/raid1/www/Hosts/bankrupt/TCR_Public/060929.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, September 29, 2006, Vol. 10, No. 232
Headlines
A-Z ELECTRONICS: Debtor-Owner Had No Authority to File Petition
ACRO BUSINESS: Wants Cash Collateral Use Extended Until Jan. 2007
ADELPHIA COMMS: Stay Modified Allowing Mr. Champ to Pursue Action
ADELPHIA COMMS: Court OKs ABIZ & ACOM Debtors' Pact with Dominion
ADVENTURE PARKS: U.S. Trustee Names Seven-Member Creditors' Panel
ADVENTURE PARKS: Has Until Oct. 25 to File Schedules & Statement
AMERISOURCEBERGEN CORP: Buying Health Advocates for $83 Million
ASARCO LLC: Court Okays Pact Terminating Financing Statement
ASARCO LLC: Gets Court's Okay on Wachovia Lease Settlement
ASSOCIATED BRANDS: Bank Waives Defaults & Defers Credit Pact Term
AVONDALE INC: Moody's Withdraws Ca Rating on $150MM Sr. Sub. Notes
BACHRACH CLOTHING: Panel Taps BDO Seidman as Financial Advisors
BEARINGPOINT INC: In Default on $200 Mil. Bonds, Court Says
BIO-KEY INT'L: Second Quarter 2006 Net Loss Decreases to $1.07MM
BLJ REALTY: Voluntary Chapter 11 Case Summary
BORGWARNER CAPITAL: Moody's Holds (P)Ba1 Preferred Shelf Rating
BP METALS: Moody's Assigns B3 Rating to Proposed $25 Mil. Loan
CARRAWAY METHODIST: Taps Bradley Arant as Bankruptcy Counsel
CARRAWAY METHODIST: Hires Bankruptcy Services as Claims Agent
CENTRAL FREIGHT: Posts $7.9 Mil. Net Loss in 2nd Qtr. Ended July 1
CENTRIX FINANCIAL: Can Pay Prepetition Employee Wages and Benefits
CENTRIX FINANCIAL: Creditors' Meeting Scheduled on October 23
COLLINS & AIKMAN: Plan Filing Period Stretched to October 27
COMPLETE RETREATS: Committee Wants Rule 2004 Exam on Abercrombie
COMPLETE RETREATS: Panel Requests Rule 2004 Exam on Robert McGrath
COMPUCOM SYSTEMS: Moody's Rates Proposed $175 Million Notes at B2
CRESCENT CAPITAL: Case Summary & Five Largest Unsecured Creditors
CSFB MORTGAGE: Moody's Lifts Ba3 Rating on Class C-B-4 Notes
DA-LITE SCREEN: Moody's Assigns Loss-Given-Default Ratings
DANA CORP: Retirees' Committee Retains Stahl Cowen as Counsel
DELPHI CORP: UnitedAuto CEO Mulls Steering Unit Purchase
DELPHI CORP: Wants to File EDS & HP IT Agreements Under Seal
DIAMOND ENTERTAINMENT: June 30 Balance Sheet Upside-Down by $1.7MM
DOBSON COMMS: Declares Cash Dividend on Series F Preferred Stock
DUO DAIRY: Trustee Wants to Sell Debtor's Coop. Equity Accounts
EDUCATE INC: Receives Non-Binding Purchase Proposal from Sterling
EXTENDICARE HEALTH: Launches $275 Million Senior Notes Offerings
FEDERAL MOGUL: Seeks Court Nod to Settle Ohio Environmental Claims
FIRST BANCORP: Files Amended December 2004 Annual Report
FISCHER IMAGING: Posts $587,000 Net Loss in Second Quarter of 2006
FORD MOTOR: Cuts 2,000 Salaried Worker Positions to Reduce Costs
FORD MOTOR: Executive Says Jaguar Brand Not For Sale
FORUM HEALTH: Moody's Cuts Bond Rating Two Notches to Ba2
FV STEEL: Judge Kelly Rejects "Judicial Estoppel" Claim Objection
GALVEX HOLDINGS: Section 341(a) Meeting Scheduled on November 6
GLOBAL HOME: Has Until December 6 to File Chapter 11 Plan
GLOBAL HOME: Court Sets November 15 as Claims Bar Date
GLOBAL POWER: Files Voluntary Chapter 11 Petition
GLOBAL POWER: Case Summary & 30 Largest Unsecured Creditors
GRANT PRIDECO: Moody's Assigns Loss-Given-Default Rating
GREENMAN TECH: Upgrades Iowa Operations Equipment for $950,000
GREY WOLF: Moody's Assigns Loss-Given-Default Rating
GULFMARK OFFSHORE: Moody's Assigns Loss-Given-Default Rating
HANOVER COMPRESSOR: Moody's Assigns Loss-Given-Default Rating
HERCULES OFFSHORE: Moody's Assigns Loss-Given-Default Rating
HORNBECK OFFSHORE: Moody's Assigns Loss-Given-Default Rating
HUNTER FAN: Moody's Assigns Loss-Given-Default Ratings
INTERACTIVE MOTORSPORTS: June 30 Equity Deficit Widens to $3.6MM
INTERSTATE BAKERIES: Wants to Reject Four Kentucky Leases
INTERSTATE BAKERIES: Wants to Use Estate Funds to Pay C&W's Fees
INZON CORP: June 30 Balance Sheet Upside-Down by $1.1 Million
JARDEN CORP: Moody's Assigns Loss-Given-Default Ratings
JUNIPER CBO: Moody's Lifts Ba1 Rating on $34 Mil. Notes to Aaa
LONDON FOG: Wants Excl. Plan-Filing Period Stretched to January 18
LSBC NET: Moody's Places B2 Rating on $6.5 Million Class N3 Notes
LUNA TECHNOLOGIES: To Redeem $1 Mil. Debenture Held by NIR Group
MARSH & MCLENNAN: CEO Responds to Putnam Purchase Inquiries
MASSACHUSETTS PORT: Moody's Withdraws Ca Underlying Rating
MAYCO PLASTICS: U.S. Trustee Names Seven-Member Creditors' Panel
MEDIABAY INC: Has $14.3 Million Equity Deficit at June 30, 2006
MERIDIAN AUTOMOTIVE: Has Until January 25 to Decide on Leases
MERIDIAN AUTOMOTIVE: Wants Flex-N-Gate Settlement Pact Approved
MORTGAGE CAPITAL: Moody's Cuts Rating on $9MM Class K Certs. to C
NEPHROS INC: Posts $2.1 Mil. Net Loss in Second Quarter of 2006
NEXIA HOLDINGS: Accumulated Deficit Tops $12.1 Million at June 30
NORTHWEST AIRLINES: Reports 5.4% Traffic Decrease in August 2006
NORTHWEST AIRLINES: Craig Friday Wants Grievances Processed
NOTIFY TECHNOLOGY: June 30 Stockholders' Deficit Tops $1 Million
ORECK CORP: Moody's Assigns Loss-Given-Default Ratings
PACIFIC SHORES: Moody's Puts Ratings on Watch for Possible Upgrade
PIERRE FOODS: Moody's Assigns Loss-Given-Default Ratings
POSITRON CORP: Posts $4.6 Million Equity Deficit at June 30
PRESIDENT CASINOS: Wants Harbour Financial Paid for Advisory Work
PRUDENTIAL SECURITIES: Moody's Holds Caa2 Rating on $8MM of Certs.
PTS INC: Posts $350,326 Net Loss in Quarter Ended June 30
PURE FISHING: Moody's Affirms B1 Corporate Family Rating
RADNOR HOLDINGS: Court Approves $103 Million DIP Financing
RECYCLED PAPER: Moody's Assigns Loss-Given-Default Ratings
REFCO INC: Will Pay $705 Mil. to Resolve All Secured Claims
REFCO INC: Chapter 7 Trustee Wants Rogers Funds Claims Disallowed
REMINGTON ARMS: Moody's Assigns Loss-Given-Default Rating
REXAIR HOLDINGS: Moody's Assigns Loss-Given-Default Ratings
RF CUNNINGHAM: Chapter 7 Panel Hires K&W as Conflicts Counsel
ROUGE INDUSTRIES: Has Until October 16 to File Chapter 11 Plan
ROYAL & SUN: Sells U.S. Operations; Terminates SEC Registration
ROYAL & SUNALLIANCE: A.M. Best Places C++ Rating Under Review
RUSSO FUEL: A.J. Willner to Auction Nine Properties on October 5
SAINT VINCENTS: Court Approves Insurance Financing Pact with AICCO
SAINT VINCENTS: Decides to Renew CBAs with Three Bargaining Units
SALTON INC: Moody's Assigns Loss-Given-Default Rating
SAMSONITE CORP: Moody's Assigns Loss-Given-Default Ratings
SANKOFA SHULE: Moody's Junks Rating on Full Term Certificates
SITESTAR CORP: Earns $327,661 in Quarter Ended June 30
SOUTHERN STATES: Moody's Assigns Loss-Given-Default Ratings
STEEL PARTS: U.S. Trustee Appoints Four-Member Creditors' Panel
SUNSET BRANDS: June 30 Stockholders' Deficit Tops $500,000
SUPERIOR ENERGY: Buying Warrior Energy in Cash and Stock Deal
TACKLEY MILL: Taps Campbell Miller as Bankruptcy Counsel
THINH PHAM: Case Summary & 19 Largest Unsecured Creditors
TIDEL TECHNOLOGIES: Posts $4.1 Million Net Loss in Third Quarter
TRANSAX INT'L: Receives Third Party Offer to Buy Brazil Operations
TRUE TEMPER: Moody's Assigns Loss-Given-Default Ratings
TRW AUTOMOTIVE: Launches Production of Latest Seat Belts in China
TUPPERWARE BRANDS: Moody's Assigns Loss-Given-Default Ratings
TYRINGHAM HOLDINGS: U.S. Trustee Names Seven-Member Official Panel
TYRINGHAM HOLDINGS: Panel Taps Otterbourg Steindler as Counsel
UTILITY CRAFT: Wants to Hire Daniel Odom as Accountants
UTILITY CRAFT: Files Schedules of Assets and Liabilities
UTIX GROUP: June 30 Balance Sheet Upside-Down by $5.8 Million
VARIG S.A.: T. Rowe Price Increases Stake in Rival TAM Linhas
VISTEON CORP: Lowers Sales Expectation for 2006 Second Half
WORLDCOM INC: Court Gives Teleserve's Claim a 6A Classification
WORLDCOM INC: Wants Summary Judgment on Mark Lahti's Injury Claim
YUKOS OIL: Surgutneftegaz Eyes Petrochemical Unit
ZULTYS TECH: U.S. Trustee Appoints Five-Member Creditors' Panel
ZULTYS TECH: Committee Taps Murray & Murray as Bankruptcy Counsel
* Fox Rothschild LLP Merges with Grotta, Glassman & Hoffman, P.C.
* BOOK REVIEW: Crafting Solutions for Troubled Businesses
*********
A-Z ELECTRONICS: Debtor-Owner Had No Authority to File Petition
---------------------------------------------------------------
Concluding that Ron Ryan, the managing member of A-Z Electronics,
LLC, and a debtor in his own chapter 7 bankruptcy proceeding, did
not have authority to place the LLC into chapter 11 bankruptcy,
the Honorable Terry L. Myers dismissed the LLC's chapter 11 case.
In a Memorandum of Decision published at 2006 WL 2536298, Judge
Myers relates the facts:
(A) Ron Ryan, along with his wife Lotte, filed a joint
petition for chapter 7 relief on November 21, 2003
(Bankr. D. Idaho Case No. 03-04278).
(B) In the initial schedule B filed in that case, Mr.
Ryan claimed to own 100% of A-Z Electronics, LLC,
ascribing a value of "$0.00" thereto.
(C) Following a conversion and brief foray into chapter 13
the Ryans' case was converted back to chapter 7 on
September 8, 2004.
(D) Their chapter 7 trustee, Lois Murphy, who was the
chapter 7 trustee before the chapter 13 hiatus,
filed a "no asset" report on August 25, 2005.
The case, however, was not closed. Ms. Murphy
thereafter "withdrew" her no asset report on
October 13, 2005, and continued to administer that
case.
(E) On December 18, 2005, A-Z ELECTRONICS, LLC, filed a
voluntary chapter 11 petition (Bankr. D. Idaho Case
No. 05-05758).
(F) The LLC's petition was signed by Ron Ryan as its
"managing member." Mr. Ryan also signed the list of
the 20 largest unsecured creditors and the statement
of financial affairs. The response to question 21(b)
on the statement of financial affairs indicates that
Mr. Ryan owns 100% of A-Z Electronics.
(G) On December 27, 2005, A-Z filed a "statement of
operations" stating it "is a single member Limited
Liability Company organized under the laws of Idaho
. . . created on April 8, 2002 with Ron Ryan holding
one hundred percent (100%) of the membership interests
as member."
When the LLC petition was filed, Judge Myers observes, the Ryans'
chapter 7 case was open and pending. When the LLC petition was
filed, the Ryans' trustee had not abandoned the Ryans' interests
in A-Z. Thus, Judge Myers explains, the Ryans' LLC interests
remained Sec. 541(a) property of the Ryans' estate. The Ryans did
file a motion to abandon under 11 U.S.C. Sec. 554(b) and Rule 6007
of the Federal Rules of Bankruptcy Procedure on January 20, 2006.
However, that motion was filed 11 days after the UST's Motion to
Dismiss.
The Ryans' LLC interests were subject to the sole and exclusive
authority of the Ryans' trustee, Judge Myers says, and Ms. Murphy
was the only one entitled to manage A-Z and decide, inter alia,
whether it would or would not file bankruptcy. Because she did
not make or authorize the chapter 11 filing, she was not consulted
or informed of the filing, and her consent to the filing has not
been established, Judge Myers concludes that A-Z's bankruptcy
petition was not properly authorized or executed under applicable
non-bankruptcy law. Because Mr. Ryan lacked the authority and
ability to file A-Z's chapter 11 case, it must be dismissed, Judge
Myers concludes.
ACRO BUSINESS: Wants Cash Collateral Use Extended Until Jan. 2007
-----------------------------------------------------------------
ACRO Business Finance Corp. seeks permission from the U.S.
Bankruptcy Court for the District of Minnesota for continued
use of the cash collateral securing repayment of its obligations
to M&I Marshall & Ilsley Bank, through Jan. 31, 2007.
The Debtor tells the Court that it will use the cash collateral to
pay for its operating expenses and fund the borrowing needs of its
customers. The Debtor will use the cash collateral pursuant to a
five-month budget. A copy of this budget is available for free
at:
http://researcharchives.com/t/s?12a0
DIP Financing Need
The Debtor has been in discussions with several parties regarding
obtaining additional financing.
The Debtor said it has informed the M&I Bank of the necessity to
arrange postpetition financing of up to $650,000, so it can have
sufficient working capital on hand and fund all of the anticipated
needs of its customers.
The Debtor intends to continue discussions with the Bank and with
other parties to arrange the loan. The Debtor will file a
separate motion on the postpetition financing if the M&I Bank
consents to its request.
The Court will convene a hearing to consider the Debtor's request
on Oct. 4, 2006, 10:00 a.m., at Courtroom No. 8, United States
Courthouse, 300 South Fourth Street, in Minneapolis, Minnesota.
In addition, the Debtor disclosed that it anticipates filing a
proposed disclosure statement and plan of reorganization by
Oct. 30, 2006.
Headquartered in Minneapolis, Minnesota, Acro Business Finance
Corp. provides financial services. The Company filed for chapter
11 protection on July 12, 2006 (Bankr. D. Minn. Case No.
06-41364). Clinton E. Cutler, Esq., and Cynthia A. Moyer, Esq.,
at Fredrikson & Byron, PA, represent the Debtor. No Official
Committee of Unsecured Creditors has been appointed in this case.
When the Debtor filed for protection from its creditors, it
estimated assets and debts between $10 million and $50 million.
ADELPHIA COMMS: Stay Modified Allowing Mr. Champ to Pursue Action
-----------------------------------------------------------------
In a court-approved stipulation, Adelphia Communications
Corporation and Todd Champ agree that the automatic stay will be
modified to permit Mr. Champ to prosecute his state court action
against Adelphia and allow the parties to take necessary and
appropriate actions to exercise their rights of appeal.
On May 15, 2005, Mr. Champ filed a complaint against Adelphia
Communications Corporation in San Bernardino County Superior
Court, alleging a number of causes of action relating to personal
injury. The State Court Action was stayed on the date the Debtor
filed for chapter 11 protection.
In the stipulation, the Parties agreed that Mr. Champ may, with
respect to the Debtor, enforce or execute any:
(1) settlement;
(2) judgment entered by a court of competent jurisdiction; or
(3) other disposition of the claims in the State Court Action,
only to the extent those claims are covered by proceeds from any
applicable liability insurance policies of ACOM to the maximum
allowable policy limits.
Mr. Champ agrees to waive any and all claims for recovery against
the Debtor other than his claims against the Policy Proceeds.
The Parties agree that any settlement of the State Court Action
will include Mr. Champ's general release of all claims against the
Debtor.
About Adelphia Communications Corp.
Based in Coudersport, Pa., Adelphia Communications Corporation
(OTC: ADELQ) -- http://www.adelphia.com/-- is the fifth-largest
cable television company in the country. Adelphia serves
customers in 30 states and Puerto Rico, and offers analog and
digital video services, high-speed Internet access and other
advanced services over its broadband networks. The Company and
its more than 200 affiliates filed for Chapter 11 protection in
the Southern District of New York on June 25, 2002. Those cases
are jointly administered under case number 02-41729. Willkie Farr
& Gallagher represents the ACOM Debtors. PricewaterhouseCoopers
serves as the Debtors' financial advisor. Kasowitz, Benson,
Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP
represent the Official Committee of Unsecured Creditors.
Adelphia Cablevision Associates of Radnor, L.P., and 20 of its
affiliates, collectively known as Rigas Manged Entities, are
entities that were previously held or controlled by members of the
Rigas family. In March 2006, the rights and titles to these
entities were transferred to certain subsidiaries of Adelphia
Cablevision, LLC. The RME Debtors filed for chapter 11 protection
on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06-
10642). Their cases are jointly administered under Adelphia
Communications and its debtor-affiliates chapter 11 cases.
(Adelphia Bankruptcy News, Issue Nos. 148; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000)
ADELPHIA COMMS: Court OKs ABIZ & ACOM Debtors' Pact with Dominion
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approved the stipulation between the Adelphia Business Solutions,
Inc., Debtors, the Adelphia Communications Corporation Debtors and
Dominion Virginia Power.
On Feb. 25, 2004, the ABIZ Debtors and the ACOM Debtors jointly
asked the Court to approve:
-- a master reciprocal operational settlement agreement dated
Dec. 3, 2003; and
-- a global settlement agreement entered Feb. 21, 2004.
Pursuant to the Global Settlement Agreement, the ABIZ Debtors
sought to assume, with the ACOM Debtors to pay the applicable cure
amounts, certain executory contracts with Virginia Electric and
Power Company, doing business as Dominion Virginia Power,
including an Agreement of Purchase of Electricity dated
Jan. 29, 1999, between Virginia Electric and Power Company and
Hyperion Communications of Virginia, LLC.
Dominion objected to the cure amounts that the Debtors proposed to
pay to assume the executory contracts, including the Electric
Agreement, pursuant to the Global Settlement Agreement.
On November 4, 2004, the ABIZ Debtors filed their omnibus
objection to certain claims in which, among others, the ABIZ
Debtors sought to disallow Virginia Power's Claim No. 125200 for
$442,412.
Dominion objected to the ABIZ Claim Objection.
To resolve Dominion's objections the ACOM Debtors, the ABIZ
Debtors and Dominion, in a stipulation, agree that:
(1) the ACOM Debtors will pay Dominion a $6,452 cure amount
to assume the Electric Agreement;
(2) Dominion's Objections will be resolved in its entirety
upon the payment in full of the Cure Amount;
(3) Dominion's Claim No. 125200 will be allowed as a general
unsecured claim in the ABIZ Debtors' Chapter 11 cases for
$442,412, and will be treated and paid in accordance to
the ABIZ Debtors' Third Amended Joint Plan of
Reorganization;
(4) Dominion will release:
-- the ABIZ Debtors from any and all actions and claims
through the Effective Date of the ABIZ Plan;
-- the ACOM Debtors from any and all actions and claims,
which relate to the Electric Agreement; and
(5) the Stipulation will not affect:
-- the parties' rights and defenses with respect to Claim
Nos. 952, 953, and 955 to 961, which have been filed
against the ACOM Debtors' estates; or
-- Dominion's right to file administrative claims, if any,
against the ACOM Debtors.
About Adelphia Communications Corp.
Based in Coudersport, Pa., Adelphia Communications Corporation
(OTC: ADELQ) -- http://www.adelphia.com/-- is the fifth-largest
cable television company in the country. Adelphia serves
customers in 30 states and Puerto Rico, and offers analog and
digital video services, high-speed Internet access and other
advanced services over its broadband networks. The Company and
its more than 200 affiliates filed for Chapter 11 protection in
the Southern District of New York on June 25, 2002. Those cases
are jointly administered under case number 02-41729. Willkie Farr
& Gallagher represents the ACOM Debtors. PricewaterhouseCoopers
serves as the Debtors' financial advisor. Kasowitz, Benson,
Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP
represent the Official Committee of Unsecured Creditors.
Adelphia Cablevision Associates of Radnor, L.P., and 20 of its
affiliates, collectively known as Rigas Manged Entities, are
entities that were previously held or controlled by members of the
Rigas family. In March 2006, the rights and titles to these
entities were transferred to certain subsidiaries of Adelphia
Cablevision, LLC. The RME Debtors filed for chapter 11 protection
on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06-
10642). Their cases are jointly administered under Adelphia
Communications and its debtor-affiliates chapter 11 cases.
(Adelphia Bankruptcy News, Issue Nos. 148; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000)
ADVENTURE PARKS: U.S. Trustee Names Seven-Member Creditors' Panel
-----------------------------------------------------------------
The U.S. Trustee for Region 21 appointed seven creditors to serve
on an Official Committee of Unsecured Creditors in Adventure Parks
Group, LLC, and its debtor-affiliates' chapter 11 cases:
1. Chris Abel
Controller
Production Resource Group, LLC
1902 Cypress Lake Drive, Suite 100
Orlando, FL 32837
Tel: (407) 996-4225
Fax: (407) 855-8059
2. Darand Williams
Vice President
D & D Construction Services of Orlando, Inc.
2700 Bonnet Creek Road
P.O. Box 22172
Lake Buena Vista, FL 32830
Tel: (407) 824-0267
Fax: (407) 824-0268
3. David J. Czerw
Director of Credit
Sysco Food Services-Jacksonville, Inc.
1501 Lewis Industrial Drive
P.O. Box 37045
Jacksonville, FL 32236
Tel: (904) 695-8189
Fax: (904) 695-8144
4. Robert C. Winter, III
President
AlerTech Systems, Inc.
916 Marion Street
Valdosta, GA 31601
Tel: (229) 244-7777
Fax: (229) 244-5550
5. Karen Tuech
Accounting Manager
WFTV, Inc.
490 East South Street
Orlando, FL 32801
Tel: (407) 822-5912
Fax: (407) 841-8259
6. Drake A. Decker
President
Florida Suncoast Tourism Promotions, Inc.
10750 75th Street
Largo, FL 33777-1422
Tel: (727) 544-1212
Fax: (727) 545-2528
7. Scott E. Friedlander
Chief Legal Officer
One Source Landscape & Golf Services, Inc.
1600 Parkwood Circle, Suite 400
Atlanta, GA 30350
Tel: (770) 308-2228
Fax: (770) 226-8669
Documents filed with the Court do not show who the Committee has
selected to represent it in the Debtors' bankruptcy proceedings.
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtor's
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 Valdosta, Georgia, Adventure Parks Group, LLC, is
the holding company of Wild Adventures and Cypress Gardens. Wild
Adventures operates an amusement park in Valdosta, Georgia while
Cypress operates an amusement park in Winter Haven, Florida. The
Company, along with Wild Adventures and Cypress Gardens, filed for
chapter 11 protection on Sept. 11, 2006 (Bankr. M.D. Ga. Case Nos.
06-70659 through 06-70661). George H. McCallum, Esq., James P.
Smith, Esq., and Ward Stone, Jr., Esq., at Stone & Baxter, LLP,
represent the Debtors. When the Debtors filed for protection from
their creditors, they estimated assets and debts between $50
million and $100 million.
ADVENTURE PARKS: Has Until Oct. 25 to File Schedules & Statement
----------------------------------------------------------------
The Hon. John T. Laney, III, of the U.S. Bankruptcy Court for the
Middle District of Georgia gave Adventure Parks Group, LLC, and
its debtor-affiliates until Oct. 25, 2006, to file their Schedules
of Assets and Liabilities and Statement of Financial Affairs.
The Debtors tell the Court that they are still accumulating the
data and reviewing their records to prepare the documents. The
Debtors add they need additional time to properly determine the
amounts owed to their creditors and identify and catalogue their
assets and accounts receivable.
Headquartered in Valdosta, Georgia, Adventure Parks Group, LLC, is
the holding company of Wild Adventures and Cypress Gardens. Wild
Adventures operates an amusement park in Valdosta, Georgia while
Cypress operates an amusement park in Winter Haven, Florida. The
Company, along with Wild Adventures and Cypress Gardens, filed for
chapter 11 protection on Sept. 11, 2006 (Bankr. M.D. Ga. Case Nos.
06-70659 through 06-70661). George H. McCallum, Esq., James P.
Smith, Esq., and Ward Stone, Jr., Esq., at Stone & Baxter, LLP,
represent the Debtors. When the Debtors filed for protection from
their creditors, they estimated assets and debts between $50
million and $100 million.
AMERISOURCEBERGEN CORP: Buying Health Advocates for $83 Million
---------------------------------------------------------------
AmerisourceBergen Corporation has agreed to acquire all of the
outstanding stock of Health Advocates, Inc. of Tampa, Florida, for
approximately $83 million in cash. The transaction is expected to
close by the end of October 2006, and to be slightly accretive to
the Company's fiscal 2007 earnings.
Following the close of the transaction, Health Advocates will be
renamed PMSI MSA Services and will become part of
AmerisourceBergen's workers' compensation business. Health
Advocates' Founder and President, June Simpson, will remain with
the company as President, PMSI MSA Services and will report to
Mark Hollifield, President of PMSI.
"We are pleased to add the expertise of Health Advocates to PMSI,
our existing workers' compensation pharmacy solutions business,"
said R. David Yost, Chief Executive Officer of AmerisourceBergen.
"Since Medicare now provides coverage for prescriptions through
its Part D program, our workers' compensation customers need to
address both medical costs and prescription drug costs when
determining Medicare set-asides. The addition of Health Advocates,
combined with PMSI's industry leading pharmacy and clinical
solutions, truly gives PMSI the ability to provide our collective
customers with a fully integrated Medicare set-aside solution."
Medicare set-asides are required in certain worker's compensation
settlements. The set-asides are funds established to cover future
medical and prescription drug expenses incurred as a result of a
job-related injury that would have been paid by Medicare. The
amount of the set-aside is dependent on a number of complex
factors, and ultimately must take Medicare into consideration in
order for a workers compensation settlement to be finalized. The
purpose of the set-aside is to ensure that Medicare is not
burdened with costs that should be covered by the private workers'
compensation insurer.
"We are thrilled to join AmerisourceBergen's workers' compensation
business" said Simpson. "Together we will offer a more
comprehensive service to our customers to assist them with
managing Medicare set-aside issues and pharmacy benefits in the
most efficient manner possible."
Based in Valley Forge, Pennsylvania, AmerisourceBergen Corp.
(NYSE:ABC) -- http://www.amerisourcebergen.com/-- is a
pharmaceutical services company in the United States and Canada.
Servicing pharmaceutical manufacturers and healthcare providers in
the pharmaceutical supply channel, the Company provides drug
distribution and related services designed to reduce costs and
improve patient outcomes.
* * *
As reported in the Troubled Company Reporter on June 5, 2006,
Moody's Investors Service upgraded AmerisourceBergen Corporation's
Corporate Family Rating to Ba1 from Ba2. The Company's rating for
its senior unsecured notes was upgraded to Ba1 from Ba2. The
speculative grade liquidity rating of SGL-1 is affirmed. Moody's
said the rating outlook is stable.
ASARCO LLC: Court Okays Pact Terminating Financing Statement
------------------------------------------------------------
The Honorable Richard S. Schmidt of the U.S. Bankruptcy Court for
the Southern District of Texas in Corpus Christi approved a
stipulation between ASARCO LLC and Sempra Metals & Concentrates
Corporation.
The parties stipulated that:
(a) Sempra's security interest constitutes a valid, perfected
and enforceable first priority security interest and lien
in the collateral described in the UCC-1 Financing
Statement;
(b) ASARCO's estates have no claims against Sempra arising
from the Tolling Agreement including any postpetition
performance under the Tolling Agreement; and
(c) Sempra will file a Termination Statement with the UCC-1
Financing Statement immediately after approval of the
Stipulation.
As reported in the Troubled Company Reporter on Aug. 29, 2006,
ASARCO and Sempra Metals were parties to:
(a) a sale contract under which ASARCO sold and delivered
copper reverts and copper matte to Sempra; and
(b) a tolling and custody agreement under which Sempra
provided the Material it has purchased under the sale
contract to ASARCO for processing into copper cathode.
Sempra at all times retained title to the Material. Sempra also
retained the right to ship the Material from ASARCO's Hayden
Facility and the Copper Cathode from ASARCO's Amarillo Facility.
Pursuant to the Tolling Agreement, the parties intended that the
transaction constitute a bailment of the Material and the Copper
Cathode by Sempra to ASARCO.
As a precautionary measure, ASARCO granted Sempra a first priority
security interest in the Copper Cathode, and in all of its
inventory pertaining to the parties' transactions.
In April 2005, Sempra filed a Uniform Commercial Code-1 Financing
Statement with the Secretary of the State of Delaware with the
description of the collateral used in the tolling agreement.
Thus, Sempra was a secured party with a valid perfected security
interest in all of ASARCO's inventory.
In October 2005, to obtain DIP financing from CIT Group/Business
Credit, Inc., ASARCO agreed to grant CIT a $20,000,000 reserve
against the $75,000,000 line of credit to protect CIT against
Sempra's senior lien.
By March 2006, ASARCO and Sempra have fully performed all
obligations under the Tolling Agreement.
Upon completion of performance under the Tolling Agreement, ASARCO
asked Sempra to terminate the Financing Statement in accordance
with the applicable provisions of the UCC. Sempra agreed to
terminate the Financing Statement only if ASARCO files a
stipulation with the Court acknowledging that ASARCO's estate has
no claims against Sempra relating to the Tolling Agreement and
agreeing that the estate will not pursue any claims.
Sempra has refused to enter into any new agreements with ASARCO
until the issue was resolved.
After discussions with counsel for the Official Committee of
Unsecured Creditors, ASARCO concluded that because the Tolling
Agreement gave rise to a transaction that was a bailment, ASARCO's
bankruptcy estate does not have, and will not have, any cause of
action for recovery of property from Sempra relating to the
Tolling Agreement.
About ASARCO LLC
Headquartered in Tucson, Arizona, ASARCO LLC --
http://www.asarco.com/-- is an integrated copper mining,
smelting and refining company. Grupo Mexico S.A. de C.V. is
ASARCO's ultimate parent. The Company filed for chapter 11
protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207).
James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A.
Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter
Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq.,
at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor
in its restructuring efforts. Lehman Brothers Inc. provides the
ASARCO with financial advisory services and investment banking
services. Paul M. Singer, Esq., James C. McCarroll, Esq., and
Derek J. Baker, Esq., at Reed Smith LLP give legal advice to
the Official Committee of Unsecured Creditors and David J.
Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee. When the Debtor filed for protection
from its creditors, it listed $600 million in total assets and
$1 billion in total debts.
The Debtor has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521
through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO
Pipe Company, Inc., Cement Asbestos Products Company, Lake
Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about
their asbestos-driven chapter 11 filings have appeared in the
Troubled Company Reporter since Apr. 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No.
05-21346) also filed for chapter 11 protection, and ASARCO has
asked that the three subsidiary cases be jointly administered
with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case
was converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7
Trustee. (ASARCO Bankruptcy News, Issue No. 29; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/
or 215/945-7000)
ASARCO LLC: Gets Court's Okay on Wachovia Lease Settlement
----------------------------------------------------------
The Honorable Richard S. Schmidt of the U.S. Bankruptcy Court for
the Southern District of Texas in Corpus Christi approved a
settlement agreement between ASARCO LLC and Wachovia Financial
Services, Inc.
The parties agree that:
(a) ASARCO will assume the Master Equipment Lease Agreement
and enter into the settlement with Wachovia for an early
purchase of the Leased Property;
(b) should any sales taxes for the Leased Property be found to
be due, Wachovia will pay 1/2 of any sales taxes due on
the Gradal Forklift and ASARCO will pay the other half;
(c) ASARCO will pay any sales taxes due on all the other
Leased Property;
(d) to the extent sales tax is found to be due, the Court
allocates $12,000 of the Gradal Forklift's purchase price,
and $50,000 of five railroad ore car's purchase price;
(e) if the Gradal Forklift's purchase price is finally
determined to be more than $12,000 and is subject to
sales tax, Wachovia will pay 1/2 of the actual amount of
sales taxes found to be due on the Gradal Forklift;
(f) ASARCO will immediately pay $1,250,000 to Wachovia, in
full satisfaction of all of its obligations under the
Lease and in full payment for the Leased Property;
(g) if ASARCO does not timely pay Wachovia or if the
Committees or Future Claim Representative timely object,
the parties will be restored to their original positions,
the Order will be of no effect and the Settlement will not
be binding on either ASARCO or Wachovia; and
(h) the compromise has no effect on the Term Note, dated
August 1, 2003, which is part of Wachovia's filed proof of
Claim. Each party reserves all rights, claims, or
objections with respect to the Term Note.
About ASARCO LLC
Headquartered in Tucson, Arizona, ASARCO LLC --
http://www.asarco.com/-- is an integrated copper mining,
smelting and refining company. Grupo Mexico S.A. de C.V. is
ASARCO's ultimate parent. The Company filed for chapter 11
protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207).
James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A.
Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter
Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq.,
at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor
in its restructuring efforts. Lehman Brothers Inc. provides the
ASARCO with financial advisory services and investment banking
services. Paul M. Singer, Esq., James C. McCarroll, Esq., and
Derek J. Baker, Esq., at Reed Smith LLP give legal advice to
the Official Committee of Unsecured Creditors and David J.
Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee. When the Debtor filed for protection
from its creditors, it listed $600 million in total assets and
$1 billion in total debts.
The Debtor has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521
through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO
Pipe Company, Inc., Cement Asbestos Products Company, Lake
Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about
their asbestos-driven chapter 11 filings have appeared in the
Troubled Company Reporter since Apr. 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No.
05-21346) also filed for chapter 11 protection, and ASARCO has
asked that the three subsidiary cases be jointly administered
with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case
was converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7
Trustee. (ASARCO Bankruptcy News, Issue No. 29; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/
or 215/945-7000)
ASSOCIATED BRANDS: Bank Waives Defaults & Defers Credit Pact Term
-----------------------------------------------------------------
Associated Brands Income Fund reached agreement with its bank and
holders of its exchangeable debentures to amend the terms and
conditions governing the Fund's $43.3 million bank facilities and
$11 million in principal amount of outstanding exchangeable
debentures. It is anticipated that the amendments will be
effective on or before Sept. 30, 2006.
Under the terms of the amended credit agreement with the Fund's
bank, the bank will waive all outstanding defaults and extend the
term of the Credit Agreement from Nov. 15, 2007 to Sept. 23, 2008.
The Fund and the bank have also agreed to modify certain of the
covenants contained in the Credit Agreement, including certain
financial covenants. Beginning Sept. 30, 2006, the Fund will be
required to make monthly repayments against its Canadian term
facility until such facility is fully repaid and then against its
United States term facility until such facility is fully repaid.
Each monthly payment is to be equal to 80% of an amount, if any,
by which Consolidated Adjusted EBITDA exceeds Consolidated Fixed
Charges for the calendar month that is two months prior to the
month in which the applicable repayment is to be made. In
addition, the Fund will pay to the bank, in quarterly installments
commencing Sept. 29, 2006, an amendment and waiver fee of $430,000
plus all of the bank's associated legal fees, and a further fee
of 0.5% of the amounts available under the credit facility on
Nov. 15, 2007.
The amended Credit Agreement requires that the Fund not pay
distributions to unitholders prior to Jan. 1, 2008. Subsequent to
that date, the Fund may pay distributions only if its Funded Debt
to Normalized EBITDA ratio is not greater than 3 to 1 on a rolling
twelve-month basis and the Fund has made permanent repayments
against its Canadian term facility of at least $7 million.
Distributions declared to unitholders may not exceed 20% of the
Distributable Amount on a monthly and annual basis.
In addition, the Fund may not pay cash interest to certain of the
exchangeable debentureholders prior to March 30, 2007. Subsequent
to that date, the Fund may not pay cash interest to these holders
unless the Fund has made repayments against its Canadian term
facility of at least $1.75 million and the availability under its
bank operating line is at least $5 million from the date which is
30 days prior to such payment to the date which is 30 days after
the date of such payment.
The outstanding exchangeable debentures, issued by Associated
Brands Holdings Limited Partnership on Nov. 14, 2005, are held by
certain current and former trustees of Associated Brands Operating
Trust, senior management of Associated Brands, and Torquest
Partners Value Fund, L.P. and Torquest Partners Value Fund
(Parallel Partnership No. 1), L.P., the general partner of which
one trustee of ABOT is a managing partner. A special committee of
the board of trustees of ABOT was formed to consider the possible
restructuring of the Fund's bank debt and exchangeable debentures.
As each member of the special committee holds debentures, these
trustees agreed that their exchangeable debentures will not be
subject to the amendments that have been agreed to with the
remaining exchangeable debentureholders. Therefore, each of the
members of the special committee is free from any interest in the
exchangeable debentures that are being amended. Each of the
members of the special committee is also unrelated to the holders
of those exchangeable debentures that are being amended.
The outstanding defaults under the exchangeable debentures will be
waived. The terms of $11 million in principal amount of the
exchangeable debentures, which are to be amended, held by the
Torquest Funds, one trustee of the Fund and ABOT and a former
trustee of ABOT, will be amended by converting such debentures
into three new series of exchangeable debentures in the same
aggregate principal amount. The terms of the new series of
exchangeable debentures will include:
* the existing exchange price of $4 per unit will be reset
on the new series of exchangeable debentures:
(a) $3.85 million principal amount will be exchangeable at
$0.75 per unit,
(b) $3.575 million principal amount will be exchangeable at
$2.50 per unit, and
(c) $3.575 million principal amount
will be exchangeable at $3.50 per unit;
* the interest accrued from Nov. 14, 2005 to Sept. 29, 2006
(approximately $0.78 million) will be paid in units of the
Fund on Sept. 29, 2006 issued at a price equal to 97% of the
weighted average market price per unit for the five
consecutive trading days on the Toronto Stock Exchange
preceding such date; and
* the Fund may, at its sole discretion and provided the Fund is
in compliance with the terms of its Credit Agreement, make
any payment of interest on the new series of exchangeable
debentures (except interest due on a redemption or following
a change of control) either in cash or by issuing units of
the Fund at a price equal to 97% of the weighted average
market price per unit for the five consecutive trading days
on the TSX preceding the applicable interest payment date.
All of the exchangeable debentures will continue to bear interest
at 9% per annum payable semi-annually and mature on Sept. 30,
2008.
The terms of the remaining $750,000, principal amount of original
exchangeable debentures will remain unchanged. Interest accrued
from Nov. 14, 2005 on such exchangeable debentures will be paid on
Sept. 30, 2006 in cash in accordance with the terms of such
debentures.
Assuming the exchange of all of the exchangeable debentures
outstanding after giving effect to the amendments, 7,772,259 units
(representing 59.45% of the currently outstanding units) would be
issued. This would substantially dilute the interests of
unitholders of the Fund.
TSX Financial Hardship Exemption
Following the amendments, the Torquest Funds will hold $10 million
of the new exchangeable debentures and a trustee of the Fund will
hold $500,000 of the new exchangeable debentures. Assuming all of
the Torquest Funds' and such trustee's new exchangeable debentures
are exchanged for units and not including any units that may be
issued in satisfaction of interest payments, the Torquest Funds
would hold 6,895,237 units, or 35.30% of the units of the Fund on
a fully diluted basis, and the trustee would be issued 809,686
units, or 4.15% of the units of the Fund on a fully diluted basis.
As such, the exchange of the exchangeable debentures could
materially affect control of the Fund. Since the issuance and
exchange of the new exchangeable debentures could
(1) materially affect control of the Fund,
(2) provide consideration to insiders, as defined by the TSX,
in excess of 10% of the market capitalization of the Fund,
(3) result in the issuance of a number of units in excess of
25% of the outstanding number of units of the Fund, and
(4) involve a private placement of entitlements to Units to an
insider, as defined by the TSX, greater than 10% of the
number of units outstanding, the TSX would typically
require the issuance of the new series of exchangeable
debentures to be approved by unitholders (excluding
management and insiders participating in the transaction).
The trustees have determined that it is in the best interest of
the Fund to close the proposed transactions as soon as possible.
The Fund has obtained from the TSX an exemption from the
unitholder approval requirements pursuant to Section 604(e) of the
TSX Company Manual on the basis of the financial difficulty that
the Fund has experienced and the urgency of putting the
restructuring of the bank debt and exchangeable debentures into
effect. The transactions have been considered by the special
committee of the board of trustees, each of whom is free from any
interest in the transactions and is unrelated to any of the
parties involved in the transactions.
"The Fund is pleased to have concluded its negotiations with the
bank and the debentureholders with respect to the Fund's ongoing
financing relationship with both parties", commented Morris
Perlis, Executive Chairman of Associated Brands.
About Associated Brands
Toronto, Ontario-based Associated Brands Income Fund (TSX: ABF.UN)
-- http://www.associatedbrands.com/-- through its operating
subsidiaries, is a North American manufacturer and supplier of
private-label dry-blend food products and household products.
Associated Brands plans to build unitholder value by leveraging
its solid presence in the U.S. private-label market, expanding its
product offerings to current and new customers and adding
additional contract manufacturing business, and through accretive
acquisitions.
AVONDALE INC: Moody's Withdraws Ca Rating on $150MM Sr. Sub. Notes
------------------------------------------------------------------
Moody's Investors Service withdrew the ratings of Avondale Mills,
Inc. and those of its parent company, Avondale Incorporated.
Moody's has withdrawn these ratings for business reasons.
These ratings were affected:
* Avondale Mills, Inc:
-- The (original) $150 million issue of senior subordinated
notes due 2013, rated Ca.
* Avondale Incorporated:
-- The Corporate Family Rating of B3.
On May 30, 2006, Avondale Incorporated, a Georgia-based textile
manufacturer, announced that its board of directors authorized a
plan to discontinue the company's ongoing business operations and
sell the company's assets in order to maximize value for its
creditors and shareholders.
BACHRACH CLOTHING: Panel Taps BDO Seidman as Financial Advisors
---------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in
Bachrach Clothing, Inc.'s chapter 11 case asks the U.S. Bankruptcy
Court for the Northern District of Illinois for permission to
employ BDO Seidman, LLP, as its financial advisors.
BDO Seidman is expected to:
a) analyze the financial operations of the Debtor's Pre- and
Post- Petition Date, as necessary;
b) analyze the Debtor's business plans, cash flow
projections, selling and general administrative
structure, key employee retention programs or employee
incentive plans, and other reports or analyses prepared
by the Debtor or its professionals in order to advise
the Committee on the liquidation process, methodology
being utilized and anticipated results;
c) analyze the financial ramifications of any proposed
transactions for which the Debtor seek Bankruptcy Court
approval including, but not limited to, post petition
financing, sale of all or portion of the Debtor's assets,
management compensation and employee incentive,
retention and severance plans;
d) perform claims analysis for the Committee, including
analysis of reclamation claims;
e) verify the physical inventory of merchandise, supplies,
equipment and other material assets and liabilities, as
necessary, and their values;
f) assist the Committee in its review of monthly statements
of operations to be submitted by the Debtors;
g) assist the Committee in its evaluation of cash flow and
other projections prepared by the Debtors;
h) scrutinize cash disbursement on an on-going basis for the
period subsequent to the Petition Date;
i) analyze transactions with insiders, related and
affiliated companies;
j) analyze transaction with the Debtor's financing
institutions;
k) analyze the Debtor's real property interests, including
lease assumptions and rejections, and potential real
property asset sales;
l) attend meetings of Creditors and conference with
representative of the creditor groups and their counsel;
m) prepare and submit reports to the Committee of Creditors
to aid them in evaluating any proposed plan of
liquidation;
n) assist the Committee in its review of the financial
aspects of a plan of liquidation to be submitted by the
Debtor, or in arriving at a proposed plan;
o) monitor the sale and liquidation of the company, and
perform reviews of the value of bids received; and
p) perform other necessary services as the Committee or the
Committee's counsel may request from time to time with
respect to the financial, business and economic issues
that may arise;
The current hourly billing rate for BDO Seidman's professionals
are:
Designation Hourly Rates
----------- ------------
Partners $350-$695
Senior Managers $275-$510
Managers $225-$345
Seniors $150-$255
Staff $100-$195
The firm can be reached at:
BDO Seiman LLP
130 East Randolph, Suite 2800
Chicago, IL 60601
Tel: (312) 240-1236
Fax: (312) 240-3311
BDO Seiman assures the Court that it does not hold any interest
adverse to the Debtor's estate.
Headquartered in Chicago, Illinois, Bachrach Clothing, Inc. --
http://www.bachrach.com/-- manufactures and retails formal men's
wear and accessories. The company filed for chapter 11 protection
on June 6, 2006 (Bankr. N.D. Ill. Case No. 06-06525). Robert M.
Fishman, Esq., at Shaw Gussis Fishman Glantz Wolfson & Towbin LLC,
represents the Debtor in its restructuring efforts. When the
Debtor filed for protection from its creditors, it disclosed
estimated assets and debts between $10 million and $50 million.
BEARINGPOINT INC: In Default on $200 Mil. Bonds, Court Says
-----------------------------------------------------------
BearingPoint, Inc., received an order entered by the New York
State Supreme Court for New York County on Sept. 20, 2006, finding
the Company in default under the indenture governing the its 2.75%
Series B Convertible Subordinated Debentures due 2024.
The Company's default came as a result of the failure to timely
provide certain Securities and Exchange Commission periodic
reports to the trustee under the Subordinated Indenture.
In its decision, the NY County Court determined that the amount of
damages to the holders of the Series B Debentures was to be
determined subsequently at trial.
BearingPoint maintains that there are serious errors in the NY
County Court's ruling and intends to pursue its rights and
remedies in that regard and has filed an appeal.
Harry You, Chief Executive Officer of BearingPoint, stated "We
respectfully but strongly disagree with the decision not to
dismiss this claim and are appealing the order. It is important
to note the court did not order an acceleration of the debentures
nor grant the request to award damages. The new uncertainties and
risks created by this lawsuit are unacceptable to the Company, our
lenders, our other debentures holders, shareholders, and
employees."
The Company says it has commenced discussions with representatives
of the holders of all series of its debentures and the lenders
under its Senior Credit Facility to avoid any unintended effects
of this decision. The Company also disclosed that it continues to
preserve its rights in the current lawsuit by simultaneously
pursuing an appeal.
BearingPoint also said it is deferring the filing of its Annual
Report on Form 10-K for fiscal 2005 because the uncertainties
created by the Supreme Court's decision that would result in an
explanatory paragraph indicating uncertainty about its ability to
continue as a going concern, if an opinion from its independent
registered public accountants were sought at this time.
Series B Debenture Litigation
BearingPoint is involved in a dispute with holders of the Series B
Debentures. In a Jan. 18, 2006 lawsuit, certain holders of the
Series B Debentures alleged that
a) the Company was in default under the Subordinated
Indenture as a result of the Company's failure to timely
provide certain periodic reports to the Trustee, and
b) the Company had not honored a demand to accelerate all of
the principal and accrued and unpaid interest on the
Series B Debentures and sought unspecified damages for the
breach.
The Trustee, on behalf of the holders of the Series B Debentures,
sought an award of damages in the amount of $21.5 million,
together with prejudgment interest at the rate of 9% commencing on
Nov. 17, 2005, but is not seeking to pursue a judgment based on
acceleration.
On Sept. 19, 2006, the NY County Court granted in part the
Trustee's motion for summary judgment by finding that the Company
is in default under the Subordinated Indenture as a result of the
failure to timely provide certain periodic SEC reports to the
Trustee under the terms of the Subordinated Indenture. The NY
County Court denied the Company's cross motion for summary
judgment. The NY County Court did not grant the award for damages
sought by the Trustee but instead ordered that damages be
determined at trial. Acceleration of the Series B Debentures was
neither sought by the Trustee in its motion for summary judgment
nor ordered by the NY County Court.
2005 Preliminary Unaudited Results
The Company's preliminary, unaudited information does not take
into account any adjustments related to the decision on the Series
B Debenture matter nor to the impacts from the passage of time
related to subsequent events accounting.
The unaudited preliminary financial results are:
* Gross revenue for 2005 was approximately $3.40 billion,
representing a 1% growth rate over 2004.
* Net revenue for 2005 was $2.40 billion, an approximately 2%
increase over the prior year.
* Net loss for 2005 is expected to be in the range of $650 to
$720 million.
Second Quarter 2006 Business Update
Highlights of the Company's second quarter ended June 30, 2006
performance include:
* Bookings were $811 million in the second quarter of this
year, bringing total bookings for the first half of 2006 to
$1.6 billion;
* Voluntary total employee turnover was 29%, up from 24% in the
first quarter 2006;
* Total workforce utilization was 76.8%, up from 73.4% in the
first quarter 2006;
* Billable headcount for the second quarter of 2006 stood at
approximately 15,200, a slight decline from the first quarter
of 2006.
In addition, as of September 25, 2006, cash balances were
approximately $291 million.
2006 Guidance
The Company further disclosed that it is targeting to become
current with its SEC filings by late spring of 2007. Through the
process, it will continue to incur higher than expected finance
and accounting charges. As a result of the costs coupled with
expenses related to equity compensation and bonus accruals and
other non- recurring items, the Company will be significantly
below the low end of its GAAP operating income and cash guidance
ranges for 2006. The Company also withdrew its previous financial
guidance.
Based in McLean, Virginia, BearingPoint, Inc. --
http://www.BearingPoint.com/-- is a global management and
technology consulting firm, providing strategic consulting,
application services, technology solutions and managed services to
Global 2000 companies and government organizations.
* * *
As reported in the Troubled Company Reporter on June 2, 2006,
Moody's Investors Service confirmed the ratings for BearingPoint,
Inc. Ratings affirmed include the B1 Corporate Family Rating and
the B3 rating on the Company's $250 million series A subordinated
convertible bonds due 2024 and $200 million series B subordinated
convertible bonds due 2024.
BIO-KEY INT'L: Second Quarter 2006 Net Loss Decreases to $1.07MM
----------------------------------------------------------------
BIO-Key International Inc.'s net loss for the three months ended
June 30, 2006, decreased to $1,072,984 from $1,526,172 reported
for the three months ended June 30, 2005.
Revenues for the current quarter increased to $3,832,771 from
$3,685,552 for the same quarter last year.
The Company's balance sheet at June 30, 2006, disclosed total
assets of $21,805,054, total liabilities of $19,526,443, and
total stockholders' equity of $1,599,642. The Company's balance
sheet also showed strained liquidity with $6,071,225 in total
current assets available to pay $17,339,072 in total current
liabilities.
Full-text copies of the Company's financial statements for the
three months ended June 30, 2006, are available for free at:
http://researcharchives.com/t/s?128c
Going Concern Doubt
DS&B Ltd. in Minneapolis Minnesota raised substantial doubt about
BIO-key International 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 auditor pointed to the
Company's losses from operations and working capital deficit.
About BIO-Key
BIO-key International, Inc. -- http://www.bio-key.com/-- develops
and markets identification biometric software in the United
States. The software provides identification technology that
scans fingerprints and identifies a person in databases.
BLJ REALTY: Voluntary Chapter 11 Case Summary
---------------------------------------------
Debtor: BLJ Realty, LLC
1734 Liberty Ridge
Braintree, MA 02184
Bankruptcy Case No.: 06-13415
Type of Business: The Debtor's managing member, Georgette
Clements, filed for chapter 11 protection on
August 2, 2006 (Bankr. D. Mass. Case No. 06-
12565).
Chapter 11 Petition Date: September 28, 2006
Court: District of Massachusetts (Boston)
Judge: Robert Somma
Debtor's Counsel: John M. McAuliffe, Esq.
McAuliffe & Associates, P.C.
430 Lexington Street
Newton, MA 02466
Tel: (617) 558-6889
Fax: (617) 558-6882
Estimated Assets: $500,000 to $1 Million
Estimated Debts: $1 Million to $10 Million
The Debtor did not file a list of its 20 largest unsecured
creditors.
BORGWARNER CAPITAL: Moody's Holds (P)Ba1 Preferred Shelf Rating
---------------------------------------------------------------
Moody's Investors Service has affirmed the debt ratings of
BorgWarner Inc., senior unsecured at Baa2, but changed the rating
outlook to stable from positive.
The actions follow BWA's announcement of Sept. 22 in which it
reduced guidance for 2006 earnings and cash flow from a
combination of significantly lowered North American customer
production schedules, restructuring programs within BWA, and the
impact of higher metal costs on its margins. While BWA benefits
from significant customer and geographic diversification and well
positioned product offerings, the magnitude of the downdraft from
structural changes in North America limits short-term expectations
and will constrain the timing and pace at which further
improvements in the company's financial standing can be expected.
Many of these challenges will continue into 2007. Despite the
weaker environment, BWA's financial metrics are expected to remain
supportive of the Baa2 rating, and the outlook is stable.
Ratings affirmed:
* BorgWarner Inc.
-- Senior Unsecured, Baa2
-- Subordinated shelf, (P)Baa3
-- Preferred shelf, (P)Ba1
* BorgWarner Capital Trusts I, II, and III
-- Shelf ratings for trust preferred, (P)Baa3
The last rating action was on December 8, 2004 at which time BWA's
long term ratings were confirmed and a positive outlook was
established.
BWA reduced its guidance for full year 2006 earnings by
approximately $23-$27 million (after-tax) prior to the impact of a
restructuring charge of roughly $9 million (after tax) to reduce
its North American workforce by 13%. While this restructuring
represents an appropriate action that will be supportive of future
performance, margins over the balance of the year will be
adversely affected by declines in production volumes announced by
General Motors, Ford Motor Company and DaimlerChrysler, as well as
the rising cost of nickel used primarily in its turbocharger
products.
Collectively, the global operations of the Big 3 OEMs accounted
for 37% of 2005 revenues (roughly 22% from their North American
base), but a significantly higher percentage of BWA's North
American revenues. While the majority of the company's revenues
and earnings are generated offshore, improvements in those
segments will not offset poorer performance in North America in
the second half of 2006.
Over time, demand for the company's products, diversification from
its customer and geographic base, savings from the restructuring
program, and book of business awards should be conducive for
resumption of revenue and earnings growth. However, in the near
term, structural shifts in North American vehicle preferences and
OEM market share will impact consolidated operating results,
resultant coverage ratios, and limit progress in reducing
indebtedness incurred for acquiring a 69.4% stake in Beru AG.
Quantitative metrics are strong for the rating category, and
qualitative factors in the Supplier Methodology remain fully
supportive of the Baa2 rating.
BorgWarner, headquartered in Auburn Hills, MI, produces highly
engineered components and systems for vehicle powertrain
applications. The company operates manufacturing and technical
facilities in 62 locations in 17 countries. Revenues in 2005 were
approximately $4.3 billion.
BP METALS: Moody's Assigns B3 Rating to Proposed $25 Mil. Loan
--------------------------------------------------------------
Moody's Investors Service has assigned a Ba3 rating to the
proposed $120 million senior secured bank revolving credit
facility and first lien term loan of BP Metals, LLC. In addition,
a B3 rating has been assigned to the proposed $25 million second
lien term loan. A B1 corporate family rating has also been
assigned. The ratings assigned to the facilities reflect both the
overall probability of default of the company, to which Moody's
assigns a B1, and a loss given default of LGD 3 for the first lien
facilities and LGD 5 for the second lien facility. The rating
outlook is stable. These first-time ratings are subject to final
documentation.
Net proceeds from the first and second lien term loans are
expected to be used to effect a recapitalization of the company by
refinancing existing debt of $54.5 million and $1.5 million of
other liabilities and financing a $62 million dividend payment to
existing shareholders and related transaction fees. Moody's
anticipates that the revolver will remain undrawn at close.
These ratings were assigned:
* Corporate family rating at B1;
* Probability-of-default rating at B1;
* The proposed five-year $20 million revolving credit facility
at Ba3 (LGD 3, 42%);
* The proposed six-year $100 million senior secured first lien
term loan at Ba3 (LGD 3, 42%);
* The proposed six and a half-year $25 million second lien
term loan at B3 (LGD 5, 86%).
The initial credit ratings reflect BP Metals relatively modest
leverage and growing free cash flow generation. Further, the
ratings benefit from BP Metals' dominant position in the niche
markets it serves complemented by a diverse blue-chip customer
base. BP Metals top ten customers represent slightly over 38% of
revenue, serving diverse end markets.
The company's rating also benefits from its position as the sole
source supplier for a significant part of its customer base, its
ability to pass through increases in commodity costs and the
significant barriers to entry created by its long-standing
customer relationships and its value-added product engineering.
Through its four operating divisions:
* (castings (37% of revenue),
* metal stampings (33 %),
* metal forgings (20%) and
* stamped aluminum and plastic casings (10%)),
the company manufactures a diverse suite of products serving rail
transportation, small gas engine, petrochemical, heavy truck,
liquid propane, oil and gas, aerospace, military/defense, and
consumer markets.
Using Moody's standard adjustments, Dec. 2006 leverage
(Debt/ EBITDA), is expected to fall below approximately 4.0x and
the rating agency estimates that FCF/Debt could increase to 5-7%
by the end of 2007. BP Metals should generate EBITDA margins in
the approximate range of 11% to 12% in 2007 with interest coverage
of 3.0x to 3.5x.
Financial covenants in the proposed loan agreements include a
maximum first lien leverage ratio, maximum total leverage ratio
and a minimum fixed charge coverage ratio. The proposed revolver
and first lien term loan will be secured by a first priority,
perfected lien on all assets and capital stock of BP Metals and
all of its domestic subsidiaries and 65% of all capital stock of
foreign subsidiaries. The second lien facility has a second
priority secured interest in all of the collateral securing the
first lien facilities. The proposed facilities will be
unconditionally guaranteed by all direct and indirect subsidiaries
of BP Metals. The first lien term loan will amortize in equal
installments at an annual rate of 1% per year with the balance due
in year six. The second lien facility will not be subject to
interim scheduled amortization. The facilities will include an
excess cash flow sweep.
The Ba3 rating on BP Metals' senior secured revolving credit
facility and first lien term loan reflects an LGD 3 loss given
default assessment resulting from the benefits and limitations of
the collateral. Total tangible assets of $145 million and
intangible assets of $17 million will secure the first lien credit
facilities at June 30, 2006. The second lien facility has been
rated a B3 reflecting an LGD 5 loss given default assessment given
its junior status relative to the first lien facilities and the
increased risk of loss under a distressed scenario.
Moody's notes that changes in documentation, structure, or
operating performance from what has been relied upon, may have
yielded a different ratings outcome.
The stable rating outlook reflects favorable market conditions
with positive near-term growth prospects. Moody's anticipates BP
Metals' expected cash flow generation will be sufficient to cover
the first lien term loan amortization and interest payments.
The ratings or outlook could be favorably impacted by a sustained
improvement in Moody's adjusted EBITDA margins to 13% that
translate into growth in cash flows and a reduction of BP Metals'
financial leverage to below 3.0x. Conversely, the ratings or
outlook could be pressured by a deterioration in cash flows, the
loss of a significant customer or a change in financial posture
that negatively impacts BP Metals' leverage.
BP Metals is a leading manufacturer of custom-engineered
components for niche markets for major industrial customers across
a wide variety of industries.
CARRAWAY METHODIST: Taps Bradley Arant as Bankruptcy Counsel
------------------------------------------------------------
Carraway Methodist Health Systems and its debtor-affiliates ask
the U.S. Bankruptcy Court for the Northern District of Alabama for
permission to employ Bradley Arant Rose & White LLP, as their
bankruptcy counsel.
Bradley Arant will:
a. give the Debtors legal advice with respect to their duties
as debtors-in-possession in the continued operation of
their businesses and management of their assets;
b. prepare, on behalf of the Debtors, necessary motions,
applications, answers, contracts, reports and other legal
documents;
c. perform any and all legal services on behalf of the Debtors
arising out of or connected with the bankruptcy
proceedings;
d. perform other legal services for the Debtors including, but
not limited to, work arising out of labor, tax,
environmental, corporate, litigation and other matters
involving the Debtors;
e. advise and consult with the Debtors for the preparation of
all necessary schedules, disclosure statements and plans of
reorganization; and
f. perform all other legal services required by the Debtors in
connection with the Debtors' chapter 11 cases.
Patrick Darby, Esq., a partner at Bradley Arant, tells the Court
that the firm's professionals bill:
Professional Hourly Rate
------------ -----------
Partners $230 - $515
Associates $155 - $325
Legal Assistants $110 - $180
Mr. Darby assures the Court that his firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
Mr. Darby can be reached at:
Patrick Darby, Esq.
Bradley Arant Rose & White LLP
One Federal Place, 1819 Fifth Avenue North
Birmingham, Alabama 35203
Tel: (205) 521-8000
Fax: (205) 521-8800
http://www.bradleyarant.com/
Based in Birmingham, Alabama, Carraway Methodist Health Systems,
dba Carraway Methodist Medical Center -- http://www.carraway.org/
-- is a major teaching hospital, referral center and acute care
hospital that serves Birmingham and north central Alabama. The
Company and its affiliates filed for chapter 11 protection on
Sept. 18, 2006 (Bankr. N.D. Ala. Case No. 06-03501). When the
Debtors filed for protection from their creditors, they listed
estimated assets between $10 million and $50 million and estimated
debts of more that $100 million.
CARRAWAY METHODIST: Hires Bankruptcy Services as Claims Agent
-------------------------------------------------------------
Carraway Methodist Health Systems and its debtor-affiliates
obtained authority from the U.S. Bankruptcy Court for the Northern
District of Alabama to employ Bankruptcy Services, LLC, as their
claims, noticing and balloting agent.
Bankruptcy Services is expected to:
a. prepare and serve required notices in this chapter 11 case,
including:
(1) a notice of commencement of this chapter 11 case and
the initial meeting of creditors under Bankruptcy
Code Section 341(a);
(2) a notice of the claims bar date;
(3) notices of objections to claims;
(4) notices of any hearings on a statement and
confirmation of a plan of reorganization; and
(5) other miscellaneous notices as the Debtors or the
Court may deem necessary or appropriate for an
orderly administration of this chapter 11 case;
b. within seven business days after the service of a
particular notice, file with the Clerk's Office an
affidavit of service that includes:
(i) a copy of the notice served,
(ii) an alphabetical list of persons on whom the notice
was served, along with their addresses, and
(iii) the date and manner of service;
c. maintain copies of all proofs of claim and proofs of
interest filed in the Debtors' chapter 11 cases;
d. maintain official claims registers in the Debtors' cases by
docketing all proofs of claim and proofs of interest in a
claims database that includes the following information for
each such claim or interest asserted:
(1) the name and address of the claimant or interest
holder and any agent thereof, if the proof of claim
or proof of interest was filed by an agent;
(2) the date the proof of claim or proof of interest was
received by the Noticing Agent or the Court;
(3) the claim number assigned to the proof of claim or
proof of interest; and
(4) the asserted amount and classification of the claim;
e. implement necessary security measures to ensure the
completeness and integrity of the claims registers;
f. transmit to the Clerk's Office a copy of the claims
registers on a weekly basis, unless requested by the
Clerk's Office on a more or less frequent basis;
g. maintain a current mailing list for all entities that have
filed proofs of claim or proofs of interest and make such
list available upon request to the Clerk's Office or any
party in interest;
h. provide access to the public for examination of copies of
the proofs of claim or proofs of interest filed in this
case without charge during regular business hours;
i. record all transfers of claims pursuant to Bankruptcy Rule
3001(e) and provide notice of such transfers as required by
Bankruptcy Rule 3001(e);
j. comply with applicable federal, state, municipal and local
statutes, ordinances, rules, regulations, orders and other
requirements;
k. provide temporary employees to process claims, as
necessary;
l. promptly comply with such further conditions and
requirements as the Clerk's Office or the Court may at any
time prescribe; and
m. provide such other claims processing, noticing and related
administrative services as may be requested from time to
time by the Debtors.
The Debtors tell the Court that professionals at the firm bill:
Professional Hourly Rate
------------ -----------
Senior Bankruptcy Consultant $225 - $295
Bankruptcy Consultant $185 - $225
IT Programming Consultant $140 - $190
Case Managers $125 - $175
Clerical $40 - $60
Based in Birmingham, Alabama, Carraway Methodist Health Systems,
dba Carraway Methodist Medical Center -- http://www.carraway.org/
-- is a major teaching hospital, referral center and acute care
hospital that serves Birmingham and north central Alabama. The
Company and its affiliates filed for chapter 11 protection on
Sept. 18, 2006 (Bankr. N.D. Ala. Case No. 06-03501). When the
Debtors filed for protection from their creditors, they listed
estimated assets between $10 million and $50 million and estimated
debts of more that $100 million.
CENTRAL FREIGHT: Posts $7.9 Mil. Net Loss in 2nd Qtr. Ended July 1
------------------------------------------------------------------
Central Freight Lines, Inc., has filed its financial statements
for the second quarter ended July 1, 2006, with the Securities and
Exchange Commission.
For the three months ended July 1, 2006, the Company reported a
$7,949,000 net loss on $85,501,000 of operating revenues, compared
with a $6,111,000 net loss on $99,518,000 of operating revenues
for the same period in 2005.
At July 1, 2006, the Company's balance sheet showed $152,834,000
in total assets, $122,480,000 in total liabilities, and
$30,354,000 in total stockholders' equity.
The Company's July 1 balance sheet showed strained liquidity with
$53,652,000 in total current assets available to pay $69,494,000
in total current liabilities coming due within the next 12 months.
Full-text copies of the Company's second quarter financials are
available for free at http://ResearchArchives.com/t/s?1293
Going Concern Doubt
As reported in the Troubled Company Reporter on May 17, 2006,
McGladrey & Pullen, LLP, in Dallas, Texas, raised substantial
doubt about Central Freight Lines, Inc.'s ability to continue as a
going concern after auditing the Company's consolidated financial
statements for the year ended Dec. 31, 2005. The auditor pointed
to the Company's recurring losses from operations and negative
working capital.
About Central Freight Lines
Based in Waco, Texas, Central Freight Lines, Inc. (Nasdaq: CENF)
-- http://www.centralfreight.com/- is a regional less-than-
truckload trucking company that has operations in the Southwest,
Midwest, and Northwest regions of the United States. The Company
offers inter-regional service between operating regions and
maintain alliances with other similar companies to complete
transportation of shipments outside the Company's operating
territory.
CENTRIX FINANCIAL: Can Pay Prepetition Employee Wages and Benefits
------------------------------------------------------------------
The Hon. Gregg W. Zive of the U.S. Bankruptcy Court for the
District of Nevada authorized Centrix Financial LLC and its
debtor-affiliates to pay wages owed to employees prior to their
bankruptcy filing.
Judge Zive further allowed the Debtors to continue extending
benefits to its employees. He also directed banks to honor checks
written to satisfy the Debtors' employee obligations.
Centrix and its affiliates, including CMGN LLC, which filed a
voluntary chapter 11 petition on Sept. 4, 2006, employs
approximately 308 hourly workers and 147 full-time salaried
employees.
The Debtors told the Court that they need to pay their prepetition
obligations to these employees, consisting of wages, salaries and
overtime pay, in order to preserve employee morale. The Debtors
say that low morale would result in unmanageable employee turnover
and cause immediate and pervasive damage to their ongoing business
operations.
According to the Debtors, accrued but unpaid wages and salaries
aggregate approximately $873,129 as of their bankruptcy filing.
The Debtors also estimate that, as of the Petition Date,
approximately $138,302.50 is owed to temporary-employment
agencies.
Apart from paying prepetition employee wages, the Debtors also
sought permission to continue providing benefits that they have
historically extended to their employees.
Headquartered in Reno, Nevada, Centrix Financial LLC provides
subprime auto loans. Centrix and its affiliates filed separate
Chapter 11 petitions on Sept. 19, 2006 (Bankr. Dist. Nev. Lead
Case No.: 06-50631). CMGN, LLC, another affiliate, filed a
separate Chapter 11 petition on Sept. 4, 2006. Bruce Thomas
Beesley, Esq., and Craig D. Hansen, Esq., at Beckley Singleton,
Chtd., represents the Debtors. The Debtors estimated more than
$100 million in assets and debts when they filed for bankruptcy.
IFC Credit Corp, Suntrust Leasing and Wells Fargo Equipment
Finance, three creditors of Centrix Financial filed involuntary
chapter 11 petition against the Debtors on Sept. 15, 2006 (Bankr
Dist. Colo. Case No:06-16403) The Creditors claim they are owed
more than $4.6 million. Lee M. Kutner, Esq., at Kutner Miller,
P.C., and David von Gunten, Esq., at Von Gunten Law LLC, represent
the petitioners.
CENTRIX FINANCIAL: Creditors' Meeting Scheduled on October 23
-------------------------------------------------------------
The U.S. Trustee for Region 17 will convene a meeting of Centrix
Financial LLC and its debtor-affiliates' creditors at 2:00 p.m.,
on Oct. 23, 2006, at Young Bldg, Rm 2110, in Reno, Nevada.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible officer of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Headquartered in Reno, Nevada, Centrix Financial LLC provides
subprime auto loans. Centrix and its affiliates filed separate
Chapter 11 petitions on Sept. 19, 2006 (Bankr. Dist. Nev. Lead
Case No.: 06-50631). CMGN, LLC, another affiliate, filed a
separate Chapter 11 petition on Sept. 4, 2006. Bruce Thomas
Beesley, Esq., and Craig D. Hansen, Esq., at Beckley Singleton,
Chtd., represents the Debtors. The Debtors estimated more than
$100 million in assets and debts when they filed for bankruptcy.
IFC Credit Corp, Suntrust Leasing and Wells Fargo Equipment
Finance, three creditors of Centrix Financial filed involuntary
chapter 11 petition against the Debtors on Sept. 15, 2006 (Bankr
Dist. Colo. Case No:06-16403) The Creditors claim they are owed
more than $4.6 million. Lee M. Kutner, Esq., at Kutner Miller,
P.C., and David von Gunten, Esq., at Von Gunten Law LLC, represent
the petitioners.
COLLINS & AIKMAN: Plan Filing Period Stretched to October 27
------------------------------------------------------------
The Honorable Steven W. Rhodes of the U.S. Bankruptcy Court for
the Eastern District of Michigan extends Collins & Aikman
Corporation and its debtor-affiliates' exclusive period to file a
Chapter 11 Plan until Oct. 27, 2006, and exclusive period to
solicit acceptances of that plan until Dec. 27, 2006.
Philip C. Dublin, Esq., at Akin Gump Strauss Hauer & Feld LLP, in
New York, told Judge Rhodes that the Unsecured Creditors Committee
has significant concerns with respect to the Debtors' Plan of
Reorganization. Among other things, the Committee objects to the
proposed treatment of unsecured creditors under the Plan.
To consensually resolve all material outstanding issues, the
Committee, the Debtors and their prepetition lenders have been
engaged in good-faith negotiations. Mr. Dublin related that while
the parties have been unable to reach a global settlement,
negotiations are continuing and the Committee is hopeful that a
consensual resolution may be reached.
The Committee is hopeful that during the additional 30-day
extensions to the exclusive periods, the parties will reach a
consensual resolution to their disputes.
Mr. Dublin states that if the parties are not successful in
resolving their differences during this period, it is unlikely
that the Committee will consent to further extensions of the
Debtors' exclusivity periods.
Headquartered in Troy, Michigan, Collins & Aikman Corporation
-- http://www.collinsaikman.com/-- is a global leader in cockpit
modules and automotive floor and acoustic systems and is a leading
supplier of instrument panels, automotive fabric, plastic-based
trim, and convertible top systems. The Company has a workforce of
approximately 23,000 and a network of more than 100 technical
centers, sales offices and manufacturing sites in 17 countries
throughout the world. The Company and its debtor-affiliates filed
for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case
No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP,
represents C&A in its restructuring. Lazard Freres & Co., LLC,
provides the Debtor with investment banking services. Michael S.
Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents
the Official Committee of Unsecured Creditors Committee. When the
Debtors filed for protection from their creditors, they listed
$3,196,700,000 in total assets and $2,856,600,000 in total debts.
(Collins & Aikman Bankruptcy News, Issue No. 41; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
COMPLETE RETREATS: Committee Wants Rule 2004 Exam on Abercrombie
----------------------------------------------------------------
The Official Committee of Unsecured Creditors in Complete Retreats
LLC and its debtor-affiliates' chapter 11 cases asks the U.S.
Bankruptcy Court for the District of Connecticut to:
(a) authorize it to serve document requests and a notice of
deposition upon Abercrombie & Kent, Inc., and to issue
subpoenas or other process to compel the production of
documents and A&K's attendance at an oral examination;
(b) direct A&K to respond to the document requests and
subpoenas within 30 days of service or a shorter period as
may be required by subpoena, court order or by the
parties' agreement; and
(c) direct A&K or its representatives to submit to an oral
examination upon reasonable notice.
A&K is a luxury adventure travel company with which certain of
the Debtors entered into licensing agreements since 2003,
Jonathan B. Alter, Esq., at Bingham McCutchen LLP, in Hartford,
Connecticut, notes. The Licensing Agreements allowed the Debtors
to use the A&K name, logo, trademark and servicemark to market
their vacation clubs.
Because of A&K's relationship with the Debtors, the Committee
believes that A&K has information that is highly relevant to the
Debtors' property, operations, management, and marketing efforts.
The Committee seeks discovery of these topics within the scope of
Bankruptcy Rule 2004(b) from A&K:
(a) Contracts, agreements, or arrangements between A&K and the
Debtors and documents relating to any decision by A&K to
enter into, modify, continue or terminate the contracts,
agreements, or arrangements;
(b) Information on the identity of persons who participated in
any decision by A&K to enter into, modify, continue or
terminate the contracts, agreements, or arrangements;
(c) Efforts, participation, oversight, or approval by A&K
relating to the marketing of the Debtors' business,
products, services or memberships;
(d) Information relating to A&K's referral or solicitation of
its members or customers to the Debtors;
(e) Information relating to the Debtors' referral or
solicitation of their members or customers to A&K;
(f) Information relating to the Debtors' use of the A&K name,
logo, trademark or servicemark;
(g) Representations made by or on behalf of the Debtors to any
third parties;
(h) Information relating to the Debtors' management,
operation, financing, or marketing;
(i) Information relating to the Debtors' financial condition;
(j) Information relating to payments, commissions, transfers
or consideration of any kind received by or due to A&K
from the Debtors;
(k) Communications between A&K and the Debtors, including
those relating to amounts due or claimed to be due from
the Debtors to A&K;
(l) Settlements between A&K and the Debtors; and
(m) Relationships between A&K and other companies relating to
the licensing and use of the A&K name, logo, trademark or
servicemark.
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)
COMPLETE RETREATS: Panel Requests Rule 2004 Exam on Robert McGrath
------------------------------------------------------------------
The Official Committee of Unsecured Creditors in Complete Retreats
LLC and its debtor-affiliates' chapter 11 cases seeks permission
from the U.S. Bankruptcy Court for the District of Connecticut to:
(a) serve document requests and a notice of deposition on
Robert L. McGrath, the Debtors' former president and chief
executive officer; and
(b) issue subpoenas or other process to compel the production
of documents and the attendance of Mr. McGrath at an oral
examination.
The Committee asks the Court to direct Mr. McGrath to:
(a) respond to the document requests and subpoenas within 30
days of service or a shorter period as may be required by
subpoena, court order or the parties' agreement; and
(b) submit to an oral examination upon reasonable notice.
A thorough examination of the Debtors' acts, conduct, assets,
operations and business is crucial to the Committee's
investigation, Jonathan B. Alter, Esq., at Bingham McCutchen LLP,
in Hartford, Connecticut, relates.
The Committee anticipates that it will obtain considerable
informal discovery and information from the Debtors on a
cooperative basis. The Committee, however, believes that the
Court's authorization to conduct formal discovery at this time is
essential for it to fulfill its responsibilities to the Debtors'
unsecured creditors and complete its investigation in a timely
fashion.
The Committee seeks discovery of these topics within the scope of
Bankruptcy Rule 2004(b) from Mr. McGrath:
(a) The nature, ownership, use, sale or other disposition of
the Debtors' property or assets;
(b) The Debtors' purchase of property or assets;
(c) The Debtors' management and operation, including the
marketing of any or all of the Debtors to members,
investors and third parties;
(d) The negotiation of, and entry into, contracts by and
between the Debtors and third parties, including contracts
with vendors, service providers and members;
(e) Any proposed or actual sale, use, transfer or other
disposition of the Debtors' property or assets;
(f) Any income, bonuses, compensation or transfer received or
derived from the Debtors;
(g) Any information regarding any accounts, whether foreign or
domestic, into which the Debtors' assets were deposited or
caused to be deposited by the Debtors;
(h) The distribution of the Debtors' property or property
that the Debtors claim to be exempt from distribution
under applicable law;
(i) Any dividends or other distributions, including the
granting of memberships from or by the Debtors;
(j) Any claim on property held or administered by the Debtors;
(k) Any agreement or transaction between or among the Debtors
and Mr. McGrath or any entity with which Mr. McGrath is
affiliated concerning the ownership, sale, use or
disposition of the Debtors' property or assets;
(l) All representations made by or on behalf of the Debtors to
third parties;
(m) All information concerning the financial condition of the
Debtors during relevant timeframes prior to the Petition
Date;
(n) All information concerning the Debtors' efforts with
regard to financing and the obtaining of credit;
(o) All information concerning lawsuits involving the Debtors;
(p) All information concerning distributions to companies
owned or controlled by the Debtors' employees, managers or
shareholders;
(q) All information relating to any consideration obtained by
Mr. McGrath, any entity or individual with whom Mr.
McGrath is related or affiliated and any entity with which
the person or entity is related or affiliated, of any
interest in property or asset that the Debtors might have
acquired in connection with their business; and
(r) All information relating to the use of the Debtors' funds,
assets or property for purposes other than for the
Debtors' benefit.
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)
COMPUCOM SYSTEMS: Moody's Rates Proposed $175 Million Notes at B2
-----------------------------------------------------------------
Moody's Investors Service assigned a first-time corporate family
rating of B2 to CompuCom Systems, Inc., and a B2 rating to its
proposed $175 million senior unsecured notes due 2014. The
ratings reflect both the overall probability of default of the
company, to which Moody's assigns a PDR of B2, and a loss-given-
default of LGD-4 for the senior notes. The net proceeds of this
offering will be used to permanently retire approximately
$58 million of notes payable, $50 million of senior subordinated
debt, repay its accounts receivable securitization facility by
approximately $18 million and pay a $45 million dividend to its
equity sponsor. The ratings outlook is stable.
CompuCom's B2 corporate family rating is constrained by the
company's
* year over year decline in procurement revenue at compounded
annual decline in excess of 8%,
* continued decline in gross margins for both the procurement
and service segments,
* the medium- to long-term potential risks of market entry by
competitors with greater financial resources, including
original equipment manufacturers selling direct,
* the significant use of debt proceeds for shareholder
dividend payments,
* customer concentration, and,
* modest free cash flow, which compare to I/T services peers
rated in the B2 category.
Collectively, these factors drive the overall B2 corporate family
rating assignment. In isolation, the company's pro forma leverage
(debt to EBITDA) of 4.1x times and moderate interest coverage
(EBIT to interest expense) of 2.3x times would suggest a rating in
the B1 category.
The ratings also consider CompuCom's unique combination of IT
service delivery capability and comprehensive procurement and
logistics service, stability provided by recurring revenues from
long-term service contracts, blue chip client base and potential
for operating margin expansion through cross-sell opportunities of
value-added service offerings into its existing client base.
The stable outlook reflects Moody's expectation that the company
will reduce its financial leverage and interest coverage metrics,
supported by a shift to higher value added IT services and
maintain superior service quality offset by further decline in
procurement revenue, gradual gross margin erosion of each segment,
working capital requirements and increasing competition.
These first-time ratings were assigned to CompuCom:
* Corporate Family Rating -- B2
* Probability of Default Rating -- B2
* $175 million Senior Notes due 2014 -- B2 (LGD-4, 50%)
Headquartered in Dallas, Texas, CompuCom Systems, Inc. is a
provider of I/T procurement and equipment outsourcing.
CRESCENT CAPITAL: Case Summary & Five Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Crescent Capital Investments LLC
P.O. Box 4112
Irvine, CA 92616
Bankruptcy Case No.: 06-13342
Type of Business: The Debtor filed for chapter 11 protection on
August 25, 2005 (Bankr. W.D. Wash. Case No. 05-
20974).
Chapter 11 Petition Date: September 28, 2006
Court: Western District of Washington (Seattle)
Judge: Samuel J. Steiner
Debtor's Counsel: Darrel B. Carter, Esq.
CBG Law Group PLLC
11100 Northeast 8th Street, Suite 380
Bellevue, WA 98004
Tel: (425) 283-0432
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's Five Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Ghazi Abu-Salem $265,000
P.O. Box 4112
Irvine, CA 92616
Jumdia Dababish $100,000
P.O. Box 4112
Irvine, CA 92616
Raven Estates, LLC $40,000
P.O. Box 5088
Irvine, CA 92616
Team 4 Engineering $10,000
5819 Northeast Minder Road
Poulsbo, WA 98370
Silverdale Water District Utility Bills $150
P.O. Box 90025
Bellevue, WA 98009
CSFB MORTGAGE: Moody's Lifts Ba3 Rating on Class C-B-4 Notes
------------------------------------------------------------
Moody's Investors Service has upgraded the ratings of forty-eight
tranches issued by CSFB Mortgage-Backed Pass-Through Certificates
in 2003. Moody's has also downgraded ratings of four classes from
such transactions and confirmed the ratings of two other tranches.
These actions are the result of a systematic review of all 2003
securitizations of adjustable rate collateral by CSFB Mortgage-
Backed Pass-Through Certificates.
All classes being upgraded have performed well in terms of payment
speeds and delinquencies in addition to retaining high levels of
credit enhancement. The upgraded classes backed by Alt-A
collateral also have the benefit of hard delinquency triggers
which have enabled the transaction to retain subordination and
continue sequential paydown. The classes being downgraded have
experienced high rates of delinquency with respect to the low
floor amounts of overcollateralization resulting from the
relatively small pool sizes at issuance.
Thes are the complete rating actions:
* Issuer: CSFB Mortgage-Backed Pass-Through Certificates,
Series 2003-AR2
-- Cl. C-B-1, upgraded to Aaa, previously Aa3,
-- Cl. C-B-2, upgraded to Aa3, previously A3,
-- Cl. C-B-3, upgraded to A2, previously Baa2,
-- Cl. C-B-4, upgraded to Baa2, previously Ba2.
* Issuer: CSFB Mortgage-Backed Pass-Through Certificates,
Series 2003-AR5
-- Cl. I-A-2, upgraded to Aaa, previously Aa1,
-- Cl. II-A-3, upgraded to Aaa, previously Aa1,
-- Cl. C-B-1, upgraded to Aaa, previously Aa3,
-- Cl. C-B-2, upgraded to Aa3, previously A3,
-- Cl. C-B-3, upgraded to A3, previously Baa3.
* Issuer: CSFB Mortgage-Backed Pass-Through Certificates,
Series 2003-AR9
-- Cl. I-A-3, upgraded to Aaa, previously Aa1,
-- Cl. C-B-1, upgraded to Aaa, previously Aa3,
-- Cl. C-B-2, upgraded to Aa3, previously A3,
-- Cl. C-B-3, upgraded to A3, previously Baa3,
-- Cl. III-M-1, confirmed Aa2.
* Issuer: CSFB Mortgage-Backed Pass-Through Certificates,
Series 2003-AR12
-- Cl. I-A-2, upgraded to Aaa, previously Aa1,
-- Cl. C-B-1, upgraded to Aaa, previously Aa3,
-- Cl. C-B-2, upgraded to Aa3, previously A3,
-- Cl. C-B-3, upgraded to A3, previously Baa3,
-- Cl. IV-M-1, upgraded to Aaa; previously: Aa2,
-- Cl. IV-M-2, downgraded to Baa3; previously: A2.
* Issuer: CSFB Mortgage-Backed Pass-Through Certificates,
Series 2003-AR15
-- Cl. II-A-2, upgraded to Aaa, previously Aa1,
-- Cl. C-B-1, upgraded to Aaa, previously Aa3,
-- Cl. C-B-2, upgraded to Aa3, previously A3,
-- Cl. C-B-3, upgraded to A3, previously Baa3.
* Issuer: CSFB Mortgage-Backed Pass-Through Certificates,
Series 2003-AR18
-- Cl. II-A-4, upgraded to Aaa, previously Aa1,
-- Cl. C-B-1, upgraded to Aaa, previously Aa2,
-- Cl. C-B-2, upgraded to Aa3, previously A3,
-- Cl. C-B-3, upgraded to A3, previously Baa3,
-- Cl. C-B-4, upgraded to Baa3, previously Ba3.
* Issuer: CSFB Mortgage-Backed Pass-Through Certificates,
Series 2003-AR20
-- Cl. II-A-4, upgraded to Aaa, previously Aa1,
-- Cl. C-B-1, upgraded to Aaa, previously Aa2,
-- Cl. C-B-2, upgraded to Aa3, previously A3,
-- Cl. C-B-3, upgraded to A3, previously Baa3,
-- Cl. C-B-4, upgraded to Baa3, previously Ba3,
-- Cl. IV-M-3, downgraded to Baa3; previously: A3.
* Issuer: CSFB Mortgage-Backed Pass-Through Certificates,
Series 2003-AR22
-- Cl. C-B-1, upgraded to Aaa, previously Aa2,
-- Cl. C-B-2, upgraded to A1, previously A2.
* Issuer: CSFB Mortgage-Backed Pass-Through Certificates,
Series 2003-AR24
-- Cl. C-B-1, upgraded to Aaa, previously Aa2,
-- Cl. C-B-2, upgraded to Aa3, previously A2,
-- Cl. C-B-3, upgraded to A3, previously Baa1,
-- Cl. C-B-4, upgraded to Baa3, previously Ba1,
-- Cl. VI-M-1, upgraded to Aaa; previously: Aa2,
-- Cl. VI-M-2, upgraded to Aa1; previously: A1.
* Issuer: CSFB Mortgage-Backed Pass-Through Certificates,
Series 2003-AR26
-- Cl. IX-M-1, upgraded to Aaa; previously: Aa2,
-- Cl. IX-M-2, upgraded to Aa1; previously: A1,
-- Cl. IX-M-3, downgraded to Baa1; previously: A3.
* Issuer: CSFB Mortgage-Backed Pass-Through Certificates,
Series 2003-AR28
-- Cl. C-B-1, upgraded to Aaa, previously Aa2,
-- Cl. C-B-2, upgraded to Aa3, previously A2,
-- Cl. VI-M-1, confirmed Aa2.
* Issuer: CSFB Mortgage-Backed Pass-Through Certificates,
Series 2003-AR30
-- Cl. C-B-1, upgraded to Aaa, previously Aa2,
-- Cl. C-B-2, upgraded to Aa3, previously A2,
-- Cl. C-B-3, upgraded to A2, previously Baa1,
-- Cl. C-B-4, upgraded to Baa3, previously Ba2,
-- Cl. VI-M-2, downgraded to A3; previously: A2.
DA-LITE SCREEN: 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. rental company sector this week, the
rating agency confirmed its B2 Corporate Family Rating for Da-Lite
Screen Company, Inc. Additionally, Moody's held its probability-
of-default ratings and assigned loss-given-default ratings on
these notes:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
$160 Million
Senior Unsecured
Notes B2 B2 LGD4 52%
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 Warsaw, Indiana, Da-Lite Screen Company Inc. manufactures
front and rear projection screens, overheads projectors and
tables, lecterns, communication cabinets, easels, flip charts, and
photographic accessories.
DANA CORP: Retirees' Committee Retains Stahl Cowen as Counsel
-------------------------------------------------------------
The Non-Union Retiree Committee of Dana Corporation, Inc. and
forty of its subsidiaries disclosed that Stahl Cowen Crowley LLC
has been selected to serve as its counsel.
The Stahl Cowen Crowley team will be led by Jon Cohen and Trent
Cornell. "This engagement is a testament to the national
leadership and extraordinary skills that Jon and Trent have
demonstrated representing retiree committees" said Scott
Schreiber, Chairman of Stahl Cowen Crowley's Bankruptcy and
Reorganization Practice.
Mr. Cohen and Mr. Cornell previously served as lead counsel to the
retiree committees in FV Steel Inc. and Intermet Inc. and their
debtor affiliates.
About Dana Corporation
Toledo, OH-based Dana Corp. -- http://www.dana.com/-- designs and
manufactures products for every major vehicle producer in the
world, and supplies drivetrain, chassis, structural, and engine
technologies to those companies. Dana employs 46,000 people in 28
countries. Dana is focused on being an essential partner to
automotive, commercial, and off-highway vehicle customers, which
collectively produce more than 60 million vehicles annually. The
company and its affiliates filed for chapter 11 protection on
Mar. 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). Corinne Ball,
Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and
Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black,
Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio,
represent the Debtors. Henry S. Miller at Miller Buckfire & Co.,
LLC, serves as the Debtors' financial advisor and investment
banker. Ted Stenger from AlixPartners serves as Dana's Chief
Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel LLP, represents the Official Committee of
Unsecured Creditors. Fried, Frank, Harris, Shriver & Jacobson,
LLP serves as counsel to the Official Committee of Equity Security
Holders. When the Debtors filed for protection from their
creditors, they listed $7.9 billion in assets and
$6.8 billion in liabilities as of Sept. 30, 2005.
DELPHI CORP: UnitedAuto CEO Mulls Steering Unit Purchase
--------------------------------------------------------
Roger Penske, chief executive officer of UnitedAuto Group Inc. and
former Delphi Corp. board member, is considering buying Delphi's
Steering unit, Bloomberg News reports, citing Automotive News.
Mr. Penske acquired Detroit Diesel Corp. from General Motors Corp.
in 1988 and later sold it to DaimlerChrysler AG in 2000,
Automotive News said, according to Bloomberg.
Mr. Penske's Penske Corporation recently acquired 492,185 shares
of common stock of UnitedAuto in exchange for shares of Penske
Corp. common stock valued at $10,308,985, in the aggregate,
according to filings with the Securities and Exchange Commission.
Based in Troy, Mich., Delphi Corporation -- http://www.delphi.com/
-- is the single largest global supplier of vehicle electronics,
transportation components, integrated systems and modules, and
other electronic technology. The Company's technology and
products are present in more than 75 million vehicles on the road
worldwide. The Company filed for chapter 11 protection on Oct. 8,
2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler
Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in
their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell
A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins
LLP, represents the Official Committee of Unsecured Creditors.
As of Aug. 31, 2005, the Debtors' balance sheet showed
$17,098,734,530 in total assets and $22,166,280,476 in total
debts. (Delphi Bankruptcy News, Issue No. 42; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
DELPHI CORP: Wants to File EDS & HP IT Agreements Under Seal
------------------------------------------------------------
Delphi Corporation and its debtor-affiliates intend to transform
their salaried workforce to ensure that their organizational and
cost structure is competitive and aligned with product portfolio
and manufacturing footprint.
This will allow the Debtors to reduce their selling, general, and
administrative expenses, John Wm. Butler, Jr., Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois, explains.
In furtherance of this goal, the Debtors have decided to undertake
an accelerated consolidation and outsourcing of their information
technology functions and to move to common technology processes
and systems. According to Mr. Butler, the outsourcing of IT
services will enable the Debtors to reduce their IT supplier base
from more than 100 regional based suppliers to fewer than 10
direct suppliers.
To achieve this goal, the Debtors have entered into agreements
with Electronic Data Systems Corporation and EDS Information
Services, LLC, and Hewlett Packard Company to provide IT
infrastructure services to the Debtors.
Mr. Butler relates that although a general description of the
agreements will be provided to certain parties-in-interest, the
agreements contain detailed descriptions of competitively
sensitive business information that may, if publicly disclosed,
detrimentally affect the competitiveness of the Debtors, EDS, and
HP as well as the ability of all three companies to negotiate
terms of future agreements.
In addition, the Agreements contain certain confidentiality
provisions that require the Debtors, EDS, and HP to maintain the
confidentiality of certain of the agreements' terms.
Therefore, to preserve the confidentiality of these sensitive
business terms, and to comply with the confidentiality provisions
in the Agreements, the Debtors seek permission from the U.S.
Bankruptcy Court for the Southern District of New York to file the
Agreements under seal.
Mr. Butler points out that disclosure of the terms contained in
the Agreements is not necessary for the protection of the public,
creditors of the Debtors, or third parties, because:
(a) whether the Debtors may enter into the Agreement is
subject to the Court's approval in any case; and
(b) the Debtors are prepared to provide complete copies of the
Agreements to (i) the U.S. Trustee, (ii) counsel to the
Creditors' Committee, and (iii) other parties, as approved
by the Court and as agreed by Delphi, EDS and HP.
Based in Troy, Mich., Delphi Corporation -- http://www.delphi.com/
-- is the single largest global supplier of vehicle electronics,
transportation components, integrated systems and modules, and
other electronic technology. The Company's technology and
products are present in more than 75 million vehicles on the road
worldwide. The Company filed for chapter 11 protection on Oct. 8,
2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler
Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in
their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell
A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins
LLP, represents the Official Committee of Unsecured Creditors.
As of Aug. 31, 2005, the Debtors' balance sheet showed
$17,098,734,530 in total assets and $22,166,280,476 in total
debts. (Delphi Bankruptcy News, Issue No. 41; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
DIAMOND ENTERTAINMENT: June 30 Balance Sheet Upside-Down by $1.7MM
------------------------------------------------------------------
Diamond Entertainment Corporation reported a $336,577 net loss on
$394,695 of net revenues for the three months ended June 30, 2006,
compared to a $301,128 net loss on $962,651 of revenues in 2005.
At June 30, 2006, the Company's balance sheet showed $1,949,567 in
total assets and $3,697,813 in total liabilities, resulting in a
$1,748,246 stockholders' deficit.
The Company's June 30 balance sheet also showed strained liquidity
with $1.4 million in total current assets available to pay
$3.8 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?129c
Going Concern Doubt
Pohl, McNabola, Berg and Company, LLP, raised substantial doubt
about Diamond Entertainment's ability to continue as a going
concern after auditing the Company's financial statements for the
years ended March 31, 2006 and 2005. The auditing firm pointed to
the Company's substantial losses and negative cash flows from
operations for the year ended March 31, 2006.
Based in Walnut, California, Diamond Entertainment Corporation,
dba e-DMEC, markets and sells a variety of DVD and videocassette
titles to the budget home video and DVD market. The Company's
wholly owned subsidiary, Jewel Products International Inc.,
manufactures and distributes general merchandise, children's toy
products and other sundry items from U.S. based importers or
directly from Asia for distribution to mass merchandisers in the
United States. During the years ended March 31, 2006 and 2005,
JPI was dormant and did not record sales of its products.
DOBSON COMMS: Declares Cash Dividend on Series F Preferred Stock
----------------------------------------------------------------
Dobson Communications Corporation declared a 6% cash dividend on
its outstanding Series F Convertible Preferred Stock. The
dividend will be payable on Oct. 15, 2006 to holders of record at
the close of business on Sept. 30, 2006.
Holders of shares of the Series F Convertible Preferred Stock will
receive a cash payment of $5.357 per share held on the record
date. The cash dividend covers the period April 15, 2005 through
Oct. 14, 2006. Cash dividends have an annual rate of 6% on the
$178.571 per share liquidation preference value of the preferred
stock.
Dobson Communications (Nasdaq: DCEL) -- http://www.bobson.net/--
provides wireless phone services to rural and suburban markets in
the United States. Headquartered in Oklahoma City, the Company
owns wireless operations in 16 states.
* * *
As reported in the Troubled Company Reporter on July 25, 2006,
Standard & Poor's Ratings Services revised its outlook for Dobson
Communications Corp. and its wholly owned operating subsidiary,
American Cellular Corp. to developing from negative and affirmed
the 'B-' corporate credit rating for both entities.
DUO DAIRY: Trustee Wants to Sell Debtor's Coop. Equity Accounts
---------------------------------------------------------------
Dennis W. King, the chapter 7 Trustee overseeing the liquidation
of Duo Dairy Ltd. LLP, seeks permission from the U.S. Bankruptcy
Court for the District of Colorado to sell the Debtor's interest
in equity accounts in cooperative associations free and clear of
liens and encumbrances.
The Trustee tells the Court that the Debtor was a member of these
cooperatives, with interests totaling $729,975, and equity account
balances of approximately $1,012,390 at Oct. 27, 2004:
Equity Account
Company Held Interest Balances
------- ------------- --------------
Dairy Farmers of
America Inc. $596,767 $852,390
Poudre Valley
Rural Electric
Association Inc. $112,438 $130,000
Agland Inc. $10,340 $30,000
Al Spinks, an individual, agreed to purchase and assume the
estate's interest in the Equity Interests for $228,379.
The Trustee informs the Court that he wasn't able to identify
other buyers who might be interested in purchasing the Equity
Interests. However, the Trustee said he will entertain competing
bids from other buyers.
The Court will convene a preliminary hearing on the Trustee's
request on Oct. 10, 2006.
Headquartered in Loveland, Colorado, Duo Dairy, LTD., LLP, filed
for chapter 11 protection on March 12, 2004 (Bankr. D. Colo. Case
No. 04-14827). The case was converted to chapter 7 on Oct. 27,
2004, and Dennis W. King was appointed as the Chapter 7 Trustee to
oversee the company's liquidation. Douglas C. Pearce II, Esq., at
Connolly, Rosania & Lofstedt, PC, represents the Chapter 7
Trustee. Patrick D. Vellone, Esq., at Allen & Vellone, P.C.
represents the Debtor. Alan K. Motes, Esq., and Carl A. Eklund,
Esq., represent the Official Committee of Unsecured Creditors.
When the Debtor filed for protection from its creditors, it
estimated assets and debts between $10 million and $50 million.
EDUCATE INC: Receives Non-Binding Purchase Proposal from Sterling
-----------------------------------------------------------------
Educate, Inc., disclosed that its Board of Directors received a
non-binding proposal from R. Christopher Hoehn-Saric, Chairman and
Chief Executive Officer of the Company, Peter J. Cohen, President
and Chief Operating Officer of the Company, and Christopher J.
Paucek, President, Educate Products, of the Company, Sterling
Capital Partners, LP, Sterling Capital Partners II, LP and certain
limited partners and co-investors of Sterling Capital Partners,
including Citigroup Private Equity, to acquire all of the
outstanding shares of the Company for $8 per share in cash.
The Board of Directors of the Company will be reviewing this
proposal. The Board of Directors cautions the Company's
shareholders and others considering trading in its securities that
the Board of Directors has just received the proposal and it has
not made any decision with respect to the Company's response to
the proposal.
About Educate
Educate, Inc. -- http://www.educate-inc.com/-- is a pre-K-12
education company delivering supplemental education services and
products to students and their families. Educate's consumer
services business, Sylvan Learning Center, operates the largest
network of tutoring centers, providing supplemental, remedial and
enrichment instruction. Its Educate Products business delivers
educational products including the Hooked on Phonics early
reading, math and study skills programs. Catapult Learning, its
school partnership business unit, provides educational services to
public and non-public schools.
* * *
As reported in the Troubled Company Reporter on Sept. 28, 2006,
Standard & Poor's Ratings Services placed its 'B+' corporate
credit rating on Educate Inc. on CreditWatch with negative
implications. The listing followed Educate's announcement that it
has received a non-binding proposal for the company to be acquired
by its management group and private equity firm Sterling Capital
Partners L.P. for about $350 million in cash.
As reported in the Troubled Company Reporter on May 17, 2006,
Moody's affirmed Educate, Inc.'s corporate family rating at B1.
Moody's also affirmed the B1 ratings for the Company's subsidiary,
Educate Operating Company LLC's $30 million senior secured
revolving credit facility and $160 million senior secured term
loan B. The outlook for the ratings is stable.
EXTENDICARE HEALTH: Launches $275 Million Senior Notes Offerings
----------------------------------------------------------------
Extendicare Inc.'s wholly owned U.S. subsidiary, Extendicare
Health Services, Inc., commenced cash tender offers for any and
all of its $150 million 9-1/2% Senior Notes Due 2010, CUSIP No.
302244AF5 and any and all of its $125 million 6-7/8% Senior
Subordinated Notes Due 2014, CUSIP No. 302244AH1.
In conjunction with the Offers, EHSI is also soliciting consents
to adopt proposed amendments to the indentures under which the
Notes were issued that would eliminate substantially all
restrictive covenants and certain event of default provisions.
Any holder who tenders Notes pursuant to the Offers must also
deliver a consent. The Offers and Solicitations are being made
upon the terms and subject to the conditions set forth in the
related Offer to Purchase and Consent Solicitation Statement dated
Sept. 22, 2006.
Holders who validly tender their Notes and deliver their consents
on or prior to 5:00 p.m., New York City time, on Oct. 5, 2006,
unless extended, will be eligible to receive the Total
Consideration.
The "Total Consideration" to be paid for each Note validly
tendered and accepted for payment on or prior to the Consent Date,
will be equal to (1) $1,050 for each $1,000 principal amount of
the 2010 Notes and (2) a price per $1,000 principal amount of the
2014 Notes that will be determined by pricing the 2014 Notes using
standard market practice to the first call date at a fixed spread
of 50 basis points over the bid-side yield on the 4.875% US
Treasury Notes due May 15, 2009, determined as of 2:00 p.m., New
York City time, on the Price Determination Date.
The Total Consideration for each Note so tendered includes a
consent payment of US$30 for each US$1,000 principal amount.
Holders whose valid tenders are received after the Consent Date,
but on or prior to 12:00 midnight, New York City time, on Oct. 20,
2006, will receive the Tender Offer Consideration but will not
receive the Consent Payment. The "Tender Offer Consideration" is
the Total Consideration less the Consent Payment.
EHSI expects to publicly announce the pricing information by 9:00
a.m., New York City time, on the business day following the Price
Determination Date.
Holders of Notes who validly tender and do not validly withdraw
their Notes in the Offers will also receive accrued and unpaid
interest from the last interest payment date to, but not
including, the applicable settlement date, payable on the
applicable settlement date.
EHSI's obligation to accept for purchase and to pay for the Notes
validly tendered and consents validly delivered, and not validly
withdrawn or revoked, pursuant to the Offers is subject to and
conditioned upon the satisfaction of or, where applicable, EHSI's
waiver of, certain conditions including (1) the tender of at least
a majority in principal amount of the outstanding Notes on or
prior to the Consent Date (and, thereby, obtaining the requisite
consents for the proposed amendments to the underlying Notes
indentures), (2) the receipt of proceeds from EHSI's anticipated
collateralized mortgage backed securitization and amended or new
revolving credit facility and (3) certain other general
conditions, each as described in more detail in the Offer to
Purchase.
EHSI has retained Lehman Brothers Inc. to serve as Dealer Manager
and Solicitation Agent and D.F. King & Co., Inc. to serve as
Information Agent and Tender Agent for the tender offers and
consent solicitations. Requests for documents may be directed to:
D.F. King & Co., Inc.
48 Wall Street, 22nd Floor
New York, NY 10005
Telephone (888) 567-1626 (toll free) or
(212) 269-5550 (collect)
Questions regarding the terms of the Offer to Purchase and Consent
Solicitations should be directed to Lehman Brothers Inc. at (800)
438-3242 (toll free) or (212) 528-7581 (collect), attention:
Liability Management Group.
About Extendicare Health Services
Extendicare Health Services, Inc. of Milwaukee, Wisconsin, is a
wholly owned subsidiary of Extendicare Inc., and is a major
provider of long-term care and related services in the United
States. Through its subsidiaries, Extendicare Inc. operates 439
long-term care facilities in the United States and Canada, with
capacity for 34,500 residents. As well, through its operations in
the United States, Extendicare offers medical specialty services
such as subacute care and rehabilitative therapy services, while
home health care services are provided in Canada. Extendicare
Inc. employs 37,600 people in North America.
* * *
As reported in the Troubled Company Reporter on June 21, 2006,
Standard & Poor's Ratings Services placed its ratings for
Extendicare Health Services Inc., including the 'BB-' corporate
credit rating, on CreditWatch with negative implications. This
follows the announcement of a reorganization of the parent
company, Extendicare Inc., into a Canadian REIT, and the spin-off
of all of Extendicare's assisted living businesses into a new,
separate public company.
FEDERAL MOGUL: Seeks Court Nod to Settle Ohio Environmental Claims
------------------------------------------------------------------
Federal-Mogul Corporation asks the U.S. Bankruptcy Court for the
District of Delaware to approve a settlement agreement with the
state of Ohio, resolving the Claims related to environmental sites
that certain U.S. Debtors either currently own, previously owned,
or sites to which they may have sent industrial waste containing
hazardous substances, to address the U.S. Debtors' actual and
potential environmental liabilities to Ohio.
As industrial manufacturers in the United States, the U.S. Debtors
have substantial environmental obligations governing their
operations under a myriad of federal and state environmental
statutes and regulations, including those of the state of Ohio,
Scotta E. McFarland, Esq., at Pachulski, Stang, Ziehl, Young,
Jones & Weintraub, P.C., in Wilmington, Delaware, relates. Under
these environmental laws, certain of the U.S. Debtors have actual
and potential liabilities.
Following the Debtors' filing for chapter 11 protection,
approximately 100 proofs of claim aggregating $252,000,000 were
filed against certain U.S. Debtors with respect to their existing
and potential environmental liabilities to Ohio. The Debtors have
been able to settle, without contested proceedings, the vast
majority of the claims.
Specifically, Ohio filed Claim Nos. 6442 to 6445 and 10417 to
10420, asserting:
-- unsecured priority claims totaling $23,905,167 for
postpetition past response costs and anticipated future
response costs; and
-- unsecured claims for $170,810 for prepetition past
response costs incurred.
Ms. McFarland tells Judge Fitzgerald that the Settlement, if
approved, will provide an immediately realizable benefit to the
U.S. Debtors and their estates by:
(1) allowing and liquidating all Claims with respect to all
Past and Future Response Costs and natural resource
damages with respect to a former facility in
McConnelsville, Ohio, with a liquidation compromising
$17,296,944 of priority Claims, as an Allowed Unsecured
Claim for $2,320,000;
(2) providing for withdrawal, with prejudice, of the State's
Claims relating to a facility in Caldwell, Ohio,
removing $6,608,223 in priority Claims;
(3) reaffirming certain U.S. Debtors' continuing obligations
with respect to sites those U.S. Debtors own upon
confirmation of the Debtors' Third Amended Plan of
Reorganization; and
(4) providing that, with respect to all other sites where a
prepetition or threatened release of a hazardous
substance has occurred that, those claims may be
liquidated post-confirmation, but will still be subject
to treatment as Unsecured Claims under the Plan.
The Settlement acknowledges that some liability may not yet be
known or quantifiable and that some sites have yet to be
discovered or linked to applicable U.S. Debtors.
Ms. McFarland notes that the U.S. Debtors may eventually recover
insurance proceeds with respect to the Liquidated Site. Under the
Settlement, Ohio may be entitled to a 50% pro rata portion of the
insurance proceeds recovered on account of the Liquidated Site,
which would be in addition to the distribution it is entitled to
under the Plan as an Allowed Unsecured Claim holder.
Ohio's receipt of those insurance proceeds is subject to:
-- a reduction in the amount of the potentially distributable
proceeds by the amount of the applicable U.S. Debtors'
cost of pursuit of the proceeds;
-- a limitation that payments will only be made to the State
to compensate for expenditures of Past and Future Response
Costs incurred and paid up to the date the applicable U.S.
Debtors notify Ohio of the recovery of any insurance
proceeds, but reasonably expected to be incurred before
2038 or five years following the insurance proceeds
recovery, whichever is later; and
-- a prohibition of further payment of recovered insurance
proceeds to Ohio if the payment would result in Ohio
receiving in excess of the lesser amount of:
* its Response Costs; or
* 100% payment on account of the Allowed Unsecured
Claim allocable to the Liquidated Site.
The Settlement expressly recognizes that the applicable U.S.
Debtors' liabilities and obligations at the Debtor-Owned Sites
will not be discharged pursuant to Section 1141 of the Bankruptcy
Code or in any way affected or waived by the Plan or the
Settlement. Thus, Ms. McFarland states that Ohio is free to
assert claims and pursue enforcement actions or other proceedings
against the U.S. Debtors with respect to the Debtor-Owned Sites.
The Debtor-Owned Site treatment applies to these Claims and
actions that may potentially be maintained by Ohio:
(a) Claims under the Comprehensive Environmental Response,
Compensation, and Liability Act, Chapters 3734, 3745 or
6111 of the Ohio Revised Code, or any other similar
federal or state law or common law, for postpetition
Response Costs incurred with respect to Response action
taken at a Debtor-Owned Site;
(b) Actions under CERCLA, Resource Conservation and Recovery
Act, Chapters 3734, 3745, or 6111 of the Ohio Revised
Code, or any other similar federal or state law or common
law seeking to compel the performance of a removal
action, remedial action, corrective action, closure or any
other cleanup action, or financial assurance at the
Debtor-Owned Site;
(c) Claims under CERCLA or Chapters 3734 or 6111 of the Ohio
Revised Code for the recovery of natural resource damages
arising from postpetition or ongoing releases of Hazardous
Substances at or which migrate or leach from a Debtor-
Owned Site; and
(d) Claims to recover civil penalties for violations due to
the applicable U.S. Debtors' postpetition conduct at a
Debtor-Owned Site.
Ms. McFarland says that all liabilities and obligations of the
applicable U.S. Debtors to Ohio with respect to the Additional
Sites will be discharged under Section 1141 pursuant to the terms
of a confirmed Plan. Ohio will also receive no distributions
under the Plan on account of liabilities and obligations.
In exchange for the discharge, the Settlement provides that Ohio
may require the applicable U.S. Debtors to pay Ohio or a designee
the amounts incurred if the state undertakes or oversees Response
activities in the ordinary course with respect to any Additional
Site.
In the event that any Claim regarding an Additional Site is
liquidated by settlement or judgment pursuant to the Settlement,
the applicable U.S. Debtors will satisfy the Determined Amount
within 30 days of the final effective date.
Ms. McFarland states that the Determined Amount will be satisfied
by providing the value of consideration that would have been
distributed if that amount had been an Allowed Unsecured Claim
under the Plan.
A full-text copy of the Settlement Agreement is available at no
charge at http://ResearchArchives.com/t/s?128e
Headquartered in Southfield, Michigan, Federal-Mogul Corporation
-- http://www.federal-mogul.com/-- is one of the world's largest
automotive parts companies with worldwide revenue of some
$6 billion. The Company filed for chapter 11 protection on
Oct. 1, 2001 (Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan
Esq., James F. Conlan Esq., and Kevin T. Lantry Esq., at Sidley
Austin Brown & Wood, and Laura Davis Jones Esq., at Pachulski,
Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the
Debtors in their restructuring efforts. When the Debtors filed
for protection from their creditors, they listed $10.15 billion in
assets and $8.86 billion in liabilities. Federal-Mogul Corp.'s
U.K. affiliate, Turner & Newall, is based at Dudley Hill,
Bradford. Peter D. Wolfson, Esq., at Sonnenschein Nath &
Rosenthal; and Charlene D. Davis, Esq., Ashley B. Stitzer, Esq.,
and Eric M. Sutty, Esq., at The Bayard Firm represent the Official
Committee of Unsecured Creditors. (Federal-Mogul Bankruptcy News,
Issue No. 113; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
FIRST BANCORP: Files Amended December 2004 Annual Report
--------------------------------------------------------
First BanCorp has filed its amended annual report on Form 10-K for
the year ended Dec. 31, 2004, with the Securities and Exchange
Commission.
In addition to the Corporation's consolidated financial statements
for 2004, the amended report also included financial statements
that restate previously reported financial results for 2000, 2001,
2002 and 2003.
For fiscal year 2004, net income decreased by approximately
$1.55 million or 0.87% of previously reported amounts.
The net cumulative effect of the restatement through Dec. 31, 2004
was a decrease in the Corporation's retained earnings and legal
surplus of approximately $17.1 million, which includes a
cumulative decrease of approximately $9.1 million for the 2004,
2003 and 2002 periods and approximately $8 million related to
periods prior to 2002. Approximately $15.1 million of the
$17.1 million represent non-cash adjustment related to derivatives
and broker placement fees.
"This filing culminates a painstakingly diligent accounting review
and significant milestone on First BanCorp's path back to normal
course financial reporting," Luis Beauchamp, president and chief
executive officer, said. "We deeply appreciate the dedication,
professionalism and support of our employees, shareholders,
directors, customers and outside advisors who have participated
and contributed to this exhaustive process."
The financial statements for the years ended 2000-2004 have been
restated as a result of the Corporation's Audit Committee review
of the accounting treatment of certain mortgage related
transactions and pass through trust certificates entered into with
Doral Financial Corporation and R&G Financial Corporation between
1999 and 2005 and of interest rate swaps that hedge the interest
rate risk related to the fixed interest rate mainly on the
Corporation's outstanding brokered certificates of deposit and
certain medium-term notes.
Doral and R&G Transaction
The mortgage-related transactions with Doral and R&G were
reflected in First BanCorp's previously issued financial
statements as purchases of residential mortgages, commercial
mortgage loans and pass-through trust certificates. The
restatement reflects the recharacterization of approximately
$3.8 billion in mortgage-related transactions as of Dec. 31, 2004
as commercial loans secured by mortgage loans and pass-through
trust certificates. The recharacterization of the mortgage-
related transactions with Doral and R&G did not impact the
Corporation's retained earnings as of Dec. 31, 2004.
Interest Rate Swaps
As part of the restatement process, the Corporation reviewed its
accounting for derivative instruments and concluded that it had
incorrectly accounted for interest rate swaps that mainly hedge
brokered certificates of deposit, and certain medium-term notes.
As a result, the Corporation corrected its previous accounting for
the transactions. The net cumulative non-cash pre-tax effect is a
decrease in retained earnings of approximately $26.3 million.
Other Accounting Adjustments
The Corporation also identified other accounting errors that
require additional adjustments and reclassifications. The
cumulative effect of all these other adjustments was an increase
in pre-tax income of approximately $862,000 through Dec. 31, 2004.
"In the aggregate, these adjustments have a minimal effect on our
stockholder's equity, and result in a decrease in 2004 net income
of less than one percent," Fernando Scherrer, executive vice
president and chief financial officer, said. "Moving forward, we
expect to file the quarterly reports for the interim periods on
Form 10-Q and the annual report on Form 10-K for the year ended
December 31, 2005 in the first quarter of 2007. Thereafter, First
BanCorp expects to file its quarterly reports for the
corresponding quarters of 2006."
Discussions with Staff of the SEC Enforcement Division
The Corporation disclosed that it is currently in discussions with
the Staff of the Enforcement Division of the Securities and
Exchange Commission to resolve the formal investigation commenced
by the SEC on Oct. 21, 2005. The Corporation expects that any
settlement with the SEC will include a monetary penalty to be paid
by the Corporation. Any agreements with the SEC staff will be
subject to the final approval of the Commissioners of the SEC.
First BanCorp (NYSE: FBP) -- http://www.firstbankpr.com/-- is the
parent corporation of FirstBank Puerto Rico, a state chartered
commercial bank with operations in Puerto Rico, the Virgin Islands
and Florida; of FirstBank Insurance Agency; and of Ponce General
Corporation. First BanCorp, FirstBank Puerto Rico and FirstBank
Florida, formerly UniBank, the thrift subsidiary of Ponce General,
all operate within U.S. banking laws and regulations.
* * *
As reported in the Troubled Company Reporter on March 22, 2006,
Fitch Ratings affirmed the ratings and Outlook for First Bancorp
and FirstBank Puerto Rico: long-term Issuer Default Rating
'BB'/short-term 'B'. The Rating Outlook remains Negative.
FISCHER IMAGING: Posts $587,000 Net Loss in Second Quarter of 2006
------------------------------------------------------------------
Fischer Imaging Corporation has filed its financial statements for
the second quarter ended June 30, 2006, with the Securities and
Exchange Commission.
For the three months ended June 30, 2006, the Company reported a
$587,000 net loss on $5,558,000 of total revenues compared with a
$9,107,000 net loss on $11,189,000 of total revenues for the same
period in 2005.
At June 30, 2006, the Company's balance sheet showed $5,155,000 in
total assets, $3,151,000 in total liabilities, and $2,004,000 in
total stockholders' equity.
Full-text copies of the Company's second quarter financials are
available for free at http://ResearchArchives.com/t/s?129f
Fischer Imaging Corporation -- http://www.fischerimaging.com/--
services and manufactures medical imaging systems for the
screening and diagnosis of disease. The Company began producing
general-purpose x-ray imaging systems in 1910 and is the oldest
manufacturer of x-ray imaging devices in the United States. The
Company filed for chapter 11 protection on Aug. 22, 2006 (Bankr.
D. Colo. Case No. 06-15611). Douglas W. Jessop, Esq., at Jessop &
Company, P.C., represents the Debtor in its restructuring efforts.
When it filed for protection from its creditors, it listed
$2,235,414 in total assets and $26,104 in total debts.
FORD MOTOR: Cuts 2,000 Salaried Worker Positions to Reduce Costs
----------------------------------------------------------------
Ford Motor Credit Company is consolidating and centralizing most
of its originations and servicing operations in the United States
to reduce costs and improve process efficiencies. At the same
time, the company said it is reducing its operating costs through
efforts that include salaried personnel reductions of about 2,000
positions in the United States and Canada.
This continues the company's global business transformation that
has been ongoing for more than a decade. "We have a history of
managing change effectively, and I'm confident the course we are
on will be equally successful," Mike Bannister, the company's
chairman and chief executive officer, said.
Ford Motor Credit will consolidate its remaining 59 U.S. branches
into six existing service centers, creating new business centers
that will manage originations, dealer credit and wholesale
operations in addition to the servicing functions already handled
today. Sales employees who work directly with dealers will remain
in local markets to maintain and enhance their strong dealer
connections. Completion of the branch consolidation is expected
by the end of 2007. A similar structure is being considered for
Ford Motor Credit's operations in Canada, which currently has
seven branches and one service center.
"As a company with strong business fundamentals, we believe this
new structure will further strengthen our operational
effectiveness," Mr. Bannister said. "Our strong collections
processes will continue while we enhance our originations of
automotive financing contracts. The North American restructuring
also will provide us with the flexibility and scale necessary to
adapt to any changes in business conditions."
"Many of the same Ford Motor Credit salespeople who call on our
dealers today will continue to do so going forward," A.J. Wagner,
president of Ford Motor Credit Company North America, said. "Our
salespeople have a unique understanding of our dealers' market and
business issues and are in the best position to provide them with
practical solutions to support their business."
In the last decade, Ford Motor Credit has restructured operations
in Australia, Germany, Japan, Mexico, North America and the UK
with a focus on reducing costs and improving process efficiencies.
Since 2003, Ford Motor Credit has closed nearly 110 branches in
the U.S. and Canada.
Personnel reductions will be achieved through attrition, early
retirements, voluntary separations and, if necessary, involuntary
separations. Currently, about 8,600 employees work in Ford Motor
Credit offices in the U.S. and Canada; the region accounts for 75
percent of the company's global business. As of June 30, 2006,
the company's global managed receivables were $151 billion.
Ford Motor Credit Company -- http://www.fordcredit.com/-- is an
automotive finance company, which has supported the sale of Ford
products since 1959. With about 14,000 employees, Ford Motor
Credit operates in 36 countries. Ford Motor Credit is an indirect
wholly owned subsidiary of Ford Motor Company. It provides
automotive financing for Ford, Lincoln, Mercury, Aston Martin,
Jaguar, Land Rover, Mazda and Volvo dealers and customers.
FORD MOTOR: Executive Says Jaguar Brand Not For Sale
----------------------------------------------------
Lewis Booth, head of Ford of Europe and the Premier Automotive
Group, or PAG, the organization under which all of Ford's European
brands are grouped, told industry analysts that the company has no
plans to sell its Jaguar luxury car brand at the moment, The
Associated Press relates.
According to the report, Mr. Booth revealed that Jaguar's status
could change as the company reviews all its assets.
As reported in the Troubled Company Reporter on Aug. 30, Sir
Anthony Bamford, JC Bamford Excavators Ltd.'s Chairman of the
Board, was looking at the possibility of buying the Jaguar brand
from Ford.
JC Bamford is a U.K.-based construction-machinery company. Mr.
Bamford said that the brand has potential although Jaguar needs to
cut ties with Land Rover for him to consider his plans further.
Jaguar is part of the Premier Automotive Group, which includes
other brands like Volvo, Land Rover and Aston Martin. In Ford's
second quarter results, the segment incurred $180 million net
loss. The Company's management said the decline in earnings in
the PAG segment primarily reflected unfavorable currency exchange
related to the expiration of favorable hedges, adjustments to
warranty accruals for prior model-year vehicles, mainly at Land
Rover and Jaguar, and lower market share at Volvo associated with
new model changeovers, offset partially by favorable product and
market mix and lower overhead costs. Mr. Booth also serves as an
executive vice president for PAG.
European Restructuring
Ford of Europe President and CEO John Fleming disclosed early this
month that Ford's strategic overhaul will not lead to a big revamp
in its profitable European operations, Reuters reports.
"We will continue to do what we always do -- we continue to refine
our weight and get efficiencies year over year -- but not a major
reorganization," Mr. Fleming said.
Reuters says the company has reduced the number of European
assembly plants to seven from 11 and cut 9,300 jobs since 2000
while increasing output. Ford's plants now operate at over 100
percent capacity, and employs around 66,000 staff including joint
ventures.
In August 2006, sales of Ford brand vehicles in 21 European
countries decreased 400 units to 95,300 vehicles and year-to-date
sales increased 17,000 units to nearly 1.14 million units.
In 2005, Ford of Europe earned $129 million.
As reported in the Troubled Company Reporter on Sept. 18, Ford
disclosed plans to further reduce its capacity and work force, and
ramp up new product introductions as it accelerates its North
America "Way Forward" turnaround plan.
Ford will cut its North American salaried-related work force by
about a third and offer buyout packages to all Ford and Automotive
Components Holdings hourly employees in the U.S. The reductions
will contribute significantly to reducing ongoing annual operating
costs by about $5 billion. In addition, Ford will renew 70% of
its North American product lineup by volume by the end of 2008.
About Ford Motor
Headquartered in Dearborn, Michigan, Ford Motor Company --
http://www.ford.com/-- manufactures and distributes
automobiles in 200 markets across six continents. With more
than 324,000 employees worldwide, the company's core and
affiliated automotive brands include Aston Martin, Ford, Jaguar,
Land Rover, Lincoln, Mazda, Mercury and Volvo. Its automotive-
related services include Ford Motor Credit Company and The Hertz
Corporation.
* * *
As reported in the Troubled Company Reporter on Aug. 22, 2006,
Dominion Bond Rating Service placed long-term debt rating of
Ford Motor Company Under Review with Negative Implications
following announcement that Ford will sharply reduce its North
American vehicle production in 2006. DBRS lowered on July 21,
2006, Ford Motor Company's long-term debt rating to B from BB,
and lowered its short-term debt rating to R-3 middle from R-3
high. DBRS also lowered Ford Motor Credit Company's long-term
debt rating to BB(low) from BB, and confirmed Ford Credit's
short-term debt rating at R-3(high).
Fitch Ratings also downgraded the Issuer Default Rating of Ford
Motor Company and Ford Motor Credit Company to 'B' from 'B+'.
Fitch also lowered the Ford's senior unsecured rating to
'B+/RR3' from 'BB-/RR3' and Ford Credit's senior unsecured
rating to 'BB- /RR2' from 'BB/RR2'. The Rating Outlook remains
Negative.
Standard & Poor's Ratings Services also placed its 'B+' long-
term and 'B-2' short-term ratings on Ford Motor Co., Ford Motor
Credit Co., and related entities on CreditWatch with negative
implications.
As reported in the Troubled Company Reporter on July 24, 2006,
Moody's Investors Service lowered the Corporate Family and
senior unsecured ratings of Ford Motor Company to B2 from Ba3
and the senior unsecured rating of Ford Motor Credit Company to
Ba3 from Ba2. The Speculative Grade Liquidity rating of Ford
has been confirmed at SGL-1, indicating very good liquidity over
the coming 12 month period. The outlook for the ratings is
negative.
FORUM HEALTH: Moody's Cuts Bond Rating Two Notches to Ba2
---------------------------------------------------------
Moody's Investors Service has downgraded the bond rating for Forum
Health (Youngstown, OH) to B1 from Ba2. The rating remains on
Watchlist for possible further downgrade.
The rating downgrade is primarily due to the system's lack of
progress on negotiating new agreements with its labor unions.
While the union contracts are not yet expiring and the unions are
under no obligation to negotiate new terms before renewal, Moody's
says agreeing on concessions is critical in order to ensure the
long-term viability of Forum Health.
Moody's recognizes that the system has made good progress over the
last several months on improving operating performance and
increase in collections. However, the rating agency believes the
improvement to date is only enough to sustain the system in the
short-term and will not allow Forum to make needed operating and
capital investments or absorb the impact of a new competitive
hospital opening in mid-2007.
This action affects Forum's Series 1997A bonds (MBIA insured, $79
million outstanding), Series 1997B bonds (MBIA insured with
standby bond purchase agreement from JPMorgan, $43 million
outstanding), and Series 2002A bonds ($40 million outstanding).
Forum also has $17 million of Series 2002B bonds outstanding that
are supported by a letter of credit from Fifth Third Bank and are
rated Aa1/VMIG1.
The continued Watchlist status reflects the system's significant
on-going challenges in executing a successful turnaround and the
resulting volatility of the overall credit position. Moody's
expects to reevaluate the rating within the next 90 days, as is
typical for the Watchlist period.
Legal Security: Gross revenue pledge and mortgages on the primary
facilities
Interest rate derivatives: None
Strengths
* Prominent market position in the consolidated two-system
Youngstown, Ohio area with about 44% market share in three
counties
* Adequate system-wide consolidated cash position with $134
million (98 days of cash on hand) as of July 31, 2006, which
has been maintained (aside from month-to-month timing
issues) from better collections and payables management
* Implementation of improvement initiatives, with the
assistance of Wellspring Partners, Ltd., that has resulted
in better operating performance over the last several months
Challenges
* Heavily unionized workforce with about 75% of employees in
unions, compared with a much smaller portion at Forum's
primary competitor. We believe Forum will need to secure
concessions from the unions in order to ensure the system's
long-term financial viability
* Capital needs in order to remain competitive. Despite
improvement, operating performance at levels that are not
strong enough to sustain operations and investment long-term
* Competition from a financially strong and equally-sized
hospital system, which is building a new hospital, and from
physicians, who are competing heavily for outpatient
services
* Economically weak service area, which is contributing to
higher self-pay and charity care as well as payer mix shifts
to less-profitable insurance plans
* Significant and multi-year declines in inpatient and
outpatient surgeries from increased competition
* Liquidity risk associated with two bank agreements,
supporting a total of $60 million in debt, which were
extended for a year but require waivers for covenant
violations and will be subject to renewal risk at the end of
2006
Recent developments
Forum continues the process of negotiating with its unions prior
to the expiration of the collective bargaining agreements to
obtain wage and benefit concessions, work rule changes, and other
contractual revisions; progress on this front has been very slow
and no agreements have been made. Without these concessions,
Forum will continue to be competitively disadvantaged as the
system's competitor does not have unions and has a significantly
lower labor cost structure.
Since July, Forum's operating performance, cash position, and
collections have been maintained at an improved level as a result
of management's work with Wellspring Partners on a restructuring
effort that includes staff reductions, non-union benefit cost
savings, limited capital spending, and other efforts to control
expenditures and improve the revenue cycle. June continued the
breakeven performance achieved in the earlier months. Forum
reported an operating loss of $2.7 million in July (prior to
restructuring costs), which was somewhat expected during summer
months when volumes are historically lower and productivity is
typically down. Unrestricted cash has generally remained stable,
excluding month-to-month timing issues.
While Moody's recognize the recently improved financial
performance, it continues to be concerned that Forum will continue
to face long-term operating challenges, as the system deals with
several immediate challenges. These include a weak local economy,
aggressive competition from Humility of Mary Health Partners' St.
Elizabeth Health Center and St. Joseph Health Center (which are
members of Aa3-rated Catholic Healthcare Partners, CHP), the
scheduled opening of a new hospital in the third quarter of 2007
by Humility of Mary; physician competition for profitable
outpatient services, and high labor costs as reportedly compared
to the local CHP facilities that operate largely free of unions.
Forum is also negotiating forbearance agreements with MBIA and
JPMorgan to restructure covenants and extend agreements; Forum has
reached a forbearance agreement with Fifth Third through December
1, 2006.
Forum had signed a letter of intent for an asset purchase with
Community Health Systems in August; CHS terminated the letter of
intent on September 20, 2006.
Outlook
The continued Watchlist status reflects the system's significant
on-going challenges in executing a successful turnaround and the
resulting volatility of the overall credit position. Moody's
expect to reevaluate the rating within the next 90 days, as is
typical for the Watchlist period.
What could change the rating--up
Significant improvement in operating performance with evidence of
ability to sustain and meet budgets, growth in unrestricted cash,
stability in volumes, demonstration of an ability to meet capital
requirements to remain competitive, the successful renegotiation
of collective bargaining agreements
What could change the rating--down
Continued operating losses, an increase in debt to finance a new
hospital or other capital needs, decline in unrestricted cash,
further notable declines in volumes, inability to achieve targeted
union concessions
Key indicators
* Assumptions & Adjustments:
-- Based on financial statements for Forum Health
-- First number reflects audit year ended December 31, 2004
-- Second number reflects unaudited 12-month financial
statements ended December 31, 2005
--Investment returns smoothed at 6% unless otherwise noted
* Inpatient admissions: 30,693; 32,253
* Total operating revenues: $499.4 million; $503.8 million
* Moody's-adjusted net revenue available for debt service:
$31.1 million; $3.5 million
*Total debt outstanding: $184.5 million; $181.9 million
* Maximum annual debt service (MADS): $14.6 million;
$14.5 million
* MADS coverage with reported investment income: 2.6 times;
0.0 times
* Moody's-adjusted MADS coverage with normalized investment
income: 2.4 times; 0.2 times
* Debt-to-cash flow: 7.2 times; negative
* Days cash on hand: 94 days; 89 days
* Cash-to-debt: 67%; 69%
* Operating margin: -1.8%; -7.9%
* Operating cash flow margin: 4.7%; -1.1%
Rated debt
* Series 1997A ($79million): Aaa; B1 underlying rating; MBIA
insured
* Series 1997B ($43million): Aaa/VMIG1; B1 underlying rating;
MBIA insured, SBPA JPMorgan (expiration January 15, 2007)
* Series 2002A ($40million): B1
* Series 2002B ($17million): Aa1/VMIG1; supported by Fifth
Third letter of credit (expiration January 15, 2007)
Contact
* Issuer: Douglas Womer, Interim Chief Financial Officer,
Forum Health (330) 884-1080
FV STEEL: Judge Kelly Rejects "Judicial Estoppel" Claim Objection
-----------------------------------------------------------------
Reorganized FV Steel and Wire Co. and Keystone Consolidated
Industries, Inc., objected to a $380,000 proof of claim filed by
Nicole Clark related to a complaint she filed with the Equal
Employment Opportunities Commission claiming that Keystone
discriminated against and harassed her on the basis of her race
and gender, and that Keystone terminated her in retaliation for
having complained about the discrimination, after discovering that
Ms. Clark failed to schedule that claim as an asset in her
personal chapter 7 bankruptcy case. The Reorganized Debtors argue
that Ms. Clark's claim proof of claim should be disallowed on the
basis of judicial estoppel.
In a decision published at 2006 WL 2536445, the Honorable Susan V.
Kelly says judicial estoppel does not bar Ms. Clark's claim
notwithstanding her failure to schedule it as an asset in her
chapter 7 case. Judge Kelly says there's no evidence Ms. Clark
intended to deceive the bankruptcy court. When she filed for
bankruptcy, Judge Kelly observes, Ms. Clark had not yet received
any indication from the EEOC that it would treat her claim
favorably, so that any recovery must have seemed extremely remote
and unlikely. The EEOC sent its determination letter over a year
after Ms. Clark received her discharge, and by that time, FV Steel
was in bankruptcy.
Judge Kelly makes it clear that Ms. Clark's claim belongs to her
bankruptcy estate (Bankr. C.D. Ill. Case No. 02-85380), and any
recovery on account of her discrimination claim will be used by
the Chapter 7 Trustee in her bankruptcy case to pay her creditors
-- who are now likely to receive a significant dividend. Judge
Kelly notes that Ms. Clark advised her Chapter 7 Trustee about her
disclosure omission as soon as she discovered it, and her Chapter
7 Trustee has reopened her bankruptcy case to include the claim
and employed an attorney to pursue it.
The Chapter 7 Trustee serving in Ms. Clark's bankruptcy case is
represented by:
Patricia C. Benassi, Esq.
Athena M. Herman, Esq.
BENASSI & BENASSI, P.C.
300 N.E. Perrt Ave.
Peoria, IL 61603
Telephone (309) 674-3556
Headquartered in Dallas, Texas, Keystone Consolidated Industries,
Inc., makes carbon steel rod, fabricated wire products, including
fencing, barbed wire, welded wire and woven wire mesh for the
agricultural, construction and do-it-yourself markets. The
Company and its debtor-affiliates filed for chapter 11 protection
on February 26, 2004, (Bankr. E.D. Wisc. Case No. 04-22421).
The Bankruptcy Court confirmed the Debtors' Third Amended Plan on
August 10, 2005. David L. Eaton, Esq., at Kirkland & Ellis LLP,
and Bruce G. Arnold, Esq., Daryl L. Diesing, Esq., Patrick B.
Howell, Esq., and Daniel J. McGary, Esq., at Whyte Hirschboeck
Dudek S.C., represent the Reorganized Debtors. When the Debtors
filed for protection from their creditors, they listed
$196,953,000 in total assets and $365,312,000 in total debts.
GALVEX HOLDINGS: Section 341(a) Meeting Scheduled on November 6
---------------------------------------------------------------
Diana G. Adams, the United States Trustee for Region 2, will
convene a meeting of Galvex Holdings Limited's creditors at 11:00
a.m., on Nov. 6, 2006, at the Second Floor of the Office of the
United States Trustee, 80 Broad Street in New York. This is the
first meeting of creditors required under Section 341(a) in all
bankruptcy cases.
This is the first meeting of creditors after the Debtor's
chapter 11 case has been converted to a chapter 7 liquidation
proceeding.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Headquartered in New York City, New York, Galvex Holdings
Limited -- http://www.galvex.com/-- and its affiliates operate
the largest independent galvanizing line in Europe. The Debtors
have offices in New York, Tallinn, Bermuda, Finland, Ukraine,
Germany and the United Kingdom. The company and four of its
affiliates filed for chapter 11 protection on Jan. 17, 2006
(Bankr. S.D.N.Y. Lead Case No. 06-10082). Galvex Capital, LLC,
is represented by David Neier, Esq., at Winston & Strawn LLP,
and Gerard DiConza, Esq., at DiConza Law, P.C. Galvex Holdings
Ltd. and the other debtor-affiliates are represented by David
Neier, Esq., at Winston & Strawn LLP, and Lori R. Fife, Esq.,
Marcia L. Goldstein, Esq., and Shai Waisman, Esq., at Weil,
Gotshal & Manges, LLP. John P. McNicholas, Esq., and Thomas R.
Califano, Esq., at DLA Piper Rudnick Gray Cary US LLP, represent
the Official Committee of Unsecured Creditors. When the Debtors
filed for protection from their creditors, they estimated assets
and debts of more than $100 million. On Aug. 30, 2006, Judge
Drain converted the chapter 11 case of Galvex Holdings to a
chapter 7 liquidation proceeding. John S. Pereira is the Debtor's
Chapter 7 Trustee.
GLOBAL HOME: Has Until December 6 to File Chapter 11 Plan
---------------------------------------------------------
The Honorable Kevin Gross of the U.S. Bankruptcy Court for the
District of Delaware extended Global Home Products, LLC, and its
debtor-affiliates' exclusive right to file a chapter 11 plan until
Dec. 6, 2006.
Judge Gross also extended, until Feb. 6, 2007, the Debtors'
exclusive right to solicit acceptances of that plan.
The Debtors' chapter 11 cases have been pending for five months.
In that period, the Debtors have completed the transition to
operate as chapter 11 debtors-in-possession, prepared and filed
their Schedules and Statements, sold substantially all of their
Burnes assets, sold substantially all of their WearEver assets,
and responded with the Official Committee of Unsecured Creditors.
Currently, the Debtors are devoting a significant amount of time
in the analysis and litigation of administrative and reclamation
claims. The Debtors are actively analyzing information relevant
to the reorganization of their Anchor Hocking Business.
Headquartered in Westerville, Ohio, Global Home Products, LLC
-- http://www.anchorhocking.com/and http://www.burnesgroup.com/
-- sells houseware and home products and manufactures high
quality glass products for consumers and the food services
industry. The company also designs and markets photo frames,
photo albums and related home decor products. The company and
16 of its affiliates, including Burnes Puerto Rico, Inc., and
Mirro Puerto Rico, Inc., filed for Chapter 11 protection on
April 10, 2006 (Bankr. D. Del. Case No. 06-10340). Laura Davis
Jones, Esq., Bruce Grohsgal, Esq., James E. O'Neill, Esq., and
Sandra G.M. Selzer, Esq., at Pachulski, Stang, Ziehl, Young,
Jones & Weintraub LLP, represent the Debtors. Bruce Buechler,
Esq., at Lowenstein Sandler, P.C., and David M. Fournier, Esq., at
Pepper Hamilton LLP represent the Official Committee of Unsecured
Creditors. Huron Consulting Group LLC gives financial advice to
the Committee. When the company filed for protection from their
creditors, they estimated assets between $50 million and
$100 million and estimated debts of more than $100 million.
GLOBAL HOME: Court Sets November 15 as Claims Bar Date
------------------------------------------------------
The Honorable Kevin Gross of the U.S. Bankruptcy Court for the
District of Delaware set Nov. 15, 2006, as the deadline for all
creditors owed money by Global Home Products, LLC, and its debtor-
affiliates on account of claims arising prior to April 10, 2006,
to file their proofs of claim.
Creditors must file written proofs of claim on or before the
November 15 Claims Bar Date and those forms must be delivered to:
Clerk of the Bankruptcy Court
District of Delaware
824 Market Street, 3rd Floor
Wilmington, DE 19801
All governmental units must file their proofs of claim by Nov. 15,
2006.
The Administrative Claims Bar Date is also Nov. 15, 2006.
Headquartered in Westerville, Ohio, Global Home Products, LLC
-- http://www.anchorhocking.com/and http://www.burnesgroup.com/
-- sells houseware and home products and manufactures high
quality glass products for consumers and the food services
industry. The company also designs and markets photo frames,
photo albums and related home decor products. The company and
16 of its affiliates, including Burnes Puerto Rico, Inc., and
Mirro Puerto Rico, Inc., filed for Chapter 11 protection on
April 10, 2006 (Bankr. D. Del. Case No. 06-10340). Laura Davis
Jones, Esq., Bruce Grohsgal, Esq., James E. O'Neill, Esq., and
Sandra G.M. Selzer, Esq., at Pachulski, Stang, Ziehl, Young,
Jones & Weintraub LLP, represent the Debtors. Bruce Buechler,
Esq., at Lowenstein Sandler, P.C., and David M. Fournier, Esq., at
Pepper Hamilton LLP represent the Official Committee of Unsecured
Creditors. Huron Consulting Group LLC gives financial advice to
the Committee. When the company filed for protection from their
creditors, they estimated assets between $50 million and
$100 million and estimated debts of more than $100 million.
GLOBAL POWER: Files Voluntary Chapter 11 Petition
-------------------------------------------------
After the closing of business, Global Power Equipment Group Inc.
and all of its U.S. subsidiaries, including Williams Industrial
Services Group, L.L.C., Braden Manufacturing, L.L.C. and Deltak,
L.L.C., commenced Chapter 11 cases in the U.S. Bankruptcy Court
for the District of Delaware to reorganize their financial affairs
and address the ongoing cash drain from Deltak's Heat Recovery
Steam Generator business.
The Company believes that the Williams and Braden businesses are
fundamentally sound and intends to continue to operate those
businesses without interruption. The Company anticipates
obtaining Court authority by Monday, October 2, to access over $20
million of cash on hand as needed to ensure that Williams' and
Braden's ongoing operations are adequately funded. Braden will
also seek limited accommodations from its customers to ensure
completion of all current projects.
Deltak, which notified its employees of a substantial initial
reduction in its workforce prior to the filing, will begin an
orderly wind down of its HRSG business, unless it is able to
obtain material concessions from its customers regarding the terms
on which it would complete its major ongoing projects. Deltak's
Specialty Boiler business will continue operations, subject to
obtaining immediate accommodations from certain of its customers.
The Company's foreign subsidiaries in Asia, Europe and Mexico are
not included in the Chapter 11 filings. Their businesses will
continue as usual without oversight by the U.S. Bankruptcy Court.
"We have been actively exploring options to recapitalize our
businesses for the last nine months," said Larry Edwards, the
Company's President and Chief Executive Officer. "Ultimately,
this effort led us to the difficult conclusion that Chapter 11
would provide the best opportunity to maximize value for all of
our stakeholders."
The Company has experienced escalating losses related to large
scale HRSG projects within Deltak. These losses, coupled with
Global Power's inability to access its credit facility, have
resulted in the Company's liquidity recently becoming
significantly constrained. As a result, the Board of Directors
concluded, after consultation with its advisors, that the
interests of the Company's stakeholders would be best served by
reorganizing under Chapter 11 of the U.S. Bankruptcy Code.
Global Power said it has initiated a thorough evaluation of all
aspects of its business operations and is undertaking a full
review of its strategic alternatives to maximize value for all its
stakeholders. The Company anticipates additional workforce
reductions in its subsidiaries, excluding Williams, as part of the
reorganization. The Company expects to obtain Court approval to
continue to pay its remaining employees all regular compensation
and health and other benefits in the future.
"The Board of Directors, the senior management team and I greatly
appreciate the continued loyalty and support of our employees,"
said Mr. Edwards.
Global Power noted that there is no assurance as to what value, if
any, will be ascribed in the Chapter 11 cases to Global Power's
existing common stock. Accordingly, the Company urges that the
appropriate caution be exercised with respect to existing and
future investments in the stock as the value and prospects are
highly speculative.
Global Power's legal advisor in the Chapter 11 filing is White &
Case LLP. Alvarez & Marsal is providing the Company with financial
advisory services.
Completion of Jones Day Review
Separately, as previously announced, the Audit Committee of the
Board of Directors engaged Jones Day, an international law firm,
to conduct a review of cost reporting practices within Deltak's
HRSG business. Jones Day reported its findings to the Audit
Committee and to the Company's external auditors,
PricewaterhouseCoopers LLP. Although Jones Day highlighted
certain control deficiencies with the cost reporting processes and
systems, there was no conclusion of fraud or any pattern of
wrongdoing identified.
Officer Resignation
Separately, the Company reported that Mardi de Verges, Senior Vice
President and CFO-Elect resigned effective Sept. 18, 2006.
About Global Power Equipment Group
Based in Tucson, Oklahoma, Global Power Equipment Group Inc.
(NYSE: GEG) -- http://www.globalpower.com/-- is a design,
engineering and manufacturing firm providing a broad array of
equipment and services to the global energy, power infrastructure
and process industries. The Company designs, engineers and
manufactures a comprehensive portfolio of equipment for gas
turbine power plants and power-related equipment for industrial
operations, and has over 30 years of power generation industry
experience. The Company's equipment is installed in power plants
and industrial operations in more than 40 countries on six
continents. In addition, the Company provides routine and
specialty maintenance services to nuclear, coal-fired, fossil, and
hydroelectric power plants and other industrial operations.
GLOBAL POWER: Case Summary & 30 Largest Unsecured Creditors
-----------------------------------------------------------
Lead Debtor: Global Power Equipment Group Inc.
aka GEEG, Inc.
6120 South Yale, Suite 1480
Tulsa, OK 74136
Bankruptcy Case No.: 06-11045
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Global Power Professional Services, L.L.C. 06-11046
Braden Manufacturing, L.L.C. 06-11047
Braden Construction Services, Inc. 06-11048
Deltak Construction Services, Inc. 06-11049
Deltak, L.L.C. 06-11050
Williams Industrial Services Group, L.L.C. 06-11051
Williams Industrial Services, LLC 06-11052
Williams Specialty Services, LLC 06-11053
Williams Plant Services, LLC 06-11054
WSServices, LP 06-11055
Type of Business: The Debtor is a provider of power generation
equipment and maintenance services for its
customers in the domestic and international
energy, power and infrastructure and service
industries. It designs, engineers and
manufactures a range of heat recovery and
auxiliary equipment primarily used to enhance
the efficiency and facilitate the operation of
gas turbine power plants as well as for other
industrial and power-related applications.
See http://www.globalpower.com/
Chapter 11 Petition Date: September 28, 2006
Court: District of Delaware (Delaware)
Debtor's Counsel: Jeffrey M. Schlerf, Esq.
Kathryn D. Sallie, Esq.
The Bayard Firm
222 Delaware Avenue, Suite 900
Wilmington, DE 19801
Tel: (302) 655-5000
Fax: (302) 658-6395
Financial Data as of September 30, 2005:
Total Assets: $381,131,000
Total Debts: $123,221,000
Debtors' Consolidated List of 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Steelhand Investments Ltd. Subordinate $27,875,835
c/o HBK Investments L.P. convertible debt
Attn: Legal Department
300 Crescent Court, Ste. 700
Dallas, TX 75201
Kings Road Investments Ltd. Subordinate $27,875,835
c/o Polygon Investment convertible debt
Partners LLP
598 Madison Avenue, 14th Fl.
New York, NY 10022
D.B. Zwim Special Subordinate $6,194,630
Opportunities Fund, Ltd.
c/o D.B. Zwim & Co., L.P.
745 Fifth Avenue, 18th Fl.
New York, NY 10151
HCM/Z Special Opportunities Subordinate $6,194,630
LLC convertible debt
c/o D.B. Zwim & Co., L.P.
745 Fifth Avenue, 18th Fl.
New York, NY 101511
D.B. Zwim Special Subordinate $3,097,315
Opportunities convertible debt
c/o D.B. Zwim & Co., L.P.
745 Fifth Avenue, 18th Fl.
New York, NY 10151
AARDING BV Trade $2,142,966
Industrieweg 59 8070 CS
Nunspeet, Holland
Tepat Teknik Sdn. Bhd. Trade $1,930,434
Lot 1, Jalan Halba 16/16
40000 Shah Alam
Selangar Darul Ehsan
Malaysia
Coen Company Inc. / DE Jong Trade $1,607,197
Coen B.V.
S Gravelandseweg 390
3125 BK Schiedam
Netherlands, 3125 BK
Scott Process Systems, Inc. Trade $1,305,524
1160 Sunnyside St.
Hartville, OH 44632
Fan Group Inc. Trade $1,199,459
1701 Terminal Rd., Ste. B
Niles, MI 49120
Turner Industries Group LLC Trade $1,175,147
1700 S. Westport Drive
Port Allen, LA 70767
Edgen Alloy Products, LLC Trade $1,018,493
3750 Stern Avenue
St. Charles, IL 60174
Geriach Trade $870,836
Post bus 470 5600 AL
Eindhuven, Denmark
PricewaterhouseCoopers LLP Trade $850,000
300 Madison Avenue
New York, NY 10017
Guangzhou Delsun Stl. Str. Trade $847,456
Co.
30 Jinxiu Road, West Section
Guangzhou Econ. Tech. Devt.
Dist.
Guangzhou, Guandong
China 510730
Edmonton Exchanger & Mfg. Trade $739,748
Ltd.
5545 89 St.
Edmonton, AB T6E 5W9
Canada
McBride Electric Inc. Trade $703,395
P.O. Box 51837
Los Angeles, CA 90051
Cormetech, Inc. Trade $609,520
5000 International Drive
Durham, NC 27712
Control Components Inc. Trade $495,750
22591 Avenida Empresa
Rencho Santa Margarita
CA 92688
Emerachem LLC Trade $492,048
2575 Cherabala Blvd.
Knoxville, TN 37932
Fabricom GTI Major Projects Trade $465,540
Apolloweg, 15 4782 SB
Moerdijk, The Netherlands
Cogburn Bros. Inc. Trade $457,993
3300 Faye Road
Jacksonville, FL 32226
Englobal Systems Inc. Trade $438,748
P.O. Box 671422
Dallas, TX 75267
Clarage Trade $430,165
5959 Trention Lane N
Minneapolis, MN 55442
Stinnett & Associates Trade $400,000
8801 South Yale, Ste. 330
Tulsa, OK 74137
APV North America Inc. Trade $394,702
105 Crosspoint Pkwy.
Getzville, NY 14068
Alstrom Trade $390,714
Estrada Nacional N10-Mitrena
Setubal, Portugal 2910-738
Southeast Texas Ind Inc. Trade $387,881
P.O. Box 1449
Buna, TX 77612
Basic Industries Inc. Trade $373,874
9139 Wallisville Road
Houston, TX 77029
Nicholson & Hall Corp. Trade $373,497
41 Columbia Street
Buffalo, NY 14203
GRANT PRIDECO: 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 oilfield service and refining and marketing
sectors this week, the rating agency confirmed its Ba1 Corporate
Family Rating for Grant Prideco Inc. Additionally, Moody's
affirmed its Ba1 rating on the company's 6.125% Senior Unsecured
Guaranteed Global Notes Due 2015 and assigned the debentures an
LGD4 rating suggesting noteholders will experience a 55% 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 Houston, Texas, Grant Prideco Inc. provides drill
bits and related equipment. The company also makes engineered
tubular products for oil field exploration and development,
including drill pipe and drill stem products, large-diameter
casings, tubing and connections, and risers. Grant Prideco offers
sales, technical support, repair, and field services to customers
worldwide. The company was spun off by drilling equipment maker
Weatherford International in 2000.
GREENMAN TECH: Upgrades Iowa Operations Equipment for $950,000
--------------------------------------------------------------
GreenMan Technologies Inc. reported a $950,000 equipment upgrade
to its Des Moines, Iowa crumb rubber processing capacity. The
capital investment was funded through long term debt provided by
the State of Iowa Department of Natural Resources and our senior
secured lender, Laurus Master Fund, Ltd.
"The installation of a new Granutech Powderizer system in Iowa
will allow us to process almost 5 times more of our existing crumb
rubber products into smaller particle sizes with higher margins
used in safety playground tiles, running tracks, football fields,
soccer fields, equestrian arenas and public walkways" Lyle Jensen,
GreenMan's CEO, stated. "These higher value markets represent
several of the fastest growing segments of the crumb rubber market
today."
"The Iowa upgrade is a prime example of Step 4 in our Turnaround
Plan which focuses on upgrading capacity and improving gross
profit mix of our continuing operations" Mr. Jensen added.
"Over 25 million pounds of processed truck tires from our Midwest
recycling facilities will find an environmentally safe home in the
sports fields, running tracks and playgrounds that our children
play and compete on."
About GreenMan
Based in Lynnfield, Massachusetts, GreenMan Technologies, Inc.
(OTCBB: GMTI), markets scrap granular tires in the United States.
The company's products are used as a tire-derived fuel used by
pulp and paper producers.
* * *
At June 30, 2006, the Company's balance sheet showed $10.6 million
in total assets and $22.3 million in total liabilities, resulting
in an $11.6 million stockholders' deficit. The Company's equity
deficit stood at $8.6 million as of Dec. 31, 2005.
GREY WOLF: 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 oilfield service and refining and marketing
sectors this week, the rating agency confirmed its Ba3 Corporate
Family Rating for Grey Wolf Inc. and revised its rating on the
company's 3.75% Senior Unsecured Guaranteed Convertible Notes Due
2023 to B1 from Ba3. Moody's assigned those debentures an LGD4
rating suggesting noteholders will experience a 61% 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%).
Houston, TX-based Grey Wolf Inc. -- http://www.gwdrilling.com--
through its subsidiaries, provides onshore contract drilling
services to the oil and gas industry. It conducts its operations
primarily in drilling markets of Ark-La-Tex, Gulf Coast,
Mississippi/Alabama, south Texas, Rocky Mountain, and the Mid-
Continent markets in the United States.
GULFMARK OFFSHORE: 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 oilfield service and refining and marketing
sectors this week, the rating agency confirmed its Ba3 Corporate
Family Rating for GulfMark Offshore Inc. and its B1 rating on the
company's 7.75% Senior Unsecured Guaranteed Global Notes Due 2014.
Moody's assigned those debentures an LGD5 rating suggesting
noteholders will experience a 78% loss in case of 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 Houston, Texas, Gulfmark Offshore Inc. --
http://www.gulfmark.com/-- together with its subsidiaries,
provides offshore marine services primarily to companies involved
in offshore exploration and production of oil and natural gas.
HANOVER COMPRESSOR: 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 oilfield service and refining and marketing
sectors this week, the rating agency confirmed its B1 Corporate
Family Rating for Hanover Compressor 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: Hanover Compressor Company
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
4.75% Sr. Unsec.
Conv Notes Due 2008 B3 B3 LGD5 89%
8.625% Sr. Unsec.
Gtd. Notes Due 2010 B3 B2 LGD4 59%
4.75% Sr. Unsec.
Conv Notes Due 2014 B3 B3 LGD5 89%
9% Sr. Unsec. Gtd.
Notes Due 2014 B3 B2 LGD4 59%
7.5% Sr. Unsec. Gtd.
Notes Due 2013 B3 B2 LGD4 59%
7.25% Conv.
Preferred
Securities Due 2029 Caa1 B3 LGD6 96%
Issuer: Hanover Equipment Trust 2001A
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
2001 A Equipment
Lease Notes
Due 2008 B2 Ba3 LGD3 30%
Issuer: Hanover Equipment Trust 2001B
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
2001 B Equipment
Lease Notes
Due 2011 B2 Ba3 LGD3 30%
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 Houston, Texas, Hanover Compressor Company rents
and repairs compressors and performs natural gas compression
services for oil and gas companies. It has a fleet of more than
6,520 mobile compressors ranging from 8 to 4,735 horsepower. The
company's subsidiaries also provide service, fabrication, and
equipment for oil and natural gas processing and transportation
applications. Hanover Compressor is disposing of its non-oilfield
power generation facilities and used equipment businesses to focus
on core operations. In 2006 the company sold the US amine
treating rental assets of Hanover Compression Limited Partnership
to oil and gas firm Crosstex Energy for about $52 million.
HERCULES OFFSHORE: 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 oilfield service and refining and marketing
sectors this week, the rating agency revised its Corporate Family
Rating for Hercules Offshore Inc. to B3 from B2.
Moody's also affirmed its B2 ratings on the company's Senior
Secured Revolving Credit Facility Due 2010, and Senior Secured
Term Loan B Due 2010. Moody's assigned those loan facilities
an LGD3 rating suggesting lenders will experience a 34% 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 Houston, Texas, Hercules Offshore, Inc. --
http://www.herculesoffshore.com-- through its subsidiaries,
provides shallow-water drilling and liftboat services to the oil
and natural gas exploration and production industry primarily in
the United States and Gulf of Mexico. The company was founded as
Hercules Offshore LLC in 2004. It changed its name to Hercules
Offshore, Inc. in 2005.
HORNBECK OFFSHORE: 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 oilfield service and refining and marketing
sectors this week, the rating agency confirmed its Ba3 Corporate
Family Rating for Hornbeck Offshore Services Inc. as well as its
Ba3 rating on the company's 6.125% Senior Unsecured Guaranteed
Global Notes Due 2014. Moody's assigned those debentures an
LGD4 rating suggesting noteholders wil experience a 58% loss in
the event of 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%).
Based in Covington, Louisiana, Hornbeck Offshore Services Inc.
-- http://www.hornbeckoffshore.com/-- through its subsidiaries,
provides offshore supply vessels for the offshore oil and gas
industry primarily in the United States Gulf of Mexico and
internationally.
HUNTER FAN: 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, the rating agency lowered its B1 Corporate Family
Rating for Hunter Fan Co., to B2. Additionally, Moody's revised
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
---------- ------- ------- ------ ----------
$50 Million
Senior Secured
Revolver B1 Ba3 LGD2 27%
$150 Million
Senior Secured
Term Loan B1 Ba3 LGD2 27%
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 Memphis, Tennessee, Hunter Fan Co. designs,
engineers, and distributes ceiling fans under the Hunter and
Casablanca brands, which represent the majority of sales. Other
product segments include home comfort products such as air
purifiers, humidifiers and programmable thermostats under the
Hunter brand, and decorative lamps and fixtures under the Hunter
and Kenroy brands. Supported by its strong brand names, Hunter
Fan has significant market share within the $1 billion domestic
ceiling fan market. However, the company is a smaller player in
the highly fragmented $1.6 billion home comfort products industry.
INTERACTIVE MOTORSPORTS: June 30 Equity Deficit Widens to $3.6MM
----------------------------------------------------------------
Interactive Motorsports and Entertainment Corp.'s balance sheet at
June 30, 2006, showed total assets of $1,738,189 and total
liabilities of $5,419,633 resulting in a total shareholders'
equity deficit of $3,681,444. The Company's stockholders' equity
deficit as of Dec. 31, 2005, stood at $3,395,501.
The Company's balance sheet at June 30, 2006, also showed negative
working capital with $333,032 in total current assets and
$3,764,559 in total current liabilities.
For the three months ended June 30, 2006, the Company incurred a
$322,775 net loss on $913,093 of total revenues, compared to
a net loss of $552,302 on $946,188 of total revenues for the same
quarter last year.
Full-text copies of the Company's financial statements for the
three months ended June 30, 2006, are available for free at:
http://researcharchives.com/t/s?128b
Headquartered in Indianapolis, Indiana, Interactive Motorsports &
Entertainment Corp., through its wholly owned subsidiary, Perfect
Line Inc., engages in the ownership and operation of NASCAR
Silicon Motor Speedway racing centers in the United States. It
operates three NASCAR Silicon Motor Speedway stores that offer
NASCAR-branded entertainment products. The Company also has
revenue share agreements with third parties allowing them to use
its NASCAR racing simulators and software, as well as sells and
leases simulators and licenses software to third parties. It owns
and operates revenue share racing centers in malls, family
entertainment centers, amusement parks, casinos, and auto malls.
INTERSTATE BAKERIES: Wants to Reject Four Kentucky Leases
---------------------------------------------------------
Pursuant to Sections 105(a) and 365(a) of the Bankruptcy Code,
Interstate Bakeries Corporation and its debtor-affiliates seek
authority from the U.S. Bankruptcy Court for the Western District
of Missouri to reject four unexpired non-residential real property
leases located in Kentucky:
Rejection
Landlord Location Date
-------- -------- ---------
David Powers Lexington, Kentucky 09/30/2006
Luann Investment, Inc. Nicholasville, Kentucky 09/30/2006
Coyne Operated, Inc. West Bath, Kentucky 09/07/2006
National TV & Appliance Beckley, Kentucky 10/07/2006
The Debtors seek that any personal property, including furniture,
fixtures and equipment, remaining in each of the Premises after
the effective rejection date will be deemed abandoned. The
Landlord will be entitled to remove or dispose of the property at
its sole discretion.
The Debtors assert that the Leases are financially burdensome and
unnecessary to their ongoing operations and business. The Leases
are also not a source of potential value for the Debtors' future
operations, creditors and interest holders, Samuel S. Ory, Esq.,
at Skadden Arps Slate Meagher & Flom LLP, in Chicago, Illinois,
contends.
By rejecting each Lease, the Debtors assert that they will avoid
incurring unnecessary administrative charges for rent and other
charges and repair and restoration of each of the Premises that
will provide them with no tangible benefit.
Headquartered in Kansas City, Missouri, Interstate Bakeries
Corporation is a wholesale baker and distributor of fresh baked
bread and sweet goods, under various national brand names,
including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R),
Merita(R) and Drake's(R). The Company employs approximately
32,000 in 54 bakeries, more than 1,000 distribution centers and
1,200 thrift stores throughout the U.S. The Company and seven of
its debtor-affiliates filed for chapter 11 protection on
September 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric
Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate,
Meagher & Flom LLP, represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they listed $1,626,425,000 in total assets and
$1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior
subordinated convertible notes due August 15, 2014 on August 12,
2004) in total debts. (Interstate Bakeries Bankruptcy News, Issue
No. 48; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
INTERSTATE BAKERIES: Wants to Use Estate Funds to Pay C&W's Fees
----------------------------------------------------------------
Interstate Bakeries Corporation and its debtor-affiliates seek
authority from the U.S. Bankruptcy Court for the Western District
of Missouri to utilize estate funds to:
-- pay for Cushman & Wakefield Inc.'s fees and expenses; and
-- reimburse UMB Bank for its reasonable out-of- pocket
expenses for acting as intermediary for the Prospective
Lenders.
According to Paul M. Hoffmann, Esq., at Stinson Morrison Hecker
LLP, Kansas City, Missouri, the Debtors have begun the process of
evaluating potential exit-financing alternatives.
To assist in the process of valuing its assets for use as
collateral, various prospective lenders seek more detailed
information in the form of appraisals conducted in accordance
with the Federal Institutions Reform, Recovery and Enforcement
Act of 1989. FIRREA requires that the appraiser be engaged
directly by a financial institution.
To maintain confidentiality and a competitive atmosphere among
the Prospective Lenders, UMB Bank, N.A., has agreed to engage
C&W, on behalf of the Prospective Lenders, to provide appraisal
services with regard to various of the Debtors' properties to
provide the Prospective Lenders with information necessary to
evaluate exit financing options.
The Debtors believe that C&W and its designated subsidiaries are
highly skilled and well qualified to assist the Prospective
Lenders based on their understanding of the real estate market.
The Debtors assert that C&W's services will help maximize the
value of their estates.
C&W will provide UMB Bank and, through UMB Bank, the Prospective
Lenders:
(a) physical inspection and valuation of 51 bakery properties
and other properties owned by Interstate Bakeries
Corporation, including retail outlets for baked goods,
light manufacturing facilities, office buildings, garages
and other properties; and
(b) furnish the Debtors a separate appraisal report for each
of the 148 properties.
C&W will charge $629,000 for the services it is contemplated to
perform, plus normal and customary travel expenses. C&W will
require an initial 50% retainer with the second 50% payment due
upon submission of the draft reports.
David F. McArdle, senior director at C&W, assures the Court that
his firm does not have any connection with the Debtors or their
creditors, and does not hold or represent an interest adverse to
the Debtors' estate. Thus, C&W is deemed a disinterested person
under Section 101(14) of the Bankruptcy Code.
Headquartered in Kansas City, Missouri, Interstate Bakeries
Corporation is a wholesale baker and distributor of fresh baked
bread and sweet goods, under various national brand names,
including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R),
Merita(R) and Drake's(R). The Company employs approximately
32,000 in 54 bakeries, more than 1,000 distribution centers and
1,200 thrift stores throughout the U.S. The Company and seven of
its debtor-affiliates filed for chapter 11 protection on
September 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric
Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate,
Meagher & Flom LLP, represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they listed $1,626,425,000 in total assets and
$1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior
subordinated convertible notes due August 15, 2014 on August 12,
2004) in total debts. (Interstate Bakeries Bankruptcy News, Issue
No. 48; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
INZON CORP: June 30 Balance Sheet Upside-Down by $1.1 Million
-------------------------------------------------------------
InZon Corporation reported a $599,571 net loss on $753,625 of net
revenues for the three months ended June 30, 2006, compared to a
$396,718 net loss on zero revenues in 2005, the Company disclosed
in its third quarter financial statements on Form-10QSB filed with
the Securities and Exchange Commission.
At June 30, 2006, the Company's balance sheet showed $1,244,361 in
total assets and $2,346,124 in total liabilities, resulting in a
$1,101,764 stockholders' deficit.
The Company's June 30 balance sheet also showed strained liquidity
with $110,983 in total current assets available to pay $2,249,841
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?1290
Going Concern Doubt
George Brenner, C.P.A., in Los Angeles, California, raised
substantial doubt about InZon Corporation's ability to continue as
a going concern after auditing the Company's consolidated
financial statements for the year ended Sept. 30, 2005. The
auditor pointed to the Company's losses from start-up operations
and it has a substantial need for working capital.
About InZon
Based in Delray Beach, Florida, InZon Corporation provides
telecommunication services in the United States. The company
offers voice over Internet protocol services to tier 1 and tier 2
carriers. Its VoIP technology provides voice, fax, data,
conference call, and Internet services over a private Internet
protocol network to international carriers and other communication
service providers.
JARDEN 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 this week, the rating agency confirmed its B1
Corporate Family Rating for Jarden Corporation. Additionally,
Moody's revised and 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
---------- ------- ------- ------ ----------
$200 Million
Senior Secured
Revolver B1 Ba3 LGD3 41%
Senior Secured
Term Loan B1 Ba3 LGD3 41%
$180 Million
Sr. Sub. Notes B3 B3 LGD6 91%
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 Rye, New York, Jarden Corporation --
http://www.jarden.com/-- is a global provider of market branded
consumer products used in and around the home. Jarden operates
through four business segments -- Branded Consumables, Consumer
Solutions, Outdoor Solutions and Others.
JUNIPER CBO: Moody's Lifts Ba1 Rating on $34 Mil. Notes to Aaa
--------------------------------------------------------------
Moody's Investors Service has upgraded the ratings on the notes
issued in 1999 by Juniper CBO 1999-1 Ltd., a high yield structured
finance collateralized bond obligation issuer:
* The $134,000,000 Class A-l Notes due 2011
-- Prior Rating: Aa2, on watch for possible upgrade
-- Current Rating: Aaa
* The U.S. $34,000,000 Class A-2 Notes due 2011
-- Prior Rating: Ba1, on watch for possible upgrade
-- Current Rating: Aaa
According to Moody's, the rating actions reflect the ongoing
delevering of the senior notes in the transaction due to failures
in the Class A Overcollateralization Test. This transaction's
underlying reference portfolio consists primarily of high yield
bonds and is managed by Wellington Management Company LLP.
LONDON FOG: Wants Excl. Plan-Filing Period Stretched to January 18
------------------------------------------------------------------
London Fog Group, Inc., and its debtor-affiliates ask the U.S
Bankruptcy Court for the District of Nevada to extend, until
Jan. 18, 2007, their exclusive period to file a Chapter 11 Plan of
Reorganization. The Debtors also ask the Court to give them
until March 19, 2007, to solicit acceptances for their Plan.
The Debtors tell the Court that they need the three-month
extension to wrap up certain loose ends connected with the sale of
their Pacific Trail brand to Columbia Sportswear and their London
Fog brand to Iconix Brand Group, Inc.
The Debtors also argued that they need more time to decide on the
actions they will take with respect to the Homestead brand, their
remaining business line.
According to the Debtors, their Homestead business continues to
operate while they and their advisors determine whether to sell it
in a Section 363 sale or use it as the centerpiece for a Plan of
reorganization.
The Court will convene a hearing at 3:00 p.m., on Oct. 10, at GWZ-
Courtroom 1, Young Bldg, in Reno, Nevada, to consider the Debtors'
request.
About London Fog
Headquartered in Seattle, Washington, London Fog Group, Inc.
-- http://londonfog.com/-- nka PTI Holding Corp. designs and
retails the latest styles in jackets and other professional
apparel. The company and six of its affiliates filed for chapter
11 protection on March 20, 2006 (Bankr. D. Nev. Case No. 06-
50146). Stephen R. Harris, Esq., at Belding, Harris & Petroni,
Ltd., represents the Debtors in their restructuring efforts.
Avalon Group, Ltd., serves as the Debtors' financial advisor.
Aron M. Oliner, Esq., at Buchalter Nemer, represents the Official
Committee of Unsecured Creditors. When the Debtors filed for
protection from their creditors, they estimated assets and debts
between $50 million to $100 million.
In a filing with the U.S. Securities and Exchange Commission,
Iconix Brand Group, Inc., disclosed that on Aug. 28, 2006, it
completed the acquisition of the London Fog trademarks and certain
related intellectual property assets from London Fog Group Inc.
for $30.5 million in cash and 482,423 shares of the Registrant's
common stock.
LSBC NET: Moody's Places B2 Rating on $6.5 Million Class N3 Notes
-----------------------------------------------------------------
Moody's Investors Service has assigned ratings to three classes of
notes of the LBSBC Net Interest Margin Securities, Series 2006-2
transaction issued by LBSBC NIM Company 2006-2. This transaction
represents a securitization of certain residual certificates
issued by Lehman Brothers Small Balance Commercial, Series 2006-2.
Primary collateral for the Net Interest Margin Notes consists of
the Class X certificates and Class P certificates from the
Underlying Transaction. The Underlying Transaction in turn is
collateralized by a pool of small business loans secured by
commercial real estate being serviced by Lehman Brothers Bank, a
subsidiary of Lehman Brothers, Inc.
These are the complete rating actions:
* Issuer: LBSBC NIM Company 2006-2
$13,008,000 Class N1 Notes rated Baa2
$8,943,000 Class N2 Notes rated Ba2
$6,504,000 Class N3 Notes rated B2
The ratings are based on the anticipated cash flows to be received
from the Class X Certificates, representing the right to receive
excess cash flows, primarily excess interest, from the Underlying
Transaction, and the Class P Certificates, representing the right
to receive prepayment fee collections from loans in the Underlying
Transaction which prepay. The ratings are also based, in the case
of the Class N1 and Class N2 Notes, on their respective reserve
accounts.
The notes were sold in privately negotiated transactions without
registration under the Securities Act of 1933. The issuance has
been designed to permit resale under Rule 144A.
LUNA TECHNOLOGIES: To Redeem $1 Mil. Debenture Held by NIR Group
----------------------------------------------------------------
Luna Technologies International, Inc., reached an agreement with
NIR Group to redeem the balance of the outstanding $1,000,000
convertible debenture currently held by NIR Group.
For the past two months NIR Group has been converting outstanding
debt into registered common shares of the Company and selling
those shares in the open market. For the next 45 days all
conversion activities will be halted, during which time Luna
Technologies can repurchase the balance of the note, which is
slightly more than $750,000 as of Sept. 21, 2006. The Company is
confident it will be successful in redeeming this convertible
note; however, there can be no guarantee of success in this
initiative. In the event that the Company fails to redeem the
outstanding balance, everything will revert back to the previous
terms and NIR Group will receive 1,000,000 additional shares as a
penalty. In the meantime the Company is actively seeking
potential acquisition targets to create shareholder value in the
future.
"We are very pleased to have reached this agreement with the
debenture holder and will work extremely hard towards the goal of
successfully retiring this note," Luna CEO Kimberly Landry stated.
"With a 45-day halt in conversion activity, the Company has some
breathing room to execute a viable game plan to address the issue
at hand."
About Luna Technologies
Luna Technologies International, Inc., (OTCBB:LTII) develops and
manufactures modern high-performance photoluminescent products.
At June 30, 2006, Luna Technologies' balance sheet showed a
stockholders' deficit of $1,010,441, compared to a deficit of
$567,072 at Dec. 31, 2006.
MARSH & MCLENNAN: CEO Responds to Putnam Purchase Inquiries
-----------------------------------------------------------
Marsh & McLennan Companies, Inc.'s President and Chief Executive
Officer Michael G. Cherkasky disclosed last week that the Company
has commenced a market check to determine the value others would
put on MMC's subsidiary, Putnam Investments.
Mr. Cherkasky's statement came in response to repeated inquiries
over the last few months from parties interested in either
acquiring or partnering with Putnam.
Mr. Cherkasky said that the Company's Board of Directors has not
decided to take any specific action in regard to Putnam at this
time.
Founded in 1937, Putnam Investments -- http://www.putnam.com/--
is one of the nation's oldest and largest money management firms.
As of June 30, 2006, Putnam managed $180 billion in assets, of
which $119 billion is for mutual fund investors and $61 billion is
for institutional accounts. Putnam has offices in Boston, London
and Tokyo.
About Marsh & McLennan
Marsh & McLennan Companies, Inc. -- http://www.mmc.com/-- is a
global professional services firm with annual revenues of
approximately $12 billion. It is the parent company of Marsh, the
world's leading risk and insurance services firm; Guy Carpenter,
the world's leading risk and reinsurance specialist; Kroll, the
world's leading risk consulting company; Mercer, a major global
provider of human resource and specialty consulting services; and
Putnam Investments, one of the largest investment management
companies in the United States. Approximately 55,000 employees
provide analysis, advice, and transactional capabilities to
clients in over 100 countries.
* * *
As reported in the Troubled Company Reporter on Aug. 25, 2006,
Standard & Poor's Ratings Services assigned its preliminary 'BBB'
senior debt, 'BBB-' subordinated debt, and 'BB+' preferred stock
ratings to Marsh & McLennan's unlimited universal shelf. Standard
& Poor's also affirmed its 'BBB' counterparty credit rating on
MMC. The outlook in negative.
As reported in the Troubled Company Reporter on Sept. 28, 2006,
Moody's Investors Service assigned provisional ratings to Marsh &
McLennan's new universal shelf registration, including a (P)Ba1
rating on the Company's provisional preferred stock. The rating
outlook for MMC remains negative.
MASSACHUSETTS PORT: Moody's Withdraws Ca Underlying Rating
----------------------------------------------------------
Moody's Investors Service has withdrawn the Ca underlying rating
on $497.6 million of Massachusetts Port Authority Special Facility
Revenue Bonds. The bonds are insured by AMBAC and will continue
to carry an Aaa rating based on the insurer's financial strength.
The rating withdrawal follows Moody's withdrawal of all ratings of
Delta Airlines, Inc. due to the company's ongoing bankruptcy
proceedings and the lack of reliable and consistently available
information. Delta's senior unsecured obligations had been rated
C and its corporate family rating was Caa2 prior to the
withdrawal.
Legal security: the bonds are secured by Delta lease payments to
the Massachusetts Port Authority; a corporate guaranty provided by
Delta; and by a 12-month debt service reserve fund. Moody's notes
that certain structural enhancements to the transaction currently
have limited value. For example, Massport has the ability to
recapture gates from Delta in the 5th year following substantial
project completion, and if it does so the Authority has covenanted
to pay from funds in its Improvement and Extension Fund
eficiencies between rent paid by replacement tenants and debt
service allocable to the rentable space. Since the project opened
in March of 2005, Massport has no legal mechanism to use this
provision at this point in time.
Rated debt
Special Facilities Revenue Bonds, Series 2001, $497.6 Million
outstanding, underlying rating Withdrawn, bonds rated Aaa based on
AMBAC's claim-paying ability.
MAYCO PLASTICS: U.S. Trustee Names Seven-Member Creditors' Panel
----------------------------------------------------------------
The U.S. Trustee for Region 9 appointed seven creditors to serve
on an Official Committee of Unsecured Creditors in Mayco Plastics,
Inc., and Stonebridge Industries, Inc.'s chapter 11 cases:
1. Terry Nicholson
Ashland, Inc.
P.O. Box 2219
Columbus, OH 45216
Tel: (614) 790-3009
Fax: (614_ 790-3702
2. Suzanne D. Ujj
JFJ Mold Processors (1988) Limited
3145 North Talbot Road
Oldcastle, Ontario N0R 1L0
Canada
Tel: (519) 737-6772 ext 22
Fax: (519) 737-1066
3. Joseph Mullen
Krailburg TPE
2625 North Berkeley Lake Road, Suite 100
Duluth, GA 30096
Tel: (678) 584-5040
Fax: (678) 584-0500
4. Michael T. Wood, Esq.
DTE Energy
2000 Second Avenue
Room 688 WCB
Detroit, MI 48226
Tel: (313) 235-7502
Fax: (313) 235-8500
5. Bruce D. Tobiansky
E I du Pont de Nemours and Company
Global Credit Manager/DuPont Performance Materials
Barley Mill Plaza, BMP26-2174
4417 Lancaster Pike
Wilmington, DE 19805
Tel: (302) 992-4589
Fax: (302) 892-0767
6. Gil Bannasch
ATCO Industries, Inc.
7500 Fifteen Mile Road
Sterling Heights, MI 48312
Tel: (586) 795-9595
Fax: (586) 795-9696
7. Larry Parmet
Sundance Products, Inc.
1425 Candler Road
Gainsville, GA 30507
Tel: (678) 207-5326
Fax: (678) 207-5338
Court records show that Joel D. Applebaum, Esq., at Clark Hill
PLC, represents the Committee.
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtor's
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 Sterling Heights, Michigan, Mayco Plastics, Inc.
-- http://www.mayco-mi.com/-- is an automotive supplier of
injection molded plastics. Stonebridge Industries, Inc., the
majority shareholder and parent of Mayco Plastics, is an
investment firm that acquires companies and helps them grow their
business in order to increase shareholder value. Mayco and
Stonebridge filed for chapter 11 protection on Sept. 12, 2006
(Bankr. E.D. Mich. Case Nos. 06-52727 & 06-52743). Stephen M.
Gross, Esq., and Jeffrey S. Grasl, Esq., at McDonald Hopkins Co.,
LPA represent the Debtors. When the Debtors filed for protection
from their creditors, they estimated assets and debts between
$50 million and $100 million.
MEDIABAY INC: Has $14.3 Million Equity Deficit at June 30, 2006
---------------------------------------------------------------
As of June 30, 2006, Mediabay Inc.'s balance sheet disclosed total
assets of $11,722,000 and total liabilities of $26,102,000,
resulting in a total common stockholders' deficiency of
$14,380,000.
The Company's balance sheet at June 30, 2006, also showed negative
working capital with $6,086,000 in total current assets and
$25,522,000 in total current liabilities.
For the three months ended June 30, 2006, the Company's net loss
increased to $12,937,000, from a net loss of $2,417,000 for the
three months ended June 30, 2005.
Sales for the current quarter decreased to $1,146,000 from sales
of $2,272,000 for the same quarter last year.
Full-text copies of the Company's financial statements for the
three months ended June 30, 2006, are available for free at:
http://researcharchives.com/t/s?128d
Headquartered in Cedar Knolls, New Jersey, MediaBay Inc. --
http://www.mediabay.com/-- is a digital media and publishing
company specializing in spoken word audio entertainment.
MERIDIAN AUTOMOTIVE: Has Until January 25 to Decide on Leases
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware further
extended until Jan. 25, 2007, Meridian Automotive Systems, Inc.,
and its debtor-affiliates' time to assume, assume and assign, or
reject unexpired non-residential real property leases.
As reported in the Troubled Company Reporter on Sept. 12, 2006,
the Debtors are party to 12 major facility lease agreements:
Lessor Location
------ --------
Etkin Equities 2001 Centerpointe Parkway
Pontiac, Michigan
DEMBS/Roth Group 4280 Haggerty Road
Canton, Michigan
Ford Motor Land Development Corp. 999 Republic Drive
Allen Park, Michigan
Growth Properties, LLC 300 Growth Parkway
Angola, Indiana
Communite Improvement Corp. 1020 E. Main Street
Jackson, Ohio
L.E. Tassell, Inc. 3075 Brenton Road, S.E.
Grand Rapids, Michigan
Meri (NC) LLC 6701 Stateville Blvd.
Salisbury, North Carolina
North-South Properties LLC 747 Southport Drive
Shreveport, Louisiana
P&E Realty Inc. 13811 Roth Road
Grabill, Indiana
Rushville Manufacturing Mall 1350 Commerce Street
Land Trust # 101 Rushville, Indiana
Westfield Industrial Center 13881 West Chicago Street
Detroit, Michigan
Brent Trade & Industrial Park Inc. 225 Henry Street
Brantford, Ontario
The Leases included several of the Debtors' primary production
facilities and warehousing centers, which are at the core of the
Debtors' operations. Many of the locations subject to the Leases
will play a significant role in the Debtors' reorganization
process.
Due to the complexity of the Debtors' business operations,
evaluation of the Leases requires the Debtors to devote
considerable time and effort to carefully review each Lease.
If the Debtors are forced to prematurely assume the Leases, the
Debtors may be required to pay cure obligations, and lessor claims
may be elevated to administrative expense status prior to
confirmation of a plan of reorganization.
Conversely, if the Debtors precipitously reject the Leases, the
Debtors may lose valuable property interests that are essential
to their reorganization.
The Debtors are in the process of evaluating the economics of the
Leases to determine whether the assumption or rejection of each
would benefit their estates and creditors. However, the Debtors'
ultimate decision to assume or reject the Leases will also depend
on their review of their overall businesses and an analysis of
each location and purpose in connection with the ongoing
restructuring efforts.
Pending their election to assume or reject the Leases, the Debtors
will perform all their undisputed obligations in a timely fashion,
including the payment of postpetition rent due, as required by
Section 365(d)(3) of the Bankruptcy Code.
Headquartered in Dearborn, Mich., Meridian Automotive Systems,
Inc. -- http://www.meridianautosystems.com/-- supplies
technologically advanced front and rear end modules, lighting,
exterior composites, console modules, instrument panels and other
interior systems to automobile and truck manufacturers. Meridian
operates 22 plants in the United States, Canada and Mexico,
supplying Original Equipment Manufacturers and major Tier One
parts suppliers. The Company and its debtor-affiliates filed for
chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos.
05-11168 through 05-11176). James F. Conlan, Esq., Larry J.
Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at
Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon
L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks,
Esq., at Young Conaway Stargatt & Taylor, LLP, represent the
Debtors in their restructuring efforts. Eric E. Sagerman, Esq.,
at Winston & Strawn LLP represents the Official Committee of
Unsecured Creditors. The Committee also hired Ian Connor
Bifferato, Esq., at Bifferato, Gentilotti, Biden & Balick, P.A.,
to prosecute an adversary proceeding against Meridian's First Lien
Lenders and Second Lien Lenders to invalidate their liens. When
the Debtors filed for protection from their creditors, they listed
$530 million in total assets and approximately $815 million in
total liabilities. (Meridian Bankruptcy News, Issue No. 39;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
MERIDIAN AUTOMOTIVE: Wants Flex-N-Gate Settlement Pact Approved
---------------------------------------------------------------
Pursuant to Rule 9019(a) of the Federal Rules of Bankruptcy
Procedure, Meridian Automotive Systems, Inc., and its debtor-
affiliates ask the U.S. Bankruptcy Court for the District of
Delaware to approve their settlement with Flex-N-Gate Corporation.
The Debtors used to supply Ford Motor Company with rear bumper
systems and hitchplates. In December 2003, Ford decided to move
production of the Bumper Systems and Hitchplates to Flex-N-Gate
Corporation. From discussions with Ford, the Debtors were made
to understand that they would continue producing and supplying
the Hitchplates until June 2004, Robert S. Brady, Esq., at Young
Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, relates.
Flex-N-Gate issued a six-month purchase order to the Debtors in
December 2003, which priced the Hitchplates at $19.115 per unit.
On Nov. 23, 2005, the Debtors filed a complaint against Flex-
N-Gate in the United States District Court for the Eastern
District of Michigan seeking payment of $2,200,000 for 111,945
Hitchplates that they supplied to Flex-N-Gate from January
through April 2004, plus the value of certain raw material,
inventory and work in progress. Flex-N-Gate denied all of the
Debtors' allegations and asserted various defenses to the
Complaint.
Mr. Brady notes that Flex-N-Gate and certain of its affiliates
timely filed several claims against the Debtors that total more
than $5,100,000. The Debtors objected to the Claims and asked
the Court to expunge or reduce them to the amounts reflected in
their books and records.
The Settlement Agreement is the result of several months of
negotiations between the Debtors and Flex-N-Gate and resolves the
Litigation and Flex-N-Gate's Claims, Mr. Brady informs the Court.
The salient terms of the Settlement Agreement include:
-- Flex-N-Gate will pay $980,000 into escrow and effect a
set-off for certain of its Claims;
-- The Debtors will dismiss the Litigation with prejudice and
Flex-N-Gate's Claims will be disallowed and expunged in
their entirety; and
-- The Debtors and Flex-N-Gate will release each other with
respect to the Litigation, except for any causes of action
or claims which the Debtors may have against Flex-N-Gate or
its affiliates under Chapter 5 of the Bankruptcy Code.
According to Mr. Brady, the Settlement Agreement will enable the
Debtors to resolve the Litigation consensually without the
burdens and contingencies associated with prosecuting and
defending a lawsuit.
Mr. Brady further relates that effecting the set-off will allow
the Debtors to recover almost $1,000,000 while at the same time
fully resolving Flex-N-Gate's Claims without further expense to
their estates.
Headquartered in Dearborn, Mich., Meridian Automotive Systems,
Inc. -- http://www.meridianautosystems.com/-- supplies
technologically advanced front and rear end modules, lighting,
exterior composites, console modules, instrument panels and other
interior systems to automobile and truck manufacturers. Meridian
operates 22 plants in the United States, Canada and Mexico,
supplying Original Equipment Manufacturers and major Tier One
parts suppliers. The Company and its debtor-affiliates filed for
chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos.
05-11168 through 05-11176). James F. Conlan, Esq., Larry J.
Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at
Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon
L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks,
Esq., at Young Conaway Stargatt & Taylor, LLP, represent the
Debtors in their restructuring efforts. Eric E. Sagerman, Esq.,
at Winston & Strawn LLP represents the Official Committee of
Unsecured Creditors. The Committee also hired Ian Connor
Bifferato, Esq., at Bifferato, Gentilotti, Biden & Balick, P.A.,
to prosecute an adversary proceeding against Meridian's First Lien
Lenders and Second Lien Lenders to invalidate their liens. When
the Debtors filed for protection from their creditors, they listed
$530 million in total assets and approximately $815 million in
total liabilities. (Meridian Bankruptcy News, Issue No. 39;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
MORTGAGE CAPITAL: Moody's Cuts Rating on $9MM Class K Certs. to C
-----------------------------------------------------------------
Moody's Investors Service upgraded the ratings of three classes,
downgraded the ratings of three classes and affirmed the ratings
of five classes of Mortgage Capital Funding, Inc.,
Multifamily/Commercial Mortgage Pass-Through Certificates, Series
1998-MC3:
Class A-2, $254,895,362, Fixed, affirmed at Aaa
Class X, Notional, affirmed at Aaa
Class B, $40,867,000, Fixed, affirmed at Aaa.
Class C, $43,138,000, Fixed, upgraded to Aaa from Aa1
Class D, $61,301,000, Fixed, upgraded Aa3 from A3
Class E, $29,515,000, Fixed, upgraded to Baa1 from Baa3
Class F, $20,433,000, Fixed, affirmed at Ba1
Class G, $20,434,000, Fixed, affirmed at B1
Class H, $6,811,000, Fixed, downgraded to B3 from B2
Class J, $22,704,000, Fixed, downgraded to Ca from Caa1
Class K, $9,082,000, Fixed, downgraded to C from Caa2
As of the Sept. 18, 2006 distribution date, the transaction's
aggregate certificate balance has decreased by approximately 42.8%
to $519.1 million from $908.2 million at securitization. The
Certificates are collateralized by 135 mortgage loans ranging in
size from less than 1.0% to 11.5% of the pool, with the top 10
loans representing 37.0% of the pool. Ten loans, representing
9.7% of the pool, have defeased and are collateralized by U.S.
Government securities.
Seven loans have been liquidated from the trust, resulting in
aggregate realized losses of approximately $12.9 million. Five
loans are in special servicing, including the pool's largest loan,
the Kranzco Portfolio Loan, discussed below. The specially
serviced loans represent 13.8% of the pool balance. Moody's has
estimated aggregate losses of approximately $21.9 million for all
of the specially serviced loans. Thirty-six loans, representing
16.8% of the pool, are on the master servicer's watchlist.
Moody's was provided with full or partial year 2005 operating
results for approximately 94.8% of the pool's performing loans.
Moody's loan to value ratio is 91.6%, compared to 83.7% at Moody's
last full review in September 2005 and compared to 83.8% at
securitization.
Based on Moody's analysis, 25.6% of the pool has a LTV greater
than 100.0%, compared to 24.3% at last review and compared to 3.1%
at securitization. Moody's is upgrading Classes C, D and E due to
increased credit subordination levels and stable overall pool
performance of the pool excluding the specially serviced loans.
Moody's is downgrading Classes H, J, and K due to realized losses
and projected losses on the specially serviced loans.
The top three loans represent 23.1% of the outstanding pool
balance. The largest loan is the Kranzco Portfolio Loan ($59.8
million - 11.5%), which is secured by nine retail centers totaling
1.4 million square feet. All of the centers are or were anchored
by Wal-Mart (Moody's senior unsecured rating Aa2; stable outlook).
Built between 1984 and 1990, the properties are located in Georgia
(5), Virginia, Florida, Ohio and Tennessee.
The loan was transferred to special servicing in June 2005 due to
imminent default and the properties were conveyed to the trust via
deed in lieu of foreclosure in March 2006. Wal-Mart has vacated
all nine properties following construction of nearby Wal-Mart
Supercenters. Wal-Mart continues to pay rent under all leases
except for the two that have expired.
An additional lease expires prior to the anticipated loan
repayment date of October 2008. Five of the former Wal-Mart spaces
are vacant, two are fully subleased and two are partially
subleased. Many of the small shop tenants also vacated the centers
after Wal-Mart vacated. The portfolio is 80.0% leased, compared
to 98.8% at securitization. The difficulty of leasing shop space
with a dark anchor as well as competition presented by the newer
Wal-Mart centers is having a significant negative impact on the
performance of this loan. Moody's current LTV is in excess of
100.0%.
The second largest loan in the pool is the Oceanside Kohl's/Gold
Coast Plaza and Swan Nursery Commons Loan ($44.4 million - 8.6%),
which is secured by two anchored retail centers located in
Oceanside and East Patchouge, New York. The two centers total
391,000 square feet and are 100.0% occupied, compared to 96.0% at
securitization. Major tenants include
* Kohl's (Moody's senior unsecured rating A3; stable outlook),
* Waldbaums (parent The Great Atlantic & Pacific Tea Co. --
Moody's senior unsecured rating Caa1; negative outlook),
* Bed Bath & Beyond, Staples (Moody's senior unsecured rating
Baa2; on review for possible upgrade), and,
* Marshalls (parent TJX Companies, Inc. -- Moody's senior
unsecured rating A3; negative outlook).
Property performance has improved since last review due to
increased rents and stable expenses. Moody's LTV is 82.8%,
compared to 95.2% at last review and compared to 80.0% at
securitization.
The third largest loan in the pool is the Shrewsbury Commons Loan
($15.8 million - 3.0%), which is secured by a community shopping
center located in Shrewsbury, Pennsylvania. Built in 1997, the
center contains 218,000 square feet. The center is 99.0%
occupied, compared to 100.0% at securitization. The property is
anchored by a Wal-Mart SuperCenter (69.0% of GLA) on a lease
expiring in January 2018. Moody's LTV is 86.1%, compared to 87.1%
at last review and compared to 90.0% at securitization.
The pool's collateral is a mix of retail (33.1%), office and mixed
use (22.0%), lodging (16.4%), industrial and self storage (9.3%),
U.S. Government securities (9.7%) and multifamily (7.5%). The
collateral properties are located in 34 states and the District of
Columbia. The highest state concentrations are New York (15.7%),
California (15.6%), Florida (7.3%), Virginia (6.5%) and Tennessee
(4.8%). All of the loans are fixed rate.
NEPHROS INC: Posts $2.1 Mil. Net Loss in Second Quarter of 2006
---------------------------------------------------------------
Nephros, Inc., has filed its financial statements for the second
quarter ended June 30, 2006, with the Securities and Exchange
Commission.
For the three months ended June 30, 2006, the Company reported a
$2,180,644 net loss on $302,055 of product revenues compared with
a $2,032,333 net loss on $226,426 of product revenues for the same
period in 2005.
At June 30, 2006, the Company's balance sheet showed $8,882,763 in
total assets, $6,979,120 in total liabilities, and $1,903,643 in
total stockholders' equity.
Full-text copies of the Company's second quarter financials are
available for free at http://ResearchArchives.com/t/s?129e
Going Concern Doubt
As reported in the Troubled Company Reporter on July 27, 2006,
Deloitte & Touche LLP expressed substantial doubt about Nephros,
Inc.'s ability to continue as a going concern after auditing the
Company's consolidated financial statements for the years ended
Dec. 31, 2005, and 2004. The auditing firm pointed to the
Company's recurring losses and difficulty in generating sufficient
cash flow to meet its obligations and sustain operations.
About Nephros Inc.
New York-based Nephros, Inc. (Amex: NEP) develops and markets
medical devices products designed to improve thequality of life
for the End-Stage Renal Disease patient, while addressing the
critical financial and clinical needs of the care provider.
Nephros also markets filtration products complimentary to its core
ESRD therapy business. ESRD is a disease state characterized by
the irreversible loss of kidney function.
NEXIA HOLDINGS: Accumulated Deficit Tops $12.1 Million at June 30
-----------------------------------------------------------------
Nexia Holdings Inc. incurred a $365,107 net loss on $365,107 of
net revenues for the three months ended June 30, 2006, compared to
a $396,718 net loss on $111,186 of net revenues in 2005.
As of June 30, 2006, the Company had an accumulated deficit of
$12.1 million compared to $13.2 million of deficit at Dec. 30,
2005.
The Company reported net working capital of $1,362,009 at June 30,
2006, in contrast to $971,535 of net working capital deficit at
Dec. 31, 2005. The increase in working capital of $2,333,544 is
due primarily to the increased fair market value of marketable
securities represented by the settlement with Diversified
Financial Resources Corporation and a reduction in the amount of
current maturities of long-term debt. A major portion of the
current obligation is a result of the loan on the Wallace-Bennett
building being due within 90 days.
A full-text copy of the Company's Quarterly Report is available
for free at http://researcharchives.com/t/s?1294
Going Concern Doubt
De Joya Griffith & Company, LLC, raised substantial doubt about
the Company's ability to continue as a going concern after
auditing the Company's financial statements for the year ended
Dec. 31, 2005. The auditor pointed to the Company's cumulative
operating losses and negative working capital.
About Nexia Holdings
Headquartered in Salt Lake City, Utah, Nexia Holdings Inc. (OTCBB:
NEXH) -- http://www.nexiaholdings.com/-- engages in the
acquisition, lease, management, and sale of real estate properties
in the continental United States, through its subsidiaries. It
operates, owns, or has interests in a portfolio of commercial,
industrial, and residential properties. The company's commercial
properties comprise Wallace-Bennett Building, and a one-story
retail building in Salt Lake City, Utah; and an office building in
Kearns, Utah. Its residential property comprises a condominium
unit located in close proximity to Brian Head Ski Resort and the
surrounding resort town in southern Utah. The company's
industrial property includes Parkersburg Terminal in Parkersburg,
West Virginia. It also owns parcels of undeveloped land in Utah
and Kansas.
NORTHWEST AIRLINES: Reports 5.4% Traffic Decrease in August 2006
----------------------------------------------------------------
Northwest Airlines disclosed an August consolidated (mainline and
regional) load factor of 85.9%, 2.3 points above August 2005.
Northwest reported a mainline load factor of 86.9%, 2.1 points
above August 2005.
In August 2006, Northwest and Northwest Airlink regional carriers
flew 7.05 billion consolidated revenue passenger miles (RPMs) and
8.20 billion consolidated available seat miles (ASMs), a traffic
decrease of 6.2% and a capacity decrease of 8.8% versus August
2005.
Northwest flew 6.58 billion mainline revenue passenger miles and
7.58 billion mainline available seat miles in August 2006, a
traffic decrease of 5.4% and a capacity decrease of 7.6% versus
August 2005.
Northwest Airlines Traffic Summary
Revenue Passenger Miles (000s):
August 2006 2005 Change
---- ---- ------
Domestic 3,848,661 4,007,749 (4.0)%
International 2,732,619 2,949,317 (7.3)%
Pacific 1,781,167 1,865,053 (4.5)%
Atlantic 951,452 1,084,264 (12.2)%
System (Mainline) 6,581,280 6,957,066 (5.4)%
Regional 467,174 560,355 (16.6)%
Consolidated 7,048,454 7,517,421 (6.2)%
Available Seat Miles (000s):
August 2006 2005 Change
---- ---- ------
Domestic 4,519,093 4,881,196 (7.4)%
International 3,057,592 3,322,067 (8.0)%
Pacific 1,985,457 2,088,615 (4.9)%
Atlantic 1,072,135 1,233,452 (13.1)%
System (Mainline) 7,576,685 8,203,263 (7.6)%
Regional 626,034 788,918 (20.6)%
Consolidated 8,202,719 8,992,181 (8.8)%
Load Factor:
August 2006 2005 Change
---- ---- ------
Domestic 85.2% 82.1% 3.1 pts
International 89.4% 88.8% 0.6 pts
Pacific 89.7% 89.3% 0.4 pts
Atlantic 88.7% 87.9% 0.8 pts
System (Mainline) 86.9% 84.8% 2.1 pts
Regional 74.6% 71.0% 3.6 pts
Consolidated 85.9% 83.6% 2.3 pts
Enplaned Passengers:
August 2006 2005 Change
---- ---- ------
System (Mainline) 4,952,087 5,064,028 (2.2)%
Regional 1,114,489 1,229,576 (9.4)%
Consolidated 6,066,576 6,293,604 (3.6)%
Revenue Passenger Miles (000s):
Year-To-Date 2006 2005 Change
---- ---- ------
Domestic 28,670,560 30,767,991 (6.8)%
International 20,447,749 21,851,063 (6.4)%
Pacific 13,264,558 14,047,594 (5.6)%
Atlantic 7,183,191 7,803,469 (7.9)%
System (Mainline) 49,118,309 52,619,054 (6.7)%
Regional 3,782,895 4,059,047 (6.8)%
Consolidated 52,901,204 56,678,101 (6.7)%
Available Seat Miles (000s):
Year-To-Date 2006 2005 Change
---- ---- ------
Domestic 34,152,030 38,468,526 (11.2)%
International 22,949,500 24,815,833 (7.5)%
Pacific 14,881,916 15,920,109 (6.5)%
Atlantic 8,067,584 8,895,724 (9.3)%
System (Mainline) 57,101,530 63,284,359 (9.8)%
Regional 5,072,227 5,904,957 (14.1)%
Consolidated 62,173,757 69,189,316 (10.1)%
Load Factor:
Year-To-Date 2006 2005 Change
---- ---- ------
Domestic 83.9% 80.0% 3.9 pts
International 89.1% 88.1% 1.0 pts
Pacific 89.1% 88.2% 0.9 pts
Atlantic 89.0% 87.7% 1.3 pts
System (Mainline) 86.0% 83.1% 2.9 pts
Regional 74.6% 68.7% 5.9 pts
Consolidated 85.1% 81.9% 3.2 pts
Enplaned Passengers:
Year-To-Date 2006 2005 Change
---- ---- ------
System (Mainline) 36,923,736 39,252,423 (5.9)%
Regional 8,860,936 9,171,262 (3.4)%
Consolidated 45,784,672 48,423,685 (5.4)%
About Northwest Airlines
Northwest Airlines Corp. (OTC: NWACQ) -- http://www.nwa.com/
-- is the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and
approximately 1,400 daily departures. Northwest is a member of
SkyTeam, an airline alliance that offers customers one of the
world's most extensive global networks. Northwest and its travel
partners serve more than 900 cities in excess of 160 countries on
six continents. The Company and 12 affiliates filed for chapter
11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No.
05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq.,
at Cadwalader, Wickersham & Taft LLP in New York, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in
Washington represent the Debtors in their restructuring efforts.
The Official Committee of Unsecured Creditors has retained Akin
Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the
Debtors' chapter 11 cases. When the Debtors filed for protection
from their creditors, they listed $14.4 billion in total assets
and $17.9 billion in total debts. (Northwest Airlines Bankruptcy
News, Issue No. 39; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
NORTHWEST AIRLINES: Craig Friday Wants Grievances Processed
-----------------------------------------------------------
Craig S. Friday asks the U.S. Bankruptcy Court for the Southern
District of New York to compel Northwest Airlines, Inc., to
process his grievances and permit him the opportunity to return to
flight status before his seven-year disability period runs this
year.
Mr. Friday has been employed at Northwest Airlines since July 14,
1978. Mr. Friday presently holds Captain status while being
involuntarily kept on company imposed disability retirement,
James A. Gauthier, Esq., at Gauthier Law Offices, P.S., in Kent,
Washington, relates.
Mr. Gauthier recounts that before 1998, Mr. Friday reported
various airline safety violations and concerns to Northwest and
to the Federal Aviation Administration. Northwest engaged in a
series of retaliatory actions against Mr. Friday in an attempt to
stop his safety reporting conduct.
In 1997, after Mr. Friday reported what he believed to be a
particularly egregious safety violation, Northwest alleged that
Mr. Friday's numerous letters alleging violations were unfounded.
Northwest ordered Mr. Friday and his wife, who was not a
Northwest employee, to undergo a Fitness for Duty Examination.
Northwest's psychiatrist, Dr. Garrett O'Connor, alleged that
Mr. Friday had a cognitive impairment and proposed that he and
his wife attend marriage counseling, in addition to his required
individual counseling.
Northwest offered no plan or arrangement for receiving the
counseling, nor would it guarantee that it would allow Mr. Friday
back to work once the unspecified number of counseling sessions
was achieved. NWA "grounded" Mr. Friday and refused to cooperate
with him on his right to return to work, Mr. Gauthier complains.
In December 1998, Mr. Friday took Dr. O'Connor's evaluation and
conclusions to a FAA Certified Medical Examiner, Dr. Aaron Kemp.
After reviewing Dr. O'Connor's evaluation, and performing a
thorough physical examination, Dr. Kemp said that Mr. Friday was
fit for duty, and re-issued him a current FAA First Class Medical
Certificate, with no waivers.
Northwest refused to accept Mr. Friday's current FAA Medical
Certificate, and continued to keep him grounded until his sick
leave and accrued vacation expired in August 1999. It became
apparent to Mr. Friday that Northwest's goal was to keep him
grounded until he was bankrupt, in retaliation for his safety
reporting, Mr. Gauthier asserts.
In order to bring in an income, in February 1999, Friday was
forced to seek temporary medical disability retirement until he
could have his employment situation heard by a grievance
arbitrator, per the NWA Pilot Collective Bargaining Agreement and
the Railway Labor Act.
The disability arbitrator ruled in Mr. Friday's favor and related
back the disability coverage to August 1999. The arbitrator
further ordered that Mr. Friday was to retain all the rights and
privileges associated with all other pilots on medical
retirement.
>From the year 2000 to the present, Friday has filed numerous
grievances directly with NWA seeking to re-establish grounds upon
which he can return to work. The grievances involved these
issues:
(a) the validity of Northwest's cause for sending Mr. Friday
to the Fitness for Duty Examination which created a second
medical standard beyond that required under the CBA;
(b) the inappropriate action of ordering that Mr. Friday's
non-employee wife to undergo the FDE with him;
(c) Northwest's refusal to accept Mr. Friday's FAA First Class
Medical Certificate;
(d) Northwest's refusal to assign medical treatment for the
alleged cognitive impairment, which is required under the
CBA. NWA is required to pay for all medical treatment for
its non-contractual FDE;
(e) Northwest's refusal to compensate Mr. Friday for loss of
pay. Under the CBA, Northwest is required to keep a pilot
on the payroll during the period of all medical testing
and assignment of medical treatment;
(f) Northwest's refusal to allow Mr. Friday to contact any
necessary Northwest personnel or departments, such as the
Pension Department or the Benefits Departments;
(g) the validity of the FDE itself which created a second
medical standard for Mr. Friday. There is no reference
to that examination in the CBA or employment agreement;
(h) the withholding of Mr. Friday's personal and family
pass travel authority which was taken away because he
wrote to then-President Bill Clinton after he was
medically retired;
(i) Northwest's refusal to allow Mr. Friday to bid the
position that his seniority holds while on disability
retirement. Bidding is important to assure proper
integration when returning to the line;
(j) Northwest's disparaging, slanderous, and completely false
public statements made about Mr. Friday in its effort to
malign his character, and thus his safety concerns and
reports. By its actions, Northwest is defying the
directives set forth by the arbitrator at the Retirement
Board Hearing, which is to allow Mr. Friday all the rights
and privileges of all other NWA pilots on medical
retirement.
Mr. Gauthier contends that Northwest has steadfastly refused to
process Mr. Friday's grievances. The seven years during which
Mr. Friday may return to the flight line from disability
retirement is fast approaching. By refusing to process
Mr. Friday's grievances in a proper and timely manner, and
allowing the grievances to go before an arbitrator, Northwest has
taken away Mr. Friday's ability to return to the flight line, has
damaged him financially, and has damaged his character and
reputation almost beyond repair. Other than a lawsuit, a fair
hearing of Mr. Friday's grievances before an arbitrator is the
only manner in which he can determine what he is required to do
in order to return to flying the line.
Mr. Gauthier argues that if Mr. Friday is forced to wait to have
his grievances heard until Northwest emerges from bankruptcy,
Mr. Friday will suffer irreparable harm. He adds that Mr. Friday
is rapidly approaching age 60, which is the mandatory retirement
age for airline pilots. If he is not allowed to have his
grievances heard in a timely manner, he may never have the
opportunity to fly again. Further, he would lose his seniority
as a line pilot.
Northwest affirmed its collective bargaining agreement with the
Air Line Pilots Association, International, thus, there is no
reason to deny Mr. Friday a Court order compelling Northwest to
comply with the Pilots CBA and process his grievances,
Mr. Gauthier asserts.
Mr. Gauthier notes that the grievance process under the Pilots
CBA remains intact. Northwest should be ordered to convene its
System Board of Adjustment to hear all of Mr. Friday's pending
grievances. If Mr. Friday is successful, awards granting pass
privileges and return-to-work right would be enforceable because
neither would deplete the Northwest's estate, he points out.
Objections
Representing the Debtors, Gregory M. Petrick, Esq., at
Cadwalader, Wickersham & Taft LLP, in New York, notes that
Mr. Friday is inviting the Bankruptcy Court to revisit previously
considered grievances and reconsider a determination of the
United States Court of Appeals for the Ninth Circuit, among other
courts, that he is no longer a Northwest employee.
Mr. Friday failed to advise the Bankruptcy Court that, as a
former employee, he has no grievance rights under the Pilots CBA.
Thus, Mr. Friday is demanding rights to invoke arbitration
procedures of a contract to which he is neither a party nor an
intended beneficiary, Mr. Petrick says.
Mr. Petrick adds that ALPA is the only entity that could have
sought to compel arbitration on behalf of Mr. Friday. The Court
should not endorse Mr. Friday's continued efforts to ignore the
CBA and burden the Debtors by revisiting issues that have been
litigated to conclusion and grieved prior to the commencement of
their cases.
According to ALPA's counsel, Richard M. Seltzer, Esq., Cohen,
Weiss and Simon LLP, in New York, Mr. Friday's request seeks a
blanket order directing the immediate arbitration of scores of
duplicative, time barred or meritless grievances. Mr. Friday's
grievances, which identify only by category and not by specific
document, involve events going back many years, including prior
to his voluntary termination of his employment seven years ago.
Mr. Seltzer contends that to the extent any of Mr. Friday's
grievances is appropriate before the Court, he must file an
adversary proceeding.
At this time, Mr. Seltzer asserts, there is no basis for relief
from the Court to the extent the merits of Mr. Friday's requests
are reached. He agrees with the Debtors that only ALPA can place
a case before the appropriate arbitration tribunal.
Mr. Friday Talks Back
Mr. Friday tells the Court that his grievances have been
repeatedly unanswered with both Northwest and ALPA refusing to
follow the mandatory grievance process, which is his exclusive
dispute resolution process under the Railway Labor Act.
Mr. Gauthier clarifies that Mr. Friday is not asking the Court to
interpret the Pilots CBA or to extend to them any different
rights than those available to all pilots.
Mr. Gauthier says that Mr. Friday is asking the Court to compel
Northwest Airlines and ALPA to process his grievances as is
required according to the process outlined in the Pilots CBA.
Mr. Friday relates that both Northwest and ALPA has previously
informed him that he can file his own grievances without ALPA's
involvement. However, he states that his grievances were
ignored.
Northwest should be compelled to follow the provisions of the
Pilots CBA, Mr. Gauthier asserts. Northwest has retained the CBA
as part of its reorganization plan.
Mr. Friday contends that Northwest and ALPA's failure to follow
the mandatory provisions of the CBA was intended to deny his
ability to return to flying within the seven-year disability
return period.
Mr. Gauthier asserts that if the Court does not direct Northwest
and ALPA to follow the mandates of the CBA, Mr. Friday and others
similarly situated will be denied any opportunity to have their
grievances properly heard.
About Northwest Airlines
Northwest Airlines Corp. (OTC: NWACQ) -- http://www.nwa.com/
-- is the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and
approximately 1,400 daily departures. Northwest is a member of
SkyTeam, an airline alliance that offers customers one of the
world's most extensive global networks. Northwest and its travel
partners serve more than 900 cities in excess of 160 countries on
six continents. The Company and 12 affiliates filed for chapter
11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No.
05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq.,
at Cadwalader, Wickersham & Taft LLP in New York, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in
Washington represent the Debtors in their restructuring efforts.
The Official Committee of Unsecured Creditors has retained Akin
Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the
Debtors' chapter 11 cases. When the Debtors filed for protection
from their creditors, they listed $14.4 billion in total assets
and $17.9 billion in total debts. (Northwest Airlines Bankruptcy
News, Issue No. 39; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
NOTIFY TECHNOLOGY: June 30 Stockholders' Deficit Tops $1 Million
----------------------------------------------------------------
Notify Technology Corporation has filed its third fiscal quarter
financial statements for the three months ended June 30, 2006,
with the Securities and Exchange Commission.
For the three months ended June 30, 2006, the Company reported a
$138,370 net loss on $937,515 of total revenues compared with a
$252,695 net loss on $866,633 of total revenues for the same
period in 2005.
At June 30, 2006, the Company's balance sheet showed $1,494,829 in
total assets and $2,572,150 in total liabilities, resulting in a
$1,077,321 stockholders' deficit.
The Company had a $778,888 deficit at Sept. 30, 2005.
The Company's June 30 balance sheet also showed strained liquidity
with $1,390,389 in total current assets available to pay
$2,558,267 in total current liabilities coming due within the next
12 months.
Full-text copies of the Company's third fiscal quarter financials
are available for free at http://ResearchArchives.com/t/s?1291
Headquartered in San Jose, California, Notify Technology
Corporation (OTC: NTFY) -- http://www.notifycorp.com/-- is a
software company that develops mobility products for organizations
of all sizes. Notify's wireless solutions provide secure
synchronized email and PIM access and management to any size
organization on a variety of wireless 2-way devices and networks.
Notify sells its wireless products directly and through authorized
resellers internationally.
ORECK 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, the rating agency lowered its B1 Corporate Family
Rating for Oreck Corporation to B2. Additionally, Moody's 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
---------- ------- ------- ------ ----------
$20 Million
Senior Secured
Revolver B1 B1 LGD2 29%
$195 Million
Senior Secured
Term Loan B1 B1 LGD2 29%
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 New Orleans, Louisiana, Oreck Corp. is a leading
manufacturer and marketer of premium priced vacuum cleaners and
air purifiers.
PACIFIC SHORES: Moody's Puts Ratings on Watch for Possible Upgrade
------------------------------------------------------------------
Moody's Investors Service has placed these classes of notes issued
by Pacific Shores CDO, Ltd. on watch for possible upgrade:
* The U.S. $96,000,000 Class B-1 Second Priority Senior
Secured Floating Rate Notes Due 2037
--Prior Rating: Aa1
-- Current Rating: Aa1, on watch for possible upgrade
* The U.S. $16,000,000 Class B-2 Second Priority Senior
Secured Floating Rate Notes Due 2037
-- Prior Rating: Aa1
-- Current Rating: Aa1, on watch for possible upgrade
* The U.S.$28,000,000 Class C Mezzanine Secured Floating Rate
Notes Due 2037
-- Prior Rating: Baa2
-- Current Rating: Baa2, on watch for possible upgrade
* The 21,500 Class 1 Preference Shares with an Aggregate
Liquidation Preference of U.S. $21,500,000
-- Prior Rating: Ba2
-- Current Rating: Ba2, on watch for possible upgrade
* The 7,000 Class 2 Preference Shares with an Aggregate
Liquidation Preference of U.S. $7,000,000
-- Prior Rating: Ba2
--Current Rating: Ba2, on watch for possible upgrade
Moody's noted that the rating action was primarily due to
improvement in the transaction's Class A/B (110.67% vs. 105.25%
covenant) and Class C (105.47% vs. 101.75% covenant)
overcollateralization tests, as well as the well diversified
portfolio of assets (diversity score of 50 vs. 26 covenant).
Furthermore, the ongoing delevering of the transaction also
contributed to the improvement in the credit quality of the notes.
PIERRE FOODS: 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, the rating agency affirmed its B1 Corporate Family
Rating for Pierre Foods, Inc. Additionally, Moody's revised and
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
---------- ------ ------ ------ ----------
$40MM Sr. Sec.
Revolver due
2099 B1 Ba2 LGD2 28%
$150MM Sr.
Sec. Term Loan
due 2010 B1 Ba2 LGD2 28%
$125MM 9.875%
Sr. Sub. Notes
due 2012 B3 B3 LGD5 82%
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 Cincinnati, Ohio, Pierre Foods, Inc., manufactures and
markets high-quality, differentiated processed food solutions,
focusing on formed, pre-cooked protein products and hand-held
convenience sandwiches. Pierre markets its sandwiches under a
number of well-known brand names, such as Fast Choice(R), Rib-B-
Q(R), Hot 'n' Ready(R) and Big AZ(R), and has licenses to sell
sandwiches using well-known brands, such as Checkers(R),
Krystal(R), Tony Roma's(R), NASCAR CAFE(R) and Nathan's Famous(R).
POSITRON CORP: Posts $4.6 Million Equity Deficit at June 30
-----------------------------------------------------------
Positron Corporation reported a $3.1 million net loss on $266,000
of net revenues for the three months ended June 30, 2006, compared
to a $949,000 net loss on $205,000 of revenues in 2005.
At June 30, 2006, the Company's balance sheet showed $1.9 million
in total assets and $6.5 million in total liabilities, resulting
in a $4.6 million stockholders' deficit. The Company's equity
deficit stood at $2.9 million as of Dec. 30, 2005.
The Company's June 30 balance sheet also showed strained liquidity
with $770,000 in total current assets available to pay
$3.4 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?1299
Going Concern Doubt
Ham, Langston & Brezina, L.L.P. expressed substantial doubt about
Positron Corporation's ability to continue as a going concern
after auditing the Company's financial statements for the year
ended Dec. 31. 2005. The auditing firm pointed to the Company's
recurring losses from operations and low inventory turnover.
Headquartered in Houston, Texas, Positron Corporation --
http://www.positron.com-- designs, manufactures, markets and
supports advanced medical imaging devices utilizing positron
emission tomography technology under the trade name POSICAM(TM)
systems. POSICAM(TM) systems incorporate patented and proprietary
software and technology for the diagnosis and treatment of
patients in the areas of cardiology, oncology and neurology.
POSICAM(TM) systems are in use at leading medical facilities,
including the University of Texas -- Houston Health Science
Center; The Heart Center of Niagara in Niagara Falls, New York;
Emory Crawford Long Hospital Carlyle Fraser Heart Center in
Atlanta; and Nishidai Clinic (Diagnostic Imaging Center) in Tokyo.
PRESIDENT CASINOS: Wants Harbour Financial Paid for Advisory Work
-----------------------------------------------------------------
President Casinos, Inc., and its debtor-affiliates ask the
Honorable Kathy A. Surratt-States of the U.S. Bankruptcy Court for
the Eastern District of Missouri in St. Louis for permission to
employ and pay Harbour Financial, LLC, for its services as their
business consultant.
In March 2006, the Debtors wanted to sell all of the issued and
outstanding common stock of President Riverboat Casino-Missouri,
Inc., to Pinnacle Entertainment, Inc. On March 30, 2006, the
Court authorized the Debtors to conduct an auction for the sale of
the stock.
The Debtors received an offer from Guggenheim Capital Partners to
refinance the Debtors' outstanding indebtedness owed to creditors
in lieu of a sale of the Global Assets to Pinnacle.
Because of the timing and the nature of the Guggenheim Offer, the
Debtors were required to evaluate the offer in an expedited and
confidential manner. To assist them in evaluating the offer, the
Debtors utilized the services of Harbour Financial. For the same
reason, the Debtors were unable to obtain the Court's prior
approval for the use of Harbour Financial's services in connection
with the evaluation of the Guggenheim Offer.
The Debtors want to compensate Harbour Financial for its services
performed in connection with the evaluation of the Guggenheim
Offer. Papers filed with the Court do not indicate how much
Harbour Finan
cial is charging the Debtors for its services.
Paul B. Clifford assures the Court that the Firm does not hold nor
represent any interest adverse to the Debtors' estates and is
disinterested as that term is defined in Section 101(14) of the
Bankruptcy Code.
About Harbour Financial, LLC
Harbour Financial, LLC, is a financial consulting and advisory
firm that works with companies, equity holders, and creditors on
middle market transactions including restructurings, distressed
sales, and capital raising events.
Headquartered in St. Louis, Missouri, President Casinos Inc. --
http://www.presidentcasino.com/-- currently owns and operates a
dockside gaming casino in St. Louis, Missouri through its wholly
owned subsidiary, President Missouri. The Debtor filed for
chapter 11 protection on June 20, 2002 (Bankr. S.D. Miss. Case No.
02-53055). On July 11, 2002, substantially all of Debtor's other
operating subsidiaries filed for chapter 11 protection in the same
Court. The Honorable Judge Edward Gaines ordered the transfer of
President Casino's chapter 11 cases from Mississippi to Missouri.
The case was reopened on Nov. 5, 2002 (Bankr. E.D. Mo. Case No.
02-53005). Brian Wade Hockett, Esq., at Hockett Thompson Coburn
LLP, represents the Debtors in their restructuring efforts. David
A. Warfield, Esq., at Blackwell Sanders Peper Martin LLP,
represents the Official Committee of Unsecured Creditors. Thomas
E. Patterson, Esq., and Ronn S. Davids, Esq., at Klee, Tuchin,
Bogdanoff & Stern LLP and E. Rebecca Case, Esq., and Howard S.
Smotkin, Esq., at Stone, Leyton & Gershman, P.C., represent the
Official Committee of Equity Security Holders.
PRUDENTIAL SECURITIES: Moody's Holds Caa2 Rating on $8MM of Certs.
------------------------------------------------------------------
Moody's Investors Service upgraded the ratings of four classes and
affirmed the ratings of eight classes of Prudential Securities
Secured Financing Corp., Mortgage Pass-Through Certificates,
Series 1998-C1:
Class A-1B, $245,798,598, Fixed, affirmed at Aaa
Class A-2MF, $65,358,628, Fixed, affirmed at Aaa
Class A-EC, Notional, affirmed at Aaa
Class B, $57,438,000, Fixed, affirmed at Aaa
Class C, $63,181,000, Fixed, affirmed at Aaa
Class D, $60,310,000, WAC, affirmed at Aaa
Class E, $17,232,000, WAC, upgraded to Aaa from Aa2
Class F, $25,848,000, WAC, upgraded to Aa2 from Baa1
Class H, $8,617,000, WAC, upgraded to Baa2 from Ba2
Class J, $11,488,000, WAC, upgraded to Ba1 from Ba3
Class L, $14,360,000, Fixed, affirmed at B3
Class M, $8,617,000, Fixed, affirmed at Caa2
As of the Sept. 15, 2006 distribution date, the transaction's
aggregate certificate balance has decreased by approximately 45.3%
to $628.4 million from $1.1 billion at securitization. The
Certificates are collateralized by 184 mortgage loans. The loans
range in size from less than 1.0% to 2.8% of the pool, with the
top 10 loans representing 19.2% of the pool. Thirteen loans,
representing 8.5% of the pool, have defeased and have been
replaced with U.S. Government securities.
Seven loans have been liquidated from the trust resulting in
aggregate realized losses of approximately $13.1 million.
Currently there is one loan in special servicing representing 0.4%
of the pool. No loss is projected on this loan. Thirty-three
loans, representing 18.7% of the pool, are on the master
servicer's watchlist.
Moody's was provided with full year 2005 operating results for
97.0% of the performing loans. Moody's weighted average loan to
value ratio is 76.7%, compared to 78.5% at Moody's last full
review in July 2005 and compared to 82.4% at securitization.
Moody's is upgrading Classes E, F, H, and J due to increased
credit support and stable overall pool performance. Classes D and
E were upgraded on August 2, 2006 and Class E was placed on review
for further possible upgrade based on a Q tool based portfolio
review (see "US CMBS: Q Tool Based Portfolio Review Results in
Numerous Upgrades," Moody's Special Report, August 2, 2006).
The top three loans represent 7.4% of the outstanding pool
balance. The largest loan is the Old Orchard Apartments Loan
($17.5 million - 2.8%), which is secured by a 220-unit multifamily
property located in Santa Clara, California. Built in 1976, the
property's performance has been impacted by lower occupancy and
income. Occupancy was 80.0% as of March 2006, compared to 90.0%
at last review and compared to 98.6% at securitization. Moody's
LTV is 94.0%, compared to 94.3% at last review and compared to
69.8% at securitization.
The second largest loan is the Holiday Inn Hotel Portfolio Loan
($14.7 million - 2.3%), which consists of four cross-
collateralized and cross-defaulted loans secured by Holiday Inn
limited service hotels built between 1965 and 1975. The hotels
include 561 rooms in aggregate and are located in Maine and
Virginia. RevPAR and occupancy for the trailing 12-month period
ending March 2006 were $49.40 and 67.3% respectively. The Holiday
Inn Civic Center located in Bangor, Maine is on the master
servicer's watchlist due to low debt service coverage and low
occupancy, the same as at last review. Moody's LTV is 61.9%,
compared to 65.5% at last review and compared to 72.1% at
securitization.
The third largest loan is the Pebblebrook Apartments Loan ($14.6
million - 2.3%), which is secured by a 486-unit multifamily
property located in New Britain, Connecticut. Built in 1974, the
property's performance has been stable since securitization.
Occupancy is 96.7%, compared to 99.0% at last review and compared
to 95.0% at securitization. Moody's LTV is 67.9%, compared to
65.4% at last review and compared to 82.6% at securitization.
The pool's collateral is a mix of retail (36.6%), multifamily
(19.9%), office and mixed use (13.7%), industrial and self storage
(7.7%), hotel (8.6%), U.S. Government securities (8.5%) and
healthcare (5.0%). The collateral properties are located in 35
states. The highest state concentrations are California (15.1%),
Texas (8.2%), Ohio (7.4%), New York (7.4%) and New Jersey (5.8%).
All of the loans are fixed rate.
PTS INC: Posts $350,326 Net Loss in Quarter Ended June 30
---------------------------------------------------------
PTS, Inc., has filed its second quarter financial statements for
the three months ended June 30, 2006, with the Securities and
Exchange Commission.
For the three months ended June 30, 2006, the Company reported a
$350,326 net loss on $211,351 of sales, compared with a $302,838
net loss for the same period in 2005.
At June 30, 2006, the Company's balance sheet showed $1,748,424 in
total assets,$2,077,191 in total liabilities, and $29,788 in
minority interest, resulting in a $358,555 stockholders' deficit.
The Company's June 30 balance sheet also showed strained liquidity
with $194,814 in total current assets available to pay $1,603,290
in total current liabilities coming due within the next 12 months.
Full-text copies of the Company's second quarter financials are
available for free at http://ResearchArchives.com/t/s?1292
Going Concern Doubt
As reported in the Troubled Company Reporter on June 2, 2006,
Lynda R. Keeton CPA, LLC, in Las Vegas, Nevada, raised substantial
doubt about PTS 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 failure to generate capital and net losses.
About PTS Inc.
PTS, Inc., manufactures and distributes paraplegic and
quadriplegic apparatus known in the market as Glove Box. The
company also offers consulting services for marketing production
design through third party contractors.
PURE FISHING: Moody's Affirms B1 Corporate Family Rating
--------------------------------------------------------
Moody's Investors Service affirmed Pure Fishing, Inc.'s B1
corporate family rating, but revised the company's outlook to
negative from stable. Moody's also affirmed the Ba3 rating on the
company's first lien senior secured credit facilities and the B3
rating on its second lien term loan. The negative outlook
reflects the company's weaker than expected performance stemming
from significant inventory adjustments by its key retail customers
and a continued soft demand environment in Europe.
The negative outlook also reflects Moody's concern over the
company's ability to comply with amended covenants given the
uncertainty over the magnitude of any further potential retailer
inventory adjustments. The company is expected to seek an
amendment to some of the financial covenants governing its senior
secured credit facilities to provide additional financial
flexibility (even though the company was in full compliance with
all of its covenants as of 2Q2006). Notwithstanding these
concerns, the ratings affirmation reflects Moody's expectation
that the company's operating performance will stabilize over the
near-term and that certain of its LTM credit metrics are still
acceptable for the B1 ratings category, although the company has
little cushion to absorb any unanticipated shortfalls in earnings
and cash flow.
These ratings are affirmed:
* Corporate family rating, B1;
* Probability-of-default rating, B1;
* $45 million first lien senior secured revolving credit
facility due 2009, Ba3 (LGD3, 39%);
* $147 million first lien senior secured term due 2010, Ba3
(LGD3, 39%).
* $35 million second lien senior secured loan due 2011, B3
(LGD5, 87%).
Pure Fishing's B1 corporate family rating is primarily driven by
the company's high leverage with credit metrics that are largely
consistent with a B/Caa ratings profile, modest scale, the mature
nature of the product category, significant competition in a
highly fragmented market, some customer concentration with one
customer accounting for a roughly a quarter of sales, and some
seasonality. The rating also reflects the company's comprehensive
line of fishing tackle products that address almost all relevant
product categories in the sport fishing market, its recognized
brand names, long standing relationships with key retail
customers, the geographic diversity of its revenues, historically
stable operating performance, and good EBITA margins consistently
in the low-teens.
Pressure for stabilizing the outlook could occur if new product
introductions offset the impact of any further retailer inventory
adjustments such that Pure Fishing's revenue and EBITDA levels
(excluding one-time expenses) decline only moderately in FY 2006
(relative to the prior year) and sequentially increase in FY 2007,
debt to EBITDA remains below 5.0 times on a sustainable basis
(using Moody's standard analytical adjustments), and free cash
flow to debt is neutral in FY 2006 while increasing to mid-single
digit levels in FY 2007.
Downward rating pressure could build to the extent that further
retailer inventory reductions or a weaker retail environment
results in Pure Fishing's debt to EBITDA exceeding 5.5 times at FY
2006, free cash flow is materially negative in FY 2006 or only
breakeven in FY 2007, or the company is unable to remain in
compliance with financial covenants.
Headquartered in Sprit Lake, Iowa, Pure Fishing, Inc. offers a
comprehensive line of products for the global fishing tackle
market, including fishing line, rods, baitcast and spinning reels,
and artificial bait. Products are sold to mass merchandisers,
sporting good retailers, catalogs, and wholesalers. The company
reported revenues of $256 million over the LTM ended June 30,
2006.
RADNOR HOLDINGS: Court Approves $103 Million DIP Financing
----------------------------------------------------------
Radnor Holdings Corporation and its debtor-affiliates obtained
final approval on Friday, Sept. 22, 2006, from the U.S. Bankruptcy
Court for the District of Delaware in Wilmington for a
$103 million in debtor-in-possession financing.
Approximately $64 million of the DIP financing has been used to
repay the Debtors' outstanding balance under their prepetition
revolving credit facility and the remainder has been and will
continue to be used to satisfy the Debtors' operating and
bankruptcy related obligations, including payment of employee
wages and benefits and payments to suppliers for goods and
services received after their bankruptcy filing.
Asset Sale
The Bankruptcy Court also approved the bidding procedures related
to the sale of the Debtors' assets. Under the approved bid
procedures, the Debtors will continue to solicit higher or better
offers, including restructuring plans.
The Debtors will hold an auction with respect to any offers on
Nov. 20, 2006, and seek court approval for such a transaction at a
hearing scheduled on Nov. 21, 2006.
Tennenbaum Capital Partners, LLC, through one of its affiliates,
remains the "stalking horse bidder" under an agreement previously
entered into with the Debtors, which provides for the sale of
substantially all of the Debtors' assets, including its WinCup and
StyroChem businesses.
Headquartered in Radnor, Pennsylvania, Radnor Holdings Corporation
-- http://www.radnorholdings.com/-- manufactures and distributes
a broad line of disposable food service products in the United
States, and specialty chemicals worldwide. The Debtor and its
affiliates filed for chapter 11 protection on Aug. 21, 2006
(Bankr. D. Del. Case No. 06-10894). Gregg M. Galardi, Esq., and
Mark L. Desgrosseilliers, Esq., at Skadden, Arps, Slate, Meagher,
represent the Debtors. The Official Committee of Unsecured
Creditors is represented by Greenberg Traurig, LLP. When the
Debtors filed for protection from their creditors, they listed
total assets of $361,454,000 and total debts of $325,300,000.
RECYCLED PAPER: 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, the rating agency confirmed its B2 Corporate Family
Rating for Recycled Paper Greetings, Inc. Additionally, Moody's
revised and 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
---------- ------- ------- ------ ----------
$120 Mil. 1st-Lien
Sr. Sec. Term Loan
due 2011 B2 Ba3 LGD3 30%
$20 Mil. 1st-Lien
Sr. Sec. Revolving
Credit Facility
due 2010 B2 Ba3 LGD3 30%
$77 Mil. 2nd-Lien
Sr. Sec. Term Loan
due 2012 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%).
Headquartered in Chicago, Illinois, Recycled Paper Greetings Inc.
manufactures greeting cards. The Company also sells gifts and
other novelties.
REFCO INC: Will Pay $705 Mil. to Resolve All Secured Claims
-----------------------------------------------------------
Refco Group Ltd., LLC and its affiliated debtors received approval
from the U.S. Bankruptcy Court for the Southern District of New
York, on Sept. 27, 2006, to pay its secured creditors, including a
group of banks led by Banc of America Securities, as agent,
approximately $705 million to settle all secured claims against
Refco.
"We are very pleased with the Court's decision," said Refco's
Chief Restructuring Officer David Pauker, who testified at the
hearing. "The approval of this settlement was a necessary step
toward effecting the global settlement, obtaining approval of the
Debtor's bankruptcy plan and making distributions to unsecured
creditors."
Under the terms of the settlement approved by the Court, Refco's
secured lenders will receive payment in full of principal, plus
interest at the contract rate, through the payment date, but have
agreed to forego payment of default interest. In addition, the
Debtors, lenders and certain third parties will exchange mutual
releases.
In papers filed with the Bankruptcy Court, Refco said that the
agreement with the secured creditors was in the best interest of
the Refco estates and their creditors because, among other things,
it limits "potentially substantial secured claims for additional
interest, fees and indemnities."
About Refco Inc.
Based in New York, Refco Inc. -- http://www.refco.com/-- is a
diversified financial services organization with operations in 14
countries and an extensive global institutional and retail client
base. Refco's worldwide subsidiaries are members of principal
U.S. and international exchanges, and are among the most active
members of futures exchanges in Chicago, New York, London and
Singapore. In addition to its futures brokerage activities, Refco
is a major broker of cash market products, including foreign
exchange, foreign exchange options, government securities,
domestic and international equities, emerging market debt, and OTC
financial and commodity products. Refco is one of the largest
global clearing firms for derivatives.
The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts. Luc A.
Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents
the Official Committee of Unsecured Creditors. Refco reported
$16.5 billion in assets and $16.8 billion in debts to the
Bankruptcy Court on the first day of its chapter 11 cases.
Refco LLC, an affiliate, filed for chapter 7 protection on
Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC, is
a regulated commodity futures company that has businesses in the
United States, London, Asia and Canada. Refco, LLC, filed for
bankruptcy protection in order to consummate the sale of
substantially all of its assets to Man Financial Inc., a wholly
owned subsidiary of Man Group plc. Albert Togut, the chapter 7
trustee, is represented by Togut, Segal & Segal LLP.
On April 13, 2006, the Court appointed Marc S. Kirschner as Refco
Capital Markets Ltd.'s chapter 11 trustee. Mr. Kirschner is
represented by Bingham McCutchen LLP. RCM is Refco's operating
subsidiary based in Bermuda.
Three more affiliates of Refco, Westminster-Refco Management LLC,
Refco Managed Futures LLC, and Lind-Waldock Securities LLC, filed
for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y. Case
Nos. 06-11260 through 06-11262)
REFCO INC: Chapter 7 Trustee Wants Rogers Funds Claims Disallowed
-----------------------------------------------------------------
Albert Togut, the Chapter 7 trustee for the estate of Refco, LLC,
asks the U.S. Bankruptcy Court for the Southern District of New
York to disallow six claims:
Claimant Claim No.
-------- ---------
Rogers Raw Material Fund, L.P. 251
Rogers International Raw Material Fund 252
Beeland Management Company, L.L.C. 253
Walter Thomas Price 254
Allen Goodman 255
James B. Rogers, Jr. 491
Rogers Funds Claims
The Rogers Funds assert claims against Refco LLC for customer net
equity under Section 766(h) of the Bankruptcy Code; commodities
fraud under 7 U.S.C. Section 6b; aiding and abetting under 7
U.S.C. Section 6b; common law fraud; contribution; negligence;
conversion; breach of fiduciary duty; and breach of contract.
Mr. Togut contends that the Rogers Funds are attempting to recover
from Refco LLC what they elected not to recover from Refco Capital
Markets, Ltd.
The Rogers Funds' claims against LLC, however, include little or
no factual or explanatory information and merely incorporate by
reference the Rogers Funds' complaint against RCM -- which does
not allege any wrongdoing or breach of duty by Refco LLC - to
support a laundry list of legal theories against Refco LLC, Mr.
Togut points out.
The Rogers Funds filed an adversary case against RCM to recover:
(1) $341 million in government securities that the Rogers
Funds transferred to RCM on October 7, 2005 -- Securities
Transfers; and
(2) $22.8 million in cash that was transferred on October 11,
2005, from Refco LLC to RCM -- Excess Margin Transfer.
The Rogers Funds allege that they authorized only that the
Transferred Property be transferred to and maintained in
segregated accounts at Refco LLC, and that their assets were
wrongfully -- and without their knowledge or consent -- diverted
to RCM.
The Rogers Funds have been sued by their investors for damages
related to the Refco situation.
In July 2006, the Rogers Funds agreed to compromise their claims
against RCM. Under the RCM Settlement, the Rogers Funds will
have allowed Securities Customer Claims for $362,883,523, and
allowed FX/Unsecured Claims for $10,151,004.
Mr. Togut tells Judge Drain that except for the Excess Margin
Transfer, none of the Transferred Property ever were deposited
with or held by LLC; the assets, instead, were transferred
directly from the Rogers Funds' accounts at Harris N.A. and Man
Financial to RCM, where they are held today. Moreover, the
Rogers Funds authorized the Excess Margin Transfer to RCM.
"There is no evidence of any conspiracy to defraud the Rogers
Funds, much less one involving LLC, and there is substantial
evidence that the corporate officers responsible for the Rogers
Funds knowingly assumed the risks presented by the transactions
they approved," Mr. Togut says.
Mr. Togut also argues that settlement of the Rogers Funds' claims
against RCM demonstrates that the Rogers Funds did not become
Refco LLC's customers with respect to the Securities Transfers.
The Rogers Funds' treatment under the RCM settlement can only be
justified if they intended RCM to be their stockbroker with
respect to the Securities Transfers, which means, a fortiori,
that the Rogers Funds could not have been commodities customers
of Refco LLC as to that same property.
Likewise, the Rogers Funds' agreement to allow the Securities
Transfers to be treated as "Assets in Place" -- as securities
customer property -- under the RCM Settlement is wholly
consistent with the Rogers Funds' treatment as securities
customers of RCM, and wholly inconsistent with the claim that the
Rogers Funds were commodities customers of Refco LLC with respect
to the same property, Mr. Togut adds.
Beeland, et al., Claims
Beeland, et al., assert claims against Refco LLC based on
potential liability that they may incur in connection with
investor actions filed against each. The claims are identical to
those filed by the Rogers Funds.
Beeland is the general partner and commodity pool operator for
the Rogers Funds. Mr. Price is the CEO and Mr. Goodman is the
chief financial officer of Beeland. Mr. Rogers is a majority
member of Beeland.
Mr. Togut contends that like the Rogers Funds Claims, the
Beeland, et al., Claims include the same laundry list of
alternative theories for Refco LLC's purported liability to the
claimants. Mr. Togut denies that the claimants are entitled to
any rights of contribution or indemnity against Refco LLC.
About Refco Inc.
Based in New York, Refco Inc. -- http://www.refco.com/-- is a
diversified financial services organization with operations in 14
countries and an extensive global institutional and retail client
base. Refco's worldwide subsidiaries are members of principal
U.S. and international exchanges, and are among the most active
members of futures exchanges in Chicago, New York, London and
Singapore. In addition to its futures brokerage activities, Refco
is a major broker of cash market products, including foreign
exchange, foreign exchange options, government securities,
domestic and international equities, emerging market debt, and OTC
financial and commodity products. Refco is one of the largest
global clearing firms for derivatives.
The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts. Luc A.
Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents
the Official Committee of Unsecured Creditors. Refco reported
$16.5 billion in assets and $16.8 billion in debts to the
Bankruptcy Court on the first day of its chapter 11 cases.
Refco LLC, an affiliate, filed for chapter 7 protection on
Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC, is
a regulated commodity futures company that has businesses in the
United States, London, Asia and Canada. Refco, LLC, filed for
bankruptcy protection in order to consummate the sale of
substantially all of its assets to Man Financial Inc., a wholly
owned subsidiary of Man Group plc. Albert Togut, the chapter 7
trustee, is represented by Togut, Segal & Segal LLP.
On April 13, 2006, the Court appointed Marc S. Kirschner as Refco
Capital Markets Ltd.'s chapter 11 trustee. Mr. Kirschner is
represented by Bingham McCutchen LLP. RCM is Refco's operating
subsidiary based in Bermuda.
Three more affiliates of Refco, Westminster-Refco Management LLC,
Refco Managed Futures LLC, and Lind-Waldock Securities LLC, filed
for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y. Case
Nos. 06-11260 through 06-11262). (Refco Bankruptcy News, Issue
No. 42; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
REMINGTON ARMS: 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, the rating agency confirmed its B3 Corporate Family
Rating for Remington Arms Company, Inc., and its Caa1 rating on
the company's $200 Million Senior Unsecured Notes due 2011.
Additionally, Moody's assigned an LGD4 rating to those bonds,
suggesting noteholders will experience a 63% 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%).
Based in Madison, North Carolina, Remington Arms Company, Inc.,
designs, manufactures, and markets rifles, shotguns, ammunition,
and hunting and gun care accessories under the Remington name.
The company's products are sold through independent dealers,
Wal-Mart, and sporting goods retailers. The company reported
sales of $410 million in 2005.
REXAIR HOLDINGS: 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, the rating agency lowered its B1 Corporate Family
Rating for Rexair Holdings, Inc., to B2. Additionally, Moody's
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
---------- ------- ------- ------ ----------
$20 Million
Senior Secured
Revolver B1 B1 LGD3 34%
$120 Million Sr.
Sec. 1st-Term
Loan B B1 B1 LGD3 34%
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%).
Rexair Holdings, Inc., based in Troy Michigan, is the manufacturer
and distributor of the Rainbow Cleaning System, a premium vacuum
cleaner. The company, founded in 1935, markets its products
throughout the world and has just 50% of its sales in the United
States. For the fiscal year ended Sept. 30, 2005, the company
reported net sales of approximately $105 million.
RF CUNNINGHAM: Chapter 7 Panel Hires K&W as Conflicts Counsel
-------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in RF
Cunningham & Co., Inc.'s chapter 11 case obtained authority from
the U.S. Bankruptcy Court for the Eastern District of New York to
employ Klestadt & Winters LLP, as its conflicts counsel.
Klestadt & Winters is expected to:
a) review of transactions between the Debtor and The CIT
Group, including, without limitation, the return of
certain funds to the estate due to termination of the
Debtor's relation ship with CIT and
b) perform legal services as may be required by the
Committee in connection with matters in which Halperin
Battaglia Raicht, LLP, has a conflict.
The Committee tells the Court that the firm's attorneys will bill
between $250-$475 per hour for this engagement. The firm's
paraprofessionals charge $125 per hour for their services.
The Debtor assures the Court that the firm does not hold any
interest adverse to the Debtor's estate.
The firm can be reached at:
Klestadt & Winters, LLP
292 Madison Avenue, 17th Floor
New York, NY 10017-6314
Tel: (212) 972-3000
Fax: (212) 972-2245
Headquartered in Smithtown, New York, R.F. Cunningham & Company,
is a grain dealer, licensed under the Agriculture and Markets Law
of New York. The company filed for chapter 11 protection on
June 13, 2005 (Bankr. E.D.N.Y. Case No. 05-84105). Harold S.
Berzow, Esq., at Ruskin Moscou Faltischek, P.C., represents the
Debtor in its restructuring efforts. Alan D. Halperin, Esq., and
Ethan D. Ganc, Esq., at Halperin Battaglia Raicht, LLP, represent
the Official Committee Of Unsecured Creditors. When The Debtor
filed for protection from its creditors, it listed $8,416,240 in
total assets and $10,218,229 in total debts.
ROUGE INDUSTRIES: Has Until October 16 to File Chapter 11 Plan
--------------------------------------------------------------
The Honorable Mary F. Walrath of the U.S. Bankruptcy Court for the
District of Delaware extended Rouge Industries, Inc., and its
debtor-affiliates' exclusive period to file a Plan of Liquidation
until Oct. 16, 2006.
Judge Walrath also extended the Debtors' exclusive period to
solicit acceptances of that plan until Dec. 18, 2006.
As reported in the Troubled Company Reporter on Aug. 17, 2006, the
Debtors have been granted nine prior extensions of their exclusive
plan-filing and solicitation periods.
Headquartered in Dearborn, Michigan, Rouge Industries, Inc., an
integrated producer of flat-rolled steel, filed for chapter 11
protection on October 23, 2003 (Bankr. D. Del. Case No. 03-13272).
Donna L. Harris, Esq., Robert J. Dehney, Esq., Eric D. Schwartz,
Esq., Gregory W. Werkheiser, Esq., and Alicia B. Davis, Esq., at
Morris, Nichols, Arsht & Tunnell represent the Debtors. Kurt F.
Gwynne, Esq., Claudia Z. Springer, Esq., and Paul M. Singer, Esq.,
at Reed Smith LLP, serve as counsel to the Official Committee of
Unsecured Creditors. When the Debtors filed for protection from
their creditors, they listed $558,131,000 in total assets and
$558,131,000 in total debts.
On Dec. 19, 2003, the Court approved the sale of substantially all
of the Debtors' assets to SeverStal N.A. for $285.5 million. The
Asset Sale closed on Jan. 30, 2005.
ROYAL & SUN: Sells U.S. Operations; Terminates SEC Registration
---------------------------------------------------------------
Royal & Sun Alliance Insurance Group plc reports the sale of its
U.S. operation to Arrowpoint Capital, a vehicle set up by the R&SA
U.S. management team. R&SA has also terminates its American
Depositary Receipt program, its voluntary delisting from the New
York Stock Exchange and its U.S. Securities and Exchange
Commission (SEC) registration.
Sale of U.S. operation
In September 2003 the Group announced that its U.S. operation was
strategically non-core. The U.S. operation was closed to new
business and a restructuring plan was instigated with the
objective of bringing certainty and finality to the Group's U.S.
exposure. In the last three years the Group has taken significant
action to deliver this objective.
The Group is selling its U.S. operation to Arrowpoint Capital for
a deferred consideration of GBP158m ($300m), which will be funded
from the future performance of the U.S. operation. The transaction
is conditional upon, inter alia, shareholder and regulatory
approvals. On receipt of these approvals and with completion of
the transaction, the Group will make a GBP151m ($287.5m) capital
contribution into the U.S. regulated entities. The net capital
contribution, write off of U.S. net assets and other related costs
will result in an estimated pre tax loss on disposal of GBP443m.
Andy Haste, Group CEO commented, "Today's announcement is a
significant step for the Group. The sale of the U.S. operation is
the right deal for our shareholders and U.S. policyholders. The
transaction will bring certainty and finality and delivers on our
objective of a clean exit from the U.S.
Over the last three years we have dealt with a number of legacy
issues and in the Core Group built a high quality business focused
on driving profitable growth and continuous operational
improvement. We remain confident of continuing to deliver
sustainable profitable performance."
Two existing arrangements will remain in place: the Adverse
Development Cover and the Letter of Credit supporting certain
third party reinsurance recoverables. The ADC is a reinsurance
cover put in place in 2003. It is at its policy limit and
therefore not subject to further insurance risk. The prudent
assumptions supporting the projected payment patterns give
additional cover against potential timing risks for payment of
claims. For the LOC of GBP79m a methodology has been agreed to
step it down commencing two years after the completion of the
transaction conditional on the financial health of the U.S.
regulated entities. In the event that the regulated entities are
required to draw down on the LOC, a mechanism has been agreed for
reimbursement to the Group.
Neither the ADC nor the LOC represent new exposures to the Group
and the directors believe that they do not represent material
risks to the Group given their nature, timing and likelihood.
As part of the disposal the Group has given minimal
representations and warranties and the transaction represents a
clean exit from the U.S. It is intended that the present value of
the deferred consideration will be held as part of the general
investment portfolio of R&SA.
With the completion of the transaction the Group will continue to
be in a strong financial position with a pro forma IGD surplus of
GBP1.1bn and IGD coverage ratio of 1.9 times.
The disposal is a related party transaction and under UK Listing
Rules requires shareholder approval at an Extraordinary General
Meeting of the Company.
It is anticipated that the formal notice of the meeting and the
resolutions to be proposed, together with a circular setting out
further details of the transaction, will be sent to shareholders
in mid to late October with the EGM of R&SA to be held in early to
mid November. Subject to receipt of shareholder and regulatory
approvals, R&SA is targeting completion by the year end.
Delisting and Deregistration
R&SA has been listed on the NYSE and registered in the U.S. under
the U.S. Securities Exchange Act 1934 since 1999 when the listing
and registration were identified as an important milestone in the
continued global development of the Group. The purpose of the
listing was to give the Group access to one of the world's largest
capital markets and to provide the then large number of U.S.
employees with the opportunity to invest in the Group through
ADRs.
The strategic benefits to the Group of having a U.S. listing and
registration no longer apply. Following the capital actions taken
by the Group since 2003, R&SA is no longer dependent upon a U.S.
listing for capital raising, and the sale of its U.S. operation;
in addition the size of the ADR programme is now at its lowest
level since April 2004.
Given these reasons, the Group believes that it is no longer cost
effective nor in the best interests of R&SA to maintain the NYSE
listing, the ADR programme or its SEC registration. The Group
estimates the ongoing costs of complying with SEC reporting and
other requirements to be over GBP10m per annum.
R&SA's NYSE listing is expected to terminate on 30 October 2006.
In order to terminate the SEC registration and suspend SEC
reporting obligations, R&SA must certify that there are less than
300 U.S. holders of each relevant class of security, whether held
directly or indirectly, and thereafter must maintain the number of
U.S. holders at less than 300. As R&SA currently has over 300
U.S. holders, it will be proposing to amend its Articles of
Association to include provisions conferring upon the Board the
power to require any U.S. holder to sell securities and restrict
the number of U.S. holders. Subject to legal, fiduciary and
regulatory requirements and costs, the compulsory transfer power
would be applied first to those U.S. holders with the smallest
holdings of shares.
Deregistration from the SEC requires an amendment to R&SA's
Articles of Association and as such, requires shareholder
approval. A formal notice of the meeting and the resolutions to
be proposed together with a circular setting out further details
will be sent to shareholders on 2 October, with an EGM of R&SA
being held on 26 October.
The termination of the ADR programme and delisting from the NYSE
will affect neither R&SA's high level of communication and
disclosure for all shareholders including U.S. investors, nor its
listing of ordinary shares on the London Stock Exchange. In line
with other companies listed on the London Stock Exchange, R&SA
will resume half yearly reporting for 2007. R&SA maintains high
standards of corporate governance and will continue to be subject
to the listing rules, the prospectus rules and the disclosure
rules made by the UK Listing Authority, and to the Combined Code
on Corporate Governance.
Royal & SunAlliance USA -- http://www.royalsunalliance-usa.com/--
provides risk management and insurance solutions through two
divisions focusing on property & casualty business and personal
insurance. The company is part of London-based Royal & Sun
Alliance Insurance Group plc (LSE: RSA; NYSE: RSA), one of the
world's leading multi-line insurers.
* * *
Standard & Poor's Ratings Services lowered its counterparty credit
and insurer financial strength ratings on Royal & Sun Alliance
Insurance Group PLC's U.S. insurance operations (RSA USA) to 'BB'
from 'BB+'. The outlook remains negative. These ratings have
been withdrawn at the request of the companies' management.
ROYAL & SUNALLIANCE: A.M. Best Places C++ Rating Under Review
-------------------------------------------------------------
A.M. Best Co. has placed the financial strength ratings of C++
(Marginal) and the issuer credit ratings of "b" of the Royal &
SunAlliance USA Insurance Pool and Royal Surplus Lines Insurance
Company under review with developing implications pending the
completion of the proposed sale of these operations to Arrowpoint
Capital, a new company formed by the existing management team of
these operations. All the above companies are domiciled in
Wilmington, Delaware. R&SAUS and RSLIC are U.S. subsidiaries of
Royal & Sun Alliance Insurance Group plc (London, England).
As part of this transaction, R&SA will infuse $287.5 million into
its U.S. subsidiaries to facilitate the ongoing run-off of R&SAUS
and RSLIC's existing liabilities. Subsequently, Arrowpoint
Capital is purchasing R&SAUS and RSLIC for $300 million in
deferred consideration, which will be based on the future
performance of the run-off of the liabilities being transferred in
the sale. R&SAUS and RSLIC ceased writing new business in 2003
and have been in run-off since then.
A.M. Best will review the impact of this transaction on the U.S.
subsidiaries' risk-adjusted capitalization as well as management's
operational plans for the newly formed company.
A.M. Best anticipates finalizing its review following the
completion of the sale to Arrowpoint Capital and discussions with
management, which are expected by year-end 2006.
The FSR of C++ (Marginal) and the ICRs of "b" have placed under
review with developing implications for Royal & SunAlliance USA
Insurance Pool and its following members:
-- Royal Indemnity Company
-- Security Insurance Company of Hartford
-- Guaranty National Insurance Company
The FSR of C++ (Marginal) and the ICR of "b" have placed under
review with developing implications for Royal Surplus Lines
Insurance Company.
A.M. Best Co., established in 1899, is the world's oldest and most
authoritative insurance rating and information source.
RUSSO FUEL: A.J. Willner to Auction Nine Properties on October 5
----------------------------------------------------------------
John Michael McDonnell, the appointed Chapter 7 Trustee for the
liquidation of Russo Fuel, Inc.'s estates, will auction nine
parcels of the Debtor's real property.
The properties include eight parcels of commercial real estate
located in Ocean County NJ and one parcel of commercial real
estate in North Carolina.
The auction will be conducted by A.J. Willner Auctions on
Oct. 5, 2006 at 11:00 a.m. The first auction site will be at
82 E. Bay St., Manahawkin, New Jersey and will continue on to
seven other locations.
Complete details and terms of the auction is available at
http://www.ajwillnerauctions.com/or at Willner Auctions at tel.
Nos. (908) 789-9999.
Russo Fuel, Inc., of Manahawkin, New Jersey, filed for chapter 11
protection on March 30, 2006. The case was converted to a chapter
7 liquidation on June 26, 2006. The Debtor is represented by
Christine M. Gravelle, Esq., and Joseph Markowitz, Esq., at
Markowitz, Gravelle & Schwimmer, LLP. John Michael McDonnell, the
court-appointed chapter 7 Trustee, is represented by Joseph J. Di
Pasquale, Esq., and Shoshana Schiff, Esq., at Booker, Rabinowitz,
Trenk, Lubetkin, Tully, DiPasquale & Webster, P.C.
SAINT VINCENTS: Court Approves Insurance Financing Pact with AICCO
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorized Saint Vincents Catholic Medical Centers of New York and
its debtor-affiliates to incur approximately $798,335 of secured
postpetition debt to finance premium payments under their
insurance programs.
The Debtors' insurance programs consist of:
-- a consolidated Directors and Officers insurance program
covering employee-related claims and other insurable claims
that could be asserted against directors or officers of
Saint Vincent Catholic Medical Centers;
-- a consolidated "Crime Program" that covers the entire SVCMC
system against employee theft losses; and
-- a fiduciary liability program for the entire SVCMC system
covering claims that could be asserted based on the
management or administration of the various funds held by
the Debtors in a fiduciary capacity.
To continue the benefits of the Programs, the Debtors must renew
the commercial insurance policies and obtain financing to cover
their premiums.
Renewed Policies
Before the Debtors filed for bankruptcy, A.I. Credit Corporation
financed the policies covering the Programs. However, the Debtors
were unable to secure financing from AICCO, or any other party,
for the policy year covering Aug. 22, 2005, through Aug. 22, 2006,
without posting a letter of credit and restricting their
liquidity.
Out of necessity, the Debtors covered the monthly premium
payments for the Previous Policies out of their operating
account, which Policies expired on August 22, 2006.
Andrew M. Troop, Esq., at Weil, Gotshal & Manges
LLP, in New York, explains that although the Previous Policies
have expired, coverage has been "bound" from August 22, 2006,
through August 22, 2007, through a series of renewed policies,
subject to combined, required premium payments of $798,335.
The Renewed Policies provide:
* for the D&O Program -- insurance coverage, subject to a
$150,000 deductible, from National Union Fire Insurance
Company of Pittsburgh, Pennsylvania, for $30,000,000 per
occurrence;
* for the Crime Program -- primary insurance coverage from AIG
for $5,000,000 per occurrence, and excess insurance coverage
from Zurich Insurance Company for an additional $5,000,000
per occurrence, subject to a $25,000 deductible; and
* for the Pension Trust Program -- insurance coverage from RLI
Insurance Company for $10,000,000 per occurrence and
$10,000,000 in the aggregate, subject to a $50,000
deductible.
Accordingly, the Debtors engaged in good faith negotiations with
AICCO regarding the terms and conditions of financing the payment
of the Insurance Premiums. Both the Debtors and AICCO agreed
that the Debtors will repay the $798,335 in Insurance Premiums to
be financed by way of:
a) an initial cash payment of $199,583 to AICCO;
b) payment of interest on the $598,751 balance at an annual
percentage rate of 5.99%;
c) monthly payments to commence on September 22, 2006;
d) payment of the amounts financed in five equal monthly
installments of $121,549; and
e) payment to AICCO of $8,996 total finance charge.
Also, pursuant to the Agreement, the Debtors will grant AICCO a
security interest in all unearned or returned Insurance Premiums
and other amounts that may become due to the Debtors in line with
the Renewed Policies.
A full-text copy of the Premium Finance Agreement, Disclosure
Statement and Security Agreement with AICCO is available for free
at http://researcharchives.com/t/s?114f
Headquartered in New York, New York, Saint Vincents Catholic
Medical Centers of New York -- http://www.svcmc.org/-- the
largest Catholic healthcare providers in New York State, operate
hospitals, health centers, nursing homes and a home health agency.
The hospital group consists of seven hospitals located throughout
Brooklyn, Queens, Manhattan, and Staten Island, along with four
nursing homes and a home health care agency. The Company and six
of its affiliates filed for chapter 11 protection on July 5, 2005
(Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary
Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will &
Emery, LLP, filed the Debtors' chapter 11 cases. On Sept. 12,
2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took
over representing the Debtors in their restructuring efforts.
Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the
Official Committee of Unsecured Creditors.
As of Apr. 30, 2005, the Debtors listed $972 million in total
assets and $1 billion in total debts. (Saint Vincent Bankruptcy
News, Issue No. 35 Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
SAINT VINCENTS: Decides to Renew CBAs with Three Bargaining Units
-----------------------------------------------------------------
Saint Vincents Catholic Medical Centers of New York and its
debtor-affiliates have determined to renew or extend their
relationship with three separate collective bargaining units:
(1) the New York State Nurses Association at Saint
Vincent's CMC Home Health Agency;
(2) the Special and Superior Officers Benevolent Association
at St. John's Hospital, Queens, and Mary Immaculate
Hospital, Queens; and
(3) the Local Unions 30 & 30 A-B-C-D at St. Vincent's
Hospital, Staten Island.
The Debtors seek authority from the U.S. Bankruptcy Court for the
Southern District of New York to enter into three agreements that
will govern their relationship with the three collective
bargaining units for periods of three years to ensure compliance,
to the extent required, with Section 363(b), 365 and 1113 of the
Bankruptcy Code.
The three agreements are:
1. The New York State Nurses Association Home Health Agreement
with 56 full-time, part-time and per diem registered
professional staff nurses employed by the Debtors' home
health division and represented by the NYSNA. The
agreement renews and extends the parties' relationship,
retroactive to July 1, 2005, and through June 30, 2008.
The new terms of the NYSNA Home Health Agreement include
wage increases, pension benefits, and health insurance
benefits.
A full-text copy of the NYSNA Home Health Agreement is
available for free at http://researcharchives.com/t/s?12a5
2. The letter of agreement under which the Debtors have agreed
to renew and extend, retroactive to September 1, 2006,
their collective bargaining agreement with 52 security
officers employed at St. John's Hospital, and Mary
Immaculate Hospital, and represented by the SSOBA, through
August 31, 2009.
Except for a 3% wage increase, the SSOBA Letter of
Agreement maintains the status quo with respect to the
existing terms and conditions of employment for the SSOBA
Employees.
A full-text copy of the SSOBA Letter of Agreement is
available for free at http://researcharchives.com/t/s?12a6
3. The memorandum of agreement under which the Debtors agreed
to renew and extend, retroactive to September 1, 2005,
their collective bargaining agreement with 23 SV Staten
Island engineers represented by Local Unions Nos. 30 & 30
A-B-C-D of the International Union of Operating Engineers,
through August 31, 2008.
The changes reflected in the Local 30 Memorandum of
Agreement include wage increases and an increase in the
contribution rate to the Local 30 annuity fund.
A full-text copy of the Local 30 Memorandum of Agreement is
available for free at http://researcharchives.com/t/s?12a7
According to Andrew M. Troop, Esq., at Weil, Gotshal & Manges
LLP, in New York, the Debtors seek approval of the SSOBA Letter
of Agreement and Local 30 Memorandum of Agreement to facilitate
the assignment of the agreements pursuant to the asset purchase
agreements applicable to the buyers of St. John's, MIH, and SV
Staten Island. The Debtors also seek approval of the NYSNA Home
Health Agreement because the Home Health Agency will continue as
a critical component of the Debtors' core organization.
Mr. Troop clarifies that the assumption of any predecessor
agreements will not constitute an assumption of any unpaid
contributions owed to any of the Unions that were not paid
prepetition, which will remain prepetition claims in the Debtors'
bankruptcy cases.
Moreover, the Labor Agreements are not, and will not be,
considered postpetition agreements by the Debtors to pay the
Prepetition Obligations other than as may be provided in a
confirmed plan of reorganization subsequently confirmed in the
Debtors' Chapter 11 cases, Mr. Troop explains.
The Debtors owe Prepetition Obligations to all three Unions.
Agreements Must be Approved
Mr. Troop asserts that absent the Court's approval, the Labor
Agreements will have expired and the Debtors will be at risk of
work stoppages by the employees that may severely disrupt the
Debtors':
(i) ability to provide home health care to patients in
Brooklyn, Queens, and Staten Island;
(ii) ability to provide security for their patients, visitors,
doctors, and others at St. John's and MIH;
(iii) provision of services necessary for the efficient function
of SV Staten Island; and
(iv) ability to assign the SSOBA Letter of Agreement and the
Local 30 Memorandum of Agreement to the Buyers pursuant to
the terms of the applicable asset purchase agreements.
Mr. Troop relates that the Labor Agreements will preserve and
protect the value of the Debtors' estates and enable them to
maximize return to creditors by ensuring the effective
administration of critical aspects of the Debtors' business, and
continue the Debtors' mission of providing high quality patient
care at their facilities and through their programs.
Headquartered in New York, New York, Saint Vincents Catholic
Medical Centers of New York -- http://www.svcmc.org/-- the
largest Catholic healthcare providers in New York State, operate
hospitals, health centers, nursing homes and a home health agency.
The hospital group consists of seven hospitals located throughout
Brooklyn, Queens, Manhattan, and Staten Island, along with four
nursing homes and a home health care agency. The Company and six
of its affiliates filed for chapter 11 protection on July 5, 2005
(Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary
Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will &
Emery, LLP, filed the Debtors' chapter 11 cases. On Sept. 12,
2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took
over representing the Debtors in their restructuring efforts.
Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the
Official Committee of Unsecured Creditors.
As of Apr. 30, 2005, the Debtors listed $972 million in total
assets and $1 billion in total debts. (Saint Vincent Bankruptcy
News, Issue No. 35 Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
SALTON 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, the rating agency confirmed its Caa1 Corporate Family
Rating for Salton, Inc., and raised its Ca rating on the company's
$150 million senior subordinated notes to Caa3. Additionally,
Moody's assigned an LGD6 rating to those notes, suggesting
noteholders will experience a 91% 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%).
Salton, Inc. designs, markets and distributes branded, high
quality small appliances, electronics, home d,cor and personal
care products.
SAMSONITE 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, the rating agency confirmed its B1 Corporate Family
Rating for Samsonite Corporation. Additionally, Moody's revised
its probability-of-default ratings and assigned loss-given-default
ratings on these notes:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
$121.5MM (EUR100MM)
Flat Rate Sr. Unsec.
Notes due June 2010 B1 Ba3 LGD3 30%
$205MM 8.875%
Sr. Sub. Notes
due June 1, 2011 B3 B3 LGD5 80%
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%).
Samsonite Corporation manufactures, markets and distributes
luggage and travel-related products. The company's owned and
licensed brands, including Samsonite, American Tourister,
Trunk & Co, Sammies, Hedgren, Lacoste and Timberland, are sold
globally through external retailers and 284 company-owned stores.
Net sales for the twelve-month period ended April 30, 2006 were
$976 million. Executive offices are located in London, England.
SANKOFA SHULE: Moody's Junks Rating on Full Term Certificates
-------------------------------------------------------------
Moody's Investors Service has downgraded the rating on Sankofa
Shule (Charter School), Michigan, Full Term Certificates of
Participation to Caa3 from B3. At this time Moody's has also
placed the certificates on Watchlist for possible downgrade
reflecting Sankofa's continuing financial pressures that create
additional risk for bondholders. The certificates are outstanding
in the amount of $2.455 million. The Caa3 rating reflects the
school's tenuous financial position given its precipitous
enrollment decline at the beginning of the 2006-2007 school year.
This will likely have a severely negative impact on the school's
enrollment-driven state aid payments which make up close to 90% of
the school's operating revenues.
In addition, the certificates are secured by a pledge of 20% of
Sankofa's state aid. At current enrollment levels, pledged
revenues would not be sufficient to cover debt service. This
situation creates concerns that the school will have difficulty
meeting its scheduled debt service payments. The presence of a
fully funded debt service reserve in the amount of maximum annual
debt service does provide some near-term cushion. In upcoming
credit reviews, Moody's will focus on the school's financial
position, enrollment, and revised fiscal year 2007 budget plan,
which is expected to address the funding shortfall precipitated by
the enrollment decline.
Sankofa Shule, located in Lansing, Michigan, is a public school
academy operating as a charter school authorized by the Central
Michigan University board of trustees. The school has its own
independent board which oversees operations although CMU provides
fiscal and administrative oversight. The school's charter has
been renewed twice: in August 2000 for five years and in August
2005, but only through June 2007. Sankofa Shule began operation
in 1995 with 111 students in grades kindergarten to four,
eventually expanding to grade nine. Enrollment fell far short of
initial projections that called for 200 students by fiscal 2001.
After a dispute over fees, among other issues, the school's
original director and management team were replaced during the
2001-2002 school year, following which enrollment dropped to a low
of 129 in January 2002. The school continued to have turnover
problems, although fiscal year 2006 enrollment reached a high of
196 students. The recent, and steepest, enrollment drop to 82
students followed the departure of the school's second director.
The school's COPs are secured by a pledge of 20% of state aid
school payments that are distributed by the State of Michigan
(general obligation bonds rated Aa2) directly to the trustee via
CMU within ten days of receipt. The state aid payments are not
subject to annual appropriation. Revenues in excess of the amount
required to pay debt service on the certificates and replenish the
debt service reserve, if necessary, are returned to the school for
operations. The debt service reserve fund is maintained at the
required amount of $234,000. Legal provisions also include a
pledge of the asset, a building that is completed and occupied by
the school, as well as the land.
Key Facts:
* Enrollment fiscal year 2006: 196
* Estimated enrollment (September 2006): 82
* Debt Service Coverage by Pledged Revenues, FY2005: 1.09 x
* Unrestricted Cash and Investments, FY 2005: $30,000
* Unrestricted Net Assets, FY 2005: $115,000
* State aid as % of General Fund Revenues, FY 2005: 87%
* Debt Service Funds (including debt service reserve), FY2005:
$300,000
SITESTAR CORP: Earns $327,661 in Quarter Ended June 30
------------------------------------------------------
Sitestar Corporation has filed its financial statements for the
second quarter ended June 30, 2006, with the Securities and
Exchange Commission.
For the three months ended June 30, 2006, the Company reported
$327,661 of net income on $1,365,029 of total revenues compared
with net income of $155,743 on $780,618 of total revenues for the
same period in 2005.
At June 30, 2006, the Company's balance sheet showed $3,885,090 in
total assets, $2,448,949 in total liabilities, and $1,436,141 in
total stockholders' equity.
The Company's June 30 balance sheet showed strained liquidity with
$309,654 in total current assets available to pay $1,698,827 in
total current liabilities coming due within the next 12 months.
Full-text copies of the Company's second quarter financials are
available for free at http://ResearchArchives.com/t/s?129a
Going Concern Doubt
As reported in the Troubled Company Reporter on May 16, 2006,
Bagell, Josephs & Company, L.L.C. expressed substantial doubt
about Sitestar Corporation'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 points to
the Company's $1,715,797 working capital deficiency as of Dec. 31,
2005.
About Sitestar Corp.
Headquartered in Lynchburg, Virginia, Sitestar Corporation --
http://www.sitestar.com/-- is an Internet access and computer
solutions provider that offers narrow and broadband Internet
access, Web hosting and design and other value-added services to
residential and commercial customers. The company's customers
include residential and commercial accounts throughout the United
States and Canada. Sitestar's wholly owned subsidiaries include:
Sitestar.net http://www.sitestar.net/netROVER, Inc.
http://www.netrover.com/Prolynx http://www.prolynx.com/
SurfWithUs.Net http://www.surfwithus.net/Lynchburg.net
http://www.lynchburg.net/Advanced Internet Services
http://www.advi.net/Computers by Design
http://www.computersbydesign.com/and CBD Toner Recharge
http://www.recharge.net/ The Company was founded in 1999 and is
traded on the over-the-counter bulletin board exchange under the
symbol SYTE.
SOUTHERN STATES: 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, the rating agency confirmed its B2 Corporate Family
Rating for Southern States Cooperative Inc. Additionally, Moody's
downgraded its probability-of-default rating and assigned loss-
given-default rating on these notes:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
$100 Million
10.5% Senior
Unsecured Notes B3 Caa1 LGD5 80%
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%).
Southern States Cooperative, Inc., is a regional farmers' supply
and marketing cooperative. Southern States provides agricultural
supplies and services to its members through its crops, feeds,
petroleum, retail farm supply, and its farm and home supply
divisions. The company also provides marketing services for its
members through its grain marketing division.
STEEL PARTS: U.S. Trustee Appoints Four-Member Creditors' Panel
---------------------------------------------------------------
The U.S. Trustee for Region 9 appointed four creditors to serve on
an Official Committee of Unsecured Creditors in Steel Parts
Corp.'s chapter 11 case:
1. David Burt, Chairperson
Worthington Steel Company
200 Old Wilson Bridge Road
Columbus, OH 43085
Tel: (614) 840-4047
Fax: (614) 840-4116
2. Lynne Richardson
Lindsay Patsolic
Air Products and Chemicals, Inc.
7201 Hamilton Boulevard
Allentown, PA 18195
Tel: (610) 481-3077 or (610) 481-8104
Fax: (610) 706-5869
3. W. Dan Stiltz
President
Marshall Manufacturing Corp.
P.O. Box 1729
Lewisburg, TN 37091
Tel: (931) 359-2573
Fax: (931) 359-5099
4. Terry Hines
CEO & Secretary/Treasurer
Custom Coating, Inc.
1937 Jacob Street
P.O. Box 143
Auburn, TN 46706
Tel: (260) 925-0623
Fax: (260) 925-5774
Documents filed with the Court do not show who the Committee has
selected to represent it in the Debtors' bankruptcy proceedings.
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtor's
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 Livonia, Michigan, Steel Parts Corp. --
http://www.steelparts.com/-- is a supplier of automatic
transmissions, suspension and steering components and assemblies,
and other automotive parts. The Company filed for chapter 11
protection on Sept. 15, 2006 (Bankr. E.D. Mich. Case No.
06-52972). Barbara Rom, Esq., and Hannah Mufson McCollum, Esq.,
at Pepper Hamilton LLP, represent the Debtors. When the Debtor
filed for protection from its creditors, it estimated assets and
debts between $10 million and $50 million.
SUNSET BRANDS: June 30 Stockholders' Deficit Tops $500,000
----------------------------------------------------------
Sunset Brands, Inc., has filed its financial statements for the
second quarter ended June 30, 2006, with the Securities and
Exchange Commission.
For the three months ended June 30, 2006, the Company reported a
$2,734,500 net loss applicable to common shareholders on
$3,711,107 of sales, compared with a $4,499,165 net loss on zero
sales for the same period in 2005.
Preferred dividends of $59,178 applicable to the Series B
Preferred stock were recorded for the three months ended June 30,
2006. No preferred dividends were recognized for the quarter
ended March 31, 2005.
At June 30, 2006, the Company's balance sheet showed $20,368,819
in total assets and $20,889,302 in total liabilities, resulting in
a $520,483 stockholders' deficit.
The Company's June 30 balance sheet showed strained liquidity with
$2,563,076 in total current assets available to pay $14,429,605 in
total current liabilities coming due within the next 12 months.
Full-text copies of the Company's second quarter financials are
available for free at http://ResearchArchives.com/t/s?129d
Going Concern Doubt
As reported in the Troubled Company Reporter on June 27, 2006,
Hansen, Barnett & Maxwell in Salt Lake City, Utah, raised
substantial doubt about Sunset Brands, Inc.'s ability to continue
as a going concern after auditing the Company's consolidated
financial statements for the years ended Dec. 31, 2005, and 2004.
The auditor pointed to the Company's losses from operations,
negative cash flows, and working capital and accumulated
deficiencies.
About Sunset Brands
Based in Los Angeles, California, Sunset Brands, Inc. --
http://www.sunsetbrands.com/-- intends to capitalize on the
growing demand for healthy foods. The Company wants to become a
category leader in this field through expanded marketing of
existing products under brands owned or licensed by US Mills and
the introduction of new products. US Mills, Inc., sells natural,
organic and specialty ready-to-eat cereals, hot cereals, cookies
and crackers. US Mills sells five brands -- Uncle Sam Cereal,
Erewhon, New Morning, Farina, and Skinner's Raisin Bran -- in all
50 states, Canada, and Puerto Rico.
SUPERIOR ENERGY: Buying Warrior Energy in Cash and Stock Deal
-------------------------------------------------------------
Superior Energy Services, Inc., has signed a definitive merger
agreement to acquire Warrior Energy Services Corporation for
approximately $175 million in cash and 5.3 million shares of
common stock.
The transaction is subject to regulatory review and customary
closing conditions, and is expected to close late in the fourth
quarter of 2006. Superior estimates the acquisition of Warrior to
be accretive to 2007 earnings per share. In connection with this
transaction, Superior has secured a commitment for $200 million in
long-term debt.
Terence Hall, Superior's Chairman and Chief Executive Officer,
stated, "This accretive acquisition represents an important step
in our continuing strategy of significantly diversifying our
services footprint beyond the Gulf of Mexico. It will appreciably
strengthen our foothold in the domestic onshore market, bringing
with it a seasoned management team with extensive onshore oilfield
services experience and over 570 skilled employees. Once closed,
we will be the leading North American production enhancement
company with an expansive platform to introduce existing and new,
highly technical well intervention services and solutions in
virtually all domestic producing basins. Additionally, we intend
to use our cash flow to help Warrior fund its capital expenditure
program, highlighted by orders for 32 coiled tubing spreads over
the next 24 months."
Warrior Energy Services Corporation is a natural gas and oil well
services company that provides wireline and well intervention
services to exploration and production companies. Its wireline
services focus on cased-hole wireline operations, including
logging services, perforating, mechanical services, pipe recovery
and eventually plugging and abandoning the well. Warrior's well
intervention services are primarily hydraulic workover services,
commonly known as snubbing services. Warrior has 25 operating
bases in 10 states.
Operations are concentrated in the major onshore and offshore
natural gas and oil producing areas of the U.S., including
offshore in the Gulf of Mexico and onshore in Alabama, Colorado,
Louisiana, Mississippi, Montana, New Mexico, North Dakota,
Oklahoma, Texas, Utah and Wyoming. Warrior also operates two
manufacturing and repair facilities that are located in Laurel,
Mississippi and Decatur, Texas which have a combined capacity to
manufacture approximately 20 wireline and four snubbing units per
year. Warrior's management team averages more than 24 years of
industry experience.
Superior Energy Services, Inc. -- http://www.superiorenergy.com/
-- provides specialized oilfield services and equipment focused on
serving the production-related needs of oil and gas companies
primarily in the Gulf of Mexico and the drilling-related needs of
oil and gas companies in the Gulf of Mexico and select
international market areas. The Company uses its production-
related assets to enhance, maintain and extend production and, at
the end of an offshore property's economic life, plug and
decommission wells. Superior also owns and operates mature oil
and gas properties in the Gulf of Mexico.
* * *
As reported in the Troubled Company Reporter on Sept. 28, 2006,
Moody's Investors Service affirmed SESI, LLC's ratings (Ba3
Corporate Family Rating and B1 rated $300 million senior unsecured
notes guaranteed by Superior Energy Services, Inc., and changed
the rating outlook to negative from stable following Superior's
announcement that it had signed a merger agreement to acquire
Warrior Energy Services Corporation.
In May 2006, Standard & Poor's Ratings Services affirmed its 'BB'
corporate credit rating on Superior Energy Services Inc. and
assigned its 'BB-' senior unsecured rating to the $300 million
senior unsecured notes issued by SESI LLC and guaranteed by
Superior, due 2014. The outlook is stable.
TACKLEY MILL: Taps Campbell Miller as Bankruptcy Counsel
--------------------------------------------------------
Tackley Mill, L.L.C., asks the U.S. Bankruptcy Court for the
Northern District of West Virginia for permission to employ
Campbell Miller Zimmerman, P.C., as its bankruptcy counsel
Campbell Miller will:
a. assist the Debtor with its schedules;
b. represent the Debtor at creditors' meetings;
c. advise the Debtor of its duties and responsibilities under
the Bankruptcy Code;
d. assist in preparing monthly accounting forms, cashflow
analysis and financial matters arising under the Code;
e. assist and advise the Debtor in determining whether to
assume or reject any executory contracts;
f. draft documents to reflect any settlement or statements
reached with secured creditors;
g. resolve motions for relief from stay and adequate
protection;
h. determine whether reorganization, dismissal or conversion
are in the best interests of the Debtor and its creditors;
i. work with creditors' committee and other counsel, if any;
j. work any disclosure statement and plan of reorganization;
and
k. assist the Debtor on other matters that arise in the normal
course of administration of its bankruptcy case.
The Debtor tells the Court that the firm's professionals who will
render services in this case bill:
Professional Hourly Rate
------------ -----------
James P. Campbell, Esq. $300
Christopher L. Rogan, Esq. $295
Kimberly A. Hertz $135
To the best of the Debtor's knowledge, the firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
Mr. Campbell can be reached at:
James Paul Campbell, Esq.
Campbell Miller Zimmerman, P.C.
19 East Market Street
Leesburg, Virginia 20176
Tel: (703) 771-8344
Fax: (703) 777-1485
http://www.cmzlaw.com/
Headquartered in Leesburg, Virginia, Tackley Mill, L.L.C., filed
for chapter 11 protection on Sept. 13, 2006 (Bankr. N.D. W.Va.
Case No. 06-00820). When the Debtor filed for protection from its
creditors, it listed total assets of $39,500,000 and total debts
of $38,437,805.
THINH PHAM: Case Summary & 19 Largest Unsecured Creditors
---------------------------------------------------------
Debtors: Thinh V. Pham
Tammy Nguyen
228 Eliza Street
Abbeville, LA 70510
Bankruptcy Case No.: 06-50808
Chapter 11 Petition Date: September 28, 2006
Court: Western District of Louisiana (Lafayette/Opelousas)
Judge: Gerald H. Schiff
Debtors' Counsel: William C. Vidrine, Esq.
Vidrine & Vidrine, PLLC
711 West Pinhook Road
Lafayette, LA 70503
Tel: (337) 233-5195
Fax: (337) 233-3897
Total Assets: $382,950
Total Debts: $1,293,134
Debtors' 19 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Business Loan Center Bank Loan $816,642
1633 Broadway, 39th Floor
New York, NY 10019
Chitimacha Tribe of Louisiana $26,000
c/o John Evans
P.O. Box 4407
Lafayette, LA 70502
Internal Revenue Service $11,770
P.O. Box 105572
Atlanta, GA 30348
Discover Fin $11,436
P.O. Box 15316
Wilmington, DE 19850
Gulf Coast Bank $10,148
221 South State Street
Abbeville, LA 70510
AT&T Universal/Citibank $7,632
J. Graham & Associates $6,472
Monogram Bank of North America $4,571
United Collection Bureau Bank Loan $3,894
Calvary Portfolio/Collection $3,168
Citifinancial $3,151
Lawrence Boivin $3,112
GTM Collections, LLC $2,982
Salvatore Spinelli $2,400
Tex Collect $2,400
Chase $2,242
Sherman Acquisitions $2,217
Dell Financial Services $1,986
Cap One Bank $2,822
TIDEL TECHNOLOGIES: Posts $4.1 Million Net Loss in Third Quarter
----------------------------------------------------------------
Tidel Technologies, Inc., has filed its third quarter financial
statements for the three months ended June 30, 2006, with the
Securities and Exchange Commission.
The Company incurred a $4.1 million net loss on zero revenue for
the three months ended June 30, 2006, compared to a $1.1 million
net loss on zero revenue in 2005.
As of June 30, 2006, the Company's accumulated deficit narrowed to
$25.4 million from $28.9 million of deficit at Sept. 30, 2005.
A full-text copy of the Company's Quarterly Report is available
for free at http://researcharchives.com/t/s?1298
Going Concern
Hein & Associates LLP expressed substantial doubt about Tidel
Technologies, Inc.'s ability to continue as a going concern after
it audited the Company's financial statements for the fiscal years
ended Sept. 30, 2005 and 2004. The auditing firm pointed to the
Company's recurring losses from operations and accumulated deficit
as of Sept. 30, 2005.
Headquarted in Carrollton, Texas, Tidel Technologies, Inc. (Other
OTC: ATMS.PK) -- http://www.tidel.com/-- manufacturers cash
security equipment designed for specialty retail marketers.
TRANSAX INT'L: Receives Third Party Offer to Buy Brazil Operations
------------------------------------------------------------------
Transax International Limited disclosed that in response to a
recent third party interest it has received to acquire its
Brazilian operations, it has retained the services of North Bay
Equity Partners to act as the Company's exclusive financial
advisor.
The Company said that it has not set a definitive timetable for
its completion of its evaluation and further that there can be no
assurances that the evaluation process will result in any specific
transaction. The Company also said that it does not intend to
disclose developments regarding its evaluation of strategic
alternatives unless and until its Board of Directors approves a
definitive transaction.
Stephen Walters, president & chief executive officer, commented,
"Transax continues to aggressively execute on it business model,
nearly tripling its revenues year over year. Due to recent
unsolicited interest expressed to us, we have decided to retain
North Bay to help us evaluate various strategic business options
in an effort to best recognize the greatest shareholder value
possible."
About North Bay
North Bay -- http://www.northbayequity.com/-- provides financial
services and M&A advisory to businesses and management teams
operating in Latin America.
About Transax International Limited
Based in Miami, Florida, Transax International Limited
(OTCBB: TNSX) -- http://www.transax.com/-- provides health
information management systems to hospitals, physicians and health
insurance companies. The Company's subsidiaries, TDS
Telecommunication Data Systems LTDA provides services in Brazil;
Transax Australia Pty Ltd. operates in Australia; and Medlink
Technologies Inc. initiates research and development.
Transax International Limited's balance sheet at June 30, 2006
showed a $3,717,316 total stockholders' deficit from total assets
of $2,196,551 and total liabilities of $5,913,867.
Going Concern Doubt
As reported in the Troubled Company Reporter on May 31, 2006
Moore Stephens, P.C., in New York, raised substantial doubt about
Transax International Limited's ability to continue as a going
concern after auditing the Company's consolidated financial
statements for the year ended Dec. 31, 2005. The auditor pointed
to the Company's losses, and working capital and stockholders'
deficiencies.
TRUE TEMPER: 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, the rating agency confirmed its B2 Corporate Family
Rating for True Temper Sports, Inc. Additionally, Moody's revised
and 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
---------- ------- ------- ------ ----------
$125 Million Sr.
Subordinated Notes
due 2011 Caa1 Caa1 LGD5 78%
$111 Million Sr.
Sec. Term Loan B
due 2011 B2 Ba2 LGD2 22%
$20 Million Sr.
Sec. Revolving
Credit Facility
due 2009 B2 Ba2 LGD2 22%
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 New York, New York, True Temper Sports, Inc., primarily
manufactures golf shafts and bicycle tubing, forks, and seat
posts.
TRW AUTOMOTIVE: Launches Production of Latest Seat Belts in China
-----------------------------------------------------------------
TRW Automotive Holdings Corp.'s Shanghai, China manufacturing
subsidiary has launched production of its latest generation of
seat belt.
Shanghai TRW Automotive Safety Systems Co., Ltd., has launched
production of the TRW BSA4.0 seat belt for a number of domestic
vehicle platforms, including the new Passat B6 by FAW Volkswagen
and Royaum by Shanghai General Motors. The BSA4.0 seat belt
offers an advanced pre-crash pretensioning feature and load-
limiting capabilities while incorporating enhancements in comfort
and noise reduction.
About Shanghai TRW Automotive
In 1993 TRW granted the first seat belt license to Shanghai
Automobile Industry Corp. Four years later, the two companies
formed Shanghai TRW Automotive Safety Systems Co., Ltd., a 50-50
joint venture. Until airbag systems were added to its portfolio
in 2005, the plant had been solely dedicated to seat belt
production for the domestic market, and has steadily elevated its
technical capability. STASS remains the only TRW plant that
supplies seat belts in China. Other major customers include
Brilliance, Chery, ChangAn Ford, Nanjing Fiat and Shanghai GM.
Headquartered in Livonia, Michigan, TRW Automotive Holdings Corp.
(NYSE: TRW) -- http://www.trwauto.com/-- is an automotive
supplier. Through its subsidiaries, it employs approximately
63,000 people in 25 countries. TRW Automotive products include
integrated vehicle control and driver assist systems, braking
systems, steering systems, suspension systems, occupant safety
systems (seat belts and airbags), electronics, engine components,
fastening systems and aftermarket replacement parts and services.
* * *
As reported in the Troubled Company Reporter on Sept. 27, 2006
Fitch Ratings affirmed these ratings of TRW Automotive
Holdings Inc.:
-- Issuer Default Rating 'BB'
-- Senior secured bank lines 'BB+'
-- Senior unsecured notes 'BB-'
-- Senior subordinated unsecured Notes 'B+'
The Rating Outlook is stable.
TUPPERWARE BRANDS: 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, the rating agency lowered its Ba2 Corporate Family
Rating for Tupperware Brands Corporation to Ba3. Additionally,
Moody's revised 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
---------- ------- ------- ------ ----------
$715 Million
Sr. Sec. Term Loan
due 2012 Ba2 Ba1 LGD2 25%
$200 Million Sr.
Sec. Revolving
Credit Facility
due 2010 Ba2 Ba1 LGD2 25%
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%).
Tupperware Brands Corporation -- http://www.tupperware.com/-- is
a global direct seller of premium, innovative products across
multiple brands and categories through an independent sales force
of approximately 1.9 million. Tupperware's product brands and
categories include design-centric preparation, storage and serving
solutions for the kitchen and home through the Tupperware brand
and beauty and personal care products through its Avroy Shlain,
BeautiControl, Fuller, NaturCare, Nutrimetics, Nuvo and Swissgarde
brands.
TYRINGHAM HOLDINGS: U.S. Trustee Names Seven-Member Official Panel
------------------------------------------------------------------
The U.S. Trustee for Region 4 appointed seven creditors to serve
on an Official Committee of Unsecured Creditors in Tyringham
Holdings, Inc.'s chapter 11 case:
1. ISM Travel & Leisure Marketing
Attn: Sal DeLuca, Chief Financial Officer
745 Boylston Street
Boston, MA 02116
Tel: (617) 424-3164
Fax: (617) 266-1890
2. LVMH Watch & Jewelry
Attn: Julie Rodriguez
966 South Springfield Avenue
Springfield, NJ 07081
Tel: (800) 321-4832
Fax: (973) 467-3785
3. Richemont, NA
Attn: Susan DeGeorge
3 Enterprise Drive, Suite 300
Shelton, CT 06484
Tel: (203) 925-6524
Fax: (203) 925-6424
4. Oscar Heyman & Brothers, Inc
Attn: Louis Heyman, Secretary
501 Madison Avenue
New York, NY 10022
Tel: (212) 593-0400
Fax: (212) 759-8612
5. Yurman Design, Inc.
Attn: Scott Vogel, VP/CFO
24 Vestry Street
New York, NY 10013
Tel: (212) 896-1564
Fax: (212) 896-1504
6. Keiter Stephens Hurst Gary and Shreaves
Attn: Deborah Ramsey, Director of Administration
P.O. Box 32066
Richmond, VA 23294-2066
Tel: (804) 273-6227
Fax: (804) 273-0048
7. LG Enterprises(dba Laura Gibson)
Attn: Laura Gibson
2410 North Huachuca Avenue
Tuscon, AZ 85745
Tel: (520) 325-3686
Fax: (520)325-3692
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtor's
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 Richmond, Virginia, Tyringham Holdings, Inc.,
sells premium brand name jewelry to a broad base of middle and
upper income customers. The Company filed for chapter 11
protection on Sept. 6, 2006 (Bankr. E.D. Va. Case No. 06-32385).
Lynn L. Tavenner, Esq., and Paula S. Beran, Esq., at Tavenner &
Beran, PLC, represent the Debtor. At August 30, 2006, the Debtor
disclosed that it had $25.0 million in total assets and
$23.7 million in total debts.
TYRINGHAM HOLDINGS: Panel Taps Otterbourg Steindler as Counsel
--------------------------------------------------------------
The Official Committee of Unsecured Creditors in Tyringham
Holdings, Inc.'s chapter 11 case asks the U.S. Bankruptcy Court
for the Eastern District of Virginia for permission to retain
Otterbourg, Steindler, Houston & Rosen, P.C., as its lead
bankruptcy counsel.
Otterbourg Steindler will:
a. assist and advise the Committee in its consultation with
the Debtor relative to the administration of this case,
including the sale of the Debtor's assets;
b. attend meetings and negotiate with the representatives of
the Debtor;
c. assist and advise the Committee in its examination and
analysis of the conduct of the Debtor's affairs;
d. assist the Committee in the review, analysis and
negotiation of any plan of reorganization that may be filed
and to assist the Committee in the review, analysis and
negotiation of the disclosure statement accompanying any
plan of reorganization;
e. assist the Committee in the review, analysis, and
negotiation of any financing agreements;
f. take all necessary action to protect and preserve the
interests of the Committee, including (i) possible
prosecution of actions on its behalf, (ii) if appropriate,
negotiations concerning all litigation in which the Debtor
is involved, and (iii) if appropriate, review and analysis
of claims filed against the Debtor's estate;
g. generally prepare on behalf of the Committee all necessary
motions, applications, answers, orders, reports and papers
in support of positions taken by the Committee;
h. appear, as appropriate, before this Court, the Appellate
Courts, and the U.S. Trustee, and to protect the interests
of the Committee before those courts and before the U.S.
Trustee; and
i. perform all other necessary legal services in the
Debtor's chapter 11 case.
Scott L. Hazan, Esq., a member at Otterbourg Steindler, tells the
Court that the firm's professionals bill:
Professional Hourly Rate
------------ -----------
Partner/Counsel $490 - $725
Associate $240 - $525
Paralegal/Legal Assistant $150 - $195
Mr. Hazan assures the Court that his firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
Mr. Hazan can be reached at:
Scott L. Hazan, Esq.
Otterbourg, Steindler, Houston & Rosen, P.C.
230 Park Avenue
New York, NY 10169-0075
Tel: (212) 661-9100
Fax: (212) 682-6104
http://www.oshr.com/
Headquartered in Richmond, Virginia, Tyringham Holdings, Inc.,
sells premium brand name jewelry to a broad base of middle and
upper income customers. The Company filed for chapter 11
protection on Sept. 6, 2006 (Bankr. E.D. Va. Case No. 06-32385).
Lynn L. Tavenner, Esq., and Paula S. Beran, Esq., at Tavenner &
Beran, PLC, represent the Debtor. At August 30, 2006, the Debtor
disclosed that it had $25.0 million in total assets and
$23.7 million in total debts.
UTILITY CRAFT: Wants to Hire Daniel Odom as Accountants
-------------------------------------------------------
Utility Craft, Inc., dba Wood Armfield Furniture, asks the U.S.
Bankruptcy Court for the Middle District of North Carolina to
employ Daniel R. Odom and the firm Odom & Company, L.L.P., as its
accountants.
Mr. Odom will prepare, complete, and file the Debtors' 2005 and
2006 tax returns.
A list of the firm's proposed rates and charges for its services
are available for free at http://researcharchives.com/t/s?12a1
The firm further agreed with the Debtor to waive its $11,509
prepetition claim.
Mr. Odom assures the Court that his firm does not hold any
interest adverse to the Debtor's estate.
Headquartered in High Point, North Carolina, Utility Craft, Inc.,
dba Wood Armfield Furniture, specializes in manufacturing high
quality furniture and accessories. The Company filed for chapter
11 protection on July 20, 2006 (Bankr. M.D. N.C. Case No. 06-
10816). When the Debtor filed for protection from its creditors,
it estimated assets between $1 million and $10 million and debts
between $10 million and $50 million.
UTILITY CRAFT: Files Schedules of Assets and Liabilities
--------------------------------------------------------
Utility Craft, Inc., delivered its Schedules of Assets and
Liabilities to the U.S. Bankruptcy Court for the Middle District
of North Carolina, disclosing:
Name of Schedule Assets Liabilities
---------------- ------ -----------
A. Real Property
B. Personal Property $3,948,405
C. Property Claimed
as Exempt
D. Creditors Holding $2,825,583
Secured Claims
E. Creditors Holding $2,042,653
Unsecured Priority Claims
F. Creditors Holding $6,784,778
Unsecured Nonpriority
Claims
------------ ------------
Total $3,948,405 $11,653,014
Headquartered in High Point, North Carolina, Utility Craft, Inc.,
dba Wood Armfield Furniture, specializes in manufacturing high
quality furniture and accessories. The Company filed for chapter
11 protection on July 20, 2006 (Bankr. M.D. N.C. Case No. 06-
10816). When the Debtor filed for protection from its creditors,
it estimated assets between $1 million and $10 million and debts
between $10 million and $50 million.
UTIX GROUP: June 30 Balance Sheet Upside-Down by $5.8 Million
-------------------------------------------------------------
Utix Group, Inc., reported a $5.1 million net loss on $370,604 net
revenues for the three months ended June 30, 2006, compared to a
$1.4 million net loss on $1.8 million of net revenues in 2005.
At June 30, 2006, the Company's balance sheet showed $3,792,877 in
total assets and $9,663,935 in total liabilities, resulting in a
$5,871,058 stockholders' deficit.
The Company's June 30 balance sheet also showed strained
liquidity with $3,662,894 in total current assets available to pay
$4,253,664 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?1297
Going Concern Doubt
As reported in the Troubled Company Reporter on January 23, 2006,
Vitale, Caturano & Company, Ltd., expressed substantial doubt
about Utix Group, Inc., fka Corporate Sports Incentives, Inc.'s
ability to continue as a going concern after it audited the
Company's financial statements for the years ended Sept. 30, 2005
and 2004. The auditing firm pointed to the Company's recurring
losses from operations, net working capital deficiency and
stockholders' deficit.
About Utix
Headquartered in Burlington, Massachusetts, Utix Group, Inc.
-- http://www.utix.com/-- provides gift tickets to retail buyers
and corporations that are redeemable at golf courses, ski resorts,
spas, and movie theaters in the United States. The company's
products consist of recreation products, such as Utix Golf
Tickets, SwingPack, and Utix Ski Tickets; and leisure products,
including Utix Spa Ticket and Movie Ticket. It distributes its
products through prepaid manual plastic gift tickets to
corporations and other business users, as well as sells prepaid
magnetic strip gift tickets through mass merchandise retail
chains.
VARIG S.A.: T. Rowe Price Increases Stake in Rival TAM Linhas
-------------------------------------------------------------
T. Rowe Price International Funds, Inc.'s Latin America Fund
increased its holdings in TAM Linhas Aereas, S.A. -- VARIG, S.A.'s
major competitor -- during the six-month period ended
April 30, 2006, the hedge fund disclosed in a regulatory filing
with the U.S. Securities and Exchange Commission.
The Latin America Fund holds 2,157,000 shares of preferred stock
in TAM, valued at $55,615,000, as of April 30, 2006. The Latin
America Fund manages $2,130,573,000 in total assets. The TAM
stake represents a 2% investment by the Fund.
David J.L. Warren, president of T. Rowe Price, notes that TAM is
expanding its fleet and capitalizing on the financial difficulties
of VARIG. "TAM has a large and expanding market share in Brazil,
where the airline industry overall shows good growth potential,"
Mr. Warren says.
At Dec. 31, 2005, TAM operated 49% more direct flights than VARIG,
and operated 96% more frequent daily flights than VARIG, according
to the airline's report filed with the SEC.
Brazil accounts for nearly 60% of the Fund's assets.
Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's
largest air carrier and the largest air carrier in Latin America.
VARIG's principal business is the transportation of passengers and
cargo by air on domestic routes within Brazil and on international
routes between Brazil and North and South America, Europe and
Asia. VARIG carries approximately 13 million passengers annually
and employs approximately 11,456 full-time employees, of which
approximately 133 are employed in the United States.
The Company, along with two affiliates, filed for a judicial
reorganization proceeding under the New Bankruptcy and
Restructuring Law of Brazil on June 17, 2005, due to a competitive
landscape, high fuel costs, cash flow deficit, and high operating
leverage. The Debtors may be the first case under the new law,
which took effect on June 9, 2005. Similar to a chapter 11
debtor-in-possession under the U.S. Bankruptcy Code, the Debtors
remain in possession and control of their estate pending the
Judicial Reorganization. Sergio Bermudes, Esq., at Escritorio de
Advocacia Sergio Bermudes, represents the carrier in Brazil.
Each of the Debtors' Boards of Directors authorized Vicente
Cervo as foreign representative. In this capacity, Mr. Cervo
filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case
Nos. 05-14400 and 05-14402). Rick B. Antonoff, Esq., at
Pillsbury Winthrop Shaw Pittman LLP represents Mr. Cervo in the
United States. As of March 31, 2005, the Debtors reported
BRL2,979,309,000 in total assets and BRL9,474,930,000 in total
debts. (VARIG Bankruptcy News, Issue No. 32; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
VISTEON CORP: Lowers Sales Expectation for 2006 Second Half
-----------------------------------------------------------
Visteon Corporation disclosed Tuesday that recent announcements of
lower North America vehicle production by its customers coupled
with changing vehicle mix, and other cost factors will challenge
its financial results for the remainder of 2006.
As a result, the company does not expect to meet the financial
guidance targets it had previously released in August. The
company currently expects second half product sales to be about
10% lower than first half product sales of $5.7 billion.
Visteon will discuss actions to respond to lower customer volumes,
its three-year improvement plan and an update to its outlook for
2006 when it releases third-quarter financial results in late
October.
About Visteon
Headquartered in Van Buren Township, Michigan, Visteon Corporation
(NYSE: VC) -- http://www.visteon.com/-- is a global automotive
supplier that designs, engineers and manufactures innovative
climate, interior, electronic and lighting products for vehicle
manufacturers, and also provides a range of products and services
to aftermarket customers. With corporate offices in the Michigan
(U.S.); Shanghai, China; and Kerpen, Germany; the company has more
than 170 facilities in 24 countries and employs approximately
50,000 people.
* * *
As reported in the Troubled Company Reporter on Sept 13, 2006,
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit rating on Van Buren Township, Michigan-based Visteon Corp.,
and removed the rating from CreditWatch with negative implications
where it was placed on Aug. 21, 2006. Visteon, a global
manufacturer of automotive components, has total debt of about
$2.3 billion. The rating outlook is negative.
WORLDCOM INC: Court Gives Teleserve's Claim a 6A Classification
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of New York gave
Teleserve Systems Inc.'s claim against WorldCom Inc. and its
debtor-affiliates a Class 6A MCI Pre-Merger classification,
holding that there is no dispute that Teleserve filed a timely
application for pre-merger treatment of its claim.
The issue is whether Teleserve's Claim passes the two-part test
set forth in the Debtors' Plan of Reorganization to be included in
Class 6A, the Honorable Arthur Gonzalez says.
To be classified as a Class 6A MCI Pre-Merger Claim, Teleserve's
Claim needs to satisfy the test set forth by the Plan. The test
has two parts:
1. The Completion Prong -- the Claim should arise solely from
an individual transaction or series of transactions that
was fully completed on or before September 13, 1998
2. The Reliance Prong -- the Claim relied on the separate
credit of MCI or any its subsidiaries as of or prior to
September 13, 1998.
On Jan. 9, 2003, Teleserve filed Claim No. 9449 against Debtors
MCI WorldCom Network Services, Inc., and Teleconnect Long Distance
Services and Systems Co. asserting $7,573,089 in prepetition
claims for damages in connection with the Debtors' purported
breach of the parties' Operator Services Agency Agreements. The
Debtors allegedly underpaid commissions due Teleserve for
commissionable calls made during the terms of the Agreements.
Judge Gonzalez allowed Teleserve's claim for $7,366,101, subject
to the Debtors' right to object to Teleserve's designation of that
claim as a Class 6A claim and payable after a determination by the
Court or by stipulation between the parties.
Subsequently, Teleserve asked the Court to allow its Claim a Class
6A classification asserting that it meets the 6A Classification
requirements.
The Debtors objected and asked the Court to designate Teleserve's
claim as an allowed Class 6 Claim, arguing that Teleserve's Claim
arises out of an arbitration award that did not become final until
after the Debtors' bankruptcy filing, and included an award of
damages through 2000, which is after the Sept. 13, 1998 cut-off
date.
The Court notes that the transaction between MCI and Teleserve
ended at the latest when MCI terminated the 1994 agreements in
February 1996, more than two years before the relevant cutoff
date, September 13, 1998. Thus, the Court finds that Teleserve's
Claim satisfies the completion prong.
As to the reliance prong, the Court avers that a narrow reading
of the word "credit," as the Debtors seemed to suggest during an
oral argument when they noted the absence of the word in one of
the 1994 agreements, would go against the purpose of the
applicable Plan provisions.
The history of the Plan demonstrates that creation of Class 6A
aimed at distinguishing between, on the one hand, creditors who
intended to complete a "transaction" only with MCI and its
affiliates, not including WorldCom, and, on the other hand,
creditors who completed a "transaction" with MCI, but knew or
should have known that WorldCom was in the picture.
The Debtors' argument predicated on the assignment clauses of the
1994 agreements has no merit because the critical issue for
satisfaction of the reliance prong is whether a creditor knew or
should have known of the merger with WorldCom when entering into
or during a "transaction" with MCI, the Court opines. The mere
existence of the clauses is not sufficient to impute the required
knowledge, Judge Gonzalez asserts.
The Court is also mindful of the Debtors' argument that a
contractual relationship with MCI that ended before the merger
with WorldCom does not suffice to qualify for Class 6A treatment
and that finding such a relationship sufficient would annihilate
the reliance prong.
The Court holds that Teleserve completed a transaction only with
MCI, which ended early enough before the merger to conclude that
Teleserve, when entering into the 1994 agreements and during the
execution of those agreements, did not and could not have known
it would ultimately be asserting a claim against WorldCom.
Therefore, Teleserve's claim satisfies the reliance prong, Judge
Gonzalez opines.
About WorldCom
WorldCom, Inc., a Clinton, MS-based global communications company,
filed for chapter 11 protection on July 21, 2002 (Bankr. S.D.N.Y.
Case No. 02-13532). On March 31, 2002, WorldCom listed
$103,803,000,000 in assets and $45,897,000,000 in debts. The
Bankruptcy Court confirmed WorldCom's Plan on Oct. 31, 2003, and
on Apr. 20, 2004, the Company formally emerged from U.S. Chapter
11 protection as MCI, Inc. On Jan. 6, 2006, MCI merged with
Verizon Communications, Inc. MCI is now known as Verizon
Business, a unit of Verizon Communications. (WorldCom Bankruptcy
News, Issue No. 125; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
WORLDCOM INC: Wants Summary Judgment on Mark Lahti's Injury Claim
-----------------------------------------------------------------
WorldCom Inc. and its debtor-affiliates ask the U.S. Bankruptcy
Court for the Southern District of New York to enter a summary
judgment against Mark Lahti and expunge his personal injury claim.
On Dec. 5, 2003, Mr. Lahti filed a personal injury lawsuit
against the Debtors in the Marion County Superior Court, in
Indiana, Shane C. Mecham, Esq., at Stinson Morrison Hecker LLP,
in Kansas City, Missouri, relates.
Subsequently, in June 2004, Mr. Lahti filed Claim No. 38344,
seeking $250,000 for personal injury and wrongful death.
The Debtors then objected to Claim No. 38344.
On March 28, 2006, the Marion Superior Court dismissed, with
prejudice, Mr. Lahti's lawsuit for failure to prosecute, Mr.
Mecham points out. Moreover, the period to file an appeal has
lapsed.
Mr. Mecham argues that the only way that a Personal Injury Claim
can become an Allowed Claim is for that Claim to be determined by
an administrative or judicial tribunal of appropriate
jurisdiction.
Under the Debtors' confirmed Plan of Reorganization, Mr. Lahti's
Claim is a personal injury claim, Mr. Mecham maintains. The
Marion Superior Court has appropriate jurisdiction over the
Claim, Mr. Mecham adds, because it is where Mr. Lahti filed his
state court action on which his Claim is based.
Furthermore, the dismissal of the Lawsuit precludes the Claim
from becoming an allowed claim, Mr. Mecham emphasizes.
About WorldCom
WorldCom, Inc., a Clinton, MS-based global communications company,
filed for chapter 11 protection on July 21, 2002 (Bankr. S.D.N.Y.
Case No. 02-13532). On March 31, 2002, WorldCom listed
$103,803,000,000 in assets and $45,897,000,000 in debts. The
Bankruptcy Court confirmed WorldCom's Plan on Oct. 31, 2003, and
on Apr. 20, 2004, the Company formally emerged from U.S. Chapter
11 protection as MCI, Inc. On Jan. 6, 2006, MCI merged with
Verizon Communications, Inc. MCI is now known as Verizon
Business, a unit of Verizon Communications. (WorldCom Bankruptcy
News, Issue No. 125; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
YUKOS OIL: Surgutneftegaz Eyes Petrochemical Unit
-------------------------------------------------
Surgutneftegaz may buy a Siberian petrochemical asset from
bankrupt OAO Yukos Oil Co., as well as build a new plant in
Russia, RIA Novosti reports.
"We do not rule out buying ANKhK, or building a new plant in
Russia," Sergei Fyodorov, Surgutneftegaz's deputy chief executive,
said.
Mr. Fyodorov also revealed that the company was in talks over the
construction of an oil refinery at the terminus of the Eastern
Siberia-Pacific Ocean pipeline, the Russian news and information
service relates.
According to RIA Novosti, Mr. Fyodorov also said that
Surgutneftegaz intends to:
-- increase its investments by 40% to RUR88 billion, with a
RUR63 billion investment planned for 2006; and
-- bring oil production levels to 67.1 million metric tons in
2007, 5 percent above its 2006 target.
From January to August 2006, Surgutneftegaz reported a 3.4% year-
on-year increase in crude output to 43.59 million metric tons
(1.33 mln bbl/d), and a 1.6% increase in the production of gas, to
9.69 billion cubic meters.
About Surgutneftegaz
Headquartered in Surgut, Russia, Surgutneftegaz OAO --
http://www.surgutneftegas.ru/-- is an oil and gas company, which
is involved in gas and oil field construction and development, gas
and oil production and marketing, as well as oil and petrochemical
product manufacture and marketing. The Company builds up to 90
horizontal wells per year and has an annual production of over 10
billion cubic meters of gas.
About Yukos
Headquartered in Moscow, Yukos Oil -- http://yukos.com/-- is an
open joint stock company existing under the laws of the Russian
Federation. Yukos is involved in energy industry substantially
through its ownership of its various subsidiaries, which own or
are otherwise entitled to enjoy certain rights to oil and gas
production, refining and marketing assets.
The Company filed for Chapter 11 protection Dec. 14, 2004
(Bankr. S.D. Tex. Case No. 04-47742), but the case was dismissed
on Feb. 24, 2005, by the Hon. Letitia Z. Clark. A few days
later, the Government sold its main production unit Yugansk, to
a little-known firm Baikalfinansgroup for $9.35 billion, as
payment for $27.5 billion in tax arrears for 2000- 2003.
Yugansk eventually was bought by state-owned Rosneft, which is
now claiming more than $12 billion from Yukos.
On March 10, a 14-bank consortium led by Societe Generale filed
a bankruptcy suit in the Moscow Arbitration Court in an attempt
to recover the remainder of a $1 billion debt under
outstanding loan agreements. The banks, however, sold the claim
to Rosneft, prompting the Court to replace them with the state-
owned oil company as plaintiff.
On April 13, court-appointed external manager Eduard Rebgun
filed a chapter 15 petition in the U.S. Bankruptcy Court for the
Southern District of New York (Bankr. S.D.N.Y. Case No. 06-
0775), in an attempt to halt the sale of Yukos' 53.7% ownership
interest in Lithuanian AB Mazeikiu Nafta.
On May 26, Yukos signed a $1.49 billion Share Sale and
Purchase Agreement with PKN Orlen S.A., Poland's largest oil
refiner, for its Mazeikiu ownership stake. The move was made a
day after the Manhattan Court lifted an order barring Yukos from
selling its controlling stake in the Lithuanian oil refinery.
On Aug. 1, the Hon. Pavel Markov of the Moscow Arbitration Court
upheld creditors' vote to liquidate OAO Yukos Oil Co. and
declared what was once Russia's biggest oil firm bankrupt. The
expected court ruling paves the way for the company's
liquidation and auction.
ZULTYS TECH: U.S. Trustee Appoints Five-Member Creditors' Panel
---------------------------------------------------------------
The U.S. Trustee for Region 17 appointed five creditors to serve
on an Official Committee of Unsecured Creditors in Zultys
Technologies' chapter 11 case:
1. FAI/Future Electronics
Attn: Robert Aslanian
237 Hymus Boulevard
Pointe Claire, Quebec
Canada H9R 5C7
Tel: (514) 694-7710, ext. 5148
2. Avnet, Inc.
Attn: Mary S. Pacini
2211 South 47th Street
Phoenix, AZ 85034
Tel: (480) 643-8143
3. Bell Microproducts Inc.
Attn: James R. Sadler
1941 Ringwood Avenue
San Jose, CA 95131
Tel: (408) 467-2767
4. Foretek International Co., Ltd.
Attn: David Chen
7F, No. 447-1, Sec. 2, Pa-Teh Rd.
Taipei, Taiwan 105
Phone: (886) 2-27217584
5. Shenzhen Gaoxinqi Technology Co. Ltd.
Attn: Shirley Chen
Gaoxinqi Industry Park, Liuxian
1 Road, District 67, Bao'an Street
Shenzhen, 518102, P.R. China
Tel: (86) 755-29619999
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtor's
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 Sunnyvale, California, Zultys Technologies
-- http://www.zultys.com/-- designs and manufactures products
that converge telecommunications and data communications for
businesses. The Company filed for chapter 11 protection on
Sept. 8, 2006 (Bankr. N.D. Calif. Case No. 06-51764). Julie H.
Rome-Banks, Esq., Michael W. Malter, Esq., and Robert G. Harris,
Esq., at the Law Offices of Binder and Malter, represent the
Debtor. When the Debtor filed for protection from its creditors,
it listed total assets of $1,804,276 and total debts of
$45,040,725.
ZULTYS TECH: Committee Taps Murray & Murray as Bankruptcy Counsel
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors of Zultys
Technologies ask the U.S. Bankruptcy Court for the Northern
District of California for permission to retain Murray & Murray,
A Professional Corporation, as its bankruptcy counsel.
Murray & Murray will:
a. provide legal advice to the Committee with respect to its
duties and powers in the Debtor's chapter 11 case;
b. consult with the Committee and the Debtor concerning the
administration of the Debtor's chapter 11 case;
c. assist the Committee in its investigation of the acts,
conduct, assets, liabilities, and financial condition of
the Debtor, operation of the Debtor's business, and the
desirability of continuing or selling its business or
assets, and any other matters relevant to the Debtor's
chapter 11 case or to the formulation of a plan;
d. assist the Committee in the evaluation of claims against
the estate, including analysis of and possible objections
to the validity, priority, amount, subordination, or
avoidance of claims or transfers of property in
consideration of the claims;
e. assist the Committee in participating in the formulation of
a plan, including the Committee's communications with
secured creditors concerning the plan and collecting of and
filing with the Court acceptances or rejections of a plan;
f. assist the Committee with any effort to request the
appointment of a trustee or examiner;
g. advise and represent the Committee in connection with
administrative and substantive matters arising in the
Debtor's chapter 11 case, including, without limitation,
the use of cash collateral, the obtaining of credit, the
sale of assets, and the rejection or assumption of
executory contracts and unexpired leases;
h. appear before the Court, any other federal court, state
court or appellate courts; and
i. perform other legal services as may be required and which
are in the interest of the unsecured creditors.
John Walshe Murray, Esq., a shareholder at Murray & Murray,
assures the Court that his firm is a "disinterested person" as
that term is defined in Section 101(14) of the Bankruptcy Code.
Mr. Murray can be reached at:
John Walshe Murray, Esq.
Murray & Murray, A Professional Corporation
19400 Stevens Creek Boulevard, Suite 200
Cupertino, CA 95014-2548
Tel: (650) 852-9000
Fax: (650) 852-9244
http://www.murraylaw.com/
Headquartered in Sunnyvale, California, Zultys Technologies
-- http://www.zultys.com/-- designs and manufactures products
that converge telecommunications and data communications for
businesses. The Company filed for chapter 11 protection on
Sept. 8, 2006 (Bankr. N.D. Calif. Case No. 06-51764). Julie H.
Rome-Banks, Esq., Michael W. Malter, Esq., and Robert G. Harris,
Esq., at the Law Offices of Binder and Malter, represent the
Debtor. When the Debtor filed for protection from its creditors,
it listed total assets of $1,804,276 and total debts of
$45,040,725.
* Fox Rothschild LLP Merges with Grotta, Glassman & Hoffman, P.C.
-----------------------------------------------------------------
Fox Rothschild LLP will merge with Grotta, Glassman & Hoffman
P.C., adding 53 lawyers to Fox Rothschild's existing team and
setting the stage for national growth. To its ten offices in
Delaware, Florida, New Jersey, New York, and Pennsylvania, Fox
Rothschild adds West Coast offices in Las Vegas, Nevada; Los
Angeles, California; and San Francisco, California. The combined
practice will continue under the name Fox Rothschild LLP.
Commenting on the deal, Mark L. Silow, administrative partner of
Fox Rothschild, said, "Grotta, Glassman & Hoffman has established
a leadership role in labor and employment law, representing
notable clients, including Aztar, Duane Reade, Trump Casino
Resorts, Perry Ellis International, Cornell University, Princeton
University, and Lea & Perrins. The firm's depth of talent and
comprehensive knowledge, combined with its West Coast presence,
make it a perfect fit for Fox Rothschild. GG&H's joining with us
will bolster our own strong labor and employment practice and fit
perfectly into our business model, offering clients both breadth
and depth in this practice area."
"Fox Rothschild was the perfect firm for us to join," Theodore M.
Eisenberg, managing principal of GG&H, said. "Our strategic goal
has been to expand nationally, and this merger accelerates that
process. In addition, both of our firms have remarkably similar,
collegial cultures, which will make the process of integration
virtually seamless."
Founded in 1966 and headquartered in Roseland, New Jersey, GG&H
focuses exclusively on the representation of management in labor,
employment, corporate immigration, and employee benefits law and
related litigation, counseling, and training. GG&H counsels and
represents clients throughout the U.S. in industries including
retail, gaming, hospitality, healthcare, media, and education
among others.
The merger with Grotta, Glassman & Hoffman continues a pattern of
unprecedented growth for Fox Rothschild. Upon completion of the
deal on Oct. 1, 2006, the firm will have added approximately 85
lawyers since August 2005, representing growth of more than 30
percent in the number of attorneys at the firm. Through organic
growth and mergers, Fox Rothschild is developing a coast-to-coast
network of offices, offering clients a broad portfolio of legal
services.
"Our merger with Grotta, Glassman & Hoffman exponentially
accelerates our strategic plan for national growth," said Mr.
Silow. "Excitement at the firm and among our attorneys and staff
is at an all-time high."
About Grotta, Glassman & Hoffman
Grotta, Glassman & Hoffman, P.C. is a national labor and
employment law firm, with offices in New Jersey, New York, Los
Angeles, San Francisco, and Las Vegas. The Firm focuses
exclusively on the representation of management in labor,
employment, corporate immigration, and employee benefits law, and
related litigation, counseling, and training.
About Fox Rothschild LLP
Counted among the 200 largest law firms in the nation, Fox
Rothschild LLP -- http://www.foxrothschild.com/-- is a full-
service firm with offices in Delaware, Florida, New Jersey, New
York, and Pennsylvania, providing a complete range of legal
services to public and private business entities, charitable,
medical and educational institution, and individuals.
* BOOK REVIEW: Crafting Solutions for Troubled Businesses
---------------------------------------------------------
Author: Stephen J. Hopkins and S. Douglas Hopkins
Publisher: Beard Books
Hardcover: 316 pages
List Price: $74.95
Order your personal copy at
http://www.amazon.com/exec/obidos/ASIN/1587982870/internetbankrupt
The book is a practical guide to evaluating and addressing the
challenges of a distressed business -- whether due to being over
leveraged, poorly managed, or is under performing.
The authors provide practical advice, based on their involvement
collectively in more than 150 financially stressed businesses, on
how to maximize the value of a troubled business.
The authors identify patterns of problems and conclude that
financially troubled companies can generally be segmented into
three classifications: Undisciplined Racehorses, Overburdened
Workhorses, and Aging Mules.
Using these classifications as a conceptual framework, the authors
offer extensive, fact-based problem diagnosis, and solution tools,
and show how to "separate the wheat from the chaff and maximize
the value of each."
Stephen J. Hopkins and S. Douglas Hopkins, a father-son team, are
founders and principals of Kestrel Consulting, LLC.
*********
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-
mail. Additional e-mail subscriptions for members of the same firm
for the term of the initial subscription or balance thereof are
$25 each. For subscription information, contact Christopher Beard
at 240/629-3300.
*** End of Transmission ***