in the revised tax amounts determined by Assessment
Technologies, Ltd.:
Total Total
Tax Amt Revised
Taxing Authority Asserted Tax Amt.
---------------- -------- --------
Alameda County Tax Collector (CA) $358,798 $192,088
Catawba County Tax Collector (NC) 162,703 78,647
City Of Morristown Tax Collector (TN) 173,163 78,005
City of Pontotoc Tax Collector (MS) 41,450 32,395
Cookeville City Clerk (TN) 6,508 5,988
County of Dona Ana (NM) 98,630 32,061
County of Pontotoc Tax Collector (MS) 25,443 18,667
Dallas County (TX) 197,885 52,168
Dekalb County Treasurer (IN) 417,163 206,521
East Rutherford Tax Collector (NJ) 644,054 529,650
Erie County Tax Claim Bureau (PA) 355,620 316,654
Gibson County Trustee (TN) 119,966 88,627
Hamblen County Trustee (TN) 327,778 137,962
King County Tax Collector (WA) 58,922 25,311
Lee County Tax Collector (MS) 575,479 293,275
Los Angeles County Treasurer (CA) 191,363 39,251
Mecklenburg County Tax Collector (NC) 311,425 153,348
Milan City Recorder (TN) 50,349 37,361
Multinomah County (OR) 26,825 13,894
Orange County Tax Collector (FL) 547,834 296,756
Orange County Treasurer (CA) 811,086 597,722
Putnam County Trustee (TN) 19,312 17,766
Sebastian County Tax Collector (AR) 23,732 16,579
Treasurer of Allen County (IN) 771,767 347,166
Treasurer of Douglas County (NE) 59,959 55,123
With the assistance of ATL, the Debtors reviewed property tax
claims filed by 25 taxing authorities. Based on ATL's analysis,
the Debtors have concluded that the tax assessments for the 2003
to 2005 periods were excessive.
By applying the applicable state valuation standards and
independent appraisal analyses, ATL ascertained the correct values
for certain real and personal property of the Debtors and from
that process, recalculated the amount of tax due under state law
to determine revised tax amounts.
The Debtors further ask the Court to determine that the adjusted
market values of their properties are the correct values the
Taxing Authorities should use in computing the tax liabilities for
2006 or 2007. A list of the properties and their market values is
available for free at http://researcharchives.com/t/s?1249
To the extent that the Tax Claims are secured by liens against the
Debtors' property and the value of the property exceeds the amount
of the tax claim, the Taxing Authorities impose interest for their
claims ranging from 9% to 18% per annum.
Sean T. Greecher, Esq., at Young Conaway Stargatt & Taylor LLP, in
Wilmington, Delaware, however, notes that the court in In re
Davison, 106 B.R. 1021, 1022 (Bankr. Neb. 1989), held that a
debtor is obligated to pay interest at the statutory rate "unless
the court determines that the statutory interest rate constitutes
a penalty."
Based upon the average one-year London Interbank Offered Rate of
4.41% and prime lending rate of 8.25%, the Debtors contend that
the Taxing Authorities' interest rate contain a penalty and should
be reduced.
Accordingly, the Debtors ask the Court to determine the adjusted
rate of 6.5% per annum to be the appropriate postpetition interest
rate on the Tax Claims.
The proposed Adjusted Rate represents Prime plus one-half percent
for the period the taxes remain unpaid, and adequately accounts
for the appropriate credit risk of the Debtors and the Taxing
Authorities' secured status, Mr. Greecher relates.
Moreover, the Debtors ask the Court to:
(a) authorize them to set off any excess amount paid against
their liability on other accounts within the same
jurisdiction and for the same or other tax years; and
(b) extinguish any liens relating to their secured tax
liabilities addressed in the Omnibus Objection upon
payment of the allowed Tax Claims and revised tax amounts.
Responses to the Debtors' request are due October 12, 2006.
Headquartered in Linwood, Pa., Foamex International Inc. --
http://www.foamex.com/-- is the world's leading producer of
comfort cushioning for bedding, furniture, carpet cushion and
automotive markets. The Company also manufactures high-
performance polymers for diverse applications in the industrial,
aerospace, defense, electronics and computer industries. The
Company and eight affiliates filed for chapter 11 protection on
Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693).
Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP,
represent the Debtors in their restructuring efforts. Houlihan,
Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the
ad hoc committee of Senior Secured Noteholders. Kenneth A. Rosen,
Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler PC and
Donald J. Detweiler, Esq., at Saul Ewings, LP, represent the
Official Committee of Unsecured Creditors. As of July 3,
2005, the Debtors reported $620,826,000 in total assets and
$744,757,000 in total debts. (Foamex International Bankruptcy
News, Issue No. 27; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
GENERAL MILLS: Earns $267 Million in 2006 Fiscal First Quarter
--------------------------------------------------------------
General Mills, Inc., reported Thursday results for the first
quarter of fiscal 2007.
Net sales for the 13 weeks ended Aug. 27, 2006, increased 7% to
$2.86 billion, as worldwide unit volume rose 4%. Segment
operating profits grew 7% to $532 million. Net earnings totaled
$267 million, up 6% despite higher interest expense and the
adoption of a new accounting standard for stock-based compensation
in this year's first quarter.
Chairman and Chief Executive Officer Steve Sanger said, "This is a
solid start to the year, driven by good unit volume and sales
gains in each of our three operating segments---U.S. Retail,
International, and Bakeries & Foodservice. The sales strength
reflects continued growth momentum in our established businesses,
along with new product introductions under way in markets around
the world."
U.S. Retail Segment Results
Net sales for General Mills' domestic retail operations grew 5% to
$1.91 billion for the first quarter, with unit volume up 3%.
Operating profits grew faster than sales, increasing 8% to
$447 million. The margin expansion reflects favorable production
mix and efficient plant performance.
The Meals division recorded a 7% net sales increase, led by Helper
dinner mixes and Progresso ready-to-serve soups. Yoplait division
net sales grew 8% with continued strong performance by the Yoplait
Light product line and contributions from new Whips! and Thick n'
Creamy varieties. Snacks division net sales grew 7% including
contributions from new items such as coffee-flavored Caribou Bars
and Select Chex Mix varieties. Big G cereals recorded a 4% net
sales increase with gains by established brands such as Honey Nut
Cheerios and Fiber One, and contributions from new products
including Fruity Cheerios. Net sales for Pillsbury USA matched
prior-year levels, and Baking Products net sales grew 1%. Net
sales for the company's Small Planet Foods organic business grew
34% in the quarter.
International Segment Results
Net sales for General Mills' consolidated international businesses
grew 13% to $505 million. Unit volume increased 7%, including
strong contributions from new products, and foreign exchange
contributed 4 points of net sales growth. Operating profits
totaled $56 million. This was $3 million below year-ago levels,
due to strong levels of new-product marketing support in this
year's quarter and comparison to a 74% profit increase in the
period last year.
Bakeries & Foodservice Segment Results
First-quarter net sales for Bakeries & Foodservice grew 9% to
$445 million, reflecting 4% unit volume growth, pricing and
favorable mix. Operating profits grew 7% to $29 million despite
significantly higher commodity and fuel costs.
Joint Venture Summary
After-tax earnings from joint ventures totaled $19 million in the
first quarter, matching prior year results. This year's results
include a $2 million after-tax charge that is part of a previously
announced restructuring of the Cereal Partners Worldwide
manufacturing plants in the United Kingdom. Net sales for CPW
grew 7% in the quarter. Net sales for the Haagen-Dazs joint
ventures in Asia declined 4%. The 8th Continent joint venture
with DuPont posted a 2% net sales increase.
Corporate Items
Corporate unallocated expense totaled a net $43 million for the
quarter compared to $37 million net expense a year ago. Fiscal
2007 results include the incremental effects of adopting SFAS 123R
for stock-based compensation, which represented $40 million pretax
expense in the quarter. Prior year first-quarter corporate
expense included a $10 million charge to write down the asset
value of a low-income housing investment.
Restructuring and other exit items contributed income of
$2 million in the quarter, including a $9 million gain on the sale
of a former manufacturing facility in Spain and a $6 million
charge associated with divestiture of a par-baked bread business
that was part of our Bakeries and Foodservice segment.
Interest expense for the quarter totaled $105 million, up 17% due
to higher rates. The effective tax rate for the quarter was
35.8%.
Cash Flow Items
Operating cash flow for the first quarter was $104 million, down
from $158 million in the same period last year due to higher
working capital use. During the first quarter, General Mills
repurchased 14 million of the company's common shares at an
average price of $52.08 per share. Dividends grew to
$126 million, reflecting two increases to the quarterly dividend
rate effective in February 2006 and August 2006. Capital
expenditures during the quarter were $61 million.
Outlook
"This is an excellent start to the fiscal year, as we are seeing
strong operating performance across all business segments," Sanger
said. General Mills reaffirmed its fiscal 2007 guidance for low
single-digit net sales growth, mid single-digit growth in segment
operating profits, and diluted EPS of $3.03 to $3.08, including an
estimated 11 to 12 cent impact from the adoption SFAS 123R for
stock-based compensation.
About General Mills
General Mills, Inc. (NYSE:GIS) -- http://www.generalmills.com--is
a cereal maker. Among its Big G Cereals unit's brands are
Cheerios, Chex, Total, Kix, and Wheaties. It also makes flour
(Gold Medal), baking mixes (Betty Crocker, Bisquick), dinner mixes
(Hamburger Helper), fruit snacks (Fruit Roll-Ups) and grain snacks
(Chex Mix, Pop Secret). It is also makes branded yogurt (Colombo,
Go-Gurt, and Yoplait). Through joint ventures, the Company has
expanded its cereals and snacks into Europe. Its 2001 acquisition
of Pillsbury (refrigerated dough products, frozen vegetables) from
Diageo doubled the its size.
* * *
As reported in the Troubled Company Reporter on May 1, 2006,
Moody's Investors Service placed under review for possible upgrade
the long-term debt ratings of General Mills, Inc. and affirmed its
Prime-2 short-term debt ratings. The review included Moody's
(P)Ba1 rating on the Company's Preferred shelf.
General Mills reported a 6% gain in quarterly earnings, helped by
improved sales and volume gains.
GENERAL MOTORS: Nissan-Renault Alliance Talks Slow Down
-------------------------------------------------------
The three-way alliance between General Motors Corp., Renault SA
and Nissan Motor Co. is making slow progress even as the October
15 deadline for the companies to turn up their findings on the
proposed merger approaches.
Monica Langley and Stephen Power at The Wall Street Journal
reports that the merger talks have lost steam because GM is
looking at a less comprehensive alliance than what Renault and
Nissan has in mind. Carlos Ghosn, head of Renault and Nissan,
had indicated that he wanted, among other things, shared equity
stakes between the Companies.
In July, the three carmakers agreed to conduct a 90-day study of
the potential benefits of an alliance that could create an
automobile giant with a combined annual production of 15 million
vehicles, The Associated Press reports. The study came after GM
shareholder Kirk Kerkorian, who owns a 9.9% stake in the company
through his investment firm Tracinda Corp., called for the
carmakers to pursue an alliance.
Mr. Ghosn is set to discuss details of the proposed merger with
Rick Wagoner, GM's CEO, in Paris next week, the Journal reports.
About General Motors
General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- the
world's largest automaker, has been the global industry sales
leader since 1931. Founded in 1908, GM employs about 317,000
people around the world. It has manufacturing operations in 32
countries and its vehicles are sold in 200 countries.
* * *
As reported in the Troubled Company Reporter on July 28, 2006,
Standard & Poor's Ratings Services held all of its ratings on
General Motors Corp. -- including the 'B' corporate credit rating,
but excluding the '1' recovery rating -- on CreditWatch with
negative implications, where they were placed March 29, 2006. The
CreditWatch update followed GM's announcement of second quarter
results and other recent developments involving its bank facility
and progress on the GMAC sale.
As reported in the Troubled Company Reporter on July 27, 2006,
Dominion Bond Rating Service downgraded the long-term debt ratings
of General Motors Corporation and General Motors of Canada Limited
to B. The commercial paper ratings of both companies are also
downgraded to R-3 (low) from R-3.
As reported in the Troubled Company Reporter on June 22, 2006,
Fitch assigned a rating of 'BB' and a Recovery Rating of 'RR1' to
General Motor's new $4.48 billion senior secured bank facility.
The 'RR1' is based on the collateral package and other protections
that are expected to provide full recovery in the event of a
bankruptcy filing.
As reported in the Troubled Company Reporter on June 21, 2006,
Moody's Investors Service assigned a B2 rating to the secured
tranches of the amended and extended secured credit facility of up
to $4.5 billion being proposed by General Motors Corporation,
affirmed the company's B3 corporate family and SGL-3 speculative
grade liquidity ratings, and lowered its senior unsecured rating
to Caa1 from B3. The rating outlook is negative.
GEO GROUP: Moody's Affirms B1 Sr. Notes Rating With Stable Outlook
------------------------------------------------------------------
Moody's Investors Service affirmed GEO Group's Ba3 corporate
family and senior secured debt ratings, with a stable outlook.
The rating agency also affirmed GEO Group's B1 senior unsecured
debt rating. GEO Group is planning to acquire CentraCore
Properties Trust in a debt-financed transaction. CentraCore, a
REIT, is GEO Group's main landlord. Moody's said that the
acquisition of CentraCore will strengthen GEO Group's strategic
flexibility and asset base, though these positives are buffered by
the increased debt leverage, particularly secured debt, funding
the merger.
According to Moody's, the transaction eliminates various cost and
structural uncertainties that have burdened GEO Group since its
spin-off from the Wackenhut Corporation in 2003. This transaction
also marks another step in GEO Group's growing scale, franchise
and revenues. The acquisition of CentraCore, though it is being
financed preponderantly with secured debt, does eliminate various
debt-like lease payments by GEO Group -- in effect, GEO is
switching from being a renter, to being an owner, of several
correctional facilities, financed with mortgages. It is unclear
at this time whether GEO Group's operating margins will improve
meaningfully.
The stable rating outlook incorporates Moody's expectation that
GEO Group will successfully integrate CentraCore, and that the
firm will continue to effectively manage expiring, terminating or
uneconomic corrections contracts. The rating agency also expects
GEO Group will continue to add profitable new contracts and
customers.
Moody's would likely upgrade GEO Group should the firm achieve
interest coverage in excess of 3X, gross operating margins above
20% and reduce secured debt below 20% of gross assets. A
downgrade would occur should GEO Group incur debt to EBITDA above
6X, sustain secured debt to gross assets above 40%, or revenue
growth stall due to major tenant loss. Any missteps integrating
CentraCore would also result in negative pressure.
These ratings are affirmed with a stable outlook:
-- Ba3 senior secured and corporate family;
-- B1 senior unsecured
Moody's affirmed GEO's ratings with a stable outlook in July 2005.
The GEO Group, Inc., is based in Boca Raton, Florida, USA, and is
a world leader in the delivery of correctional, detention and
residential treatment services to federal, state and local
government agencies around the globe. GEO has government clients
in the USA, Australia, South Africa, Canada and the United
Kingdom. GEO Group's worldwide operations include 62 correctional
and residential treatment facilities, with a total design capacity
of approximately 52,000 beds.
CentraCore Properties Trust, based in Palm Beach Gardens, Florida,
USA, is dedicated to ownership of properties under long-term,
triple-net leases, which minimizes occupancy risk and development
risk. CentraCore currently owns 13 correctional facilities in
nine states, all of which are leased, with an aggregate completed
design capacity of 8,071 beds.
GLOBAL REALTY: 2006 Second Quarter Net Loss Narrows to $1.2 Mil.
----------------------------------------------------------------
For the second quarter ended June 30, 2006, Global Realty
Development Corp.'s net loss decreased to $1.2 million on $4.5
million of net revenues compared to a $2.3 million net loss on
$37,046 of revenues in the prior year.
As of June 30, 2006, the Company's accumulated deficit widened to
$15.8 million from a $13.8 million of deficit as of Dec. 31, 2005.
A full-text copy of the Company's Quarterly Report is available
for free at http://researcharchives.com/t/s?1244
Going Concern Doubt
As reported in the Troubled Company Reporter on June 13, 2006,
Meyler & Company, LLC, in Middletown, New Jersey, raised
substantial doubt about Global Realty Development Corp.'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 net losses of
$10,642,711 and $2,872,372 for the years ended Dec. 31, 2005 and
2004, respectively.
About Global Realty Development
Based in Coral Springs, Florida, Global Realty Development Corp.
(OTC BB:GRLY.OB) -- http://www.grdcorporation.com/-- is an
international land development company operating through various
real estate development subsidiaries. The Company is primarily
engaged in the acquisition and development of real estate in
Australia and is pursuing projects in the United States, South
America and the Far East. Global intends to focus its future on
the entertainment and gaming industries and Biofuels.
GRANT FOREST: S&P Affirms BB Rating & Revises Outlook to Negative
-----------------------------------------------------------------
Standard & Poor's Ratings Services revised the outlook on Grant
Forest Products Inc. to negative from stable. At the same time,
the 'BB' long-term corporate credit rating on Grant was affirmed.
"The company's debt-to-EBITDA is expected to rise significantly as
it funds the construction of two new oriented strand board mills
through mid-2007 substantially with debt, while its operating
income is expected to decline sharply amid a rapid weakening in
market conditions for its main product, OSB," said Standard &
Poor's credit analyst Donald Marleau.
"Nevertheless, Grant began 2006 with virtually no debt and good
liquidity, which helps to moderate the deterioration of its credit
risk," he added.
The ratings on privately owned Grant reflect:
* the company's modest size and narrow product focus in OSB;
* a plywood substitute; and
* the resulting volatility in earnings and cash flow.
These factors are partially offset by the company's high degree of
fiber integration and its modern, cost-efficient facilities.
The company has traditionally maintained a moderate capital
structure, quickly repaying debt incurred to fund its growth
capital expenditures. Notwithstanding the increased credit risk
stemming from its expansion plans in the next year, the company
will benefit from improved operating diversity and will mitigate
its foreign exchange exposure on completion of the two U.S. mills.
Grant is increasing its production capacity by building two new
mills in Allendale, S.C. and Clarendon, S.C. The Allendale
facility is expected to begin production late in 2006, and the
Clarendon mill will begin production in mid-2007.
Other industry participants have undertaken similar expansions
amid record profitability in 2005, and this will contribute to a
glut of new capacity in 2007. OSB has continued to displace
plywood and now accounts for about 60% of structural panel usage,
but the slowdown in residential construction has contributed to a
severe decline in prices in late 2006.
Furthermore, the industry could add 15% of new capacity through
2008, which will necessitate the permanent closure of higher cost
plywood and OSB mills, and could require production curtailments
by industry leaders to maintain market equilibrium.
The outlook is negative. The combination of weaker OSB prices and
the company's capital expenditure plans will increase debt
considerably in 2006 and 2007. Lower margins will produce credit
metrics that will be very weak, but the current ratings are
nevertheless supported by committed credit facilities to construct
the two new, low-cost OSB mills in the U.S.
If industry conditions remain weak for a protracted period or if
capital expenditures increase unexpectedly, either of which
contributes to materially higher debt or weaker liquidity, ratings
could be lowered.
Grant has a track record of reducing debt on completion of its
growth capital expenditures, and Standard & Poor's expects that to
maintain the current rating, the company will return to a moderate
financial profile after the Allendale and Clarendon mills are
complete.
GSAMP TRUST: Moody's Assign Ba1 Rating on Class B-3 Certs.
----------------------------------------------------------
Moody's Investors Service has assigned an Aaa rating to the senior
certificates issued by GSAMP Trust 2006-HE6, and ratings ranging
from Aa1 to Ba1 to the subordinate certificates in the deal.
The securitization is backed by:
* Ameriquest Mortgage Company (25%),
* Mortgage Lenders Network USA, Inc (19%),
* Ownit Mortgage Solutions, Inc (16%),
* SouthStar Funding, LLC (9%),
* AIG Federal Savings Bank (7%),
* Encore Credit Corp (6%), and
* various others originated adjustable-rate and fixed-rate
subprime mortgage loans.
The ratings are based primarily on the credit quality of the
loans, and on the protection from subordination, excess spread,
overcollateralization, and an interest rate swap and an interest
rate cap agreement between the trust and Barclays Bank PLC.
Moody's expects collateral losses to range from 4.60% to 5.10%.
Litton Loan Servicing LP will service the loans. Moody's has
assigned Litton its top servicer quality rating of SQ1 as a
primary servicer of subprime loans.
These are the complete rating actions:
* GSAMP Trust 2006-HE6
-- Mortgage Pass-Through Certificates, Series 2006-HE6
Cl. A-1, Assigned Aaa
Cl. A-2, Assigned Aaa
Cl. A-3, Assigned Aaa
Cl. A-4, Assigned Aaa
Cl. M-1, Assigned Aa1
Cl. M-2, Assigned Aa2
Cl. M-3, Assigned Aa2
Cl. M-4, Assigned Aa3
Cl. M-5, Assigned A1
Cl. M-6, Assigned A2
Cl. M-7, Assigned A3
Cl. M-8, Assigned Baa1
Cl. B-1, Assigned Baa2
Cl. B-2, Assigned Baa3
Cl. B-3, Assigned Ba1
GSMPS MORTGAGE: Moody's Junks Series 2005-LT1 Class B-3 to Caa3
---------------------------------------------------------------
Moody's Investors Service has upgraded three certificates from one
GSMPS Mortgage deal, issued in 2002 and downgraded three
certificates from two GSMPS Mortgage deals, issued in 2002 and
2005. The transactions consist of securitizations of FHA insured
and VA guaranteed re-performing and nonperforming loans virtually
all of which were repurchased from GNMA pools. The insurance
covers a large percent of any losses incurred as a result of
borrower defaults.
The three mezzanine and subordinate certificates from the series
2002-1 transaction have been upgraded based on the substantial
build-up in credit support. The projected pipeline losses are not
expected to significantly affect the credit support for these
certificates. The seasoning of the loans and low pool factor
reduce loss volatility.
The most subordinate certificate from the GSMPS 2002-1 transaction
and the two most subordinate certificates from the GSMPS 2005-LT1
transaction have been downgraded because existing credit
enhancement levels are low given the current projected losses on
the underlying pools. Currently there is only a small amount of
credit enhancement for the two transactions in the form a
subordinate bond and overcollateralization.
These are the rating actions:
* Issuer: GSMPS Mortgage Loan Trust
-- Upgrades:
* Series 2002-1; Class B1, upgraded to Aaa from Aa2;
* Series 2002-1; Class B2, upgraded to Aa2 from A2;
* Series 2002-1; Class B3, upgraded to Baa1 from Baa2.
-- Downgrade:
* Series 2002-1; Class B5, downgraded to Caa3 from B2.
* Issuer: GSMPS Mortgage Loan Trust
--Downgrades:
* Series 2005-LT1; Class B-2, downgraded to B1 from Ba2;
* Series 2005-LT1; Class B-3, downgraded to Caa3 from B2.
GULFMARK OFFSHORE: Moody's Lifts Rating on $160MM Sr. Notes to B1
-----------------------------------------------------------------
Moody's Investors Service upgraded GulfMark Offshore, Inc.'s
corporate family rating from B1 to Ba3 and its $160 million senior
unsecured notes due 2014 from B2 to B1. The outlook is stable.
The upgrade of GulfMark's ratings reflects its fleet's growth and
improved quality and diversity and the enhanced forward revenues
and earnings visibility. While adding 13 newbuilds since 2000,
GulfMark has divested of older vessels to improve its overall
asset mix. Moody's believes that GulfMark's younger, high
specification fleet is well-suited for its core markets while
increasing its flexibility to mobilize its vessels to other
attractive international regions. Furthermore, management's
strategic decision to increase the term portion of it contract
portfolio and reduce spot rate exposure provides more stability in
its cash flows than past years.
GulfMark has further solidified its strong position in the North
Sea offshore production support market, grown its presence in the
growing Asian market and expanded into the Mexican Gulf of Mexico
and Brazilian offshore markets. These developments combined with
robust market conditions have enabled the company to make
substantial reductions in its operating leverage and improve
liquidity. This higher quality fleet is more likely to be
employed in a market downturn, albeit at lower dayrates, when
compared to the older fleets of some of its competitors.
Outlook
The ratings have limited upside in the near to medium term due to
the company's relatively small scale and market position outside
of its key North Sea market, particularly its lack of
participation in the U.S. Gulf of Mexico. The current ratings
contemplate GulfMark's recently initiated speculative newbuild
program that is expected to add 10 more vessels by 2008 at a total
cost of approximately $225 million. While this expansion is
comparable in size to its 2000-2005 build out and will further
strengthen its fleet, it represents a much smaller addition
relative to its present scale which makes the risks more
manageable. The majority of the deliveries and expenditures will
occur during 2007, requiring expenditures nearing $150 million.
The company plans to fund these expenditures largely through
operating cash flows and from borrowings on its revolving credit
facilities. The company has good visibility into the remainder of
2006 and 2007 through forward contract cover and should have
significant capacity on its $175 million secured revolver
following an expected $60 million of repayments during 2006.
While current market conditions look strong into 2007, recent
commodity price declines and the substantial quantity of new
vessels to be added by GulfMark and its competitors could portend
weaker conditions in the latter half of 2007 into 2008. In that
case, Moody's would expect that GulfMark could need to finance a
much larger portion of its vessel expansion using its revolving
credit facilities. While this could elevate the company's debt
levels and leverage measures, Moody's would expect these levels to
remain within a range consistent with a Ba3 rating.
If market demand severely contracted in the face of this
additional capacity for a prolonged period, the company's earnings
and cash flows could decline to levels that could pressure the
ratings or outlook. In addition, the rating is predicated on the
company not materially increasing its speculative fleet expansion
and continuing its policies of devoting operating cash flows to
funding capital expenditures and reducing borrowings in order to
weather cyclical downturns.
GulfMark Offshore, Inc., headquartered in Houston, Texas, is a
provider of offshore marine services primarily to oil and gas
exploration production firms in the North Sea, India, Southeast
Asia, Brazil and West Africa.
HEALTHY DIRECTIONS: Moody's Assigns Loss-Given-Default Rating
-------------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. natural product processors sector last
week, the rating agency confirmed its B1 Corporate Family Rating
for Healthy Directions LLC.
Moody's also held its probability-of-default ratings and assigned
loss-given-default ratings on these loans and bond debt
obligations:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
$10mm 1st Lien
Gtd. Sr. Sec.
Revolver (2009) B1 B1 LGD3 43%
$100mm 1st Lien
Gtd. Sr. Sec.
Term Loan (2010) B1 B1 LGD3 43%
$15mm 2nd Lien
Gtd. Sr. Sec.
Term Loan (2011) B3 B3 LGD5 89%
Moody's explains that current long-term credit ratings are
opinions about expected credit loss which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
Headquartered in Potomac, Maryland, Healthy Directions LLC --
http://www.healthydirections.com/-- publishes alternative and
complementary health newsletters, including The Lark Letter, and
produces a number of online resources that provide authoritative
health solutions to consumers. Its subsidiary, Doctors' Preferred
LLC, is a vitamin and nutritional supplement business.
HERBALIFE INTERNATIONAL: Moody's Assigns Loss-Given-Default Rating
------------------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. natural product processors sector last
week, the rating agency raised its Corporate Family Rating for
Herbalife International Inc. to Ba2 from Ba1, and confirmed its
Ba1 ratings on the company's $100 million Guaranteed Senior
Secured Revolving Credit Facility Due 2012 and $200 million
Guaranteed Senior Secured Term Loan B Due 2013. Additionally,
Moody's assigned an LGD2 rating to those bonds, suggesting lenders
will experience a 27% loss in the event of a default.
Moody's explains that current long-term credit ratings are
opinions about expected credit loss which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
Headquartered in Inglewood, California, Herbalife International
Inc. sells more than 100 products containing herbal and other
natural ingredients. The company's products include weight-
control mixes and tablets, nutritional supplements specifically
designed for men and women, food, shampoos, lotions, sunscreens,
and body oils. The multi-level marketer sells its products
through a network of independent distributors in nearly 60
countries; salespeople earn money from their own efforts, as well
as from the sales of those whom they have recruited into the
organization.
INCO LTD: Board Recommends Shareholders Accept CVRD Proposal
------------------------------------------------------------
The Board of Directors of Inco Limited has recommended that Inco
shareholders tender their shares to the offer made by Companhia
Vale do Rio Doce to purchase all of the outstanding common shares
of Inco at a price of CDN$86 in cash per share.
"We are satisfied that the CVRD offer of CDN$86 per share
represents compelling value for our shareholders," said Chairman
and CEO Scott Hand. "CVRD is the third company that has made an
offer for Inco, and those companies have announced a total of six
bids between them since early May. We believe this process has
brought about a very positive outcome for Inco shareholders, and
we recommend that they tender to the CVRD offer."
In addition to the value of the CVRD offer, Inco's Board and
management believe that CVRD represents an attractive partner for
Inco. "We have great respect for the quality of their management
team and for what they have accomplished as a company," Mr. Hand
added.
"Assuming CVRD is successful in their acquisition, we plan to
assist them in every way we can to ensure the smoothest possible
integration of our two companies, and a successful transition to
create a new world leader in mining and metals," he said.
CVRD has obtained its required regulatory clearances from the
Canadian Competition Bureau and the United States competition
authorities but it has yet to obtain clearances from the European
Commission and Investment Canada.
About CVRD
Headquartered in Rio de Janeiro, Brazil, Companhia Vale do Rio
Doce -- http://www.cvrd.com.br/-- engages primarily in mining
and logistics businesses. It engages in iron ore mining, pellet
production, manganese ore mining, and ferroalloy production, as
well as in the production of nonferrous minerals, such as
kaolin, potash, copper, and gold.
About Inco Ltd.
Headquartered in Sudbury, Ontario, Inco Limited (TSX, NYSE:N) --
http://www.inco.com/-- produces nickel, which is used primarily
for manufacturing stainless steel and batteries. Inco also
mines and processes copper, gold, cobalt, and platinum group
metals. It makes nickel battery materials and nickel foams,
flakes, and powders for use in catalysts, electronics, and
paints. Sulphuric acid and liquid sulphur dioxide are produced
as byproducts. The company's primary mining and processing
operations are in Canada, Indonesia, and the U.K.
* * *
Inco Limited's 3-1/2% Subordinated Convertible Debentures due
2052 carry Moody's Investors Service's Ba1 rating.
INDEPENDENCE III: $15MM Issued Notes Eyed for Upgrade by Moody's
----------------------------------------------------------------
Moody's Investors Service placed on watch for possible upgrade the
ratings on these notes issued in 2002 by Independence III CDO,
Ltd, a managed investment grade structured finance re-
securitization issuer:
* The U.S.$18,000,000 Class B Second Priority Floating Rate
Term Notes, Due 2037
-- Prior Rating: A2
-- Current Rating: A2, on watch for possible upgrade
* The U.S.$7,000,000 Class C-1 Third Priority Floating Rate
Term Notes, Due 2037
-- Prior Rating: Caa1
-- Current Rating: Caa1, on watch for possible upgrade
* The U.S.$15,000,000 Class C-2 Third Priority Fixed Rate Term
Notes, Due 2037
-- Prior Rating: Caa1
-- Current Rating: Caa1, on watch for possible upgrade
The rating actions reflect the ongoing delivering of the
transaction, according to Moody's.
INDYMAC HOME: Moody's Assigns Ba2 Rating to Class M-11 Notes
------------------------------------------------------------
Moody's Investors Service has assigned a Aaa rating to the senior
certificates issued by IndyMac Home Equity Mortgage Loan Asset-
Backed Trust, Series INABS 2006-D, and ratings ranging from Aa1 to
Ba2 to the subordinated certificates in the deal.
The securitization is backed by IndyMac Bank F.S.B. originated
adjustable-rate at 81.44% and fixed-rate at 8.56% subprime
mortgage loans. The ratings are based primarily on the credit
quality of the loans, and on the protection from subordination,
overcollateralization, excess spread and an interest rate swap
agreement provided by Bear Stearns Financial Products Inc. Moody's
expects collateral losses to range from 5.35% to 5.85%.
IndyMac Bank F.S.B will service the mortgage loans. Moody's has
assigned IndyMac Bank F.S.B an SQ2- servicer quality rating as a
primary servicer of subprime loans.
These are the rating actions:
* IndyMac Home Equity Mortgage Loan Asset-Backed Trust, Series
INABS 2006-D
* Home Equity Mortgage Loan Asset-Backed Trust Certificates,
Series INABS 2006-D
Cl. 1A, Assigned Aaa
Cl. 2A-1, Assigned Aaa
Cl. 2A-2, Assigned Aaa
Cl. 2A-3, Assigned Aaa
Cl. 2A-4, Assigned Aaa
Cl. M-1, Assigned Aa1
Cl. M-2, Assigned Aa2
Cl. M-3, Assigned Aa3
Cl. M-4, Assigned A1
Cl. M-5, Assigned A2
Cl. M-6, Assigned A3
Cl. M-7, Assigned Baa1
Cl. M-8, Assigned Baa2
Cl. M-9, Assigned Baa3
Cl. M-10, Assigned Ba1
Cl. M-11, Assigned Ba2
INNOVATIVE COMMS: Taps Shearman & Sterling as Bankruptcy Counsel
----------------------------------------------------------------
Innovative Communications Company, LLC, and its debtor-affiliate,
Emerging Communications, Inc., ask the U.S. District Court of the
Virgin Islands, Division of St. Thomas and St. John, Bankruptcy
Division, for permission to employ Shearman & Sterling LLP as
their bankruptcy counsel.
Shearman & Sterling will:
(a) provide legal advice with respect to the Debtors' powers
and duties as debtors-in-possession in the continued
operation of their businesses and management of their
properties;
(b) prepare on behalf of the Debtors all necessary
applications, motions, objections, responses, answers,
orders, reports and other legal papers;
(c) advise the Debtors with respect to obtaining financing
necessary to perform the Terms and Conditions, and to
effect a financial restructuring;
(d) pursue confirmation of a plan of reorganization and
approval of the corresponding solicitation procedures and
disclosure statement;
(e) attend meetings and negotiate with representatives of
creditors and other parties-in-interest in connection with
the Debtors' chapter 11 cases;
(f) provide general corporate, capital markets, finance,
employment and litigation advice and other general non-
bankruptcy legal services to the Debtors;
(g) appear before the Court, any appellate courts and the
Office of the U.S. Trustee to protect the interests of the
Debtors; and
(h) perform all other legal services for the Debtors which may
be necessary and proper in the Debtors' bankruptcy
proceedings.
Douglas P. Bartner, Esq., a member of Shearman & Sterling, tells
the Court that the firm's professionals bill:
Professional Hourly Rate
------------ -----------
Partners $610 - $850
Counsel/Associates $245 - $675
Legal Assistants/Specialists $95 - $235
Mr. Bartner assures the Court that his firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
Mr. Bartner can be reached at:
Douglas P. Bartner, Esq.
Shearman & Sterling LLP
599 Lexington Avenue
New York, New York 10022
Tel: (212) 848-4000
Fax: (212) 848-7179
http://www.shearman.com/
Headquartered in St. Thomas, Virgin Islands, Innovative
Communication Company, LLC -- http://www.iccvi.com/-- and
Emerging Communications, Inc., are diversified telecommunications
and media companies operating mainly in the U.S. Virgin Islands.
Jeffrey J. Prosser is the owner of Emerging Communications and
Innovative Communications. Innovative and Emerging filed for
chapter 11 protection on July 31, 2006 (D.C. V.I. Case Nos.
06-30007 and 06-30008). When the Debtors filed for protection
from their creditors, they estimated assets and debts of more than
$100 million.
Mr. Prosser also filed for chapter 11 protection on July 31, 2006
(D.C. V.I. Case No. 06-10006).
Greenlight Capital Qualified, L.P., Greenlight Capital, L.P., and
Greenlight Capital Offshore, Ltd., which holds a $18,780,614 claim
against the Mr. Prosser, had filed an involuntary chapter 11
petition against Innovative Communication, Emerging
Communications, and Mr. Prosser on February 10, 2006 (Bankr. D.
Del Case Nos. 06-10133, 06-10134, and 06-10135). Mr. Prosser
argued that the Greenlight entities, the former shareholders of
Innovative Communications, and Rural Telephone Finance
Cooperative, Mr. Prosser's lender, conspired to take down his
companies into bankruptcy and collect millions in claims.
INNOVATIVE COMMS: Taps Dudley Clark as Bankruptcy Co-Counsel
------------------------------------------------------------
Innovative Communications Company, LLC, and its debtor-affiliate,
Emerging Communications, Inc., ask the U.S. District Court of the
Virgin Islands, Division of St. Thomas and St. John, Bankruptcy
Division, for permission to employ Dudley Clark & Chan, LLP, as
their bankruptcy co-counsel.
Dudley Clark will:
a. advise the Debtors of their rights, powers and duties as
debtors and debtors-in-possession;
b. take all necessary action to protect and preserve the
Debtors' estates, including the prosecution of motions or
actions on the Debtors' behalf, the defense of any motions
or actions commenced against the Debtors, the negotiation
of disputes in which the Debtors are involved, and the
preparation of objections to claims filed against the
Debtors' estates;
c. negotiate on the Debtors' behalf with the constituents in
the chapter 11 cases and prepare and prosecute a plan of
reorganization, a disclosure statement and all related
matters;
d. prepare on behalf of the Debtors all necessary motions,
applications, answers, orders, reports and papers in
connection with the administration of the Debtors' estates;
and
e. perform all other necessary legal services in connection
with the Debtors' chapter 11 cases.
Carol Ann Rich, Esq., counsel at Dudley Clark, tells the Court
that she will bill $300 per hour for this engagement. Ms. Rich
discloses that the firm's other professionals bill:
Professional Hourly Rate
------------ -----------
Partners $300
Associates $275
Paralegals $125
Ms. Rich assures the Court that her firm is a "disinterested
person," as that term is defined in Section 101(14) of the
Bankruptcy Code.
Ms. Rich can be reached at:
Carol Ann Rich, Esq.
Dudley Clark & Chan, LLP
9720 Estate Thomas, Havensight
St. Thomas, U.S. Virgin Islands 00802
Tel: (340) 776-7474
Fax: (304) 776-8044
http://www.dudleylaw.com/
Headquartered in St. Thomas, Virgin Islands, Innovative
Communication Company, LLC -- http://www.iccvi.com/-- and
Emerging Communications, Inc., are diversified telecommunications
and media companies operating mainly in the U.S. Virgin Islands.
Jeffrey J. Prosser is the owner of Emerging Communications and
Innovative Communications. Innovative and Emerging filed for
chapter 11 protection on July 31, 2006 (D.C. V.I. Case Nos.
06-30007 and 06-30008). When the Debtors filed for protection
from their creditors, they estimated assets and debts of more than
$100 million.
Mr. Prosser also filed for chapter 11 protection on July 31, 2006
(D.C. V.I. Case No. 06-10006).
Greenlight Capital Qualified, L.P., Greenlight Capital, L.P., and
Greenlight Capital Offshore, Ltd., which holds a $18,780,614 claim
against the Mr. Prosser, had filed an involuntary chapter 11
petition against Innovative Communication, Emerging
Communications, and Mr. Prosser on February 10, 2006 (Bankr. D.
Del Case Nos. 06-10133, 06-10134, and 06-10135). Mr. Prosser
argued that the Greenlight entities, the former shareholders of
Innovative Communications, and Rural Telephone Finance
Cooperative, Mr. Prosser's lender, conspired to take down his
companies into bankruptcy and collect millions in claims.
INTELSAT LTD: Reports Anomaly on Intelsat 802 Satellite
-------------------------------------------------------
Intelsat, Ltd., reported that its IS-802 satellite, located at
33ø E, experienced a sudden and unexpected anomaly on
Sept. 21, 2006, at approximately 8:27 p.m. E.T.
The Company disclosed that its satellite control center is
communicating with the satellite and the satellite is under
control and accepting commands. The Company is in the process of
making alternative capacity available to its IS-802 customers, in
accordance with its existing contingency plans.
The satellite, launched in 1997, furnishes telecommunications
services to customers on the African continent and the Indian
Ocean Region. The Company and Lockheed Martin Corporation, the
manufacturer of the satellite, are working together to identify
the cause of the problem.
The Company also disclosed that it currently does not know if
there is a connection between the event and the Intelsat 804
satellite failure, which occurred in January 2005 and was also
manufactured by Lockheed Martin.
"Our first priority is the continuation of service for our
customers," Dave McGlade, chief executive officer, said. "The
Intelsat system has a number of satellites serving the region.
Within hours of the event, we are issuing replacement capacity
within the Intelsat system. This is a testament to the resilience
and redundancy of our network."
The Company further disclosed that IS-802 is not insured, in
accordance with its practice of self-insuring satellites that are
beyond the initial year of operations. The IS-802 satellite
generates annual revenue of less than $30 million, although the
Company's initial view is that it will be able to restore a
substantial portion of the customer traffic, given the resilience
and redundancy of the Intelsat system. The Company will issue a
statement regarding the degree to which it is able to retain
revenue on the Company's system following the completion of the
restoration process.
Intelsat, Ltd. -- http://www.intelsat.com/-- offers telephony,
corporate network, video and Internet solutions around the globe
via capacity on 25 geosynchronous satellites in prime orbital
locations. Customers in approximately 200 countries rely on
Intelsat's global satellite, teleport and fiber network for high-
quality connections, global reach and reliability.
* * *
As reported in the Troubled Company Reporter on June 19, 2006,
Fitch upgraded the Issuer Default Rating for Intelsat to 'B' from
'B-' pro forma for its pending acquisition of PanAmSat. The
ratings were also removed from Rating Watch Negative, where they
had originally been placed on Aug. 30, 2005. Fitch said the
Rating Outlook is Stable.
As reported in the Troubled Company Reporter on June 13, 2006,
Moody's Investors Service affirmed the B2 corporate family rating
of Intelsat, Ltd., and downgraded the corporate family rating of
PanAmSat Corporation to B2, given the greater clarity regarding
the final capital structure and the near-term completion of the
PanAmSat acquisition by Intelsat.
INTERPHARM HOLDINGS: Closes $10MM Financing with Aisling Capital
----------------------------------------------------------------
Interpharm Holdings, Inc., has completed a $10 million capital
financing with Aisling Capital II, L.P.
The Series C-1 stock is convertible into an aggregate of
approximately 6.5 million shares of Interpharm common stock at
$1.53 per share, and the warrants, which have an exercise price of
$1.639 per share, are exercisable for an aggregate of 2,281,914
shares of common stock.
The Aisling financing supplements Interpharm's $41.5 million
credit facility with Wells Fargo Business Credit as well as the
recently announced sale of $10 million of its Series B-1
Convertible Preferred Stock which closed in May of this year.
Cameron Reid, Chief Executive Officer of Interpharm Holdings,
Inc., stated: "With the four year business plan already fully
funded, this financing will provide the capital necessary to
implement already identified projects that reach beyond the scope
of our existing plan. Aisling brings a strong understanding of
the pharmaceutical sector and we look forward to working with
them. Their long-term goals and objectives coincide with ours."
"Changes in the healthcare system have created tremendous
opportunities for manufacturers of generic pharmaceuticals,"
commented Drew Schiff, MD, Managing Director at Aisling.
"Interpharm is very well positioned to identify and benefit from
these opportunities for growth. We are pleased to support their
efforts."
Interpharm's future plans include significant increases in
research and development as well as pursuing certain targeted
projects and will therefore likely generate losses for the next
several quarters. Interpharm further believes this spending will
enable it to supplement its current product line by launching
additional products which should generate higher gross margins
than its currently marketed products.
A full-text copy of the Aisling Stock Purchase Agreement is
available for free at http://ResearchArchives.com/t/s?1243
About Interpharm Inc.
Based in Hauppauge, New York, Interpharm Holdings, Inc. (AMEX:IPA)
-- http://www.interpharminc.com/-- is engaged in the business of
developing, manufacturing and marketing generic prescription
strength and over-the-counter pharmaceutical products. Interpharm
is focused on setting the pace in the generic pharmaceutical
industry by increasing its product lines, investing in the future,
and continuing sound business principles.
* * *
On Sept. 30, 2005, Interpharm Holdings, Inc. was in default of
financial covenants that the Company had to comply with HSBC Bank
after Interpharm obtained a new $21 million credit facility from
the same Bank. The Company has received a waiver from the Bank of
the financial default covenants related to the four advised lines.
With respect to the mortgage loan, the Bank has waived the
financial covenant defaults incorporated in the mortgage note as
well as the cross default provisions within the four advised lines
through Oct. 1, 2006.
ISLAMORADA CORP: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: Islamorada, Corp.
P.O. Box 109
Islamorada, FL 33036
Bankruptcy Case No.: 06-14756
Type of Business: The Debtor operates a bar and restaurant.
Chapter 11 Petition Date: September 25, 2006
Court: Southern District of Florida (Miami)
Judge: Robert A. Mark
Debtor's Counsel: Lloyd H. Falk, Esq.
Lloyd H. Falk, P.A.
600 Soutwest 4 Avenue, Suite 113
Fort Laudedale, FL 33315
Tel: (954) 763-3231
Fax: (954) 764-1968
Total Assets: Unknown
Total Debts: $137,856
The Debtor did not file a list of its 20 largest unsecured
creditors.
IWT TESORO: Bank of America Credit Line Increased to $26.5 Mil.
---------------------------------------------------------------
IWT Tesoro Corporation entered into an agreement with Bank of
America to increase the company's credit line to $26.5 million.
"Bank of America has been a strong financial partner of IWT Tesoro
for the last three years, and we are pleased to have their ongoing
financial support as the company continues to manage its double
digit growth," Tesoro's CEO, Henry J. Boucher, said.
About IWT Tesoro
Headquartered in Westport, Connecticut, IWT Tesoro Corporation
(OTCBB: IWTT) -- http://www.iwttesoro.com/-- is as a wholesale
distributor of building materials, specifically hard floor and
wall coverings, which consist of ceramic, porcelain and natural
stone floor, wall and decorative tile. The Company imports a
majority of these products from suppliers and manufacturers in
Europe, South America, and the Near and Far East.
At June 30, 2006, the Company's balance sheet showed a
stockholders' deficit of $1,042,936, compared to a deficit of
$4,176,802 at Dec. 31, 2005.
Going Concern Doubt
As reported in the Troubled Company Reporter on May 31, 2006,
McGladrey & Pullen, LLP, in New Haven, Connecticut, raised
substantial doubt about IWT Tesoro Corporation's ability to
continue as a going concern after auditing the Company's
consolidated financial statements for the year ended Dec. 31,
2005. The auditor pointed to the Company's recurring losses from
operations, and working capital and stockholders' deficiencies.
IWORLD PROJECTS: Court Dismisses Chapter 7 Petition Filed by CEO
----------------------------------------------------------------
iWorld Projects & Systems, Inc., has reached a settlement
agreement with its former CEO Robert Hipple. Consequently, the
bankruptcy petition previously filed against the Corporation in
Florida has been dismissed by the U.S. Bankruptcy Court in the
Middle District of Florida. Mr. Hipple had filed an involuntary
Chapter 7 Bankruptcy petition against iWorld in Court on
June 14, 2006.
As reported in the Troubled Company Reporter on June 21, 2006, Mr.
Hipple represented himself and iTrust Financial, Inc. of Cocoa,
Florida, and claimed amounts owed by the Corporation of $47,9252
to him and $58,404 to iTrust Financial, a company he owns.
"The dismissal of the bankruptcy threat in Florida is an important
achievement," according to iWorld President David Pells. "We can
now bring new business and financing into the Company, which we
have been unable to do for the last three months. With the
bankruptcy out of the way, we can now really launch a turnaround
for iWorld. I am excited about the possibilities, and committed
to returning to the vision we began with two years ago -- to
create a global resource for the world of project management."
Headquartered in Addison, Texas, iWorld Projects & Systems, Inc.
(PINKSHEETS: IWPS) is registered as a Business Development Company
in the USA under the Investment Company Act of 1940 and is a
reporting company for SEC purposes under the Securities Exchange
Act of 1934. As a BDC, the Company is engaged in the business of
investing in and assisting small public and private operating
companies with a focus on project management.
KING PHARMACEUTICALS: Moody's Assigns Loss-Given-Default Ratings
----------------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. pharmaceutical sector this week, the
rating agency confirmed its Ba3 Corporate Family Rating for King
Pharmaceuticals, Inc., and its Baa3 rating on the company's $400
million issue of secured revolving credit facility. Additionally,
Moody's assigned an LGD2 rating to those bonds, suggesting
noteholders will experience a 12% loss in the event of a default.
Moody's explains that current long-term credit ratings are
opinions about expected credit loss, which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
King Pharmaceuticals, Inc., headquartered in Bristol, Tennessee,
manufactures, markets, and sells primarily acquired branded
prescription pharmaceutical products. The company reported
revenues of approximately $1.8 billion in 2005.
LE-NATURE'S INC: Moody's Assigns Loss-Given-Default Rating
----------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. beverage company sector last week, the
rating agency said its confirmed B1 Corporate Family Rating for
Le-Nature's Inc. may be under review.
Also in review, according to Moody's, could be its revised or held
probability-of-default ratings and assigned loss-given-default
ratings on these loans and bond debt obligations:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
$20 million Sr.
Sec. Revolving
Credit Facility
Due 2010 B1 Ba2 LGD2 27%
$265M Sr. Sec.
Term Loan B
Due 2011 B1 Ba2 LGD2 27%
$150M 9% Sr. Sub.
Notes Due 2013 B3 B3 LGD5 81%
Moody's explains that current long-term credit ratings are
opinions about expected credit loss which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
Headquartered in Latrobe, Pennsylvania, Le-Nature's, Inc., founded
in 1989 by chairman and CEO Greg Podlucky, produces a variety of
flavored bottled waters, lemonades, fruit drinks, and teas. Le-
Nature pasteurizes its products in the bottle using the full
tunnel method in an attempt to seal in the flavor. Brand names
include DAZZLER, Flavored ICE Water, Kettle Brewed Ice Tea, and
AQUA Xtra (vitamin enriched flavored water).
LEAR CORP: Production Cuts to Lower 2006 Net Sales by $300 Million
------------------------------------------------------------------
Lear Corporation discloses the impact of production cuts in North
America by major customers on its 2006 financial outlook.
The production cuts disclosed since the Company issued financial
guidance on July 28, 2006 are expected to negatively impact 2006
net sales by about $300 million and income before interest, other
expense, income taxes, restructuring costs and other special items
by about 15% compared with prior guidance levels of about
$18 billion in net sales and a range of $400 to $440 million in
core operating earnings. The Company's revised outlook for full-
year free cash flow is slightly positive. The Company is
continuing to aggressively implement cost reduction and
restructuring actions to mitigate the impact of the production
cuts and to align the Company's cost structure to the current
production outlook.
"We know our customers and our shareholders expect us to operate
as efficiently as we can, and we are proactively looking at every
aspect of our business for further improvement," Bob Rossiter,
chairman and chief executive officer, commented. "While we remain
positive about the longer-term outlook, we are taking additional
steps now to ensure that we remain financially strong and even
more competitive in the long run."
The Company further disclosed that while the production cuts will
adversely impact both the third and fourth quarters and each of
the Company's business segments, about two thirds of the decline
is in the fourth quarter and a disproportionate amount is in the
Interior segment.
The Company will discuss and update its outlook for the remainder
of 2006 and for 2007 when it releases third quarter financial
results on Oct. 26, 2006.
Headquartered in Southfield, Michigan, Lear Corporation
(NYSE: LEA) -- http://www.lear.com/-- supplies automotive
interior systems and components. Lear provides complete seat
systems, electronic products and electrical distribution systems
and other interior products.
* * *
Standard & Poor's affirmed the 'B+' rating on the $1 billion
first-lien term loan. Standard & Poor's corporate credit rating
on Lear Corp. is B+/Negative/B-2. The speculative-grade rating
reflects the company's depressed operating performance caused by
severe industry pressures. The ratings were assigned since
March 29, 2006.
LEINER HEALTH: Moody's Assigns Loss-Given-Default Rating
--------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. natural product processors sector last
week, the rating agency confirmed its B2 Corporate Family Rating
for Leiner Health Products Inc.
Additionally, Moody's revised or held its probability-of-default
ratings and assigned loss-given-default ratings on these loans and
bond debt obligations:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
$50mm Sr. Sec.
Revolvng Credit
Facility (2009) B2 Ba3 LGD2 28%
$240mm Sr. Sec.
Term Loan B (2011) B2 Ba3 LGD2 28%
$150mm 11% Gtd.
Sr. Sub. Notes
(2012) Caa1 Caa1 LGD5 81%
Moody's explains that current long-term credit ratings are
opinions about expected credit loss which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
Headquartered in Carson, California, Leiner Health Products Inc.
-- http://www.leiner.com/-- manufactures and markets over-the-
counter drugs including vitamins, minerals and nutritional
supplements.
LOCATEPLUS HOLDINGS: Posts $1.3MM Net Loss in 2006 Second Quarter
-----------------------------------------------------------------
For the three months ended June 30, 2006, LocatePLUS Holdings
Corp's net loss increased to $1.3 million on $3.5 million of net
revenues, compared to a $518,380 net loss on $2.7 million of
revenues in the prior year.
As of June 30, 2006, the Company's accumulated deficit widened to
$37.6 million compared to a $35.8 million of deficit at
June 30, 2005.
A full-text copy of the Company's Quarterly Report is available
for free at http://researcharchives.com/t/s?1246
Going Concern Doubt
Livingston & Haynes, P.C., in Wellesley, Massachusetts, raised
substantial doubt about LocatePLUS' 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 accumulated deficit at December 31, 2005 and
substantial net losses in each of the last two years.
About LocatePLUS
Based in Beverly, Massachusetts, LocatePLUS Holdings Corp. --
http://www.locateplus.com/-- and its subsidiaries
are industry-leading providers of public information and
investigative solutions that are used in homeland security, anti-
terrorism and crime fighting initiatives. The Company's
proprietary, Internet-accessible database is marketed to business-
to-business and business-to-government sectors worldwide.
MAFCO WORLDWIDE: Moody's Assigns Loss-Given-Default Rating
----------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. packaged food processors sector last
week, the rating agency upgraded Mafco Worldwide Corporation's
Corporate Family Rating to B2 from B1.
Moody's also affirmed its B1 ratings on the company's $15 million
Guaranteed Senior Secured Revolving Credit Facility Due 2010 and
$110 million Guaranteed Senior Secured Term Loan Due 2011,
suggesting lenders will experience a 31% loss in the event of a
default.
Moody's explains that current long-term credit ratings are
opinions about expected credit loss which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
Headquartered in Camden, New Jersey, Mafco Worldwide Corporation
manufactures licorice products including Magnasweet, a line of
multifunctional flavor enhancers, sweetness potentiators and
masking agent.
MARSH SUPERMARKETS: Shareholders Approve Merger Agreement
---------------------------------------------------------
Marsh Supermarkets, Inc.'s shareholders have approved the
Agreement and Plan of Merger, dated as of May 2, 2006, by and
among the Company, MSH Supermarkets Holding Corp. and MS
Operations, Inc., and the merger of MS Operations, Inc. with and
into the Company.
The Company disclosed that upon completion of the merger, it will
become a wholly owned subsidiary of MSH Supermarkets, an affiliate
of Sun Capital Partners, Inc.
At the special meeting, 72.4% of the outstanding Class A common
stock and 84% of the outstanding Class B common stock were voted
to approve the Merger Agreement and the merger.
Trading in the Company's Class A common stock and Class B common
stock on the NASDAQ Global Market will officially cease upon the
closing of the merger, which is expected to be completed by the
end of Sept. 2006.
About Sun Capital Partners, Inc.
Sun Capital Partners, Inc. is a private investment firm focused on
leveraged buyouts, equity, debt, and other investments in market-
leading companies that can benefit from its in-house operating
professionals and experience. Sun Capital affiliates have
invested in and managed more than 130 companies worldwide. Sun
Capital has offices in Boca Raton, Los Angeles, New York, London,
and Shenzhen.
About Marsh Supermarkets, Inc.
Headquartered in Indianapolis, Indiana, Marsh Supermarkets, Inc.
(Nasdaq: MARSA & MARSB) -- http://www.marsh.net/-- is a regional
supermarket chain with stores primarily in Indiana and western
Ohio, operating 69 Marsh(R) supermarkets, 38 LoBill(R) Food
stores, eight O'Malias(R) Food Markets, 154 Village Pantry(R)
convenience stores, and two Arthur's Fresh Market(R) stores. The
Company also operates Crystal Food Services(SM) which provides
upscale catering, cafeteria management, office coffee, coffee
roasting, vending and concessions, and Primo Banquet Catering and
Conference Centers; Floral Fashions(R), McNamara(R) Florist and
Enflora(R) -- Flowers for Business.
* * *
As reported in the Troubled Company Reporter on May 8, 2006,
Moody's Investors Service placed the ratings of Marsh
Supermarkets, Inc., including the B3 Corporate Family Rating and
Caa2 rating of 8.875% Senior Subordinated Notes due 2007 on
review-direction uncertain.
As reported in the Troubled Company Reporter on April 25, 2006,
Standard & Poor's Ratings Services held its 'B-' corporate credit
and 'CCC' subordinated debt ratings on Marsh Supermarkets Inc. on
CreditWatch with developing implications.
MEDCATH HOLDINGS: S&P Affirms B+ Rating & Alters Outlook to Stable
------------------------------------------------------------------
Standard & Poor's Ratings Services revised its rating outlook on
Charlotte, North Carolina-based hospital operator MedCath Holdings
Corp. to stable from negative. Ratings on the company, including
the 'B+' corporate credit rating, were affirmed. The company had
$336 million in debt outstanding as of June 30, 2006.
"The outlook revision reflects MedCath's recently improved
financial results and better prospects that its financial profile
will likely be maintained at a level consistent with the current
rating," said Standard & Poor's credit analyst David Peknay.
"Factors contributing to the recently improved earnings were a
strong 6.9% increase in adjusted admissions, a reduction in bad
debt, and a higher operating margin aided by a solid increase
in revenues per admission and better cost control. With a new
senior management team in place, greater clarity on reimbursement
over the next year, and the company taking steps to improve its
business portfolio, the company, in our view, is better positioned
to address industry challenges."
The low-speculative-grade rating on MedCath, an operator of
primarily specialty cardiovascular care hospitals, reflects:
* the reimbursement risk associated with a narrow focus in a
highly competitive business;
* the geographic concentration of a small portfolio of 11
hospitals; and
* regulatory issues that could change the company's future
prospects.
These concerns are only partially mitigated by MedCath's
relatively large presence for its specialized services in its
respective markets.
MERITAGE HOMES: Reports Sales and Closings for July & August 2006
-----------------------------------------------------------------
Meritage Homes Corporation disclosed preliminary sales and
closings for the first two months of the Company's third quarter
ending Sept. 30, 2006, in advance of upcoming investor meetings.
Home closings in July and August 2006 of 1,659 were 17% higher
than the same two months of 2005. Net new orders for 1,261 homes
were off 38% compared to July and August a year ago, as order
cancellations of 38% compounded a 21% decline in gross orders
during the two months. Order backlog at Aug. 31, 2006 stood at
5,451 homes, down 23% from the prior year's August 31st.
"Demand has slowed and resale inventories have risen in many
markets, making it more difficult for our buyers to sell their
existing homes, and in turn causing higher cancellations and
inventories industry-wide," said Steven J. Hilton, Meritage
chairman and chief executive officer. "Homebuilders are offering
greater incentives to reduce resulting inventories, pressuring
prices and margins on top of slower sales.
"Considering this further deterioration in market conditions, we
would expect our third quarter results to be near or slightly
below the lower end of our previous guidance. It is difficult to
accurately project the impact that increased cancellations and
weaker prices will have on our revenue and margins, or the
potential for additional asset write-offs, but these factors will
make it difficult to achieve our guidance for the remainder of the
year."
Mr. Hilton continued, "We continue with our strategy to carefully
manage inventory levels and are striving to resell inventories of
unsold homes caused by cancellations. We remain committed to
maintaining a high-quality balance-sheet and delivering
competitive returns to our shareholders as we manage through this
challenging homebuilding cycle."
Meritage expects to report third quarter results on or about
Oct. 25, 2006, and will provide additional information at that
time.
About Meritage Homes Corp.
Headquartered in Scottsdale, Arizona, Meritage Homes Corporation
(NYSE: MTH) -- http://www.meritagehomes.com/-- is a leader in the
consolidating homebuilding industry. Meritage operates in fast-
growing states of the southern and western United States,
including six of the top 10 single-family housing markets in the
country, and has reported 18 consecutive years of record revenue
and net earnings.
* * *
Meritage Homes Corp.'s 7% Senior Notes due 2014 carry Moody's
Investors Service's Ba2 rating, Fitch Ratings' BB rating and
Standard & Poors' BB- rating.
METALDYNE CORP: S&P Holds B Corporate Credit Rating on Watch
------------------------------------------------------------
Standard & Poor's Ratings Services' 'B' corporate credit rating
and other ratings on Plymouth, Michigan-based auto supplier
Metaldyne Corp. remained on CreditWatch with developing
implications following the recent announcement of lower production
levels by important customer DaimlerChrysler AG unit Chrysler.
Previously, Metaldyne agreed to be acquired by unrated Asahi Tec
Corp.
Standard & Poor's will review the terms of the transaction to
assess the impact on Metaldyne's credit quality. Developing
implications mean that the ratings could be lowered, raised, or
affirmed following our review of the terms of the proposed
transaction. Metaldyne has total debt of about $860 million.
The ratings could be raised if it appears that Metaldyne's
liquidity and cash flow protection will significantly strengthen,
reducing its financial risk.
On the other hand, the ratings could be affirmed if the company
achieves only modest improvements in its financial risk profile,
while still facing the intense challenges of the automotive supply
industry.
The ratings could be lowered if the transaction is not completed
as planned, leaving Metaldyne with a very heavy debt burden amid
difficult market conditions, including sharply lower production
levels at important customers Ford Motor Co. and Chrysler.
METROPOLITAN ASSET: Moody's Cuts Rating on Class B-1 Cert. to Caa1
------------------------------------------------------------------
Moody's Investors Service has downgraded, two certificates issued
by Metropolitan Asset Funding, Inc. II, Series 1998-B. The
transaction consists of subprime and seller financed first-lien
fixed-rate loans.
The two most subordinate certificates from the transaction have
been downgraded because existing credit enhancement levels are low
given the current projected losses on the underlying pools. There
is only $177,270 of credit enhancement in the form a B-2 tranche
to support the B-1 class as of the 8/21/06 reporting date.
These are the rating actions:
* Issuer: Metropolitan Asset Funding, Inc. II
-- Downgrades:
* Series 1998-B; Class B-1, downgraded to Caa1 from B3;
* Series 1998-B; Class B-2, downgraded to C from Ca.
MORGAN STANLEY: Moody's Junks Rating on Class B-2 Certificates
--------------------------------------------------------------
Moody's Investors Service has downgraded six certificates from
four transactions issued by Morgan Stanley Dean Witter Capital I
Inc. Trust. The transactions are backed by subprime mortgage
loans originated by Aames Capital Corporation.
These actions are being taken based on higher than anticipated
severities on liquidated loans, an accelerating pace of losses, as
well as an accompanying deterioration of credit enhancement, some
of which can be attributed to passing performance triggers.
These are Moody's complete rating:
* Issuer: Morgan Stanley Dean Witter Capital I Inc. Trust
Downgrade:
Series 2001-AM1, Class M-2, Downgraded from A2 to Baa2,
Series 2001-AM1, Class B-1, Downgraded from B1 to Caa1,
Series 2002-AM1, Class B-1, Downgraded from Ba2 to B3,
Series 2002-AM2, Class B-1, Downgraded from B2 to B3,
Series 2002-HE2, Class B-1, Downgraded from Ba1 to B1,
Series 2002-HE2, Class B-2, Downgraded from Ba3 to Caa1.
MULTIPLAN INC: Moody's Assigns B2 Rating on $360 Mil. Sr. Loan
--------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to the proposed
$360 million add-on Senior Secured Term Loan of MultiPlan, Inc.
Moody's also affirmed the B2 Corporate Family Rating, the B2
rating on the existing senior secured facility and the Caa1 rating
on the company's senior subordinated notes.
These rating actions follow the Aug. 30, 2006 announcement that
MultiPlan signed a definitive agreement to acquire Private
Healthcare Systems, Inc. for a total transaction value of $365
million, including transaction fees. MultiPlan intends to finance
the acquisition with the proceeds from a new $360 million term
loan. PHCS, based in Waltham, Massachusetts is the fourth largest
independent Preferred Provider Organization and the largest
primary PPO in the United States.
The continuation of the B2 Corporate Family Rating reflects the
significant increase in debt leverage to finance the acquisition
which is substantially offset by the existing cash flow of PHCS on
a stand-alone basis in addition to the anticipated potential cost
synergies as well as increased scale, product diversification, and
covered lives. While the company's operating and free cash flow
to debt (using Moody's standard analytic adjustments) metrics put
them at the low range of the B2 rating category, Moody's expects
that the company will generate enough meaningful cash flow to pay
down debt and improve its financial position within its rating
category over the immediate term.
The B2 ratings for the senior secured credit facilities reflect
the security and guarantee by all assets of MultiPlan and its
subsidiaries. The senior secured credit facilities are rated on
the same level as the Corporate Family Rating due to the fact that
the expanded senior credit facilities, which continue to benefit
from a security interest in all assets of the company and upstream
guarantees from subsidiaries, constitute a significant portion of
the overall debt capital structure. Once the transaction closes,
Moody's expects that goodwill will account for 85% to 90% of total
assets in 2006, which results in minimal asset coverage and does
not offer the company much in terms of alternate liquidity. The
Caa1 rating for the senior subordinated notes is notched two
levels below the Corporate Family Rating to reflect their
contractual subordination to the existing senior secured credit
facilities and the potential for less than 100% recovery under a
distressed scenario. These notes do, however, benefit from
upstream subsidiary guarantees.
These ratings were assigned with a stable outlook:
* $360 million Senior Secured Term Loan C, due 2013, rated B2
These ratings were affirmed with a stable outlook:
* $50 million Senior Secured Revolver, due 2012, (P)B2
* $425 million Senior Secured Term Loan B, due 2013,(P) B2
* Corporate Family Rating, rated (P) B2
* $225 million Senior Subordinated Notes, due 2016, rated
(P)Caa1
MYLAN LABORATORIES: Moody's Assigns Loss-Given-Default Rating
-------------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. pharmaceutical sector this week, the
rating agency confirmed its Ba1 Corporate Family Rating for Mylan
Laboratories Inc. Additionally, Moody's revised or held its
probability-of-default ratings and assigned loss-given-default
ratings on these loans and bond debt obligations:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
$350 million
Senior Unsecured
Notes due 2015 Ba1 Ba1 LGD4 51%
$150 Million
Senior Unsecured
Notes due 2010 Ba1 Ba1 LGD4 51%
$700 Million
Revolving Credit
Facility due 2011 Ba1 Ba1 LGD4 51%
Moody's explains that current long-term credit ratings are
opinions about expected credit loss, which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
Headquartered in Canonsburg, Pennsylvania, Mylan Laboratories Inc.
is a pharmaceutical company with three principal subsidiaries:
Mylan Pharmaceuticals Inc., Mylan Technologies Inc., and UDL
Laboratories, Inc. During the fiscal year ended March 31, 2006,
Mylan reported total revenue of approximately $1.26 billion.
NBTY INC: Moody's Assigns Loss-Given-Default Rating
---------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. natural product processors sector last
week, the rating agency upgraded its probability-of-default
ratings and assigned loss-given-default ratings on NBTY Inc.'s
loans and bond debt obligations:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
$125mm Gtd. Sr.
Sec. Revolver (2008) Ba2 Baa3 LGD2 13%
$120mm Gtd. Sr.
Sec. Term
Loan A (2010) Ba2 Baa3 LGD2 13%
$200mm 7.125% Gtd.
Sr. Sub. Notes (2015) B1 Ba3 LGD4 66%
In addition, Moody's confirmed the company's Ba2 Corporate Family
Rating at Ba2.
Moody's explains that current long-term credit ratings are
opinions about expected credit loss which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
Based in Bohemia, New York, NBTY Inc. -- http://www.nbty.com/--
together with its subsidiaries, engages in the manufacture,
marketing, and retail of nutritional supplements in the United
States and worldwide. The company offers approximately 22,000
products, including vitamins, minerals, herbs, sports nutrition
products, diet aids, and other nutritional supplements under
various company's and third-party brands. NBTY was founded in
1971 under the name Nature's Bounty Inc. and changed its name to
NBTY Inc. in 1995.
NEWPARK RESOURCES: Names James Braun as Vice President and CFO
--------------------------------------------------------------
Newpark Resources, Inc., named James E. Braun as vice president
and chief financial officer, effective Oct. 11, 2006.
The Company also disclosed that Mark J. Airola has been named
General Counsel and Chief Administrative Officer, newly created
position, effective Oct. 2, 2006. Eric Wingerter will relinquish
the position of acting chief financial officer and remain as vice
president and chief accounting officer.
Paul Howes, president and chief executive officer, stated, "We are
extremely pleased to welcome both Jim and Mark to our senior
leadership team and look forward to benefiting from their broad
experience in their respective fields. They bring not only
technical skills and expertise to their positions but also strong
leadership experience. Eric has done a tremendous job as acting
CFO and I am pleased he will continue in his role as our Chief
Accounting Officer.
Before joining the Company, Mr. Braun served in several management
positions at Baker Hughes Incorporated. Since 2002 he was vice
president, Finance of Baker Oil Tools, where his responsibilities
included financial management of a global oilfield service
business and serving as a member of the Leadership Team
responsible for the strategic direction of the company. From 1998
until 2002, Mr. Braun was Vice President, Finance and
Administration of Baker Petrolite, the oilfield specialty chemical
business division of Baker Hughes, also serving on the Leadership
Team. He served as vice president and controller of Baker Hughes
Incorporated, and he was with Deloitte & Touche for 12 years,
where his focus was on the oilfield service industry. Mr. Braun
is a Certified Public Accountant and received a BS in Accounting
from the University of Illinois.
Mr. Airola has practiced law for 22 years, primarily with large,
publicly traded companies. Recently he was Assistant General
Counsel and Chief Compliance Officer for BJ Services Company,
serving as an executive officer since 2003. From 1988 to 1995, he
held the position of Senior Litigation Counsel at Cooper
Industries, Inc., with initial responsibility for managing
environmental regulatory matters and litigation and subsequently
managing the company's commercial litigation. He received his JD
from the University of Houston Law Center and a combined
bachelor's degree in accounting and finance from Baylor
University.
The terms of the employment agreements with Mr. Braun and
Mr. Airola include, among other provisions, an inducement award of
100,000 time-restricted shares, which will vest ratably over three
years. The grant of the inducement awards has been approved by
the independent Compensation Committee of the Company's board of
directors and is exempt from the shareholder approval requirements
of the New York Stock Exchange.
Newpark Resources, Inc., (NYSE: NR) -- http://www.newpark.com/--
is a worldwide provider of drilling fluids,environmental waste
treatment solutions, and temporary worksites and access roads for
oilfield and other commercial markets.
* * *
As reported in the Troubled Company Reporter on Aug. 15, 2006
Standard & Poor's Ratings Services assigned its 'BB-' rating and
'1' recovery rating to oil field services company Newpark
Resources Inc.'s (B+/Watch Neg/--) planned $150 million senior
secured term loan. The 'BB-' rating was also placed on
CreditWatch with negative implications. All the ratings on the
Company are on CreditWatch.
As reported in the Troubled Company Reporter on Aug. 14, 2006
Moody's Investors Service assigned a B2 rating to Newpark
Resources, Inc.'s new $150 million five-year senior secured term
loan facility. At the same time, Moody's affirmed Newpark's B1
Corporate Family Rating and B3 senior subordinated note rating.
The rating outlook remains negative pending the filing of its
financial statements for the last five fiscal years, as well as
for the fiscal quarters within 2004 and 2005.
NIGHTHAWK SYSTEMS: Posts $633,561 Net Loss in Qtr. Ended June 30
----------------------------------------------------------------
Nighthawk Systems, Inc., incurred a $633,561 net loss for the
three-month period ended June 30,2006, a 31% improvement compared
to a $933,517 net loss for the same period in 2005. According to
the Company, the decrease in net loss was due primarily to
increased sales and production of the Company's products that
produced additional gross margin dollars, combined with a
reduction in expenses for public relations campaign and reduction
in interest expense related to notes and debentures issued to
Dutchess Private Equities, II, L.P.
In August 2004, the Company signed a financing arrangement with
Dutchess under which the Company received $250,000 in exchange
for a convertible debenture during August 2004. The Company also
signed an investment agreement under which Dutchess agreed to
purchase up to $10 million in common stock from the Company over
the next three years.
Revenues for the three-month period ended June 30, 2006 were
$252,139 as compared to $98,372 for the corresponding period of
the prior year, an increase of 156% between periods. Sales of
each of Company's core products increased between the periods
presented, and the Company also produced revenues from the sale of
emergency notification products during the 2006 period.
During 2005, the Company hired its first fulltime sales staff, and
began proactively marketing its products for the first time. In
2006, the Company added an in-house sales coordinator. These
additions have produced more frequent contact with both new and
existing customers and have resulted in an increased level of
product sales.
At June 30, 2006, the Company's balance sheet showed $1,042,447 in
total assets and $3,469,593 in total liabilities, resulting in a
$2,427,146 stockholders' deficit.
A full-text copy of the Company's quarterly report is available
for free at http://researcharchives.com/t/s?123c
Going Concern Doubt
As reported in the Troubled Company Reporter on May 17, 2006,
GHP Horwath, P.C., in Denver, Colorado, raised substantial doubt
about Nighthawk's ability to continue as a going concern after
auditing the Company's consolidated financial statements for the
year ended Dec. 31, 2005. The auditor pointed to the Company's net
loss, negative working capital and stockholders' deficit.
About Nighthawk Systems
Based in San Antonio, Texas, Nighthawk Systems, Inc. --
http://www.nighthawksystems.com/-- designs and manufactures
ready-to-deploy intelligent remote power control products that can
remotely control virtually any device from any location. It
serves electric utilities, traffic control, computer systems,
commercial lighting, and irrigation markets primarily in the
United States.
OHIO VALLEY: Fitch Affirms $27 Million Hospital Bonds' B+ Rating
----------------------------------------------------------------
Fitch Ratings affirmed at 'B+' the rating on approximately $27
million of hospital revenue bonds issued on behalf of Ohio Valley
Medical Center in West Virginia and East Ohio Regional Hospital in
Ohio.
Ohio Valley Health Services and Education Corps. is the parent and
sole member of the two hospital facilities. The Rating Outlook is
Stable.
The affirmation at 'B+' is supported by OVHSEC's continued
strategic focus at EORH which has led to recent improvements in
operating performance. OVHSEC has continued to concentrate more
on the complement of services provided at EORH with the most
recent addition of orthopedic and cardiac services to that
hospital.
Patient volume has exhibited strong growth at EORH as inpatient,
emergency room, and outpatient surgery visits have shifted to EORH
from OVMC. Due to this volume growth, EORH is challenged by
capacity constraints. In order to provide some capacity relief,
EORH is expected to complete by the first quarter of 2007 the
construction of new operating rooms, recovery rooms/holding areas,
and the upgrade of the emergency room. Management continues to
focus on patient throughput and reducing patient length stay at
EORH.
OVHSEC's strategic focus at EORH has resulted in recent improved
operating performance as the consolidated system was able to post
breakeven operating results in 2005, compared to historical
operating losses.
Losses have ranged from approximately $3 million to $5 million
over the past five years. The obligated group (approximately 97%
of the system's total revenues) generated a 0.3% operating margin
through the first half of 2006. OVHSEC budgeted a negative 0.5%
operating margin (loss of $969,000) for 2006.
Nonetheless, OVMC continues to be a drag on system-wide
profitability, posting losses of $1.9 million in 2005 and $1.3
million through the six months ended June 30, 2006.
In order to reduce these losses at OVMC, management continues to
focus on labor productivity and improvements to service mix with
the expansion of psychiatric and oncology services.
Primary credit concerns remain OVHSEC's:
* weak liquidity,
* historical operating losses,
* high age of plant, and
* unfavorable service area characteristics.
Unrestricted cash and investments declined to $6.4 million at
June 30, 2006, as compared to $9.8 million at Dec. 31, 2004,
(excludes investment securities that are posted as collateral for
an outstanding line of credit).
As a result, liquidity is very weak at 16.3 days cash on hand and
cash to debt of 19.6% at June 30, 2006. The decline in liquidity
reflects the funding of approximately $11 million in capital
projects at EORH through a $5 million bank loan, fundraising
efforts, equity contribution from operations, and prior bond
funds.
The bank loan is secured by a mortgage pledge, which provides more
collateral and security than is available to bondholders and is
viewed negatively by Fitch. Given OVHSEC's weak historical
profitability and the use of short-term debt to finance ongoing
capital needs, maximum annual debt service coverage was weak at
1.3x in 2005, but improved to 2.0x through June 30, 2006.
Additionally, capital needs at OVHSEC remain substantial with an
average age of plant of 22.3 years (Fitch's median for below-
investment-grade credits is 13.1 years) and capacity constraints
at EORH.
Other risks include the unfavorable service area characteristics
and difficult malpractice environment in West Virgina. The
service area characteristics for OVMC are unfavorable, with low
income levels, a concentration in steel manufacturing, and high
unemployment.
The Stable Outlook reflects Fitch's expectation that operating
profitability at EORH will continue to be largely offset by
continued losses at OVMC. However, management's initiatives at
OVMC should help to reduce future losses and allow the system to
generate near breakeven results. While future capital needs will
be an ongoing challenge, the completion of the capital projects at
EORH should provide some capacity relief.
Nonetheless, there may be rating pressure with any larger than
anticipated operating loss, sizeable increase in debt, or
continued declines in liquidity.
OVHSEC is a two-hospital system consisted of OVMC, located in
Wheeling, West Virginia, and EORH, located in Martins Ferry, Ohio.
The system had a combined total of 243 acute-care beds and 94
long-term care beds with total revenues of $155 million in 2005.
OVHSEC covenants to provide bondholders with annual financial
disclosure and quarterly disclosure to the bond trustee, which is
viewed negatively by Fitch.
However, these disclosure practices were standard at the time of
the series 1998 bond financing. Audited financial statements are
disseminated through the nationally recognized municipal
securities information repositories.
Outstanding bonds affirmed at 'B+':
-- $11,350,000 County Commission of Ohio County, WV health
system refunding and improvement revenue bonds (Ohio Valley
Medical Center issue), series 1998A (1);
-- $1,455,000 County Commission of Ohio County, WV health
system refunding and improvement revenue bonds (Ohio Valley
Medical Center issue), series 1998B (taxable) (2);
-- $14,200,000 County of Belmont, OH health system refunding
and improvement revenue bonds (East Ohio Regional Hospital
issue), series 1998 (1).
(1) The bonds are partially insured by ACA Financial Guaranty
Corporation.
(2) The bonds are fully insured by ACA Financial Guaranty
Corporation.
ORIENTAL TRADING: Moody's Assigns Loss-Given-Default Rating
-----------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. toy company sector last week, the rating
agency held its B3 Corporate Family Rating for Oriental Trading
Company Inc. and raised its probability-of-default ratings on the
company's $50 million Guaranteed First Lien Senior Secured
Revolver Due 2012 and $410 Million Guaranteed First Lien Senior
Secured Term Loan B Due 2013 to B1 from B3. Moody's assigned an
LGD3 rating to those bonds, suggesting lenders will experience a
30% loss in the event of a default.
Moody's also cut its Caa1 rating to Caa2 on the company's $180
Million Guaranteed Senior Secured Second Lien Term Loan Due 2013.
The bonds were assigned an LGD5 rating suggesting a projected
loss-given default of 79%.
Moody's explains that current long-term credit ratings are
opinions about expected credit loss which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
Headquartered in Omaha, Nebraska, Oriental Trading Company, Inc.
sells more than 10,000 products from novelties, party supplies,
and toys to stationery, crafts, and home decor items through its
Web sites and catalogs.
PHIBRO ANIMAL: Moody's Assigns Loss-Given-Default Rating
--------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. pharmaceutical sector this week, the
rating agency confirmed its B2 Corporate Family Rating for Phibro
Animal Health Corporation. Additionally, Moody's revised or held
its probability-of-default ratings and assigned loss-given-default
ratings on these loans and bond debt obligations:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
$160 Million
Senior Unsecured
Notes due 2013 B3 B2 LGD3 48%
$80 Million
Senior Subordinated
Notes due 2015 Caa1 Caa1 LGD5 89%
Moody's explains that current long-term credit ratings are
opinions about expected credit loss, which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
Headquartered in Ridgefield Park, New Jersey, Phibro Animal Health
Corporation is a diversified manufacturer of a broad range of
animal health and nutritional products. For the twelve-month
period ended March 31, 2006, Phibro reported net sales of
approximately $388 million.
PIER 1 IMPORTS: Moody's Downgrades Corp. Family Rating to B3
------------------------------------------------------------
Moody's Investors Service downgraded Pier 1's corporate family
rating to B3 from B1 following continued degradation in same store
sales, which have resulted in modest operating results and
negative free cash flow. The rating outlook is stable.
Pier 1's continuing operating difficulties are highlighted by a
continued general decline in same store sales over the last two to
three years due to moderating customer traffic and unsuccessful
product initiatives. The rating action also reflects Moody's
expectation that same store sales and operating margins will
likely be slow to rebound over the next few quarters, while
recognizing the company's liquidity benefits from the sale of its
credit card business.
Pier 1 is a specialty retailer, located in Forth Worth, Texas,
which operates principally through its Pier 1 Imports stores.
Sales for the LTM ended August 2006, approximated $1.8 billion.
QUINTILES TRANSNATIONAL: Moody's Assigns Loss-Given-Default Rating
------------------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. pharmaceutical sector this week, the
rating agency confirmed its B1 Corporate Family Rating for
Quintiles Transnational Corp. Additionally, Moody's revised or
held its probability-of-default ratings and assigned loss-given-
default ratings on these loans and bond debt obligations:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
$1 Billion
First Lien Term
Loan B1 B1 LGD3 44%
$225 Million
First Lien
Revolving Credit
Facility B1 B1 LGD3 44%
$220 Million
Second Lien Term
Loan B3 B2 LGD5 72%
Moody's explains that current long-term credit ratings are
opinions about expected credit loss, which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
Headquartered near Research Triangle Park, North Carolina,
Quintiles Transnational Corp. -- http://www.quintiles.com/--
helps improve healthcare worldwide by providing a broad range of
professional services, information and partnering solutions to the
pharmaceutical, biotechnology and healthcare industries.
RADIO SYSTEMS: Moody's Assigns B1 Rating to $195MM Sr. Sec. Loans
-----------------------------------------------------------------
Moody's Investors Service assigned a B1 corporate family rating to
Radio Systems Corporation. Moody's also assigned a B1 rating to
the company's $195 million of senior secured credit facilities,
consisting of a revolving credit facility and term loan B
facility. Proceeds from the senior secured credit facilities
combined with a $30 million equity contribution from TSG Consumer
Partners will be used to fund the acquisition of Invisible
Technologies, Inc. for $163 million. The acquisition closed in
September. The rating outlook is stable. This is a first time
rating for the company.
The ratings assigned:
* Radio Systems Corporation
-- Corporate family rating at B1;
-- Probability-of-default rating at B2;
-- $45 million senior secured revolving credit facility due
2011 at B1 (LGD3, 32%);
-- $150 million senior secured term loan B due 2013 at B1
(LGD3, 32%).
RSC's B1 corporate family rating is primarily driven by the
company's high leverage with pro forma credit metrics that are
largely consistent with a B credit profile, the company's modest
scale, narrow product focus on the electronic pet supplies
category, some customer concentration, integration risk as the
company digests a company nearly half its size, and potential
longer-term acquisition risk as the company seeks to expand within
the fragmented pet supply industry.
RSC's B1 rating also reflects the company's leading market
position within pet containment and training products, its
extensive product portfolio with well recognized brand names,
strong operating margins in the high teens, access to low-cost
sourcing through its Asian suppliers, and moderate seasonality.
The rating also recognize the benefits of the RSC and ITI merger,
which increases scale and purchasing power, and improves brand
awareness for RSC's products.
The stable outlook reflect Moody's expectation that RSC will not
encounter any significant challenges as it absorbs ITI into its
operations, that volume trends will remain stable, and that the
company will refrain from any additional acquisitions in the near-
term. The outlook also reflects Moody's expectation that RSC will
reduce debt to EBITDA to below 4.0 times by the end of 2007,
produce free cash flow to debt at least in the mid-single digits,
and maintain operating margins in the high teens.
Based in Knoxville, Tennessee, Radio Systems Corporation is a
provider of electronic pet containment products, pet training
products, and pet doors. Invisible Technologies, Inc. provides
pet containment products under the "Invisible Fence" brand name
and other pet training products. RSC and ITI expect to report
over $200 million of pro forma revenue for 2006.
RADIO SYSTEMS: S&P Rates Proposed $195 Mil. Debt Facility at B
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to Knoxville, Tennessee-based Radio Systems Corp.,
a provider of technology-based pet care products. The rating
outlook is positive.
At the same time, Standard & Poor's assigned its loan and recovery
ratings to the company's proposed $195 million senior secured
credit facility, consisting of a $150 million term loan due 2013
and a $45 million revolving credit facility due 2011. The
facility is rated 'B' (at the same level as the corporate credit
rating) with a recovery rating of '2', indicating the expectation
for substantial (80%-100%) recovery of principal in the event of a
payment default. All ratings are based on preliminary offering
statements and are subject to review upon final documentation.
In September 2006, Radio Systems entered into a definitive
purchase agreement to acquire its major competitor, Invisible
Technologies Inc., for $163 million in cash. The company will
finance the acquisition through its new bank facility. As part of
the transaction, TSG Consumer Partners will also invest about $30
million to help fund the acquisition, and will hold a 15.5% equity
interest in the company.
Standard & Poor's estimates that Radio Systems will have about
$182 million of total debt outstanding upon closing of the
transaction, excluding operating lease obligations.
"The 'B' corporate credit rating reflects Radio Systems' exposure
to technology risk and overall narrow product focus, a highly
competitive operating environment, moderate customer concentration
with the company's key retailers, and some vulnerability to weak
economic and retail environments," said Standard & Poor's credit
analyst Mark Salierno.
"These risks are somewhat mitigated by the company's leading
market share in the niche pet containment and training industry,
and favorable demographic industry trends relating to growth in
pet ownership and spending."
REVLON INC: Reveals Broad Organizational Streamlining
-----------------------------------------------------
Revlon, Inc., disclosed a broad organizational streamlining and
consolidation that builds on the scope of the Company's
restructuring actions implemented earlier in the year and
accelerates the Company's efforts to reduce costs and improve
profit margins.
In connection with the announcements, the Company provided its
outlook for 2006 and 2007 and indicated that it plans to
discontinue Vital Radiance, due to the new brand not achieving an
economically feasible retail platform for future growth. Revlon
indicated that it expects these actions to accelerate the
Company's path to becoming net income and cash flow positive.
Revlon President and Chief Executive Officer David Kennedy stated,
"Today's announcements represent important and necessary steps
forward for Revlon. We are moving forward with a clear focus on
leveraging the tremendous equity of our established brands --
particularly Revlon -- and without the burden of the operating
loss we anticipated from Vital Radiance in 2007. As we look
ahead, we will continue to work to bring innovation and excitement
to the market and, importantly, we will do so in a way that is
focused on driving our profitability and cash flow, while also
generating top-line growth."
Organizational Streamlining
The organizational streamlining, which will reduce the Company's
U.S. workforce by approximately 250 positions, or approximately
8%, will result in restructuring and related charges totaling
approximately $29 million, with related ongoing annualized savings
estimated at approximately $34 million.
The primary components of the streamlining involve:
* consolidating responsibilities in certain related functions
and reducing layers of management to increase accountability
and effectiveness;
* streamlining support functions to reflect the new
organization structure;
* eliminating certain senior executive positions; and
* consolidating various facilities.
The Company's brand marketing and creative activities in the U.S.
will be further consolidated, eliminating redundancy and reducing
layers of management. The new structure is designed to enable
more effective innovation and creativity, while fostering more
efficient decision-making and appropriately aligning this
decision-making with accountability. As a result, the roles of
Executive Vice President and Chief Marketing Officer, held by
Stephanie Klein Peponis, and Executive Vice President and Chief
Creative Officer, held by Rochelle Udell, will be eliminated, and
the brand marketing leadership will report directly to David
Kennedy. The marketing leadership will be responsible for all
elements of brand marketing, brand positioning and advertising,
media and creative services, category development and other
promotional activities. In addition, the role of Executive Vice
President and President of International, currently held by Tom
McGuire, is also being eliminated, and the executives leading the
Company's three geographic International regions will report
directly to David Kennedy.
Commenting on the organizational streamlining, David Kennedy
continued, "This opportunity to improve our operational
effectiveness, accelerate our cost reduction and improve our
margins is meaningful, and we are moving forward aggressively with
the implementation. We expect these actions to result in
significant and sustainable savings for the Company, and I am
confident that the individuals assuming greater responsibility and
decision making will be more effective in their roles moving
forward. I believe that today's announcements position us well
for improved results in 2007 and beyond."
The Company indicated that the $29 million in restructuring and
related charges is comprised primarily of employee-related costs,
including severance and other termination benefits, with
approximately $15 million of the charges expected to be incurred
in the third quarter of 2006 and another $8 million expected to
impact the fourth quarter of 2006. The Company expects the
balance of the charges to be incurred in 2007. Approximately $21
million of the charges are expected to reflect cash charges that
the Company will pay out over the 2006 to 2008 period.
Of the $34 million in expected ongoing annualized savings, the
Company expects approximately $5 million to benefit 2006 results.
The Company's restructuring actions implemented earlier in the
year resulted in $10 million in charges incurred in the first half
of 2006, with expected related ongoing annualized savings of
approximately $15 million.
Vital Radiance Update
Revlon plans to discontinue Vital Radiance, its new brand targeted
at the mature consumer, due to the disappointing performance of
the brand and the likelihood that Vital Radiance would not
maintain an economically feasible retail footprint in the future.
As a result, the Company expects to incur charges of approximately
$63 million in the third quarter of 2006 related to discontinuing
the brand. The charges will include a provision for estimated
returns and allowances of approximately $40 million, as well as
approximately $13 million for the write-off of inventories and
selling and promotional materials, and approximately $10 million
for the acceleration of display amortization.
The Company indicated that, including the cost to discontinue the
brand, Vital Radiance is expected to negatively impact the
Company's operating results by approximately $70 million in the
third quarter. For the full year, the negative impact of Vital
Radiance on the Company's operating results is expected to be
approximately $110 million, including the cost to discontinue the
brand in the third quarter and the charges taken earlier in the
year associated with a reduction of retail space at several large
format retailers.
Commenting on the decision, David Kennedy stated, "The decision to
discontinue Vital Radiance is the right strategic and economic
choice for the Company. The likelihood of the brand maintaining
much of its retail space in the future, including adequate space
at the brand's best accounts, was questionable, which made staying
the course unfeasible for Revlon. Given the opportunity to further
leverage our established brands-in particular, the Revlon brand
and our intense focus on dramatically improving our bottom-line
performance in 2007, we are confident that moving forward without
what would have been a significant, ongoing investment behind
Vital Radiance is the appropriate course of action."
In connection with the charges associated with both discontinuing
Vital Radiance and streamlining the organization, Revlon announced
that its wholly owned operating subsidiary, Revlon Consumer
Products Corporation, will seek an amendment to its bank credit
agreement to add back these charges in the calculation of its
financial covenants. The Company noted that the credit agreement
amendment is expected to be consummated in late September 2006,
subject to market and other customary conditions, including
receipt of consents from the appropriate lenders.
Preliminary Third Quarter 2006 Results
The Company indicated that net sales in the third quarter of 2006
are expected to be in the range of approximately $280 million to
$290 million, after giving effect to approximately $40 million in
estimated Vital Radiance returns and allowances.
Adjusted EBITDA for the third quarter of 2006 is expected to be a
loss of approximately $50 million, and operating loss in the
quarter is expected to be approximately $90 million, after giving
effect to the costs related to the organizational streamlining,
the total impact in the quarter of Vital Radiance, including the
cost to discontinue the brand, and other charges in connection
with executive severance. The total impact of these items on
Adjusted EBITDA in the quarter is expected to be approximately $79
million, and the total impact on operating profitability is
expected to be approximately $92 million.
Net loss in the third quarter is expected to be approximately $135
million, after giving effect to the costs of the organizational
streamlining, the total impact of Vital Radiance and other charges
in connection with executive severance.
Full Year 2006 Outlook
For the full year 2006, the Company indicated that it expects net
sales of approximately $1,340 million, including the impacts of
Vital Radiance returns and allowances provisions in the second and
third quarters of 2006. Adjusted EBITDA for the year is expected
to be approximately $75 million to $85 million, and operating loss
is expected to be approximately $45 million to $55 million, after
giving effect to the impacts of restructuring actions taken during
the year, the expected full-year impact of Vital Radiance,
including the cost to discontinue the brand, and other charges in
connection with executive severance. The total impact of these
items on Adjusted EBITDA for the year is expected to be
approximately $129 million, and the total impact on operating
profitability is expected to be approximately $150 million.
The Company is currently developing a plan to refinance its 8 5/8%
Senior Subordinated Notes maturing in 2008. In addition, as
previously disclosed, Revlon currently intends to conduct a $75
million equity issuance in late 2006 or the first quarter of 2007,
with the proceeds used for debt reduction. The backstop
obligations of MacAndrews & Forbes, Revlon's principal
shareholder, will remain in effect to ensure that Revlon issues
the $75 million. In addition, the existing $87 million line of
credit from MacAndrews & Forbes will remain available to the
Company through the completion of the $75 million equity issuance.
Longer-Term Outlook
As previously announced, the Company indicated that its goal for
longer-term net sales growth is in the mid-single-digit range, on
average, over time. In addition, the Company continues to expect
to achieve significant improvement in profit margins over time,
with 2007 expected to benefit meaningfully from restructuring
actions taken in 2006.
More specifically, Adjusted EBITDA in 2007 is expected to be
approximately $210 million. The Company believes that, based on
the business plans and strategies already in place for 2007, as
well as the benefits of the 2006 restructuring actions and the
elimination of the expected operating loss from Vital Radiance,
this level of performance is achievable. In addition, the Company
is aggressively focused on improving profitability beyond the
expected 2007 level. This additional growth is expected to be
driven by a continuing focus on the Company's margin and other
productivity initiatives, as well as the benefit of driving
profitable revenue growth of the Company's strong portfolio of
established brands.
About Revlon
Revlon, Inc. (NYSE:REV) -- http://www.revloninc.com/-- is a
worldwide cosmetics, skin care, fragrance, and personal care
products company. The Company's vision is to deliver the promise
of beauty through creating and developing the most consumer
preferred brands. The Company's brands include Revlon(R),
Almay(R), Vital Radiance(R), Ultima(R), Charlie(R), Flex(R), and
Mitchum(R).
At June 30, 2006, the Company's balance sheet showed $960.7
million in total assets and $2.09 billion in total liabilities,
resulting in a $1.1 billion stockholders' deficit.
SEAENA INC: Losses Continue in 2006 Second Quarter
--------------------------------------------------
Seaena, Inc., reported a $725,529 net loss for the quarter ended
June 30, 2006, compared to a $1,197,944 net loss for the same
period in 2005.
Revenue for the three months ended June 30, 2006 increased by
$278,930 or 30.8% from $906,005 for the three months ended June
30, 2005 to $1,184,935 for the three months ended June 30, 2006.
The Company generates product sales through the sale of laser
machines, of engraved glass products to customers in its retail
kiosks and through the sale of glass blanks, display bases, and
related products to independent distributors.
The increase in revenue is primarily due to the revenue generated
by U.C. Laser. The Company completed the Asset Purchase Agreement
with U.C. Laser Ltd. on March 31, 2006. U.C. Laser sold all of
its assets used in connection with the manufacturing,
distribution and marketing of its decorative images and products.
At June 30, 2006, the Company's balance sheet showed $16,228,560
in total assets, $8,287,948 in total liabilities and $7,940,612 in
stockholders' equity.
A full-text copy of the Company's quarterly report is available
for free at http://researcharchives.com/t/s?123e
Going Concern Doubt
De Joya Griffith & Company, LLC, in Las Vegas, Nevada, raised
substantial doubt about Seaena Inc.'s ability to continue as a
going concern after auditing the Company's consolidated financial
statements for the year ended Dec. 31, 2005. The auditor pointed
to the Company's recurring losses from operations, negative
working capital, and negative cash flows.
About Seaena Inc
Seaena, Inc., fka Crystalix Group International, Inc. --
http://www.seaena.com/-- manufactures and sells laser engraved
optical glass and crystal products. It sells its products
directly to corporate customers and market organizations.
SEARCHHELP INC: Posts $923,311 Net Loss in 2006 Second Quarter
--------------------------------------------------------------
SearchHelp, Inc., reported a $923,311 net loss on $22,854 of net
revenues for the three months ended June 30, 2006, compared to a
$355,713 net loss on $159,028 of revenues in 2005.
At June 30, 2006, the Company's balance sheet showed $2,492,647 in
total assets and $2,478,955 in total liabilities, resulting in a
$13,692 stockholders' deficit.
The Company's June 30 balance sheet also showed strained liquidity
with $563,860 in total current assets available to pay $1,027,218
in total current liabilities coming due within the next 12 months.
Since inception, the Company has not generated any significant
cash flows from operations. At June 30, 2006, the Company had
cash and cash equivalents of $335,715.
A full-text copy of the Company's Quarterly Report is available
for free at http://researcharchives.com/t/s?1248
Going Concern Doubt
Lazar, Levine and Felix LLP in New York raised substantial doubt
about SearchHelp, Inc.'s ability to continue as a going concern
after auditing the Company's consolidated financial statements for
the year ended Dec. 31, 2005. The auditor pointed to the
Company's recurring losses from operations, negative working
capital and capital deficiency.
SearchHelp, Inc., sells family oriented software through its
subsidiary, FamilySafe, Inc., and sells film and cameras through
its subsidiary, E-Top-Pics, Inc.
SENSE HOLDINGS: Posts $788,262 Net Loss in Quarter Ended June 30
----------------------------------------------------------------
Sense Holdings, Inc., incurred a $788,262 net loss on $1,466 of
revenue for the quarter ended June 30, 2006, compared to a
$347,484 net loss on $23,794 of revenue for the same period in
2005.
At June 30, 2006, the Company's balance sheet showed $1,065,436 in
total assets, $162,516 in total liabilities and shareholders'
equity of $902,920.
Sense Holdings completed a private placement of units to
accredited investors consisting in the aggregate of 11,140,910
shares of its common stock and warrants to purchase 5,570,455
shares of common stock on March 7, 2006. The warrants are
exercisable at $0.35 per share for a term of five years. The net
proceeds from the transaction are being used to eliminate debt of
the Company owing to certain prior note holders and for working
capital purposes. The Company received gross proceeds of
$2,451,000 and net proceeds of $2,086,282 in this transaction.
A full-text copy of the Company's quarterly report is available
for free at http://researcharchives.com/t/s?123f
Going Concern Doubt
Sherb & Co., LLP, expressed substantial doubt about Sense
Holdings, Inc.'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 net loss and $11,059,850 accumulated deficit at
Dec. 31. 2005.
About Sense Holdings
Sense Holdings, Inc. -- http://www.senseme.com/-- designs
develops manufactures and sells biometric security identification
systems. The Company's identification system uses fingerprinting
to verify a person's identity.
SEVENTY-ONE FARM: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: Seventy-One Farm, LLC
P.O. Box 752
New Roads, LA 70760
Bankruptcy Case No.: 06-10789
Chapter 11 Petition Date: September 25, 2006
Court: Middle District of Louisiana (Baton Rouge)
Judge: Douglas D. Dodd
Debtor's Counsel: Arthur A. Vingiello, Esq.
Steffes, Vingiello & McKenzie, LLC
13702 Corsey Boulevard, Building 3
Baton Rouge, LA 70817
Tel: (225) 751-1751
Fax: (225) 751-1998
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.
SIERRA PACIFIC: S&P Upgrades Senior Unsecured Debt to B from B-
---------------------------------------------------------------
Standard & Poor's Ratings Service raised the corporate credit
rating on Sierra Pacific Resources and its subsidiaries Nevada
Power Co. and Sierra Pacific Power Company to 'BB-' from 'B+'.
The rating on the utilities' general and refunding mortgage bonds
was raised to 'BB+' from 'BB', while the senior unsecured debt at
the utilities and at SRP was raised to 'B' from 'B-'.
The raised ratings reflect the cumulative impact of:
* a substantially improved regulatory relationship with the
Public Utilities Commission of Nevada;
* improved liquidity;
* asset acquisitions that have significantly reduced the
utilities' short capacity and energy position; and
* financial restructuring that included conversion of more than
$500 million of hybrid securities into equity in 2005, the
recent issue of $280 million in new equity, and the pushing
out of debt maturities into later years.
Standard & Poor's also viewed favorably, and factored into the
rating, the expected recovery of $180 million in deferred costs
that were disallowed in 2002. The outlook is stable.
"Importantly, it is our expectation that SRP will need to issue
additional equity in order to retain its 'BB-' rating while
implementing its huge $6.4 billion capital expenditure program
between 2006-2010. While ratios meet benchmarks even in the
absence of equity in the next three years, the forecast assumes a
substantial amount of incremental equity issuances in the outer
years to finance the capital program," said Standard & Poor's
credit analyst Swami Venkataraman.
"We believe that management fully intends to issue equity and that
the issuances of equity in 2005 and 2006 are testimony to the
ability to do so. Should equity market conditions or other
extraneous factors prevent issuance of equity, the rating or
outlook could be adversely affected."
NPC and SPP provide electricity to more than a million customers
in northern and southern Nevada and the Lake Tahoe area in
California. SPP also provides natural gas service to 134,800
customers around Reno. NPC has historically represented about 75%
of consolidated cash flows. SRP had more than $4.4 billion of
debt outstanding as of June 30, 2006.
The principal source of business risk at both utilities has been
their short capacity position, especially NPC. The acquisition of
about 1,800 MW at NPC and the expected construction of a 500 MW
combined cycle plant at SPP will substantially reduce the short
capacity position, leaving exposure to gas prices and needle peak
loads as the major operational risk.
Prudent risk management policies, the ability to file for two Base
Tariff Energy Rate changes annually, and supportive regulatory
rulings over the past three years substantially mitigate SRP's
exposure to the wholesale energy markets.
The rating anticipates that the Public Utilities Commission of
Nevada will continue to demonstrate support in view of the rise in
gas prices and large capital expenditures at the utilities, both
of which will exert upward pressure on rates. Management's long-
term goal of having owned resources or long-term contracts that
cover 80% of peak load will also impose a significant financial
burden and require rate increases, given that peak load is growing
at more than 200 MW annually.
SIMMONS BEDDING: To Buy Simmons Canada from SCI for CDN$130 Mil.
----------------------------------------------------------------
Simmons Bedding Company entered into a definitive agreement
pursuant to which a subsidiary of the Company will acquire all of
the securities of Simmons Canada Inc. from SCI Income Trust.
The Company disclosed that under the proposed transaction SCI will
receive approximately CDN$130 million as consideration for the
sale of Simmons Canada, and immediately following the sale of
Simmons Canada, SCI will redeem all of SCI's outstanding units for
CDN$16.25 per unit in cash. The proposed transaction provides
SCI's unitholders with a premium of approximately 30% over the
Sept. 20 closing price of CDN$12.46 per unit on the Toronto Stock
Exchange.
The Company sold its Canadian manufacturing rights in 1990 as part
of a Canadian management led buyout and currently does not own any
units of SCI or any equity interest in Simmons Canada.
The Board of Directors of Simmons Canada, as administrator of SCI,
established a committee of independent directors to review the
terms of the proposed transaction. The Special Committee retained
legal counsel and CIBC World Markets Inc. as financial advisor.
The Special Committee recommended that the Board of Directors
approve the transaction. The Board of Directors of Simmons Canada
has determined that the proposed transaction is in the best
interests of SCI and has unanimously approved the proposed
transaction. They further agreed to support the transaction and
recommend to unitholders of SCI that they approve the proposed
transaction. SCI has agreed to not complete its reorganization
into a modern trust-on-partnership structure pending approval of
the proposed transaction by its unitholders.
A special meeting of SCI unitholders, which represents more than
66-2/3% of the units voted, will be held on Nov. 14, 2006 to
approve the transaction. The Board of Directors of Simmons Canada
has set a record date of Oct. 16, 2006 for the special meeting.
The Company plans to finance the acquisition from proceeds from
its completed sale of Sleep Country USA, cash flows from
operations, and availability under its revolving loan from its
existing senior credit facility.
Scotia Capital, Inc., acted as financial advisor to the Company on
the transaction.
About Simmons Canada Inc.
Simmons Canada Inc., the operating company wholly owned by SCI
Income Trust, -- http://www.simmonscanada.com/-- is a leading
manufacturer of mattresses and foundations in Canada. The company
manufactures five nationally-known brand names of mattresses,
Beautyrest(R) (now featuring Evolution the Non-Flip Pocket
Coil(R)), BackCare(R), Beautysleep(R), Dreamscapes and sang(TM) as
well as manufacturing and distributing the Obus Forme(TM) line of
mattresses and foundation under license. Simmons Canada also
contracts the manufacture of Hide-A-Bed(R) convertible sofas and
other upholstery products and high quality furniture. Simmons
Canada supplies its products to a broad range of customers,
including national department store chains, specialty sleep
stores, furniture buying groups, independent furniture retailers
as well as to the hospitality industry. Simmons Canada services
its customers from factories in Vancouver, Calgary, Toronto and
Montreal.
About Simmons Bedding Company
Based in Atlanta, Simmons Bedding Company or Simmons US, a
subsidiary of Simmons Company, -- http://www.simmons.com/--
manufactures and markets a broad range of products including
Beautyrest(R), BackCare(R), Beautyrest Black(TM), Natural Care(TM)
Latex, BackCare Kids(R) and Deep Sleep(R). Simmons US operates 17
conventional bedding manufacturing facilities and two juvenile
bedding manufacturing facilities across the United States and
Puerto Rico.
* * *
As reported in the Troubled Company Reporter on May 26, 2006
Standard & Poor's Ratings Services assigned its 'BB-' bank loan
rating and '1' recovery rating to Altanta, Georgia-based Simmons
Bedding Co.'s proposed $490 million senior secured term loan D due
2011. Standard & Poor's also raised its rating on the company's
existing $75 million revolving credit facility to 'BB-' from 'B+',
and assigned a '1' recovery rating to the facility. The outlook
is negative.
SPOKANE RACEWAY: U.S. Trustee Unable to Form Creditors Committee
----------------------------------------------------------------
Ilene J. Lashinsky, the U.S. Trustee for Region 18 informs the
U.S. Bankruptcy Court for the Eastern District of Washington that
there was an insufficient number of creditors willing to serve on
an Official Committee of Unsecured Creditors in the chapter 11
case of Spokane Raceway Park Inc.
Accordingly, the U.S. Trustee is unable to appoint a committee
under Section 1102(a) of the Bankruptcy Code at this time.
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtors'
expense. They may investigate the Debtors' business and financial
affairs. Importantly, official committees serve as fiduciaries to
the general population of creditors they represent. Those
committees will also attempt to negotiate the terms of a
consensual chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest. If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management with
an independent trustee. If the Committee concludes reorganization
of the Debtors is impossible, the Committee will urge the
Bankruptcy Court to convert the chapter 11 cases to a liquidation
proceeding.
Headquartered in Spokane, Washington, Spokane Raceway Park Inc.
-- http://www.spokaneracewaypark.com/-- operates a 2.5 mile Grand
Prix Road Course and racing facility. The Debtor filed for
chapter 11 protection on Aug. 17, 2006 (Bankr. E. D. Wash. Case
No. 06-01966). Bruce R. Boyden, Esq., in Spokane, Washington,
represents the Debtor. When the Debtor filed for protection from
its creditors, it listed total assets of $62,904,383 and total
debts of $2,252,748.
STRUCTURED ASSET: Weak Performance Cues Moody's to Lower Ratings
----------------------------------------------------------------
Moody's Investors Service has downgraded twenty mezzanine and
subordinate certificates from ten transactions and has confirmed
the ratings on four mezzanine and subordinate certificates from
four transactions all issued by Structured Asset Securities
Corporation's Amortizing Residential Collateral Trusts in 2001 and
2002.
These certificates are secured by fixed-rate and adjustable-rate
subprime home equity loans. Option One Mortgage Corporation,
Wells Fargo Bank Minnesota, N.A. and Aurora Loan Services, Inc.
are the master servicers for the 2001-BC1, 2001-BC6, and 2002
transactions, respectively.
The certificates are being downgraded based on the weaker than
anticipated performance of the mortgage pools and the resulting
erosion of credit support. Overcollateralization amounts in most
of the transactions are currently below their targets and pipeline
losses could cause further depletion of the overcollateralization
and put pressure on the most subordinate tranches.
In addition, some of the credit support deterioration can be
attributed to the deals passing performance triggers and therefore
leaking cash to subordinate tranches. Existing credit enhancement
levels may be low given the current projected losses on the
underlying pools.
Moody's has confirmed the current ratings on the most subordinate
certificates from the 2001-BC1, 2002-BC2, 2002-BC5, and 2002-BC10
deals. Overcollateralization has remained stable over the last
several months and credit support is consistent with the current
ratings on these certificates. Finally, the rating on the B class
from the 2002-BC8 was withdrawn on June 25, 2006 following its
redemption in full.
The complete rating actions are as follows:
* Issuer: Amortizing Residential Collateral Trust
-- Downgraded:
* Series 2001-BC1; Class M1, downgraded from A3 to Baa2
* Series 2001-BC6; Class M2, downgraded from A2 to Baa1
* Series 2002-BC1, Class M2, downgraded from A2 to Baa1
* Series 2002-BC1, Class B, downgraded from Baa2 to Baa3
* Series 2002-BC2, Class M1, downgraded from Aa2 to A3
* Series 2002-BC2, Class M2, downgraded from A2 to Baa1
* Series 2002-BC3, Class M2, downgraded from A2 to A3
* Series 2002-BC3, Class B1, downgraded from Baa2 to Baa3
* Series 2002-BC4, Class M3, downgraded from Baa2 to Ba1
* Series 2002-BC4, Class B1, downgraded from Baa3 to Ba2
* Series 2002-BC6, Class M3, downgraded from Baa1 to Baa3
* Series 2002-BC6, Class B, downgraded from Baa2 to Ba2
* Series 2002-BC7, Class B1, downgraded from Baa2 to Ba2
* Series 2002-BC7, Class B2, downgraded from Baa2 to Ba3
* Series 2002-BC7, Class B3, downgraded from Baa2 to Ba3
* Series 2002-BC8, Class M3, downgraded from Baa1 to Baa2
* Series 2002-BC8, Class M4, downgraded from Baa2 to Ba1
* Series 2002-BC9, Class M3, downgraded from Baa1 to Ba1
* Series 2002-BC9, Class M4, downgraded from Baa2 to Ba3
* Series 2002-BC9, Class B, downgraded from Baa3 to B1
-- Confirmed:
* Series 2001-BC1; Class M2, confirmed at Baa3
* Series 2002-BC2, Class B, confirmed at Baa2
* Series 2002-BC5, Class M3, confirmed at Baa2
* Series 2002-BC10, Class M3, confirmed at Baa2
STRUCTURED ASSET: Moody's Lowers Rating on Class B-2 Certs. to Ba3
------------------------------------------------------------------
Moody's Investors Services has made rating changes on twenty-two
certificates issued by Structured Asset Securities Corporation.
These actions are based on the analysis of the credit enhancement
levels when compared to the current projected losses. The
analysis takes into account the deal structures, the collateral
types, the certificate cash flows, and the effects of the stepdown
triggers.
The eighteen certificate upgrades are based on the high levels of
protection provided by the subordination, overcollateralization,
excess spread, and mortgage insurance. One class was downgraded
and two classes are under review for possible downgrade due to
their higher delinquency rates, loss severities, and projected
losses. One rating has been confirmed as the projected loss and
available credit support are consistent with its rating.
These are Moody's actions:
* Issuer: Structured Asset Securities Corporation
-- Upgrades:
* Series 2003-2A, Class B1-I, Upgraded from Aa2 to Aaa
* Series 2003-2A, Class B1-II, Upgraded from Aa2 to Aaa
* Series 2003-2A, Class B2-I, Upgraded from A2 to Aa2
* Series 2003-2A, Class B2-II, Upgraded from A2 to Aa2
* Series 2003-2A, Class B3, Upgraded from Baa2 to A2
* Series 2003-37A, Class B1-I, Upgraded from Aa2 to Aaa
* Series 2003-GEL1, Class M-1, Upgraded from Aa2 to Aaa
* Series 2003-GEL1, Class M-2, Upgraded from A2 to Aa2
* Series 2003-GEL1, Class M-3, Upgraded from Baa2 to A3
* Series 2003-BC1, Class M-1, Upgraded from Aa2 to Aaa
* Series 2003-BC1, Class M-2, Upgraded from A2 to Aa2
* Series 2003-BC3, Class M-1, Upgraded from Aa2 to Aaa
* Series 2003-BC3, Class M-2, Upgraded from A2 to Aa3
* Series 2003-S1, Class M-4, Upgraded from Baa3 to A1
* Series 2003-S2, Class M1-A, Upgraded from Aa2 to Aaa
* Series 2003-S2, Class M1-F, Upgraded from Aa2 to Aaa
* Series 2003-S2, Class M2-A, Upgraded from A2 to Aa3
* Series 2003-S2, Class M2-F, Upgraded from A2 to Aa3
-- Downgrade:
* Series 2003-BC1, Class B-2, Downgraded from Baa3 to
Ba3.
-- Confirm:
* Series 2003-BC2, Class M-3, Confirmed at Baa2.
-- Review for Downgrade:
* Series 2003-25XS, Class M-1, Currently: Aa2, under
review for possible downgrade.
* Series 2003-25XS, Class M-2, Currently: A2, under
review for possible downgrade.
TARGUS GROUP: Moody's Assigns Loss-Given-Default Rating
-------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. consumer product sector last week, the
rating agency affirmed its B2 Corporate Family Rating for Targus
Group International Inc., and raised its rating on the company's
$40 million Guaranteed First Lien Senior Secured Revolver Due 2011
to Ba3 from B2. Moody's assigned an LGD2 rating to those bonds
suggesting lenders will experience a 27% loss in the event of a
default.
Moody's explains that current long-term credit ratings are
opinions about expected credit loss which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
Headquartered in Anaheim, California, Targus Group International
Inc. -- http://www.targus.com/-- supplies notebook carrying cases
and accessories. The company has offices on every continent and
distributes in over 145 countries.
TIX CORPORATION: Repays $1.1 Million Note Payable in Full
---------------------------------------------------------
Tix Corporation has repaid in full a note payable, including
accrued interest, with a balance of approximately $1,180,000 by a
final cash payment to the note holder of approximately $101,000.
As a result, the Company expects to report a non-cash gain on
settlement of debt of approximately $1,079,000 during the three
months ended Sept. 30, 2006.
"We are delighted to have eliminated this debt obligation, which
will result in the Company having reduced its remaining interest-
bearing term debt to approximately $220,000, which consists of
sign and equipment capital leases," Mitch Francis, CEO of Tix
Corporation, commented. "As a result of this debt reduction, we
believe that the improvement in the Company's financial position
and net working capital, combined with the positive cash flow from
operations, will provide enhanced value for our shareholders."
Tix Corporation (OTCBB:TIXC), through its wholly owned subsidiary,
Tix4Tonight -- http://www.tix4tonight.com/-- sells tickets for
Las Vegas shows, concerts, attractions and sporting events at
half-price, on the same day of the performance. Tix4Tonight has
four prime ticket booth facilities, strategically placed at highly
foot-trafficked locations in Las Vegas, Nevada. They include the
Hawaiian Marketplace at the South end of the Strip, the Fashion
Show Mall in front of Neiman Marcus, directly across the street
from the new Wynn Resort at the middle of the Strip, North Strip,
across from the Stardust Hotel, and a new downtown Las Vegas
facility in the Four Queens Hotel, fronting onto the Fremont
Street Experience.
As of June 30, 2006, the Company had $1,493,386 in assets. The
Company's equity deficit narrowed to $1,631,570 at June 30, 2006,
from a $2,399,569 deficit at Dec. 31, 2005.
Going Concern Doubt
Weinberg & Company, P.A., the Company'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. The auditor pointed to net
loss, working capital deficiency stockholders' deficiency.
TRIBUNE CO: Fitch Downgrades Ratings to Double-Bs with Neg. Watch
-----------------------------------------------------------------
Fitch Ratings downgraded these ratings for Tribune Co. and
subsequently placed them on Rating Watch Negative:
-- Issuer Default Rating to 'BB+' from 'BBB-'
-- Senior unsecured revolving credit facility to 'BB+'
from 'BBB-'
-- Senior unsecured notes due 2006-2027 to 'BB+' from 'BBB-'
-- Subordinated exchangeable debentures due 2029 to 'BB'
from 'BB+'
-- Commercial paper program to 'B' from 'F3'
Approximately $3.1 billion of outstanding senior unsecured and
subordinated debt on the balance sheet as of June 25, 2006, is
affected by this action.
Tribune announced that its board of directors had established a
special committee to oversee management's exploration of
alternatives for creating additional value for shareholders and
that it expected the process to conclude by the end of 2006.
Tribune also announced the restructuring of two partnerships that
were inherited as part of the Times Mirror transaction. This
restructuring should remove some barriers to the pursuit of
certain alternatives the company might consider. As a result of
the restructuring, Chandler Trust's economic stake in the company
increases to nearly 20% (it's voting stake is slightly lower, but
it is still the largest voting shareholder).
Tribune also announced progress on its performance improvement
plan as it has identified $420 million of the $500 million in
divestitures and has sold $46 million in shares held for
investment.
The current rating action is consistent with Fitch's guidance to
the market that Tribune had 'very limited room at its prior rating
for financial policy revisions, meaningful operational shortfalls
or other materially negative strategy changes.' In Fitch's view,
this announcement marks the second departure by management from
stated financial policies in just over a year.
While ultimate financial policies are uncertain, operating results
remain pressured and the rating watch negative reflects Fitch's
belief there is a high probability that the previous announcement
will result in a financial strategy that is detrimental to
bondholders.
Resolution of the Negative Rating Watch will include Fitch's
evaluation of Tribune's ultimate financial strategy. The
resolution will incorporate Fitch's view of the risks of
accelerated deterioration in the company's major business lines
and markets, additional stock price pressure and potential further
financial policy revisions.
Fitch notes there are minimal covenants in the indentures to
protect bondholders against the risk of further leveraging
transactions, as there are no financial covenants, change of
control provisions, asset sales restrictions or additional
unsecured debt provisions. The limitation on secured debt does
provide a level of protection for the senior bonds.
Unlike the bonds, the credit facility contains a more restrictive
covenant package. Financial covenants in the credit facility
include maximum leverage of 5.5x, stepping down to 4.0x after
2010, and an interest coverage minimum of 2.5x. There is also an
explicit change of control provision in the recently established
credit facility that tightened slightly compared with the previous
facility.
While these features provide protection for bank creditors, they
do little for the majority of unsecured bondholders. Fitch
believes there is slightly stronger cross-default language in the
New TMC Inc indenture dated Jan. 30, 1995 (covering two former
Times Mirror obligations: 7.25% debentures due 2013 and the 7.5%
debentures due 2023), which could provide these holders with some
of the same benefits of the stronger credit facility covenant
package.
Fitch believes this provision could provide advantages to these
note holders relative to other note holders under severe financial
distress, as this cross-default might help enhance the negotiating
position of these bondholders. However, in the circumstance where
banks believed Tribune would generate more value as a going
concern, the banks could amend the facility prior to a covenant
breach or cure a default in the cure period to avoid involving
bondholders.
As such, in practicality, this cross-default language would not
likely improve the position of the New TMC note holders relative
to other unsecured creditors under many circumstances, leaving
them in much the same unprotected position as other bondholders.
TRIBUNE CO: S&P Lowers Corporate Credit Rating to BB+ from BBB-
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on Tribune
Co., including its long- and short-term corporate credit ratings
to 'BB+' from 'BBB-' and to 'B' from 'A-3', respectively.
In addition, these ratings were placed on CreditWatch with
negative implications. This Chicago, Illinois-headquartered
company had about $4.9 billion of reported debt outstanding as
of July 2006.
The lower ratings and CreditWatch listing reflect Tribune's
announcement that it would be considering various alternatives
for "creating additional value for shareholders." The company
expects to complete its review by the end of this year.
Tribune also announced that it restructured two partnerships
owned by the company and the Chandler Trusts, which were inherited
as part of the Times Mirror Co. acquisition in 2000. The
partnerships own all of Tribune's preferred stock and 51.3 million
shares of its common stock, as well as real estate used by several
of the company's newspapers and other investments. Tribune will
receive all of the preferred stock and about 39.5 million of the
common shares.
In addition, the company has the right to acquire the real
estate holdings for $175 million in January 2008. Tribune's
interest in the partnerships is reduced to 5% from about 50%.
The Chandler Trusts, which increased their ownership in the
partnerships to 95%, will receive the 11.8 million common shares
remaining in the partnerships. The company said that the
restructuring of the partnerships will allow it to "pursue
strategic alternatives to further enhance shareholder value."
In May 2006, Tribune announced plans for a leveraged
recapitalization with the repurchase of up to 75 million common
shares, or about 25% of the common stock outstanding.
In response, Standard & Poor's lowered its ratings on the company,
including its long-term corporate credit rating to 'BBB-' from
'A-', and assigned a negative outlook. Standard & Poor's had
expected that Tribune would focus on debt reduction following the
completion of the repurchases.
Standard & Poor's will review its ratings on Tribune once
definitive plans are announced and the company's operating and
financial objectives are evaluated.
TRIBUNE COMPANY: Moody's Affirms Ba2 Senior Sub. Ratings
--------------------------------------------------------
Moody's Investors Service changed the Tribune Company's rating
outlook to negative from stable in connection with the company's
announcement that its board of directors has formed a special
committee to oversee management's exploration of alternatives for
creating additional shareholder value. Moody's affirmed the
current Ba1 Corporate Family and senior unsecured ratings, and the
Ba2 senior subordinate ratings.
Outlook Actions:
* Issuer: Tribune Company
-- Outlook, Changed To Negative From Stable
* Issuer: Times Mirror Company, The
-- Outlook, Changed To Negative From Stable
The negative rating outlook reflects Moody's concern that the
outcome of Tribune's strategic evaluation could involve
incremental borrowings or dispositions of significant cash-
generating assets that would increase leverage or reduce the cash
flows available to support bondholders. Moody's notes the
indentures do not provide for change of control put rights, or
limitations on asset sales or asset sale proceeds that could
mitigate the potential risk to bondholders from a full or partial
sale of the company, or the incurrence of incremental debt.
Moody's will monitor the company's announcements and consider
additional rating actions, including a review for possible
downgrade, as the nature and timing of the outcome of Tribune's
strategic evaluation become more certain.
Tribune Company, headquartered in Chicago, Illinois, is a leading
media company with operations in television and radio
broadcasting, publishing, education and interactive services.
TRM CORPORATION: Moody's Withdraws Caa1 Corp. Family Rating
------------------------------------------------------------
Moody's Investors Service has withdrawn all ratings for TRM
Corporation for business reasons.
These are the ratings withdrawn:
* Corporate Family Rating of Caa1;
* Senior Secured Revolving Credit Facility of Caa1;
* Speculative grade liquidity rating of SGL-4.
UAL CORP: Hires Goldman Sachs to Look for Possible Merger Deal
--------------------------------------------------------------
United Airlines, a unit of UAL Corp., has hired Goldman Sachs &
Co. to review its holdings, Crain's Chicago Business stated.
Goldman Sachs will also advise on sales or purchases of domestic
or international routes and look for possible merger transaction,
the article reported.
Crain's Chicago Business said Continental or Delta Air Lines as
the most likely merger candidates.
About UAL Corp.
Headquartered in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA)
-- http://www.united.com/-- through United Air Lines, Inc., is
the holding company for United Airlines -- the world's second
largest air carrier. The Company filed for chapter 11 protection
on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M.
Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq.,
and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the
Debtors in their restructuring efforts. Fruman Jacobson, Esq., at
Sonnenschein Nath & Rosenthal LLP represented the Official
Committee of Unsecured Creditors before the Committee was
dissolved when the Debtors emerged from bankruptcy. When the
Debtors filed for protection from their creditors, they listed
$24,190,000,000 in assets and $22,787,000,000 in debts. Judge
Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20,
2006. The Company emerged from bankruptcy protection on Feb. 1,
2006.
* * *
As reported in the Troubled Company Reporter on July 31, 2006,
Moody's Investors Service assigned ratings to United Air Lines,
Inc.'s Pass Through Trust Certificates, Series 2000-1, 2000-2 and
2001-1:
-- Series 2000-1
* $233,244,336 Class A-1 Certificates: Ba3
* $324,913,300 Class A-2 Certificates: Ba3
* $186,368,450 Class B Certificates: B3
-- Series 2000-2
* $260,322,870 Class A-1 Certificates: Ba2
* $684,117,291 Class A-2 Certificates: Ba2
* $266,663,000 Class B Certificates: B1
* $148,577,000 Class C Certificates: Caa2
-- Series 2001-1
* $204,981,915 Class A-1 Certificates: Ba2
* $207,139,050 Class A-2 Certificates: Ba2
* $295,462,107 Class A-3 Certificates: Ba2
* $150,168,000 Class B Certificates: Ba3
* $251,885,000 Class C Certificates: B2
* $137,268,000 Class D Certificates: B3
VALEANT PHARMA: Moody's Assigns Loss-Given-Default Ratings
----------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. pharmaceutical sector last week, the
rating agency confirmed its B1 Corporate Family Rating for Valeant
Pharmaceuticals International, and its Ba3 rating on the company's
$300 million issue of 7% senior unsecured notes due 2011.
Additionally, Moody's assigned an LGD3 rating to those bonds,
suggesting noteholders will experience a 39% loss in the event of
a default.
Moody's explains that current long-term credit ratings are
opinions about expected credit loss, which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology
will also enhance the consistency in Moody's notching practices
across industries and will improve the transparency and accuracy
of Moody's ratings as Moody's research has shown that credit
losses on bank loans have tended to be lower than those for
similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion
of expected loss are expressed as a percent of principal and
accrued interest at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to
LGD6 (loss anticipated to be 90% to 100%).
Headquartered in Costa Mesa, California, Valeant Pharmaceuticals
International is a global specialty pharmaceutical company with
$823 million of 2005 revenues.
VERASUN ENERGY: Moody's Lifts Corp. Family Rating to B2 from B3
---------------------------------------------------------------
Moody's Investors Service upgraded its ratings for VeraSun Energy
Corporation and its notes due 2012 to B2 from B3. A speculative
grade liquidity rating of SGL-1 was affirmed for the firm. The
outlook remains positive. Loss given default assessments were not
assigned, but will be assigned at a later date in September 2006,
when loss given default assessments are rolled out for the entire
chemical industry portfolio of companies rated by Moody's
Investors Service. These ratings were changed:
* VeraSun Energy Corporation
-- Corporate Family Rating -- to B2 from B3
-- 9-7/8% Senior Secured Notes due 2012 -- to B2 from B3
The upgrade reflects the firm's significant cash balances
following its IPO in June, strong operating results in 2006,
favorable industry environment and the pre-funded status of the
planned capital expenditures for the company's fourth and fifth
ethanol plants. VeraSun's IPO raised approximately $233.4 million
in net proceeds to the company.
Unrestricted cash as of June 30, 2006, of $312.9 exceeds the
company's estimate of $280 million required to fund the
construction of two ethanol plants in Northwestern Iowa and
Welcome, Minnesota. Restricted cash raised in December 2005 from
the issuance of the notes due 2012 is funding the construction of
VeraSun's third plant in Charles City, Iowa.
Investors in VeraSun's notes will benefit from the additional
plant, property and equipment as the notes are secured by a first
priority lien on substantially all fixed assets of the company and
its subsidiaries. Despite its low leverage, Moody's is not
raising VeraSun's ratings more than one notch due to the
developing nature of the industry, the possibility of short term
swings in commodity prices and profitability, and large industry
capacity expansions that could negatively impact the economics.
The favorable ethanol industry environment is a result of a
combination of factors including:
* The Energy Policy Act of 2005 is the latest major federal
legislation that established a renewable fuels standard
mandating a minimum annual usage of ethanol in the U.S.
gasoline pool (starting with 4 billion gallons per year in
2006, ramping up to 7.5 BGPY in 2012). The legislation did
not provide liability protection for manufacturers of MTBE
(methyl tertiary butyl ether), which further boosted demand
(and prices) for ethanol as an alternative gasoline blend
component when MTBE left the US gasoline pool in the first
half of 2006;
* Federal excise tax credits of $0.51 per gallon of ethanol
blended with gasoline directly supports the economics of
producing ethanol;
* There is a federal tariff of $0.54 per gallon on imported
ethanol that offsets the excise tax credit benefit for
imported ethanol;
* State legislation promoting the use of ethanol; and,
* Corn and natural gas commodity prices are at moderate levels
such that ethanol manufacturers are enjoying strong margins
and operating cash flows.
The ratings reflect the risks associated with the developing
nature of the industry, industry economics that are driven by
government legislation, low barriers to entry, aggressive
competing capacity expansions that could lead to oversupply and
lower ethanol prices, the presence of competitors with
substantially greater resources, VeraSun's narrow product profile
with predominately one commodity product (ethanol) such that the
firm has little or no ability to influence the price of the
product, modest firm size and the lack of correlation between
input costs and ethanol prices impacting margins.
The positive outlook reflects the pre-funded status of VeraSun's
capital expansion plants, financial strength credit metrics that
are supportive of higher ratings, current favorable ethanol market
conditions, the likelihood that ethanol prices will be supported
by oil and gasoline prices that remain at relatively high levels
leading to healthy operating cash flow, and the firm's strong cash
position and operating cash flow which can support its cash
requirements over the next one to two years.
The rating could move up if the industry dynamics remain favorable
as the industry matures and VeraSun continues to be successful in
executing its strategy (which includes completing the construction
of at least two of the three additional plants announced by the
first half of 2008 and bringing in-house the marketing of
ethanol), maintained a conservative financial philosophy and is
able to finance the construction of its fourth and fifth plants
with existing cash balances. A deterioration in operating margins
due to adverse movements in commodity prices or failure by the
company to successfully execute its strategy might put negative
pressure on the ratings and outlook.
The speculative grade liquidity rating of SGL-1 (excellent
liquidity) reflects the high existing cash balances, strong gross
cash flows from operations and a $30 million asset based revolving
credit facility (secured by accounts receivable and inventory),
which had borrowing availability of $25.8 million as of
June 30, 2006, after taking into account outstanding letters of
credit totaling approximately $3.2 million.
VeraSun Energy Corporation, headquartered in Brookings, South
Dakota, is the second largest producer of ethanol in the United
States with two facilities having production capacity of 230
million gallons per year. A third plant is under construction
(due for completion by the end of August 2007) and VeraSun plans
to start building its fourth and fifth plants in the fourth
quarter of 2006. Both existing plants use the dry mill production
process. Revenues for the six months ended June 30, 2006, which
reflect the operations of both of VeraSun's plants, were
approximately $262 million.
VILLAGEEDOCS INC: Has $4.1 Mil. Working Capital Deficit at June 30
------------------------------------------------------------------
VillageEDOCS, Inc., incurred a $356,693 net loss on $3 million of
net revenues for the three months ended June 30, 2006, compared to
a $6.4 million net loss on $2.2 million of revenues in 2005.
The Company's June 30 balance sheet also showed strained liquidity
with $2.2 million in total current assets available to pay $6.3
million in total current liabilities coming due within the next 12
months.
A full-text copy of the Company's Quarterly Report is available
for free at http://researcharchives.com/t/s?1245
Going Concern Doubt
As reported in the Troubled Company Reporter on June 14, 2006,
Corbin & Company, LLP, in Irvine, California, raised substantial
doubt about VillageEDOCS' ability to continue as a going concern
after auditing the Company's consolidated financial statements for
the year ended Dec. 31, 2005. The auditor pointed to the
Company's recurring losses since inception and its working capital
deficit of $676,198 at Dec. 31, 2005.
VillageEDOCS, Inc. -- http://www.villageedocs.com/-- through its
MessageVision subsidiary, provides comprehensive business-to-
business information delivery services and products for
organizations with mission-critical needs, including major
corporations, government agencies and non-profit organizations.
The Company's Tailored Business Systems subsidiary provides
accounting and billing solutions for county and local governments.
Through its Resolutions subsidiary, it provides products for
document management, archiving, document imaging, imaging
software, document scanning, e-mail archiving, document imaging
software, electronic forms, and document archiving.
VOICE MOBILITY: Incurs $883,439 Net Loss in 2006 Second Quarter
---------------------------------------------------------------
Voice Mobility International, Inc., reported an $883,439 net loss
for the three-month periods ended June 30, 2006, compared to a
$708,934 net loss for the same period in 2005. The 25% increase
in net loss was primarily attributable to an increase of $159,751
in stock-based compensation expenses recognized from the adoption
of FAS 123(R). The remaining increase can be attributed to
salaries and interest costs of approximately $15,000. Since
inception through June 30, 2006, the Company has incurred
aggregate net losses of approximately $45 million.
Sales for the three-month period ended June 30, 2006 were nil,
compared to $29,255 for the three-month period ended
June 30, 2005. Sales for the three-month period ended
June 30, 2005 were from recognition of deferred revenue of $11,755
and technical training and support services of $17,500 provided to
Avaya, the Company's channel partner.
Voice Mobility has shifted its sales approach from direct sales to
sales through channel partners. During the three-month period
ended June 30, 2006, the Company's focus was to establish and
develop a relationship with a channel partner that would provide
opportunities for sales to Tier I telecommunication companies.
At June 30, 2006, the Company's balance sheet showed $2,038,666 in
total assets and $10,536,433 in total liabilities, resulting in
total stockholders' deficiency of $8,497,767.
A full-text copy of the Company's quarterly report is available
for free at http://researcharchives.com/t/s?124a
Going Concern Doubt
Ernst & Young LLP, in Vancouver, Canada, expressed substantial
doubt about Voice Mobility International, Inc.'s ability to
continue as a going concern after auditing the Company's
consolidated financial statements for the year ended Dec. 31,
2005. The auditor pointed to the Company's recurring net losses
and shareholders' deficiency.
Based in Burnaby, British Columbia, Canada, Voice Mobility
International, Inc. -- http://www.voicemobility.com/-- markets
and deploys next generation messaging solutions that provide
enhanced messaging features and functionality while ensuring
integration with, or replacement of, existing first generation
voicemail messaging systems.
WARNING MANAGEMENT: Withdraws Offer for All Staffing Purchase
-------------------------------------------------------------
Warning Management Services, Inc., and All Staffing Inc. have
mutually agreed to rescind their binding letter of intent for the
acquisition of all of the outstanding shares of capital stock of
All Staffing by Warning Management.
"Although the independent audit of All Staffing has not yet been
completed, and my initial findings were that All Staffing could
have been a valuable addition to the Warning family of companies,"
John Capezzuto, COO of Warning, said. "However, we do not feel,
at this time, that funds would be readily available for Warning to
complete the transaction. Additionally, upon review of the
potential conversion factors held by debenture holders, we felt it
necessary to inform All Staffing of the "down side" of the
conversions. Therefore, Warning and All Staffing have mutually
agreed to halt negotiations"
"All Staffing Inc. is more than pleased with the candor of
Warning's Board of Directors. Mr. Bonar and the Warning Board
have shown honesty, integrity and professionalism in its dealings
with All Staffing," Stanley J. Costello Jr., President and CEO of
All Staffing said. "We look forward to continued strategic
alliances with Warning, Mr. Bonar and their related companies."
About All Staffing
Headquartered in Lansford, Pennsylvania, All Staffing Inc. --
http://www.allstaffing.com/-- develops data processing and IT
systems along with proposed legislation and regulations to enable
business owners to take full advantage of the professional
employer organization.
About Warning Management
Based in Beverly Hills, California, Warning Management Services
Inc. (Pink Sheets:WNMI) -- http://www.warningmanagement.com/--
through its Uber Models and Warning Model Management divisions
develops and supplies models for fashion editorials in magazines,
catalogs and newspaper advertisements and for advertising clients
who use models in posters, websites, billboards and other outlets.
Warning Model Management models also make TV, video and personal
appearances. Its other divisions include the Warning magazine,
the Uber Girl and Uber Vintage clothing.
* * *
Warning Management's stockholders' deficit of $6,577,195 is based
on the Annual Financial Report on Form 10-K for the year ended
Dec. 31, 2004, which was filed with the Securities and Exchange
Commission on June 16, 2005. To date, the Company hasn't filed
its financial statement for the year ended Dec. 31, 2005, and its
quarterly financial reports.
Going Concern Doubt
Pohl, McNabola, Berg and Company, LLP, raised substantial doubt on
Warning Management Services, Inc.'s ability to continue as a going
concern after auditing the Company's consolidated financial
statements for the year ended Dec. 31, 2004 and 2003. The auditor
pointed to the Company's substantial net losses, an accumulated
deficit of $10,519,827 and a stockholders' deficit of $6,577,195.
WIMBLEY GROUP: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: The Wimbley Group, Inc.
1100 Arlington Heights Road, Suite 210
Itasca, IL 60143
Bankruptcy Case No.: 06-11942
Type of Business: The Debtor provides marketing and advertising
services. See http://www.wimbleygroup.com/
Chapter 11 Petition Date: September 22, 2006
Court: Northern District of Illinois (Chicago)
Judge: Jack B. Schmetterer
Debtor's Counsel: Gina B. Krol, Esq.
Cohen & Krol
105 West Madison St., Ste. 1100
Chicago, IL 60602
Tel: (312) 368-0300
Fax: (312) 368-4559
Estimated Assets: $0 to $50,000
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Hamilton Partners Rent $432,713
Attention: Ron Lunt
1 Pierce Place
Itasca, IL 60143
Internal Revenue Service 941 $358,872
230 South Dearborn Street
Mail Stop 5010 CHI
Chicago, IL 60604
Black Enterprise $105,072
Earl G. Graves Publishing
130 Fifth Avenue
New York, NY 10011
E&Z Sales & Marketing 180129000002 $85,500
Nat'l Credit & Collection
T. Costello
9919 Roosevelt Road
Westchester, IL 60154
Johnson Publishing $79,940
820 South Michigan Avenue
Chicago, IL 60605
WUTB/UPN $46,750
Szabo Associates Inc.
3355 Lenox Road NE 9th
Floor
Atlanta, GA 303261332
Hearst Argyle TV Inc. Pending suit $34,542
(WBAL-TV)
Stein & Rotman
105 West Madison Street
Suite 605
Chicago, IL 60602
WBFF-TV/WNUV-TV Ch Fox 45 - $14,750 $27,768
Newton Associates/Brad Ch WB 54 - $13,018
Kresh
3001 Division Street
Metairie, LA 70002
Scripps Howard Broadcast Pending suit $21,375
Stein & Rotman
105 West Madison Street
Suite 605
Chicago, IL 60602
Intersport Inc. Pending suit $17,900
Freeborn & Peters
311 South Wacker #3000
Chicago, IL 60606
Crain Communications Pending suit $17,112
Stein & Rotman
105 West Madison Street
Suite 605
Chicago, IL 60602
I Dept. of Employment $14,090
Security
P.O. Box 802551
Chicago, IL 60680
New World Communication of Pending suit $12,314
Atlanta
Stein & Rotman
105 West Madison Street
Suite 605
Chicago, IL 60602
WSB-TV $8,202
1601 West Peachtree Street
Atlanta, GA 30309
Wisconsin Revenue $7,306
P.O. Box 8901
Attention: Bankruptcy
Madison, WI 53708
Market Place Media Pending suit $6,408
Baker Miller Markoff &
Krasny LLC
29 North Wacker 5th Floor
Chicago, IL 60606
Georgia Gannett Pending suit $5,591
Stein & Rotman
105 West Madison Street
Suite 605
Chicago, IL 60602
IL Dept. of Revenue Security & Revenue $5,505
Bankruptcy Division
100 W. Randolph Street
Chicago, IL 60601
Citi Capital Commercial $4,635
Corp.
Equipment Capital $4,634
Commercial Corp.
WIZZARD SOFTWARE: Posts $921,587 Net Loss in Quarter Ended June 30
------------------------------------------------------------------
Wizzard Software Corp. incurred a $921,587 net loss in the quarter
ended June 30, 2006, representing a 33% increase from the $691,061
net loss reported in the second quarter of 2005.
During the 2006-second quarter, Wizzard recorded revenues of
$782,046, a 268% increase from revenues of $291,519 in the second
quarter of 2005 and a 30% increase over revenues of $602,391
generated in the first quarter of 2006. The Company attributes
the revenue increase to the expansion of its healthcare
operations.
At June 30, 2006, the Company's balance sheet showed $2,217,963 in
total assets, $1,172,009 in total liabilities and stockholders'
equity of $1,045,954. Cash on hand was $593,959 at June 30, 2006,
a decrease of $695,637 over the $1,289,596 on hand at June 30,
2005.
A full-text copy of the Company's quarterly report is available
for free at http://researcharchives.com/t/s?1239
Going Concern Doubt
As reported in the Troubled Company Reporter on June 13, 2006,
Gregory & Associates, LLC, in Salt Lake City, Utah, raised
substantial doubt about Wizzard Software's ability to continue as
a going concern after auditing the Company's consolidated
financial statements for the year ended Dec. 31, 2005. The
auditor pointed to the Company's significant losses since its
inception due to unprofitable operations.
About Wizzard Software
Wizzard Software Corp. -- http://www.wizzardsoftware.com/--
develops and sells desktop and enterprise speech technology,
speech recognition and text-to-speech programming tools,
distributable engines, and speech related consulting services and
support. It also develops talking prescription bill bottles and
offers home healthcare services through its wholly owned
subsidiary Interim Healthcare of Wyoming, Inc.
ZALE CORP: SEC Terminates Investigation
---------------------------------------
The staff of the Securities and Exchange Commission has notified
Zale Corporation that its investigation of the Company has been
terminated with no enforcement action being recommended.
"Although we are clearly focused on the business at hand, we are
pleased to put this matter behind us," commented Betsy Burton,
President and Chief Executive Officer. "I would like to thank our
shareholders, customers and employees for continuing to
demonstrate their confidence in our organization throughout this
process. We remain deeply committed to adhering to the highest
standards of corporate governance."
As reported in the Troubled Company Reporter on April 12, 2006,
the SEC initiated a non-public investigation relating to various
accounting and other matters related to the Company, including
accounting for extended service agreements, leases, and accrued
payroll.
Subpoenas issued in connection with the SEC investigation asked
for materials relating to these accounting matters as well as to
executive compensation and severance, earnings guidance, stock
trading, and the timing of certain vendor payments. Zale asserted
that its accounting complied with generally accepted accounting
principles.
This report concludes the TCR's coverage of Zale Corp, unless and
until circumstances change that warrant reporting in the TCR.
Headquartered in Irving, Texas, Zale Corporation (NYSE: ZLC) --
http://www.zalecorp.com/-- is North America's largest specialty
retailer of fine jewelry operating approximately 2,345 retail
locations throughout the United States, Canada and Puerto Rico.
Zale Corporation's brands include Zales Jewelers, Zales Outlet,
Gordon's Jewelers, Bailey Banks & Biddle, Peoples Jewellers,
Mappins Jewellers and Piercing Pagoda. Through its ZLC Direct
organization, Zale also operates online at http://www.zales.com/
and http://www.baileybanksandbiddle.com/
* Large Companies with Insolvent Balance Sheets
-----------------------------------------------
Total
Shareholders Total Working
Equity Assets Capital
Company Ticker ($MM) ($MM) ($MM)
------- ------ ------------ ------- --------
Abraxas Petro ABP (21) 132 (6)
AFC Enterprises AFCE (46) 172 5
Alaska Comm Sys ALSK (17) 565 24
Alliance Imaging AIQ (23) 682 26
AMR Corp. AMR (508) 30,752 (1,392)
Atherogenics Inc. AGIX (124) 211 165
Biomarin Pharmac BMRN 49 469 307
Blount International BLT (123) 465 126
CableVision System CVC (2,468) 12,832 2,643
Centennial Comm CYCL (1,062) 1,436 23
Cenveo Inc CVO 24 941 128
Choice Hotels CHH (118) 280 (58)
Cincinnati Bell CBB (705) 1,893 18
Clorox Co. CLX (156) 3,616 (123)
Columbia Laborat CBRX 10 29 23
Compass Minerals CMP (63) 664 161
Crown Holdings I CCK 144 7,287 174
Crown Media HL CRWN (393) 1,018 133
Deluxe Corp DLX (90) 1,330 (235)
Domino's Pizza DPZ (609) 395 (4)
Echostar Comm DISH (512) 9,105 1,589
Emeritus Corp. ESC (111) 721 (29)
Emisphere Tech EMIS 2 43 19
Empire Resorts I NYNY (26) 62 (3)
Encysive Pharm ENCY (64) 93 56
Foster Wheeler FWLT (38) 2,224 (93)
Gencorp Inc. GY (88) 990 (28)
Graftech International GTI (166) 900 250
H&E Equipment HEES 226 707 22
I2 Technologies ITWO (55) 211 (9)
ICOS Corp ICOS (36) 266 116
IMAX Corp IMAX (21) 244 33
Incyte Corp. INCY (55) 375 155
Indevus Pharma IDEV (147) 79 35
J Crew Group Inc. JCG (83) 362 102
Koppers Holdings KOP (95) 625 140
Kulicke & Soffa KLIC 65 398 230
Labopharm Inc. DDS (92) 143 105
Level 3 Comm. Inc. LVLT (33) 9,751 1,333
Ligand Pharm LGND (238) 286 (155)
Lodgenet Entertainment LNET (66) 262 15
Maytag Corp. MYG (187) 2,954 150
McDermott Int'l MDR 125 3,181 64
McMoran Exploration MMR (21) 434 (38)
NPS Pharm Inc. NPSP (164) 248 168
New River Pharma NRPH 0 93 68
Omnova Solutions OMN (6) 366 67
ON Semiconductor ONNN (75) 1,423 279
Qwest Communication Q (2,826) 21,292 (2,542)
Riviera Holdings RIV (29) 214 7
Rural/Metro Corp. RURL (93) 302 50
Sepracor Inc. SEPR (109) 1,277 363
St. John Knits Inc. SJKI (52) 213 80
Sulphco Inc. SUF 25 34 12
Sun Healthcare SUNH 10 523 (34)
Sun-Times Media SVN (261) 965 (324)
Tivo Inc. TIVO (33) 143 19
USG Corp. USG (313) 5,657 (1,763)
Vertrue Inc. VTRU (16) 443 (72)
Weight Watchers WTW (110) 857 (72)
WR Grace & Co. GRA (515) 3,612 929
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com/
On Thursdays, the TCR delivers a list of recently filed chapter 11
cases involving less than $1,000,000 in assets and liabilities
delivered to nation's bankruptcy courts. The list includes links
to freely downloadable images of these small-dollar petitions in
Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA. Marie Therese V. Profetana, Robert Max Victor M. Quiblat II,
Shimero R. Jainga, Joel Anthony G. Lopez, Melvin C. Tabao, Rizande
B. Delos Santos, Cherry A. Soriano-Baaclo, Christian Q. Salta,
Jason A. Nieva, Lucilo M. Pinili, Jr., Tara Marie A. Martin and
Peter A. Chapman, Editors.
Copyright 2006. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $725 for 6 months delivered via e-
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for the term of the initial subscription or balance thereof are
$25 each. For subscription information, contact Christopher Beard
at 240/629-3300.
*** End of Transmission ***